Ithaca Energy shares dip after UK’s largest IPO this year

  • Shares fell 0.8%, in line with the sector’s benchmark
  • The company raised 288 million pounds to pay off debt
  • The listing comes amid a drought in the IPO market

LONDON, Nov 9 (Reuters) – Shares in Ithaca Energy edged lower in London on Wednesday after defying North Sea oil and gas markets to deliver an initial public offering ( IPO) is the largest in Britain this year, and the fifth largest in Europe.

The shares opened 2% below the 250 pence per share price and briefly fell as much as 4% to a low of 240.05 pence, before retreating to 248 pence, down 0.8%. Meanwhile, the pan-European STOXX 600 (.STOXX) was down 0.4% and the European oil and gas stock index was down 0.9%. (.SXEP)

The IPO, priced at the lower end of the expected price range, gave the company an initial valuation of 2.45 billion pounds ($2.83 billion). The peak value of the original price was 3.1 billion pounds.

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Ithaca has raised 288 million pounds in a drought of stock market listings this year, with global IPOs down more than 70% compared to the same period in last year, according to Dealogic data.

The London stock exchange has suffered its worst year on record for UK IPOs as market volatility continues amid the energy crisis and worsening economic outlook.

“Ithaca has an IPO going into a tougher market environment and the near-term weakness could highlight that,” said Investec analyst Nathan Piper.

Reuters Graphics

Revenues from UK division sales have fallen by 95% this year and only two of the 38 UK listings were in the power and energy supply sector, worth just £5m each. of $ 910 million in total collected in the region to date, according to Dealogic data.

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So far in 2022, global utility and energy IPOs worth $100 million have seen an average return of 19.9% ​​after one day, compared to negative returns for European and energy IPOs and UK IPOs across all sectors, according to Dealogic data.

Ithaca, owned by Tel Aviv-listed Delek Group ( DLEKG.TA ), is seen as a sign of investor interest in the North Sea energy producer, an aging basin that has been bought by non-oil companies. independent in recent years, but stopped. IPOs.

Ithaca’s move to seek capital markets comes amid new government interest in the North Sea region due to the energy crisis, with Britain recently issuing its license -the first oil and gas extraction route since 2019, in an effort to boost domestic production.

Ithaca, which produces about 70,000 barrels of oil equivalent per day, wants to use the proceeds from the IPO to pay down debt, which reached $1.4 billion at the end of June.

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The last oil and gas producer to float on the main London stock market was Eastern Mediterranean’s Energean ( ENOG.L ) in 2018.

Goldman Sachs ( GS.N ) and Morgan Stanley ( MS.N ) are global regulators with the deal, while HSBC ( HSBA.L ), Jefferies ( JEF.N ) and Bank of America ( BAC.N ) are partner, with ING (INGA.AS) acting as co-lead.

($1 = 0.8649 pounds)

Reporting by Emma-Victoria Farr, Joice Alves, Shadia Nasralla and Lucy Raitano; Editing by Amanda Cooper and Mark Potter

Our Standards: The Thomson Reuters Trust Principles.

Emma-Victoria Farr

Thomson Reuters

European M&A reporting with previous experience at Mergermarket, Bloomberg The Daily Telegraph and Deutsche Presse Agentur.

Shadia Nasralla

Thomson Reuters

Writing about the intersection of oil companies and climate politics. Reported on politics, economics, immigration, nuclear diplomacy and business from Cairo, Vienna and elsewhere.

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