North Sea oil and gas producer Ithaca Energy said on Tuesday it is planning a London listing, stoking hopes for a fourth quarter recovery in a stock market overshadowed by the dismal economic outlook.
The initial public offering (IPO) will test investors' appetite for oil and gas companies at a time of soaring global energy prices and a renewed focus in Europe on energy security following Russia's invasion of Ukraine.
Ithaca Energy will use the proceeds to help it become a key player in British energy security, the firm said in a statement, adding it had delivered a 5.4 times increase in equity value between 2018 and the end of June this year.
Tel Aviv-listed Delek Group, which acquired Ithaca in 2017, would reduce its ownership stake in Ithaca Energy, but would remain a controlling shareholder, Ithaca Energy said.
The implied free float has yet to be determined but will be at least 10%.
Ithaca produced about 66,700 barrels of oil equivalent per day (boed) in the first half of the year, of which 35% was natural gas.
The company also owns a 70% stake in the Cambo development in the North Sea, with Shell seeking to sell its 30% stake, which has been at the centre of protests by climate activists in recent years.
Ithaca acquired several North Sea rivals in recent years to build up its production and reserves including private equity-owned Siccar Point and Chevron's CVX.N North Sea operations.
But it is not clear how much interest the IPO will attract as investors weigh the short-term energy crunch with longer-term environmental concerns that require shifting away from fossil fuels.
The European energy index, which includes many exploration and production companies, has gained 17% since the beginning of the year, compared with 17.4% gains for Brent oil.
London-listed BPhas gained more than 36% and Shell 40% this year.
Ithaca hired investment banks Goldman Sachs, Morgan Stanley as joint coordinators for the IPO.
(Reuters - Reporting by Carolyn Cohn; editing by Sinead Cruise, Robert Birsel)