Energean Raises $460mn in IPO

Greek upstream minnow Energean completed March 15 its initial public offering in London and 47.7% of the company shares started trading March 16. With a $1.275mn loan  secured earlier in March, Energean has raised $1.6bn. The money will cover the development of the Karish and Tanin gas fields off shore Israel, for which Energean can now take a final investment decision.

The share price was set at £4.55 per share and yielded $460mn, a little below expectations of $500mn, and net proceeds of $400mn.  According to sources close to the company it is the biggest oil and gas IPO since 2014 and the biggest IPO in London this year.

Following the IPO, current shareholders were diluted to 52.3% of the company's shares. The company's capitalisation was set at at about £695mn ($968mn). Most of the $400mn Energean will receive will go towards the development of Karish and Tanin gas fields off shore Israel. 

The biggest new investor in the IPO is Clal Insurance, one of the leading insurance groups in Israel, which now holds 10.4% of Energean shares. It invested about $100mn in the IPO. The identities of the other Israeli investors were not disclosed as they hold less than 3% each. But collectively they invested about $140mn in the IPO.

Other big investors in the IPO were Capital Research Global Investors, which bought 7.1% of the shares; Pelham Capital which bought 4.8% and Kerogen which bought 3.6%. Kerogen last year bought half of Energean Israel, an Energean subsidiary that will develop the two fields and paid $50mn towards the planning phase of the project.

Energean is expected to announce a positive final investment decision this month or early next month. Drilling at the site is expected to start next year and first gas is expected during the first quarter 2021.