Aberdeen-based North Sea oil and gas producer Ithaca Energy said on Tuesday it is planning an initial public offering (IPO) on the London Stock Exchange.
Ithaca owns a 70% stake in the controversial Cambo development in the North Sea.
The listing could fetch between $300 million and $500 million and give Ithaca a market cap of $2 billion to $3 billion, a bookrunner working on the deal told Reuters.
Ithaca said in a statement it has firm expectations to pay a dividend of $400 million in 2023, and $420 million in 2024.
Tel Aviv-listed Delek Group, which acquired Ithaca in 2017, would reduce its stake in Ithaca but would remain a controlling shareholder.
“Ithaca Energy has access to flagship assets, with stakes in six of the top ten largest fields in the UKCS, including the two largest undeveloped discoveries, Cambo and Rosebank, to drive organic growth,” said Ithaca.
“Ithaca Energy’s goal is to continue to increase value while generating attractive and sustainable shareholder distributions …
“Immediately following admission, the company intends to have a free float of at least 10% of issued share capital and expects that it would be eligible for inclusion in the FTSE UK indices,” said Ithaca.
“In addition, it is expected that up to a further 15% of the offer will be made available pursuant to an over-allotment option.
“Ithaca Energy will not receive any proceeds from the sale of over-allotment shares (all of which will ultimately be received by Delek).”
Delek Group CEO Idan Wallace said: “Delek has invested a large amount of capital in Ithaca Energy since we acquired it in 2017, delivering significant value for our shareholders.
“A London listing is the natural next step, allowing Ithaca Energy to flourish as an independent company with its own capital allocation policy and the potential to generate substantial value for all its shareholders.
“I am proud of the work the Ithaca Energy team has done and Delek looks forward to supporting Ithaca Energy as a long-term shareholder.”
Ithaca Energy executive chairman Gilad Myerson said: “I am incredibly proud of the transformation Ithaca Energy has undergone over the past three years to become one of the UK’s leading independent oil and gas companies.
“Following the Siccar Point acquisition, Ithaca Energy now has material scale and portfolio longevity, with significant growth opportunities.
“Our strategy is simple – by buying, building and boosting assets we aim to increase value while generating attractive and sustainable returns to shareholders.
“Our track record of value creation is exceptionally strong and we have a deeply experienced team in place who will continue to deliver.
“Our strategy is aligned with the UK Government’s Energy Security Strategy and we are proud to be investing in the UK at a time when domestic energy security could not be more important.
“I am very excited for what lies ahead and to welcome new shareholders on board as we continue our journey in the public markets.”
Goldman Sachs and Morgan Stanley are joint global coordinators on Ithaca Energy’s IPO, alongside bookrunners Bank of America, HSBC and Jefferies. ING is co-lead manager.