North Sea oil and gas producer Ithaca Energy’s planned IPO in London is set to be priced at the bottom of the range at 250 pence per share, a book-runner on the deal said on Nov. 8.

Ithaca’s market debut will be watched for indications of investor appetite for energy producers in the British North Sea, an aging basin where private-equity firms have in recent years bought assets, but avoided public listings, which can raise cash but also increase public scrutiny.

On Nov. 7, book-runners revised their price guidance to between 250 and 270 pence per share, compared with the previous price range of 250 to 310 pence, which had implied a market value of 2.5 billion pounds to 3.1 billion pounds (US$2.87 billion to US$3.56 billion).

The planned IPO of Ithaca—owned by Tel Aviv-listed Delek Group—on the London Stock Exchange on Nov. 9 has been closely watched in an IPO market starved of activity since Russia’s invasion of Ukraine.

Delek bought Ithaca in 2017 and in April acquired private equity-backed Siccar Point Energy through Ithaca, flagging its intention to float the unit this year.

Reuters chart - Britain biggest oil and gas producers
(Courtesy of Reuters)

Ithaca, which produces around 70,000 boe/d, also holds stakes in the yet-to-produce fields Rosebank, which is operated by Equinor ASA, and Cambo, where Shell Plc is trying to sell its minority stake.

It has said it wants to use the cash from the IPO to pay down debt, which stood at a net $1.4 billion at the end of June and that it aims to pay dividends of 15-30% of post-tax net cash from operations, expecting a 2023 dividend of $400 million.

Books were multiple times oversubscribed at the set price and above, the book-runner said, adding that they would close at 1300 GMT on Nov. 8.

The last oil and gas producer to float on the main London stock exchange was eastern Mediterranean-focused Energean in 2018.

(US$1 = 0.8716 pounds)