Oslo-listed BW Offshore Ltd. plans to float its BW Energy oil and gas business in first-quarter 2020, with an expected valuation of between $700 million and $800 million, the company said Jan. 15.
BW Offshore, a service provider to many petroleum producers, has in recent years built up its own E&P operations through BW Energy, which has oil fields in Brazil and Gabon.
BW Energy aims to raise $175 million in cash in the IPO to help fund output growth from 9,000 barrels per day (bbl/d) of oil in 2019 to a range of 50,000-60,000 bbl/d in 2023.
Most of the increase is expected to come from Brazil's Maromba Field, in which BW Energy last year bought a 95% stake from Petrobras and Chevron Corp. The field is due to start production in late 2022, ramping up to 29,000 bbl/d of oil the following year.
"Our business model is to acquire resources that have already been found by others, and to develop those. We do not want to spend money on exploration in uncharted waters," BW Energy CEO Carl Arnet told Reuters.
BW Offshore first announced plans for the spin-off of BW Energy last year without providing a valuation or specific time frame for a listing.
"BW Energy has matured into a full ... E&P company with competencies covering the full scope of offshore field developments and a clear path to future production growth and value creation," said group Chairman Andreas Sohmen-Pao.
The company said it aimed to pay out up to half of its net income in dividends to shareholders from the time when Maromba comes on stream.
BW Offshore also plans to distribute stakes in BW Energy directly to its own shareholders, it said.
Outside investors are expected to own a quarter of the shares in BW Energy after the transactions are completed, while BW Offshore and its parent company, Sohmen-Pao's BW Group, will own the rest.
Shares of BW Offshore, which have risen by 64% in the last 12 months, were trading 1.9% lower at 4:45 a.m. CT (10:45 GMT), underperforming a 0.1% rise in Oslo's benchmark stock index.
Eni, headed by CEO Claudio Descalzi, will remain a majority shareholder in a venture that one source close to the matter said could be valued at between $10 billion and $13 billion in an IPO.
Houston, Texas-based Halliburton said it would boost its dividend to 12 cents, payable on March 23, up from a 4.5 cents dividend previously.
"It's by no means a way to say that we shouldn't pursue transition or slow it down," Peter Martin, WoodMac's chief economist, said. "This pain in the short-term will pay off in the long-term."