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London IPO of Israel-owned Ithaca Energy priced at bottom of range

REUTERS/Dado Ruvic
Tel Aviv-listed Delek Group-owned Ithaca produces around 70,000 barrels of oil equivalent per day

North Sea oil and gas producer Ithaca Energy’s planned initial public offering (IPO) in London is set to be priced at the bottom of the range at 250 pence per share, a bookrunner on the deal said on Tuesday.

Ithaca’s market debut will be watched for indications of investor appetite for energy producers in the British North Sea, an ageing 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 Monday, bookrunners 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 to £3.1 billion pounds ($2.87 billion to $3.56 billion).

The planned IPO of Ithaca – owned by Tel Aviv-listed Delek Group – on the London Stock Exchange on Wednesday 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.

Ithaca, which produces around 70,000 barrels of oil equivalent per day, also holds stakes in the yet-to-produce fields Rosebank, which is operated by Equinor, and Cambo, where Shell 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 percent 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 bookrunner said, adding that they would close at 13:00 GMT on Tuesday.

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