Perenco Petroleo e Gas do Brasil Particpacoes S.A., the Brazilian unit of French oil and natural gas exploration company Perenco, said Thursday that it plans to raise between 633.3 million Brazilian reais and BRL817.1 million ($395.8 million-$510.7 million) through an initial public offering of shares on the Brazilian Stock Exchange, or BMFBovespa.
The company plans to offer 408,568 common shares, with the price of each share expected to be in a range of BRL1,550 to BRL2,000. Trading is expected to begin July 5. The company could offer an extra lot of shares if there is sufficient demand.
It will sell its shares in Brazil and to qualified investors in the U.S. Investors can reserve shares from June 24 to June 30.
Perenco is the operator of five offshore exploration blocks in the Espirito Santos Basin, with a 50% stake in each block. The company is partnered with independent driller OGX Petroleo e Participacoes, part of billionaire Brazilian businessman Eike Batista’s EBX industrial conglomerate.
Itau BBA, BTG Pactual and Morgan Stanley will coordinate the offering.
Perenco said it will list its shares under the Novo Mercado mechanism, which has the most rigorous listing rules on the exchange. To qualify, a company must sell a minimum 25% stake, and all its shares must be common rather than preferred stock.
The company’s shares will trade under the ticker symbol PEOG3.BR.
The share sale is the latest in a string of oil-company launches on the Sao Paulo Stock Exchange, and the second one planned for 2011. In March, QGEP Participacoes SA – an arm of local engineering and construction firm Queiroz Galvao–raised BRL1.5 billion in an IPO.
Brazilian oil companies have attracted interest from investors, lured by the promise of black gold riches after a series of massive offshore oil discoveries made by state-run energy giant Petroleo Brasileiro, or Petrobras. Last year, Petrobras sold $70 billion worth of shares in the world’s largest-ever stock sale.
The IPO boom in Brazil’s oil industry was started in earnest in June 2008, when Batista launched a then-record BRL6.7 billion IPO for OGX. That was followed by a series of sales in 2010 that included the Petrobras deal and a BRL1.5 billion IPO for start-up HRT Participacoes SA.
The market has not been all wine and roses, however, for oil companies. Australia’s Karoon Gas Australia Ltd. cited poor market conditions when it cancelled its plans to raise about $773 million in an IPO of its local unit, Karoon Petroleo & Gas.
Perenco said that it will use proceeds from the share sale to fund its exploration activities, including seismic data gathering. In addition, the company could use the funds to acquire exploration assets in Brazil. Brazil will offer fresh offshore concessions later this year, when the National Petroleum Agency will hold its 11th round auction of exploration and production blocks.
The company’s Espirito Santos Basin blocks hold unrisked potential resources of 2.16 billion barrels, while risked potential resources were measured at 645 million barrels by consultants DeGolyer and MacNaughton, according to the preliminary prospectus of the operation.
