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Page added on November 30, 2009

Oil companies cash in for UK stock exchange listings

A group of oil companies is to cash in on rising fuel prices by floating on the UK London Stock Exchange for 2010 in deals that will value them at more than £1.2 billion.

At least five oil and gas groups are in early stages of preparations for stock market listings. The wave of offerings will make millionaires of a handful of oil entrepreneurs and generate much-needed returns for the private equity firms that have backed some of the companies. Much of the activity is being driven by buyout firms eager to pocket some money.

The oil price has more than doubled since hitting a low of $33 a barrel in February when the world was in the depths of recession. It is now $76.

Fairfield Energy, a North Sea oil explorer backed by Warburg Pincus, the buyout firm, has hired Hawkpoint, the investment-banking arm of Collins Stewart, to advise it on a listing. Market sources say the float could value the company at as much as $600m (£363m).

Kuwait Energy Corporation, whose operations range from Ukraine to Egypt and Pakistan, has hired JP Morgan Cazenove to lead a London float. Most of its projects are at an early stage and market sources say it could be worth $200m.

Several other companies are working on listing plans. Caithness Petroleum recently launched a fundraising orchestrated by Bank of America Merrill Lynch that valued it at $600m. The firm, which has operations in the North Sea, Morocco and America, is understood to be close to appointing advisers for a float. Going public could mean a big payday for the management and directors, who own 40% of the group.

Exillon Energy, a Siberian oil driller based in Dubai, has also hired Merrill Lynch to co-ordinate a $500m float.

Canamens, a Kazakhstanfocused oil explorer based in London, is understood to have begun sounding out bankers about an offering next year. It is backed by Goldman Sachs and Sector Asset Management, a Norwegian investment firm.