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Vista Oil & Gas, a private company backed by Riverstone Capital, will launch its initial public offering on August 11, becoming the first public oil company in Mexico, four years after the start of reforms that removed the monopoly status of state-owned Pemex, according to sources close to the company who spoke to Reuters.
Vista Oil & Gas will be a special purpose acquisition company, it says on its website. This type of company raises funds and uses them for mergers and acquisitions to generate revenues and profits. In its IPO, Vista plans to place 50 million Series A units with a value of US$10 per unit, eyeing at least US$500 million in proceeds.
The unit placement will be private, targeting U.S. institutional investors and non-U.S. institutional and retail investors, the company also said. A road show for the IPO started this Monday in New York and will continue for two weeks in Toronto, London, and Boston.
The company says its acquisition priorities geographically center on Latin America, more specifically Mexico, Argentina, Brazil, and Colombia. There are high-quality acquisition targets in these four countries, Vista notes, and the regulatory frameworks in recent years have shifted toward a more investor-friendly direction, enhancing the appeal of these targets.
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Indeed, the last few years have seen some major changes in oil and gas regulation not just in Mexico, but also in Brazil and Argentina, for example, aimed at attracting more investors in local oil and gas. Argentina has been particularly eager to see more foreign investment in its hydrocarbons industry, amending laws and reducing royalties and taxes in a bid to stimulate the development of its oil and gas reserves.
Brazil, too, has changed the rules to motivate foreign companies to invest in its oil and gas. Most recently, the government relieved Petrobras, the state major, of hits obligation to be the operator of all new projects offshore. In the past, the company was bound by law to be the operator of all fields to ensure the government’s interests—now it is no longer under such obligation, and foreign operators are welcome.
By Irina Slav for Oilprice.com
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Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.