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The UAE’s energy major ADNOC has raised $2.5 billion from the listing of its gas business unit in what has become the biggest IPO since the start of the year.
The offering was 50 times oversubscribed, with investors placing orders for $124 billion in total, Bloomberg reported. The issue was fully subscribed just hours after the offering was first announced.
Then, this week, ADNOC had to increase the size of the planned offering by 25 percent due to strong investor interest, suggesting that despite the recent slump in gas prices interest in the industry remained high.
The listing gave the company a market capitalization of some $50 billion, close to the upper end of the price range set by the parent company ahead of the listing.
The Emirati state energy major announced it would be listing its gas business last year before the business was even set up as a separate unit amid soaring gas prices because of the European energy crunch. ADNOC Gas was officially set up as a separate business at the beginning of this year.
The new unit, ADNOC Gas, has a production capacity of some 10 billion cubic feet daily and operates a pipeline network of over 2,000 miles. The new company said it expects to pay its new shareholders a total of $3.25 billion this year.
The shares of the new business entity will be floated on March 13.
Two years ago, just as oil and gas markets began recovering after the pandemic hit they suffered in 2020, ADNOC announced it planned to spend $127 billion in the period between 2022 and 2026.
The money, the company said, would go towards expanding the UAE’s oil and gas production capacity and building a greater presence in low-carbon energy. LNG capacity expansion is among the priorities, with ADNOC eyeing an annual export capacity of 15 million tons.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com