Ithaca energy shares dip on london debut

The shares opened 2% below the 250 pence per share issue price and briefly fell by as much as 4% to a low of 240.05 pence, before recovering to 248 pence, down 0.8%

Ithaca Energy shares dipped on their London debut on Wednesday after the North Sea oil and gas producer defied volatile markets to deliver Britain's largest initial public offering (IPO) this year, and Europe's fifth biggest.

The shares opened 2% below the 250 pence per share issue price and briefly fell by as much as 4% to a low of 240.05 pence, before recovering to 248 pence, down 0.8%. At the same time, the pan-European STOXX 600 was down 0.4% and an index of European oil and gas stocks was down 0.9%.

The IPO, which priced at the bottom of the expected price range, gave an initial valuation of 2.45 billion pounds ($2.83 billion) for the company. The top of the original price range would have valued it at 3.1 billion pounds.

Ithaca raised proceeds of 288 million pounds amid a drought of stock market listings this year, with global IPO proceeds down more than 70% compared with the same time last year, according to Dealogic data.

Ithaca has IPO'd into a difficult broader market backdrop and the near term weakness probably underlines that, said Investec analyst Nathan Piper.

Proceeds from UK shares sales have dropped 95% so far this year and only two out of 38 listings in Britain have been in the utility and energy sector, amounting to a mere $5 million from an overall $910 million raised in the region year to date, according to Dealogic data.

So far in 2022, global utility and energy IPOs valued at more than $100 million saw an average 19.9% return after one day, compared with negative returns for European utility and energy IPOs and UK IPOs across all sectors, according to Dealogic data.

Ithaca, owned by Tel Aviv-listed Delek Group, is being watched for indications of investor interest in energy producers in the North Sea, an ageing basin where private equity firms have in recent years bought assets, but have held off IPOs.

Ithaca, which produces around 70,000 barrels of oil equivalent per day, wants to use the IPO proceeds to pay down debt, which stood at a net $1.4 billion at the end of June.