Cadogan Petroleum raises USD 272 mln in IPO

Cadogan Petroleum PLC (CAD LN: N/R), an oil & gas exploration and production company with onshore gas and condensate assets in Ukraine, announced yesterday it has raised net GBP 139 mln (USD 272 mln) via an IPO on the London Stock Exchange. The company offered 66,443,479 new ordinary shares (28.8% of the total) at 230 pence (450 cent) per share, which implies MCap of GBP 531 mln (USD 1 bln) at placement. Conditional trading commenced on the London Stock Exchange yesterday. The stock closed at 200 pence per share on the day. Vladimir Nesterenko: We agree a comment from Cadogan’s CEO that yesterday’s placement was “very successful under rather difficult market conditions.” As we said last month (see our news from May 15), the offering didn’t look cheap. The market paid USD 13 per barrel of Cadogan’s 2P reserves, twice higher than it currently values Regal Petroleum (RPT LN: N/R), another London-listed independent E&P company with key assets in Ukraine. However, Regal is already producing – in contrast to Cadogan and other companies with their value still lying largely underground. Currently, such companies are trading at around USD 2-3 per 1 boe of 2P reserves.