2nd UPDATE: Dart Energy Defers International Asset IPO
May 29 2012 - 1:55AM
Dow Jones News
Coal seam gas producer Dart Energy Ltd. (DTE.AU) said Tuesday it
has deferred listing its international assets on the Singapore
Stock Exchange due to weak equities markets and a steep fall in its
share price.
It joins an expanding group of companies that have canned
impending initial public offerings amid a global share market
downturn sparked by Europe's sovereign debt woes. Coal miner Ambre
Energy this month delayed a listing on the Australian Securities
Exchange beyond June and China Yongda Automobiles, which sells BMWs
and Toyotas in China, on Monday scrapped an up to US$433 million
float.
"Doing a listing at this price in this market would have been
more or less giving the assets away," Eytan Uliel, Dart's Chief
Commercial Officer told Dow Jones Newswires.
Shares in the company were up half a cent at 20.5 cents each at
0409 GMT. They listed in 2010 at 72 cents and peaked above A$1.30
in October of that year.
"We think this is a sensible move given the general de-rating of
the global energy sector, although the process had taken longer
than expected," Deutsche Bank analyst John Hirjee said, while
keeping a buy recommendation on the shares.
Apart from owning properties in China, India and Indonesia, Dart
has been picking up unconventional acreage including shale gas
prospects in the United Kingdom, Germany and Poland.
A listing in Singapore remains an option when markets recover,
but Dart's swelling European portfolio means it could chose to list
in London instead, Mr. Uliel said.
The company will also consider alternative corporate level
transactions, and Eytan confirmed it's in contact with potential
investors in individual assets.
Dart hasn't started producing gas commercially from any of its
properties. The company has A$70 million in cash and liquid assets
and is in the process of finalizing a US$100 million debt facility
arranged by HSBC that will go towards funding projects in Scotland,
China and Indonesia.
Small amounts of revenue are planned to start flowing from pilot
wells drilled in Scotland towards the end of the year. Dart has
signed a more substantial sales contract with a Scottish utility,
which Mr. Uliel said is the company's first "big project".
"My estimate is that we will be able to start delivering large
volumes of gas to them in the second half of next year," Mr. Uliel
said.
U.K. utilities are keen to find new sources of energy, given a
current reliance on offshore supplies from Russia and Norway.
Dart was created in 2010 when Arrow Energy's offshore assets
were spun out into a different company when Arrow was acquired by
Royal Dutch Shell and PetroChina. It still owns some Australian
assets, largely in New South Wales state.
-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692;
Ross.Kelly@dowjones.com
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