Argent Energy Trust is finally a public company.
The firm first had dreams of going public a year ago, but those were dashed when markets soured. Then it came back with an ambitious $325-million deal this past May, but that too had to be reworked.
Argent finally settled on a smaller initial public offering last month, and the tradeoff worked, considering it closed its $212-million offering on Friday.
In scaling back the IPO, Argent had to give up on an asset purchase. The firm originally hoped to acquire both the Denali assets in Texas and Mississippi from Denali Oil & Gas for $178-million, as well as the EQ assets in southern Oklahoma and Texas from EnergyQuest for $148-million. The EQ assets were ultimately scrapped and the Denali assets are now being bought for $167-million.
After re-filing its prospectus in July, Argent was put under the gun to get its deal done because a new clause allowed either party to walk away if the proposed acquisition didn’t close by August 31. That’s no longer a worry.
As a mutual fund trust, Argent will pay out much of its income the way that the old income trusts used to and started trading a pricey yield of 10.5 per cent annually.
Scotia Capital, CIBC World Markets and RBC Dominion Securities co-led the offering.