It may not be well known outside Calgary just yet, but Laricina Energy Ltd. is turning into the next big oil sands player as its valuation approaches $3-billion.
Closely held Laricina is planning to sell shares in a private placement at $40 to $45 apiece, raising $250-million to $400-million. At the mid-point of that range, Laricina now has a valuation of about $2.55-billion even before the share sale.
Even though it's still in the pilot project stage the valuation puts Laricina a good way to the valuations of some of the new, well-known publicly traded oil sands companies. Athabasca Oil Sands, for example, has a market capitalization of $7-billion, and MEG Energy has a market cap of $10-billion. It also means that Laricina has almost doubled the valuation that its founders achieved with their last oil sands venture.
Laricina was started by veterans of Deer Creek Energy after that oil sands company was sold in 2005 for $1.6-billion.
The valuation also marks a nice return for Canada Pension Plan Investment Board, which invested $250-million in Laricina in the middle of 2010 for a 17 per cent stake. That valued Laricina at about $1.5-billion. At that point, CPPIB paid $30 apiece for its shares. That means that if Laricina sells shares at the top of the range CPPIB will have booked a 50 per cent return in a year.
BMO Nesbitt Burns and Peters & Co. are leading the latest financing.