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Topaz Energy Corp., the spinoff of natural gas producer Tourmaline Oil Corp., aims to raise up to $253-million in an initial public offering and secondary issue of shares that follow months of difficult conditions in Canada’s energy industry.

Topaz, a royalty and energy-infrastructure company, hopes to raise about $218-million in the treasury offering, and Calgary-based Tourmaline plans to sell stock worth $35-million, according to a preliminary prospectus filed late on Thursday.

The range for the share price is set at $13 to $15, with pricing expected in mid- to late October, according to the document, which confirmed an earlier Globe and Mail story.

The underwriting syndicate is being led by Peters & Co. Ltd. and Bank of Nova Scotia. Underwriters are being given overallotment options of up to another 15 per cent of the shares being issued. The shares will trade on the Toronto Stock Exchange.

If successful, the Topaz deal would be the first sizable IPO in Canada’s energy sector in two years. The oil patch and energy-finance industry have been watching closely for the offering after months of severe strain in the sector that accompanied the COVID-19 pandemic. Oil prices crashed amid global lockdowns, and many oil and gas producers faced concerns about falling cash flow and rising debt levels, sparking calls for government support.

Tourmaline and Topaz, however, have been seen as consolidators in the industry, especially amid improvement natural gas prices. Tourmaline chief executive Mike Rose has described prospects for buying up additional natural gas properties in the British Columbia Montney and Alberta Deep Basin regions as “a generational opportunity.”

Indeed, Topaz is expected to use the proceeds from the deal to acquire more royalty interests and stakes in natural-gas processing and other facilities. It recently increased its holdings by paying $100-million for a minority stake in a gas plant owned by Advantage Oil & Gas.

Tourmaline currently has a 64-per-cent interest in Topaz, which it spun off late last year. It would retain a majority interest after the offering. Its shares rose 2 per cent to $17.13, after The Globe reported that the Topaz IPO was expected as early as Thursday. Tourmaline is up 11 per cent year to date, vastly outpacing the S&P/TSX energy group, which is down by more than half.

Officials from Tourmaline, Peters & Co. and Bank of Nova Scotia did not respond to requests for comment.

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