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Topaz Energy Corp. has priced its initial public offering at the bottom of its target range, and its parent company reduced the size of a planned secondary issue of stock amid shaky energy markets.

Topaz, a royalty-collecting and natural-gas infrastructure company, said it will raise $217.5-million from the sale of shares at $13 apiece in Canada’s first energy-related IPO since 2018. It had set the range as high as $15 when it announced the offering three weeks ago.

Meanwhile, Calgary-based natural gas producer and Topaz parent Tourmaline Oil Corp. has elected to sell one million of its shares in Topaz at the same price, to raise $13-million. That is less than half of its initial goal, after the company decided it would hold on to a larger share of Topaz for now rather than sell at the lower price. It will retain a majority interest in Topaz.

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The oil patch and energy-finance industry have been watching closely for the offering after months of severe financial strain in the sector that accompanied the COVID-19 pandemic. Oil prices crashed as global lockdowns took effect, and many producers faced worries about dwindling cash flow and rising debt levels, sparking calls for government support. The S&P/TSX Capped Energy Index is worth less than half of what it was at the start of this year,

Tourmaline and Topaz, however, have been touted as consolidators in the industry, especially against a backdrop of improving natural gas prices.

Topaz is expected to use the proceeds from the IPO 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 Calgary-based Advantage Oil & Gas Ltd

The underwriters, led by Peters & Co. Ltd. and Bank of Nova Scotia, have been given an option to buy an addition 2.5 million Topaz shares at the same price for a period of 30 days. The offering is expected to close on Oct. 26.

Tourmaline shares fell 2.5 per cent on Monday to finish the session at $16.98.

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