Energy-industry stock offerings have picked up this year along with merger and acquisition activity as investors have rediscovered the sector following a weak 2013.RICHARD PERRY/The New York Times
Capital keeps flowing into the oil patch, with two more companies notching sizable equity financings on Tuesday.
Energy-industry stock offerings have picked up this year along with merger and acquisition activity as investors have rediscovered the sector following a weak 2013. The rebound has accompanied strong prices for both Western Canadian heavy crude and natural gas, which spell increases in cash flow. The largest deal on Tuesday, however, was by a company with operations in Colombia and Ecuador – Canacol Energy Ltd.
Canacol sold 15.8 million shares at $7.90 apiece in a bought deal to raise $125-million. The syndicate was led by Canaccord Genuity. Proceeds will be used to expand the company's capital spending budget.
One finance-industry source said the offering proved popular with retail investors.
In a separate deal, Petrus Resources Ltd., a private concern in a stable of companies led by former Peyto Energy Trust chief Don Gray, raised $40-million in a private placement.
Petrus offered 7.7 million shares at $3.25 each for a total of $25-million. RBC Dominion Securities was bookrunner for the offering. GMP Securities LP was co-lead agent. At the same time, it issued another 4.5 million shares at the same price to company insiders.
Petrus produces oil and gas in the Peace River and Foothills areas of Alberta. The proceeds will be used to fund capital spending, and also for general corporate purposes.
Jeffrey Jones