Sunday Telegraph: Addax seeks £2.7bn listing in London

EXTRACT: Total, the French oil group, and Occidental Petroleum of the US also submitted bids, but analysts said Shell was widely tipped as the frontrunner. The Anglo-Dutch oil company has been active in the UAE for several decades. The UAE holds the world’s fifth largest gas reserves and wants to develop them to meet soaring demand.

THE ARTICLE

By Sylvia Pfeifer
Last Updated: 12:58am BST 22/04/2007
 
A Swiss-based company with assets in West Africa and Iraq is poised to become the largest independent oil and gas company on the London market.

Addax Petroleum, which is already listed in Toronto, has hired advisers ahead of a dual listing on the main market.

With a market value of £2.7bn, Addax will be larger than Tullow Oil, currently the largest independent, and could be a candidate to enter the blue-chip FTSE100 index at a later stage.

Representatives from Addax are understood to be holding meetings with prospective investors this week with a view to listing as early as next month.

“They’re a proper big exploration and production company,” said one industry source.

“The shares have had a good run in Canada but the audience is different in London and they may get a better valuation here.”

Shares in the company soared to an all-time high of C$39.49 (£17.55) earlier this month. They closed on Friday at C$39.30.

Founded in 1994 by the Addax & Oryx Group, Addax Petroleum has grown through targeted acquisitions of producing assets and exploration acreage in countries such as Nigeria, Cameroon and offshore Gabon.

Unlike many of the oil and gas companies that have taken advantage of the soaring crude prices and listed in London, Addax is profitable and has significant assets and production.

Last year it struck a C$1.6bn (£800m) deal to buy PanOcean Energy, a Calgary-listed oil and gas explorer with assets in West Africa. Two years ago Addax also became one of the first oil companies to set foot in Iraq, buying a stake in one of the largest oil fields in the Kurdistan region of the country.

Analysts said last week that the acquisition spree had paid off; Addax’s annual production rose last year to around 100,000 barrels per day, significantly higher than Tullow’s 80,000 barrels a day.

In a recent note on the company, analysts from First-Energy Capital in Canada said the company estimated that annual production could rise to between 127,000 and 133,000 barrels a day by the end of this year.

• Separately, five of the world’s largest oil majors are competing for a stake in one of the largest gas projects in the Middle East. Both BP and Royal Dutch Shell have submitted bids for the sour gas project in the United Arab Emirates, which could cost an estimated $10bn to develop and produce a massive 3bn cubic feet a day.

Representatives from the companies are expected to meet the government in the coming days to discuss their bids. The contract is expected to be awarded in the final quarter of this year.

Total, the French oil group, and Occidental Petroleum of the US also submitted bids, but analysts said Shell was widely tipped as the frontrunner. The Anglo-Dutch oil company has been active in the UAE for several decades. The UAE holds the world’s fifth largest gas reserves and wants to develop them to meet soaring demand.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/04/22/cnadd22.xml

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