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Kosmos Energy IPO Expects To Raise $621 Mln

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4/15/2011 12:06 AM ET

Privately-held oil exploration and production company Kosmos Energy Ltd. (KOS: Quote) revealed in a regulatory filing on Thursday that it intends to sell about 30 million common shares in a initial public offering to raise about $621 million. The Hamilton, Bermuda-based company has applied for the common shares to be listed on the New York Stock Exchange under the symbol "KOS."

Kosmos has granted to the underwriters a 30-day option to purchase up to 4.5 million additional common shares at the offering price to cover over-allotments, if any. Following the closing of the IPO, the company expects to have 371.18 million issued and outstanding common shares.

The company currently estimates the net proceeds from the IPO to be about $477.7 million after deducting estimated offering expenses as well as underwriting discounts and commissions at an assumed initial public offering price of $17.00 per common share. If the over-allotment option is exercised in full, net proceeds are estimated to be about $550.2 million.

Kosmos intends to use the net proceeds from the offering to fund capital expenditures, particularly for exploration and appraisal drilling program and development activities through early 2013 and associated operating expenses, the payment of $15.0 million to Ghana National Petroleum Corp. or GNPC upon successful completion of the offering, and for general corporate purposes.

Kosmos Energy filed its initial registration statement on Form S-1 with the U.S. Securities and Exchange Commission relating to the proposed initial public offering of its common shares on January 14, 2011.

Credit Suisse and Citi will act as global coordinators and, along with Barclays Capital, as joint book-running managers of the offering.

Meanwhile, the company added that it intends to apply to list its common shares on the Ghana Stock Exchange shortly after the closing of the U.S. offering, although there can be no assurance that the listing will be completed in a timely manner, or at all.

Kosmos Energy, founded in 2003, is an international oil exploration and production company backed by private equity firms Warburg Pincus LLC and the Blackstone Group L.P. (BX: Quote), with a focus on exploring and developing oil and gas reserves in West Africa's Gulf of Guinea.

Kosmos is the operator of Ghana's large Jubilee oil field. Kosmos, together with its partners U.K.-listed Tullow Oil plc (TLW.L) and U.S.-based Anadarko Petroleum Corp. (APC) discovered Jubilee in 2007.

There were reports in September 2010 that the private-equity firms were considering taking the oil company public after the company's $4 billion deal to sell its 23.5 percent stake in the Jubilee oil field and other Ghana assets to ExxonMobil Corp. (XOM: Quote) collapsed in August due to opposition from Ghana due to the huge profit that Kosmos stood to make.

The public listing of Kosmos is expected to help the company's private equity owners avoid interference from Ghana, as it would not amount to a change of control. It could also be a negotiating tactic to push up the price of an expected bid for the company by Ghana National Petroleum Corp.

Blackstone and Warburg Pincus are keen to cash in on some of their stake in Kosmos, as they have invested $800 million into the venture. An IPO would give them a route to raise more capital for Kosmos as it seeks to develop the Jubilee field and continues its exploration activities.

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by RTT Staff Writer

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