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Oman’s OQ Exploration and Production (OQEP) intends to proceed with an initial public offering (IPO) and to list its ordinary shares on the Muscat Stock Exchange (MSX).
The listing is expected to take place in October, with the subscription period commencing in September 2024, on receipt of required approval from the Financial Services Authority (FSA) of Oman.
OQ SAOC intends to offer up to 25% of the shares in OQEP, with the company retaining the right to amend the size of the offering at any time before the end of the subscription period.
The offering will be in two tranches to eligible investors in Oman and qualified institutional and other investors in several countries, the Category I Investors, representing 60% of the total offering.
Category II or the Retail Tranche will represent 40% of the total offering for retail investors in Oman.
The company said it has adopted a quarterly dividend distribution policy to pay dividends after the offering and expects to pay an annualised dividend payment of approximately OMR 230.7 million ($600 million).
HSBC, Natixis, OIB and Sohar International have been appointed as joint global coordinators. Sohar International has been appointed as the issue manager.
Speaking about the IPO, OQEP Chief Executive Officer, Ahmed Al-Azkawi, said: “Our strategic goals, aligned with Oman’s Vision 2040, focus on monetising the country’s hydrocarbon resources while supporting the energy transition. Additionally, stimulating the local economy is central to our sustainability initiatives, which includes developing local talent and supporting our CSI projects to increase our contributions to In-Country Value.”
Plans to invest in Oman
In a media call following the announcement, Al-Azkawi didn’t commit to how much capital the company hoped to raise from the IPO, but revealed its plans to grow and invest further within Oman in the short-term.
“I would say that the company has the capability and the potential of growing outside Oman, yet in the immediate term, we see more opportunities within the country, given the attractiveness of the petroleum agreements and the attractiveness of the investment profile in Oman, the stability, the local knowledge, and the fact that we have been very successful in attracting more investments within Oman,” he said.
When asked about potential regions earmarked for future expansion, Al-Azkawi told Zawya: “It’s very difficult to answer that now, because the decision on which region we end up investing in would truly depend on the dynamics, the geopolitics of that region, the technical challenges involved, and so on that will dictate at that given time.”
OQEP’s investment in Oman has contributed to approximately 14% of the sultanate’s total oil, condensate and gas production in 2023 and represent approximately 40% of OQ Group’s adjusted EBITDA in 2023.
As of 30 June 2024, the company had a net external debt of minus $329 million. Since June 2024, the company also entered into two long-term financing facilities for a total of $1 billion comprising a $500 million conventional bridge facility for a two-year term at US Dollar Term SOFR plus a fixed margin (85bps) and a $500 million Islamic financing facility for a seven-year term structured as a wakala bil-istithmar, paying a variable return set by reference to US Dollar Term SOFR plus a fixed margin (125bps).
(Reporting by Bindu Rai, editing by Brinda Darasha)