July 28 (Bloomberg) -- MEG Energy Corp., a Canadian oil-sands developer partly owned by China’s Cnooc Ltd., sold C$700 million ($674 million) of shares after slashing the size of its initial public offering by up to 37 percent, according to two people familiar with the sale.
MEG sold 20 million shares for C$35 each, valuing the Calgary-based company at C$6.6 billion after selling a 10.6 percent stake, according to the people, who declined to be identified because the information isn’t public. The amount fell short of initial plans to sell 23 million shares for between C$42 to C$48 each, raising as much as C$1.1 billion.
MEG cut the size and price range of its IPO, joining Canadian companies including C&C Energia Ltd. and Mitel Networks Corp. that were forced to pare back their sales in order to complete their offerings this year. MEG’s sale is the second-largest Canadian IPO this year, after the C$1.35 billion offering by Athabasca Oil Sands Corp. in April.
MEG Energy will trade on the Toronto Stock Exchange under the symbol MEG, with preliminary trading starting tomorrow.
The company, with 2,175 square kilometers (840 square miles) of oil-sand leases, is raising money to fund its project at Christina Lake, which has produced tar-like bitumen since 2008, according to a July filing. MEG has 1.7 billion barrels of proved and probable bitumen reserves as of Dec. 31, according to independent engineering firm GLJ Petroleum Consultants Ltd.
The company plans to expand bitumen production capacity at its Christina Lake and Surmont projects to 260,000 barrels per day by 2020 and produce at that rate for over 30 years, according to the prospectus for the share sale.
Credit Suisse Securities Canada led a group of nine banks including BMO Nesbitt Burns, Barclays Capital Canada and Morgan Stanley Canada for the sale.
To contact the reporter on this story: Doug Alexander in Toronto at firstname.lastname@example.org