PTT Exploration & Production Pcl, Thailand’s biggest publicly traded oil and gas explorer, will raise about $3 billion in the nation’s biggest equity offering.
PTT Exploration will sell shares at 142 baht ($4.62) apiece, near the high end of a marketed range of 135 baht to 145 baht, it said today in a statement. That’s a discount of 7.8 percent to the closing price of PTTEP’s shares yesterday.
The share sale comes as state-owned oil and gas companies in Asia try to secure more reserves. PTTEP is seeking funds to help finance its 1.2 billion pound ($1.9 billion) acquisition of Cove Energy Pcl after beating Royal Dutch Shell Plc in the contest for control of the East Africa-focused explorer.
“The equity raising will enable PTTEP to strengthen its capital structure and allow the company to achieve its growth plans,” Chief Executive Officer Tevin Vongvanich said today in a statement on the company’s website. He said the sale would “help ensure Thailand’s energy security.”
Cnooc Ltd., China’s largest offshore oil and gas explorer, agreed in July to buy Calgary-based Nexen Inc. in a deal that’s awaiting Canadian approval. Petroliam Nasional Bhd., the Malaysian producer known as Petronas, offered in June to acquire Progress Energy Resources Corp. While that agreement was rejected by Canada, Petronas was allowed to appeal.
PTTEP will sell 650 million shares at a ratio of one existing share to 0.195783 new shares from Dec. 3 to Dec. 5, according to its statement. PTT Pcl, which owns 65 percent of PTTEP, will subscribe to its full entitlement of shares, according to a term sheet obtained by Bloomberg News.
Shares of PTTEP rose the most in a month in Bangkok trading, gaining 3.3 percent to 159 baht. The stock has fallen 5.6 percent this year, compared with a 2.4 percent decline for the 18-member Bloomberg Asia Pacific Oil and Gas Index.
“Prolonged capital raising and concerns over benefits from the Cove acquisition have put pressure on the price,” Kavee Chukitkasem, an investment strategist at Kasikorn Securities Co., said today by phone. “After the capital is raised and concerns ease, prices should climb.” Kasikorn has a 12-month price target of 165 baht on PTTEP shares, Kavee said.
The stock sale will help PTTEP meet a target to increase daily production of oil and natural gas to 900,000 barrels of oil equivalent by 2020, Tevin said in July. PTTEP plans to spend about $20 billion by 2016 to raise output.
The sale will be Thailand’s biggest ever equity offering, topping Siam Commercial Bank Pcl’s 65 billion baht share sale in 1999, according to data compiled by Bloomberg.
PTTEP has oil and gas projects in countries including Canada, Australia, Myanmar, Indonesia, Vietnam and Oman.