Eclipse Resources Corp., which explores for oil and natural gas in the Appalachian Basin, dropped in its trading debut after raising $818 million in a U.S. initial public offering.
The shares fell 4.6 percent to $25.75 today after the IPO was priced at $27. Eclipse and its owners sold 30.3 million shares at that price, after offering them at $27 to $30.
At $27 a share, Eclipse has a market value of $4.32 billion, according to the terms of its original filing. The company, which is backed by the private-equity firm EnCap Investments LP, will use the money it raised to pay off some of its debt and fund capital expenditures.
It joins a growing list of publicly traded operators drilling in the natural gas-rich Utica Shale, including Chesapeake Energy Corp., Antero Resources Corp. and Hess Corp., according to data compiled by Bloomberg. Eclipse, which is unprofitable, jointly owns and operates properties with Antero, according to its filings.
Antero, which raised $1.8 billion in an IPO last year, is up nearly 50 percent since its October debut. The 17-company S&P 500 Oil & Gas Exploration and Production Index has risen about 32 percent in the past year.
Eclipse plans to spend more than $577 million on drilling and another $116 million on leasing and land, it said in the IPO prospectus. The State College, Pennsylvania-based company owns more than 96,000 acres in the Utica Shale, an oil field that stretches from Tennessee to Canada.
The three-year-old company centralized its operations in Eastern Ohio because it believes that area is the “most prolific and economic area of the Utica Shale fairway,” Eclipse said in a regulatory filing. Ahead of the IPO, Eclipse was among the most active privately-held operators in the Utica Shale, according to data compiled by Bloomberg based on permits supplied by the Department of Natural Resources in Ohio.
Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley managed the IPO. The shares are listed on the New York Stock Exchange under the symbol ECR.