IPO Watch: Vintage Energy eyes $30m float ahead of potential gas shortages
IPO Watch
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Gas explorer Vintage Energy thinks now is just the right time to hit investors up to capitalise on a potential east coast gas shortage.
Vintage has set itself an ambitious initial public offering target of $30 million priced at 20c per share. The target listing date is September 17.
If the company raises the full amount, it will have a market value of about $52.8 million on listing.
“The ramp-up of [liquified natural gas] capacity and demand in Australia at substantially higher prices than traditional domestic Australian gas prices caused a structural change in the eastern Australian gas market,” chairman Reg Nelson told prospective investors.
“This is exacerbated by adverse policy by various states’ governments in land access for petroleum exploration.
“The outcome is now a more volatile gas market for the variables of price, demand, supply and contract term.
“With the demand for gas and the recent recovery in oil prices, we believe timing is ripe for reinvigoration of petroleum exploration.”
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ACCC calls for more supply
While conditions in the east coast gas market have eased since the extremes reported last year, a diversity of supply and supportive government policies are needed to further relieve pressure, according to a recent gas inquiry by the Australian Competition and Consumer Commission.
“While gas market conditions have improved, these market conditions can change and the reality is that more gas is required to lower prices to users,” ACCC chair Rod Sims said.
“To improve market conditions, the east coast gas market requires a greater level and diversity of supply, a more efficient transportation network, and greater transparency.
“The ACCC continues to urge state governments to adopt policies that consider and manage risks of individual gas developments rather than implementing blanket moratoria and regulatory restrictions.”
Vintage Energy is acquiring a large landholding in the Galilee Basin in Queensland through a farm-in with Comet Ridge (ASX:COI).
The company is also in a joint venture with Rawson Oil and Gas (ASX:RAW) to drill the Nangwarry gas prospect in South Australia.
Rawson is currently the subject of a friendly takeover bid by Gina Rinehart-backed Lakes Oil (ASX:LKO).
Vintage also has a gas permit in the onshore Bonaparte Basin in the Northern Territory.
