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Sloppy markets typically don't lead to hot initial public offerings. Therefore, it should warm the hearts of those at Dallas- and Bermuda-based Kosmos Energy (NYSE: KOS ) that, amid a less-than-buoyant market and with crude prices off by more than 5% on Wednesday, the newly public oil and gas company was the only IPO to finish the day in positive territory.
The company ultimately offered 33 million shares at $18 per share -- the top of a proposed $16-$18 range, thereby generating $594 million in gross proceeds. The 4.95 million shares set aside to cover overallotments brought the total to $683 million. The shares closed at $18.24 on Wednesday.
Kosmos has been backed by private equity firms Warburg Pincus and Blackstone Group (NYSE: BX ) . Its primary claim to fame thus far is its approximately 23.5% stake in the Jubilee oil field off the coast of Ghana. The field began producing about 55,000 barrels a day in November, following its discovery in 2007, the year Kosmos purchased exploration licenses in the area.
Jubilee is believed to hold about 1.6 billion barrels of light crude, and should reach its production capacity of about 120,000 barrels per day within a matter of months. Kosmos is a member of a group with interests in Jubilee that is headed by London's Tullow Oil, which has a 34.7% interest and serves as operator, along with Anadarko Petroleum's (NYSE: APC ) 23.5%, and the 13.8% held by Ghana National Petroleum (GNPC).
Kosmos nearly didn't make it to the IPO stage, at least with its Jubilee stake still in its little red wagon. About 18 months ago, the company agreed to sell its interest in Jubilee to ExxonMobil (NYSE: XOM ) for $4 billion. The deal was soon nixed by the country's government, however, which maintained that it hadn't been kept abreast of the companies' negotiations. The government then lined up a $5 billion competing bid by China's CNOOC (NYSE: CEO ) and CNPC. That deal also fell short of the altar when Kosmos' management and backers had second thoughts about selling.
Today, the allure of Kosmos results largely from Jubliee's potential position at the eastern extremity of a possibly 700-mile-long structure that may extend as far west as Sierra Leone, where a group that includes Anadarko and Spain's Repsol (NYSE: REP ) came upon a big discovery in 2009.
At the same time, the company, which was founded in 2003 by CEO Brian Maxted, among others, has claim to a number of deepwater assets offshore from Ghana. All in all, it's zeroing in on 18 prospects off Ghana, 10 off Cameroon, and 19 sites offshore Morocco.
Newly minted, public oil and gas companies aren't a dime a dozen these days. On that basis, and given the opportunity to track its concentrated assets, I'd recommend that Fools watch the company's blips on your radar screens. Better yet, add it to MyWatchlist, our free, personalized stock tracking service.
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