Ophir Energy, the African explorer backed by Lakshmi Mittal, one of Britain’s richest men, is set to tap into the demand for energy stocks by announcing on Thursday its intention to float on the London market.
The flotation is expected to value Ophir at more than $1bn (£607m), making it one of the largest exploration IPOs in London.
If the flotation is successful, the company would become one of the main independent players on the London market, smaller than Premier Oil but bigger than Salamander Energy.
Ophir hopes to raise up to $400m through the sale of new shares to fund further exploration.
It has some high-profile backers, including Mittal Group, which owns 21 per cent. Poland’s wealthiest man, Jan Kulczyk, is another backer with 13 per cent while Och-Ziff, the asset manager, holds 13 per cent.
Other investors include Mvelaphanda Holdings, the South African company founded by former freedom fighter and South African politician Tokyo Sexwale, with a 3.8 per cent share.
None of the existing shareholders is selling into the initial public offering.
The company recently recruited Nick Cooper, previously chief financial officer at Salamander Energy, as chief executive.
Set up in 2004, Ophir has notched up a string of exploration successes, with five discoveries from eight wells drilled as operator since 2008.
Two were gas discoveries in Equatorial Guinea and three were gas discoveries in Tanzania.
The current portfolio comprises 17 assets in eight jurisdictions in Africa. It is the fifth largest holder of deepwater acreage in Africa The company has approximately 90,000 sq km of net exploration acreage.
The company plans to undertake an extensive exploration programme and appraisal drilling following the listing, with plans to drill 11 wells in four countries over the next 18 months.
The company acts as operator on most of its projects and usually holds a high level of equity as a way of being able to control the timing and scale of any expenditure.
The flotation comes at a time of strong demand for energy stocks. Kosmos Energy, an explorer and a producer, recently floated on the New York Stock Exchange and raised more than expected.
Ophir is being advised by Credit Suisse as sponsor, global coordinator and joint bookrunner and lead manager, with JPMorgan Cazenove as joint bookrunner and lead manager.
RBC Capital Markets is also joint bookrunner, with Oriel Securities and Standard Bank as syndicate members.
Lexicon Partners is the financial adviser to the company.