Amid the COP, oil company registers biggest IPO of the year on the London Stock Exchange

The world may be losing the fight against the climate crisis, but investors are still willing to throw money at oil and gas companies.

That’s a lesson from Wednesday’s initial public offering (IPO) of Ithaca Energy, a North Sea oil and gas producer – which came as world leaders gathered for the UN climate summit in Egypt.

The listing of about 10% of the company, the largest in London so far this year. The shares last traded at around 230 pence ($2.62), more than 7% below the IPO price. That was already at the lower end of the range set by the company’s investment bankers, according to Reuters.

However, the fact that Ithaca hits the market is a sign of its appeal at a time when Europe is worried about access to energy supplies, fuel prices are high and turbulent markets have sparked an active search for steady returns. .

Stock market quotes have all but dried up this year as companies have decided to wait for economic conditions to improve and volatility to subside.

“The UK oil and gas sector has seen a good recovery in interest throughout 2022,” said Nathan Piper, industry analyst at Investec bank. The best performing stock so far this year on London’s FTSE 250 index is Energean, which focuses on gas projects in the North Sea and Mediterranean. The company’s shares are up nearly 80% in 2022, while the index is down more than 20%.

The North Sea is an aging basin, and oil and gas giants like Chevron, Exxon and Shell are waning their presence. But smaller players and private equity firms have stepped in, investing billions of dollars in recent years.

Plans to develop new oil and gas projects in the region have proved controversial, however, given the UK’s desire to establish itself as a leader in the fight to reduce global emissions.

Earlier this year, Ithaca – which is majority-owned by Israel’s Delek Group – completed the acquisition of Siccar Point, which aims to develop an oil field in the North Sea.

Activists have been critical of the project, noting that the International Energy Agency (IEA) has warned that development of new oil and gas fields must stop if the world is to limit warming to 1.5 degrees Celsius and avoid the worst effects of the climate crisis. .

Piper said an oil and gas company is one of the few that can do well with a listing on the market right now. The number of IPOs has dropped this year, according to Dealogic data. There have been fewer than 1,250 global listings so far in 2022, compared to over 3,000 in 2021, which was a record year.

But Ithaca’s stock could take a bumpy ride. The UK government is considering extending an unexpected tax on oil and gas profits in a bid to plug a hole in its finances.

“This is going to impact the value of all North Sea oil producers,” Piper said.

*Paul R. La Monica contributed to this story.