Market sentiment fails to halt IPB listing

Ayesha De Kretser, 17 April 2013

The sky looks decidedly more grey than blue in mining towns at the moment but that hasn’t deterred IPB Petroleum from its plans to wrap up a listing by Friday.

IPB is looking to raise a minimum of $2.5 million at 50¢ a share through its float on the Australian Securities Exchange, with the listed portion representing roughly 5 per cent of the company.

Getting the leg work done on the listing early will help the hitherto privately held Browse Basin-focused oil explorer mobilise quickly in the event of exploration success.

Managing director Brendan Brown reckons Woodside’s decision to shelve its onshore liquefied natural gas processing plans for Browse have had zero impact on IPB, which is focused solely on conventional oil rather than gas and only ever envisaged offshore processing.

It’s understood that IPB expects to be oversubscribed and raise $2.7 million to $2.9 million. The company is valued at roughly $50 million or 10¢ a barrel using the independent expert’s resource calculations.

Brown is equally undeterred by the disastrous sentiment being felt in equity markets and says the partial listing is a good option – for now.

IPB might look to sell more of the company down the line or sell assets but says it is well funded through a farm-in arrangement with CalEnergy, which will earn a 25 per cent interest by funding the first exploration well at Pryderi.

CalEnergy is 100 per cent owned by MidAmerican, which is in turn 89 per cent owned by the oracle of Omaha’s Berkshire Hathaway. CalEnergy holds a handful of other Australian projects at various stages but is believed to be a longer term investor in IPB.