OQ's Exploration and Production subsidiary raises $2 billion in Oman’s largest IPO

The company’s shares are expected to start trading on the Muscat Stock Exchange on October 28

The Gulf region has hosted several large IPOs in the past few years, with its capital markets benefiting from high energy prices and business-friendly regulations. Photo: Syed Basheer Ahmed

OQ Exploration and Production (OQEP), a subsidiary of Oman’s state-run energy company OQ, has raised 780 million Omani rials ($2.02 billion) through its initial public offering, making it the sultanate's biggest IPO.

The company has set the final price at 390 baisas per share, OQ said in a statement on Thursday, which is at the top of the indicated range, for its public float on the Muscat Stock Exchange.

The parent company offered roughly two billion ordinary shares in OQEP, or 25 per cent of its total share capital, implying a market valuation on listing of 3.12 billion rials. OQ will continue to own the remaining 75 per cent of the company’s share capital following IPO completion.

The share sale, which ran from September 30 to October 10, attracted “strong demand” from local, regional and institutional investors, including “irrevocable” commitments from six high-profile anchor investors to subscribe for a total of 20 per cent of the offering, OQ said.

“We are pleased that investors have recognised our exceptional track record in value creation, operational excellence and financial performance and we look forward to the next phase of growth as a publicly traded company,” said Ahmed Al Azkawi, chief executive of OQEP.

“The broad support received from both institutional and retail investors … is a testament to our business model, the high quality of our portfolio and our ambitious growth strategy.”

President Sheikh Mohamed bids farewell to Sultan Haitham of Oman, at the Presidential Airport in Abu Dhabi. All photos: UAE Presidential Court

President Sheikh Mohamed bids farewell to Sultan Haitham of Oman, at the Presidential Airport in Abu Dhabi

Sheikh Saif bin Zayed, Deputy Prime Minister and Minister of Interior, and Sheikh Nahyan Bin Zayed, Chairman of the Board of Trustees of Zayed bin Sultan Al Nahyan Charitable and Humanitarian Foundation, bid farewell to Sultan Haitham

Sheikh Saif bin Zayed, Deputy Prime Minister and Minister of Interior, and Sheikh Nahyan Bin Zayed, Chairman of the Board of Trustees of Zayed bin Sultan Al Nahyan Charitable and Humanitarian Foundation, await the departure of Sultan Haitham (not shown), at the Presidential Airport

Sheikh Hamed bin Zayed bids farewell to Sultan Haitham

Sheikh Saif bin Zayed, Deputy Prime Minister and Minister of Interior, Sheikh Nahyan Bin Zayed, Chairman of the Board of Trustees of Zayed bin Sultan Al Nahyan Charitable and Humanitarian Foundation, and Sheikh Hamed bin Zayed, bid farewell to Sultan Haitham

Members of the Omani Delegation await the departure of Sultan Haitham at the Presidential Airport

President Sheikh Mohamed and Sultan Haitham witnessed the signing of agreements aimed at further strengthening relations between the Gulf neighbours

Sheikh Mansour bin Zayed, Vice President, Deputy Prime Minister and Chairman of the Presidential Court, and Sultan Haitham, pray at the tomb of UAE Founding Father, the late Sheikh Zayed bin Sultan Al Nahyan, at the Sheikh Zayed Grand Mosque

Sultan Haitham and Sheikh Mansour at the Sheikh Zayed Grand Mosque

Sultan Haitham signs a guest book during a visit the Sheikh Zayed Grand Mosque

Oma's Foreign Minister Sayyid Badr bin Hamad and Commerce Minister Qais Al Yousef at the Sheikh Zayed Grand Mosque

Sultan Haitham visit to the UAE was aimed at promoting relations on a range of issues

Sultan Haitham and Sheikh Mansour at the Sheikh Zayed Grand Mosque

President Sheikh Mohamed hosts a dinner reception for Sultan Haitham at Qasr Al Watan

Sheikh Mansour with Sayyid Shihab Al Said, Oman's Deputy Prime Minister for Defence Affairs, at the dinner reception

Sheikh Saif bin Zayed, Deputy Prime Minister and Minister of Interior, Sheikh Khaled bin Mohamed, Crown Prince of Abu Dhabi, and Sheikh Suroor bin Mohamed attend the dinner reception

Sheikh Saif at the dinner reception for Sultan Haitham

Sheikh Khaled in discussion with Oman's Sayyid Bilarab bin Haitham

Musicians perform during the dinner reception

Sheikh Suroor bin Mohamed and Sayyid Khalid bin Hilal Al Busaidi, Minister of Diwan of the Royal Court of Oman

President Sheikh Mohamed arrives for a dinner reception for Sultan Haitham of Oman

President Sheikh Mohamed and Sultan Haitham

President Sheikh Mohamed receives Sultan Haitham of Oman for a state visit

Sheikh Mansour and Sheikh Tahnoun bin Zayed, National Security Adviser and Deputy Ruler of Abu Dhabi, at the reception for Sultan Haitham

Sheikh Mohammed bin Hamad, Adviser for Special Affairs at the Presidential Court, and Mohammed Al Dhaheri, UAE ambassador to Oman, attend the reception at the Presidential Airport

Sheikh Saif and Sheikh Hamdan bin Mohamed attend the reception for Sultan Haitham at the Presidential Airport

Mohammed Al Dhaheri, UAE ambassador to Oman, attends the reception at the Presidential Airport

President Sheikh Mohamed and Sultan Haitham stand for the national anthems during a state visit reception at Qasr Al Watan in Abu Dhabi

Sheikh Mohamed hosts a state visit reception for Sultan Haitham at Qasr Al Watan

Sheikh Mohamed escorts Sultan Haitham to the state reception at Qasr Al Watan

The company’s shares are expected to commence trading on the MSX on or around October 28, under the symbol “OQEP”. OQEP’s portfolio comprises 14 upstream oil and gas exploration and production assets in Oman and includes onshore and offshore operations as well as assets under service contracts.

The company reported an adjusted revenue of 1.09 billion rials last year, compared with 1.27 billion rials in 2022. OQEP’s adjusted profit fell marginally to about 611 million rials last year. OQEP’s revenue for the first six months of this year was about 428 million rials, down 23 per cent from the same period last year.

The Gulf region has hosted several large IPOs in the past few years, with its capital markets benefiting from high energy prices and business-friendly regulations.

On Wednesday, ADNH Catering, a unit of Abu Dhabi National Hotels, raised Dh864 million ($235 million) through its initial public offering, pricing its shares at the top of the indicated range.

It followed the listing of NMDC Energy, a unit of Abu Dhabi contractor National Marine Dredging Company, which began trading on the Abu Dhabi Securities Exchange in September after closing the biggest IPO in the Emirates this year.

In April, Saudi Arabia's low-cost airline Flynas confirmed plans to list its shares on the Tadawul stock exchange this year, amid the kingdom's ambitions to grow its aviation sector.

IPO activity in the Mena region remained strong in the second quarter of this year, with 14 IPOs raising $2.64 billion. There were 13 IPOs in the same period last year, with proceeds rising by 45.3 per cent on a year-on-year basis, according to EY.

Oman has enacted reforms to boost and diversify its economy, reducing its reliance on the energy sector, most notably on oil and hydrocarbons. The Gulf state launched a three-year fiscal stability programme in October 2022 to add momentum to its economic recovery from the pandemic-driven slowdown and support the development of its financial sector.

The OQEP IPO follows the listing of OQ’s pipeline business – OQ Gas Networks – in October last year, which raised 288 million rials and was the sultanate's biggest IPO at the time. OQGN offered nearly 2.1 billion ordinary shares, representing 49 per cent of issued share capital. OQ owns a 51 per cent stake in OQGN.