Riverstone Energy investment firm plans stock market debut

By Sarah Young

LONDON, Sept 24 (Reuters) - Energy-focused private equity firm Riverstone Holdings (SES: AP4.SI - news) is to list a new energy vehicle on the London Stock Exchange (LSE: LSE.L - news) in an initial public offering that could raise up to 1.5 billion pounds ($2.4 billion).

The new company, Riverstone Energy Limited (REL), said on Tuesday it had already secured 550 million pounds worth of commitments. It plans to invest in energy companies and assets worldwide, focusing on exploration and production of oil and gas, and their storage and transportation.

It has a heavyweight board, counting the former chairman of FTSE 100 (FTSE: ^FTSE - news) oil and gas firm BG Robert Wilson as its chairman, and former BP Chief Executive John Browne as a director.

Wilson said REL would seek to raise up to 1.5 billion pounds from other institutional investors before the shares are admitted to London's main market on Oct (KOSDAQ: 039200.KQ - news) . 29.

The minimum size of the share sale would be 670 million pounds, he added.

REL said U.S.-headquartered Riverstone (SES: E1:AP4.SI - news) would act as its investment manager and the two would co-invest on deals.

Europe has seen a pick-up in initial public offerings (IPOs) this year as market confidence has improved, with London a big driver of activity. As of Sept. 19, IPOs by British companies had raised $3.9 bln in 2013, a 201 percent increase on the same period in 2012.

Should it beat its minimum target size, REL could enter the FTSE 250 (FTSE: ^FTMC - news) index of Britain's midcap companies, Wilson said.

The 550 million pounds already committed is comprised of 50 million pounds from Riverstone as well as 500 million pounds from five so-called cornerstone investors.

Those five investors are a unit of the Alaska Permanent Fund Corporation; Texas-based Hunt Oil Company; KFI, a private investment vehicle of Louis Bacon, founder of Moore Capital Management; Casita LP; and the McNair Group.

REL said the 550 million pounds bought 55 million shares at 10 pounds a share. The number of shares issued in total and the price would be determined by demand, a spokesman said.

Riverstone has featured in the British press in recent months because it is a part-owner of Cuadrilla, a company whose exploration for shale gas in southern England has been the subject of protests.

REL will aim to invest primarily in privately-owned companies and also assets, said Wilson, highlighting the numerous recent disposals by oil majors such as BP (LSE: BP.L - news) and Total as potential opportunities.

"Some of those assets which may be relatively marginal to a super major, can actually be good opportunities for businesses like a Riverstone and REL," he said.

Riverstone, for example, bought U.S. oil firm Apache (NYSE: APA - news) 's Gulf of Mexico shelf assets for $3.75 billion in July.

Goldman Sachs (NYSE: GS-PB - news) , JP Morgan Cazenove, Deutsche Bank (LSE: 0H7D.L - news) , Morgan Stanley are acting as joint bookrunners while Berenberg and Tudor, Pickering, Holt & Co were co-lead managers.