Northern Blizzard launches $500 mln IPO, secondary offering

Northern Blizzard Resources Inc, a portfolio company of U.S. private equity firms NGP Energy Capital Management and Riverstone Holdings, has confirmed earlier reports of a planned initial public offering (IPO).

On SEDAR, the company has filed an IPO of 18.4 million common shares and a secondary offering of 7.9 million common shares. At $19 per offered share, gross proceeds will total approximately $500 million.

The secondary offering, which will account for around $150 million of gross proceeds, is being made by selling shareholders NGP and Riverstone.

Based in Calgary, Northern Blizzard is a crude oil production and development company focused on maximizing oil recovery from its large-scale, low viscosity heavy oil resource base. The company’s operations, infrastructure and land position are focused in the Kerrobert and Lloydminster areas of Saskatchewan.

A major share of Northern Blizzard’s assets were acquired from the Western Canadian heavy oil portfolio of Nexen Inc in 2010. That deal, which was backed heavily with equity from NGP and Riverstone, is valued by the company at just more than $944 million.

Northern Blizzard said it intends to use a large part of its net proceeds from the IPO to redeem a portion of its senior unsecured notes and reduce debt. Freed up borrowing capacity will then be applied to its capital expenditure program and for general corporate purposes.

Upon the closing of the IPO and secondary offering, NGP and Riverstone will maintain significant investment stakes in the company. NGP is expected to hold 38.6 percent of Northern Blizzard’s total common shares, while Riverstone is expected to hold 26.2 percent.

Northern Blizzard will list on the Toronto Stock Exchange under the symbol “NBZ.”

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