Seven Generations Energy edges closer to IPO launch: report

Seven Generations Energy, a Canadian energy company focused on resource plays in North America, has hired the Royal Bank of Canada (RBC) and investment dealer Peters & Co to help arrange an initial public offering (IPO), Bloomberg reported.

Sources said that the company is seeking to raise more than $500 million in an IPO sometime before the end of 2014.

The report reinforces growing speculation that Seven Generations intends to go public in the coming months. Should an IPO happen, it will provide exit opportunities to the company’s private equity backers, which include ARC Financial Corp, Canada Pension Plan Investment Board (CPPIB), KERN Partners, Natural Gas Partners and ZBI Ventures.

Founded in May 2008, the Calgary-based Seven Generations is a tight gas developer with a single asset, the Kakwa River Project, which is located in proximity to its operational headquarters in Grande Prairie, Alberta. The project includes more than 500 square miles of rights in the Alberta Deep Basin, primarily targeting the Montney formation.

The company is led by CEO Pat Carlson, who has previously built three private energy businesses, including the formerly PE-backed North American Oil Sands Corp. Northern American Oil Sands was acquired by Statoil in 2007.

In April, Seven Generations closed a $633 million secondary offering of common shares by its major founding investors—ARC Financial, KERN, Natural Gas Partners and ZBI. (CPPIB invested subsequently.)  Following the deal, the investors continued to hold around 31 percent of the company’s total shares.

The offering gave hints of a forthcoming IPO. At the time, Carlson said the transaction marked “the beginning of a transition of our shareholder base from our private equity founders towards new public market focused institutional investors” and positioned the company to evaluate “potential liquidity alternatives.”

Earlier this month, another Canadian oil and gas company, Northern Blizzard Resources, was reported as having IPO amibitions. Northern Blizzard is backed by U.S. private equity firms Riverstone Holdings and NGP Energy Capital Management.

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