Jagged Peak Energy expected to price its initial public offering at $16 to $18 a share, but debuted instead at $15 a share on Friday, only to drop as low as $13.83 a share before recovering.
Shares of the Denver-based independent oil and gas producer, which trade on the New York Stock Exchange under the ticker JAG, closed Monday at $14.50.
The company raised $494 million, below the $719.2 million it could have raised had investors accepted $18 a share. The company, in its registration statement, said it plans to use proceeds to repay a $132 million credit line and to fund a $580 million drilling program in the southern Delaware Basin.
The west Texas basin is one of the hottest in the country, with multiple formations stacked on top of each other, which contributes to a lower cost for each barrel of oil brought up.
Jagged Peak Energy’s offering contrasts with that of Denver-based , marking the first production company IPO in two years. Extraction shares priced at $19, $1 above the top of the estimated price range, and they ended up 15 percent on their first day of trading. Extraction shares closed Monday at $18.36.
