One of the biggest Initial Public Offering (IPO) in over a decade in Oman, Abraj Energy Services (“Abraj”) will sit among the most prominent public joint stock transformations in the nation when its IPO opens on February 20, 2023.
This comes following a Capital Market Authority (CMA) approval for the stock prospectus of Abraj Energy Services SAOC, a subsidiary of OQ Group, to proceed with its transformation from a closed joint stock company to a public joint stock company.
As a result of this transformation, the company will be offering 377,398,000 shares for public subscription – and these shares will be made available in two parallel categories:
The first category will be reserved for major investors and will consist of a maximum of 85 per cent of the total offering. This category will be directed towards major and corporate investors in Oman as well as international investors. The subscription price for this first category will be set within the range of 242 baizas to 249 baizas per share.
The second category of shares, intended for small individual investors within the Sultanate of Oman, will make up no less than 15 per cent of the total public offering. These shares will be offered at a maximum discounted price of 224 baizas per share, calculated as 249 baizas minus a discount of 10 per cent.
Abraj Energy Services has informed the public that its stock prospectus and details regarding its initial public offering have been furnished at the Muscat Stock Exchange (MSX).
The public offering for the first category of shares is expected to take place between 20 February and 2 March 2023, while the subscription period for the second category will run from 20 February until 1 March 2023.
During this subscription period, 49 per cent of Abraj’s issued capital will be sold, as per a statement issued by the Oman News Agency. The selling shareholders reserve the right to modify the offering at any time before the end of the underwriting period at their discretion and in accordance with applicable laws, following approval from the CMA in Oman.
What Is Abraj Energy Services
Abraj (the company under transformation) is currently a fully-owned subsidiary of OQ S.A.O.C., an integrated energy company based in Oman. Established in 2006 as an onshore drilling and well services provider, Abraj has evolved into the leading player in the Omani onshore drilling services market with the most contracted operating drilling rigs.
With a focus on modernising through technology investments, Abraj now operates a fleet of cutting-edge rigs that service long-term contracts with major national and international exploration and production companies.
Assets and innovation
Abraj provides a comprehensive range of drilling, workover and well services. The drilling rigs are integrated systems used to drill new onshore oil and gas wells while the workover rigs are used to maintain, restore, and reinstate the integrity of existing wells.
Abraj also provides a diverse portfolio of oil and gas well services through three business lines: hydraulic fracturing, cementing and coiled tubing.
It operates one of the youngest and most modern drilling fleets in the MENA region. Abraj is well positioned versus its regional competitors in terms of average power ratings; and the Company believes its “superior horsepower capabilities” will facilitate regional expansion while the presence of lower horsepower capabilities helps with the local Omani market.
Responsible growth
The company places a strong emphasis on enhancing in-country value and supporting the Sultanate’s sustainable economic growth. Abraj’s unwavering focus on HSEQ policies and comprehensive ESG framework ensures responsible growth and underpins all its innovations.
Looking towards future expansion, Abraj has already been pre-qualified in Algeria, India, Saudi Arabia, and Kuwait to offer its services. The company states it has also signed a contract to provide rigs for an oil field project with Saudi Arabian Chevron Inc. and Kuwait Gulf Oil Company in the Wafra region of the Saudi Arabian-Kuwaiti neutral zone, building on its pre-qualifications and setting the stage for international growth.
The IPO Timeline
- 22 January 2023: Intention to float announcement
- 09 February 2023: Publication of prospectus and price range announcement
- 20 February 2023: Opening of Category I Offer (large investors)
- 20 February 2023: Opening of Category II Offer (small investors)
- 01 March 2023: Closing of Category II Offer
- 02 March 2023: Closing of Category II Offer
- 06 March 2023: Announcement of Final Offer Price
- 09 March 2023: Settlement Date
- 09 March 2023: Refund of Excess Subscription Amounts (if any)
- 14 March 2023: Listing Date
*Source: Abraj
Why The Abraj Energy Services IPO Is Important To Oman
Abraj has reportedly secured the involvement of the Saudi Arabian sovereign wealth fund and energy services giant Schlumberger, as anchor investors for its initial public offering (IPO).
These anchor investors, which include Schlumberger Oman & Co, Royal Court Affairs and the Saudi-Omani Investment Company (a wholly-owned entity of the Public Investment Fund), have agreed to invest a total of RO37.58mn, accounting for 40 per cent of the total offer size.
Following admission, their shares will be subject to a 90-day lock-up period.
The Offering comes at a critical moment in Oman’s history. It is indicative of Oman’s outward-facing, modern economy, providing opportunities for foreign investment that is fundamental to the country’s ability to build an even brighter future.
Abraj will play a crucial role in developing this future. Through innovation, research and development, the Company will seek to leverage its advanced drilling capabilities to capitalise on the MENA region’s ability to meet the world’s demand for oil and natural gas. Abraj is dedicated to ensuring that this long-term journey is one of responsible growth.
Abraj’s Board, management, and highly trained employees are committed to upholding our high standard of operations and are ready to provide value to our shareholders with an ambition of delivering consistent, strong returns.
The Abraj IPO is a moment to celebrate the Company’s historic successes while preparing for an ambitious future that’s focused on modernisation, innovation, and a commitment to excellence.
– Ayad Al Balushi, Board Chairman, Abraj
The Company proposes to pay yearly dividends, subject to debt repayments and covenants, working capital requirements, operational expenditure obligations, growth plans and the necessary approvals.
In 2023, the Company intends to pay a dividend of RO15.4 million for the year ended 31 December 2022. In 2024, the Company intends to pay a dividend which is the higher of 85 per cent of the net profit for 2023 or a six per cent increase on the dividend paid in 2023.
In 2025, the Company intends to pay a dividend which is the higher of 85 per cent. of net profit for 2024 or six per cent. increase on the dividend paid in 2024. The size of annual dividends and the determination of whether to pay dividends in any year may be affected by a number of factors, including but not limited to the Company’s business, financial condition, results of operations and prospects (including the prospects of the oil and gas sector).
Ahli Bank, EFG-Hermes UAE Limited, and National Bank of Oman have been appointed as joint global coordinators for the Abraj IPO, with Ahli Bank and National Bank of Oman serving as issue managers.
