UPDATE 1-Shale boom bolsters oil and gas producer Antero's market debut

Thu Oct 10, 2013 12:05pm EDT

Related Topics

* Shares rise 25 pct to $54.94, valuing Antero at $13.98 bln

* Could drive other companies to expedite their IPOs - analyst

* Suntrust Robinson starts coverage with a "buy" rating (Adds details, analysts' comments)

By Garima Goel

Oct 10 (Reuters) - Shares of Antero Resources Corp, an oil and gas producer controlled by Warburg Pincus, rose as much as 25 percent in their market debut, underscoring the eagerness of investors to cash in on the shale boom in the United States.

Antero's shares opened at $54.15 on Thursday. At the stock's peak of $54.94, the Denver-based company was worth $13.98 billion.

Antero raised $1.57 billion on Wednesday, after its offering of about 36 million shares was priced at $44 per share, above the expected price range of $38 to $42 apiece.

"This is very encouraging. It's possible that Antero's IPO will drive other companies to expedite their IPOs from next couple of years to this year," said Suntrust Robinson Humphrey analyst Neal Dingmann, who started coverage of Antero with a "buy" rating.

Dingmann said Pennsylvania-based Eclipse Resources and former Chesapeake Energy Corp CEO Aubrey McClendon's American Energy Partners LP could look to go public soon.

The United States is likely to be the largest oil and gas producer in the world this year, the U.S. Energy Information Administration said, as the vast reserves of oil and gas unlocked from shale deposits fuel an energy renaissance.

Antero, founded in 2002 by Chief Executive Paul Rady and Chief Financial Officer Glen Warren, drills in the Appalachian basin in the U.S. Northeast, home to the Marcellus and Utica shale fields, which are rich in natural gas and related liquids.

The fortunes of other oil and gas companies focused in these areas have also soared. Gulfport Energy Corp has risen 69 percent so far this year, while Cabot Oil & Gas Corp has climbed 42 percent.

The $316 million IPO of Apollo-backed oil and gas company Athlon Energy Inc in August was also well received by investors, with shares rising as much as 34 percent on its first day. The stock is up 10 percent since then.

OUTPUT COULD DOUBLE

Analysts say Antero should be one of the fastest growing oil companies in the country. Its production rose to average 594 million cubic feet equivalent per day (mmcfe) in August, from 458 mmcfe per day in the second quarter ended June 30.

Suntrust Robinson's Dingmann expects Antero's output to double next year, and rise 50 percent in 2015.

"The company is focused in two of the most productive shale reserves and has seen their top-line revenue grow," said Francis Gaskins, partner at IPO research company IPODesktop.com.

The company's revenue grew 6.4 percent to $735.7 million in the year ended December 2012.

Warburg and other investors, including energy-dedicated private equity firm Yorktown Energy Partners and Lehman Brothers Merchant Banking Group, initially invested $260 million in Antero in 2003.

Four years later, the consortium led a $1 billion equity investment in the company.

Warburg's plans for an IPO of Antero come as private equity firms have been trying to sell or list assets to take advantage of a surging IPO market, as a rally in the stock market and low interest rates have enticed investors into stocks.

EP Energy Corp filed for an IPO last month, just over a year after it was bought by a consortium led by Apollo Global Management LLC for $7.15 billion in the largest private equity deal of 2012.

Barclays, Citigroup and JP Morgan were the lead underwriters on Antero's IPO. (Additional reporting by Tanya Agrawal in Bangalore; Editing by Savio D'Souza)

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