* Shares rise 25 pct to $54.94, valuing Antero at $13.98 bln
* Could drive other companies to expedite their IPOs -
* Suntrust Robinson starts coverage with a "buy" rating
(Adds details, analysts' comments)
By Garima Goel
Oct 10 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
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
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
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