May 11, 2011 / 12:46 AM / 8 years ago

UPDATE 2-Kosmos Energy IPO raises more than expected

* IPO sells 33 mln shares for $18 vs $16-$18 range

* Has stake in recently-discovered oil field in Ghana

* To begin trading on NYSE on Wednesday under symbol “KOS”

* Citi, Barclays, Credit Suisse led underwriters (Adds bidding war on Kosmos assets, analyst comment, byline)

By Alina Selyukh

NEW YORK, May 10 (Reuters) - Oil company Kosmos Energy Ltd, which is known for its discovery of a major oil field in West Africa, raised more than expected in its initial public offering on Tuesday, selling more shares than planned at the top of the proposed price range, an underwriter said.

Backed by private equity firms Blackstone Group (BX.N) and Warburg Pincus [WP.UL], Kosmos sold 33 million shares for $18 each, the underwriter said. The company had planned to sell 30 million shares at $16 to $18 each.

Kosmos recently was in the spotlight, circulated by potential buyers who were eager to snatch a stake in its assets in Ghana, where Kosmos made one of the largest recent oil discoveries in the world.

“It’s a rags to riches story,” said Mike Breard, oil analyst at Hodges Capital in Dallas, calling the Ghana oil discovery “tremendous.”

The asset is Kosmos’s 23.49 percent stake in the Jubilee oil field, off the shores of Ghana, which is operated by Britain’s Tullow Oil (TLW.L) and holds around 1.6 billion barrels of light crude.

Breard said a rush of oil companies have been drilling all over West Africa, looking for oil and gas reserves. While the big oil companies were skeptical of the region’s prospects, smaller ones such as Kosmos were more optimistic — and lucky.

“These guys, they had the guts and took the risk,” Breard said. “If they had drilled a dry hole, they’d lost everything, but they hit a bonanza over there.”

The bonanza spurred rumored interest from the world’s biggest oil giants. The first agreement to surface was what sources said was to be a $4 billion sale of Kosmos’s stake to ExxonMobil (XOM.N). But, as reports came out about resistance from Ghanian National Petroleum Corp (GNPC), Exxon called off the deal. [ID:nSGE67H089]

GNPC later made its own $5 billion offer, jointly with China’s CNOOC (0883.HK), but Kosmos declined it.[ID:nSGE6A00JR] A senior Kosmos executive then told Reuters in November that the oil company may choose to opt for a private and later public placement instead of a sale to raise more cash for further development of its assets in Ghana. [ID:nWEA6489]

The Dallas, Texas-based Kosmos now has five exploration licenses in Ghana, Cameroon and Morocco and operates under three of them, it said in the filing.

It said it planned to use the proceeds from the IPO on development and exploration in Ghana and Cameroon as well as new ventures to get more licenses. It also plans to pay GNPC $15 million to “resolve our past disputes,” according to the filing.

Shares of Kosmos are expected to begin trading on the New York Stock Exchange on Wednesday under symbol “KOS.” (KOS.N)

Citigroup, Barclays Capital and Credit Suisse led underwriters on the IPO. (Editing by Carol Bishopric, Bernard Orr)

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