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Energy fans, rejoice. The ASX welcomed a new oil and gas explorer today and its shares are overshooting the initial public offering (IPO) price.
After offering shares of the company for 20 cents according to its prospectus, the Top End Energy Ltd (ASX:TEE) stock price has hit rock bottom.
The company’s shares currently trade for 36.5 cents apiece — an 82.5% gain over the float.
However, that’s nowhere near the highest level Top End Energy’s share price has seen today. In fact, it was trading at 40 cents when it first opened.
In addition, it had risen to 41 cents from its current record high. That’s right, at one point this afternoon the ASX newbie was boasting a 105% gain.
So what got the market so excited about the Energy Commodity Explorer? Let’s take a look.
ASX Energy newbies’ shares are trading at twice their IPO price
Top End Energy joined the ASX at 1:00 p.m. Monday at double the IPO offer price. The company raised $6.4 million in its IPO by issuing 32 million shares at 20 cents each.
Top End Energy is focused on its Queensland and Northern Territory projects.
It holds a hydrocarbon permit on Queensland’s ATP 1069 called the Tri-Star Project.
It is also progressing towards obtaining permits for a 50 percent interest in 30 oil and gas permit applications — known as the TG Project — in the Northern Territory, which covers more than 160,000 square kilometers.
Top End Energy acquired the TG Project from McKam, a private company that has been identifying, exploring and developing resources for more than 30 years.
The project is being carried out in joint venture with McKam. In addition, McKam owns a 22.2% stake in Top End Energy.
The Company intends to explore for gas and oil, as well as other marketable products such as helium and hydrogen. However, its primary goal is to achieve net-zero Scope 1 and Scope 2 emissions.
To get there, it plans to explore renewable energy, carbon mitigation and sequestration projects, and purchase carbon credits as needed.
In addition, the Company will explore the development of free renewable energy revenue streams near its core facilities. These could include wind, sun, biomass and biogas.
The cost of offsetting emissions is expected to be included in future exploration and development budgets.
Assuming its shares trade on the ASX at the IPO price, the company expected a fully diluted market capitalization of approximately $24 million with approximately 119.9 million shares outstanding.
At the current share price, the company has a fully diluted market capitalization of approximately $43 million.
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