Sunshine Oilsands, founded by Canadian oil and gas industry veteran Michael Hibberd and geologist Shen Songning in 2007, is seeking to raise up to US$700 million in Hong Kong's first initial public offering of an oil sands developer.
While high oil prices have made oil sands economically viable in recent years, analysts said investors should still be aware of the risks of early-stage project developers like Sunshine, which lacks a track record in bringing projects to production.
The producer of petroleum from oil sands in northern Alberta province, based in Calgary, western Canada, aims to sell 923.3 million new shares at HK$4.86 to HK$5.08 each. If demand exceeds the shares on offer, it may sell 15 per cent more shares.
According to joint book runner BOC International, the asking valuation represents 46 to 48 US cents per barrel of proved and probable reserves, plus its best estimate of contingent resources.
It compares favourably to the 52 cents per barrel current valuation of oil sands assets in the same Athabasca region where Sunshine's projects are located, it said.
BOCI and the other two joint book runners, Deutsche Bank and Morgan Stanley, have helped line up well-known cornerstone investors for the deal.