Venture Global LNG is holding its highly anticipated initial public offering (IPO) in New York today (Jan. 24) in what’s being billed as the largest ever share sale by a liquefied natural gas concern.
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The Arlington, Virginia-based company comes to market after lowering its IPO valuation to $60.50 billion, a 40% reduction from an initial valuation of $110 billion. Media reports say Venture Global reduced its valuation after investors balked at the price.
Still, Venture Global is set to be one of the largest U.S.-listed energy companies once its shares begin trading on the New York Stock Exchange (NYSE) under the ticker symbol “VG.” Venture Global’s share sale is being marketed as the biggest IPO ever by an LNG company, according to Dealogic. It is the third-largest energy sector listing in the U.S. since 1995.
Share Sale
Venture Global sold 70 million shares at $25 each for gross proceeds of $1.75 billion. Venture Global had initially proposed raising as much as $2.30 billion by selling shares at $40 to $46. Even with the reduced IPO, Venture Global is firmly in league with top U.S. energy companies and is larger than high-profile names such as Occidental Petroleum (OXY).
The company’s market debut is being viewed on Wall Street as a test both of equity markets and energy companies under the new administration of U.S. President Donald Trump. Trump has made increasing U.S. energy output and rolling back policies on climate change a central tenet of his administration.
Rising prices for crude oil and natural gas, and optimism for pro-energy policies under the Trump administration, are expected to drive a recovery in energy sector IPOs, say analysts.
Is OXY Stock a Buy?
It’s too early for analysts to have issued ratings on Venture Global. So instead we look at another leading energy company, Occidental Petroleum. As the chart below indicates, OXY stock has a consensus Moderate Buy rating among 21 Wall Street analysts. That rating is based on seven Buy, 13 Hold, and one Sell recommendations issued in the last three months. The average OXY price target of $60.95 implies 22.39% upside from current levels.
