Riverstone Energy (RSE) – an investment vehicle backed by energy-focused private equity firm Riverstone Holdings – has raise£760.3 million from institutional investors.

The issued shares, sold at £10 each, are down 4.2% to 958.5p as conditional dealing gets underway. The shares will be available to trade to the wider market from 29 October. The total raised was at the lower end of the £670 million to £1.5 billion the company hoped to raise.

Nonetheless this is still comfortably the biggest IPO in the oil and gas sector since Vallares, backed by former BP (BP.) chief executive officer (CEO) Tony Hayward, netted £1.35 billion back in June 2011 (prior to its acquisition of Kurdistan-focused Turkish oil firm and subsequent transformation into Genel Energy (GENL)).

There is a BP connection with Riverstone Energy too; Hayward's predecessor John Browne is a director, former BG (BG.) chairman Robert Wilson will chair this new concern and Jim Hackett, the ex-chairman and CEO of large US independent Anadarko Petroleum (APC:NYSE), will also have a seat on the board.

There are few clues to where the group will invest its funds, beyond its parent Riverstone Holding's traditional US focus, with indications it will look at 'opportunities in the exploration and production (E&P) and midstream energy sub-sectors'. A reference to the 'North American energy revolution' in today's announcement does hint at investment in unconventional shale plays and interestingly Riverstone Holdings owns 44% of Cuadrilla which is looking for shale gas in the UK.

According to its chairman, Riverstone Energy aims to fill a gap in the market between the major integrated oil companies, like BP, BG and Royal Dutch Shell (RDSB), and smaller exploration-focused stocks.

Issue Date: 24 Oct 2013