China’s Cnooc Ltd. 883 -2.51% surged on its Shanghai trading debut, after the country’s largest offshore producer of crude oil and natural gas raised about $4.4 billion in one of this year’s biggest share sales.
The listing comes months after Cnooc was kicked off the New York Stock Exchange, and follows similar deals by two of China’s largest telecommunications operators that were also ejected from U.S. stock markets. In total, the three state-backed companies have raised about $20 billion from Chinese onshore investors, showing they still have access to abundant funding.
Cnooc shares closed nearly 28% higher Thursday, at 13.79 yuan apiece. The stock had earlier jumped by the maximum possible 44%, triggering a short trading halt, before paring gains.
The oil giant raised 28.1 billion yuan, equivalent to about $4.4 billion, from the offering. This is the world’s third-largest equity capital markets deal so far this year, Dealogic data shows. The final total could be increased by as much as 15% to a maximum of about $5 billion, if banks exercise a so-called green shoe option.
The NYSE delisted Cnooc in October to comply with an investment ban introduced by former President Donald Trump. The ban blocks American investment in companies that the U.S. says aid China’s military and security services. Cnooc had unsuccessfully appealed the delisting.
China Telecom Corp. and China Mobile Ltd. together raised about 100 billion yuan in Shanghai share sales last year after their U.S. delistings.
Cnooc is a subsidiary of the unlisted, state-owned China National Offshore Oil Corp.
In the prospectus for its onshore share sale, Cnooc also warned it couldn’t predict if the company, its affiliates or overseas partners would be affected by future U.S. sanctions. It also warned that a liquefied natural gas project in Siberia in which it owns a 10% stake could be hurt by sanctions on Russia.
With prices for oil and other commodities surging, Cnooc and its peers have been spared a selloff that has dragged down broader Chinese markets. The Shanghai Composite index has fallen about 15% so far this year, according to FactSet, while Cnooc’s Hong Kong-listed shares have gained about 35%. Cnooc reported a record annual net profit for 2021 of 70.3 billion yuan.
Cnooc priced its shares earlier this month at 10.80 yuan. Based on exchange rates at the time, that was a 19% premium to the closing price of its shares that day in Hong Kong.
Nearly half of the offering was bought by 12 Chinese state-owned investors, such as China Life Insurance Co. Those buyers included rival China National Petroleum Corp. and the asset-management arm of Sinopec Corp., another major competitor. After this offering, the trio, China’s three biggest oil companies, now all have domestic listings in China.
Wang Dongjin, chairman of Cnooc, touted high dividends in an online roadshow for individual investors earlier this month. Cnooc has paid 300 billion yuan of dividends since it went public in Hong Kong in 2001, the fourth-highest among all companies listed in the city, Mr. Wang said. Once the Shanghai listing is complete, Cnooc plans to pay shareholders a delayed dividend for 2021 that combines a regular year-end dividend with a special “20th anniversary” payout.
Cnooc intends to use the offering’s proceeds to fund various oil-field developments.
Write to Rebecca Feng at [email protected]
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