EMGS shares plummet 66% following IPO

Since Warburg Pincus-backed EMGS, the oil exploration and production company, was listed on Oslo Bors in March 2007, the share price has fallen by 66%, from NOK 135 to NOK 46.40 (14 December 2007). (See IPO tracker, page 46). At the time, the listing received a lot of press coverage and it was argued that the listing price was over-hyped. SEB Enskilda, the Swedish investment bank, called it "the biggest tech bubble valuation ever seen in oil service", and it seems that their prophecies have come true. However, the company is still praised for its quality of service and technology.

Warburg Pincus remains the largest owner, with about 63% of the shareholding, after the IPO. Due to the fall in the share price, the value of this stake has fallen by NOK 4.5bn.

In 2004, Warburg Pincus and the management acquired EMGS from Statoil (July/August 2004, page 19) in an early-stage venture investment. Leading up to the IPO, Warburg Pincus invested new capital into the company and worked with management to grow and develop the business.

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