The independent petroleum company, which is selling some 45 million shares, priced the share offering at C$18, compared with an earlier projected range of C$17 to C$21. The offering is set to value the company at over C$5 billion.
The stock, which began trading on the Toronto Stock Exchange on Thursday on a "when-issued" basis, surged more than 16 percent, indicating robust investor appetite for energy stocks despite the recent selloff in the price of oil.
"We have strong confidence that it’s a fairly explosive growth story," said Paul Taylor, chief investment officer at BMO Asset Management, which owns shares of Seven Generations. "It has a lot of the positive attributes that we look for, in terms of a growing production profile, strong management team and good assets."
Calgary-based Seven Generations focuses on a liquids-rich natural gas property in northwest Alberta, with almost all of it in the highly sought-after Montney region.
Natural gas liquids are hydrocarbons used as vehicle fuel blends and inputs at petrochemical plant. Liquids-rich natural gas fields such as the Marcellus and Utica shale plays in the United States tend to be more lucrative than "dry" gas fields, and there has been a rush to drill in these areas.
The company's major shareholders include the Canada Pension Plan Investment Board and Calgary-based private equity firms ARC Financial and KERN Partners.
Some large initial investors in the company including ARC and KERN that were considering selling down a portion of their stake via a concurrent secondary offering appear to have chosen not to do so at this time. ARC and KERN could not immediately be reached for comment.
CPPIB is likely to remain the biggest shareholder in Seven Generations with a 14.8 percent stake, after taking into account the new equity being issued and the over-allotment options. On the same basis, ARC and KERN would retain stakes of about 11.6 percent and 8.2 percent, respectively.
The offering is expected to raise C$931.5 million if the over-allotment option is fully tapped by RBC Capital Markets, Credit Suisse and Peters & Co, who are co-lead underwriters on the offering.
On a fully diluted basis, if the over-allotment option is maxed out, the pricing of the offering values the company at C$5.1 billion. After taking into account the jump in the share price on Thursday, the company would be worth C$6 billion.
The stock, which will officially begin trading on or about Nov. 5, was the second most heavily traded scrip on the Toronto Stock Exchange on Thursday.
"It was attractively priced to generate some interest, and obviously there is interest," said Taylor, adding that the IPO was oversubscribed.
(Reporting by John Tilak and Euan Rocha in Toronto and Nia Williams in Calgary; editing by Andrew Hay)
By John Tilak and Euan Rocha
