Oslo-listed BW Offshore said it will float BW Energy this year to help expand the oil and gas business, particularly in Brazil, as its first quarter earnings rose 72%.
Shares in BW Offshore, originally an owner of floating production, storage and offloading (FPSO) vessels operated on behalf of oil companies, were 17.6% higher at 60.6 Norwegian crowns by 0901 GMT on Thursday.
BW Offshore, whose stock has risen 94 percent year-to-date, has in recent years built up its oil and gas exploration and production business, with licences in Gabon, Namibia and Brazil.
"BW Energy ... will invite external investors into the company to finance development of the recently acquired Maromba field offshore Brazil and value-enhancing investments at the Dussafu Marin Permit offshore Gabon," BW Offshore said.
The company won permission from Brazilian regulators in March for its acquisition of Maromba from Petrobras and Chevron.
"We will also of course be looking for new projects, but we are primarily seeking funding for Maromba," BW Offshore Chief Executive Carl Arnet told Reuters.
He declined to say how much money he hopes to raise when BW Energy goes public, adding that it will depend of the planning process and the speed of the Brazilian development.
Shipping conglomerate BW Group Limited is BW Offshore's largest shareholder, with a 49.9% stake.
The spin-off of the energy business will make the value of BW's oilfields more evident to investors, Arctic Securities analyst Morten Nystrom said.
"The share is up for two reasons - they deliver good numbers, and they say they will spin off the oil and gas business ... People are starting to calculate what the oil and gas business is worth and will likely discover that this is a share that is undervalued. So this is very positive," he added.
Arnet and chief financial officer Knut Saethre will step down by the end of June to take up similar posts at BW Energy.
The company's chief operating officer, Marco Beenen, will be promoted to CEO, while senior finance executive Staale Andreassen will become CFO, BW Offshore added.
After years of low investments by oil firms the demand for FPSOs is likely to rise in coming years, further boosting the prospects of its remaining business, BW Offshore said.
The group's first-quarter earnings before interest, tax, depreciation and amortisation rose 72% year-on-year to $186.8 million, beating a forecast of $161 million in a Reuters poll.
DNB Markets and Pareto Securities have been retained as financial advisers for the IPO on the Oslo Stock Exchange.
(Editing by Simon Cameron-Moore, Jason Neely and Alexander Smith)