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The Deal: Jones Energy's IPO Fails to Gain Market Interest

NEW YORK (The Deal) -- Metalmark Capital-backed Jones Energy priced its initial public offering of 12.5 million shares at $15, below the expected range of between $17 and $19 per share range, according to a Wednesday, July 24 regulatory filing. The company raised $188 million in the offering, which had been downsized from 14 million share.

Austin, Texas-based Jones Energy is an oil and gas explorer and producer focused almost exclusively in an eight county region in the Texas Panhandle. The company was established in 2009, with Metalmark contributing $135 million. It posted revenue of $149.8 million in 2012, down from $168.3 million in 2011. New York private equity firm Metalmark has a 63% stake, or 23.2 million shares, in Jones. It did not sell any shares at the company's public debut. At the IPO price, the private equity firm's stake is valued at $348 million.

Jones Energy's shares, which are trading on the NYSE under the ticker symbol JONE, opened below the IPO price at $14.04 on their debut. The share price had fallen 6.9% to $13.97 in midday trading, slipping to a low of $13.85 during the day. Jones Energy will use proceeds to repay outstanding borrowings under its senior secured revolving credit facility. As of June 30, the company had $445 million of indebtedness outstanding under its senior secured revolving credit facility, according to a filing.

JPMorgan Securities, Barclays and Wells Fargo Securities are acting as book-running managers for the offering.

-- Written by Taina Rosa in New York