Private equity giant the Blackstone Group said Tuesday it has agreed to team up with Covington, Louisiana–based energy outfit LLOG Exploration Company on a strategic partnership through which the two parties will invest a combined $1.2 billion to develop offshore oil and gas assets in the Gulf of Mexico.
The amount each company is investing was not disclosed.
The agreement was announced in a joint press release that called the partnership the largest-ever private equity investment in Gulf of Mexico energy assets. The investment will be used to further develop LLOG’s current holdings in the area, which include four recently discovered deepwater projects. The money would also go toward exploring more than 110 offshore blocs on which LLOG holds leases, as well as potential future acquisitions of additional Gulf assets.
Simpson, Thacher & Bartlett is advising longtime client Blackstone on the partnership with a team led by Houston corporate partner Andrew Calder. Tax partner Gary Mandel, compensation and benefits partner David Rubinsky, and credit partner Robert Rabalais are also advising.
The firm frequently advises Blackstone on transactional work. The private equity firm’s chief legal officer, John Finley, joined Blackstone in 2010 after heading Simpson Thacher’s global M&A practice.
LLOG has turned to Haynes and Boone for legal counsel on the matter, according to a source familiar with the agreement. The firm previously advised LLOG on joint venture financing for the development of the company’s Who Dat Field, a drilling project in the Gulf of Mexico that is not a part of the Blackstone partnership. Energy partners George “Guy” Young III and Bernard “Buddy” Clark Jr. are leading the firm’s team advising LLOG on the Blackstone partnership. A Haynes and Boone spokesman was not immediately able to confirm the firm’s role on the transaction.
The partnership represents the latest private equity investment in the energy industry. Earlier this year, private equity firm Global Infrastructure Partners was among the buyers lining up when Chesapeake Energy Corp looked to shed oil and gas holdings to pay off debt, with GIP paying $2.7 billion for a collection of midstream assets. Last month, Kohlberg Kravis Roberts & Co. struck a $1.4 billion deal with fellow private equity firm First Reserve Corporation to buy British oil and natural gas company Acteon Group. That deal came roughly a year after a KKR–led consortium paid $7.2 billion to acquire Tulsa-based private exploration and production outfit Samson Investment Company. Simpson Thacher advised the investor group in that deal.