Despite some predictions of production declines in the Gulf of Mexico (GOM), private equity firms The Carlyle Group and Riverstone Holdings have committed $450 million for investment in a new oil and gas company that will focus on acquiring and developing producing properties in the Gulf.
The founders and management team of the new company, Houston-based Dynamic Offshore Resources, have committed to fund up to an additional $50 million, saying they will use the committed capital “to concentrate entirely on the unique challenges and opportunities associated with Gulf of Mexico assets, which are often viewed as out-of-favor or neglected, but still have viable and attractive growth and profit opportunities.”
“With the major oil companies, large independents and other public companies exiting the Gulf of Mexico shelf, market conditions are very favorable for a well funded and experienced management team like the one we are building at Dynamic Offshore Resources,” said Matt McCarroll, chief executive and co-founder of the company.
McCarroll previously served as the president of Tetra Technologies subsidiary Maritech Resources Inc., an exploitation and production company focused on the Gulf. McCarroll built Maritech into a successful operator of mature assets in the Gulf and was founder of another GOM-focused company, Augusta Petroleum Partners.
Dynamic Offshore Resources’ other co-founder, Mike Moreno, serves as chairman of Lafayette, LA-based oilfield services company Moreno Group LLC, which received a significant equity investment from Riverstone and Carlyle last year. John Y. Jo, who serves as Dynamic’s senior vice president, was previously COO at Turnkey E&P Corp.
Company officials would not say how much of the investment would be invested in either natural gas- or oil-producing properties.
Despite predictions of production declines, Carlyle and Riverstone have recently made major investments in the Gulf. Last year 4Gas Texas LLC, an independent developer and operator of liquefied natural gas (LNG) import terminals majority-owned by Carlyle and Riverstone, entered into agreements to buy partnership interests in the Vista del Sol LNG project from affiliates of ExxonMobil (see NGI, Sept. 24, 2007). The $600 million Vista del Sol terminal project, about two miles west of Ingleside along the Gulf Coast in San Patricio County, TX, would have sendout capacity of 1.1 Bcf/d as well as three 155,000-cubic-meter storage tanks and a 25.3-mile pipeline with potential interconnects with up to eight existing interstate and intrastate pipeline systems (see NGI, June 20, 2005).
In October Cobalt International Energy LP — a Houston-based independent launched in December 2005 with $500 million in backing from Carlyle, Riverstone and Goldman Sachs Capital Partners (see NGI, Dec. 5, 2005) — submitted more bids in the Minerals Management Service’s Central GOM Lease Sale 205 than any other producer, and it captured 53 deepwater leaseholds (see NGI, Oct. 15, 2007). Cobalt outbid nine other producers to obtain the fifth most expensive block — deepwater Green Canyon Block 817 — with a $55.3 million bid ($9,598/acre).
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