Two weeks after its sponsor, Constellation Energy Group, fell on hard times and agreed to be acquired by Berkshire Hathaway’s MidAmerican Energy Holdings, Constellation Energy Partners LLC (CEP) has put itself on the “for sale” block.

CEP said it has retained a financial advisor to assist in a review of the company’s strategic alternatives to enhance unitholder value. Tudor, Pickering, Holt & Co. Securities Inc. has been engaged to advise management. CEP was formed by Constellation in June 2005 to focus on the acquisition, development and exploitation of oil and natural gas properties, as well as related midstream assets. In November 2006 CEP conducted an initial public offering, and Constellation assumed the role of sponsor and provider of support services. Constellation currently owns 28% of CEP.

CEP assets include gas and oil reserves in the Black Warrior Basin in Alabama, the Cherokee Basin in Oklahoma and Kansas and the Woodford Shale in the Arkoma Basin in Oklahoma. The company has said these reserves provide long-lived production, low-risk, low-cost drilling opportunities and a high percentage of proved developed reserves.

“Given the current market environment and the recent merger announcement by our sponsor, Constellation Energy Group, we believe the assistance of Tudor, Pickering, Holt & Co. Securities will be helpful in our efforts to conduct a comprehensive review of our strategic options,” said CEP CEO Stephen R. Brunner. “We will continue to focus on the interests of our company and unitholders.”

CEP noted that the board of managers has not determined to pursue any particular alternative and that it does not intend to disclose developments unless and until the board has approved a course of action.

The announcement by CEP comes one day after Constellation and MidAmerican attempted to shore up confidence in their pending merger (see Daily GPI, Sept. 19). Since the deal was announced on Sept. 18 the proposed union has been assailed by a competing offer for Constellation from EDF International as well as from outraged Constellation shareholders, who believe the MidAmerican offer of $4.7 billion is too little (see Daily GPI, Sept. 26; Sept. 23).

Constellation and MidAmerican said Monday that the merger is proceeding.

“We continue to work very closely with MidAmerican to complete the due diligence process, file the merger application with the Maryland Public Service Commission and submit the proxy to the Securities and Exchange Commission,” said Constellation CEO Mayo A. Shattuck.

MidAmerican CEO Greg Abel added, “We expect to complete our due diligence within the 14-day period, and based on information reviewed to date, we have not identified any issues. We have completed a significant amount of due diligence to date and are very comfortable with the state of affairs of Constellation.”

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