GE Energy Financial Services is partnering with a Union Gas Corp. subsidiary to acquire oil and natural gas reserves from two fields in East Texas and along the Texas Gulf Coast for $115 million. The exact location of the fields was not disclosed.

The GE business unit will be a 90% limited partner in the venture, and it initially plans to invest $104 million in the partnership. Union Gas will own a 10% stake and act as operator. The new alliance, Union Gas Production Partners LP, plans to spend another $29 million to develop and produce proved reserves over the next two years. Additional financial and operating details were not disclosed.

“Our new partnership combines the Union Gas team’s exploration and operating experience with the know-how and financial strength of GE,” said Union Gas President Randy Lowry. “Allying with a strong institutional partner allows us to accelerate the development of our reserves to grow our production and cash flow at reasonable costs.”

Union Gas, headquartered in Houston, was founded in 1995. It currently is developing seven fields on the Texas Gulf Coast.

John Schaeffer, who heads the GE unit’s oil and gas business, said that “combining Union’s expertise in the complete oil and gas development cycle and GE Energy Financial Services’ industry knowledge and commitment should create strong operating results enhanced by attractive related drilling projects.”

Since 1991 GE’s oil and gas unit has provided $3 billion in partnership equity for independent private and public oil and gas partner-operators in the United States. Based in Stamford, CT, the GE business said it is active in all major onshore basins and the shallow-water Gulf of Mexico. Its 22 partnership investments produce an estimated 88 MMcf/d of natural gas and 9,400 b/d of oil.

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