First Reserve has agreed to sell Deep Gulf Energy for a consideration of $1.225 billion. The buyer is Kosmos Energy. The deal is expected to close around the end of the third quarter of this year. Barclays advised First Reserve and Deep Gulf Energy on the transaction. DGE is a deepwater oil and gas exploration and development business operating in the Gulf of Mexico.
STAMFORD, CT; HOUSTON, TX; LONDON, U.K. – August 6, 2018 – First Reserve, a leading global private equity investment firm exclusively focused on energy, today announced an agreement to sell the Deep Gulf Energy companies (“DGE”), a deepwater oil and gas exploration and development business operating in the Gulf of Mexico, to Kosmos Energy (NYSE/LSE:KOS) for a total consideration of $1.225 billion, subject to post-closing adjustments, to First Reserve and other shareholders. Subject to the receipt of regulatory approval and the satisfaction of customary closing conditions, the transaction is expected to close around the end of the third quarter of 2018.
With a commitment to backing experienced management teams through the Firm’s extensive global network, First Reserve first backed the Deep Gulf Energy team in 2005. Since inception of the franchise, Deep Gulf Energy has successfully employed a disciplined strategy focused on projects in small- to mid-sized fields with subsea tiebacks to existing infrastructure. Deep Gulf Energy’s management team is made up of a core group of mostly ex-Mariner Energy founders and personnel with a total of over 300 years of E&P experience including over 175 years in the deepwater Gulf of Mexico.
Neil Wizel, Managing Director at First Reserve, stated, “Over the last 13 years, we have backed the Deep Gulf team in three separate vehicles, leveraging a focused, low-cost strategy to create value in the deepwater Gulf of Mexico. We are pleased to see the recognition of this value for our funds and the Deep Gulf shareholders in a transaction that will be immediately accretive for Kosmos. The Deep Gulf Energy platform is a strong example of First Reserve’s thematic approach to investments throughout the energy value chain, and we look forward to seeing continued impressive performance from the Deep Gulf Energy team.”
Richard Clark, President of each of the Deep Gulf Energy companies, added, “We look forward to becoming a part of the Kosmos team which, we believe, will not only enhance our exploration focus in the deepwater Gulf of Mexico but will add overall value and skills to the Kosmos group. First Reserve has been a dedicated and loyal partner to the DGE team over many years. We thank them for their trust and thoughtful guidance.”
Barclays acted as an advisor for First Reserve and Deep Gulf Energy. Lazard Freres & Co. LLC and Moelis & Company provided fairness opinions to the Special Committees of the Deep Gulf Energy vehicles in the transaction. Vinson & Elkins and Gibson, Dunn & Crutcher LLP provided legal advice.
About First Reserve
First Reserve is a leading global private equity investment firm exclusively focused on energy. With 35 years of industry insight, investment expertise and operational excellence, the Firm has cultivated an enduring network of global relationships and raised approximately USD $31 billion of aggregate capital since inception. First Reserve has completed over 650 transactions (including platform investments and add-on acquisitions), creating several notable energy companies throughout the Firm’s history. Its portfolio companies have operated on six continents, spanning the energy spectrum from upstream oil and gas to midstream and downstream, including resources, equipment and services, and associated infrastructure. Please visit www.firstreserve.com for further information.