Warburg Pincusand Blackstone Group LP affiliate Blackstone Capital Partners have committed $500 million of equity to Kosmos Energy LLC to help the Dallas-based oil company accelerate exploration in offshore West Africa, Kosmos said Thursday, June 19.

This comes on top of a combined $300 million commitment for joint control of Kosmos in March 2004.

Among its activities is the first-phase development of Jubilee Field, off the coast of the Republic of Ghana. Kosmos said it expects to have as many as four rigs under contract in the West African country.

The company's broader exploration portfolio includes large acreage positions in Morocco, Cameroon, Nigeria and Benin, as well as licenses for offshore Ghana.

"We are dedicated to producing oil from the Jubilee Field for the government and people of the Republic of Ghana as soon as practicable," said Kosmos chairman and CEO James Musselman in a statement.

Moreover, the company this summer plans to conduct a high-resolution 3-D seismic survey over its recent Odum discovery, and will be looking for additional opportunities in Ghana.

Warburg holds a 55% stake in the exploration and production company, while Blackstone owns the remaining 45% interest, according to a source.

Kosmos' management team came from international oil and gas exploration and production company Triton Energy Ltd., which has a track record of discovering and developing significant oil and gas reserves offshore West Africa, as well as other global basins.

"We backed an outstanding management team and pursued this opportunity early on, before oil prices ran up," said David Foley, senior managing director at Blackstone. Also, in 2004, "there was still opportunity to secure significant acreage ahead of an increase in block prices," he added.

Both Blackstone and Warburg have been active energy investors.

Earlier this year, Warburg led a $300 million investment in Canadian exploration and production company Canbriam Energy Inc. And over the last couple of years, Blackstone has invested more than $500 million in Sithe Global Power LLC, a New York-based electric power plant developer with projects in the U.S., Canada, Europe, Africa and the Middle East, according to Foley.

In 2006, Blackstone and First Reserve Corp. cashed out of Foundation Coal Holdings Inc., seeing the value of their original investment increase more than 5 times after taking the company public.


Source: Daily Deal/The Deal