(Aug. 6) – Private equity firm First Reserve said Monday it agreed to sell Deep Gulf Energy Cos. to publicly traded Kosmos Energy for $1.225 billion, signifying the buyer’s entry into the Gulf of Mexico.
The deal included $925 million in cash and $300 million shares.
Vinson & Elkins counseled Deep Gulf with a team led by partners Shamus Crosby, Bryan Loocke and Doug McWilliams and senior associate Benji Barron with assistance from associate Mike Marek.
Also advising were partners David Peck and Jason McIntosh on tax, Stephen Jacobson on executive compensation and benefits, Sean Becker on labor and employment, Larry Nettles on environmental and a partner in its Washington, D.C. office on regulatory issues.
Gibson, Dunn & Crutcher represented First Reserve. The team was led by a corporate partner in Denver but included Houston tax partner James Chenoweth. Davis Polk & Wardwell represented Kosmos Energy.
Barclays was First Reserve’s and Deep Gulf’s financial advisors. Lazard Freres and Moelis provided fairness opinions to the special committees of Deep Gulf’s vehicles involved in the transaction.
First Reserve first backed Deep Gulf’s management team, former executives at Mariner Energy, in 2005 and then two more times through separate vehicles.
First Reserve managing director Neil Wizel in Houston said in a statement that the deal should immediately add to Kosmos’ earnings.
Deep Gulf president Richard Clark said becoming a part of Kosmos will enhance its exploration focus in the deepwater Gulf of Mexico but will add overall value and skills to Kosmos.
Kosmos CEO Andrew Inglis said the transaction will help the company double its production over the next four years, as it’s done over the past four years. He added that there’s an opportunity to buy offshore oil and gas properties as companies switch to onshore shale prospects and claims that best deepwater assets can compete with the best of shale.
Connecticut-based First Reserve is focused only on energy investments. The 35-year-old firm has raised $31 billion in capital since inception and completed 650 transactions.