Blackstone, LLOG agree on $1.2 billion Gulf of Mexico oil deal

Blackstone Group LP (BX) started a partnership with LLOG Exploration Co., an unlisted oil company, to invest more than $1.2 billion in offshore operations in the Gulf of Mexico.

The cash will be used to speed up development of four deepwater discoveries as well as for new exploration and buying more assets, according to a statement today. Covington, Louisiana-based LLOG said it’s one of the largest private operators in the Gulf, with an exploration success rate of 70 percent.

“With Blackstone’s team, extensive capital resources, oil and gas expertise and industry resources, we will be able to take our business activity levels and assets to the next level,” said Scott Gutterman, chief executive officer of LLOG.

Production from LLOG’s Who Dat discovery, which holds as much as 300 million barrels of oil equivalent, is excluded from the partnership. LLOG said it started production from the field last year.

Blackstone, the New York-based private-equity firm, in September completed gathering $2.5 billion for its debut energy fund, Blackstone Energy Partners. Blackstone has more than $205 billion in assets under management, it said in the statement.