Blackstone pours capital into Midland, Delaware basin startups

Blackstone Energy Partners LP, an affiliate of multinational private equity firm Blackstone Group LP, has partnered with a seasoned oil and gas executive and a producing firm to target acreage in the Midland and Delaware basins of West Texas and southern New Mexico.

Blackstone and Jay Still, a former senior executive for Pioneer Natural Resources Co. and Laredo Petroleum Inc., have formed Dallas-based, Midland basin-focused Guidon Energy and acquired 22,000 gross acres (16,000 net) in the core of Martin County, Tex.

Blackstone and affiliated funds have committed $500 million of capital to Guidon, “with the potential to commit significantly more” in future acquisitions. The firm plans to “develop its leasehold through manufacturing styled horizontal well development.”

Separately, Blackstone and an affiliate of Jetta Operating Co. Inc. have formed Jetta Permian LP, a Fort Worth-based firm focused on the Delaware basin. With $1 billion committed in capital, Jetta’s strategy includes pursuing asset and leasehold acquisition opportunities, farm-in deals, and partnerships or joint ventures with existing operators and landowners.

Blackstone is among a horde of entities to recently target Permian basin acreage. In the Midland basin alone, Pioneer Natural Resources, Laredo Petroleum, Callon Petroleum Co., QEP Resources Inc., SM Energy Co., Concho Resources Inc., and Parsley Energy Inc. have all made moves this summer to expand their positions.

Earlier this week, Denver-based PDC Energy Inc. entered the Delaware basin by agreeing to purchase two units managed by energy-focused privately equity firm Kimmeridge Energy Management Co. LLC for $1.5 billion (OGJ Online, Aug. 24, 2016). Silver Run Acquisition Corp., Houston, agreed last month to acquire a controlling interest in Delaware producer Centennial Resources Production LLC (OGJ Online, July 22, 2016).

Drilling has concurrently ramped up in the Permian, with more than two thirds of all rigs added during the recent US rig count rebound coming in the basin.

Contact Matt Zborowski at matthewz@ogjonline.com.

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