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First Reserve Private equity firm plans billion-dollar sale

August 6, 2018

Private equity firm First Reserve announced Monday it would sell Deep Gulf Energy Cos., a Houston-based oil-and-gas business, for approximately $1.23 billion to Dallas-based Kosmos Energy.

The deal would culminate a 13-year partnership between First Reserve and Deep Gulf, during which time they have embarked on three ventures and invested more than $1.5 billion in the deep waters of the Gulf of Mexico. The transaction is expected to close around the end of the third quarter.

“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,” First Reserve Managing Director Neil Wizel said in a statement.

Deep Gulf focuses on exploration and development near existing infrastructure in “oil-prone” areas that can be safely connected to existing production facilities, according to the company’s website.

“We look forward to becoming a part of the Kosmos team which, we believe, will not only enhance our exploration focus in the deep-water Gulf of Mexico but will add overall value and skills to the Kosmos group,” Richard Clark, president of each of the Deep Gulf Energy companies, said in a statement.

Last month, First Reserve announced it planned to buy an equipment maker from GE’s Baker Hughes oilfield services company, accounting for a majority of the $375 million sale of the latter’s natural gas business.

First Reserve previously owned Houston-based Dresser Natural Gas Solutions, which manufactures commercial and industrial natural gas meters and pipeline repair products, for about 10 years when it was part of Dresser Inc., a former First Reserve portfolio company that was sold to GE for $3 billion in 2011. Dresser NGS then became part of Baker Hughes, after the firm merged last year with GE’s own oil-and-gas equipment and services business.

Expected to close by the end of the year, the sale includes the transfer of approximately 450 employees. They are located in eight countries, including three manufacturing sites in North America and the United Kingdom.

First Reserve is based in the Shippan Landing complex, in Stamford’s Shippan section. The firm relocated last year from Greenwich.

pschott@scni.com; 203-964-2236; Twitter: @paulschott

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