NGP bets on offshore oil and gas

Natural Gas Partners has created its third offshore oil and gas company under the “Northstar” brand after selling its previous two offshore businesses for a combined $466m.

Natural Gas Partners has formed a new oil and gas exploration and production company to acquire assets in the Gulf of Mexico.

The entity, Northstar Offshore Group, is Natural Gas Partners’ third portfolio company under the Northstar name. NGP previously created Northstar GOM, which sold for $265 million in 2008; and Northstar Offshore Energy Partners, which sold last December for $201 million. All three businesses focus on shallow-water assets on the Gulf of Mexico shelf.

“We sell all of the assets and then we restart with basically a new entity that’s got a slightly different name from the last time,” NGP principal Tomas Ackerman told Private Equity International.

“The brand has built up a reputation in the industry with both people that they’re buying assets from and service providers, so it’s important to keep the Northstar name.”

Most of the Northstar management team has remained in place since NGP formed Northstar GOM from its eighth fund in 2006. The firm invested in Northstar Offshore Energy Partners using capital from its ninth fund in 2008.

NGP formed the new company by investing from its tenth fund that is currently targeting $4.75 billion, according to data provider Private Equity Connect.

Limited partners in Fund X include the Los Angeles Fire and Police Pension system and the Minnesota State Board of Investment, both of which committed to NGP’s ninth fund that collected $4 billion in 2008.

NGP manages about $7.3 billion in funds that invest in oil and gas production, mid-stream, oil field services and power companies. The firm is an affiliate of NGP Energy Capital Management, a $9.5 billion firm based in Irving, Texas that invests across the natural resources sector.