Apollo, Riverstone back U.S. Gulf region energy co
(Reuters) - Private equity firms Apollo Global Management (APO.N) and Riverstone Holdings said they will back a new company that will invest in oil and gas opportunities in the U.S. Gulf Coast and Gulf of Mexico regions.
The private equity firms said in a statement that they will invest up to $600 million in Talos Energy, backing a management team that has worked with Riverstone previously.
"The Gulf Coast and Gulf of Mexico continues to be a rewarding basin to acquire assets and use innovative techniques to develop another round of investment opportunities," Tim Duncan, chief executive of Talos, said in a statement.
The Talos management team's previous company Phoenix Exploration was sold to Apache Corp (APA.N) last year for an undisclosed sum. Before that, the team worked at Gryphon Exploration, which was sold to Woodside Petroleum's (WPL.AX) U.S. unit for around $300 million.
The company will be based in Houston.
Private equity firms have flooded the U.S. oil and gas sector with billions of dollars in recent years, buying assets from energy firms thirsty for capital to help them drill in expensive and challenging areas.
An Apollo-led group struck a $7.15 billion deal to buy El Paso Corp's EP.N oil and gas exploration and production assets earlier this year. Last year's second-largest leveraged buyout came from the energy space, as a consortium led by private equity firm KKR & Co LP (KKR.N) paid $7.2 billion for privately held oil and gas group Samson Investment Co.
(Reporting By Michael Erman; Editing by Phil Berlowitz and M.D. Golan)