* To focus on conventional E&P assets
* Hopes to spend at least $500 mln over several years
* Announces $75 million deal in Mississippi
(Adds quotes from TPG executive, background)
By Michael Erman
NEW YORK, Oct 13 Private equity firm TPG
[TPG.UL] said on Wednesday it launched a new venture to invest
in conventional oil and gas assets in North America, bolstered
by the belief that the segment has become undervalued.
Indeed, Petro Harvester has already announced its first
deal, spending $75 million to buy oil and gas properties in
Mississippi from Comstock Resources. (CRK.N)
TPG would like to invest at least $500 million in the
venture over several years, called Petro Harvester Oil & Gas,
the private equity firm's head of energy investing told
"People are tending to sell what I call slow and steady,
conventional oil properties. Our plan was to put together a
team that could find the ones we like, properties that can
benefit from greater operational focus and put together a good,
old-fashioned oil-focused business," Michael MacDougall, the
TPG partner in charge of energy investing, said.
TPG is bucking the trend of investing in so-called
unconventional oil and gas resources, which include oil and gas
shale and oil sands.
Shale plays -- where oil and gas are trapped in underground
rock formations -- have become particularly sought after, with
international oil companies lining up to spend billions of
dollars to participate in joint ventures in these regions.
But Petro Harvester plans to look for value elsewhere,
looking for conventional exploration and production assets
where it believes it can drive up production.
The venture will be led by Gareth Roberts, who previously
founded and led Denbury Resources (DNR.N), also a TPG
MacDougall stressed that Roberts' involvement would be a
benefit for TPG, whose relationship with the executive dates
back to 1995.
"In firms like ours, if you've known someone for 15 years,
it's a lot easier to back them in forming a new business,"
MacDougall said. "The message we're delivering is that
Harvester is open for business and has a deep-pocketed friend
in TPG behind them."
(Reporting by Michael Erman; Editing by Steve Orlofsky,