Israel's Navitas Petroleum LP said July 28 The Blackstone Group LP signed a preliminary deal to raise its stake in a drilling project in the Gulf of Mexico to 47% from 16%.
Navitas had partnered with U.S. oil firm LLOG Exploration Co. LLC and Blackstone's portfolio company Beacon Offshore Energy LLC in drilling at the Shenandoah discovery that holds 431 million barrels of oil. Blackstone, through Beacon, is buying LLOG's 31% holding in the $250 million project while Navitas would continue to hold 53%, Navitas said.
It noted that the project is expected to generate $1.13 billion in cash flow for the company. Production is forecast to begin in 2024.
The group recently signed a deal for drilling rig with Transocean Ltd.
"Blackstone's and Beacon's capabilities will help complete the project's financing and rapid and successful development," Navitas Chairman Gideon Tadmor said.
U.S. energy firms cut the number of oil and gas rigs over the past week to a record low for a 14th week even as higher oil prices prompt some producers to start drilling again.
The move comes as the November presidential election looms and the Trump administration aims to complete several more deregulatory actions on the spring Unifed Agenda, a list of its policy priorities.
The U.S. oil and gas rig count fell by four to an all-time low of 247 in the week to Aug. 7, according to data from energy services firm Baker Hughes Co.