Carlyle Group Backs Former Cove Energy Team

Major private equity group Carlyle Group has committed up to $200 million funding to Discover Exploration – a new oil and gas explorer led by the management team behind Cove Energy.

Cove Energy was acquired for $1.9 billion by Thai state oil firm PTT Exploration & Production in August 2012 after a lengthy takeover battle with Royal Dutch Shell. Both companies were keen to get their hands on Cove's 8.5-percent stake in Mozambique's Rovuma offshore basin – which holds tens of trillions of cubic feet of natural gas resources.

Now, Cove's former management team has turned its attention towards the Comoros Islands to the east of Mozambique as well as New Zealand. In a statement released Monday, Discover Exploration said that the $200 million raised will allow it to fund existing operations in both countries as well as new opportunities in Europe, Africa, Latin America and Asia.

Discover will focus on exploration and appraisal programs that focus on deepwater petroleum systems. Concentrating on young and emerging basins, de-risked through 2D and 3D seismic data surveys, it aims to participate in multi-well drilling programs through farm-ins, farm-outs and M&A activity.

The firm said that the Carlyle Group investment will fund its near-term, high-impact drilling programs offshore New Zealand with operating partner Anadarko Petroleum, as well as provide working capital for its stake offshore the Comoros.

Discover holds 10-percent interests in the PEP38451 permit in both the Taranaki and Canterbury basins, offshore New Zealand. It also has a 60-percent participation in a production sharing contract offshore the Comoros, which is currently awaiting that country's approval. The Comoros PSC is located in an area on trend with the major Rovuma delta gas discoveries offshore northern Mozambique.

Discover Executive Chairman Michael Blaha commented in a company statement:

"We are delighted that [Carlyle] has agreed to support the company with significant investment funding to allow us to acquire these two New Zealand opportunities and to capture other future opportunities that are available to us from host governments and our international peers in the oil and gas industry. We are confident of using the success we enjoyed with Cove Energy as a bridgehead to our new endeavors."



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