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Blackstone aims new fund at troubled offshore drilling market

Thu 11th February, 2016 6:06pm
NEW YORK, Feb 11 (Reuters) - Blackstone Group  BX.N  has 
launched a fund to finance the troubled offshore drilling and 
services sector, the U.S. private equity firm said on Thursday, 
anticipating a buyer's market as low oil prices set the stage 
for restructuring and consolidation.  
    Blackstone's new entity, called Clarion Energy Partners, 
will be led by former executives of Pride International, an 
offshore drilling services company that was acquired by 
London-based Ensco PLC  ESV.N  in 2011.  
    Clarion would be able to provide "creative financing and 
operational solutions" to companies whose "balance sheets are 
under severe pressure" in the current downturn, Louis Raspino, 
the new entity's chairman and Pride's former chief executive, 
said in the press release.  
    The oil price rout has left many energy companies teetering 
on the brink of bankruptcy and left many of their assets 
appearing cheap. Private equity funds have been mobilizing to 
hunt for favorable deals.  
    Creation of the Blackstone fund was announced on the day 
that Hercules Offshore Inc  HERO.O , a U.S.-based offshore 
driller and liftboat services provider that emerged from 
bankruptcy in August, said it was exploring strategic options, 
including selling itself.  urn:newsml:reuters.com:*:nRSD24B7N2  
    Offshore rig services is perhaps the most oversupplied 
sector of the glut-ravaged oil industry, and many players 
besides Hercules have begun exploring restructuring options. 
 urn:newsml:reuters.com:*:nL1N11L2IQ 
    Samson Resources Corp filed for bankruptcy in September, 
while Paragon Offshore PLC  PGNPF.PK  has hired a well-known 
restructuring firm and the investment bank Lazard and has 
deferred interest payments amid conversations with 
debtholders. urn:newsml:reuters.com:*:nWNAB09OHD 
    Hercules on Thursday said it had formed a special committee 
to explore options including a sale, an issuance of equity or 
debt, or sales of certain assets, though it said it had not 
received any specific proposal.  
    Oil prices  CLc1  tumbled on Thursday to $26.22 per barrel, 
near 12-1/2 year lows hit last month.  O/R  Natural gas prices 
fell 2.5 percent and remain near 16-year lows hit last month. 
 NGA/  
    The long, deep price slump has left drilling rigs sitting 
idle as producers choose not to extract oil and gas at a loss.  
    "This year is off to a particularly slow start with contract 
terminations as prolific as new fixtures," Rob Saltiel, chief 
executive of Atwood Oceanics Inc  ATW.N  , said in a call with 
investors last week. 
 
 (Reporting By Luc Cohen; Editing by Terry Wade and David 
Gregorio) 
 ((luc.cohen@thomsonreuters.com; +1-646-223-8699; Reuters 
Messaging: luc.cohen.thomsonreuters@reuters.net)) 
 
Keywords: BLACKSTONE GROUP OIL/OFFSHORE
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