Sources say US Gulf producer LLOG Exploration is interested in selling at a $3 billion valuation.

People familiar with the matter have said that LLOG Exploration Offshore has been exploring the possibility of a sale. This could value one the largest privately owned oil and gas producers on the U.S. Gulf Coast at more than 3 billion dollars, including debt.

Sources said that the Covington, Louisiana based company has been working with investment banks at Guggenheim Securities to assess buyer interest. A limited number of parties have been contacted over the past few weeks in order to gauge the level of interest. Gerald Boelte founded LLOG in 1976. His family still controls the company. Gerald Boelte died last year. Sources say that any deal would include provisions to cement Gerald Boelte's legacy, including commitments from the buyer to keep the LLOG name, and to keep the Covington headquarters, and the company staff.

Sources who requested anonymity in order to discuss private discussions said that no transaction was guaranteed.

LLOG declined to comment on a request. Guggenheim declined comment. Guggenheim declined to comment.

Production from recent sites is also beginning to come online, in addition to the new investments made in the basin. LLOG announced last month that it had produced its first oil using the floating production unit Salamanca, which supports drilling in the Leon Castille fields. Repsol is one of LLOG's key partners in this project.

Sources said that given LLOG's size, an energy giant would be the logical buyer. However, it would also make a good acquisition for a foreign oil and gas company with offshore experience looking to enter the U.S. Gulf. Reporting by David French, New York; Editing and proofreading by Richard Chang

(source: Reuters)