Dallas-based Keystone Petroleum LLC has formed its second limited partnership, Keystone Petroleum II LP with initial capital commitments of $50 million.

The partnership will primarily focus on drilling and acquisitions in southeastern New Mexico. Majority funding is provided by New York-based private equity fund Energy Trust Partners III LP.

            Keystone Petroleum’s initial partnership was formed in March 2006 and has been successfully drilling, producing and selling properties in the Wolfberry play, in West Texas. That partnership currently holds an interest in 17,000 acres, primarily in Ector County, which will be developed during the next 24 to 36 months.

            H.C. Lee has been named vice president, business development and geology. He was responsible for the efforts of Magnum Hunter Resources in southeastern New Mexico, during which time a total of 105 wells were drilled in New Mexico, with a 98% success ratio.

            Earl Krieg Jr. has been named chief operating officer. He remains senior vice president, engineering, and is one of Keystone Petroleum’s founders.

            Keystone Petroleum president and chief executive Richard R. Frazier says, “We are all very proud of what has been accomplished to date with the first partnership, and we still have two large acreage blocks to develop before we wrap up that entity. We are very excited about the additional focus on Southeast New Mexico and the energy and expertise that H.C. Lee brings to that effort. Earl Krieg has been doing an excellent job managing the activities of the company and we are finally giving him the appropriate title to match his responsibilities.”

            Keystone Petroleum has oil and gas assets in West Texas, southeastern New Mexico and Oklahoma.