KKR today announced the closing of its Eagle Ford Shale drilling
partnership with EXCO Resources, an oil and natural gas exploration and
production company headquartered in Dallas, Texas. The partnership marks
KKR's seventh investment in the Eagle Ford Shale and the Firm's fourth
investment within its oil and gas drilling and development strategy.
KKR's development drilling strategy provides capital to strong operators
by investing in oil and gas working interests at the asset level.
Marc Lipschultz, Global Head of KKR's Energy & Infrastructure business
stated: "We are excited to be EXCO's acquisition and development partner
in the Eagle Ford Shale, a basin where we have substantial prior
experience. Led by EXCO's strong operating capabilities, we look forward
to developing the drilling locations which hold significant resource
potential and attractive economics."
As part of a Participation Agreement with EXCO, entities advised by or
affiliated with Kohlberg Kravis Roberts & Co. L.P., including KKR
Financial Holdings LLC (NYSE: KFN), acquired an undivided 50% interest
in certain undeveloped Eagle Ford acreage for approximately $131 million
in cash after preliminary closing adjustments. EXCO and KKR will jointly
fund future development of the undeveloped acreage. KKR will fund and
own 75% of each well drilled and EXCO will fund and own 25% of each well
drilled. When each quarterly tranche of wells drilled has been on
production for one year, EXCO has the right to offer to purchase KKR's
75% working interest at fair market value, subject to specific well
criteria and return hurdles. EXCO would make its first offer for wells
that have been online for one year during the fourth quarter of 2014.
KKR's development drilling strategy is part of an effort to support the
large capital needs of oil and gas companies in attractive
unconventional resource basins. With the announcement of the EXCO
transaction, the firm has now invested in four drilling partnerships
over the past 12 months, providing capital to strong operators by
investing in oil and gas working interests at the asset level. As an
asset class, real asset investments in oil and gas can provide
meaningful current yield, inflation protection and low correlation with
many other asset classes.
KKR's Global Energy & Infrastructure business invests across the entire
energy supply chain and multiple asset classes around the world in its
mission to serve as a flexible solutions provider to the energy sector.
Since 2009, KKR, through its investment funds and vehicles, has invested
or committed approximately $4.0 billion to oil and gas investments
spanning buy-outs, minority equity investments, joint-ventures, and
various asset-level and structured investments, making KKR one of the
more active private-market investors in the oil and gas space across
Founded in 1976 and led by Henry Kravis and George Roberts, KKR is a
leading global investment firm with $83.5 billion in assets under
management as of June 30, 2013. With offices around the world, KKR
manages assets through a variety of investment funds and accounts
covering multiple asset classes. KKR seeks to create value by bringing
operational expertise to its portfolio companies and through active
oversight and monitoring of its investments. KKR complements its
investment expertise and strengthens interactions with fund investors
through its client relationships and capital markets platform. KKR & Co.
L.P. is publicly traded on the New York Stock Exchange (NYSE: KKR), and
"KKR," as used in this release, includes its subsidiaries, their managed
investment funds and accounts, and/or their affiliated investment
vehicles, as appropriate.
Kristi Huller, 212-230-9722
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