KKR signs partnership deal with EXCO Resources

Kohlberg Kravis Roberts (KKR) has signed a deal with Texas-based oil and natural gas exploration and production firm EXCO Resources to become its acquisition and development partner in the Eagle Ford Shale basin.

KKR’s affiliates have acquired an undivided 50% stake in undeveloped Eagle Ford property for approximately $131m.

The property will be jointly funded by EXCO and KKR for future development, while KKR will own 75% of each well drilled and EXCO 25%.

After one year of production, EXCO have the option to purchase KKR’s 75% working interest at market value, subject to certain terms.

KKR global head of energy and infrastructure business Marc Lipschultz said the companies have substantial prior experience in the Eagle Ford Shale basin.

"Led by EXCO’s strong operating capabilities, we look forward to developing the drilling locations which hold significant resource potential and attractive economics," Lipschultz added.

The partnership marks KKR’s seventh investment in the Eagle Ford Shale and fourth in the last 12 months under its oil and gas drilling and development strategy.

Since 2009, KKR has made oil and gas investments worth approximately $4bn that have included buy-outs, minority equity investments, joint-ventures and various asset-level and structured investments.

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Image: EXCO and KKR will jointly fund future development of the undeveloped acreage; Photo: courtesy of ShavPS.