KKR in $104m oil and gas deal

The acquisition of properties in the Barnett Shale region of Texas marks the third investment made by KKR Natural resources.

Kohlberg Kravis Roberts has acquired a number of properties in Texas’ Barnett Shale region from Carizzo Oil & Gas for $104 million. The Barnett Shale assets purchased by KKR contain 122 billion cubic feet equivalent of total proved resources, based on a third party estimate.

The deal marks the third investment made by KKR Natural Resources, the partnership between KKR and Premier Natural Resources, following a transaction in January for properties in the Barnett Shale and a $40 million acquisition of Southeast Texas oil and gas assets in last November. KKR partnered with Premier Natural Resources, an oil and gas company founded in 2006 by former executives of Vintage Petroleum, in February 2010 to pursue investments in North American oil and gas properties.

Senior member of KKR’s Energy and Infrastructure business Jonathan Smidt said in a statement the firm plans “to grow the [KKR Natural Resources] platform through the acquisition of additional oil and gas properties in North America”.

KKR Natural Resources is an oil and gas fund within the firm’s broader energy group. The amount KKR has raised for the fund could not be determined at press time, but the firm had collected at least $257 million as of 31 December 2010. Since the formation of KKR Natural Resources, the firm has added an office in Houston, Texas.

KKR’s energy-related investment team has kept busy over the past year. In January, the firm purchased assets containing 93 billion cubic feet equivalent of total proved resources from ConocoPhillips. The acquisition was KKR’s first deal in the Barnett Shale region.

Last December, the firm purchased half of El Paso Midstream Group’s midstream infrastructure assets in Utah for $125 million. KKR and El Paso have an oil and gas joint venture worth roughly $625 million.