KKR acquires oil & gas properties in the U.S.

KKR has signed a definitive agreement to acquire certain oil and gas properties in Ector and Midland Counties of the Permian Basin (USA) from Linn Energy, LLC for US$350 million.

The transaction, which is expected to close in the fourth quarter, is being made through the KKR Natural Resources' (KNR) partnership with Fleur de Lis Energy (FDL) that is focused on pursuing investments in producing North American oil and gas properties.

Commenting on the acquisition, FDL CEO Porter Trimble stated:

These are high quality assets that fit our acquisition and development strategy perfectly. This field has an extensive geologic column consisting of multiple producing horizons within the Permian Basin. This will allow the FDL team to access over 33 MMBOE of long life reserves.

The assets are comprised of over 7,200 contiguous acres producing from multiple hydrocarbon-rich zones, including the Strawn, Wolfcamp and Spraberry formations. FDL estimates fourth quarter production of over 5,200 boe/d, the majority of which is oil, and contain an attractive inventory of near-term development opportunities.

Jonathan Smidt, a Member of KKR and Head of KKR Natural Resources commented:

We believe this represents an exciting opportunity to acquire high-quality producing assets that will benefit from ongoing development, and the application of new technologies, within the hydrocarbon rich Permian Basin. This is an important step as we continue to expand our natural resources platform in partnership with Fleur de Lis Energy.

KKR announced its partnership with Fleur de Lis Energy in March 2014. Founded by former Merit Energy Company Vice Chairman, Porter Trimble, FDL currently manages a portfolio of natural gas producing assets in Southern Mississippi. This is KKR's second investment behind operating partner FDL, following the July 2014 acquisition of Selma Chalk properties from Penn Virginia Corporation.