A portfolio company of KKR has agreed to buy certain oil and gas assets in west Texas for $350 million, according to a statement.
The New York-based global private equity giant is making the purchase through a partnership between its KKR Natural Resources unit and Fleur de Lis Energy (FDL), the statement said, adding that the transaction is expected to close in the fourth quarter of this year.
This is KKR’s second investment with operating partners FDL, following the acquisition of Selma Chalk properties from Penn Virginia Corporation in July this year.
The oil and gas assets are located in Ector and Midland Counties of the Permian Basin in west Texas, and are comprised of over 7,200 contiguous acres producing from multiple hydrocarbon-rich zones, including the Strawn, Wolfcamp and Spraberry formations.
FDL estimates production to reach over 5,200 barrels of oil equivalent per day (boe/d) for the fourth quarter, the majority of which is oil, and which contains an attractive inventory of near-term development opportunities, according to the statement.
Jonathan Smidt, head of KKR Natural Resources, called the purchase “an important step” as the firm continues to expand its natural resources platform in partnership with FDL.
KKR announced its partnership with FDL in March this year. FDL currently manages a portfolio of natural gas producing assets in Southern Mississippi.
Since 2009, KKR, through its investment funds and vehicles, has invested or committed approximately $4.7 billion to energy-related investments spanning buy-outs, minority equity investments, joint ventures, and various asset-level and structured investments, the statement added.