UPDATE 2-KKR invests in U.S. natural gas company
* Source says investment was about $350 mln
* East Resources holds Marcellus shale acres (Adds confirmation, background)
NEW YORK, June 9 (Reuters) - U.S. private equity firm Kohlberg Kravis Roberts & Co [KKR.UL] has made a significant investment in East Resources Inc, the privately held natural gas company said on Tuesday.
The size of the investment was about $350 million, according to a source familiar with the matter.
Pennsylvania-based East Resources holds more than 650,000 acres in the Marcellus shale -- a rock formation that runs from West Virginia to New York and is said to have vast amounts of natural gas.
The company plans to use the proceeds from the KKR convertible debt investment to repay all outstanding balances under its credit facility and develop its existing leasehold positions.
Drilling in a shale formation, where the gas is locked tightly in rock, is more complex and expensive than conventional drilling. But the wells often come on-line faster and can be more profitable over time. (Reporting by Michael Erman in New York and Esha Dey in Bangalore; editing by Lisa Von Ahn and Tim Dobbyn)