KKR takes a stake in Comstock's Eagle Ford shale oil venture
NEW YORK, July 30 |
NEW YORK, July 30 (Reuters) - Private equity firm KKR and Co LP agreed to pay up to around $200 million to take a one third stake in oil and gas company Comstock Resources' position in the Eagle Ford shale in south Texas.
Under the terms of the deal, KKR will pay the equivalent of $25,000 per acre of its stake as Comstock develops the roughly 26,000 acres it has yet to drill of its Eagle Ford shale holdings.
The companies said in a statement that KKR has committed to participating in the next 100 wells and can continue to participate beyond that.
Comstock will continue to hold all of the interest in the wells it developed before March 31.
The Eagle Ford shale field has become one of the hotter U.S. oil exploration regions in recent years. According to a study by energy consultancy IHS, Eagle Ford may be a better find than the prolific Bakken shale in North Dakota, as typical wells in the south Texas prospect gush more oil than those in the northern Midwest.
KKR and other private equity companies have had success with energy investments. Last year, Marathon Oil Corp struck a deal to buy oil and gas properties in Texas' Eagle Ford shale field for $3.5 billion from KKR and Hilcorp. With the sale, KKR nearly tripled the investment it made just a year previously.
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