* Source says investment was about $350 mln
* East Resources holds Marcellus shale acres
(Adds confirmation, background)
NEW YORK, June 9 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
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
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)