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KKR, Chesapeake to Partner in Energy Project (KKR, CHK)

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Chesapeake Energy CorporationInvestment firm Kohlberg Kravis Roberts & Co. (NYSE: KKR) and Chesapeake Energy Corp. (NYSE: CHK) are jointly collaborating to invest in U.S. oil and gas fields.

The companies announced on Tuesday that they will invest together $250 million to buy new resources. KKR, which has considerable exposure to the energy sector as the invested in it for nearly two decades, will contribute 90 percent of the money for the partnership. Chesapeake, nation’s second-largest natural gas producer, will contribute 10 percent.


In a statement, KKR Director, Robert Antablin, said “Driven predominantly by the recent advancements in unconventional oil and gas technology, we continue to see attractive opportunities to invest behind the domestic exploration and production of oil and gas”.

Meanwhile, the announcement of collaboration over oil exploration shows Chesapeake’s interest in expanding its footprint in the U.S., where new drilling techniques have allowed companies to tap vast areas of underground shale oil and gas. Chesapeake’s $1 billion in long-term debt last year, used mostly in acquiring new properties, has prompted the Company to get access to more oil, which has become much more profitable to produce.

The price of oil in January and February has climbed up an average 13 percent from the same two months last year. Natural gas, meanwhile, has slipped near 10-year lows.

Lately, investment firms have been fairly bullish on energy sector, mainly oil and gas. Cheniere Energy announced last week that it will receive $2 billion in financing from The Blackstone Group to fund the construction of a natural gas export plant in Louisiana.

El Paso Corp. (NYSE: EP) also reported last month that it will sell its exploration and production business for $7.15 billion to a group of buyers which includes Apollo Global Management, LLC and Riverstone Holdings, LLC.

 

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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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