Spur Energy Partners LLC (“Spur”) and KKR, a prominent global investment firm, have announced a strategic partnership aimed at acquiring substantial, high-margin oil and gas production and development assets across the Lower 48 United States. This collaboration marks a significant move in the energy sector, combining Spur Energy Partners’ operational expertise with KKR’s investment prowess. Alongside the partnership announcement, the companies confirmed the signing of a definitive agreement to purchase the Permian Northwest Shelf assets from Percussion Petroleum LLC, signaling their immediate action and investment focus.
This initial acquisition encompasses interests in approximately 380 gross producing wells and 22,000 net acres situated in the core of the Yeso formation within Eddy and Lea Counties, New Mexico. These locations are known for their robust oil and gas production capabilities. The deal also includes associated water and midstream assets, crucial for efficient operations in the region. During the first quarter of 2019, these assets demonstrated strong performance, producing approximately 9,200 net barrels of oil equivalent per day, with a significant 85% being liquids. The acquisition is anticipated to be finalized in the second quarter of 2019, pending standard closing conditions.
Spur Energy Partners is spearheaded by CEO Jay Graham, a co-founder and former CEO of WildHorse Resource Development Corporation (WRD). Graham brings with him a core team of executives and key technical personnel from WRD, a group with a long history of successful collaborations in upstream oil and gas ventures. Spur Energy Partners intends to leverage this experienced team and their proven methodologies to identify, acquire, and enhance assets throughout the Lower 48. Their strategy emphasizes the integration of robust commercial strategies with a strong commitment to operational efficiency and precise technical execution, aiming to maximize asset value and production.
Jay Graham, CEO of Spur Energy Partners, highlighted the strategic alignment with KKR, stating, “Given their long-term perspective and dedication to investing in scaled, cash flowing E&P assets that offer growth potential, KKR is the ideal partner for Spur as we aim to establish a large-scale business in the oil and gas sector. Our focus is on generating value through exceptional technical and operational execution, and we believe this partnership is perfectly positioned to achieve that. We are excited to commence our collaboration with this high-quality asset acquisition, which boasts a solid existing production base and promising development opportunities.”
Dash Lane, Managing Director on KKR’s Energy Real Assets team, also commented on the partnership and acquisition, “This acquisition represents the initial step in what we envision as a multi-billion dollar investment partnership with Spur Energy Partners. We are confident in Spur’s ability to generate substantial value in the current oil and gas market. Having observed the Spur team’s commercial and operational expertise over many years, we are delighted to partner with Jay and his team and support their vision.”
The financial backing for the Spur Energy Partners and KKR partnership will be provided by funds associated with KKR’s Energy Real Assets strategy. This strategy has a significant track record, having invested approximately $4.0 billion in capital across 12 transactions since 2015. KKR’s Energy Real Assets strategy manages a diverse portfolio of oil and gas assets spanning numerous unconventional and conventional resource areas across the United States, demonstrating their deep commitment to the energy sector.
About Spur Energy Partners
Established in 2019 with a commitment from KKR, Spur Energy Partners is dedicated to delivering superior long-term investor returns. The company focuses on acquiring and developing oil and gas assets that possess both a strong base production and substantial low-cost development inventory across the Lower 48, ensuring sustainable growth and profitability.
About KKR
KKR is a leading global investment firm managing multiple alternative asset classes, including private equity, energy, infrastructure, real estate, and credit, alongside strategic hedge fund partnerships. KKR’s mission is to generate attractive investment returns for its fund investors through a patient and disciplined investment approach, employing top-tier professionals, and driving growth and value creation within its portfolio companies. KKR’s investment strategy includes deploying its own capital alongside that managed for fund investors and offering financing solutions and investment opportunities via its capital markets business. References to KKR’s investments may encompass activities of its sponsored funds. For more information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com and on Twitter @KKR_Co.
Contacts
Media:
KKR:
Kristi Huller or Cara Major, + 1-212-750-8300
[email protected]
