By OGJ editors
HOUSTON, June 11 -- East Resources Inc., a privately-owned independent in Warrendale, Pa., said Kohlberg Kravis Roberts & Co. LP (KKR), New York, bought a minority equity position in the company with a “significant investment” from private equity funds.
East Resources’ management and employees retain responsibility for day-to-day operations.
Proceeds will be used to strengthen the company’s balance sheet through the repayment of all outstanding balances under the company’s credit facility. It also will help finance long-term oil and gas exploration and development, particularly in the Marcellus shale.
“Given the increased competition in the Appalachian basin’s Marcellus shale region from a number of well capitalized publicly traded oil and gas companies, we chose a capital provider that has both relationships and skills that could add value to East Resources,” said Terrence M. Pegula, founder, president, and chief executive officer.
East Resources has one of the top acreage positions—more than 650,000 net acres—in the southwestern and northeastern regions of the Marcellus shale trend, particularly in northeastern Pennsylvania where it is focused on ramping up development.
Company officials said Marcellus shale represents the most promising gas opportunity in North America, extending from the southern tier of New York through western Pennsylvania into the eastern half of Ohio and south through West Virginia. These deposits are close to existing interstate pipelines supplying US population centers in the Northeast.
East Resources expanded its operations within Pennsylvania and into West Virginia through its acquisition of some former Pennoil assets from Devon Energy Corp. in 2000. It owns and operates 2,400 producing oil and gas wells in New York, Pennsylvania, West Virginia, Colorado, and Wyoming.