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KKR commits $250m to Westbrick Energy oil, gas growth

20 Nov 2012

Global buyout house KKR has closed an investment in oil and gas company Westbrick Energy, in a deal that could reach $250m.

The company said it would use an initial $75m to fund its capital programme and purchase strategy, while KKR has committed a further $175m of equity for follow-on investments.

Westbrick currently owns over 70,000 net acres of oil and gas rights and expects to be producing the equivalent of more than 2,500 barrels of oil per day by the end of November.

Jonathan Smidt and Brandon Freiman, who are both members of KKR’s energy and infrastructure business, have joined the Westbrick board of directors as part of the deal.

Smidt said, “KKR is thrilled to be partnering with Westbrick to invest in the compelling opportunities available in the Canadian oil and gas marketplace today.

“The combination of Westbrick’s top-tier management team, its distinguished and value-added board, and now its ready access to equity capital creates a differentiated platform to execute against the market opportunity.”

KKR closed its maiden natural resource fund in June with $1.25bn of commitments, marking the global private equity giant’s latest attempt to diversify its operations beyond leveraged buyouts.

KKR Natural Resources Fund, which counts influential US pension fund Teachers’ Retirement System of Texas as one of its LPs, will look to invest in oil and gas properties largely comprised of proved, developed producing reserves.

A month later the firm agreed to participate in energy company Comstock Resources’ future development of its Eagle Ford shale acreage in several sites across Texas.

As part of the deal KKR will have the right to participate for one-third of Comstock’s working interest in wells drilled on 28,000 net acres, in exchange for paying $25,000 per acre through a drilling carry for the net acreage acquired by the firm.

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