KKR, Chesapeake collaborate on energy investment

HOUSTON — Investment firm Kohlberg Kravis Roberts & Co. and Chesapeake Energy Corp. are teaming up to invest in mineral and royalty interests in key U.S. oil and gas basins.

“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,” KKR director Robert Antablin said in a statement. Antablin leads the New York company’s royalties investment strategy.

Investment firms are playing a bigger role in the oil and gas sector, as Cheniere Energy said 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.

KKR has invested in the energy sector for more than 20 years, beginning with an investment in Union Texas Petroleum in 1985.

KKR and Chesapeake said Tuesday that they will initially contribute a combined $250 million to the partnership. Chesapeake, the second-largest natural gas producer in the U.S., will pay 10 percent of that amount and source, acquire and manage the royalty investment opportunities.

The companies will jointly oversee the partnership.

Chesapeake CEO Aubrey McClendon said in a statement that the Oklahoma City company has acquired about $900 million in royalties over the last 10 years.

“We look forward to accelerating the pace of our acquisition of royalties by combining our unparalleled acquisition skills and unique information base with KKR’s capital and business structuring expertise,” McClendon said.

Chesapeake’s stock fell 13 cents to $24.10 in premarket trading.