Dallas-based exploration firm Exco Resources has completed a $685million deal for Chesapeake’s operations in the Eagle Ford shale formation in south Texas.
The deal will see the US-focused company partnering with investment firm Kohlberg Kravis Roberts, which has taken a 50% stake in the undeveloped acreage for around $131million.
KKR already has six investments in the Eagle Ford shale field, which has been growing its oil and gas development strategy.
‘We are excited to be EXCO’s acquisition and development partner in the Eagle Ford Shale, a basin where we have substantial prior experience,” said KKR head of energy and infrastructure Marc Lipshultz.
“Led by EXCO’s strong operating capabilities, we look forward to developing the drilling locations which hold significant resource potential and attractive economics.”
Oklahoma-based Chesapeake had been looking to divest assets after being hit by the fall in natural gas prices. The 55,000 net acre area has around 120 producing wells.
Exco will take fund and own 25% of each well drilled on the undeveloped sites, with KKR owning and funding 75% of the wells.