2010-06-21-2010-06-14-2010-06-14

To acquire 40% WI in 100,000 acres in S. TX Eagle Ford shale play.

Houston-based asset-management firm Kohlberg Kravis Roberts & Co., publicly traded through KKR & Co. (Guernsey) LP, (Euronext Amsterdam: KKR) has agreed to invest $400 million in Hilcorp Resources LLC, a partnership recently formed to operate privately held Hilcorp Energy Co.'s South Texas Eagle Ford oil and gas interests.

The partnership combines a capital commitment from KKR and Hilcorp and an Eagle Ford position comprising approximately 100,000 net acres from parent company Hilcorp, which will manage its daily operations. KKR will retain a 40% interest in the partnership; Hilcorp will hold a majority interest of 60%.

KKR managing director John Bookout says, "With more than two decade of history, Hilcorp is a known leader when it comes to exploring for, developing and producing oil and gas, and Hilcorp's management is unparalleled in terms of its experience in the South Texas region. This partnership is an endorsement of the founding vision of Hilcorp Energy and the strength and experience of its management team."

Marc Lipschultz, KKR global head, energy and infrastructure, adds, "We believe in the long-term potential of the Eagle Ford and see a tremendous opportunity to drive job creation and related economic benefits for a variety of stakeholders in connection with the development of the Eagle Ford."

The Eagle Ford play is estimated to contain more than 80 billion barrels equivalent of original oil in place. Hilcorp currently operates two horizontal-drilling rigs in the play.

Jefferies & Co. Inc. is sole advisor to Hilcorp.

Founded in 1976 and led by Henry Kravis and George Roberts, KKR manages approximately $55 billion in assets as of March 31. Led by CEO, Jeff Hildebrand, Hilcorp is the largest producer of conventional oil in South Texas.