Spur Energy Partners has formed partnership with KKR to acquire large, high-margin oil and gas production and development assets across the Lower 48.
Spur said that the both the companies have also signed a definitive agreement to acquire the Permian Northwest Shelf assets of Percussion Petroleum.
The acquisition includes interests in approximately 380 gross producing wells and 22,000 net acres situated in the core of the Yeso formation in Eddy & Lea Counties, New Mexico, along with associated water and midstream assets.
The assets produced approximately 9,200 net barrels of oil equivalent per day during the first quarter of 2019. The transaction is expected to be closed in the second quarter of 2019, subject to customary closing conditions.
Spur is led by CEO Jay Graham, co-founder and former CEO of WildHorse Resource Development Corporation (WRD), along with a core team of executives and key technical personnel from WRD who have worked together for many years through multiple successful upstream oil and gas ventures.
Spur said that it intends to apply its expertise to acquire and enhance assets across the Lower 48 by combining commercial capabilities with a focus on operational efficiency and technical execution.
Spur CEO Jay Graham said: “Given their long-term approach and commitment to investing in scaled, cash flowing E&P assets with growth potential, KKR is the ideal partner for Spur as we look to build a large scale business in the oil and gas sector that creates value through exceptional technical and operational execution.
“We look forward to working together as we make our first investment in this high-quality asset with a strong existing production base and attractive development potential.”
The Spur and KKR partnership is expected to be funded through funds affiliated with KKR’s Energy Real Assets strategy, which saw an investment of approximately $4bn in capital across 12 transactions since 2015. It also manages a portfolio of oil and gas assets in numerous unconventional and conventional resource areas across the US.
KKR energy real assets team managing director Dash Lane said: “This acquisition is the first step in what we expect to be a multi-billion dollar investment partnership with Spur, which we believe is well-positioned to create significant value in today’s oil and gas market.
“We have known the Spur team for many years, have seen firsthand their commercial and operational expertise, and are thrilled to be partnering with Jay and his team.”