KKR KKR +0.47% & Co. has agreed to buy natural-gas fields in Texas and Oklahoma for $306 million as the private-equity firm continues an energy patch spending spree that has seen it commit billions of dollars to oil and gas producing properties.
KKR said Monday that it is acquiring 93,000 gas-producing fields from WPX Energy Inc. WPX -0.83% About a third of the properties are in the Barnett Shale beneath Fort Worth, Texas while the rest is in the Arkoma Basin, which underlies swaths of Oklahoma and Arkansas.
KKR has been among the most aggressive buyers in a surge of private-equity investment in U.S. energy production. In November it led a $7.2-billion acquisition of closely held Tulsa, Okla., explorer Samson Investment Co. And last month it struck a $250-million pact with Chesapeake Energy Inc. CHK -0.17% to invest in oil and gas properties.
WPX, of Tulsa, was spun out of Williams Companies Inc., WMB +0.72% a large pipeline owner and one of several energy companies that have decided recently that the value of their parts is more than their whole.
WPX shares began trading in December. They closed Friday trading on the New York Stock Exchange at $18.01 for a market capitalization of about $3.6 billion.
The properties WPX is shedding produce mostly natural gas, which recently hit a 10-year low as a glut of gas has overwhelmed demand. An unusually warm winter hastened the heating fuel's fall.
The low price has some producers shutting in production and shifting their focus to more lucrative oil extraction, particularly from shale formations and other reservoirs that have been unlocked by new technology. Such so-called unconventional drilling is capital intensive, prompting some producers to sell gas-producing properties.
WPX has said it plans to boost drilling in its oil fields in North Dakota's Bakken Shale, anticipating that it will spend about a third of its $1.2-billion budget there this year. It also has energy fields in Pennsylvania, Colorado and Argentina.
Private-equity firms have been willing to take a longer-term view on natural gas, seeing promise in a fuel that is cleaner burning than coal and oil and wagering on growing global demand for energy. They are also less sensitive to price swoons because they don't have to show quarterly production growth that investors expect from publicly traded oil companies and can therefore slow drilling when prices don't justify boosting output.
KKR said it is buying the WPX properties through a partnership with Premier Natural Resources LLC, also of Tulsa. Called KKR Natural Resources, the partnership has so far this year spent $600 million on oil-and-gas-producing assets and has $1 billion on hand to spend on other energy fields, KKR said. KKR said that amount of capital is enough to acquire $2 billion worth of assets.
