This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Deals to Watch: PE Wants Into Shale, Paper Wants out of Content

NEW YORK ( TheStreet) -- After completing its $3.5 billion sale of Eagle Ford drilling and production assets to Marathon Oil (MRO - Get Report) earlier in November, KKR (KKR - Get Report) is reported by Bloomberg to be considering a $7 billion takeover of privately held shale driller Samson Investment, upping previous bid rumors by $2 billion according to unnamed sources familiar with talks.

If rumors prove to be true, it would be KKR's biggest private equity deal since the financial crisis. The buyout would also be the largest private equity buyout of the year, according to data compiled by Bloomberg, topping an October $6.3 billion takeover of Kinetic Concepts (KCI) by a consortium led by Apax Partners.

For KKR, which became a Wall Street buyout legend in the 1980s for its $25 billion takeover of RJR Nabisco, it would be a further push to shale drilling. In particular. The deal puts the firm into the Bakken shale in North Dakota and Marcellus shale in Pennsylvania. Its previous Hilcorp investment focused on oil and gas shale in 141 acres of the Eagle Ford in East Texas.

In 2009, KKR cut its first shale deal, investing $350 million in East Resources to get a foothold in the Marcellus shale. Eleven months later, KKR sold the investment in shale assets stretching from New York to West Virginia for $4.7 billion to Royal Dutch Shell (RDS), making it one of its most lucrative post-crisis investments.

According Bloomberg reports of Samson and KKR sale talks, the deal won't include its Gulf of Mexico operations. Itochu of Japan, Crestview Partners and NGP Energy Capital Management will join KKR in a Samson bid, according to separate reports from Reuters, citing unnamed sources. KKR is expected to take a 60% holding in Samson, while Itochu set to take a 25% stake, the sources said.

Founded in 1971 by Charles Schusterman, privately held Samson is headquartered in Tulsa, Okla., and has 1,200 employees that manage its oil and gas operations, which require in excess of $1 billion in annual capital expenditure, according to its Web site. The company derives 70% of its revenue from gas drilling and 30% from oil liquids, and has spent $4 billion in oil and gas asset acquisitions in recent years.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
NYX $0.00 0.00%
BHP $27.63 -6.56%
KKR $13.40 -0.70%
MRO $12.16 -4.90%
NDAQ $62.60 0.53%


Chart of I:DJI
DOW 17,651.26 -99.65 -0.56%
S&P 500 2,051.12 -12.25 -0.59%
NASDAQ 4,725.6390 -37.5850 -0.79%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs