Kohlberg Kravis Roberts has entered into a definitive agreement to sell East Resources to Royal Dutch Shell (NYSE: RDS) for $4.7 billion in cash. East Resources owns 650,000 net acres of highly contiguous, operated acreage in the Marcellus shale and produces about 60 mmscfe/d, mostly in natural gas. KKR acquired its stake in the company when it provided it with $350 million of convertible debt last year.
Private equity firms have exited 93 companies in the Energy industry for a total of $37.8 billion since the beginning of 2007, according to the PitchBook Platform. This pales in comparison to the $120 billion PE firms have invested in 433 Energy companies (excluding add-ons) over the same time period. So far in 2010, investors appear to still be bullish on the industry with 36 investments compared to only 15 exits. This interest remains broad-based with 33 different PE firms having made investments, led by Riverstone Holdings with 8 deals. However, this disparity in investment and exit levels could lead to some issues down the road as a large number of PE firms start looking for exits.