KKR Partners with Oil and Gas Exploration Company RPM Energy to Scout Deals

Kohlberg Kravis Roberts & Co. is partnering with New York-based RPM Energy, a privately owned oil and gas exploration company, to target “resource plays.” Financial terms of the partnership aren’t being disclosed.


New York, NY, October 26, 2010 – Kohlberg Kravis Roberts & Co. (together with its affiliates, “KKR”) today announced the formation of a partnership with RPM Energy LLC (“RPM”), a privately-owned oil and gas exploration and development company led by veteran energy professionals Claire Scobee Farley and David Rockecharlie. The partnership, RPM Energy Partners L.P. (the “Partnership”), will target opportunities to be a joint venture partner with E&P companies that are well positioned in the large unconventional resource plays throughout North America. Financial details and terms of the transaction were not disclosed.

“KKR is excited to partner with Claire and David. Both have a deep knowledge of the energy sector – from operations to business development – and we are thrilled to partner on investments that will develop much needed oil and natural gas reserves across North America,” Marc Lipschultz, Member of KKR and Global Head of KKR’s Energy and Infrastructure business, said.

The current industry environment is ripe with opportunity driven by the significant capital requirements facing oil and gas producers as they seek to develop newly acquired shale resource positions. “We estimate that the “Big Six” shales alone could require in excess of $1.0 trillion of total capital throughout their lifecycles in order to maintain lease positions, construct infrastructure and develop the underlying hydrocarbons,” said David Rockecharlie, Co-founder of RPM.

“With so many high-quality companies, of every size, looking for partners with capital and technical expertise to help them evaluate and develop their shale acreage, we see tremendous opportunity. With KKR’s backing, we expect to build an exciting new oil and gas company with a portfolio of asset positions in several of the unconventional resource plays,” Claire Scobee Farley, Co-founder of RPM said.

The Partnership will invest in or acquire positions in unconventional oil and gas properties in a wide range of basins. RPM aims to structure creative, mutually rewarding industry partnerships with existing land and working interest owners.

The formation of the Partnership is an extension of KKR’s oil and gas strategy. KKR has been investing in the energy sector and the oil and gas sector, in particular, for more than twenty years, dating back KKR’s investment in Union Texas Petroleum in 1985. Today, KKR’s global energy and infrastructure business spans the globe and covers the full energy supply chain.

“Over the last few years, we have been building a platform to invest in both unconventional and conventional oil and gas assets. The energy industry, with its complex dynamics, continues to be exciting and full of opportunities for long-term partnerships,” John Bookout, Managing Director of KKR, said.

KKR’s recent oil and gas transactions include East Resources, Hilcorp Resources and KKR’s conventional oil and gas platform, formed with Premier Natural Resources.

About Claire Scobee Farley

Prior to founding RPM, Ms. Farley was Co-President of Jefferies Randall & Dewey from February 2005 to August 2008 and Chief Executive Officer of Randall & Dewey, oil and gas asset transaction advisors, from September 2002 until February 2005 when Randall & Dewey became the Oil and Gas Investment Banking Group of Jefferies & Company, Inc. Ms. Farley has extensive expertise in oil and gas exploration operations, business development and marketing having spent 18 years (1981 to 1999) at Texaco, Inc. where her roles included Chief Executive Officer, HydroTexaco; President, North American Production Division; and President, Worldwide Exploration & New Ventures. She also served as Chief Executive Officer of two start-up ventures, Intelligent Diagnostics Corporation (October 1999 to January 2001) and Trade-Ranger Inc. (January 2001 to May 2002). Ms. Farley serves on the Board of Directors of Encana, Inc. and of FMC Technologies, Inc. She holds a Bachelor of Science in geology (Emory University).

About David Rockecharlie

Prior to founding RPM, Mr. Rockecharlie was Co-Head of Jefferies Randall & Dewey (the Energy Investment Banking Group at Jefferies & Company) from June 2008 to June 2010 and Managing Director and Head of Corporate Finance from February 2005 to June 2008. Previously, Mr. Rockecharlie was a partner and Managing Director of Randall & Dewey, oil and gas asset transaction advisors, from June 2003 until the acquisition of Randall & Dewey by Jefferies & Company in February 2005. Mr. Rockecharlie also has extensive industry experience, having served as an executive of El Paso Corp., from March 2000 to April 2003. While at El Paso, Mr. Rockecharlie led a variety of corporate activities including business segment repositioning and restructuring, capital markets financing, risk management, business development and strategic planning. He also served as Senior Vice President in El Paso’s Merchant Energy Group focusing on operating and financial responsibilities within the firm’s unregulated businesses, which included oil and gas exploration and production, power generation and energy marketing and trading. From March 1996 to March 2000, Mr. Rockecharlie was an energy investment banker with Donaldson Lufkin & Jenrette. He began his career as an investment banker at SG Warburg & Co. in 1994. Mr. Rockecharlie received an A.B. in Economics, magna cum laude, from Princeton University.

About KKR

Founded in 1976 and led by Henry Kravis and George Roberts, KKR is a leading global alternative asset manager with $54.4 billion in assets under management as of June 30, 2010. With over 600 people and 14 offices around the world, KKR manages assets through a variety of investment funds and accounts covering multiple asset classes. KKR seeks to create value by bringing operational expertise to its portfolio companies and through active oversight and monitoring of its investments. KKR complements its investment expertise and strengthens interactions with investors through its client relationships and capital markets platforms. KKR is publicly traded on the New York Stock Exchange (NYSE: KKR). For additional information, please visit KKR’s website at www.kkr.com.