New technology has transformed the world’s energy supply by enhancing successful and safe exploration for natural gas from shale rock formations. Recognizing this revolutionary change, our energy team identified East Resources, Inc., a leading oil and gas company with a stable portfolio of producing assets and more than 650,000 net acres of highly contiguous, operated acreage in some of the most attractive areas of the Marcellus Shale in Pennsylvania. East’s regional concentration and entrepreneurial approach provided operational and cost advantages that made it an attractive investment. In June 2009, KKR invested $330 million in East through a convertible security, which enabled the company to expand development — drilling 75 horizontal wells, compared to only one horizontal well prior to KKR’s investment.
This expanded development demonstrated the value of East’s asset position. In late 2010, Royal Dutch Shell Plc acquired East for $4.7 billion, a $1.2 billion gain for KKR and our investors.