Apollo Trumps KKR in Shale Buyouts After Wildcatting Ends

For KKR & Co. and Apollo Global Management LLC, leaders of the biggest shale-field buyouts, the difference between failure and success may come down to 93 days.

KKR, led by Henry Kravis, in November 2011 agreed to buy Samson Resources Corp. for $7.2 billion, or 6.6 times the company’s cash flow. Three months later, with gas plunging, Leon Black’s Apollo struck a deal to buy EP Energy Corp. for $7.15 billion, though at a lower valuation relative to cash flow. EP, able to use excess capital to expand into shale oil as gas prices slumped, has turned a profit for investors. A similar effort at Samson stalled under too much debt.