Southwestern Energy Co. has entered into a definitive agreement with Flywheel Energy, a private company backed by Kayne Private Energy Income Funds, to sell its Fayetteville Shale E&P and related midstream gathering assets for $1.865 billion in cash, subject to adjustments and customary closing conditions.
Under the terms of the transaction, Southwestern Energy will exit Fayetteville.
In addition, the buyer will assume approximately $438 million of future contractual liabilities after taking into account certain obligations retained by the company.
The transaction, which was unanimously approved by Southwestern Energy’s directors, has an effective date of July 1, 2018, and is expected to close in December 2018.
Southwestern Energy has more than 475,000 (net) acres in the Appalachia Basin prospective for Upper and Lower Marcellus, Upper Devonian and Utica/Upper Point Pleasant development. Within Appalachia, Southwestern Energy has identified over 40 Tcfe of resource, which includes more than 1,800 economic drilling locations below $2.75/Mcf gas and $50/Bbl oil. The company’s year-end 2017 Appalachia reserves were 11.1 Tcfe, 33 percent of which were condensate and natural gas liquids.
These assets include approximately 915,000 net acres, 4,033 operated producing wells, 3.7 Tcf of proved reserves as of year-end 2017, anticipated 2019 production of 225–230 Bcf and associated midstream gathering infrastructure and compression.
