Southwestern Energy completes sale of Fayetteville shale business

Southwestern Energy Company has completed the $1.865bn divestment of its Fayetteville shale business in Arkansas, US, to oil and natural gas firm Flywheel Energy.

The sale comprises the company’s Fayetteville exploration, production and midstream assets. The agreement for the transaction was signed in September.

The completion of the transaction will allow Southwestern Energy to enhance its balance sheet and focus on its 500,000-acre natural gas position in the Appalachia basin.

Southwestern Energy president and CEO Bill Way said: “This strategic transaction represents a further significant step in the transformation of the company.

“We’re now better positioned to leverage our leading technical and operating capabilities to drive greater value from our highly attractive and significant asset base in Appalachia, pay down debt and create even greater financial flexibility.”

The company will use the proceeds from the sale to retire senior notes of $900m and the outstanding balance under its revolving credit facility.

A portion of the proceeds is also expected to be invested in the company’s Appalachia assets over the next two years.

As a result of the sale, Southwestern Energy noted that there would be a reduction of around 19Bcf in its production guidance for the fourth quarter.

Flywheel Energy is supported by Kayne Private Energy Income Funds, which is an energy-focused private equity fund of Kayne Anderson Capital Advisors.

The acquired assets comprise around 3.7Tcf of proved reserves, 4,033 operated producing wells across 915,000 net acres, and related midstream gathering infrastructure and compressor stations.

The deal also involves the $438m assumption of future contractual liabilities by Flywheel Energy.