Southwestern Energy Co. has agreed to sell its Fayetteville Shale E&P and related midstream gathering assets to Flywheel Energy for US$1.86 billion. Flywheel Energy, a private company backed by Kayne Private Energy Income Funds, also assumes US$438 million of future contractual liabilities.
Bill Way, Southwestern Energy’s CEO and president said the move allows the company to focus on its higher-yielding shale assets in the Appalachia Basin. Southwestern Energy has more than 475,000 net acres (192,226 ha) in the Appalachia Basin. The company has identified more than 40 Tcf (1.13 X 1012 m3) of natural gas, including more than 1800 viable drilling locations. Its 2017 Appalachia reserves were 11.1 Tcf (314 X 109 m3) of natural gas, 33% of which was condensate and natural gas liquids.
Per the agreement with Flywheel Energy, Southwestern Energy will leave Fayetteville. Its assets in this region include 915,000 net acres (370,287 ha), 4033 production wells, 3.7 Tcf (104.7 X 109 m3) of reserves, anticipated 2019 production of 225 to 230 Bcf (6.4 to 6.5 X 109 m3) and midstream gathering infrastructure and compression.
The transaction has an effective date of July 1, 2018 and will close in December 2018.