Southwestern Energy Company is selling its Fayetteville Shale business and related midstream assets for $1.865 billion, the company announced Sept. 4.
The company has entered into a definitive agreement with private Flywheel Energy, LLC and under the transaction will exit Fayetteville. Assets include 915,000 net acres; 4,033 operated producing wells; 3.7 Trillion cubic feet (Tcf) of proved reserves as of year-end 2017; anticipated 2019 production of 225-230 Billion cubic feet (Bcf) and associated midstream gathering infrastructure and compression.
, which was announced earlier this year.
“The sale of Fayetteville represents a pivotal and deliberate step towards fulfilling our promise to reposition Southwestern Energy to capture greater returns from our higher margin Appalachia assets,†Way said in a company statement.
Southwestern expects additional annualized interest and organizational cost reductions between $60 and $75 million as a result of the transaction.
The company also announced:
- A conditional tender offer for up to $900 million of its Senior Notes
- A share repurchase program of up to $200 million
- Allocation of up to $600 million over the next two years, in aggregate, supplementing cash flow to further develop the company’s liquids-rich Appalachia assets and accelerate the path to self-funding
Southwestern also plans to deploy up to six rigs in 2019, which will generate total production growth of 8-12Â percent and liquids growth of 15-25 percent. Looking ahead to 2020, the company anticipates total production growth in the mid-teens and liquids growth in the mid-twenties.
The transaction has an effective date of July 1, 2018 and is expected to close in December 2018.
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