Transaction enables the Company to increase focus in Appalachia region; reduce debt; return capital to shareholders
SPRING, Texas–(BUSINESS WIRE)–Southwestern Energy Company (NYSE: SWN) today announced that it has completed the sale of its Fayetteville assets to Flywheel Energy, LLC, a private company backed by Kayne Private Energy Income Funds.
The sale of the Company’s Fayetteville exploration, production and midstream assets for $1.865 billion in cash resulted in net proceeds of $1.65 billion, following customary adjustments due primarily to the net cash flow from the economic effective date of July 1, 2018, to the closing date.
“This strategic transaction represents a further significant step in the transformation of the Company,” says Bill Way, President and CEO of Southwestern Energy. “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. I am truly excited about the future of the Company.”
As a result of the transaction, the Company is further strengthening its balance sheet and is positioned to capture greater returns from its top tier, 500,000 acre assets in the Appalachia basin.
The proceeds will be used to retire senior notes of $900 million, retire the outstanding balance under the Company’s revolving credit facility, repurchase stock up to the remainder of the Company’s $200 million stock buyback program and invest in Appalachia assets over the next two years, subject to market conditions. Proceeds will be held in cash and cash equivalents until applied.
The Company’s fourth quarter production guidance will be impacted by a reduction of approximately 19 Bcf resulting from the sale of the Fayetteville operations.
About Southwestern Energy Company
Southwestern Energy Company (NYSE: SWN) is an independent energy company whose wholly-owned subsidiaries are engaged in natural gas, natural gas liquids and oil exploration, development, production, gathering and marketing. Additional information about the Company is available at www.swn.com.