Southwestern Energy 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. In addition, the buyer will assume approx. $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.

The Company also announced:

• A conditional tender offer for up to $900 million of its Senior Notes, as described in a separate press release also issued today;
• A share repurchase program of up to $200 million; and
• 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. Until investments are made, these funds will be used to repay credit facility borrowings.

Bill Way, President and CEO of Southwestern Energy, said:
"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. We are pleased with the process, the outcome and the resulting valuation of this significant asset. I’d like to thank the employees of Fayetteville for their years of extraordinary service to the Company and its shareholders, particularly during this process.

'This transaction is a significant milestone in advancing our strategic plan. Our shareholders will benefit from an optimized portfolio, stronger balance sheet including improved financial flexibility and the return of capital to all shareholders through a share repurchase program. I am grateful for the tireless work of our entire dedicated and talented SWN team that sets the stage for a stronger future."