Flywheel Energy to Acquire Southwestern Energy Company’s Fayetteville Shale Business for $2 Billion
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Flywheel Energy has closed on an equity commitment of $700 million by the Kayne Private Energy Income Funds platform and members of Flywheel management. The commitment represents the platform’s second partnership with the Flywheel management team, following its original investment in 2017.
Concurrent with the new commitment, Flywheel has signed definitive agreements to acquire Southwestern Energy Company’s natural gas properties and affiliated midstream business in the Fayetteville Shale in Arkansas for $1.865 billion. The transaction is expected to close in the fourth quarter, subject to customary regulatory and other approvals.
The assets include 716 mmcf/d of net production from 4,033 producing wells across over 900,000 net acres and an integrated midstream gathering system with over 2,000 miles of gathering pipelines and more than 50 compressor stations, all located in central Arkansas.
“Flywheel Energy is proud to join the Arkansas community as an operator in the historic Fayetteville Shale,” said Justin Cope, chief executive officer of Flywheel.
“We believe this is another great step as we work to execute our long term strategy and achieve superior risk-adjusted returns for our investors. The Fayetteville Shale has played a prominent role in the American shale revolution. We look forward to being a part of its next chapter and to providing affordable energy to the U.S. gas market for decades to come,” added Cope.
“We are thrilled to be partnering with the Flywheel team once again to acquire these long-life natural gas assets in the Fayetteville Shale. Southwestern’s Fayetteville assets are an ideal fit for our Funds’ strategy, generating significant free cash flow through low-risk, legacy natural gas production,” said Danny Weingeist, managing partner of the Kayne Private Energy Income Funds.
“We believe having a high quality team is critical to our company’s future success and we are honored to join an organization with an exceptional track record of safe and reliable operations. We look forward to working with this experienced operations team to continue the Fayetteville legacy,” said Justin Cope.
About Flywheel Energy
Flywheel Energy began as Valorem Energy in early 2017 with backing from the Kayne Anderson Private Energy Income Fund. In 2017, Valorem acquired interests in the Williston Basin for $285 million, which the Flywheel organization continues to retain. In August 2018, the platform committed a second time to the management team with $700 million of equity in the form of the newly-formed Flywheel Energy. Flywheel Energy is a private exploration and production company formed to acquire and operate large, producing onshore U.S. oil and gas assets with an emphasis on the Rockies and Mid-Continent. With this acquisition, Flywheel entities will have made over $2.1 billion of acquisitions since 2017.
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