Southwestern Energy Announces Agreement to Acquire GEP Haynesville


Strategic consolidation of large-scale core Haynesville assets;
Creates the largest dual-basin natural gas producer

SPRING, Texas--(BUSINESS WIRE)-- Southwestern Energy Company (NYSE: SWN) (the “Company” or “Southwestern”) today announced that it has entered into a definitive agreement with the third largest private Haynesville producer – GEP Haynesville, LLC (“GEP”) under which it will acquire GEP for approximately $1.85 billion. The transaction is expected to close by year-end 2021, subject to customary closing conditions. Transaction highlights include:

  • Builds further scale in the Haynesville with approximately 700 MMcf per day of production; total Company production of approximately 4.7 Bcfe per day pro forma;
  • Expands exposure to the LNG corridor and growing demand centers along the Gulf Coast;
  • Further deepens economic inventory with 700 locations across stacked-pay Haynesville and Middle Bossier;
  • Adds 2.2 Tcfe of estimated year-end 2021 proved reserves at projected SEC pricing1; expected year-end 2021 total proved reserves approximately 20.9 Tcfe;
  • Attractive valuation; implied transaction multiple of 2.9x estimated 2022 EBITDA;
  • Expected to be immediately accretive to margins, returns and key per-share metrics;
    • Estimated 2022 free cash flow per share and cash flow per share expected to improve by ~15% each

  • Complementary assets expected to provide $25 million of immediate annual synergies;

  • Projected pro forma free cash flow approximately $2.3 billion in 2022 – 2023;
  • Disciplined financing minimizes equity dilution while preserving financial strength;
  • Maintains pathway to achieving sustainable leverage target range of 1.0x to 1.5x by year-end 2022; and
  • Execution of strategic hedging plan in current price environment.

“This strategic move positions Southwestern as the largest producer in the Haynesville and enhances our leading presence in the top two premier natural gas basins in the US. The Company’s increased scale from both a reserves and production perspective is expected to deliver higher margins, enhanced economic returns and improved per-share cash flow metrics. The transaction adds significant high-return locations to our development inventory while expanding access to premium Gulf Coast markets,” said Bill Way, Southwestern Energy President and Chief Executive Officer.

Way continued, “This transaction reflects the Company’s strict adherence to our rigorous acquisition framework and will build on our leading execution in the integration and development of large scale assets. The financing and hedging strategy for the deal aligns with our commitment to financial strength and disciplined enterprise risk management. Combined with our other strategic actions, this transaction further expands the sustainable value being generated for our shareholders.”

Transaction and Timing

The total consideration of $1.85 billion will be comprised of $1.325 billion in cash and approximately $525 million in Southwestern common shares.

The stock consideration consists of approximately 99 million shares of Southwestern Energy common stock, calculated utilizing the 30-day volume-weighted average price of $5.285 as of November 2, 2021.

The Company expects to finance the $1.325 billion cash consideration in a manner that affords near-term and efficient debt reduction, extends its maturity runway and lowers its cost of debt.

The acquisition valuation compares favorably to other recent natural gas transactions, with the $1.85 billion purchase price representing 2.9x estimated 2022 EBITDA using a $4 per Mcf NYMEX Henry Hub price, which is below today’s strip prices.

The transaction was unanimously approved by each of Southwestern Energy’s and GEP Haynesville’s boards of directors. It is expected to close by year-end 2021, subject to regulatory approvals and customary closing conditions.


Once the transaction is closed, the Company will produce approximately 4.7 Bcfe per day. Within Southwestern’s balanced portfolio, approximately 65% of its daily natural gas production will be marketed to growing demand centers along the Gulf Coast, positioning the Company to efficiently capture natural gas price improvement and expand margins.

As of September 30, 2021, the Company had total debt of $4.2 billion. After the financing of the $1.325 billion cash consideration for this transaction, the Company anticipates its year-end 2021 debt balance to be approximately $5.4 billion with a leverage ratio of approximately 2.0x.

Southwestern expects to continue utilizing free cash flow to reduce debt to maintain a sustainable target leverage range of 1.0x to 1.5x. Consistent with this target leverage range, the Company is targeting total debt of $3 billion to $3.5 billion. The Company believes this target range of leverage and total debt balances cost of capital efficiency with the preservation of the Company’s financial strength through commodity price cycles. As it approaches its total debt target, the Company intends to initiate a program to return capital to shareholders.

The Company will protect its financial strength by executing a comprehensive hedge plan designed to safeguard cash flow for debt reduction, consistent with the Company’s established enterprise risk management policy. GEP has existing 2022 hedge positions for approximately 35% of its expected 2022 production at an average price of $2.89 per Mcf. GEP does not have existing hedge positions beyond 2022, providing an opportunity to protect returns and cash flow well above valuation prices.

The Company will release formal 2022 guidance at the beginning of next year. In 2022, Southwestern Energy expects to continue with maintenance capital investment, averaging approximately 4.7 Bcfe per day of production. At $4 per Mcf NYMEX Henry Hub and $67 per barrel WTI, the Company expects to generate approximately $1 billion of free cash flow.

Upon closing, Southwestern expects to realize at least $25 million in annual synergies, driven by G&A and other operational savings. The Company expects further value enhancing opportunities through operating economies, marketing synergies, contract optimization, and reduced cost of capital given its improved financial and business risk profile.


Goldman Sachs & Co. LLC served as the exclusive strategic advisor to Southwestern. JP Morgan, Bank of America, Citigroup, RBC and Wells Fargo served as financing advisors and provided $1.325 billion committed financing in connection with the transaction. Intrepid Partners, LLC also provided a fairness opinion to Southwestern. Credit Suisse Securities (USA) LLC served as the exclusive strategic and financial advisor to GEP. Skadden, Arps, Slate, Meagher & Flom LLP served as legal advisor to Southwestern, and Kirkland & Ellis LLP served as legal advisor to GEP.

Conference Call

Southwestern Energy will host a conference call on Thursday, November 4, 2021 at 10:00 a.m. Central to discuss this transaction and its third quarter 2021 results. To participate, dial US toll-free 877-883-0383, or international 412-902-6506 and enter access code 7695937. A live webcast will be available at

About Southwestern Energy

Southwestern Energy Company (NYSE: SWN) is a leading U.S. producer of natural gas and natural gas liquids focused on responsibly developing large-scale energy assets in the nation’s most prolific shale gas basins. SWN’s returns-driven strategy strives to create sustainable value for its stakeholders by leveraging its scale, financial strength and operational execution. For additional information, please visit and

About GEP Haynesville

GEP Haynesville, LLC, a joint venture formed by the principals of GeoSouthern Haynesville, LP and a private equity firm, and based in the Woodlands, Texas, is a leading energy company focused on the development of natural gas properties in the stacked Haynesville and Middle Bossier shale plays in North Louisiana.

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This is good news? for mineral rights owners? Environmental concerns? LOL Larger area of shale productive?

Too soon to tell but likely no change.  This is simply a change of operator.


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