Market Overview

Kayne Backs Flywheel Energy to Acquire Southwestern Energy Company's Fayetteville Shale Business


$1.865 Billion Purchase of Southwestern Energy Company's
Integrated Fayetteville Shale Business

Flywheel Energy, LLC Receives $700 Million Equity Commitment from

Flywheel Energy, LLC ("Flywheel"), announced today the closing of 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 (originally
as Valorem Energy, LLC).

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," commented 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."

"We are thrilled to be partnering with the Flywheel team once again to
acquire these long-life natural gas assets in the Fayetteville Shale,"
commented Danny Weingeist, Managing Partner of the Kayne Private Energy
Income Funds. "Southwestern's Fayetteville assets are an ideal fit for
our Funds' strategy, generating significant free cash flow through
low-risk, legacy natural gas production."

"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," said Cope.
"We look forward to working with this experienced operations team to
continue the Fayetteville legacy."

Wells Fargo Bank, N.A, along with Citibank, N.A. provided an
underwritten debt commitment for debt financing as part of the
acquisition. Wells Fargo Securities, LLC served as financial and
technical advisor to Flywheel. In addition, Vinson & Elkins LLP provided
legal counsel to Flywheel, Mobius Risk Group served as marketing and
derivates advisor to Flywheel and Alvarez & Marsal North America, LLC
has been retained by Flywheel for transaction due diligence.


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.


Kayne Anderson Capital Advisors, L.P. ("Kayne Anderson" or the "Firm"),
founded in 1984, is a leading alternative investment management firm
focused on niche investing in upstream oil and gas companies, energy
infrastructure, specialized real estate, middle market credit, and
growth private equity. Kayne Anderson manages over $29 billion in assets
(as of July 31, 2018) and employs more than 300 professionals in eight
offices across the U.S.

The Kayne Private Energy Income Funds platform is part of Kayne
Anderson's successful energy private equity practice that has raised
over $8 billion since 1998. The strategy was formed in late 2014 to take
advantage of the market opportunity to acquire and develop large,
long-life producing oil and gas assets in North America.

The Firm is headquartered in Los Angeles with offices in Houston, New
York City, Chicago, Denver, Dallas, Atlanta, and Boca Raton. For more
information, please visit

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