Exxon Will Sell Flywheel Energy Its Shale Gas Assets In Arkansas

An Exxon spokesperson confirmed on Friday that the company has reached an agreement with Flywheel Energy to sell natural gas properties in Arkansas to the privately held American oil and gas producer.

With the sale of its Fayetteville Shale assets, Exxon will be one step closer to reaching its goal of offloading $15 billion in non-core assets in order to concentrate on more lucrative opportunities. It was impossible to know the proposed deal’s value right away.

Due to the spike in fuel demand caused by the conflict in Ukraine, both U.S. gas prices and real estate have seen an increase in demand this year. U.S. gas futures on Friday reached a settlement price of around $9.30 per million BTUs, up 160% year to date.

“The sale advances Exxon Mobil’s strategy to focus investments on advantaged assets,” Exxon spokesperson Julie King told Reuters.

When contacted for comment regarding the agreement made with XTO Energy, an Exxon subsidiary, Flywheel Energy did not respond right away. Kayne Anderson Private Energy Income Funds are the company’s backers, and Flywheel has its headquarters in Oklahoma City.

About 5,000 natural gas wells—850 operated and 4,100 unoperated—along with related pipeline and processing properties spread across about 381,000 acres are included in the assets covered by the agreement.

The Fayetteville assets were purchased by Exxon’s XTO Energy division for $650 million in 2010 during a shale boom that changed the U.S. energy landscape. King declined to comment on pricing, claiming that the details of the deal are private.

Regulatory and other approvals are necessary for the sale. According to King, it is anticipated to close before the end of October.

The oil giant announced plans to sell its U.S. shale assets outside of the Permian Basin, including Fayetteville, in 2020. As energy prices started to recover from the slump brought on by the pandemic last year, it actively restarted its divestment program.

Exxon has been abandoning projects in Asia, Africa, and Europe for shale oil in the Permian Basin of West Texas and New Mexico as well as offshore Guyana and Brazil.

It sold North Texas shale assets to Denver-based BKV, a gas producer owned to a large extent by Thai energy company Banpu PCL, earlier this year for $750 million.

(Adapted from Reuters.com)

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