[Context: Indigo Natural Resources, an upstream operator in the Haynesville, was acquired by $2.7bn for Southwestern Energy. Indigo is backed by Yorktown Partners, Ridgemont Equity Partners, Blackstone Credit, Trilantic North America, Roy OMartin and Beland, according to the company’s website. Further details, including a link to full Agreement and Plan of Merger, Southwestern’s legal advisor and related links are below.]
Indigo Natural Resources LLC Announces Merger with Southwestern Energy Company
HOUSTON, June 2, 2021 /PRNewswire/ — Indigo Natural Resources LLC (“Indigo” or the “Company”) today announced that it has entered into a definitive merger agreement with Southwestern Energy Company (“Southwestern”, NYSE: SWN), under which Southwestern will acquire Indigo for approximately $2.7 billion.
The total consideration of $2.7 billion will be comprised of $400 million in cash, approximately $1.6 billion in SWN common stock and $700 million in aggregate principal amount of assumed 5.375% Senior Notes due 2029 of Indigo (the “Notes”). This release constitutes the public announcement of the intention of Indigo to effect a Change of Control, as defined under the indenture governing the Notes.
The transaction was unanimously approved by each of Southwestern Energy’s and Indigo’s board of directors. The transaction is expected to close early in the fourth quarter of 2021, subject to regulatory approvals, customary closing conditions and the approval by Southwestern Energy’s shareholders.
About Indigo Natural Resources
Indigo Natural Resources LLC is one of the largest natural gas producers in the Haynesville Shale and the third largest private natural gas producer in the U.S. Indigo is an experienced operator, focused in northern Louisiana with direct access to Gulf Coast markets and associated industrial and LNG demand growth. Indigo is headquartered in Houston, Texas.
————–Excerpts from Material Definitive Agreement————–
Entry into a Material Definitive Agreement (Link to full Agreement and Plan of Merger)
On June 1, 2021, Southwestern Energy Company, a Delaware corporation (“Southwestern” or “Parent”) and Ikon Acquisition Company, LLC, a Delaware limited liability company and wholly-owned subsidiary of Parent (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Indigo Natural Resources LLC, a Delaware limited liability company (“Indigo” or the “Company”), and Ibis Unitholder Representative, LLC, solely in its capacity as the representative of the Holders (as defined in the Merger Agreement) (the “Unitholder Representative” and together with the Company, Parent, and Merger Sub, the “Parties,” sometimes referred to individually herein as a “Party”), pursuant to which Parent will acquire all of the outstanding membership interests of the Company (each, an “Indigo Membership Interest”) in exchange for the consideration described below. Upon the terms and subject to the conditions of the Merger Agreement, Merger Sub will merge with and into Indigo, with Indigo continuing as the surviving company (the “Merger”) and a wholly-owned subsidiary of Parent.
Under the terms and conditions of the Merger Agreement, the aggregate consideration to be paid to the Holders in the Transaction will consist of $400 million in cash (the “Cash Consideration”) and 339,270,568 shares of Parent common stock (the “Stock Consideration”), which shares have an aggregate dollar value equal to $1.6 billion based on the volume weighted average sales price as traded on the New York Stock Exchange of such shares calculated for the thirty trading day period ending on May 28, 2021.
The board of directors of Parent has unanimously approved the Merger Agreement and the Merger.
The merger agreement define Haynesville as:
“Haynesville (LESS AND EXCEPT Mid Bossier) Target Zone” means the Haynesville Target Zone, LESS AND EXCEPT the stratigraphic equivalent of the Mid-Bossier Formation, defined as that interval from 11,134 feet to 11,397 feet, measured depth, as found and identified on the electronic log, for the Martin Timber Co. No. 4 Well (API # 1703124507), located in Section 20, Township 13 North, Range, 15 West, DeSoto Parish, Louisiana.
“Haynesville Target Zone” means either (a) the stratigraphic equivalent of the “Haynesville Zone” as defined in the applicable Louisiana Office of Conservation Unit Order for the Township, Range and Section in which the applicable Lease, Well-In-Progress, or Fee Mineral is located, as set forth on Annex A-1, Annex A-6 or Annex A-3, as applicable, or (b) if a Louisiana Office of Conservation Unit Order for the “Haynesville Zone” covering the location of the applicable Lease, Well-In-Progress, or Fee Mineral has not been established, the stratigraphic equivalent of that gas and condensate-bearing interval encountered between the depths of 10,418 feet to 12,308 feet (electrical log measurements) in the Winchester Production Company – Means No. 16 Well, located in Section 23, Township 14 North, Range 14 West, DeSoto Parish, Louisiana.
Southwestern’s advisor listed in the Agreement:
Skadden, Arps, Slate, Meagher & Flom LLP
1000 Louisiana Street
Houston, Texas 77002-5026
Attention: Frank Ed Bayouth II, Eric C. Otness, Cody Carper
Email: firstname.lastname@example.org;email@example.com; firstname.lastname@example.org