Indigo Natural Resources is a natural gas producer with operations focused in the Haynesville in northern Louisiana. Credit: drpepperscott230 from Pixabay.

Southwestern Energy in the US has signed a definitive merger agreement to acquire natural gas producer Indigo Natural Resources for nearly $2.7bn.

The deal will further diversify Southwestern’s asset base, adding net production of around one billion cubic feet (bcf) of gas per day to its portfolio.

It will also provide Southwestern with direct access to the Gulf Coast markets.

As agreed, the total consideration will include $400m of cash, around 339 million shares of Southwestern Energy common stock, and $700m of assumed 5.375% senior notes due in 2029.

Based in Houston, Indigo Natural Resources is the third-largest private natural gas producer in the US. Most of its operations are focused in the Haynesville shale in northern Louisiana.

Southwestern Energy president and CEO Bill Way said: “Today, we are proud to announce another accretive transaction that will benefit the company’s shareholders for years to come.

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“This acquisition enhances Southwestern’s position as a leading natural gas producer and aligns with our disciplined strategy to generate free cash flow, enhance our balance sheet, optimise performance and build scale.

“Indigo has done a terrific job building its business, its balance sheet strength, low cost structure, and high-quality acreage position in the core of the Haynesville play accelerates the delivery of our strategic goals.”

The deal is expected to close early in the fourth quarter of this year, subject to customary closing conditions, including approval from Southwestern Energy’s shareholders and regulatory bodies.

Indigo is expected to produce around 1.1bcf net of gas per day.