The independent oil and gas company is selling a 36 percent stake to PT Saka Energi Indonesia, a unit of the government-controlled Perusahaan Gas Negara Persero Tbk (PGAS), in its 8,300 acres of Fasken area Eagle Ford shale natural gas properties in Texas, according to a May 6 statement. Houston-based Swift will receive an estimated $150 million of proceeds, which it will use to pay down $297.7 million outstanding on the revolver, Vincent said.
While Swift is giving up a portion of the revenue in the joint venture, Saka’s contribution may help the U.S. company “align our capital spending with our cash flow” in the second half of 2014 and in 2015, Vincent said in a May 7 telephone interview. The company’s free cash flow was negative for the fourth straight year in 2013, according to data compiled by Bloomberg.
Saka will pay a total $175 million, comprising $125 million for its stake in the venture and $50 million for field development costs, according to the statement.
To contact the editors responsible for this story: Shannon D. Harrington at firstname.lastname@example.org Mitchell Martin, John Parry