Southwestern Energy Company (NYSE:SWN) entered into a definitive merger agreement to acquire Montage Resources Corporation (NYSE:MR) from EnCap Energy Capital Fund VIII, L.P. and EnCap Energy Capital Fund IX, L.P. managed by EnCap Investments, L.P., Travis Peak Resources, LLC, Silver Point Capital L.P. and others for approximately $210 million on August 12, 2020. Under the terms of the all-stock merger transaction, the shareholders of Montage Resources will receive 1.8656 shares of Southwestern Energy for each share held in Montage Resources. Each Montage Resources Corporation RSU Award shall be converted into an award with respect to a number of Southwestern Common Shares equal to the product obtained by multiplying (i) the applicable number of Montage Common Shares subject to such Montage RSU Award immediately prior to the effective time by (ii) the exchange ratio. Concurrently, Southwestern Energy also commenced a registered underwritten public offering of 55 million shares of its common stock, with the proceeds expected to be used to retire a portion of Montage Resources' 8.875% Senior Notes due 2023. As of August 18, 2020, Southwestern Energy completed the underwritten public offering of 63.25 million shares of its common stock at a price of $2.50 per share and intends to use the net proceeds from the offering to partially redeem Montage's issued and outstanding senior notes that Southwestern Energy will assume upon the closing of the transaction. On August 27, 2020 Southwestern Energy Company closed its offering of $350 million aggregate principal amount of 8.375% senior notes due 2028. The net proceeds from the offering were approximately $345 million. Southwestern Energy intends to use the net proceeds from the offering, together with the net proceeds received from its recent common stock offering and borrowings under its revolving credit facility, to fund a redemption of Montage Resources Corporation's issued and outstanding senior notes that it will assume upon the closing of the merger. Upon the terms and subject to the conditions of the merger agreement, Montage will merge with and into Southwestern, with Southwestern continuing as the surviving company. The common stock of the combined company will remain listed on the NYSE under the symbol “SWN.” In case of termination, Montage Resources Corporation may be required to pay Southwestern Energy Company a termination fee equal to $9.7 million.

The transaction is subject to various closing conditions, including, but not limited to, the approval of the merger agreement by the holders of a majority of the outstanding Montage Resources Corporation, the expiration or earlier termination of the waiting period under the Hart–Scott–Rodino Antitrust Improvements Act of 1976, as amended, the Securities and Exchange Commission having declared effective Southwestern's Registration Statement on Form S-4 filed in connection with the transaction and Southwestern Energy common stock to be issued upon the merger shall have been approved for listing on the NYSE Stock Exchange subject to official notice of issuance. The Boards of Directors of Southwestern Energy have approved the transaction. The Boards of Directors of Montage have unanimously approved the transaction. Southwestern Energy has entered into a support agreement with stockholders representing approximately 39% of Montage's outstanding common stock. EnCap Investments has agreed to vote its 39% stake in favor of the transaction. As of September 9, 2020, Federal Trade Commission granted the early termination notice for the transaction. As of October 2, 2020, Montage announced it will hold a special meeting of shareholders on November 12, 2020 to approve the transaction. The registration statement was declared effective by the SEC on October 6, 2020. As of October 8, 2020, Southwestern Energy Company announced that its borrowing base was reaffirmed at $1.8 billion during its fall semi-annual redetermination. Additionally, upon the close of the transaction, the Company's borrowing base and bank commitments will increase to $2.0 billion, with asset coverage exceeding the Company's borrowing base level. On November 12, 2020, the special meeting of Montage Resources stockholders approved the transaction. The transaction is expected to close in the fourth quarter of 2020. The transaction is expected to be accretive to per share financial metrics as well as leverage, margin and returns of Southwestern Energy. The transaction will be accretive to the shareholders of both Southwestern Energy and Montage Resources.

Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC acted as financial advisors, while Frank Bayouth, Alec Jarvis, Elizabeth Malone, Timothy F. Nelson, Eric Otness, Erica Schohn, David Schwartz and Kenneth Schwartz of Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisors to Southwestern Energy. Barclays acted as financial advisor and fairness opinion provider, and Bryn A. Sappington, Trevor G. Pinkerton, Todd Schroeder, Alex Clark and Ryan Searfoorce of Norton Rose Fulbright US LLP acted as legal advisors to Montage Resources. W. Matthew Strock, Stephen M. Gill, John Lynch, David D'Alessandro and Regina Ibarra of Vinson & Elkins LLP acted as legal advisors to EnCap Investments, L.P. Cleary Gottlieb Steen & Hamilton LLP acted as the legal advisor to Goldman Sachs in the transaction. Computershare Trust Company N.A. acted as transfer agent and registrar to Southwestern and Montage. Montage paid Barclays $1 million upon the delivery of Barclays' opinion and a compensation of approximately $8 million will be payable on completion of the transaction against which the amounts paid for the opinion will be credited. Melissa Sawyer of Sullivan & Cromwell LLP acted as legal advisor to Barclays Capital Inc