The team behind Flywheel Energy is reloading with fresh backing from private equity firm Kayne Anderson. (Source: Shutterstock.com)
The team behind Flywheel Energy is launching a new E&P company with backing from Kayne Anderson.
South Wind Exploration & Production has received more than $400 million in commitments from Kayne Private Energy Income Fund III LP and company management, the firms said after markets closed April 29.
Oklahoma City-based South Wind seeks to acquire large, producing onshore U.S. oil and gas assets.
South Wind’s management team includes co-CEOs Tyler Bolton and Greg Boxer, executive vice president and general counsel Jeremy Fitzpatrick, COO Zack Laird, CFO Son Hoang and CTO Andy Broussard.
Bolton previously served as Flywheel’s vice president of asset development, and Boxer was Flywheel’s CFO.
Flywheel and its affiliates operated for seven years in Kayne Anderson’s portfolio before being sold in June 2024. The buyer was not disclosed.
“We have had a long and successful partnership with this team, and we are excited to build on that momentum with South Wind," said Kayne Anderson Managing Partner Mark Teshoian.
Flywheel’s Fayetteville gas
Flywheel first launched as Valorem Energy in early 2017 with backing from Kayne Anderson. That year it closed a $285 million acquisition of Williston Basin assets.
Kayne Anderson committed another $700 million of equity to newly formed Flywheel Energy in 2018, and Flywheel landed a $2 billion acquisition of Southwestern Energy’s Fayetteville Shale assets in Arkansas.
Flywheel eventually sold the Williston assets to Northern Oil and Gas (NOG) in the summer of 2019.
In 2022, Exxon Mobil reportedly sold its Arkansas shale gas assets to Flywheel.
Flywheel had grown into the 17th-largest privately held E&P in the U.S. as of early last year, according to Enverus Intelligence Research data.
Flywheel produced around 673 MMcf/d during first-quarter 2024, ranking near other large producers including GeoSouthern Energy and Appalachia’s HG Energy.
Kayne Anderson did not respond to a request for more information about Flywheel “successfully monetizing” the Fayetteville portfolio in June 2024.
Flywheel’s largest offset neighbor in Arkansas is privately held Merit Energy Co., according to Rextag data.
Compared to the Haynesville Shale and Appalachian Basin gas plays, the Fayetteville has languished under a lack of capital investment and exits by major producers.
Fayetteville drilling activity declined massively after natural gas prices dropped from more than $12/Mcf in 2008 to under $2/Mcf in 2016.
Fayetteville also produces dry gas. Operators generate higher returns from associated oil and NGL production from the Haynesville, Appalachia’s Marcellus and Utica shales and Permian Basin production.
Most recent Arkansas drilling activity has focused on lithium-rich brines of the Smackover formation.
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X2
Private equity is reloading with other new E&P companies.
X2 Resources, led by the team that built XCL Resources, is targeting $500 million to multibillion-dollar acquisitions across “premier” oil and gas basins with fresh backing.
X2 Resources secured new equity capital commitments from EnCap Investments LP, Westlawn Group, Rice Investment Group and its management team, the firms said April 24.
The X2 team is coming off a $2.64 billion sale in Utah to SM Energy and NOG in October 2024. NOG took a 20% non-operated stake in XCL’s Uinta Basin assets.
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XCL Resources Team Launches X2, Targets Multibillion-Dollar M&A
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