HOUSTON, July 21, 2016 /PRNewswire/ -- Southwestern Energy
Company (NYSE: SWN) today announced its financial and operating
results for the quarter ended June 30,
2016.
"The second quarter was a defining time at Southwestern Energy,
where we delivered on our strategic commitments of strengthening
our balance sheet, enhancing margins and optimizing our portfolio,"
remarked Bill Way, President and
Chief Executive Officer of Southwestern Energy. "As promised, we
took significant and deliberate steps this quarter to strengthen
our balance sheet that, when combined with the continued
outperformance by our assets, positions us to reinitiate drilling
and completion activities and accelerate our path to value-adding
growth. We are excited as we drive into the second half of
the year and build momentum toward the future." Highlights
include:
- Strengthened the balance sheet and liquidity profile through a
combination of extending bank agreements, successfully issuing
equity, launching and concluding tender offers for debt and
negotiating long-dated inventory monetization (to be closed in
third quarter); these actions, most of which are completed, will
reduce or extend debt due prior to 2020 by approximately
$1.8 billion (approximately
$1.2 billion repaid and approximately
$600 million extended) and extend
access to approximately $1.9 billion
of liquidity until December
2020;
- Activated a plan to accelerate investment of an incremental
$500 million (earmarked from the July
equity offering) into high return projects within each of the
Company's core assets, approximately $375
million of which is expected to be invested by the end of
2016;
- Exceeded previously issued production guidance for the quarter
by 5% with natural gas, NGL and oil production of 225 Bcfe,
including 128 Bcfe from the Appalachia Basin and 96 Bcf from the
Fayetteville Shale;
- Raising total year production guidance range by 45 Bcfe or 5%
(using midpoints) to 865 Bcfe to 875 Bcfe primarily resulting from
improved production efficiencies and strong well performance,
coupled with an expected 11 to 14 Bcfe from the $375 million investment increase during the
second half of 2016;
- Continued capital discipline, with net cash provided by
operating activities of $73 million
and net cash flow (a non-GAAP measure reconciled below) of
$114 million, aligning with capital
investments of $74 million; and
- Net loss attributable to common stock of $620 million, or $1.61 per diluted share, and an adjusted net loss
attributable to common stock (a non-GAAP measure reconciled below)
of $34 million, or $0.09 per diluted share.
Second Quarter of 2016 Financial Results
For the second quarter of 2016, Southwestern reported a net loss
attributable to common stock of $620
million, or $1.61 per diluted
share, and an adjusted net loss attributable to common stock
(reconciled below) of $34 million, or
$0.09 per diluted share. This
compares to a net loss attributable to common stock of $815 million, or $2.13 per diluted share, and an adjusted net loss
attributable to common stock of $9
million, or $0.02 per diluted
share, in the second quarter of 2015.
Net cash provided by operating activities was $73 million for the second quarter of 2016,
compared to $399 million in the
second quarter of 2015. Net cash flow (reconciled below) was
$114 million for the second quarter
of 2016, compared to $339 million for
the same period in 2015.
E&P Segment – The operating loss from the
Company's E&P segment was $549
million for the second quarter of 2016, compared to an
operating loss of $1.6 billion during
the second quarter of 2015. The decreased operating loss was
primarily due to a smaller non-cash impairment. The adjusted
operating loss from the Company's E&P segment was $68 million for the second quarter of 2016
(reconciled below), when excluding the non-cash impairment and
restructuring charges, compared to an adjusted operating loss of
$104 million for the same period in
2015. The decreased adjusted operating loss was primarily due to
lower operating costs and higher realized NGL prices partially
offset by lower realized natural gas prices and decreased
production.
Net production totaled 225 Bcfe in the second quarter of 2016,
down less than anticipated from the 245 Bcfe in the second quarter
of 2015. The quarter included 96 Bcf from the Fayetteville
Shale, 90 Bcf from Northeast Appalachia and 38 Bcfe from Southwest
Appalachia. This compares to 121 Bcf from the Fayetteville
Shale, 87 Bcf from Northeast Appalachia and 35 Bcfe from Southwest
Appalachia in the second quarter of 2015.
Due to the continued challenging commodity price environment,
including the effect of derivatives, Southwestern's average
realized gas price in the second quarter of 2016 was $1.32 per Mcf, down from $2.23 per Mcf in the second quarter of 2015. The
Company's commodity derivative activities increased its average
realized gas price by $0.11 per Mcf
during the second quarter of 2016, compared to an increase of
$0.47 per Mcf during the same period
in 2015. As of July 19, 2016, the
Company had approximately 93 Bcf of its remaining 2016 forecasted
gas production protected at an average floor price of $2.57 per Mcf with upside exposure on
approximately 34% of those protected volumes. Additionally,
the Company had approximately 228 Bcf of its 2017 forecasted gas
production protected at an average floor price of $3.01 per Mcf with upside exposure on
approximately 29%, or 66 Bcf, of those protected volumes to
$3.39 per Mcf.
A detailed breakdown of the Company's derivative financial
instruments as of July 19, 2016 is
shown below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Price per MMBtu
|
|
Volume
(Bcf)
|
|
Swaps
|
|
Sold
Puts
|
|
Purchased
Puts
|
|
Sold
Calls
|
Financial
protection on production
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price
swaps
|
61
|
|
$
|
2.57
|
|
$
|
–
|
|
$
|
–
|
|
$
|
–
|
Purchased put
options
|
17
|
|
$
|
–
|
|
$
|
–
|
|
$
|
2.34
|
|
$
|
–
|
Two-way
costless-collars
|
15
|
|
$
|
–
|
|
$
|
–
|
|
$
|
2.81
|
|
$
|
3.38
|
Total
|
93
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price
swaps
|
163
|
|
$
|
3.07
|
|
$
|
–
|
|
$
|
–
|
|
$
|
–
|
Two-way
costless-collars
|
47
|
|
$
|
–
|
|
$
|
–
|
|
$
|
2.90
|
|
$
|
3.33
|
Three-way
costless-collars
|
18
|
|
$
|
–
|
|
$
|
2.25
|
|
$
|
2.75
|
|
$
|
3.56
|
Total
|
228
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sold call
options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
60
|
|
$
|
–
|
|
$
|
–
|
|
$
|
–
|
|
$
|
5.00
|
2017
|
86
|
|
$
|
–
|
|
$
|
–
|
|
$
|
–
|
|
$
|
3.25
|
2018
|
63
|
|
$
|
–
|
|
$
|
–
|
|
$
|
–
|
|
$
|
3.50
|
2019
|
52
|
|
$
|
–
|
|
$
|
–
|
|
$
|
–
|
|
$
|
3.50
|
2020
|
32
|
|
$
|
–
|
|
$
|
–
|
|
$
|
–
|
|
$
|
3.75
|
Total
|
293
|
|
|
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Like most producers, the Company typically sells its natural gas
at a discount to NYMEX settlement prices. This discount includes a
basis differential, third-party transportation charges and fuel
charges. Disregarding the impact of derivatives, the Company's
average price received for its gas production during the second
quarter of 2016 was approximately $0.74 per Mcf lower than average NYMEX settlement
prices, compared to approximately $0.88 per Mcf lower than average NYMEX settlement
prices during the second quarter of 2015. As of June 30, 2016, the Company attempted to mitigate
the volatility of basis differentials by protecting basis on
approximately 118 Bcf of the remaining 2016 expected natural gas
production through financial derivative instruments and physical
sales arrangements at a basis differential to NYMEX natural gas
prices of approximately ($0.13) per
Mcf. Additionally, the Company has protected basis on
approximately 105 Bcf of its 2017 forecasted natural gas production
at a basis differential to NYMEX natural gas prices of
approximately ($0.10) per Mcf.
Lease operating expenses per unit of production for the
Company's E&P segment were down to $0.87 per Mcfe in the second quarter of 2016,
compared to $0.93 per Mcfe in the
second quarter of 2015. The decrease was primarily due to reduced
workover activity and contract services as well as the successful
renegotiation of the existing gathering and processing rates in
Southwest Appalachia.
General and administrative expenses per unit of production were
flat at $0.21 per Mcfe in the second
quarter of 2016 as compared to the second quarter of 2015. General
and administrative cost reductions were offset by decreased
production volumes. This excludes the restructuring charges
associated with the workforce reduction, which were $11 million for the E&P segment in the second
quarter of 2016.
Taxes other than income taxes were down to $0.09 per Mcfe in the second quarter of 2016,
compared to $0.10 per Mcfe in the
second quarter of 2015. Taxes other than income taxes per Mcfe vary
from period to period due to changes in severance and ad valorem
taxes that result from the mix of the Company's production volumes
and fluctuations in commodity prices.
The Company's full cost pool amortization rate declined
significantly to $0.35 per Mcfe in
the second quarter of 2016, compared to $1.13 per Mcfe in the second quarter of 2015. The
amortization rate is impacted by the timing and amount of reserve
additions, the costs associated with those additions, revisions of
previous reserve estimates due to both price and well performance,
write-downs that result from full cost ceiling tests, proceeds from
the sale of properties that reduce the full cost pool and the
levels of costs subject to amortization. The Company cannot predict
its future full cost pool amortization rate with accuracy due to
the variability of each of the factors discussed above, as well as
other factors.
Midstream – Operating income for the Company's
Midstream segment, comprised of gathering and marketing activities,
was $57 million for the second
quarter of 2016, compared to $355
million for the same period in 2015. The decrease in
operating income was primarily due to 2015 including a $278 million gain on sale of assets divested.
Adjusted operating income (reconciled below) for the Company's
Midstream segment was $57 million for
the second quarter of 2016. This is down from adjusted
operating income of $77 million,
which excluded a $278 million gain on
sale of assets divested, for the same period in 2015. The decrease
in adjusted operating income was largely due to a decrease in
volumes gathered, resulting from lower production volumes in the
Fayetteville Shale.
First Six Months of 2016 Financial Results
For the first six months of 2016, Southwestern reported a net
loss attributable to common stock of $1.8
billion, or $4.63 per diluted
share, and an adjusted net loss attributable to common stock
(reconciled below) of $66 million, or
$0.17 per diluted share. This
compares to a net loss attributable to common stock of $762 million, or $2.01 per diluted share, and an adjusted net
income attributable to common stock of $74
million, or $0.20 per diluted
share, in the first six months of 2015.
Net cash provided by operating activities was $165 million for the first six months of 2016,
compared to $940 million in the first
six months of 2015. Net cash flow (reconciled below) was
$261 million for the first six months
of 2016, compared to $832 million for
the same period in 2015.
The first six months of 2015 included the operating results from
the gathering system in northeast Pennsylvania and conventional E&P assets
in East Texas and the Arkoma basin
that were divested during the second quarter of 2015.
E&P Segment – The operating loss from the
Company's E&P segment was $1.7
billion for the first six months of 2016, compared to an
operating loss of $1.6 billion during
the first six months of 2015. The larger operating loss was
primarily due to lower realized commodity prices. The adjusted
operating loss from the Company's E&P segment was $133 million for the first six months of 2016
(reconciled below), when excluding the non-cash impairment and
restructuring charges, compared to an adjusted operating loss of
$26 million for the same period in
2015. The larger loss was primarily due to lower realized natural
gas prices along with decreases in realized oil and NGL prices
partially offset by lower operating costs.
Net production totaled 462 Bcfe in the first six months of 2016,
down less than anticipated from the 478 Bcfe in the first six
months of 2015. The first six months of 2016 included 199 Bcf
from the Fayetteville Shale, 184 Bcf from Northeast Appalachia and
78 Bcfe from Southwest Appalachia. This compares to 236 Bcf
from the Fayetteville Shale, 170 Bcf from Northeast Appalachia and
65 Bcfe from Southwest Appalachia in the first six months of
2015.
Due to the continued challenging commodity price environment,
including the effect of derivatives, Southwestern's average
realized gas price in the first six months of 2016 was $1.40 per Mcf, down from $2.60 per Mcf in the six months of 2015. The
Company's commodity derivative activities increased its average
realized gas price by $0.07 per Mcf
during the first six months of 2016, compared to an increase of
$0.41 per Mcf during the same period
in 2015. Disregarding the impact of derivatives, the Company's
average price received for its gas production during the first six
months of 2016 was approximately $0.69 per Mcf lower than average NYMEX settlement
prices, compared to approximately $0.62 per Mcf lower than average NYMEX settlement
prices during the first six months of 2015.
Lease operating expenses per unit of production for the
Company's E&P segment declined to $0.88 per Mcfe in the first six months of 2016,
compared to $0.93 per Mcfe in the
first six months of 2015. The decrease was primarily due to reduced
workover activity and contract services as well as the successful
renegotiation of the existing gathering and processing rates in
Southwest Appalachia.
General and administrative expenses per unit of production
decreased to $0.20 per Mcfe in the
first six months of 2016, compared to $0.22 per Mcfe in the first six months quarter of
2015, down primarily due to a decrease in employee costs. This
excludes the restructuring charges associated with the workforce
reduction, which were $69 million for
the E&P segment in the first six months of 2016.
Taxes other than income taxes were down to $0.09 per Mcfe in the first six months of 2016,
compared to $0.11 per Mcfe in the
first six months of 2015. This excludes the restructuring charges
associated with the workforce reduction, which were $3 million for the E&P segment in the first
six months of 2016.
The Company's full cost pool amortization rate declined
significantly to $0.42 per Mcfe in
the first six months of 2016, compared to $1.14 per Mcfe in the first six months of
2015.
Midstream – Operating income for the Company's
Midstream segment was $117 million
for the first six months of 2016, compared to $443 million for the same period in 2015. The
decrease in operating income was primarily due to 2015 including a
$278 million gain on sale of assets
divested. Adjusted operating income (reconciled below) for the
Company's Midstream segment was $120
million for the first six months of 2016, excluding the
impacts from restructuring charges. This is down from
$165 million for the same period in
2015, which excluded a $278 million
gain on sale of assets divested. The decrease in adjusted operating
income was largely due to a decrease in volumes gathered resulting
from lower production volumes in the Fayetteville Shale and the
sale of the Company's northeast Pennsylvania gathering assets.
Capital Structure and Investments – At
June 30, 2016, the Company had total
debt of approximately $5.8 billion
and $4.8 billion in net debt (a
non-GAAP measure reconciled below). These amounts do not
reflect the effect of the $1.25
billion equity offering and retirement of approximately
$700 million of 2018 bonds through
tender offers, all completed in July, or the anticipated closing of
the previously announced asset sale in the third quarter.
In June 2016, the Company entered
into a new credit agreement for $1,934
million, consisting of a $1,191
million secured term loan that is fully drawn and a new
$743 million unsecured revolving
credit facility, which matures in December
2020, and reduced its existing $2.0
billion unsecured revolving credit facility due in
December 2018 to $66 million. As of June
30, 2016, there were no borrowings under either revolving
credit facility; however, there was $169
million in letters of credit outstanding against the new
revolving credit facility.
During the first six months of 2016, Southwestern invested a
total of $196 million. This is
down from $1.6 billion in the first
six months of 2015. The $196 million
includes approximately $193 million
invested in its E&P business, $2
million invested in its Midstream segment and $1 million invested for corporate and other
purposes. Of the $196 million,
approximately $82 million was
associated with capitalized interest and $41
million was associated with capitalized expenses.
Revised 2016 Guidance
The Company has increased its production guidance by 45 Bcfe
(using midpoints) for 2016 based on the strong performance of the
portfolio for the first six months and, to a lesser extent,
improved commodity prices and the availability of capital from the
Company's July equity offering. The revised total natural gas, NGL
and oil production guidance for 2016 is raised to 865 to 875 Bcfe,
an increase of approximately 5% over the Company's previous 2016
production guidance.
Of the 45 Bcfe increase (using midpoints), approximately 33 Bcfe
is a result of the strong portfolio performance and only 12 Bcfe is
associated with the increased capital being invested during the
second half of the year. While having only an estimated 12
Bcfe impact on 2016 production, the increased capital investments
for the year will have a significant impact on 2017
production. Of the Company's total expected production in
2016, approximately 371 to 374 Bcf is expected to come from the
Fayetteville Shale, approximately 345 to 348 Bcf is expected to
come from Northeast Appalachia and 147 to 151 Bcfe is expected to
come from Southwest Appalachia.
The Company is currently in the process of reinitiating drilling
and completion activity in each of its operating areas and plans to
make incremental capital investments of up to $500 million from its July equity offering, with
approximately $375 million of this
incremental capital expected to be invested before the end of
2016. As part of this plan, the Company reinitiated drilling
with its first rig this week in Northeast Appalachia and intends to
increase its company-wide rig count to five by the end of the third
quarter. These five rigs are expected to be comprised of two
in Northeast Appalachia, two in Southwest Appalachia and one in
Fayetteville. Additionally, the Company expects to complete
approximately 90 to 100 wells in the second half of 2016, which
includes new wells drilled and a portion of the inventory of
previously drilled but uncompleted wells. The Company's
updated guidance for 2016 is shown below.
|
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|
2016
Guidance
|
|
Original
|
|
Revised
|
$ millions (except
production and well count)
|
$2.35 /
$35.00
|
|
$2.45 /
$45.00
|
Capital:
|
|
|
|
Discretionary Capital
|
$100 -
$125
|
|
$485 -
$525
|
Capitalized Interest and Expenses
|
$250 -
$275
|
|
$240 -
$250
|
Total
Capital
|
$350 -
$400
|
|
$725 -
$775
|
|
|
|
|
Net Cash Flow
(1) (2)
|
$450 -
$500
|
|
$655 -
$680
|
|
|
|
|
Adjusted net
income (loss) attributable to common stock (1)
(2)
|
($180) -
($160)
|
|
($10) -
$10
|
|
|
|
|
Adjusted EBITDA
(1) (2)
|
$450 -
$500
|
|
$675 -
$700
|
|
|
|
|
Production
(Bcfe)
|
815 -
835
|
|
865 -
875
|
Wells
Drilled
|
-
|
|
55 - 65
|
Wells
Completed
|
20 - 30
|
|
100 - 110
|
Wells Placed on
Production
|
20 - 30
|
|
120 - 130
|
Ending DUC
Inventory
|
100 - 110
|
|
55 - 65
|
|
|
(1)
|
Excludes the impact
of one-time severance charges associated with the 2016 workforce
reduction.
|
|
|
(2)
|
This represents a
Non-GAAP measure; see "Explanation and Reconciliation of Non-GAAP
Financial Measures" below.
|
Estimated Capital
Investments in 2016
|
|
|
|
|
|
Capital
Investments
|
|
YTD
|
|
Total
Year
|
$
millions
|
June
2016
|
|
2016
(1)
|
Northeast
Appalachia
|
$
24
|
|
$
220
|
Southwest
Appalachia
|
20
|
|
175
|
Fayetteville
Shale
|
13
|
|
80
|
Midstream
Services
|
1
|
|
5
|
Capitalized
Interest
|
82
|
|
160
|
Capitalized
G&A
|
41
|
|
85
|
E&P
Services & Corporate
|
15
|
|
25
|
Total Capital
Investments
|
$
196
|
|
$
750
|
|
(1) Assumes midpoint
of total company guidance provided in table above.
|
Estimated Production
by Quarter in 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1st
Quarter
|
|
2nd
Quarter
|
|
3rd
Quarter
|
|
4th
Quarter
|
|
Total Year
2016
|
|
|
|
|
|
|
|
|
|
|
|
Previous Guidance
(Bcfe)
|
|
230 -
235
|
|
210 -
215
|
|
195 -
200
|
|
180 -
185
|
|
815 -
835
|
|
|
|
|
|
|
|
|
|
|
|
New
Guidance:
|
|
|
|
|
|
|
|
|
|
|
Natural
Gas (Bcf)
|
|
213
|
|
203
|
|
186 - 190
|
|
179 - 184
|
|
781 - 790
|
Oil
(MBbls)
|
|
607
|
|
586
|
|
510 - 560
|
|
470 - 510
|
|
2,173 -
2,263
|
NGLs
(MBbls)
|
|
3,376
|
|
3,136
|
|
2,750 -
2,850
|
|
2,550 -
2,650
|
|
11,812 -
12,012
|
Total Production
(Bcfe)
|
|
237
|
|
225
|
|
206 -
211
|
|
197 -
202
|
|
865 -
875
|
Estimated E&P
Pricing Deductions in 2016
|
|
Avg Gas
Basis Differential and Transportation Charge
|
$0.73 - $0.83 per
Mcf
|
Avg Oil
Basis Differential and Transportation Charge
|
$13.00 - $15.00 per
Bbl
|
Avg NGL
Price Realization
|
15% - 20% of
WTI
|
|
|
Estimated E&P
Operating Expenses in 2016 (per Mcfe)
|
|
Lease
Operating Expenses
|
$0.88 -
$0.92
|
General
& Administrative Expense
|
$0.22 -
$0.25
|
Taxes,
Other Than Income Taxes
|
$0.09 -
$0.11
|
|
|
Other Items in
2016
|
|
Midstream EBITDA ($ in millions)
|
$255 -
$270
|
Net
Interest Expense ($ in millions)
|
$60 - $65
|
E&P Operations Review
During the first six months of 2016, Southwestern invested
approximately $193 million in its
E&P business, including $71
million in investment capital and $122 in capitalized interest and
expenses.
In Northeast Appalachia, the Company placed 6 wells on
production in the second quarter of 2016. This activity
resulted in net gas production of 90 Bcf, up 4% from 87 Bcf in the
second quarter of 2015. Gross operated production in
Northeast Appalachia was approximately 1.2 Bcf per day at
June 30, 2016. The Company
expects to drill 37 to 40 wells, complete 35 to 38 wells and place
an additional 29 to 33 wells on production in the second half of
2016 in this operating area.
In Southwest Appalachia, net production of 38 Bcfe in the second
quarter of 2016 was 8% higher than the 35 Bcfe of net production in
the same period of 2015. The gross operated production rate
in Southwest Appalachia was approximately 644 MMcfe per day at
June 30, 2016. The Company
placed 11 new wells on production in the second quarter of 2016 and
expects to drill 11 to 15 wells, complete 20 to 24 wells and place
an additional 19 to 22 wells on production in the second half of
2016 in this operating area.
In the second quarter of 2016, Southwestern's net gas production
from the Fayetteville Shale was 96 Bcf, compared to 121 Bcf in the
second quarter of 2015. Gross operated gas production in the
Fayetteville Shale was approximately 1.5 Bcf per day at
June 30, 2016. The Company
placed 6 wells on production in the second quarter of 2016 and
expects to drill 7 to 10 wells, complete 36 to 39 wells and place
an additional 37 to 40 wells on production in the second half of
2016 in this operating area.
Explanation and Reconciliation of Non-GAAP Financial
Measures
The Company reports its financial results in accordance with
accounting principles generally accepted in the United States of America ("GAAP").
However, management believes certain non-GAAP performance measures
may provide financial statement users with additional meaningful
comparisons between current results, the results of its peers and
of prior periods.
One such non-GAAP financial measure is net cash flow. Management
presents this measure because (i) it is accepted as an indicator of
an oil and gas exploration and production company's ability to
internally fund exploration and development activities and to
service or incur additional debt, (ii) changes in operating assets
and liabilities relate to the timing of cash receipts and
disbursements which the Company may not control and (iii) changes
in operating assets and liabilities may not relate to the period in
which the operating activities occurred.
Additional non-GAAP financial measures the Company may present
from time to time are net debt, adjusted net income, adjusted
diluted earnings per share, adjusted EBITDA and its E&P and
Midstream segment operating income, all which exclude certain
charges or amounts. Management presents these measures because (i)
they are consistent with the manner in which the Company's position
and performance are measured relative to the position and
performance of its peers, (ii) these measures are more comparable
to earnings estimates provided by securities analysts, and (iii)
charges or amounts excluded cannot be reasonably estimated and
guidance provided by the Company excludes information regarding
these types of items. These adjusted amounts are not a measure of
financial performance under GAAP.
See the reconciliations throughout this release of GAAP
financial measures to non-GAAP financial measures as of and for the
three and six months ended June 30,
2016 and June 30, 2015 and the
2016 Guidance, as applicable. Non-GAAP financial measures should
not be considered in isolation or as a substitute for the Company's
reported results prepared in accordance with GAAP.
|
|
|
|
|
|
|
3 Months Ended
June 30,
|
|
2016
|
|
2015
|
|
(in
millions)
|
Net loss
attributable to common stock:
|
|
|
|
|
|
Net loss attributable
to common stock
|
$
|
(620)
|
|
$
|
(815)
|
Add back:
|
|
|
|
|
|
Impairment of natural
gas and oil properties
|
|
470
|
|
|
1,535
|
Restructuring
charges
|
|
11
|
|
|
–
|
Gain on sale of assets,
net
|
|
(2)
|
|
|
(277)
|
Transaction
costs
|
|
–
|
|
|
1
|
Loss on certain
derivatives
|
|
108
|
|
|
50
|
Adjustments due to
inventory valuation
|
|
1
|
|
|
–
|
Adjustments due to
discrete tax items(1)
|
|
216
|
|
|
–
|
Tax impact on
adjustments
|
|
(218)
|
|
|
(503)
|
Adjusted net loss
attributable to common stock
|
$
|
(34)
|
|
$
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Months Ended
June 30,
|
|
2016
|
|
2015
|
|
|
|
|
|
|
Diluted earnings
per share:
|
|
|
|
|
|
Diluted earnings per
share(2)
|
$
|
(1.61)
|
|
$
|
(2.13)
|
Add back:
|
|
|
|
|
|
Impairment of natural
gas and oil properties
|
|
1.22
|
|
|
4.02
|
Restructuring
charges
|
|
0.03
|
|
|
–
|
Gain on sale of assets,
net
|
|
(0.01)
|
|
|
(0.72)
|
Transaction
costs
|
|
–
|
|
|
0.00
|
Loss on certain
derivatives
|
|
0.28
|
|
|
0.13
|
Adjustments due to
inventory valuation
|
|
0.00
|
|
|
–
|
Adjustments due to
discrete tax items(1)
|
|
0.56
|
|
|
–
|
Tax impact on
adjustments
|
|
(0.56)
|
|
|
(1.32)
|
Adjusted diluted
earnings per share
|
$
|
(0.09)
|
|
$
|
(0.02)
|
|
|
|
|
|
|
(1)
|
2016 primarily
relates to the exclusion of certain discrete tax adjustments in the
second quarter of 2016 due to an increase to the valuation
allowance against the Company's deferred tax assets. The
Company expects its 2016 income tax rate to be 38.0% before the
impacts of any valuation allowance.
|
|
|
(2)
|
Does not include the
effect of 98.9 million shares of common stock issued in July
2016.
|
|
|
|
|
|
|
|
6 Months Ended
June 30,
|
|
2016
|
|
2015
|
|
(in
millions)
|
Net income (loss)
attributable to common stock:
|
|
|
|
|
|
Net loss attributable
to common stock
|
$
|
(1,779)
|
|
$
|
(762)
|
Add back:
|
|
|
|
|
|
Participating
securities – mandatory convertible preferred stock
|
|
–
|
|
|
(13)
|
Impairment of natural
gas and oil properties
|
|
1,504
|
|
|
1,535
|
Restructuring
charges
|
|
75
|
|
|
–
|
Gain on sale of assets,
net
|
|
(2)
|
|
|
(277)
|
Transaction
costs
|
|
–
|
|
|
52
|
Loss on certain
derivatives
|
|
129
|
|
|
71
|
Adjustments due to
inventory valuation
|
|
4
|
|
|
–
|
Adjustments due to
discrete tax items(1)
|
|
647
|
|
|
–
|
Tax impact on
adjustments
|
|
(644)
|
|
|
(532)
|
Adjusted net income
(loss) attributable to common stock
|
$
|
(66)
|
|
$
|
74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 Months Ended
June 30,
|
|
2016
|
|
2015
|
|
|
|
|
|
|
Diluted earnings
per share:
|
|
|
|
|
|
Diluted earnings per
share(2)
|
$
|
(4.63)
|
|
$
|
(2.01)
|
Add back:
|
|
|
|
|
|
Participating
securities – mandatory convertible preferred stock
|
|
–
|
|
|
(0.03)
|
Impairment of natural
gas and oil properties
|
|
3.91
|
|
|
4.05
|
Restructuring
charges
|
|
0.19
|
|
|
–
|
Gain on sale of assets,
net
|
|
(0.00)
|
|
|
(0.73)
|
Transaction
costs
|
|
–
|
|
|
0.14
|
Loss on certain
derivatives
|
|
0.34
|
|
|
0.19
|
Adjustments due to
inventory valuation
|
|
0.01
|
|
|
–
|
Adjustments due to
discrete tax items(1)
|
|
1.68
|
|
|
–
|
Tax impact on
adjustments
|
|
(1.67)
|
|
|
(1.41)
|
Adjusted diluted
earnings per share
|
$
|
(0.17)
|
|
$
|
0.20
|
|
|
|
|
|
|
(1)
|
2016 primarily
relates to the exclusion of certain discrete tax adjustments in the
first six months of 2016 due to an increase to the valuation
allowance against the Company's deferred tax assets. The
Company expects its 2016 income tax rate to be 38.0% before the
impacts of any valuation allowance.
|
|
|
(2)
|
Does not include the
effect of 98.9 million shares of common stock issued in July
2016.
|
|
|
|
|
|
|
|
3 Months Ended
June 30,
|
|
2016
|
|
2015
|
|
(in
millions)
|
Cash flow from
operating activities:
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
73
|
|
$
|
399
|
Add back:
|
|
|
|
|
|
Changes in operating
assets and liabilities
|
|
17
|
|
|
(60)
|
Restructuring
charges
|
|
24
|
|
|
–
|
Net Cash
Flow
|
$
|
114
|
|
$
|
339
|
|
|
|
|
|
|
|
6 Months Ended
June 30,
|
|
2016
|
|
2015
|
|
(in
millions)
|
Cash flow from
operating activities:
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
165
|
|
$
|
940
|
Add back:
|
|
|
|
|
|
Changes in operating
assets and liabilities
|
|
50
|
|
|
(108)
|
Restructuring
charges
|
|
46
|
|
|
–
|
Net Cash
Flow
|
$
|
261
|
|
$
|
832
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Months Ended
June 30,
|
|
2016
|
|
2015
|
|
(in
millions)
|
E&P segment
operating loss:
|
|
|
|
|
|
E&P segment
operating loss
|
$
|
(549)
|
|
$
|
(1,639)
|
Add back:
|
|
|
|
|
|
Impairment of natural
gas and oil properties
|
|
470
|
|
|
1,535
|
Restructuring
charges
|
|
11
|
|
|
–
|
Adjusted E&P
segment operating loss
|
$
|
(68)
|
|
$
|
(104)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 Months Ended
June 30,
|
|
2016
|
|
2015
|
|
(in
millions)
|
E&P segment
operating loss:
|
|
|
|
|
|
E&P segment
operating loss
|
$
|
(1,709)
|
|
$
|
(1,561)
|
Add back:
|
|
|
|
|
|
Impairment of natural
gas and oil properties
|
|
1,504
|
|
|
1,535
|
Restructuring
charges
|
|
72
|
|
|
–
|
Adjusted E&P
segment operating loss
|
$
|
(133)
|
|
$
|
(26)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Months Ended
June 30,
|
|
2016
|
|
2015
|
|
(in
millions)
|
Midstream segment
operating income:
|
|
|
|
|
|
Midstream segment
operating income
|
$
|
57
|
|
$
|
355
|
Add back:
|
|
|
|
|
|
Gain on sale of assets,
net
|
|
–
|
|
|
(278)
|
Adjusted Midstream
segment operating income
|
$
|
57
|
|
$
|
77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 Months Ended
June 30,
|
|
2016
|
|
2015
|
|
(in
millions)
|
Midstream segment
operating income:
|
|
|
|
|
|
Midstream segment
operating income
|
$
|
117
|
|
$
|
443
|
Add back:
|
|
|
|
|
|
Restructuring
charges
|
|
3
|
|
|
–
|
Gain on sale of assets,
net
|
|
–
|
|
|
(278)
|
Adjusted Midstream
segment operating income
|
$
|
120
|
|
$
|
165
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
2016
|
|
2015
|
|
(in
millions)
|
Net
debt:
|
|
|
|
|
|
Total debt
|
$
|
5,768
|
|
$
|
4,705
|
Subtract:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
(998)
|
|
|
(15)
|
Net debt
|
$
|
4,770
|
|
$
|
4,690
|
|
|
|
|
|
|
|
2016
Guidance
|
|
|
Original
|
|
Revised
|
|
|
$2.35 Gas / $35
Oil
|
|
$2.45 Gas / $45
Oil
|
|
|
($
millions)
|
Cash flow from
operating activities:
|
|
|
|
|
Net cash provided by
operating activities
|
|
$405 -
$450
|
|
$609 -
$634
|
Add back
(deduct):
|
|
|
|
|
One-time
cash severance payments
|
|
45 - 50
|
|
46
|
Change
in operating assets and liabilities
|
|
–
|
|
–
|
Net cash
flow
|
|
$450 -
$500
|
|
$655 -
$680
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
Guidance
|
|
|
Original
|
|
Revised
|
|
|
$2.35 Gas / $35
Oil
|
|
$2.45 Gas / $45
Oil
|
|
|
($
millions)
|
Net loss attributable
to common stock
|
|
($223) -
($197)
|
|
($1,655) -
($1,625)
|
Add back
(deduct):
|
|
|
|
|
Impairment of natural
gas and oil properties
|
|
–
|
|
1,504
|
Restructuring
charges
|
|
60 - 70
|
|
75
|
Gain on sale of assets,
net
|
|
–
|
|
(2)
|
Loss on certain
derivatives
|
|
–
|
|
129
|
Adjustments due to
inventory valuation
|
|
–
|
|
4
|
Adjustments due to
discrete tax items
|
|
–
|
|
568 - 579
|
Tax impact on
adjustments
|
|
(23) -
(27)
|
|
(644)
|
Adjusted net income
(loss) attributable to common stock
|
|
($180) -
($160)
|
|
($10) -
$10
|
|
|
|
|
|
(1)
|
Does not include any
forecasted impairments.
|
|
|
|
|
|
|
|
2016
Guidance
|
|
|
Original
|
|
Revised
|
|
|
$2.35 Gas / $35
Oil
|
|
$2.45 Gas / $45
Oil
|
|
|
($ in
millions)
|
Net loss attributable
to common stock
|
|
($223) -
($197)
|
|
($1,655) -
($1,625)
|
Add back:
|
|
|
|
|
Mandatory convertible preferred stock dividend
|
|
108 - 108
|
|
108 - 108
|
Net loss attributable
to SWN
|
|
($115) -
($89)
|
|
($1,547) -
($1,517)
|
|
|
|
|
|
Add back:
|
|
|
|
|
Provision for income taxes
|
|
(70) -
(54)
|
|
–
|
Impairment of natural gas and oil properties
|
|
–
|
|
1,504
|
Depreciation, depletion and amortization
|
|
520 - 530
|
|
440 - 450
|
Gain on
sale of assets
|
|
–
|
|
(2)
|
Loss on
certain derivatives
|
|
–
|
|
129
|
Interest
expense
|
|
53 - 58
|
|
60 - 65
|
Write-down on inventory
|
|
–
|
|
4
|
Restructuring costs
|
|
60 - 70
|
|
75
|
Adjusted
EBITDA
|
|
$450 -
$500
|
|
$675 - 700
|
|
|
(1)
|
Does not include any
forecasted impairments.
|
Southwestern management will host a teleconference call on
Friday, July 22, 2016 at 10:00 a.m. Eastern to discuss its second quarter
2016 results. The toll-free number to call is 877-407-8035 and the
international dial-in number is 201-689-8035. The teleconference
can also be heard "live" on the Internet at http://www.swn.com.
Southwestern Energy Company is an independent energy company
whose wholly owned subsidiaries are engaged in natural gas and oil
exploration, development and production, natural gas gathering and
marketing. Additional information on the Company can be found on
the Internet at http://www.swn.com.
This news release contains forward-looking statements.
Forward-looking statements relate to future events and anticipated
results of operations, business strategies, and other aspects of
our operations or operating results. In many cases you can identify
forward-looking statements by terminology such as "anticipate,"
"intend," "plan," "project," "estimate," "continue," "potential,"
"should," "could," "may," "will," "objective," "guidance,"
"outlook," "effort," "expect," "believe," "predict," "budget,"
"projection," "goal," "forecast," "target" or similar words.
Statements may be forward looking even in the absence of these
particular words. Where, in any forward-looking statement, the
Company expresses an expectation or belief as to future results,
such expectation or belief is expressed in good faith and believed
to have a reasonable basis. However, there can be no assurance that
such expectation or belief will result or be achieved. The actual
results of operations can and will be affected by a variety of
risks and other matters including, but not limited to, changes in
commodity prices; changes in expected levels of natural gas and oil
reserves or production; operating hazards, drilling risks,
unsuccessful exploratory activities; limited access to capital or
significantly higher cost of capital related to illiquidity or
uncertainty in the domestic or international financial markets;
international monetary conditions; unexpected cost increases;
potential liability for remedial actions under existing or future
environmental regulations; potential liability resulting from
pending or future litigation; and general domestic and
international economic and political conditions; as well as changes
in tax, environmental and other laws applicable to our business.
Other factors that could cause actual results to differ materially
from those described in the forward-looking statements include
other economic, business, competitive and/or regulatory factors
affecting our business generally as set forth in our filings with
the Securities and Exchange Commission. Unless legally required,
Southwestern Energy Company undertakes no obligation to update
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.
OPERATING
STATISTICS (Unaudited)
|
|
Southwestern Energy
Company and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
|
For the six months
ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Exploration &
Production
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas production
(Bcf)
|
|
|
203
|
|
|
226
|
|
|
416
|
|
|
445
|
Oil production
(MBbls)
|
|
|
586
|
|
|
589
|
|
|
1,193
|
|
|
1,134
|
NGL production
(MBbls)
|
|
|
3,136
|
|
|
2,574
|
|
|
6,512
|
|
|
4,340
|
Total production
(Bcfe)
|
|
|
225
|
|
|
245
|
|
|
462
|
|
|
478
|
Commodity
Prices
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized gas
price per Mcf, including derivatives
|
|
$
|
1.32
|
|
$
|
2.23
|
|
$
|
1.40
|
|
$
|
2.60
|
Average realized gas
price per Mcf, excluding derivatives
|
|
$
|
1.21
|
|
$
|
1.76
|
|
$
|
1.33
|
|
$
|
2.19
|
Average realized oil
price per Bbl
|
|
$
|
32.46
|
|
$
|
40.88
|
|
$
|
25.43
|
|
$
|
36.08
|
Average realized NGL
price per Bbl
|
|
$
|
6.41
|
|
$
|
5.77
|
|
$
|
5.67
|
|
$
|
7.63
|
Summary of
Derivative Activity in the Statement of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
Settled commodity
amounts included in "Operating Revenues" (in millions)
|
|
$
|
–
|
|
$
|
53
|
|
$
|
–
|
|
$
|
95
|
Settled commodity
amounts included in "Gain (Loss) on Derivatives" (in
millions)
|
|
$
|
23
|
|
$
|
52
|
|
$
|
31
|
|
$
|
88
|
Unsettled commodity
amounts included in "Gain (Loss) on Derivatives" (in
millions)
|
|
$
|
(108)
|
|
$
|
(52)
|
|
$
|
(126)
|
|
$
|
(70)
|
Average unit costs
per Mcfe
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
expenses
|
|
$
|
0.87
|
|
$
|
0.93
|
|
$
|
0.88
|
|
$
|
0.93
|
General &
administrative expenses (1)
|
|
$
|
0.21
|
|
$
|
0.21
|
|
$
|
0.20
|
|
$
|
0.22
|
Taxes, other than
income taxes (2)
|
|
$
|
0.09
|
|
$
|
0.10
|
|
$
|
0.09
|
|
$
|
0.11
|
Full cost pool
amortization
|
|
$
|
0.35
|
|
$
|
1.13
|
|
$
|
0.42
|
|
$
|
1.14
|
Midstream
|
|
|
|
|
|
|
|
|
|
|
|
|
Volumes marketed
(Bcfe)
|
|
|
271
|
|
|
289
|
|
|
550
|
|
|
549
|
Volumes gathered
(Bcf)
|
|
|
154
|
|
|
201
|
|
|
318
|
|
|
434
|
|
|
(1)
|
Excludes $11 million
and $69 million of restructuring charges for the three and six
months ended June 30, 2016, respectively.
|
|
|
(2)
|
Excludes $3 million
of restructuring charges for the six months ended June 30, 2016,
respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATEMENTS OF
OPERATIONS (Unaudited)
|
|
Southwestern Energy
Company and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
|
For the six months
ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
(in millions, except
share/per share amounts)
|
Operating
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas sales
|
|
$
|
251
|
|
$
|
457
|
|
$
|
566
|
|
$
|
1,082
|
Oil sales
|
|
|
20
|
|
|
24
|
|
|
31
|
|
|
41
|
NGL sales
|
|
|
20
|
|
|
15
|
|
|
37
|
|
|
33
|
Marketing
|
|
|
196
|
|
|
222
|
|
|
394
|
|
|
447
|
Gas
gathering
|
|
|
35
|
|
|
46
|
|
|
73
|
|
|
94
|
|
|
|
522
|
|
|
764
|
|
|
1,101
|
|
|
1,697
|
Operating Costs
and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing
purchases
|
|
|
197
|
|
|
219
|
|
|
393
|
|
|
441
|
Operating
expenses
|
|
|
151
|
|
|
176
|
|
|
316
|
|
|
331
|
General and
administrative expenses
|
|
|
56
|
|
|
60
|
|
|
110
|
|
|
128
|
Restructuring
charges
|
|
|
11
|
|
|
–
|
|
|
75
|
|
|
–
|
Depreciation,
depletion and amortization
|
|
|
107
|
|
|
308
|
|
|
250
|
|
|
601
|
Impairment of natural
gas and oil properties
|
|
|
470
|
|
|
1,535
|
|
|
1,504
|
|
|
1,535
|
Gain on sale of
assets, net
|
|
|
–
|
|
|
(277)
|
|
|
–
|
|
|
(277)
|
Taxes, other than
income taxes
|
|
|
22
|
|
|
27
|
|
|
45
|
|
|
57
|
|
|
|
1,014
|
|
|
2,048
|
|
|
2,693
|
|
|
2,816
|
Operating
Loss
|
|
|
(492)
|
|
|
(1,284)
|
|
|
(1,592)
|
|
|
(1,119)
|
Interest
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on
debt
|
|
|
56
|
|
|
52
|
|
|
109
|
|
|
102
|
Other interest
charges
|
|
|
2
|
|
|
3
|
|
|
4
|
|
|
52
|
Interest
capitalized
|
|
|
(41)
|
|
|
(54)
|
|
|
(82)
|
|
|
(102)
|
|
|
|
17
|
|
|
1
|
|
|
31
|
|
|
52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Loss), Net
|
|
|
–
|
|
|
3
|
|
|
(3)
|
|
|
2
|
Gain (Loss) on
Derivatives
|
|
|
(85)
|
|
|
1
|
|
|
(99)
|
|
|
15
|
Loss Before Income
Taxes
|
|
|
(594)
|
|
|
(1,281)
|
|
|
(1,725)
|
|
|
(1,154)
|
Provision
(Benefit) for Income Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
–
|
|
|
7
|
|
|
–
|
|
|
7
|
Deferred
|
|
|
(1)
|
|
|
(500)
|
|
|
–
|
|
|
(451)
|
|
|
|
(1)
|
|
|
(493)
|
|
|
–
|
|
|
(444)
|
Net
Loss
|
|
|
(593)
|
|
|
(788)
|
|
|
(1,725)
|
|
|
(710)
|
Mandatory
convertible preferred stock dividend
|
|
|
27
|
|
|
27
|
|
|
54
|
|
|
52
|
Net Loss
Attributable to Common Stock
|
|
$
|
(620)
|
|
$
|
(815)
|
|
$
|
(1,779)
|
|
$
|
(762)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss Per Common
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(1.61)
|
|
$
|
(2.13)
|
|
$
|
(4.63)
|
|
$
|
(2.01)
|
Diluted
|
|
$
|
(1.61)
|
|
$
|
(2.13)
|
|
$
|
(4.63)
|
|
$
|
(2.01)
|
Weighted Average
Common Shares Outstanding
|
Basic
|
|
|
385,594,815
|
|
|
382,114,011
|
|
|
384,232,831
|
|
|
378,797,446
|
Diluted
|
|
|
385,594,815
|
|
|
382,114,011
|
|
|
384,232,831
|
|
|
378,797,446
|
|
|
|
|
|
|
|
BALANCE SHEETS
(Unaudited)
|
|
Southwestern Energy
Company and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2016
|
|
December 31,
2015
|
|
|
(in
millions)
|
ASSETS
|
|
|
|
|
|
|
Current
assets
|
|
$
|
1,278
|
|
$
|
393
|
Property and
equipment
|
|
|
24,529
|
|
|
24,364
|
Less: Accumulated
depreciation, depletion and amortization
|
|
|
(18,582)
|
|
|
(16,821)
|
Total property and
equipment, net
|
|
|
5,947
|
|
|
7,543
|
Other long-term
assets
|
|
|
152
|
|
|
150
|
Total
assets
|
|
|
7,377
|
|
|
8,086
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
Current
liabilities
|
|
|
591
|
|
|
707
|
Long-term
debt
|
|
|
5,767
|
|
|
4,704
|
Pension and other
postretirement liabilities
|
|
|
51
|
|
|
50
|
Other long-term
liabilities
|
|
|
395
|
|
|
343
|
Total
liabilities
|
|
|
6,804
|
|
|
5,804
|
Equity:
|
|
|
|
|
|
|
Common stock, $0.01
par value; 1,250,000,000 shares authorized; issued 392,496,825
(1) shares as of June 30, 2016 (does not include
2,100,119 shares declared as a stock dividend on June 14, 2016 and
issued on July 15, 2016) and 390,138,549 as of December 31,
2015
|
|
|
4
|
|
|
4
|
Preferred stock,
$0.01 par value,10,000,000 shares authorized, 6.25% Series B
Mandatory Convertible, $1,000 per share liquidation preference,
1,725,000 shares issued and outstanding as of June 30, 2016 and
December 31, 2015, conversion in January 2018
|
|
|
–
|
|
|
–
|
Additional paid-in
capital
|
|
|
3,418
|
|
|
3,409
|
Accumulated
deficit
|
|
|
(2,807)
|
|
|
(1,082)
|
Accumulated other
comprehensive loss
|
|
|
(41)
|
|
|
(48)
|
Common stock in
treasury; 31,269 shares as of June 30, 2016 and 47,149 as of
December 31, 2015, respectively
|
|
|
(1)
|
|
|
(1)
|
Total
equity
|
|
|
573
|
|
|
2,282
|
Total liabilities and
equity
|
|
$
|
7,377
|
|
$
|
8,086
|
|
|
(1)
|
Does not include
98,900,000 shares of common stock issued in July 2016.
|
|
|
|
|
|
|
|
STATEMENTS OF CASH
FLOWS (Unaudited)
|
|
Southwestern Energy
Company and Subsidiaries
|
|
|
|
|
|
|
|
For the six months
ended
|
|
|
June 30,
|
|
|
2016
|
|
2015
|
|
|
(in
millions)
|
Cash Flows From
Operating Activities
|
|
|
|
|
|
|
Net loss
|
|
$
|
(1,725)
|
|
$
|
(710)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
|
250
|
|
|
603
|
Impairment of natural
gas and oil properties
|
|
|
1,504
|
|
|
1,535
|
Amortization of debt
issuance costs
|
|
|
4
|
|
|
49
|
Deferred income
taxes
|
|
|
–
|
|
|
(451)
|
Loss on derivatives,
net of settlement
|
|
|
129
|
|
|
71
|
Stock-based
compensation
|
|
|
17
|
|
|
12
|
Gain on sales of
assets, net
|
|
|
–
|
|
|
(277)
|
Restructuring
charges
|
|
|
29
|
|
|
–
|
Other
|
|
|
7
|
|
|
–
|
Change in assets and
liabilities
|
|
|
(50)
|
|
|
108
|
Net cash provided by
operating activities
|
|
|
165
|
|
|
940
|
|
|
|
|
|
|
|
Cash Flows From
Investing Activities
|
|
|
|
|
|
|
Capital
investments
|
|
|
(241)
|
|
|
(974)
|
Acquisitions
|
|
|
–
|
|
|
(569)
|
Proceeds from sale of
property and equipment
|
|
|
54
|
|
|
703
|
Other
|
|
|
1
|
|
|
10
|
Net cash used in
investing activities
|
|
|
(186)
|
|
|
(830)
|
|
|
|
|
|
|
|
Cash Flows From
Financing Activities
|
|
|
|
|
|
|
Payments on current
portion of long-term debt
|
|
|
(1)
|
|
|
(1)
|
Payments on long-term
debt
|
|
|
–
|
|
|
(500)
|
Payments on short-term
debt
|
|
|
–
|
|
|
(4,500)
|
Payments on revolving
credit facility
|
|
|
(3,268)
|
|
|
(1,534)
|
Borrowings under
revolving credit facility
|
|
|
3,152
|
|
|
1,804
|
Payments on commercial
paper
|
|
|
(242)
|
|
|
(1,182)
|
Borrowings under
commercial paper
|
|
|
242
|
|
|
1,288
|
Change in bank drafts
outstanding
|
|
|
(21)
|
|
|
(1)
|
Proceeds from issuance
of long-term debt
|
|
|
1,191
|
|
|
2,200
|
Debt issuance
costs
|
|
|
(16)
|
|
|
(17)
|
Proceeds from issuance
of common stock
|
|
|
–
|
|
|
669
|
Proceeds from issuance
of mandatory convertible preferred stock
|
|
|
–
|
|
|
1,673
|
Preferred stock
dividend
|
|
|
(27)
|
|
|
(25)
|
Other
|
|
|
(6)
|
|
|
–
|
Net cash provided by
(used in) financing activities
|
|
|
1,004
|
|
|
(126)
|
|
|
|
|
|
|
|
Increase (decrease)
in cash and cash equivalents
|
|
|
983
|
|
|
(16)
|
Cash and cash
equivalents at beginning of year
|
|
|
15
|
|
|
53
|
Cash and cash
equivalents at end of period
|
|
$
|
998
|
|
$
|
37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT
INFORMATION (Unaudited)
|
|
Southwestern Energy
Company and Subsidiaries
|
|
Exploration
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
|
|
Midstream
|
|
Other
|
|
Eliminations
|
|
Total
|
|
|
(in
millions)
|
Three months ended
June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
284
|
|
$
|
559
|
|
$
|
–
|
|
$
|
(321)
|
|
$
|
522
|
Marketing
purchases
|
|
|
–
|
|
|
452
|
|
|
–
|
|
|
(255)
|
|
|
197
|
Operating
expenses
|
|
|
196
|
|
|
21
|
|
|
–
|
|
|
(66)
|
|
|
151
|
General and
administrative expenses
|
|
|
46
|
|
|
10
|
|
|
–
|
|
|
–
|
|
|
56
|
Restructuring
charges
|
|
|
11
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
11
|
Depreciation,
depletion and amortization
|
|
|
90
|
|
|
17
|
|
|
–
|
|
|
–
|
|
|
107
|
Impairment of
natural gas and oil properties
|
|
|
470
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
470
|
Taxes, other than
income taxes
|
|
|
20
|
|
|
2
|
|
|
–
|
|
|
–
|
|
|
22
|
Operating income
(loss)
|
|
|
(549)
|
|
|
57
|
|
|
–
|
|
|
–
|
|
|
(492)
|
Capital
investments(1)
|
|
|
73
|
|
|
–
|
|
|
1
|
|
|
–
|
|
|
74
|
Three months ended
June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
490
|
|
$
|
766
|
|
$
|
–
|
|
$
|
(492)
|
|
$
|
764
|
Marketing
purchases
|
|
|
–
|
|
|
624
|
|
|
–
|
|
|
(405)
|
|
|
219
|
Operating
expenses
|
|
|
226
|
|
|
35
|
|
|
2
|
|
|
(87)
|
|
|
176
|
General and
administrative expenses
|
|
|
52
|
|
|
9
|
|
|
(1)
|
|
|
–
|
|
|
60
|
Depreciation,
depletion and amortization
|
|
|
291
|
|
|
17
|
|
|
–
|
|
|
–
|
|
|
308
|
Impairment of natural
gas and oil properties
|
|
|
1,535
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
1,535
|
(Gain) loss on sale
of assets, net
|
|
|
1
|
|
|
(278)
|
|
|
–
|
|
|
–
|
|
|
(277)
|
Taxes, other than
income taxes
|
|
|
24
|
|
|
4
|
|
|
(1)
|
|
|
–
|
|
|
27
|
Operating income
(loss)
|
|
|
(1,639)
|
|
|
355
|
|
|
–
|
|
|
–
|
|
|
(1,284)
|
Capital
investments(1)
|
|
|
389
|
|
|
19
|
|
|
7
|
|
|
–
|
|
|
415
|
Six months ended
June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
620
|
|
$
|
1,180
|
|
$
|
–
|
|
$
|
(699)
|
|
$
|
1,101
|
Marketing
purchases
|
|
|
–
|
|
|
955
|
|
|
–
|
|
|
(562)
|
|
|
393
|
Operating
expenses
|
|
|
405
|
|
|
48
|
|
|
–
|
|
|
(137)
|
|
|
316
|
General and
administrative expenses
|
|
|
91
|
|
|
19
|
|
|
–
|
|
|
–
|
|
|
110
|
Restructuring
charges
|
|
|
72
|
|
|
3
|
|
|
–
|
|
|
–
|
|
|
75
|
Depreciation,
depletion and amortization
|
|
|
217
|
|
|
33
|
|
|
–
|
|
|
–
|
|
|
250
|
Impairment of
natural gas and oil properties
|
|
|
1,504
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
1,504
|
Taxes, other than
income taxes
|
|
|
40
|
|
|
5
|
|
|
–
|
|
|
–
|
|
|
45
|
Operating income
(loss)
|
|
|
(1,709)
|
|
|
117
|
|
|
–
|
|
|
–
|
|
|
(1,592)
|
Capital
investments(1)
|
|
|
193
|
|
|
2
|
|
|
1
|
|
|
–
|
|
|
196
|
Six months ended June
30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
1,145
|
|
$
|
1,704
|
|
$
|
1
|
|
$
|
(1,153)
|
|
$
|
1,697
|
Marketing
purchases
|
|
|
–
|
|
|
1,410
|
|
|
–
|
|
|
(969)
|
|
|
441
|
Operating
expenses
|
|
|
442
|
|
|
71
|
|
|
2
|
|
|
(184)
|
|
|
331
|
General and
administrative expenses
|
|
|
108
|
|
|
20
|
|
|
–
|
|
|
–
|
|
|
128
|
Depreciation,
depletion and amortization
|
|
|
569
|
|
|
32
|
|
|
–
|
|
|
–
|
|
|
601
|
Impairment of natural
gas and oil properties
|
|
|
1,535
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
1,535
|
(Gain) loss on sale
of assets, net
|
|
|
1
|
|
|
(278)
|
|
|
–
|
|
|
–
|
|
|
(277)
|
Taxes, other than
income taxes
|
|
|
51
|
|
|
6
|
|
|
–
|
|
|
–
|
|
|
57
|
Operating income
(loss)
|
|
|
(1,561)
|
|
|
443
|
|
|
(1)
|
|
|
–
|
|
|
(1,119)
|
Capital
investments(1)
|
|
|
1,419
|
|
|
157
|
|
|
10
|
|
|
–
|
|
|
1,586
|
|
|
(1)
|
Capital investments
includes a $27 million increase and an $11 million decrease for the
three months ended June 30, 2016 and 2015, respectively, and a $51
million decrease and an $11 million decrease for the six months
ended June 30, 2016 and 2015, respectively, relating to the change
in accrued expenditures between periods. E&P capital for the
three months ended June 30, 2015 includes approximately $516
million related to the WPX Property and Statoil Property
Acquisitions. Midstream capital for the six months ended June 30,
2015 includes approximately $119 million of firm transport
associated with the WPX Property Acquisition.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/southwestern-energy-announces-second-quarter-2016-results-improved-guidance-outcomes-of-financial-strengthening-efforts-and-resumption-of-drilling-and-completion-activity-300302479.html
SOURCE Southwestern Energy Company