HOUSTON, Aug. 3, 2017 /PRNewswire/ -- Southwestern Energy
Company (NYSE: SWN) today announced its financial and operating
results for the quarter ended June 30,
2017, along with other recent developments. Highlights
include:
- Net income attributable to common stock of $224 million, or $0.45 per diluted share, and adjusted net income
attributable to common stock of $40
million, or $0.08 per diluted
share; improved substantially from a net loss attributable to
common stock of $620 million and an
adjusted net loss attributable to common stock of $34 million in the second quarter of 2016;
- Net cash provided by operating activities of $266 million and net cash flow of $250 million, up 264% and 119%, respectively,
compared to the second quarter of 2016;
- Total net production of 222 Bcfe, an increase of approximately
9% compared to the first quarter of 2017 despite third-party
gathering operational issues that are expected to be resolved later
in 2017;
- Added approximately 140 MMcf per day of new firm takeaway
capacity to the portfolio in Northeast Appalachia at an average
cost of $0.10 per Mcf;
- Successfully drilled and completed an extended lateral well of
over 12,000 lateral feet in Bradford
County, Pennsylvania, delivering an initial production rate
of over 37 MMcf per day, further demonstrating the improved
economics of longer laterals that will be targeted throughout the
portfolio;
- Continued strong productivity from the first Company-drilled
Utica well, with over 2 Bcf of
cumulative production and a flat current producing rate of over 15
MMcf per day with current casing pressure of approximately 6,100
psi;
- Further progressed learning of Moorefield acreage; and
- Retired remaining $251 million of
its outstanding 2018 bonds, leaving only $40
million in near-term debt, which is expected to be repaid
upon maturity in October 2017.
"The core tenets of our focused strategy continue to generate
value-adding and economic production growth, as demonstrated by our
recent enhancement to well productivity and improving capital
efficiency, while we invest within our capital plan," said
Bill Way, President and Chief
Executive Officer of Southwestern Energy. "The application of
our operational learnings are driving dramatically improving well
results and continue to produce material increases in value and
diversification of the portfolio. Our innovative culture and
operational excellence, coupled with our commitment to financial
discipline, position us to deliver growing shareholder value moving
forward."
Financial Results
for the Three and Six Months ended June 30
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Southwestern Energy
Company and Subsidiaries
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For the three
months ended
|
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For the six months
ended
|
|
June
30,
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June
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
(in millions, except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
188
|
|
$
|
(492)
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|
$
|
454
|
|
$
|
(1,592)
|
Adjusted operating
income (loss) (non-GAAP measure)
|
$
|
188
|
|
$
|
(11)
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|
$
|
454
|
|
$
|
(13)
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|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common stock
|
$
|
224
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|
$
|
(620)
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$
|
505
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|
$
|
(1,779)
|
Adjusted net income
(loss) attributable to common stock (non-GAAP measure)
|
$
|
40
|
|
$
|
(34)
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|
$
|
127
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|
$
|
(66)
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|
|
|
|
|
|
|
|
|
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|
Diluted earnings
(loss) per share
|
$
|
0.45
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|
$
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(1.61)
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|
$
|
1.02
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|
$
|
(4.63)
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Adjusted diluted
earnings (loss) per share (non-GAAP measure)
|
$
|
0.08
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|
$
|
(0.09)
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|
$
|
0.26
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|
$
|
(0.17)
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|
|
|
|
|
|
|
|
|
|
|
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Net cash provided by
operating activities
|
$
|
266
|
|
$
|
73
|
|
$
|
578
|
|
$
|
165
|
Net cash flow
(non-GAAP measure)
|
$
|
250
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|
$
|
114
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|
$
|
568
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|
$
|
261
|
|
|
|
|
|
|
|
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Exploration and
Production Operating Results
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For the three
months ended
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For the six months
ended
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June
30,
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June
30,
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|
2017
|
|
2016
|
|
2017
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|
2016
|
Production
|
|
|
|
|
|
|
|
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|
Fayetteville
(Bcf)
|
|
82
|
|
|
96
|
|
|
163
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|
|
199
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Northeast Appalachia
(Bcf)
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|
97
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|
|
90
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|
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184
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|
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184
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Southwest Appalachia
(Bcfe)
|
|
43
|
|
|
38
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|
|
79
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|
|
78
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Other (Bcfe)
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|
–
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1
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–
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1
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Total
production (Bcfe)
|
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222
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225
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426
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462
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% Natural
Gas
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90%
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|
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90%
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|
|
90%
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|
|
90%
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|
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|
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Average unit costs
per Mcfe
|
|
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Lease operating
expenses
|
$
|
0.89
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|
$
|
0.87
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|
$
|
0.89
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|
$
|
0.88
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General &
administrative expenses(1)
|
$
|
0.23
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|
$
|
0.21
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|
$
|
0.22
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|
$
|
0.20
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Taxes, other than
income taxes(2)
|
$
|
0.10
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|
$
|
0.09
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|
$
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0.11
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|
$
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0.09
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Full cost pool
amortization
|
$
|
0.44
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|
$
|
0.35
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|
$
|
0.42
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$
|
0.42
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(1)
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Excludes $11 million
and $69 million of restructuring charges for the three and six
months ended June 30, 2016, respectively.
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(2)
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Excludes $3 million
of restructuring charges for the six months ended June 30,
2016.
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Realized
Prices
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For the three
months ended
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For the six months
ended
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June
30,
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June
30,
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2017
|
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2016
|
|
2017
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2016
|
Natural Gas
Price:
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NYMEX Henry Hub Price
($/MMBtu)(1)
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$
|
3.18
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$
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1.95
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$
|
3.25
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$
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2.02
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Discount to
NYMEX(2)
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(0.83)
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(0.74)
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(0.72)
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(0.69)
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Average realized gas
price per Mcf, excluding hedges
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$
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2.35
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$
|
1.21
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$
|
2.53
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$
|
1.33
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Gain
(loss) on settled financial basis derivatives ($/Mcf)
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(0.15)
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0.00
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(0.08)
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0.01
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Gain
(loss) on settled commodity derivatives ($/Mcf)
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|
(0.05)
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0.11
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(0.10)
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|
0.06
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Average realized gas
price per Mcf, including hedges
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$
|
2.15
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$
|
1.32
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$
|
2.35
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$
|
1.40
|
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Oil
Price:
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WTI oil price
($/Bbl)
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$
|
48.28
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$
|
45.59
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$
|
50.10
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$
|
39.52
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Discount to
WTI
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(7.72)
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|
|
(13.13)
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(8.02)
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|
(14.09)
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Average oil price per
Bbl
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$
|
40.56
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|
$
|
32.46
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|
$
|
42.08
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$
|
25.43
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NGL
Price:
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Average net realized
NGL price per Bbl(3)
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$
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11.25
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$
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6.41
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$
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12.22
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$
|
5.67
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Percentage of
WTI
|
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23%
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|
|
14%
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|
|
24%
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|
|
14%
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(1)
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Based on last day
settlement prices from monthly futures contracts.
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(2)
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This discount
includes a basis differential, physical basis sales, third-party
transportation charges and fuel charges and excludes financial
basis hedges.
|
(3)
|
Includes $0.04 per
Bbl and $0.03 per Bbl of realized hedge gains for the three and six
months ended June 30, 2017 and the impact of transportation
costs.
|
Second Quarter of 2017 Financial Results
E&P Segment – The operating income from the
Company's E&P segment improved to $146
million for the second quarter of 2017, compared to an
operating loss of $549 million during
the second quarter of 2016, primarily due to the $470 million impairment of natural gas and oil
properties and $11 million in
restructuring charges during this period last year. The
increase in operating income was primarily due to the absence of
impairments and restructuring charges and higher realized natural
gas and liquids pricing.
Midstream Segment – Operating income for the
Company's Midstream segment, comprised of gathering and marketing
activities, was $42 million for the
second quarter of 2017, compared to $57
million for the same period in 2016. The decrease in
operating income was largely due to a decrease in volumes gathered
resulting from lower production volumes in the Fayetteville
Shale.
First Six Months of 2017 Financial Results
E&P Segment – The operating income from the
Company's E&P segment improved to $371
million for the first six months of 2017, compared to an
operating loss of $1.7 billion during
the first six months of 2016, primarily due to the $1.5 billion impairment of natural gas and oil
properties and $72 million in
restructuring charges during this period last year. The
increase in operating income was primarily due to the absence of
impairments and restructuring charges, higher realized natural gas
and liquids pricing and lower operating costs, partially offset by
decreased production.
Midstream Segment – Operating income for the
Company's Midstream segment, comprised of gathering and marketing
activities, was $83 million for the
first six months of 2017, compared to $117
million for the same period in 2016, which included
$3 million in restructuring charges.
The decrease in operating income was largely due to a
decrease in volumes gathered resulting from lower production
volumes in the Fayetteville Shale.
Capital Structure and Investments – At
June 30, 2017, the Company had total
debt of approximately $4.4 billion
and $3.3 billion in net debt.
In the second quarter, the Company retired its remaining 2018 notes
and expects to retire the $40 million
outstanding of its 2017 notes when they mature in October.
During the first six months of 2017, Southwestern invested a
total of $615 million. This
included approximately $601 million
invested in its E&P business, $12
million invested in its Midstream segment and $2 million invested for corporate and other
purposes. Of the $615 million,
approximately $56 million was
associated with capitalized interest and $51
million was associated with capitalized expenses. The
Company remains committed to aligning its capital investments with
commodity prices and will adjust activity in order to protect the
balance sheet.
Hedging Update
As of August 1, 2017, the Company
had approximately 284 Bcf of its second half of 2017 forecasted gas
production protected at an average swap or purchased put strike
price of $3.02 per Mcf.
Including the protected volumes, the Company retained upside
exposure on over half of its remaining forecasted 2017
volumes. Additionally, the Company had approximately 407 Bcf
of its 2018 forecasted gas production protected at an average swap
or purchased put strike price of $2.98 per Mcf, with upside exposure on
approximately 72%, or 295 Bcf, of those protected volumes up to
$3.39 per Mcf. The Company also had
approximately 108 Bcf of its 2019 forecasted gas production
protected at an average purchased put strike price of $2.95 with upside exposure up to $3.32 per Mcf.
A detailed breakdown of the Company's natural gas derivative
financial instruments as of August 1,
2017 is shown below. Please refer to the Company's
quarterly report on Form 10-Q filed with the Securities and
Exchange Commission for complete information on the Company's
commodity, basis and interest rate protection.
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|
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|
|
|
|
|
|
|
|
|
|
|
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|
|
Weighted Average
Price per MMBtu
|
|
Volume
(Bcf)
|
|
Swaps
|
|
Sold
Puts
|
|
Purchased
Puts
|
|
Sold
Calls
|
Financial
protection on production
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price
swaps
|
168
|
|
$
|
3.07
|
|
$
|
–
|
|
$
|
–
|
|
$
|
–
|
Two-way costless
collars
|
48
|
|
|
–
|
|
|
–
|
|
|
2.93
|
|
|
3.35
|
Three-way
costless collars
|
68
|
|
|
–
|
|
|
2.29
|
|
|
2.97
|
|
|
3.30
|
Total
|
284
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price
swaps
|
112
|
|
$
|
3.00
|
|
$
|
–
|
|
$
|
–
|
|
$
|
–
|
Two-way costless
collars
|
23
|
|
|
–
|
|
|
–
|
|
|
2.97
|
|
|
3.56
|
Three-way
costless collars
|
272
|
|
|
–
|
|
|
2.40
|
|
|
2.97
|
|
|
3.37
|
Total
|
407
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-way
costless collars
|
108
|
|
$
|
–
|
|
$
|
2.50
|
|
$
|
2.95
|
|
$
|
3.32
|
Total
|
108
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sold call
options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
43
|
|
$
|
–
|
|
$
|
–
|
|
$
|
–
|
|
$
|
3.68
|
2018
|
63
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
3.50
|
2019
|
52
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
3.50
|
2020
|
32
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
3.75
|
Total
|
190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Amounts may not
sum due to rounding
|
As of August 1, 2017, the Company
had also taken steps to mitigate the volatility of basis
differentials by protecting basis on approximately 210 Bcf of its
second half of 2017 forecasted natural gas production at a basis
differential to NYMEX natural gas prices of approximately
($0.69) per Mcf, which includes the
impact of both physical and financial basis positions. A
detailed breakdown of the Company's financial basis positions as of
August 1, 2017 is shown below:
|
|
|
|
|
|
|
|
|
|
Financial basis
positions
(excludes physical
positions)
|
|
Dominion
South
|
|
TETCO
M3
|
|
Total
|
|
Volume
(Bcf)
|
Basis Diff
($/MMBTU)
|
|
Volume
(Bcf)
|
Basis Diff
($/MMBTU)
|
|
Volume
(Bcf)
|
Basis Diff
($/MMBTU)
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
54
|
($1.13)
|
|
32
|
($0.82)
|
|
86
|
($1.02)
|
2018
|
|
18
|
($1.19)
|
|
4
|
$0.87
|
|
22
|
($0.83)
|
E&P Operational Review
During the second quarter of 2017, Southwestern invested a total
of approximately $318 million in the
E&P business and participated in drilling 26 wells, completed
39 wells, and placed 44 wells to sales.
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2017 E&P Division Results
|
Appalachia
|
|
Fayetteville
|
|
Northeast
|
|
Southwest
|
|
Shale
|
Production
(Bcfe)
|
|
97
|
|
|
43
|
|
|
82
|
|
|
|
|
|
|
|
|
|
Capital
investments ($ in millions)
|
|
|
|
|
|
|
|
|
Exploratory and
development drilling, including workovers
|
$
|
114
|
|
$
|
81
|
|
$
|
20
|
Acquisition and
leasehold
|
|
5
|
|
|
15
|
|
|
−
|
Seismic and
other
|
|
4
|
|
|
1
|
|
|
1
|
Capitalized interest
and expense
|
|
10
|
|
|
32
|
|
|
6
|
Total capital
investments
|
$
|
133
|
|
$
|
129
|
|
$
|
27
|
|
|
|
|
|
|
|
|
|
Gross operated
well count summary
|
|
|
|
|
|
|
|
|
Drilled
|
|
16
|
|
|
8
|
|
|
1
|
Completed
|
|
19
|
|
|
15
|
|
|
5
|
Wells to
sales
|
|
21
|
|
|
15
|
|
|
8
|
|
|
|
|
|
|
|
|
|
Realized
Price
|
|
|
|
|
|
|
|
|
NYMEX Henry Hub Price
($/MMBtu)
|
$
|
3.18
|
|
$
|
3.18
|
|
$
|
3.18
|
Discount to NYMEX
($/Mcf)(1)
|
$
|
(0.95)
|
|
$
|
(0.63)
|
|
$
|
(0.75)
|
Average realized gas
price, excluding hedges ($/Mcf)
|
$
|
2.23
|
|
$
|
2.55
|
|
$
|
2.43
|
|
|
(1)
|
This discount
includes a basis differential, physical basis sales, third-party
transportation charges and fuel charges and excludes financial
basis hedges.
|
During the first six months of 2017, Southwestern invested a
total of approximately $601 million
in the E&P business and participated in drilling 59 wells,
completed 88 wells, and placed 93 wells to sales.
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2017 E&P Division Results
|
Appalachia
|
|
Fayetteville
|
|
Northeast
|
|
Southwest
|
|
Shale
|
Production
(Bcfe)
|
|
184
|
|
|
79
|
|
|
163
|
Gross operated
production as of June 30, 2017 (MMcfe/d)
|
|
1,265
|
|
|
783
|
|
|
1,288
|
|
|
|
|
|
|
|
|
|
Capital
investments ($ in millions)
|
|
|
|
|
|
|
|
|
Exploratory and
development drilling, including workovers
|
$
|
211
|
|
$
|
154
|
|
$
|
53
|
Acquisition and
leasehold
|
|
9
|
|
|
31
|
|
|
−
|
Seismic and
other
|
|
5
|
|
|
1
|
|
|
1
|
Capitalized interest
and expense
|
|
20
|
|
|
64
|
|
|
12
|
Total capital
investments
|
$
|
245
|
|
$
|
250
|
|
$
|
66
|
|
|
|
|
|
|
|
|
|
Gross operated
well count summary
|
|
|
|
|
|
|
|
|
Drilled
|
|
33
|
|
|
16
|
|
|
9
|
Completed
|
|
39
|
|
|
31
|
|
|
18
|
Wells to
sales
|
|
45
|
|
|
28
|
|
|
20
|
|
|
|
|
|
|
|
|
|
Realized
Price
|
|
|
|
|
|
|
|
|
NYMEX Henry Hub Price
($/MMBtu)
|
$
|
3.25
|
|
$
|
3.25
|
|
$
|
3.25
|
Discount to NYMEX
($/Mcf)(1)
|
$
|
(0.70)
|
|
$
|
(0.57)
|
|
$
|
(0.78)
|
Average realized gas
price, excluding hedges ($/Mcf)
|
$
|
2.55
|
|
$
|
2.68
|
|
$
|
2.47
|
|
|
(1)
|
This discount
includes a basis differential, physical basis sales, third-party
transportation charges and fuel charges and excludes financial
basis hedges.
|
Northeast Appalachia – In the second quarter
of 2017, the Company placed 21 wells to sales, which had an average
lateral length of 5,530 feet and an average cost of $5.1 million per well. The average rate for
the first 30 days for the 16 wells that were online for at least 30
days was 12.5 MMcf per day, down from the first quarter of 2017 due
to isolated third-party line pressure and infrastructure
limitations that are expected to be resolved in the second half of
the year. The Company's operations were impacted in the
second quarter by a delay in the installation of a third-party
gathering line in Susquehanna
County that was expected to come online in early 2017 and a
third-party compressor station that was unexpectedly taken offline
in late June. The gathering line installation is expected to
be completed and in service during the fourth quarter of 2017, and
the compressor station is expected to be recommissioned within the
third quarter of 2017. The Company has taken action to
mitigate the effects of these interruptions, including utilizing
the availability of its alternate transportation paths.
The Company's Northeast Appalachia results continue to
demonstrate the value of innovation and knowledge application while
delivering continuous improvement, with the Company achieving some
of its best wells ever drilled after seven years of
development. The learnings realized from extended laterals,
lateral placement, completion intensity and optimized flow
techniques represent a step change in how the Company is
approaching well design to maximize value. The most recent
example is the Seymour 1H, which is demonstrating productivity
among the top 10% of the Company's wells drilled to date in
Bradford County on a CLAT-adjusted
basis. This well, with a lateral length of over 12,000 feet,
was successfully drilled over 90% within the targeted interval and
delivered an initial production rate of 37.7 MMcf per day.
The Seymour 1H is roughly 20 miles away from the successful results
that have been demonstrated in 50 Susquehanna County wells using
the same enhancements. These results show that these
improvements create significant additional value in other
areas.
To facilitate further growth, the Company added approximately
140 MMcf per day of new firm takeaway capacity to the portfolio at
an average cost of $0.10 per
Mcf. The volumes utilizing this capacity will be indexed to
Dominion South pricing, which has significantly improved in 2017
based on new infrastructure progress being made. The basis at
this hub is expected to continue to improve as additional progress
is made later this year and throughout 2018, resulting in enhanced
margins as this asset is further developed.
Southwest Appalachia – In the second quarter
of 2017, Southwest Appalachia achieved record net operated
production rates, surpassing 500 MMcfe per day in June, a growth of
40% since year-end 2016. Southwest Appalachia's assets continue to
provide optionality to maximize returns. With the improved
liquids pricing being realized, the Company's development
activities in 2017 have focused on the wet gas portion of the
play. With this focus and the optimization of the portfolio,
Southwest Appalachia's cash flow increased by over $35 million compared to the second quarter of
2016. The Company expects NGL prices to strengthen further as
a result of new Gulf Coast ethane cracker facilities coming online
and continued expansion of ethane and propane export capacity.
Southwestern brought online 15 wells in Southwest Appalachia in
the second quarter, 11 of which were both drilled and completed by
Southwestern and four of which were drilled by the previous
operator. The 11 wells drilled and completed by Southwestern
had an average lateral length of 7,627 feet and an average cost of
$7.1 million per well. During
the second quarter, the Company continued to realize positive
results from its completion design testing. In Marshall
County, Southwestern placed the Michael Dunn pad to sales in early
April. Through 110 days of production, the 4-well pad has
cumulatively produced 4 Bcfe and is currently producing at a flat
pad rate of 38 MMcfe per day, 44% of which is liquids, with an
average flowing casing pressure of 2,400 psi. The Company
tested two wells on this pad with enhanced completions and these
wells are currently flowing at an average of 1,050 Mcfe per day
higher with an additional 250 psi higher flowing casing pressure,
indicating improved performance versus the standard design.
The Company will continue to monitor these wells to further
assess the well productivity and economic improvements resulting
from these enhanced designs.
The Company's first Utica well,
the O.E. Burge 501H, continues to exhibit strong productivity, with
cumulative production of over 2 Bcf in its first six flowing
months. The well is currently flowing at a flat rate of 15
MMcf per day with approximately 6,100 psi of casing pressure and
the Company plans to hold the well at this rate into 2018 as part
of its pressure management program. Additionally, the Company
drilled and completed its second Utica well in Washington County, PA and expects to place the
well online and have initial results later in the year.
Fayetteville Shale – During the second quarter of
2017, the Company produced 82 Bcf from the Fayetteville Shale,
compared to 81 Bcf in the first quarter of 2017, while generating
yet another quarter of positive cash flow. The Company's
Fayetteville E&P and gathering operations are expected to
generate over $425 million of free
cash flow in 2017. This cash flow is a key component of the
portfolio and supports the growth in the Appalachian basin.
Additionally, the Company placed eight wells to sales focusing
on enhancing economics across the play. Six of the wells
placed online targeted the Fayetteville and two targeted the
Moorefield. The six Fayetteville wells had an average lateral
length of 6,674 feet and average costs of $3.4 million per well and an average 30-day rate
of 3.1 MMcf per day.
The two Moorefield wells had an average lateral length of 6,519
feet and an average cost of $4.3
million per well. One well continued the previous
success of this development and had a 30th-day rate of
5.0 MMcf per day and an initial EUR of 5.2 Bcf. The second well
encountered a fault during drilling, increasing the water rate and
impacting the early well results. The learnings from these two
wells have been incorporated into the Company's geologic model and
it plans to continue to progress its learning of the Moorefield
with additional results expected throughout the second half of
2017.
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 for the three and
six months ended June 30, 2017 and
June 30, 2016, and as of June 30, 2017 and December
31, 2016, 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,
|
|
2017
|
|
2016
|
|
(in
millions)
|
Net income (loss)
attributable to common stock:
|
|
|
|
|
|
Net income (loss)
attributable to common stock
|
$
|
224
|
|
$
|
(620)
|
Add back:
|
|
|
|
|
|
Participating
securities – mandatory convertible preferred stock
|
|
27
|
|
|
−
|
Impairment of natural
gas and oil properties
|
|
−
|
|
|
470
|
Restructuring
charges
|
|
−
|
|
|
11
|
(Gain) loss on certain
derivatives
|
|
(173)
|
|
|
108
|
Gain on sale of assets,
net
|
|
(2)
|
|
|
(2)
|
Loss on early
extinguishment of debt
|
|
10
|
|
|
−
|
Adjustments due to
inventory valuation and other
|
|
(1)
|
|
|
1
|
Adjustments due to
discrete tax items(1)
|
|
(108)
|
|
|
216
|
Tax impact on
adjustments
|
|
63
|
|
|
(218)
|
Adjusted net income
(loss) attributable to common stock
|
$
|
40
|
|
$
|
(34)
|
|
|
(1)
|
Primarily relates to
the exclusion of certain discrete tax adjustments associated with
the valuation allowance against deferred tax assets. The
Company expects its 2017 income tax rate to be 38.0% before the
impacts of any valuation allowance.
|
|
|
|
|
|
|
|
|
|
6 Months Ended
June 30,
|
|
2017
|
|
2016
|
|
(in
millions)
|
Net income (loss)
attributable to common stock:
|
|
|
|
|
|
Net income (loss)
attributable to common stock
|
$
|
505
|
|
$
|
(1,779)
|
Add back:
|
|
|
|
|
|
Participating
securities – mandatory convertible preferred stock
|
|
57
|
|
|
−
|
Impairment of natural
gas and oil properties
|
|
−
|
|
|
1,504
|
Restructuring
charges
|
|
−
|
|
|
75
|
(Gain) loss on certain
derivatives
|
|
(319)
|
|
|
129
|
Gain on sale of assets,
net
|
|
(3)
|
|
|
(2)
|
Loss on early
extinguishment of debt
|
|
11
|
|
|
−
|
Adjustments due to
inventory valuation and other
|
|
(1)
|
|
|
4
|
Adjustments due to
discrete tax items(1)
|
|
(242)
|
|
|
647
|
Tax impact on
adjustments
|
|
119
|
|
|
(644)
|
Adjusted net income
(loss) attributable to common stock
|
$
|
127
|
|
$
|
(66)
|
|
|
(1)
|
Primarily relates to
the exclusion of certain discrete tax adjustments associated with
the valuation allowance against deferred tax assets. The
Company expects its 2017 income tax rate to be 38.0% before the
impacts of any valuation allowance.
|
|
|
|
|
|
|
|
|
|
3 Months Ended
June 30,
|
|
2017
|
|
2016
|
Diluted earnings
(loss) per share:
|
|
|
|
|
|
Diluted earnings
(loss) per share
|
$
|
0.45
|
|
$
|
(1.61)
|
Add back:
|
|
|
|
|
|
Participating
securities - mandatory convertible preferred stock
|
|
0.06
|
|
|
−
|
Impairment of natural
gas and oil properties
|
|
−
|
|
|
1.22
|
Restructuring
charges
|
|
−
|
|
|
0.03
|
(Gain) loss on certain
derivatives
|
|
(0.36)
|
|
|
0.28
|
Gain on sale of assets,
net
|
|
(0.00)
|
|
|
(0.01)
|
Loss on early
extinguishment of debt
|
|
0.02
|
|
|
–
|
Adjustments due to
inventory valuation and other
|
|
(0.00)
|
|
|
0.00
|
Adjustments due to
discrete tax items(1)
|
|
(0.22)
|
|
|
0.56
|
Tax impact on
adjustments
|
|
0.13
|
|
|
(0.56)
|
Adjusted diluted
earnings (loss) per share
|
$
|
0.08
|
|
$
|
(0.09)
|
|
|
(1)
|
Primarily relates to
the exclusion of certain discrete tax adjustments associated with
the valuation allowance against deferred tax assets. The
Company expects its 2017 income tax rate to be 38.0% before the
impacts of any valuation allowance.
|
|
|
|
|
|
|
|
|
|
6 Months Ended
June 30,
|
|
2017
|
|
2016
|
Diluted earnings
(loss) per share:
|
|
|
|
|
|
Diluted earnings
(loss) per share
|
$
|
1.02
|
|
$
|
(4.63)
|
Add back:
|
|
|
|
|
|
Participating
securities - mandatory convertible preferred stock
|
|
0.11
|
|
|
−
|
Impairment of natural
gas and oil properties
|
|
−
|
|
|
3.91
|
Restructuring
charges
|
|
−
|
|
|
0.19
|
(Gain) loss on certain
derivatives
|
|
(0.64)
|
|
|
0.34
|
Gain on sale of assets,
net
|
|
(0.00)
|
|
|
(0.00)
|
Loss on early
extinguishment of debt
|
|
0.02
|
|
|
–
|
Adjustments due to
inventory valuation and other
|
|
(0.00)
|
|
|
0.01
|
Adjustments due to
discrete tax items(1)
|
|
(0.49)
|
|
|
1.68
|
Tax impact on
adjustments
|
|
0.24
|
|
|
(1.67)
|
Adjusted diluted
earnings (loss) per share
|
$
|
0.26
|
|
$
|
(0.17)
|
|
|
(1)
|
Primarily relates to
the exclusion of certain discrete tax adjustments associated with
the valuation allowance against deferred tax assets. The
Company expects its 2017 income tax rate to be 38.0% before the
impacts of any valuation allowance.
|
|
|
|
|
|
|
|
3 Months Ended
June 30,
|
|
2017
|
|
2016
|
|
(in
millions)
|
Cash flow from
operating activities:
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
266
|
|
$
|
73
|
Add back:
|
|
|
|
|
|
Changes in operating
assets and liabilities
|
|
(16)
|
|
|
17
|
Restructuring
charges
|
|
−
|
|
|
24
|
Net Cash
Flow
|
$
|
250
|
|
$
|
114
|
|
|
|
|
|
|
|
6 Months Ended
June 30,
|
|
2017
|
|
2016
|
|
(in
millions)
|
Cash flow from
operating activities:
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
578
|
|
$
|
165
|
Add back:
|
|
|
|
|
|
Changes in operating
assets and liabilities
|
|
(10)
|
|
|
50
|
Restructuring
charges
|
|
−
|
|
|
46
|
Net Cash
Flow
|
$
|
568
|
|
$
|
261
|
|
|
|
|
|
|
|
3 Months Ended
June 30,
|
|
2017
|
|
2016
|
|
(in
millions)
|
Operating income
(loss):
|
|
|
|
|
|
Operating income
(loss)
|
$
|
188
|
|
$
|
(492)
|
Add back:
|
|
|
|
|
|
Impairment of natural
gas and oil properties
|
|
–
|
|
|
470
|
Restructuring
charges
|
|
–
|
|
|
11
|
Adjusted
operating income (loss)
|
$
|
188
|
|
$
|
(11)
|
|
|
|
|
|
|
|
6 Months Ended
June 30,
|
|
2017
|
|
2016
|
|
(in
millions)
|
Operating income
(loss):
|
|
|
|
|
|
Operating income
(loss)
|
$
|
454
|
|
$
|
(1,592)
|
Add back:
|
|
|
|
|
|
Impairment of natural
gas and oil properties
|
|
–
|
|
|
1,504
|
Restructuring
charges
|
|
–
|
|
|
75
|
Adjusted
operating income (loss)
|
$
|
454
|
|
$
|
(13)
|
|
|
|
|
|
|
|
3 Months Ended
June 30,
|
|
2017
|
|
2016
|
|
(in
millions)
|
E&P segment
operating income (loss):
|
|
|
|
|
|
E&P segment
operating income (loss)
|
$
|
146
|
|
$
|
(549)
|
Add back:
|
|
|
|
|
|
Impairment of natural
gas and oil properties
|
|
–
|
|
|
470
|
Restructuring
charges
|
|
–
|
|
|
11
|
Adjusted
E&P segment operating income (loss)
|
$
|
146
|
|
$
|
(68)
|
|
|
|
|
|
|
|
6 Months Ended
June 30,
|
|
2017
|
|
2016
|
|
(in
millions)
|
E&P segment
operating income (loss):
|
|
|
|
|
|
E&P segment
operating income (loss)
|
$
|
371
|
|
$
|
(1,709)
|
Add back:
|
|
|
|
|
|
Impairment of natural
gas and oil properties
|
|
–
|
|
|
1,504
|
Restructuring
charges
|
|
–
|
|
|
72
|
Adjusted
E&P segment operating income (loss)
|
$
|
371
|
|
$
|
(133)
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
2017
|
|
2016
|
|
(in
millions)
|
Net
debt:
|
|
|
|
|
|
Total debt
|
$
|
4,381
|
|
$
|
4,653
|
Subtract:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
(1,111)
|
|
|
(1,423)
|
Net debt
|
$
|
3,270
|
|
$
|
3,230
|
Southwestern management will host a teleconference call on
Friday, August 4, 2017 at
10:00 a.m. Eastern to discuss its
second quarter 2017 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.
Cautionary Note to U.S. Investors – The SEC permits oil and gas
companies, in their filings with the SEC, to disclose only proved,
probable and possible reserves. We use the term "EUR" in this
release that the SEC's guidelines prohibit us from including in
filings with the SEC. The quarterly reserves data included in
this release are estimates we prepared that have not been audited
by our independent reserve engineers. U.S. investors are
urged to consider closely the oil and gas disclosures in our Form
10-K and other reports and filings with the SEC. Copies are
available from the SEC and from the Southwestern Energy Company
website.
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
STATISTICS (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Southwestern Energy
Company and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
|
For the six months
ended
|
|
June 30,
|
|
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Exploration &
Production
|
|
|
|
|
|
|
|
|
|
|
|
Production
|
|
|
|
|
|
|
|
|
|
|
|
Gas production
(Bcf)
|
|
199
|
|
|
203
|
|
|
382
|
|
|
416
|
Oil production
(MBbls)
|
|
565
|
|
|
586
|
|
|
1,084
|
|
|
1,193
|
NGL production
(MBbls)
|
|
3,316
|
|
|
3,136
|
|
|
6,324
|
|
|
6,512
|
Total
production (Bcfe)
|
|
222
|
|
|
225
|
|
|
426
|
|
|
462
|
Commodity
Prices
|
|
|
|
|
|
|
|
|
|
|
|
Average realized gas
price per Mcf, including derivatives
|
$
|
2.15
|
|
$
|
1.32
|
|
$
|
2.35
|
|
$
|
1.40
|
Average realized gas
price per Mcf, excluding derivatives
|
$
|
2.35
|
|
$
|
1.21
|
|
$
|
2.53
|
|
$
|
1.33
|
Average realized oil
price per Bbl
|
$
|
40.56
|
|
$
|
32.46
|
|
$
|
42.08
|
|
$
|
25.43
|
Average realized NGL
price per Bbl
|
$
|
11.25
|
|
$
|
6.41
|
|
$
|
12.22
|
|
$
|
5.67
|
Summary of
Derivative Activity in the Statement of Operations
|
|
|
|
|
|
|
|
|
|
|
|
Settled commodity
amounts included in "Gain (Loss) on Derivatives" (in
millions)
|
$
|
(39)
|
|
$
|
23
|
|
$
|
(69)
|
|
$
|
31
|
Unsettled commodity
amounts included in "Gain (Loss) on Derivatives" (in
millions)
|
$
|
174
|
|
$
|
(108)
|
|
$
|
319
|
|
$
|
(126)
|
Average unit costs
per Mcfe
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
expenses
|
$
|
0.89
|
|
$
|
0.87
|
|
$
|
0.89
|
|
$
|
0.88
|
General &
administrative expenses (1)
|
$
|
0.23
|
|
$
|
0.21
|
|
$
|
0.22
|
|
$
|
0.20
|
Taxes, other than
income taxes (2)
|
$
|
0.10
|
|
$
|
0.09
|
|
$
|
0.11
|
|
$
|
0.09
|
Full cost pool
amortization
|
$
|
0.44
|
|
$
|
0.35
|
|
$
|
0.42
|
|
$
|
0.42
|
Midstream
|
|
|
|
|
|
|
|
|
|
|
|
Volumes marketed
(Bcfe)
|
|
264
|
|
|
271
|
|
|
509
|
|
|
550
|
Volumes gathered
(Bcf)
|
|
128
|
|
|
154
|
|
|
257
|
|
|
318
|
|
|
(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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATEMENTS OF
OPERATIONS (Unaudited)
|
|
Southwestern Energy
Company and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
|
For the six months
ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
(in millions, except
share/per share amounts)
|
Operating
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas sales
|
|
$
|
471
|
|
$
|
251
|
|
$
|
974
|
|
$
|
566
|
Oil sales
|
|
|
23
|
|
|
20
|
|
|
46
|
|
|
31
|
NGL sales
|
|
|
37
|
|
|
20
|
|
|
77
|
|
|
37
|
Marketing
|
|
|
250
|
|
|
196
|
|
|
503
|
|
|
394
|
Gas
gathering
|
|
|
30
|
|
|
35
|
|
|
57
|
|
|
73
|
|
|
|
811
|
|
|
522
|
|
|
1,657
|
|
|
1,101
|
Operating Costs
and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing
purchases
|
|
|
253
|
|
|
197
|
|
|
504
|
|
|
393
|
Operating
expenses
|
|
|
164
|
|
|
151
|
|
|
311
|
|
|
316
|
General and
administrative expenses
|
|
|
58
|
|
|
56
|
|
|
108
|
|
|
110
|
Restructuring
charges
|
|
|
–
|
|
|
11
|
|
|
–
|
|
|
75
|
Depreciation, depletion
and amortization
|
|
|
123
|
|
|
107
|
|
|
229
|
|
|
250
|
Impairment of natural
gas and oil properties
|
|
|
–
|
|
|
470
|
|
|
–
|
|
|
1,504
|
Taxes, other than
income taxes
|
|
|
25
|
|
|
22
|
|
|
51
|
|
|
45
|
|
|
|
623
|
|
|
1,014
|
|
|
1,203
|
|
|
2,693
|
Operating Income
(Loss)
|
|
|
188
|
|
|
(492)
|
|
|
454
|
|
|
(1,592)
|
Interest
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on
debt
|
|
|
59
|
|
|
56
|
|
|
117
|
|
|
109
|
Other interest
charges
|
|
|
3
|
|
|
2
|
|
|
5
|
|
|
4
|
Interest
capitalized
|
|
|
(28)
|
|
|
(41)
|
|
|
(56)
|
|
|
(82)
|
|
|
|
34
|
|
|
17
|
|
|
66
|
|
|
31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (Loss) on
Derivatives
|
|
|
134
|
|
|
(85)
|
|
|
250
|
|
|
(99)
|
Loss on Early
Extinguishment of Debt
|
|
|
(10)
|
|
|
–
|
|
|
(11)
|
|
|
–
|
Other Income
(Loss), Net
|
|
|
6
|
|
|
–
|
|
|
8
|
|
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss)
Before Income Taxes
|
|
|
284
|
|
|
(594)
|
|
|
635
|
|
|
(1,725)
|
Benefit for Income
Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
|
|
|
–
|
|
|
(1)
|
|
|
–
|
|
|
–
|
Net Income
(Loss)
|
|
|
284
|
|
|
(593)
|
|
|
635
|
|
|
(1,725)
|
Mandatory
convertible preferred stock dividend
|
|
|
27
|
|
|
27
|
|
|
54
|
|
|
54
|
Participating
securities - mandatory convertible preferred stock
|
|
|
33
|
|
|
–
|
|
|
76
|
|
|
–
|
Net Income (Loss)
Attributable to Common Stock
|
|
$
|
224
|
|
$
|
(620)
|
|
$
|
505
|
|
$
|
(1,779)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss)
Per Common Share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.45
|
|
$
|
(1.61)
|
|
$
|
1.02
|
|
$
|
(4.63)
|
Diluted
|
|
$
|
0.45
|
|
$
|
(1.61)
|
|
$
|
1.02
|
|
$
|
(4.63)
|
Weighted Average
Common Shares Outstanding
|
Basic
|
|
496,419,815
|
|
385,594,815
|
|
494,753,391
|
|
384,232,831
|
Diluted
|
|
498,224,599
|
|
385,594,815
|
|
496,627,843
|
|
384,232,831
|
|
|
|
|
|
|
|
BALANCE SHEETS
(Unaudited)
|
|
Southwestern Energy
Company and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30, 2017
|
|
December
31, 2016
|
|
|
(in
millions)
|
ASSETS
|
|
|
|
|
|
|
Current
assets
|
|
$
|
1,579
|
|
$
|
1,872
|
Property and
equipment
|
|
|
25,108
|
|
|
24,489
|
Less: Accumulated
depreciation, depletion and amortization
|
|
|
(19,767)
|
|
|
(19,534)
|
Total property
and equipment, net
|
|
|
5,341
|
|
|
4,955
|
Other long-term
assets
|
|
|
230
|
|
|
249
|
Total
assets
|
|
|
7,150
|
|
|
7,076
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
Current
liabilities
|
|
|
821
|
|
|
1,064
|
Long-term
debt
|
|
|
4,341
|
|
|
4,612
|
Pension and other
postretirement liabilities
|
|
|
46
|
|
|
49
|
Other long-term
liabilities
|
|
|
369
|
|
|
434
|
Total
liabilities
|
|
|
5,577
|
|
|
6,159
|
Equity:
|
|
|
|
|
|
|
Common stock, $0.01 par
value; 1,250,000,000 shares authorized; issued 505,893,345 shares
as of June 30, 2017 (does not include 3,346,738 shares issued on
July 17, 2017 on account of a dividend declared on June 21, 2017)
and 495,248,369 as of December 31, 2016
|
|
|
5
|
|
|
5
|
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, 2017 and December 31,
2016, conversion in January 2018
|
|
|
–
|
|
|
–
|
Additional paid-in
capital
|
|
|
4,697
|
|
|
4,677
|
Accumulated
deficit
|
|
|
(3,090)
|
|
|
(3,725)
|
Accumulated other
comprehensive loss
|
|
|
(38)
|
|
|
(39)
|
Common stock in
treasury; 31,269 shares as of June 30, 2017 and December 31, 2016,
respectively
|
|
|
(1)
|
|
|
(1)
|
Total
equity
|
|
|
1,573
|
|
|
917
|
Total
liabilities and equity
|
|
$
|
7,150
|
|
$
|
7,076
|
|
|
|
|
|
|
|
STATEMENTS OF CASH
FLOWS (Unaudited)
|
|
Southwestern Energy
Company and Subsidiaries
|
|
|
|
|
|
|
For the six months
ended
|
|
|
June
30,
|
|
|
2017
|
|
2016
|
|
|
(in
millions)
|
Cash Flows From
Operating Activities
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
635
|
|
$
|
(1,725)
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
|
229
|
|
|
250
|
Impairment of
natural gas and oil properties
|
|
|
–
|
|
|
1,504
|
Amortization of
debt issuance costs
|
|
|
4
|
|
|
4
|
(Gain) loss on
derivatives, unsettled
|
|
|
(319)
|
|
|
129
|
Stock-based
compensation
|
|
|
12
|
|
|
17
|
Restructuring
charges
|
|
|
–
|
|
|
29
|
Loss on early
extinguishment of debt
|
|
|
11
|
|
|
–
|
Other
|
|
|
(4)
|
|
|
7
|
Change in assets and
liabilities
|
|
|
10
|
|
|
(50)
|
Net cash provided by
operating activities
|
|
|
578
|
|
|
165
|
|
|
|
|
|
|
|
Cash Flows From
Investing Activities
|
|
|
|
|
|
|
Capital
investments
|
|
|
(619)
|
|
|
(241)
|
Proceeds from sale of
property and equipment
|
|
|
12
|
|
|
54
|
Other
|
|
|
1
|
|
|
1
|
Net cash used in
investing activities
|
|
|
(606)
|
|
|
(186)
|
|
|
|
|
|
|
|
Cash Flows From
Financing Activities
|
|
|
|
|
|
|
Payments on short-term
debt
|
|
|
(287)
|
|
|
(1)
|
Payments on revolving
credit facility
|
|
|
–
|
|
|
(3,268)
|
Borrowings under
revolving credit facility
|
|
|
–
|
|
|
3,152
|
Payments on commercial
paper
|
|
|
–
|
|
|
(242)
|
Borrowings under
commercial paper
|
|
|
–
|
|
|
242
|
Change in bank drafts
outstanding
|
|
|
3
|
|
|
(21)
|
Proceeds from issuance
of long-term debt
|
|
|
–
|
|
|
1,191
|
Debt issuance
costs
|
|
|
–
|
|
|
(16)
|
Preferred stock
dividend
|
|
|
–
|
|
|
(27)
|
Other
|
|
|
–
|
|
|
(6)
|
Net cash provided by
(used in) financing activities
|
|
|
(284)
|
|
|
1,004
|
|
|
|
|
|
|
|
Increase (decrease)
in cash and cash equivalents
|
|
|
(312)
|
|
|
983
|
Cash and cash
equivalents at beginning of year
|
|
|
1,423
|
|
|
15
|
Cash and cash
equivalents at end of period
|
|
$
|
1,111
|
|
$
|
998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT
INFORMATION (Unaudited)
|
|
Southwestern Energy
Company and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration
and
Production
|
|
Midstream
Services
|
|
Other
|
|
Eliminations
|
|
Total
|
|
|
(in
millions)
|
Three months ended
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
526
|
|
$
|
822
|
|
$
|
–
|
|
$
|
(537)
|
|
$
|
811
|
Marketing
purchases
|
|
|
–
|
|
|
731
|
|
|
–
|
|
|
(478)
|
|
|
253
|
Operating
expenses
|
|
|
200
|
|
|
23
|
|
|
–
|
|
|
(59)
|
|
|
164
|
General and
administrative expenses
|
|
|
50
|
|
|
8
|
|
|
–
|
|
|
–
|
|
|
58
|
Depreciation,
depletion and amortization
|
|
|
107
|
|
|
16
|
|
|
–
|
|
|
–
|
|
|
123
|
Taxes, other than
income taxes
|
|
|
23
|
|
|
2
|
|
|
–
|
|
|
–
|
|
|
25
|
Operating
income
|
|
|
146
|
|
|
42
|
|
|
–
|
|
|
–
|
|
|
188
|
Capital
investments (1)
|
|
|
318
|
|
|
6
|
|
|
1
|
|
|
–
|
|
|
325
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
1,089
|
|
$
|
1,680
|
|
$
|
–
|
|
$
|
(1,112)
|
|
$
|
1,657
|
Marketing
purchases
|
|
|
–
|
|
|
1,496
|
|
|
–
|
|
|
(992)
|
|
|
504
|
Operating
expenses
|
|
|
381
|
|
|
50
|
|
|
–
|
|
|
(120)
|
|
|
311
|
General and
administrative expenses
|
|
|
93
|
|
|
15
|
|
|
–
|
|
|
–
|
|
|
108
|
Depreciation,
depletion and amortization
|
|
|
197
|
|
|
32
|
|
|
–
|
|
|
–
|
|
|
229
|
Taxes, other than
income taxes
|
|
|
47
|
|
|
4
|
|
|
–
|
|
|
–
|
|
|
51
|
Operating
income
|
|
|
371
|
|
|
83
|
|
|
–
|
|
|
–
|
|
|
454
|
Capital
investments (1)
|
|
|
601
|
|
|
12
|
|
|
2
|
|
|
–
|
|
|
615
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
(1)
|
Capital investments
includes increases of $41 million and $27 million for the three
months ended June 30, 2017 and 2016, respectively, and decreases of
$11 million and $51 million for the six months ended June 30, 2017
and 2016, respectively, relating to the change in accrued
expenditures between periods.
|
View original
content:http://www.prnewswire.com/news-releases/southwestern-energy-announces-second-quarter-2017-financial-and-operating-results-300499498.html
SOURCE Southwestern Energy Company