HOUSTON, Oct. 2, 2017 /PRNewswire/ -- Southwestern
Energy Company (NYSE: SWN) today announced that it has signed an
amended transportation agreement with Boardwalk Pipeline Partners'
(NYSE:BWP) Texas Gas Transmission, LLC subsidiary for a portion of
its Fayetteville firm takeaway
capacity, subject to approval from the Federal Energy Regulatory
Commission. This new agreement is effective November 1, 2017 and is expected to provide
savings of approximately $70 million
from 2017 through 2020, including approximately $45 million in savings in 2018 through the
reduction of current excess capacity, while guaranteeing future
flexible takeaway capacity through 2030 at competitive rates. Key
components of this amended agreement include:
- Provides right-sized, fixed rate, guaranteed long-term takeaway
capacity and future option capacity to highly sought after gulf
coast markets;
- Fayetteville Lateral volume commitment reduced from 800,000
MMBTU per day to 100,000 MMBTU per day in November 2017 through October 2020 at existing rates;
- Restructured firm transportation agreements and demand fees
beginning in 2021 at approximately $0.10 per MMBTU; and
- Firm transportation agreements for up to 800,000 MMBTU per day
starting in 2021 and decreasing each year.
"We are very excited about this new agreement and the
opportunity to continue our long-standing relationship with an
exceptional company like Texas Gas," commented Bill Way, President and Chief Executive Officer
of Southwestern Energy. "This agreement further enhances our
margins and reduces excess demand capacity while securing option
capacity for future development. It also provides the
flexibility to ramp activity in the Fayetteville and Moorefield area as economics
dictate at competitive transportation rates without incurring
additional liabilities during times of decreased activity."
Total Fayetteville
Firm Transportation Terms:
|
|
Previous Firm
Transportation Terms
|
|
Renegotiated Firm
Transportation Terms
|
|
Committed
|
|
Reservation
|
|
Annual
|
|
Committed
|
|
Reservation
|
|
Annual
|
|
Volumes
|
|
Rate(1)
|
|
Obligation
|
|
Volumes
|
|
Rate(1)
|
|
Obligation
|
|
(Bcf/d)
|
|
($/MMBtu)
|
|
($MMs)
|
|
(Bcf/d)
|
|
($/MMBtu)
|
|
($MMs)
|
2017
|
2.00
|
|
$0.26
|
|
$191.5
|
|
1.88
|
|
$0.27
|
|
$184.1
|
2018
|
2.00
|
|
$0.26
|
|
$191.5
|
|
1.30
|
|
$0.31
|
|
$147.5
|
2019
|
1.62
|
|
$0.25
|
|
$150.9
|
|
1.30
|
|
$0.29
|
|
$135.5
|
2020
|
1.45
|
|
$0.24
|
|
$125.8
|
|
1.28
|
|
$0.26
|
|
$121.7
|
2021-2030
|
-
|
|
-
|
|
-
|
|
See below
|
|
$0.10
|
|
$12.8(2)
|
(1) Total reservation
rate includes 1.2 Bcf per day capacity on Fayetteville Express
through December 2020 and impact of 0.64 Bcf per day capacity on
Texas Gas Transmission's Greenville Lateral pipeline, which is
additive to the rates on Texas Gas Transmission's Fayetteville
lateral
(2) Average annual obligation
|
Capacity(1) (Bcf/d)
|
2021
|
2022
|
2023
|
2024
|
2025
|
2026
|
2027
|
2028
|
2029
|
2030
|
Contracted
firm
|
0.55
|
0.50
|
0.45
|
0.40
|
0.35
|
0.30
|
0.30
|
0.25
|
0.23
|
0.20
|
Additional firm with
volumetric optionality
|
0.25
|
0.30
|
0.35
|
0.40
|
0.45
|
0.50
|
0.50
|
0.55
|
0.57
|
0.60
|
(1) All future
incremental production above the contracted firm is committed to
Texas Gas Transmission starting in 2021, under a tiered volumetric
rate design of $0.05 and $0.08 per MMBtu up to 0.80 Bcf per day, at
which point the volumetric commodity rate is fixed at $0.05 per
MMBtu for any available capacity above the 0.80 Bcf per
day.
|
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.
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SOURCE Southwestern Energy Company