false000000733200000073322021-07-292021-07-29

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

________________________________________________________________
FORM 8-K
 
________________________________________________________________

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of report (Date of earliest event reported): July 29, 2021
 
________________________________________________________________
SOUTHWESTERN ENERGY COMPANY
(Exact name of registrant as specified in its charter)
 
________________________________________________________________
Delaware001-08246 71-0205415
(State or other jurisdiction of incorporation)(Commission File Number) (IRS Employer Identification No.)
 
10000 Energy Drive 
Spring, TX 77389
(Address of principal executive offices)(Zip Code)

(832) 796-1000
(Registrant's telephone number, including area code)
 
Not Applicable
(Former name or former address, if changed since last report)
 
________________________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
        ☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
        ☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
        ☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
        ☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, Par Value $0.01SWNNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Explanatory Note
The information in this report provided under Item 2.02, including Exhibit 99.1 attached hereto, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
 
SECTION 2 - Financial Information
 
Item 2.02 Results of Operations and Financial Condition.

On July 29, 2021, Southwestern Energy Company (the "Company") issued a press release announcing the Company's financial results for the quarter ended June 30, 2021 (Exhibit 99.1).  The press release is being furnished as Exhibit 99.1.
  
SECTION 9 - Financial Statements and Exhibits
 
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document)
   
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
  SOUTHWESTERN ENERGY COMPANY
Dated: July 29, 2021
 By:  /s/   CARL F. GIESLER, JR.                  
  Name: Carl F. Giesler, Jr.
  Title: Executive Vice President and Chief Financial Officer
    




swnheadera.jpg
NEWS RELEASE

SOUTHWESTERN ENERGY ANNOUNCES SECOND QUARTER 2021 RESULTS
Strategically positioned to capture sustainable value from increasing scale and responsible development

SPRING, Texas – July 29, 2021...Southwestern Energy Company (NYSE: SWN) today announced financial and operating results for the second quarter ended June 30, 2021.

•Integration planning for scale-enhancing acquisition and Haynesville entry ahead of schedule; shareholder vote set for August 27th;
•Implemented basin-wide project to certify and continuously monitor potential emissions from all Appalachia unconventional wells;
•Further reduced leverage ratio by 0.4x to 2.6x; sustainable 2x leverage expected in late 2021;
•Generated $270 million net cash provided by operating activities; invested $259 million consistent with our maintenance capital plan; expect free cash flow to ramp in second half 2021;
•Captured promised $100 per foot well costs savings on first three Ohio Utica wells;
•Reported total production of 276 Bcfe, or 3.0 Bcfe per day, including 2.4 Bcf per day of gas and 104 MBbls per day of liquids;
•Received weighted average realized price (excluding impact of transportation and hedges) of $2.92 per Mcfe; and
•Approximately 90% of remaining 2021 Appalachia natural gas basis protected; annual differential guidance range remains unchanged.

“Southwestern Energy meaningfully advanced its strategic value-creation objectives during the quarter. The Company announced a significant acquisition that we believe is highly accretive across both equity and credit metrics. The addition of Indigo further positions SWN as a leading natural gas company; it expands our investment opportunities across the nation’s top two natural gas basins and enhances our margins while reducing basis volatility. Additionally, in alignment with our ESG strategy, we initiated the certification and continuous monitoring of all Appalachia unconventional wells. These two strategic actions enhance sustainable and responsible value creation for all stakeholders,” said Bill Way, Southwestern Energy President and Chief Executive Officer.


            
Financial Results
For the three months endedFor the six months ended
June 30,June 30,
(in millions)2021202020212020
Net income (loss)$(609)$(880)$(529)$(2,427)
Adjusted net income (loss) (non-GAAP)$129 $(1)$325 $55 
Diluted earnings (loss) per share$(0.90)$(1.63)$(0.78)$(4.49)
Adjusted diluted earnings (loss) per share (non-GAAP)$0.19 $(0.00)$0.48 $0.10 
Adjusted EBITDA (non-GAAP)$300 $106 $682 $312 
Net cash provided by operating activities$270 $94 $617 $254 
Net cash flow (non-GAAP)$272 $87 $626 $278 
Total capital investments (1)
$259 $245 $525 $482 
(1)Capital investments include a decrease of $9 million for the three months ended June 30, 2021 and increases of $29 million and $8 million for the six months ended June 30, 2021 and 2020, respectively, relating to the change in accrued expenditures between periods. There was no change in the capital accrual for the three months ended June 30, 2020.

For the quarter ended June 30, 2021, Southwestern Energy recorded net loss of $609 million, or ($0.90) per diluted share, compared to a net loss in 2020 of $880 million, or ($1.63) per diluted share. The quarter ended June 30, 2021 included a $772 million loss on unsettled derivatives and the same period for 2020 included a $655 million non-cash impairment and a $229 million loss on unsettled derivatives.

Adjusted net income was $129 million, or $0.19 per diluted share, in the second quarter of 2021, compared to a loss of $1 million, or ($0.00) per diluted share, for the prior year period. The increase was primarily related to a 33% increase in the weighted average realized price including derivatives and a 37% increase in production volumes, largely due to the Montage acquisition. Adjusted EBITDA (non-GAAP) was $300 million, net cash provided by operating activities was $270 million and net cash flow (non-GAAP) was $272 million.

As indicated in the table below, second quarter 2021 weighted average realized price, including $0.37 per Mcfe of transportation expenses, was $2.55 per Mcfe excluding the impact of derivatives. Including derivatives, weighted average realized price (including transportation) for the quarter was up 33% from $1.65 per Mcfe in 2020 to $2.20 per Mcfe in 2021 primarily due to higher commodity prices including a 65% increase in NYMEX Henry Hub and a 137% increase in WTI. Second quarter 2021 weighted average realized price before transportation expense and excluding the impact of derivatives was $2.92 per Mcfe.

At quarter end, the Company had hedges in place for 88% of its remaining 2021 expected natural gas production, 71% of its 2021 expected natural gas liquids (NGLs) production and 89% of its 2021 expected oil production. The Company also has approximately 90% of its remaining 2021 expected natural gas production protected from the impact of widening basis differentials through transportation capacity and basis hedges.

As of June 30, 2021, Southwestern Energy had total debt of $3.0 billion and a leverage ratio of 2.6x, an improvement of 0.4x compared to last quarter. At quarter end, the
2

            
Company had $568 million of borrowings under its revolving credit facility with $233 million in letters of credit and ample liquidity of $1.2 billion.

Realized PricesFor the three months endedFor the six months ended
(includes transportation costs)June 30,June 30,
2021202020212020
Natural Gas Price:
NYMEX Henry Hub price ($/MMBtu) (1)
$2.83 $1.72 $2.76 $1.83 
Discount to NYMEX (2)
(0.91)(0.74)(0.74)(0.57)
Realized gas price per Mcf, excluding derivatives$1.92 $0.98 $2.02 $1.26 
Gain (loss) on settled financial basis derivatives ($/Mcf)
0.03 (0.05)0.11 0.03 
Gain (loss) on settled commodity derivatives ($/Mcf)
(0.06)0.57 (0.02)0.43 
Realized gas price, including derivatives ($/Mcf)
$1.89 $1.50 $2.11 $1.72 
Oil Price:
WTI oil price ($/Bbl) (3)
$66.07 $27.85 $61.96 $37.01 
Discount to WTI(8.57)(12.16)(8.92)(9.46)
Realized oil price, excluding derivatives ($/Bbl)
$57.50 $15.69 $53.04 $27.55 
Realized oil price, including derivatives ($/Bbl)
$38.37 $41.64 $37.70 $44.08 
NGL Price:
Realized NGL price, excluding derivatives ($/Bbl)
$23.24 $6.43 $23.05 $7.29 
Realized NGL price, including derivatives ($/Bbl)
$15.87 $8.22 $15.99 $9.50 
Percentage of WTI, excluding derivatives35 %23 %37 %20 %
Total Weighted Average Realized Price:
Excluding derivatives ($/Mcfe)
$2.55 $1.05 $2.58 $1.37 
Including derivatives ($/Mcfe)
$2.20 $1.65 $2.36 $1.90 
(1)Based on last day monthly futures settlement prices.
(2)This discount includes a basis differential, a heating content adjustment, physical basis sales, third-party transportation charges and fuel charges, and excludes financial basis derivatives.
(3)Based on the average daily settlement price of the nearby month futures contract over the period.

Operational Results
Total production for the quarter ended June 30, 2021 was 276 Bcfe, of which 79% was natural gas, 17% NGLs and 4% oil. Capital investments totaled $259 million for the second quarter, with 23 wells drilled, 19 wells completed and 31 wells placed to sales.

3

            
For the three months endedFor the six months ended
June 30,June 30,
2021202020212020
Production
Gas production (Bcf)
219 158 433 314 
Oil production (MBbls)
1,831 1,083 3,493 2,482 
NGL production (MBbls)
7,666 6,111 15,244 12,239 
Total production (Bcfe)
276 201 545 402 
Total production (Bcfe/day)
3.0 2.2 3.0 2.2 
Average unit costs per Mcfe
Lease operating expenses (1)
$0.94 $0.91 $0.94 $0.94 
General & administrative expenses (2,3)
$0.11 $0.14 $0.12 $0.13 
Taxes, other than income taxes$0.10 $0.05 

$0.09 $0.06 
Full cost pool amortization$0.34 $0.38 $0.34 $0.46 
(1)Includes post-production costs such as gathering, processing, fractionation and compression.
(2)Excludes $3 million and $4 million in merger-related expenses for the three and six months ended June 30, 2021, respectively, and $1 million and $7 million in restructuring charges for the three and six months ended June 30, 2021, respectively.
(3)Excludes $2 million and $12 million in restructuring charges for the three and six months ended June 30, 2020, respectively.

Southwest Appalachia – In the second quarter, total production was 153 Bcfe, with NGL production of 84 MBbls per day and oil production of 20 MBbls per day. The Company drilled 15 wells, completed 12 wells and placed 20 wells to sales with an average lateral length of 15,067 feet.

Nine of the wells to sales were located in the rich acreage with an average 30-day rate of 19 MMcfe per day, including 44% liquids, and eight of the wells to sales were located in the super rich acreage with an average 30-day rate of 13 MMcfe per day, including 67% liquids. The remaining three wells placed to sales this quarter were the Company’s first dry gas Ohio Utica wells. These wells had an average lateral length of 13,781 feet and each had an average 30-day rate of 25 MMcf per day.

Northeast Appalachia – Second quarter 2021 production was 123 Bcf. The Company drilled eight wells, completed seven wells and placed 11 wells to sales with an average lateral length of 11,568 feet and an average 30-day rate of 14 MMcf per day.
4

            
E&P Division ResultsFor the three months ended June 30, 2021For the six months ended June 30, 2021
NortheastSouthwestNortheastSouthwest
Gas production (Bcf)
123 96 241 192 
Liquids production
Oil (MBbls)
— 1,826 — 3,484 
NGL (MBbls)
— 7,665 — 15,242 
Production (Bcfe)
123 153 241 304 
Gross operated production June 2021 (MMcfe/d)
1,645 2,486 
Net operated production June 2021 (MMcfe/d)
1,346 1,691 
Capital investments ($ in millions)
Drilling and completions, including workovers$75 $127 $146 $269 
Land acquisition and other3 11 7 20 
Capitalized interest and expense7 31 12 63 
Total capital investments$85 $169 $165 $352 
Gross operated well activity summary
Drilled8 15 19 27 
Completed7 12 19 29 
Wells to sales11 20 19 29 
Average well cost on wells to sales (millions)
$6.1 $10.0 $7.2 $9.4 
Average lateral length (ft)
11,568 15,067 12,369 14,311 
Total weighted average realized price per Mcfe, excluding derivatives$1.87 $3.10 $2.05 $3.01 
Third Quarter 2021 Price Guidance
Based on current market conditions, Southwestern expects third quarter price differentials to be within the following ranges before the impact of the Indigo acquisition. The Company maintains its full year 2021 price differential guidance before the impact of the Indigo acquisition.
Natural gas discount to NYMEX including transportation (1)
$0.90 – $1.00 per Mcf
Natural gas liquids realization as a % of WTI including transportation38% – 44%
(1)Includes the impact of basis hedges.
Conference Call
Southwestern Energy will host a conference call on Friday, July 30, 2021 at 9:30 a.m. Central to discuss second quarter 2021 results. To participate, dial US toll-free 877-883-0383, or international 412-902-6506 and enter access code 3889842. A live webcast will be available at ir.swn.com.


5

            
About Southwestern Energy
Southwestern Energy Company (NYSE: SWN) is a leading U.S. producer of natural gas and natural gas liquids focused on responsibly developing large-scale energy assets in the nation’s most prolific shale gas basins. SWN’s returns-driven strategy strives to create sustainable value for its stakeholders by leveraging its scale, financial strength and operational execution. For additional information, please visit www.swn.com and www.swn.com/responsibility.

Investor Contact
Brittany Raiford
Director, Investor Relations
(832) 796-7906
brittany_raiford@swn.com

Bernadette Butler
Investor Relations Advisor
(832) 796-6079
bernadette_butler@swn.com

Forward Looking Statement
Certain statements and information in this news release may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act, as amended. The words “believe,” “expect,” “anticipate,” “plan,” "predict," “intend,” "seek," “foresee,” “should,” “would,” “could,” “attempt,” “appears,” “forecast,” “outlook,” “estimate,” “project,” “potential,” “may,” “will,” “likely,” “guidance,” “goal,” “model,” “target,” “budget” and other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. Statements may be forward looking even in the absence of these particular words. Examples of forward-looking statements include, but are not limited to, statements regarding the proposed acquisition of Indigo Natural Resources LLC (the “Proposed Transaction”), expected synergies and other benefits from and costs in connection with the Proposed Transaction, estimated financial metrics giving effect to the Proposed Transaction, our financial position, business strategy, production, reserve growth and other plans and objectives for our future operations, and generation of free cash flow. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. The forward-looking statements contained in this document are largely based on our expectations for the future, which reflect certain estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions, operating trends, and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. As such, management’s assumptions about future events may prove to be inaccurate. For a more detailed description of the risks and uncertainties involved, see “Risk Factors” in our most recently filed Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other SEC filings. We do not intend to publicly update or revise any forward-looking statements as a result of new information, future events, changes in circumstances, or otherwise. These cautionary statements qualify all
6

            
forward-looking statements attributable to us, or persons acting on our behalf. Management cautions you that the forward-looking statements contained herein are not guarantees of future performance, and we cannot assure you that such statements will be realized or that the events and circumstances they describe will occur. Factors that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements herein include, but are not limited to: the timing and extent of changes in market conditions and prices for natural gas, oil and natural gas liquids (“NGLs”), including regional basis differentials and the impact of reduced demand for our production and products in which our production is a component due to governmental and societal actions taken in response to COVID-19 or other public health crises and any related company or governmental policies and actions to protect the health and safety of individuals or governmental policies or actions to maintain the functioning of national or global economies and markets; our ability to fund our planned capital investments; a change in our credit rating, an increase in interest rates and any adverse impacts from the discontinuation of the London Interbank Offered Rate; the extent to which lower commodity prices impact our ability to service or refinance our existing debt; the impact of volatility in the financial markets or other global economic factors; difficulties in appropriately allocating capital and resources among our strategic opportunities; the timing and extent of our success in discovering, developing, producing and estimating reserves; our ability to maintain leases that may expire if production is not established or profitably maintained; our ability to realize the expected benefits from recent acquisitions or the Proposed Transaction; costs in connection with the Proposed Transaction; the consummation of or failure to consummate the Proposed Transaction and the timing thereof; costs in connection with the Proposed Transaction; integration of operations and results subsequent to the Proposed Transaction; our ability to transport our production to the most favorable markets or at all; the impact of government regulation, including changes in law, the ability to obtain and maintain permits, any increase in severance or similar taxes, and legislation or regulation relating to hydraulic fracturing, climate and over-the-counter derivatives; the impact of the adverse outcome of any material litigation against us or judicial decisions that affect us or our industry generally; the effects of weather; increased competition; the financial impact of accounting regulations and critical accounting policies; the comparative cost of alternative fuels; credit risk relating to the risk of loss as a result of non-performance by our counterparties; and any other factors listed in the reports we have filed and may file with the SEC that are incorporated by reference herein. All written and oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary statement.
###
7

            
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the three months endedFor the six months ended
June 30,June 30,
(in millions, except share/per share amounts)2021202020212020
Operating Revenues:
Gas sales$433 $164 $897 $412 
Oil sales106 19 187 71 
NGL sales179 40 352 90 
Marketing332 187 684 426 
Other— — 2 3 
1,050 410 2,122 1,002 
Operating Costs and Expenses:
Marketing purchases333 201 689 449 
Operating expenses259 182 509 375 
General and administrative expenses34 32 72 58 
Merger-related expenses3 — 4 — 
Restructuring charges1 2 7 12 
Depreciation, depletion and amortization100 84 196 197 
Impairments— 655 — 2,134 
Taxes, other than income taxes27 10 51 23 
757 1,166 1,528 3,248 
Operating Income (Loss)293 (756)594 (2,246)
Interest Expense:
Interest on debt48 40 98 80 
Other interest charges3 3 6 5 
Interest capitalized(21)(21)(43)(44)
30 22 61 41 
Gain (Loss) on Derivatives(871)(109)(1,062)230 
Gain on Early Extinguishment of Debt— 7 — 35 
Other Income (Loss), Net(1)— — 1 
Income (Loss) Before Income Taxes(609)(880)(529)(2,021)
Provision (Benefit) for Income Taxes:
Current— — — (2)
Deferred— — — 408 
— — — 406 
Net Income (Loss)$(609)$(880)$(529)$(2,427)
Earnings (Loss) Per Common Share
Basic$(0.90)$(1.63)$(0.78)$(4.49)
Diluted$(0.90)$(1.63)$(0.78)$(4.49)
Weighted Average Common Shares Outstanding:
Basic676,722,999 541,079,192 676,057,534 540,693,841 
Diluted676,722,999 541,079,192 676,057,534 540,693,841 
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, 2021December 31, 2020
ASSETS(in millions)
Current assets:
Cash and cash equivalents$2 $13 
Accounts receivable, net408 368 
Derivative assets132 241 
Other current assets51 49 
Total current assets593 671 
Natural gas and oil properties, using the full cost method27,796 27,261 
Other496 523 
Less: Accumulated depreciation, depletion and amortization(23,846)(23,673)
Total property and equipment, net4,446 4,111 
Operating lease assets147 163 
Deferred tax assets— — 
Other long-term assets208 215 
Total long-term assets355 378 
TOTAL ASSETS$5,394 $5,160 
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt$207 $— 
Accounts payable653 573 
Taxes payable62 74 
Interest payable57 58 
Derivative liabilities901 245 
Current operating lease liabilities41 42 
Other current liabilities23 20 
Total current liabilities1,944 1,012 
Long-term debt2,814 3,150 
Long-term operating lease liabilities104 117 
Long-term derivative liabilities355 183 
Pension and other postretirement liabilities33 45 
Other long-term liabilities162 156 
Total long-term liabilities3,468 3,651 
Commitments and contingencies
Equity:
Common stock, $0.01 par value; 1,250,000,000 shares authorized; issued 721,372,443 shares as of June 30, 2021 and 718,795,700 shares as of December 31, 20207 7 
Additional paid-in capital5,104 5,093 
Accumulated deficit(4,892)(4,363)
Accumulated other comprehensive loss(35)(38)
Common stock in treasury, 44,353,224 shares as of June 30, 2021 and December 31, 2020(202)(202)
Total equity(18)497 
TOTAL LIABILITIES AND EQUITY$5,394 $5,160 


8

            
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the six months ended
June 30,
(in millions)20212020
Cash Flows From Operating Activities:
Net loss$(529)$(2,427)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, depletion and amortization196 197 
Amortization of debt issuance costs4 4 
Impairments— 2,134 
Deferred income taxes— 408 
(Gain) loss on derivatives, unsettled941 (17)
Stock-based compensation2 2 
Gain on early extinguishment of debt— (35)
Other1 — 
Change in assets and liabilities:
Accounts receivable(40)94 
Accounts payable75 (121)
Taxes payable(12)(11)
Interest payable— (1)
Inventories3 6 
Other assets and liabilities(24)21 
Net cash provided by operating activities617 254 
Cash Flows From Investing Activities:
Capital investments(493)(472)
Proceeds from sale of property and equipment2 2 
Other(1)— 
Net cash used in investing activities(492)(470)
Cash Flows From Financing Activities:
Payments on long-term debt— (72)
Payments on revolving credit facility(1,782)(919)
Borrowings under revolving credit facility1,650 1,221 
Change in bank drafts outstanding— (8)
Debt issuance/amendment costs(1)— 
Cash paid for tax withholding(3)(1)
Net cash provided by (used in) financing activities(136)221 
Increase (decrease) in cash and cash equivalents(11)5 
Cash and cash equivalents at beginning of year13 5 
Cash and cash equivalents at end of period$2 $10 








9

            

Hedging Summary
A detailed breakdown of derivative financial instruments and financial basis positions as of June 30, 2021, including the remainder of 2021 and excluding those positions that settled in the first and second quarter, is shown below. Please refer to the Company’s quarterly report on Form 10-Q to be filed with the Securities and Exchange Commission for complete information on the Company’s commodity, basis and interest rate protection.
Weighted Average Price per MMBtu
VolumeSoldPurchasedSold
(Bcf)SwapsPutsPutsCalls
Natural gas
2021
Fixed price swaps103 $2.80 $— $— $— 
Two-way costless collars140 — — 2.62 2.97 
Three-way costless collars153 — 2.18 2.51 2.86 
Total396 
2022
Fixed price swaps268 $2.72 $— $— $— 
Two-way costless collars125 — — 2.65 3.04 
Three-way costless collars333 — 2.06 2.51 2.94 
Total726 
2023
Fixed price swaps23 $2.70 $— $— $— 
Two-way costless collars34 — — 2.50 2.72 
Three-way costless collars215 — 2.09 2.54 3.00 
Total272 
2024
Three-way costless collars11 $— $2.25 $2.80 $3.54 
Natural gas financial basis positionsVolumeBasis Differential
(Bcf)($/MMBtu)
Q3 2021
Dominion South40 $(0.65)
TCO28 $(0.51)
TETCO M327 $(0.47)
Total95 $(0.55)
Q4 2021
Dominion South28 $(0.63)
TCO18 $(0.49)
TETCO M325 $0.06 
Total71 $(0.36)
2022
Dominion South118 $(0.59)
TCO71 $(0.49)
TETCO M372 $0.01 
Total261 $(0.40)
10

            
Weighted Average Price per Bbl
VolumeSoldPurchasedSold
(MBbls)SwapsPutsPutsCalls
Oil
2021
Fixed price swaps1,739 $50.10 $— $— $— 
Two-way costless collars92 — — 37.50 45.50 
Three-way costless collars1,152 — 39.22 49.05 54.35 
Total2,983 
2022
Fixed price swaps3,203 $53.54 $— $— $— 
Three-way costless collars1,380 — 39.89 50.23 57.05 
Total4,583 
2023
Fixed price swaps846 $55.98 $— $— $— 
Three-way costless collars1,268 — 33.97 45.51 56.12 
Total2,114 
2024
Fixed price swaps54 $53.15 $— $— $— 
Ethane
2021
Fixed price swaps3,284 $7.64 $— $— $— 
Two-way costless collars294 — — 7.14 10.40 
Total3,578 
2022
Fixed price swaps2,362 $8.97 $— $— $— 
Two-way costless collars135 — — 7.56 9.66 
Total2,497 
Propane
2021
Fixed price swaps4,261 $24.00 $— $— $— 
2022
Fixed price swaps4,092 $25.90 $— $— $— 
Three-way costless collars305 — 16.80 21.00 31.92 
Total4,397 
Normal Butane
2021
Fixed price swaps1,245 $29.04 $— $— $— 
2022
Fixed price swaps1,295 $29.16 $— $— $— 
Natural Gasoline
2021
Fixed price swaps1,281 $43.58 $— $— $— 
2022
Fixed price swaps1,201 $45.76 $— $— $— 

11

            
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 and adjusted EBITDA, 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.

Three Months Ended
June 30,		Six Months Ended
June 30,
2021202020212020
(in millions)
Adjusted net income (loss):
Net income (loss)$(609)$(880)$(529)$(2,427)
Add back (deduct):
Merger-related expenses3 — 4 — 
Restructuring charges1 2 7 12 
Impairments— 655 — 2,134 
(Gain) loss on unsettled derivatives772 229 941 (17)
Gain on early extinguishment of debt— (7)— (35)
Other (gain) loss1 (1)— (1)
Adjustments due to discrete tax items (1)
141 207 123 881 
Tax impact on adjustments(180)(206)(221)(492)
Adjusted net income (loss)$129 $(1)$325 $55 
(1)2020 primarily relates to the recognition of a valuation allowance. The Company expects its 2021 income tax rate to be 23.2% before the impacts of any valuation allowance.
12

            
Three Months Ended
June 30,		Six Months Ended
June 30,
2021202020212020
Adjusted diluted earnings (loss) per share:
Diluted earnings (loss) per share$(0.90)$(1.63)$(0.78)$(4.49)
Add back (deduct):
Merger related expenses0.00 — 0.01 — 
Restructuring charges0.00 0.01 0.01 0.02 
Impairments— 1.21 — 3.95 
(Gain) loss on unsettled derivatives1.14 0.42 1.38 (0.03)
Gain on early extinguishment of debt— (0.01)— (0.07)
Other (gain) loss0.00 (0.00)— (0.00)
Adjustments due to discrete tax items (1)
0.21 0.38 0.18 1.63 
Tax impact on adjustments(0.26)(0.38)(0.32)(0.91)
Adjusted diluted earnings (loss) per share$0.19 $(0.00)$0.48 $0.10 
(1)2020 primarily relates to the recognition of a valuation allowance. The Company expects its 2021 income tax rate to be 23.2% before the impacts of any valuation allowance.
Three Months Ended
June 30,		Six Months Ended
June 30,
2021202020212020
Net cash flow:(in millions)
Net cash provided by operating activities$270 $94 $617 $254 
Add back (deduct):
Changes in operating assets and liabilities(2)(9)(2)12 
Merger related expenses3 — 4 — 
Restructuring charges1 2 7 12 
Net cash flow$272 $87 $626 $278 

Three Months Ended
June 30,		Six Months Ended
June 30,
2021202020212020
Adjusted EBITDA:(in millions)
Net income (loss)$(609)$(880)$(529)$(2,427)
Add back (deduct):
Interest expense30 22 61 41 
Provision (benefit) for income taxes— — — 406 
Depreciation, depletion and amortization100 84 196 197 
Merger related expenses3 — 4 — 
Restructuring charges1 2 7 12 
Impairments— 655 — 2,134 
(Gain) loss on unsettled derivatives772 229 941 (17)
Gain on early extinguishment of debt— (7)— (35)
Other (gain) loss1 — — (1)
Stock based compensation expense2 1 2 2 
Adjusted EBITDA$300 $106 $682 $312 
13

            
June 30, 2021
Net debt:(in millions)
Total debt (1)
$3,039 
Subtract:
Cash and cash equivalents(2)
Net debt$3,037 
(1)Does not include $19 million of unamortized debt discount and issuance expense.
June 30, 2021
Net debt to Adjusted EBITDA:(in millions)
Net debt$3,037 
Adjusted EBITDA (1)
$1,169 
Net debt to Adjusted EBITDA2.6x
(1)Adjusted EBITDA of $1,169 million for the twelve months ended June 30, 2021 includes $57 million of adjusted EBITDA generated by Montage Resources prior to November 2020 acquisition.
14



v3.21.2
Cover Page
Jul. 29, 2021
Cover [Abstract]  
Amendment Flag false
Entity Central Index Key 0000007332
Document Type 8-K
Document Period End Date Jul. 29, 2021
Entity Registrant Name SOUTHWESTERN ENERGY CO
Entity Incorporation, State or Country Code DE
Entity File Number 001-08246
Entity Tax Identification Number 71-0205415
Entity Address, Address Line One 10000 Energy Drive
Entity Address, City or Town Spring
Entity Address, State or Province TX
Entity Address, Postal Zip Code 77389
City Area Code 832
Local Phone Number 796-1000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, Par Value $0.01
Trading Symbol SWN
Security Exchange Name NYSE
Entity Emerging Growth Company false


This regulatory filing also includes additional resources:
swn20210729x8k.pdf
Southwestern Energy (NYSE:SWN)
Historical Stock Chart
From Aug 2024 to Sep 2024 Click Here for more Southwestern Energy Charts.
Southwestern Energy (NYSE:SWN)
Historical Stock Chart
From Sep 2023 to Sep 2024 Click Here for more Southwestern Energy Charts.