Financial Results

For the quarter ended March 31, 2023, Southwestern Energy recorded net income of $1.9 billion, or $1.76 per diluted share, including a gain on mark-to-market of unsettled derivatives. Excluding this and other one-time items, adjusted net income (non-GAAP) was $346 million, or $0.31 per diluted share, and Adjusted EBITDA (non-GAAP) was $799 million. Net cash provided by operating activities was $1.1 billion, net cash flow (non-GAAP) was $764 million and free cash flow (non-GAAP) was $99 million.

During the quarter, the Company fully redeemed its outstanding 7.75% Senior Notes due 2027 utilizing cash on hand and borrowings under its revolving credit facility. As of March 31, 2023, Southwestern Energy had total debt of $3.95 billion and net debt to adjusted EBITDA (non-GAAP) of 1.2x. At the end of the quarter, the Company had $210 million of borrowings under its revolving credit facility and $89 million in outstanding letters of credit.

The Company is currently rated one notch below an investment grade credit rating by all three credit agencies. In January 2023, S&P updated Southwestern Energy to positive outlook, joining Fitch, which updated the Company to positive outlook in August 2022.

As indicated in the table below, first quarter 2023 weighted average realized price was $3.48 per Mcfe, excluding the impact of derivatives and net of $0.27 per Mcfe of transportation expenses. Including derivatives, weighted average realized price for the first quarter was down 2% from $3.24 per Mcfe in 2022 to $3.18 per Mcfe in 2023 primarily due to lower commodity prices including a 31% decrease in NYMEX Henry Hub and a 19% decrease in WTI.

Operational Results

Total net production for the quarter ended March 31, 2023 was 411 Bcfe, of which 86% was natural gas, 12% NGLs and 2% oil. Capital investments totaled $665 million for the first quarter of 2023, consistent with the Company's front-end loaded capital program, with 31 wells drilled, 36 wells completed and 36 wells placed to sales.

Appalachia - In the first quarter, total production was 251 Bcfe, with NGL production of 91 MBbls per day and oil production of 16 MBbls per day. The Company drilled 19 wells, completed 15 wells and placed 13 wells to sales with an average lateral length of 14,916 feet.

Haynesville - In the first quarter, total production was 160 Bcfe. There were 12 wells drilled, 21 wells completed and 23 wells placed to sales in the quarter with an average lateral length of 8,207 feet.

Second Quarter 2023 Guidance Update

Based on current market conditions, Southwestern expects second quarter production and price differentials to be within the following ranges.