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IPAA OGIS Toronto – Southwestern Energy Co.

Southwestern Energy Co. · Jun 11, 2013 · 35 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. IPAA OGIS Toronto – Southwestern Energy Co. – slide 1
    Presentation to 2013 IPAA Oil & Gas Symposium Toronto June 11, 2013 NYSE: SWN
  2. IPAA OGIS Toronto – Southwestern Energy Co. – slide 2
    Southwestern Energy Company General Information Southwestern Energy Company is an independent natural gas company whose wholly-owned subsidiaries are engaged in natural gas and oil exploration and production and natural gas gathering…
  3. IPAA OGIS Toronto – Southwestern Energy Co. – slide 3
    About Southwestern Focused on exploration and production of natural gas. 4.0 Tcfe of reserves; 7.1 R/P at year-end 2012. E&P strategy built on organic growth through the drillbit. Approximately 75% of planned E&P capital allocated…
  4. IPAA OGIS Toronto – Southwestern Energy Co. – slide 4
    First Quarter 2013 Highlights First Quarter 2013 Highlights Production up 11%, due to strong Fayetteville and Marcellus results. Recorded highest first quarter cash flow in company history, primarily driven by low cash operating…
  5. IPAA OGIS Toronto – Southwestern Energy Co. – slide 5
    Proven Track Record For the Periods Ended December 31 Average Realized Proved Production (Bcfe) Gas Price (/Mcf) Reserves (Bcfe) EBITDA (MM) (1) F&D Cost (/Mcfe)(2) 565 7.52 6.80 1,780 2.70 500 6.55 5,893 1,612 1,636 6.51…
  6. IPAA OGIS Toronto – Southwestern Energy Co. – slide 6
    Areas of Operations Exploration & Production Segment PENNSYLVANIA 2012: 4,018 Bcfe of Reserves Production - 565.0 Bcfe 2013 Est. Production: 631-642 Bcfe ARKANSAS Marcellus Shale OKLAHOMA Reserves: 816 Bcf (20%) Production: 53.6…
  7. IPAA OGIS Toronto – Southwestern Energy Co. – slide 7
    Capital Investments 2,500 2,207 2,120 2,081 Corporate & Other 1,985(1) 2,000 Midstream Services 1,796 1,809 Drilling Rigs ( Millions) 1,503 1,500 Property Acquisitions Cap. Expense & Other E&P 1,000 942 Leasehold &…
  8. IPAA OGIS Toronto – Southwestern Energy Co. – slide 8
    Fayetteville Shale Focus Area SWN holds approx. 914,000 net acres in the Fayetteville Shale play (approx 1,400 sq. miles). Mississippian-age shale, geological equivalent of the Barnett Shale in north Texas. SWN discovered the…
  9. IPAA OGIS Toronto – Southwestern Energy Co. – slide 9
    Fayetteville Shale Continuous Improvement -62% +82% -14% +807% +317% Days to Drill Lateral Length Well Cost F&D Cost Production Reserves (feet in length) ( in millions) ( per Mcf) (in Bcf) (in Bcf) 17.5 3.0 2.53 5,104 4,836 4,833…
  10. IPAA OGIS Toronto – Southwestern Energy Co. – slide 10
    Midstream - Adding Value Beyond the Wellhead DeSoto Gathering Lines Transmission AR Compression Facility 0 10 20 Miles SWNs Fayetteville Shale gathering system is one of the largest in the U.S. At March 31, 2013, gathering…
  11. IPAA OGIS Toronto – Southwestern Energy Co. – slide 11
    Marcellus Shale Bradford County 32 wells planned for 2013 Susquehanna County 44 wells planned for 2013 Shell Chief Shell Citrus Lycoming County Seneca 11 wells planned for 2013 Range We hold approximately 337,300…
  12. IPAA OGIS Toronto – Southwestern Energy Co. – slide 12
    Marcellus Shale Horizontal Well Performance SWN Gross Operated Production 400,000 350,000 Gross operated production of approx. 300,000 359 MMcf/d as of March 31, 2013 Gross Production (Mcf/d) 250,000 200,000…
  13. IPAA OGIS Toronto – Southwestern Energy Co. – slide 13
    Brown Dense Exploration Project Fayetteville Little River Shale Hempstead Oil Field Arkoma Nevada Camden -4,00 0 Basin -5,00 Gas Field Drew 0 Calhoun Bowie Ouachita SWN Drilled 1 Arkansas Bradley SWN 2013 Plan Texarkana Miller…
  14. IPAA OGIS Toronto – Southwestern Energy Co. – slide 14
    Denver Julesburg Basin Exploration Project Denver Julesburg Basin Subsea Structure on the Top of Atoka CO KS Denver Arkoma Arkoma Basin Basin Fayetteville Fayetteville Shale Shale Julesburg OK N M AR A Basin R Brown…
  15. IPAA OGIS Toronto – Southwestern Energy Co. – slide 15
    Outlook for 2013 Production target of 631-642 Bcfe in 2013 (estimated growth of 13%). 2012 2013 Guidance Actual NYMEX Price Assumption 2.79 Gas 3.50 Gas 3.75 Gas 4.00 Gas 94.94 Oil 85.00 Oil 85.00 Oil 85.00 Oil Adj. Net Income…
  16. IPAA OGIS Toronto – Southwestern Energy Co. – slide 16
    The Road to Invest in the Highest PVI Projects. Flexibility in 2013 Capital Program. Maintain Strong Balance Sheet. Deliver the Numbers. Production and Reserves. Maximize Cash Flow. Curiosity to Learning to Innovation to…
  17. IPAA OGIS Toronto – Southwestern Energy Co. – slide 17
    Appendix 18
  18. IPAA OGIS Toronto – Southwestern Energy Co. – slide 18
    Financial & Operational Summary Quarter Ended March 31, Year Ended December 31, 2013 2012 2012 2011 2010 ( in millions, except per share amounts) ( in millions, except per share amounts) Revenues 733.6 654.8 2,715.0 2,952.9 2,610.7…
  19. IPAA OGIS Toronto – Southwestern Energy Co. – slide 19
    Gas Hedges in Place Through 2014 Bcf 90 Hedged Avg Price per Mcf Percent 85 Type Volumes (or Floor / Ceiling) Hedged 80 2013 Swaps 285.7 Bcf 4.76 45% 2014 Swaps 232.7 Bcf 4.41 --- 75 70 NYMEX Fixed Price 65 4.22 4.22 4.22 60…
  20. IPAA OGIS Toronto – Southwestern Energy Co. – slide 20
    SWN is One of the Lowest Cost Operators 4.50 4.00 3.50 3.00 Lifting Cost 2.50 2.00 per Mcfe of Production (3 year average) 1.50 1.00 0.50 0.00 COG RRC UPL SWN SWN NBL CHK FST SM EOG APC DVN XEC PXD APA NFX SD MUR OXY…
  21. IPAA OGIS Toronto – Southwestern Energy Co. – slide 21
    Marcellus Shale - Horizontal Well Performance 30th-Day Avg. Rate 60th-Day Avg. Rate 120th-Day Avg. Rate Average of CLAT ( of Wells) ( of Wells) ( of Wells) (ft) Q3 2010 1,405 (1) 3,680 (1) 2,491 (1) 2,927 Q4 2010 5,584 (6) 5,602…
  22. IPAA OGIS Toronto – Southwestern Energy Co. – slide 22
    Fayetteville Shale - Horizontal Well Performance Wells Average 30th-Day 60th-Day Placed on IP Rate Avg Rate Avg Rate Avg Lateral Time Frame Production (Mcf/d) ( of wells) ( of wells) Length 1st Qtr 2007 58 1,261 1,066 (58) 958 (58)…
  23. IPAA OGIS Toronto – Southwestern Energy Co. – slide 23
    Fayetteville Shale - Horizontal Well Performance Mcf/d 5000 5,000 ft Well 569 572 527 437 417 364 300 142 251 194 103 63 37 22 12 7 Count 4500 4,000 ft 1486 1473 1365 1203 1191 1056 927 818 696 566 456 351 278 209 161 107 Well…
  24. IPAA OGIS Toronto – Southwestern Energy Co. – slide 24
    Drilling & Completion Major Cost Categories Average 2013 Fayetteville Shale Well Cost Estimate Major Cost Categories - 2,725M Fracture Stimulation Rig 22% OCTG Environmental & Restoration Drilling Fluids Fracture Directional…
  25. IPAA OGIS Toronto – Southwestern Energy Co. – slide 25
    Water Demand: Perspective Statewide Demand: SWN Operations Demand: 11,500 million gallons/day 10 million gallons/day (600 Wells/year) SWN Operations Less than 0.09% of States water usage 33% 25% Ground Water Recycle/Reused…
  26. IPAA OGIS Toronto – Southwestern Energy Co. – slide 26
    ArkLaTex Division Arkoma Basin Arkoma Basin Acreage: 114,287 net acres (at 12/31/12) 2012 Reserves: 160 Bcf (4% of total) 2012 Production: 14.1 Bcf (2% of total) Arkoma Basin OK AR East Texas East Texas TX LA East…
  27. IPAA OGIS Toronto – Southwestern Energy Co. – slide 27
    New Brunswick, Canada Exploration Project Marysville SWN currently holds exploration 2,309,247 acres licenses to over 2.5 million acres within the Maritimes Basin Principal targets are the conventional and unconventional sandstone…
  28. IPAA OGIS Toronto – Southwestern Energy Co. – slide 28
    U.S. Gas Consumption and Sources Bcf 30,000 25,000 20,000 15,000 U.S. gas production and consumption rising in recent years. 10,000 5,000 0 1975 1980 1985 1990 1995 2000 2005 2010 U.S. Gas U.S. Dry Gas Net…
  29. IPAA OGIS Toronto – Southwestern Energy Co. – slide 29
    U.S. Electricity Consumption 350 325 Billion 300 Kilowatt Hours Per Month 275 250 225 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Source: Edison Electric Institute 30
  30. IPAA OGIS Toronto – Southwestern Energy Co. – slide 30
    U.S. Electricity Generation Electricity Generation by Energy Source Electricity Generation Capacities Total 4,060 Billion KWh in 2012. While coal and nuclear power plants operate at high capacity, natural gas power plants are running…
  31. IPAA OGIS Toronto – Southwestern Energy Co. – slide 31
    U.S. Gas Drilling and Prices Gas Rigs Gas Price Drilling /MMBtu 2,000 16.00 1,500 12.00 1,000 8.00 500 4.00 Gas Rigs Gas Price 0 0.00 Source: Baker Hughes, Bloomberg 32
  32. IPAA OGIS Toronto – Southwestern Energy Co. – slide 32
    Oil and Gas Price Comparison /Bbl /MMBtu 150.00 15.00 Henry Hub WTI Crude Natural Gas (left scale) 120.00 (right scale) 12.00 90.00 9.00 60.00 6.00 30.00 3.00 0.00 0.00 97 98 99 00 01 02 03 04 05 06 07 08 09 10…
  33. IPAA OGIS Toronto – Southwestern Energy Co. – slide 33
    Explanation and Reconciliation of Non-GAAP Financial Measures: Net Cash Flow We report our financial results in accordance with accounting principles generally accepted in the United States of America (GAAP). However, management…
  34. IPAA OGIS Toronto – Southwestern Energy Co. – slide 34
    Explanation and Reconciliation of Non-GAAP Financial Measures: Adjusted Net Income Additional non-GAAP financial measures we may present from time to time are net income attributable to Southwestern Energy and diluted earnings per share…
  35. IPAA OGIS Toronto – Southwestern Energy Co. – slide 35
    Explanation and Reconciliation of Non-GAAP Financial Measures: EBITDA EBITDA is defined as net income plus interest, income tax expense, depreciation, depletion and amortization. Southwestern has included information concerning EBITDA…

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