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Q4 2009 Earnings Call – Southwestern Energy Co.

Southwestern Energy Co. · Mar 26, 2010 · 29 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. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 1
    OUR WAY March 2010 Update NYSE: SWN
  2. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 2
    Southwestern Energy Company General Information Southwestern Energy Company is an integrated natural gas company whose wholly-owned subsidiaries are engaged g g in natural g gas and oil exploration p and p production and natural…
  3. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 3
    About Southwestern Focused on domestic exploration and production of natural gas. h 3,657 Bcfe of reserves; 100% natural gas; 12.2 R/P at year-end 2009. E&P strategy built on organic growth through the drillbit. h Over 75% of…
  4. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 4
    Recent Developments 2009 Highlights h Production of 300.4 Bcfe, up 54%. h R Reserves off 3 3.7 7TTcfe, f up 67% 67%. h Discretionary cash flow(1) of 1.4 billion, up 23%. h Finding and development cost of 0.86 per Mcfe…
  5. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 5
    Proven Track Record For the Periods Ended December 31 Reserve Production (Bcfe) Replacement (%) EBITDA (MM)(1) F&D Cost (/Mcfe) 400-410E 592 1,362 1,368 523 2.72 2.55 300 474 399 386 1.70 364 195 313 675 1.59 1.43 1.53…
  6. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 6
    Areas of Operations Exploration & Production Segment Conventional Arkoma PENNSYLVANIA 2009: 3,657 Bcfe of Reserves Reserves: 208 Bcf (6%) 100% Natural Gas Production: 22.0 Bcf (7%) Production 300.4 Bcfe Net Acres: 338,486…
  7. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 7
    Capital Investments 2,500 Corporate & Other 2,100 Midstream Services 2 000 2,000 Drilling Rigs 1,796 1 809 1,809 Property Acquisitions ( Millions) 1,503 1,500 Cap. Expense & Other E&P Leasehold & Seismic 942 Development…
  8. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 8
    East Texas Ms SWN Acreage La Texas Haynesville Shale Prospective Area 95 Wells CHK - 120 Wells Tyler Overton Avg IP: Avg IP: 8.0 MMcf/d 10.6 MMcf/d HK - 66 Wells Avg g IP: James Lime Horizontals 17.0 MMcf/d 43 Operated…
  9. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 9
    Marcellus Shale Millennium Stagecoach New York New York Pennsylvania Range Trust Pennsylvania Greenzweig 4.5 MMcf/d Price 4.0 MMcf/d West CHK Virginia CHK 10.1 MMcf/d 8.9 MMcf/d RRC 13.0 Cabot MMcf/d 30 wells…
  10. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 10
    Fayetteville Shale Focus Area AR Conventional Fairway 763,293 Net Acres Existing Pilots Ozark 125,400 Net Acres HBP Chattanooga Test Boardwalk Centerpoint Fayetteville Lateral Ozark Compression in-service January 2010…
  11. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 11
    Fayetteville Shale - Improving 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)…
  12. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 12
    Fayetteville Shale - Horizontal Well Performance 3,500 4,000 250 283 208 175 151 106 78 52 39 27 17 5 4 1 1 Well Count 3,000 3 0 Bcf Typecurve 3.0 2.5 Bcf Typecurve 2,500 2.0 Bcf Typecurve Wells with Laterals 4,000 Feet…
  13. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 13
    Fayetteville Project - Gross Production 1,400 1,200 Gross operated production of approx. 1,188 MMcf/d as of February 20, 2010 MMcf/d) 1,000 Gross Production (M 800 600 Pipeline Curtailment 400 Issues 2009…
  14. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 14
    Midstream - Adding Value Beyond the Wellhead DeSoto Gathering Lines Transmission AR Compression Facility 0 10 20 Miles Independence Johnson Van Buren Cleburne Ozark Pope Logan White Conway Faulkner Yell Midstream…
  15. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 15
    Outlook for 2010 Production target of 400 - 410 Bcfe in 2010 (estimated growth of 35%). 2009 2010 Guidance Actual NYMEX Price Assumption 3.99 Gas 4.00 Gas 5.00 Gas 6.00 Gas 58.36 Oil 70.00 Oil 70.00 Oil 70.00 Oil h Adj. Net…
  16. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 16
    The Road to Invest in the Highest PVI Projects. Flexibility in 2010 Capital Program. Maintain Strong Balance Sheet. Deliver the Numbers. h Production and Reserves. h Maximize Cash Flow. Continue to Tell Our Story. 16…
  17. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 17
    Appendix 17
  18. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 18
    Financial & Operational Summary Year Ended December 31, 2009 2008 2007 ( in millions, except per share amounts) Revenues 2,145.8 2,311.6 1,255.1 (1) EBITDA 1,368.1 (3) 1,362.3 (2) 675.4 Adjusted Net Income 522.7 (3) 567.9 (2)…
  19. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 19
    Gas Hedges in Place Through 2011 Bcf 24 22 Hedged Avg Price per Mcf Percent Type Volumes (or Floor / Ceiling) Hedged 20 2010 Swaps 36.0 Bcf 9.04 9% Collars 30.0 Bcf 6.80 / 8.43 7% 2011 Swaps 30.0 Bcf 6.69 - 18 Collars 7.3 Bcf…
  20. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 20
    SWN is One of the Lowest Cost Operators 3.50 3.00 Lifting Costs (//Mcfe) 2.50 Lifting Cost per Mcfe 2.00 of Production 1.50 (3 year average) 1.00 0 50 0.50 0.00 SWN UPL EOG NBL CHK RRC ECA FST PXD NFX DVN XTO APC…
  21. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 21
    Fayetteville Shale Activity Compared to the Barnett 2508 Barnett Shale Play 2117 1981 1st Well Drilled 1513 1214 1992 1st Horizontal Well Drilled 701 1997 1st Slickwater Frac 70 260 2 1 669 663 524 165 408 351 Average 28…
  22. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 22
    Fayetteville Shale Production Compared to the Barnett 2,400 2,200 2,000 5 Years 25 Years Total Fayetteville Shale Field Average Daily Production 1,800 for November 2009: 1,798 MMcf/d 1,600 1,400 MMcf/d We collapsed…
  23. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 23
    U.S. Gas Consumption and Sources Bcf 25,000 20,000 15 000 15,000 U.S. gas consumption and production rising 10,000 in recent years. 5,000 0 1975 1980 1985 1990 1995 2000 2005 U.S. Gas U.S. Dry Gas Net Imports…
  24. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 24
    U.S. Electricity Consumption on the Rise 350 325 300 Billion Billi 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 Source: Edison Electric Institute 24
  25. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 25
    U.S. Gas Drilling and Prices Gas Rigs Gas Price Drilling /MMBtu 2 000 2,000 15 00 15.00 1,700 12.00 1,400 9.00 1,100 , 6.00 800 Gas Rigs 3.00 Gas Price 500 0.00 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009…
  26. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 26
    Oil and Gas Price Comparison /Bbl /MMBtu 150.00 15.00 Henry Hub 120.00 Natural Gas 12.00 (right scale) 90.00 9.00 60.00 6.00 WTI Crude (left scale) 30.00 3.00 0.00 0.00 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08…
  27. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 27
    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…
  28. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 28
    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…
  29. Q4 2009 Earnings Call – Southwestern Energy Co. – slide 29
    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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