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Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co.

Southwestern Energy Co. · Mar 4, 2014 · 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. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 1
    March 2014 Update NYSE: SWN
  2. Raymond James 35th Annual Institutional Investors Conference – 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 g g in natural g gas and oil exploration p and p production and natural…
  3. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 3
    About Southwestern US Lower 48 Gas Production Sorted by 4Q13 (MMcf/d) 4,000 3 500 3,500 SWN iis 4th overallll as off 4Q13 3,000 2013: 6,976 Bcfe of Reserves 2,500 Production 657 Bcfe Reserve Life 10.6 10 6 Years 4Q13 2014:…
  4. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 4
    2013 Highlights and 2014 Outlook Full-year 2013 Highlights Record production of 657 Bcfe, up 16%, due to strong Fayetteville and Marcellus results Record total proved reserves of approximately 7.0 Tcfe, up 74% Record adjusted…
  5. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 5
    Proven Track Record For the Periods Ended December 31 Average Realized Average Realized Adjusted EBITDA dj d Proved P d Production (Bcfe) Gas Price (/Mcf) (MM)(1) Reserves (Bcfe) F&D Cost (/Mcfe)(2) 657 2.70 7.52 6.80 6.55…
  6. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 6
    Areas of Operations Exploration & Production Segment PENNSYLVANIA 2013: 6,976 Bcfe of Reserves Production - 657 Bcfe 2014 Production: 740 - 752 Bcfe ARKANSAS Marcellus Shale OKLAHOMA Reserves: 1,963 Bcf (28%) Production: 151 Bcf…
  7. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 7
    Capital Investments 2,500 2,325 2,207 2,235 2,120 2,081 Corporate & Other 2,000 Midstream Services 1 796 1,809 1,796 ( Millions)) Drilling Rigs 1,503 1,500 Property Acquisitions Cap. Expense & Other E&P 942 Leasehold &…
  8. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 8
    Marcellus Shale New York Millennium legany Steuben Chemung Tioga Broome Bluestone Delaware New York Pennsylvania y Bradford County y y Pennsylvania 41 wells planned for 2014 St Stagecoach h S Susquehanna h County C t 27…
  9. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 9
    Marcellus Gross Production 800,000 Gross operated production of approx. 698 MMcf/d as of December 31, 2013 700,000 30th Day Avg. 30 hD A Avg RERE A RE RE Avg CWC A CWC Time Period Rate ( of Wells) Avg CLAT (ft) (Rig Days)…
  10. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 10
    Marcellus Shale Horizontal Well Performance 16,000 14,000 Multiple wells shut-in for 12,000 simultaneous operations over the 700-750 day period 10,000 Daily Rate, Mcf/ d 8,000 6,000 4,000 2,000 0 0 100…
  11. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 11
    Fayetteville Shale Focus Area SWN holds approx. 906,000 net acres in the Fayetteville Shale play. SWN discovered the Fayetteville Shale and has first mover advantage average acreage cost of 320 per acre with a 15% royalty and…
  12. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 12
    Fayetteville Shale Continuous Improvement -65% +102% -17% +800% +570% Days to Drill Lateral Well Cost F&D Cost Production Reserves L Length th ( in millions) ( per Mcf) (in Bcf) (in Bcf) 17.5 2.53 5,104 5,356 2.39 486 486 4,795…
  13. Raymond James 35th Annual Institutional Investors Conference – 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 2014 Plan Texarkana Miller…
  14. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 14
    Outlook for 2014 Production target of 740-752 Bcfe in 2014 (estimated growth of 14%). 2013 2014 Guidance Actual NYMEX Price Assumption 3.65 Gas 3.75 Gas 4.00 Gas 4.25 Gas 96.77 Oil 90.00 Oil 90.00 Oil 90.00 Oil Adj. Net Income(1)…
  15. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 15
    The Road to Invest in the Highest PVI Projects. Maintain Strong Balance Sheet. Deliver the Numbers. Production and Reserves. Maximize Cash Flow. Curiosity C i it to t Learning L i to t Innovation I ti to t . 15…
  16. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 16
    Appendix 16
  17. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 17
    Financial & Operational Summary Year Ended December 31, 2013 2012 2011 ( in millions, except per share and unit amounts) Revenues 3,371.1 2,730.0 2 730 0 2,951.3 2 951 3 (1) Adjusted EBITDA 1,997.2 1,638.3 1,774.0 Adjusted Net…
  18. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 18
    Gas Hedges in Place Through 2015 Bcff 150 140 Hedged Average Price Percent Type Volumes per MMBtu Hedged 130 2014 Swaps 455.8 Bcf 4.34 61% 120 2015 Swaps 119.5 Bcf 4.40 --- 110 4.42 4.42 4.42 100 4.42 NYMEX Fixed Price 90 80…
  19. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 19
    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…
  20. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 20
    Denver Julesburg Basin Exploration Project Denver Julesburg Basin Subsea Structure on the Top of Atoka CO KS Denver Arkoma Arkoma Basin B i Basin Fayetteville Fayetteville Shale Shale Julesburg g OK N M AR A Basin R…
  21. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 21
    New Brunswick, Canada Exploration Project Marysville SWN currently holds exploration 2,309,247 acres licenses to over 2.5 million acres within ithi the th Maritimes M iti Basin B i Principal targets are the conventional and…
  22. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 22
    Fayetteville Shale - Horizontal Well Performance W ll Wells Average A 30th-Day 30th D 60th-Day 60th D Placed on IP Rate Avg Rate Avg Rate Avg Lateral Time Frame Production (Mcf/d) ( of wells) ( of wells) Length 1st Qtr 2007 58…
  23. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 23
    Fayetteville Shale - Horizontal Well Performance Mcf/d 5000 5,000 ft Well 304 713 735 663 626 571 527 470 414 353 250 183 142 100 64 38 Count 4500 4,000 ft 1730 1776 1655 1570 1469 1355 1262 1156 1036 912 801 662 562 454 357 275…
  24. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 24
    Midstream Adding Value Beyond the Wellhead DeSoto Gathering Lines Transmission AR Compression Facility 0 10 20 Miles SWNs SWN s Fayetteville Shale gathering system is one of the largest in the U U.S. S At December 31, 2013,…
  25. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 25
    Drilling & Completion Major Cost Categories Average 2014 Fayetteville Shale Well Cost Estimate Major Cost Categories - 2.6 Million Fracture Stimulation Rig 22% OCTG Environmental & Restoration Drilling Fluids Fracture…
  26. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 26
    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…
  27. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 27
    U.S. Gas Consumption and Sources Bcf 30,000 25,000 20,000 15,000 U.S. gas production and consumption rising i recentt years. in 10,000 5,000 0 1975 1980 1985 1990 1995 2000 2005 2010 U.S. Gas U.S. Dry Gas Net…
  28. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 28
    U.S. Electricity Consumption 350 325 Billion 300 Kilowatt Hours Per Month 275 250 225 Source: Edison Electric Institute 28
  29. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 29
    U.S. Electricity Generation Electricity Generation by Energy Source Electricity Generation Capacities Total 4,020 Billion KWh (Nov 2012 Oct 2013). While coal and nuclear power plants operate at high capacity, natural gas power plants…
  30. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 30
    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 30
  31. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 31
    Oil and Gas Price Comparison /Bbl /MMBtu 150 15 Henry Hub WTI Crude Natural Gas (left scale) (right scale) 120 12 90 9 60 6 30 3 0 0 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Source:…
  32. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 32
    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…
  33. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 33
    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…
  34. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 34
    Explanation and Reconciliation of Non-GAAP Financial Measures: Adjusted EBITDA EBITDA is defined as net income plus interest, income tax expense, depreciation, depletion and amortization. Southwestern has included information concerning…
  35. Raymond James 35th Annual Institutional Investors Conference – Southwestern Energy Co. – slide 35
    Explanation and Reconciliation of Non-GAAP Financial Measures: Adjusted EBITDA The table below reconciles forecasted EBITDA with forecasted net income for 2014, assuming various NYMEX price scenarios and the corresponding estimated…

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