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Bairds Growth Stock Conference – Southwestern Energy Co.

Southwestern Energy Co. · May 9, 2012 · 36 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. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 1
    UPLIFTING May 2012 Update NYSE: SWN
  2. Bairds Growth Stock Conference – 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. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 3
    About Southwestern Focused on exploration and production of natural gas. 5.9 Tcfe of reserves; 11.8 R/P at year-end 2011. E&P strategy built on organic growth through the drillbit. Over 80% of planned E&P capital allocated to…
  4. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 4
    Recent Developments First Quarter 2012 Highlights Production of 133.4 Bcfe, up 16%, due to strong Fayetteville and Marcellus results. Drilling D illi on 540 540,000 000 nett acre position iti iin a new unconventional ti…
  5. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 5
    Proven Track Record For the Periods Ended December 31 Proved P d Production (Bcfe) Reserves (Bcfe) EBITDA (MM) (1) F&D Cost (/Mcfe) 1,780 2.72 500 5,893 2.55 1,612 1,368 4,937 405 1,362 1.70 3,657 1.59 300 1.53 1.43…
  6. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 6
    Areas of Operations Exploration & Production Segment PENNSYLVANIA 2011: 5,893 Bcfe of Reserves Production - 500.0 500 0 Bcfe 2012 Est. Production: 560-570 Bcfe ARKANSAS Marcellus Shale OKLAHOMA Reserves: 342 Bcf (6%)…
  7. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 7
    Capital Investments 2,500 2,207 2,120 2,105 Corporate & Other 2 000 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 ease o d &…
  8. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 8
    Fayetteville Shale Focus Area SWN holds approx. 925,000 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. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 9
    Fayetteville Shale - Continuous Improvement Days to Drill Lateral Length Well Cost F&D Cost Production Reserves (in feet) ( in millions) ( per Mcfe) (in Bcfe) (in Bcfe) 17 4,836 3.0 2.05 436.8 5,104 2.9 2.9 4,528 2.8 2.8 14…
  10. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 10
    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 March 31, 2012,…
  11. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 11
    Marcellus Shale Millennium New York New York Pennsylvania Stagecoach Range Trust Pennsylvania Greenzweig West Virginia Price Lycoming SWN 0 10 20 30 40 50 Mil Miles Pi li Pipelines At December 31, 2011, SWN…
  12. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 12
    Marcellus Shale - Horizontal Well Performance 10,000 SWN Gross Operated Production 160,000 9,000 140,000 Gross operated production of approx. 120,000 122 MMcf/d as of March 31, 2012 8,000 100,000 Gross Production…
  13. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 13
    Brown Dense Exploration Project Fayetteville Little River Arkoma Basin Hempstead Nevada Oil Field Camden -4,00 0 Shale -5,00 0 GasDrew Field Bowie Wesson Ouachita Calhoun SWN well A r k a n s a s Smackover Bradley OBO well…
  14. Bairds Growth Stock Conference – 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 B i Basin Fayetteville Fayetteville Shale Shale Julesburg g OK N M AR A Basin R…
  15. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 15
    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…
  16. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 16
    Outlook for 2012 Production target of 560-570 Bcfe in 2012 (estimated growth of 13%). 2011 2012 Guidance Actual NYMEX Price Assumption 4.04 Gas 2.50 Gas 2.75 Gas 3.00 Gas 94.01 Oil 105.00 Oil 105.00 Oil 105.00 Oil Net Income…
  17. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 17
    The Road to Invest in the Highest PVI Projects. Flexibility in 2012 Capital Program. Maintain Strong Balance Sheet. Deliver the Numbers. Production and Reserves. Maximize Cash Flow. Continue to Tell Our Story. 17…
  18. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 18
    Appendix 18
  19. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 19
    Financial & Operational Summary Quarter Ended March 31, Year Ended December 31, 2012 2011 2011 2010 2009 ( in millions, except per share amounts) ( in millions, except per share amounts) Revenues 656.5 676.3 2,952.9 2,610.7 2,145.8…
  20. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 20
    Gas Hedges in Place Through 2013 Bcf 85 Hedged Avg Price per Mcf Percent 80 Type Volumes (or Floor / Ceiling) Hedged 75 2012 Swaps 185.2 Bcf 5.02 33% 47% Collars 80.5 80 5 Bcf 5 50 / 6 5.50 6.67 67 14% 70 2013 Swaps 185.2 Bcf…
  21. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 21
    SWN is One of the Lowest Cost Operators 4.00 3.50 3.00 2.50 2 50 Lifting Cost 2.00 per Mcfe of Production 1.50 (3 year average) 1.00 0 50 0.50 0.00 UPL RRC SWN SWN COG CHK FST NBL EOG APC SM DVN XEC PXD NFX APA SD MRO…
  22. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 22
    Ark-La-Tex Division Arkoma Basin Arkoma Basin Acreage: 194,494 net acres (at 12/31/11) 2011 Reserves: 194 Bcf (3% of total) 2011 Production: P d ti 16 3 Bcf 16.3 B f (3% off total) t t l) Arkoma Basin OK AR East Texas…
  23. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 23
    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)…
  24. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 24
    Fayetteville Shale Horizontal Well Performance Mcf/d 5000 5,000 ft Well 30 399 379 321 272 202 157 120 70 45 18 8 4 5 1 1 4500 Count 4,000 4 000 ft 1159 1101 964 866 737 604 513 378 299 233 177 115 66 42 17 1 Well 4000 Count…
  25. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 25
    Drilling & Completion Major Cost Categories Average 2012 Fayetteville Shale Well Cost Estimate Major Cost Categories - 2,866M Fracture Stimulation Rig OCTG 25% Environmental & Restoration Drilling Fluids Fracture Directional…
  26. Bairds Growth Stock 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% 20% Ground Water Recycle/Reused…
  27. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 27
    Fayetteville Shale Production Compared to the Barnett 3,400 3,200 3 000 3,000 7 Years Total Fayetteville Shale Field 28 Years 2,800 Average Daily Production 2,600 for January 2012: 2,400 2,746 MMcf/d 2,200 2,000 MMcf/d…
  28. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 28
    Fayetteville Shale Activity Compared to the Barnett 2508 Barnett Shale Play 2117 1981 1st Well Drilled 1586 1643 1214 1992 1st Horizontal Well Drilled 701 1997 1st Slickwater Frac 70 260 2 1 669 663 524 165 408 351…
  29. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 29
    U.S. Gas Consumption and Sources Bcf 30,000 25,000 20,000 15,000 U.S. gas production 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 Imports Consumption…
  30. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 30
    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 Source: Edison Electric Institute 30
  31. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 31
    U.S. Electricity Generation Electricity Generation by Energy Source Electricity Generation Capacities Total 4,120 Billion kWh in 2010. While coal and nuclear power plants operate at very high capacity, natural gas power plants are…
  32. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 32
    U.S. Gas Drilling and Prices Gas Rigs Gas Price Drilling /MMBtu 2,500 16.00 2,000 12.00 1,500 8.00 1,000 4.00 Gas Rigs G Ri Gas Price 500 0.00 Source: Baker Hughes, Bloomberg 32
  33. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 33
    Oil and Gas Price Comparison /Bbl /MMBtu 150.00 15.00 Henry Hub WTI Crude 120.00 Natural Gas (left scale) 12.00 (right scale) 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 11…
  34. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 34
    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…
  35. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 35
    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…
  36. Bairds Growth Stock Conference – Southwestern Energy Co. – slide 36
    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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