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The Enercom Oil and Gas Conference – Southwestern Energy Co.

Southwestern Energy Co. · Aug 20, 2014 · 34 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. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 1
    Presentation to The 2014 Oil & Gas Conference Sponsored by Enercom, Inc. August 20, 2014 NYSE: SWN
  2. The Enercom Oil and Gas 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 in natural gas and oil exploration and production and natural gas gathering…
  3. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 3
    About Southwestern US Lower 48 Gas Production Sorted by 2Q14 (MMcf/d) 4,000 3,500 SWN is 4th overall as of 2Q14 2013: 6,976 Bcfe of Reserves 3,000 Production 657 Bcfe Reserve Life 10.6 Years 2014: 70%+ of Capex Allocated to…
  4. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 4
    Second Quarter 2014 Highlights Second Quarter 2014 Highlights Record production of 189 Bcfe, up 18%, due to strong Marcellus and Fayetteville results Adjusted earnings(1) of 207 million, up 9%, discretionary cash flow(1) of 579…
  5. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 5
    Proven Track Record For the Periods Ended December 31 Average Realized Adjusted EBITDA Proved Production (Bcfe) Gas Price (/Mcf) (MM)(1) Reserves (Bcfe) F&D Cost (/Mcfe)(2) 657 2.70 7.52 6.80 6.55 6,976 565 6.51 1,997 500…
  6. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 6
    Areas of Operations Exploration & Production Segment PENNSYLVANIA 2013 Reserves: 6,976 Bcfe Production: 657 Bcfe 2014 Production: 758 764 Bcfe ARKANSAS Marcellus Shale OKLAHOMA Reserves: 1,963 Bcf (28%) Production: 151 Bcf…
  7. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 7
    Capital Investments 2,500 2,400 2,207 2,235 Corporate & Other 2,120 2,081 Midstream Services 2,000 1,796 1,809 Drilling Rigs ( Millions) Property Acquisitions 1,503 1,500 Cap. Expense & Other E&P Leasehold & Seismic…
  8. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 8
    Marcellus Shale Bradford County 33 wells planned for 2014 Susquehanna County 33 wells planned for 2014 Lycoming County 5 wells planned for 2014 Wyoming-Sullivan-Tioga Counties 4 wells planned for 2014 We hold…
  9. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 9
    Marcellus Gross Production 1,000,000 Gross operated production of approx. 900,000 744 MMcf/d as of June 30, 2014 30th Day Avg. Avg RE-RE Avg CWC 800,000 Time Period Rate ( of Wells) Avg CLAT (ft) (Rig Days) (MM) 2010 3rd Qtr 1,405…
  10. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 10
    Marcellus Shale Horizontal Well Performance 16,000 14,000 12,000 Multiple wells shut-in for 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. The Enercom Oil and Gas 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. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 12
    Fayetteville Shale Continuous Improvement -61% +107% -14% +800% +570% Days to Drill Lateral Well Cost F&D Cost Production Reserves Length ( in millions) ( per Mcf) (in Bcf) (in Bcf) 17.5 2.53 5,104 5,503 486 486 5,356 2.39 4,795…
  13. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 13
    Exploration Sand Wash Basin Niobrara Proven Hydrocarbon System Niobrara vertical prod since 1920s with avg 130 MBOE/well Contiguous 380,000 Net Acres in AOI 75% fee, 15% federal, 10% state Thick, Continuous Section Favorable…
  14. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 14
    Outlook for 2014 Production target of 758 764 Bcfe in 2014 (estimated growth of 16%). 2013 2014 Guidance(3) Actual NYMEX Price Assumption 3.65 Gas 4.00 Gas 4.25 Gas 4.50 Gas 96.77 Oil 90.00 Oil 90.00 Oil 90.00 Oil Adj. Net…
  15. The Enercom Oil and Gas 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 to Learning to Innovation to . 15 Forward-Looking Statement
  16. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 16
    Appendix 16
  17. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 17
    Financial & Operational Summary Six Months June 30, Year Ended December 31, 2014 2013 2013 2012 2011 ( in millions, except per share amounts) ( in millions, except per share and unit amounts) Revenues 2,148 1,595 3,371 2,730 2,951…
  18. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 18
    Gas Hedges in Place Through 2015 Bcf 150 140 Hedged Average Price Percent Type Volumes per MMBtu Hedged 130 2014 Swaps 455.8 Bcf 4.34 60% 120 2015 Swaps 240.0 Bcf 4.40 110 NYMEX 4.42 4.42 4.42 Fixed Price 100 4.42 90 80 4.22…
  19. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 19
    SWN is One of the Lowest Cost Operators 3.00 2.50 2.00 Lifting Cost 1.50 per Mcfe of Production 1.00 (3 year average) 0.50 0.00 EQT COG RRC SWN SWN CHK NBL SM APC EOG XEC DVN PXD APA MRO SD OXY MUR NFX 9.00…
  20. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 20
    Brown Dense Exploration Project Fayetteville Little River Shale Hempstead Oil Field Arkoma Nevada Camden -4,00 0 Gas Field Basin -5,00 0 Drew Bowie Ouachita Calhoun SWN Drilled 1 Arkansas Bradley SWN 2014 Plan Texarkana Miller…
  21. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 21
    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…
  22. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 22
    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…
  23. The Enercom Oil and Gas 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 SWN Gross Operated Production 1st Qtr 2007…
  24. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 24
    Fayetteville Shale - Horizontal Well Performance Mcf/d 5000 5,000 ft Well 713 735 663 626 571 527 470 304 414 353 250 183 142 100 64 38 Count 4500 4,000 ft Well 1730 1776 1655 1570 1469 1355 1262 1156 1036 912 801 662 562 454…
  25. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 25
    Midstream Adding Value Beyond the Wellhead Fayetteville Gathering Marcellus Gathering SWNs Fayetteville Shale gathering SWNs Marcellus Shale gathering system is one of the largest in the U.S. system is concentrated in Bradford…
  26. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 26
    Drilling & Completion Major Cost Categories Average 2014 Fayetteville Shale Well Cost Estimate Major Cost Categories - 2,595M Fracture Stimulation Water Treatment/Disposal 23% Rig OCTG D&C Fluids Fracture Rentals Stimulation…
  27. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 27
    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…
  28. The Enercom Oil and Gas Conference – 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. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 29
    U.S. Electricity Consumption 350 325 Billion 300 Kilowatt Hours Per Month 275 250 225 Source: Edison Electric Institute 29
  30. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 30
    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…
  31. The Enercom Oil and Gas Conference – 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 31
  32. The Enercom Oil and Gas Conference – Southwestern Energy Co. – slide 32
    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 14 Source:…
  33. The Enercom Oil and Gas Conference – 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. The Enercom Oil and Gas Conference – 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 adjusted net income and adjusted diluted earnings per share attributable to…

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