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August 2012 Update – Southwestern Energy Co.

Southwestern Energy Co. · Aug 15, 2012 · 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. August 2012 Update – Southwestern Energy Co. – slide 1
    UPLIFTING August 2012 Update NYSE: SWN
  2. August 2012 Update – 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. August 2012 Update – 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. August 2012 Update – Southwestern Energy Co. – slide 4
    Recent Developments First Six Months of 2012 Highlights Production of 270.8 Bcfe, up 14%, due to strong Fayetteville and Marcellus results. Currently drilling on 3 New Ventures ideas the Lower Smackover Brown Dense formation in…
  5. August 2012 Update – Southwestern Energy Co. – slide 5
    Proven Track Record For the Periods Ended December 31 Proved 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 1.32…
  6. August 2012 Update – Southwestern Energy Co. – slide 6
    Areas of Operations Exploration & Production Segment PENNSYLVANIA 2011: 5,893 Bcfe of Reserves Production - 500.0 Bcfe 2012 Est. Production: 560-570 Bcfe ARKANSAS Marcellus Shale OKLAHOMA Reserves: 342 Bcf (6%) Production: 23.4…
  7. August 2012 Update – Southwestern Energy Co. – slide 7
    Capital Investments 2,500 2,207 2,120 2,105 Corporate & Other 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 & Seismic…
  8. August 2012 Update – 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. August 2012 Update – 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) Continuous improvement in our Fayetteville Shale operations…
  10. August 2012 Update – 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 June 30, 2012, gathering…
  11. August 2012 Update – 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 Miles Pipelines We hold approximately 187,000 net acres…
  12. August 2012 Update – Southwestern Energy Co. – slide 12
    Marcellus Shale - Horizontal Well Performance SWN Gross Operated Production 180,000 160,000 Gross operated production of approx. 140,000 166 MMcf/d as of June 30, 2012 120,000 Gross Production (Mcf/d) 100,000…
  13. August 2012 Update – Southwestern Energy Co. – slide 13
    Brown Dense Exploration Project Arkoma Basin Fayetteville Little River Hempstead Shale Nevada Oil Field Camden -4,00 0 Brown Wesson -5,00 0 Calhoun Gas Drew Field BowieEast Dense Ouachita Texas A r k a n s a s Smackover…
  14. August 2012 Update – 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. August 2012 Update – 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 the Maritimes Basin Principal targets are the conventional and unconventional sandstone…
  16. August 2012 Update – 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 95.00 Oil 95.00 Oil 95.00 Oil Adj. Net Income…
  17. August 2012 Update – 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. August 2012 Update – Southwestern Energy Co. – slide 18
    Appendix 18
  19. August 2012 Update – Southwestern Energy Co. – slide 19
    Financial & Operational Summary Six Months Ended June 30 Year Ended December 31, 2012 2011 2011 2010 2009 ( in millions, except per share amounts) ( in millions, except per share amounts) Revenues 1,256.2 1,441.5 2,952.9 2,610.7…
  20. August 2012 Update – 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 Bcf 5.50 / 6.67 14% 70 2013 Swaps 185.2 Bcf 5.06 - 65 5.50/…
  21. August 2012 Update – Southwestern Energy Co. – slide 21
    SWN is One of the Lowest Cost Operators 4.00 3.50 3.00 2.50 Lifting Cost 2.00 per Mcfe of Production 1.50 (3 year average) 1.00 0.50 0.00 UPL RRC SWN SWN COG CHK FST NBL EOG APC SM DVN XEC PXD NFX APA SD MRO OXY MUR…
  22. August 2012 Update – 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: 16.3 Bcf (3% of total) Arkoma Basin OK AR East Texas East Texas TX LA…
  23. August 2012 Update – 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. August 2012 Update – Southwestern Energy Co. – slide 24
    Fayetteville Shale Horizontal Well Performance Mcf/d 5000 5,000 ft Well 451 443 374 321 267 207 150 43 120 72 33 16 8 5 5 1 4500 Count 4,000 ft 1247 1221 1077 968 867 722 604 503 376 297 242 171 116 68 40 15 Well 4000 Count…
  25. August 2012 Update – Southwestern Energy Co. – slide 25
    Drilling & Completion Major Cost Categories Average 2012 Fayetteville Shale Well Cost Estimate Major Cost Categories - 2,808M Fracture Stimulation Rig OCTG 25% Environmental & Restoration Drilling Fluids Directional Drilling…
  26. August 2012 Update – 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. August 2012 Update – Southwestern Energy Co. – slide 27
    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…
  28. August 2012 Update – Southwestern Energy Co. – slide 28
    U.S. Electricity Consumption 350 325 300 Billion 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 28
  29. August 2012 Update – Southwestern Energy Co. – slide 29
    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…
  30. August 2012 Update – Southwestern Energy Co. – slide 30
    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 Gas Price 500 0.00 Source: Baker Hughes, Bloomberg 30
  31. August 2012 Update – Southwestern Energy Co. – slide 31
    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…
  32. August 2012 Update – 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. August 2012 Update – 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. August 2012 Update – Southwestern Energy Co. – slide 34
    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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