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2016 IPAA Oil and Gas Symposium – Southwestern Energy Co.

Southwestern Energy Co. · Apr 12, 2016 · 33 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. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 1
    2016 IPAA Oil & Gas Symposium A Strong Bridge Forward NYSE: SWN
  2. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 2
    Responding to Todays Price Environment Strong liquidity 2.0B unsecured revolver 1.9B undrawn at December 31, 2015 Proactively managing debt maturities No significant maturities until 2018 Maintain and right size balance sheet Review…
  3. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 3
    SWN Creating Enduring Value Disciplined capital allocation and investment practices Target 1.30 of present value cash flow, discounted at 10%, for each dollar invested (defined as 1.3 PVI) Capital allocation based on highest return…
  4. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 4
    Liquidity Debt Coverage from Existing Assets (excluding future investments) 10 All debt is unsecured 8 Only one financial debt covenant Debt to total book…
  5. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 5
    Focus on Premier Quality Assets RESERVES & PRODUCTION 2015 Reserves: 6,215 Bcfe 2015 Production: 976 Bcfe 2016 Estimated production: 815 - 835 Bcfe PA NORTHEAST APPALACHIA 2015 Reserves: 2,319 Bcf (37%) 2015 Production: 360 Bcf…
  6. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 6
    A Look to the Future Total Resource by Area 70 60 50 40 Tcfe 30 20 2016 10 45% Production 0 3.00 3.50 4.00 4.00 55% Split Fayetteville Appalachia Gross Drilling Locations Remaining 3.00 3.50 4.00 4.00…
  7. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 7
    Southwest Appalachia SWN acreage shown in yellow Bcf/Section Core Position in Premier Play 50 Bcf 100 Bcf 150 Bcf 200 Bcf 250 Bcf 300 Bcf 425,000 net acres with stacked pays creating more than 800,000 net developable acres…
  8. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 8
    Extending Proven Track Record of Performance SW Appalachia 1 Year Later Created additional value from 40% improved well performance Geosteered in target zone 94% of time (formerly 46% to 74%) Tighter stage spacing and increased…
  9. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 9
    Well-Positioned in Rapidly Developing Play Acreage is low-risk opportunity in the heart of world-class play Lateral IP ID Operator Well Name Length (MMcfed/ % Liquids (feet) 1000 Lateral) MARCELLUS 1 SWN Rayle Coal 1H 5,141 2.0…
  10. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 10
    Northeast Appalachia SWN Acreage Gross operated production of 1,302 Proved reserves of 2.3 Tcf as of MMcf/d (1,058 MMcf/d net) from 423 December 31, 2015 with a 3-Year F&D operated horizontal wells as of of 0.42 per Mcf (1)…
  11. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 11
    Fayetteville SWN Acreage Gross operated production was 1,759 958,000 net acres in the Fayetteville, MMcf/d (1,206 MMcf/d net) from 3,724 including 202,000 net acres retained operated horizontal wells as of from divested Arkoma…
  12. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 12
    Capital Allocation By Investment Type in Millions Discretionary Capitalized 2,440 Capital Interest & 2,500 2,235 30% Expenses 70% 1,828 2,000 1,500 Capital Breakdown 1,000 350 - 400 2016 500 0 (1) (1) 2013 2014 2015…
  13. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 13
    Northeast Appalachia Takeaway 1.6 1.4 1.2 Transport Renewal Options 1.0 Bcf/d 0.8 0.6 Constitution (project not in service) 0.4 Firm Transportation Capacity 0.2 0.0 Firm Sales Sales Location SWN Firm Reservation…
  14. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 14
    Southwest Appalachia Takeaway 0.9 0.8 0.7 0.6 Columbia Gas Transmission MXP (project not in service) 0.5 Bcf/d 0.4 0.3 0.2 Firm Transportation Capacity ET Rover (project not in service) 0.1 Firm Sales 0.0…
  15. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 15
    Fayetteville Takeaway 2.5 2.0 1.5 1.0 Firm Transportation Capacity 0.5 0.0 Sales Locations 120% SWN Firm Reservation Total Firm Annual Firm Sales Rate per Year Transport Rate per Transport WAVG Rate 100% (MMbtu)…
  16. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 16
    Improving Basis Differentials Total Sales Locations Basis Locations Timeline 2016 2019 70% 2.00 60% 1.50 50% 1.00 0.50 40% 0.00 30% (0.50) 20% (1.00) 10% (1.50) 0% Gulf Dominion TCO M3 Other Gulf Dominion TCO…
  17. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 17
    Our Path Forward Production 2015 (1) 2016 Guidance target of 815 Actual Impacts of Incremental NYMEX Price 835 Bcfe in 2016 2.66 Gas 2.35 Gas 48.80 Oil 35.00 Oil 0.25 Gas 5.00 Oil Adj. Net Income (Loss) 71 MM (160)-(180) MM +…
  18. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 18
    A Strong Bridge Forward Strong liquidity Strengthen balance sheet Expand margins Capital discipline www.swn.com 19
  19. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 19
    Appendix www.swn.com 20
  20. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 20
    Proven Track Record Production (Bcfe) Adjusted EBITDA (B) (1) 2,320 976 1,998 1,774 768 1,602 1,638 657 1362 1,383 1,440 565 500 405 300 675 195 113 07 08 09 10 11 12 13 14 15 07 08 09 10 11 12 13 14 15 Price(2) 6.80…
  21. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 21
    Hedging Long-term target is to have at Currently assessing least 30% of production opportunities to hedge oil and hedged in any given year NGLs Looking to opportunistically 2016 gas hedges in place: add hedges to protect balance…
  22. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 22
    Southwest Appalachia Horizontal Well Performance Early Well Results Exceeding Expectations Avg Rate 30th-Day Avg Rate 60th-Day Average Average Wells Placed Average For 1st 30 % Gas / For 1st 60 % Gas / Completed Drilling Time Frame…
  23. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 23
    Southwest Appalachia Type Curves www.swn.com 24
  24. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 24
    Northeast Appalachia Operating Statistics 30th-Day Average Average Completed Average RE-RE Completed Time Frame Avg Rate Lateral Length (Rig Days) Well Cost 25.6 ( of wells) (ft) (MM) 7.0 7.0 5.9 6.2 6.1 1st Qtr 2014 7,009 ( 21)…
  25. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 25
    Northeast Appalachia - Well Performance by County www.swn.com 26
  26. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 26
    Fayetteville Operating Statistics Wells Average 30th-Day 60th-Day Average Time Frame Placed on IP Rate Avg Rate Avg Rate Lateral Production (Mcf/d) ( of wells) ( of wells) Length 2.8 2.8 2.8 10.9 2.6 1st Qtr 2014 105 4,272 2,616 (…
  27. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 27
    Fayetteville Horizontal Well Performance Normalized to 5,300 ft. lateral Notes: Data as of December 31, 2015. Excludes shut-in wells and wells with mechanical problems (114). www.swn.com 28
  28. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 28
    Midstream SWN MARKETING 2016 Estimated Gas Volumes Marketed (Bcf) 875 900 2016 Estimated EBITDA (MM)(1) 35 - 40 FAYETTEVILLE SHALE GATHERING Gathered Volumes at Dec. 31, 2015 (Bcf/d) 1.9 Gathering Lines (Miles) 2,044 Firm…
  29. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 29
    U.S. Natural Gas Supply & Demand 29 12 Month Rolling Average 28 27 26 25 24 TCF 23 22 21 20 19 18 17 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15…
  30. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 30
    Financial and Operational Summary Year Ended December 31, 2015 2014 2013 ( in millions, exc ept per share amounts) Revenues 3,133 4,038 3,371 Adjusted EBITDA(1) 1,440 2,320 1,998 (2) Adjusted Net Income 71 801 704 (1) Net Cash…
  31. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 31
    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 believes…
  32. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 32
    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…
  33. 2016 IPAA Oil and Gas Symposium – Southwestern Energy Co. – slide 33
    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. Adjusted EBITDA is defined as EBITDA less gains…

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