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August 2016 Update – Southwestern Energy Co.

Southwestern Energy Co. · Aug 1, 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. August 2016 Update – Southwestern Energy Co. – slide 1
    August 2016 Update A Strong Bridge Forward NYSE: SWN
  2. August 2016 Update – Southwestern Energy Co. – slide 2
    Delivering on Commitments Credit facility / term loan maturity extended to 2020 Strong Over 1.9 billion liquidity available until December 2020 Liquidity Position Net cash flow(1) exceeded capital investments for the first six months…
  3. August 2016 Update – Southwestern Energy Co. – slide 3
    SWN Creating Enduring Value Premiere, Large, core position in both of the highest quality Appalachian areas Diversified Vast upstream and midstream assets in Fayetteville generating substantial cash flow Natural Gas High degree of…
  4. August 2016 Update – Southwestern Energy Co. – slide 4
    Strengthening our Balance Sheet Execution of a 3-part plan to enhance capital structure Add Duration & Preserve Reduce Leverage & Improve Liquidity Operational Flexibility 1 Amend and extend 2 Monetize non-core assets 3 Equity…
  5. August 2016 Update – Southwestern Energy Co. – slide 5
    Pro-forma Model Cash Balance and Debt Maturities 2,500 2,000 1,500 Before recent MMs transactions 1,000 As of April 1, 2016 500 0 Cash 16 17 18 19 20 21 22 23 24 25 Bonds Revolver - Drawn Unsecured Term Loan Revolver -…
  6. August 2016 Update – Southwestern Energy Co. – slide 6
    Focus on Premier Quality Assets Reserves & Production 2015 Reserves 6,215 Bcfe 2015 Production 976 Bcfe 2016 Estimated production 865 - 875 Bcfe PA Northeast Appalachia 2015 Reserves 2,319 Bcf (37%) 2015 Production 360 Bcf…
  7. August 2016 Update – Southwestern Energy Co. – slide 7
    High Quality and Flexible Portfolio Total Resource by Area for Various Assumed Gas Prices 70 60 50 40 Tcfe 30 20 Expected 43% 10 2016 0 3.00 3.50 4.00 4.00 57% Production Fayetteville Appalachia Split Gross…
  8. August 2016 Update – Southwestern Energy Co. – slide 8
    Southwest Appalachia Gas in Place Map Core Position in Premier Play SWN acreage shown in yellow Bcf/Section 50 Bcf 100 Bcf 150 Bcf 370,000 net acres with stacked pays from 200 Bcf 250 Bcf the Marcellus, Utica and…
  9. August 2016 Update – Southwestern Energy Co. – slide 9
    Well-Positioned in Rapidly Developing Play Acreage is low-risk opportunity in the heart of world-class play 1 Lateral IP ID Operator Well Name Length (Mmcfed/ % Liquids (feet) 1000 Lateral) 1 2 MARCELLUS 2 3 10 1 SWN Rayle…
  10. August 2016 Update – Southwestern Energy Co. – slide 10
    Northeast Appalachia SWN Acreage 270,000 net acres and 423 producing operated horizontal wells in Northeast Appalachia as of December 31, 2015 Proved reserves of 2.3 Tcf as of December 31, 2015 with a 3-Year F&D of 0.42/Mcf(1)…
  11. August 2016 Update – Southwestern Energy Co. – slide 11
    Fayetteville SWN Acreage 958,000 net acres and 3,724 producing operated horizontal wells as of December 31, 2015 Proved reserves of 3.3 Tcf as of December 31, 2015 with a 3-Year F&D of 0.74/Mcf(1) Gross operated production was…
  12. August 2016 Update – Southwestern Energy Co. – slide 12
    2016 Capital Investments MM Fully-funded capital program of 1,200 1,043MM low-risk drilling and completion opportunities 1,000 750MM(2) Dynamic portfolio allowing flexibility to align activity with 800 25 668(2) price movements…
  13. August 2016 Update – 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 Locations SWN Firm…
  14. August 2016 Update – Southwestern Energy Co. – slide 14
    Southwest Appalachia Takeaway 0.90 0.80 0.70 0.60 0.50 Columbia Gas Transmission MXP (project not in service) Bcf/d 0.40 0.30 ET Rover (project not in service) 0.20 0.10 Firm Transportation Capacity Firm Sales…
  15. August 2016 Update – Southwestern Energy Co. – slide 15
    Fayetteville Takeaway 2.5 2.0 1.5 1.0 Firm Transportation Capacity 0.5 0.0 Sales Locations SWN Firm Reservation Total Firm Annual 120% Firm Sales Rate per Year Transport Rate per Transport WAVG Rate (MMbtu/d)…
  16. August 2016 Update – Southwestern Energy Co. – slide 16
    Improving Basis Differentials Basis Locations 3.00 2.50 2.00 Estimated Weighted Average Sales Differential (excluding transportation) 1.50 2016 2017 2018 2019 1.00 Fayetteville (0.07) (0.07) (0.07) (0.05) 0.50 Northeast…
  17. August 2016 Update – Southwestern Energy Co. – slide 17
    Hedging 90 Full Year 2016 Swaps 91 Bcf % Hedged 19% 2 way Collars 15 Bcf Volumes 149 Bcf Puts 43 Bcf 80 Average Floor Price 2.52 Total 149 Bcf Full Year 2017 Swaps 163 Bcf 70 Volumes 228 Bcf 2 way Collars 47 Bcf Average Floor…
  18. August 2016 Update – Southwestern Energy Co. – slide 18
    Our Path Forward 2015 2016 Original 2016 Revised Actual Guidance Guidance 2.66 Gas 2.35 Gas 2.45 Gas 48.80 Oil 35.00 Oil 45.00 Oil Production (Bcfe) 976 815 - 835 865 - 875 Adj. Net Income (Loss) 71MM (180) - (160)MM (10) - 10MM…
  19. August 2016 Update – Southwestern Energy Co. – slide 19
    Driving Performance Strong liquidity Strengthened balance sheet Expanded margins Capital discipline 20
  20. August 2016 Update – Southwestern Energy Co. – slide 20
    Credit Facility/Term Loan Amendments Enhance Financial Flexibility Post-Amendment vs. Previous Amendment Post-Amendment Previous 800MM Unsecured Revolvers(1) Structure 2.0B Unsecured Revolver 1.2B Secured Term Loan Maturity Date…
  21. August 2016 Update – Southwestern Energy Co. – slide 21
    Proven Track Record (1) Production (Bcfe) Adjusted EBITDA (MM) 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…
  22. August 2016 Update – Southwestern Energy Co. – slide 22
    Southwest Appalachia Horizontal Well Performance Early Well Results Exceeding Expectations Avg Rate Avg Rate 30th-Day 60th-Day Average Average Wells Average For 1st 30 For 1st 60 % Gas / % Gas / Completed Drilling Time Frame Placed…
  23. August 2016 Update – Southwestern Energy Co. – slide 23
    Southwest Appalachia Type Curves SWN Drilled & Completed Rich Gas Condensate (Normalized to 7,500 ft lateral) Historical Production 12 BCFe Type Curve 14 BCFe Type Curve 10,500 9,000 7,500 Mmcfe/d 6,000 4,500 3,000…
  24. August 2016 Update – Southwestern Energy Co. – slide 24
    Northeast Appalachia Operating Statistics 30th-Day Average Average Average Time Frame Avg Rate Lateral RE-RE Well Cost ( of wells) Length (ft) (Rig Days) (MM) 25.6 7.0 7.0 5.9 6.2 6.1 1st Qtr 2014 7,009 ( 21) 3,859 10.5 6.2 16.5…
  25. August 2016 Update – Southwestern Energy Co. – slide 25
    Northeast Appalachia Well Performance 8,000 Company Operated Drilled Wells 7,000 6,000 5,000 Daily Rate, MCFPD 4,000 3,000 2,000 1,000 0 0 365 730 1095 1460 1825 Days of Production Bradford County…
  26. August 2016 Update – Southwestern Energy Co. – slide 26
    Fayetteville Operating Statistics Time Frame Wells Average Placed on IP Rate 30th-Day Avg Rate 60th-Day Avg Rate Average Lateral Production (Mcf/d) ( of wells) ( of wells) Length (ft) 2.8 2.8 2.8 10.9 1st Qtr 2014 105 4,272…
  27. August 2016 Update – Southwestern Energy Co. – slide 27
    Fayetteville Well Performance Mcf/d 5,000 4 Bcf Typecurve 3 Bcf Typecurve 4,500 2 Bcf Typecurve 4,000 All Wells Normalized to 5,300 ft. lateral 3,500 3,000 2,500 2,000 1,500 1,000 500 0 0 100 200…
  28. August 2016 Update – Southwestern Energy Co. – slide 28
    Midstream SWN Marketing 2016 Estimated total volumes marketed (Bcfe) 1,015 - 1,030 2016 Estimated EBITDA (MM)(1) 35 - 40 Fayetteville Shale Gathering Gathered volumes at June 30, 2016 (Bcf/d) 1.7 Gathering lines (Miles) 2,044…
  29. August 2016 Update – Southwestern Energy Co. – slide 29
    U.S. Natural Gas Supply & Demand 29 28 12-Month Rolling Average 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. August 2016 Update – Southwestern Energy Co. – slide 30
    Financial and Operational Summary 6 Months Ended June 30, Year Ended Decem ber 31, 2016 2015 2015 2014 2013 ( in millions, except per share amounts) ( in millions, except per share amounts) Revenues 1,101 1,697 3,133 4,038 3,371…
  31. August 2016 Update – 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. August 2016 Update – 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. August 2016 Update – 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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