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Q4 2016 Results – Southwestern Energy Co.

Southwestern Energy Co. · Nov 11, 2016 · 37 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. Q4 2016 Results – Southwestern Energy Co. – slide 1
    4th Quarter 2016 Update A Strong Bridge Forward NYSE: SWN
  2. Q4 2016 Results – Southwestern Energy Co. – slide 2
    Southwestern Energy Company General Information Southwestern Energy Company is a leading natural gas and oil company with operations predominantly in the United States, engaged in exploration, development and production…
  3. Q4 2016 Results – Southwestern Energy Co. – slide 3
    SWN Creating Enduring Value Premier, Diversified Natural Gas Assets Large, core position in both of the highest quality Appalachian areas Vast upstream and midstream assets in Fayetteville generating substantial cash flow High degree…
  4. Q4 2016 Results – Southwestern Energy Co. – slide 4
    Delivering on Commitments Strong liquidity position Credit facility / term loan maturity extended to 2020(1) Access to over 1.9 billion in liquidity capacity until December 2020(1) Net cash flow(2) exceeded capital investments for…
  5. Q4 2016 Results – Southwestern Energy Co. – slide 5
    Improving Capital Efficiency Allocation of capital based on individual project economics Decreasing proved developed (PDP) F&D resulting from portfolio shift toward Appalachia Historical Results Potential Development…
  6. Q4 2016 Results – Southwestern Energy Co. – slide 6
    Driving Value Generating Production Growth Focused on creating value and exhibiting capital discipline Committed to flexible capital program that adjusts with commodity prices Estimated production at various annual capital…
  7. Q4 2016 Results – Southwestern Energy Co. – slide 7
    2017 Maintenance Capital 700MM all-in capital holds 2017 annual volumes flat vs 2016 150 Bcfe of 2017 production associated with re-initiation of 2016 activity Over 10% growth in Appalachian assets offsetting Fayetteville decline,…
  8. Q4 2016 Results – Southwestern Energy Co. – slide 8
    Debt Structure Cash Balance and Debt Maturities Cash balance anchors liquidity position As of September 30, 2016, the Company had 317MM in remaining 2017 and 2018 debt maturities Credit profile expected to significantly improve based…
  9. Q4 2016 Results – Southwestern Energy Co. – slide 9
    Focus on Premier Quality Assets Reserves & Production 2015 Reserves: 6,215 Bcfe 2015 Production: 976 Bcfe Northeast Appalachia Southwest Appalachia 2015 Reserves 2,319 Bcf (37%) 2015 Reserves 611 Bcfe (10%) PA 2015 Production 360…
  10. Q4 2016 Results – Southwestern Energy Co. – slide 10
    Southwest Appalachia Gas in Place Map SWN acreage shown in yellow Bcf/Section Core Position in Premier Play(1) 50 Bcf 100 Bcf 370,000 net acres with stacked pays from the 150 Bcf Marcellus, Utica and Devonian 200 Bcf 250 Bcf…
  11. Q4 2016 Results – Southwestern Energy Co. – slide 11
    Southwest Appalachia Operational Initiatives Successful re-initiation of drilling and completion activities Third quarter wells drilled with RR-RR of 15.2 days versus 15.5 days in 2015 with 98% of lateral in target interval Third…
  12. Q4 2016 Results – Southwestern Energy Co. – slide 12
    Northeast Appalachia SWN Acreage Gross operated production of 1,046 MMcf/d (856 MMcf/d net) as of Sept 30, 2016 Low cost integrated firm transportation portfolio with industry leading delivery point, volume and term optionality…
  13. Q4 2016 Results – Southwestern Energy Co. – slide 13
    Fayetteville SWN Acreage Gross operated production was 1,443 MMcf/d (942 MMcf/d net) as of Sept 30, 2016 Extensive high quality cash flow generating asset with large production base, company-owned gathering system and access…
  14. Q4 2016 Results – Southwestern Energy Co. – slide 14
    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(2,3) price movements…
  15. Q4 2016 Results – Southwestern Energy Co. – slide 15
    Northeast Appalachia Takeaway 1.6 1.4 1.2 Transport Renewal Options 1.0 Transport Renewal Options Bcf/d 0.8 Constitution Constitution (project not in service) (project not in service) 0.6 0.4 FirmFirm Transportation…
  16. Q4 2016 Results – Southwestern Energy Co. – slide 16
    Southwest Appalachia Takeaway 0.9 0.8 0.7 0.6 0.5 Columbia Gas Transmission MXP (project not in service) Bcf/d 0.4 0.3 ET Rover (project not in service) 0.2 0.1 Firm Transportation Capacity Firm Sales 0.0…
  17. Q4 2016 Results – Southwestern Energy Co. – slide 17
    Fayetteville Takeaway 2.5 2.0 1.5 Bcf/d 1.0 Firm Transportation Capacity 0.5 0.0 Sales Locations SWN Firm Reservation Total Firm Annual 100% Firm Sales Rate per 100% 100% 100% 100% Year Transport Rate per…
  18. Q4 2016 Results – Southwestern Energy Co. – slide 18
    Improving Basis Differentials Basis Locations 3.00 Estimated Weighted Average Sales Differential (excluding transportation) 2017 2018 2019 2020 2.00 Fayetteville (0.07) (0.06) (0.08) (0.08) 1.00 Northeast Appalachia (0.74)…
  19. Q4 2016 Results – Southwestern Energy Co. – slide 19
    Hedging 200 180 160 160 140 132 133 135 135 Volumes Hedged, Bcf 2.29 x 2.29 x 2.29 x 2.29 x 120 2.97 x 2.97 x 2.97 x 2.97 x 3.30 3.30 3.30 3.30 99 2.31 x 100 2.93 x 2.30 x 3.33 2.89 x 2.89 x 3.00 x 3.29 3.29 3.25…
  20. Q4 2016 Results – Southwestern Energy Co. – slide 20
    Driving Performance Demonstrating capital discipline in pursuit of value adding growth Proactively managing risk Preserving strong liquidity Strengthened balance sheet Expanding margins through innovation Delivering on HSE…
  21. Q4 2016 Results – Southwestern Energy Co. – slide 21
    Appendix 21
  22. Q4 2016 Results – Southwestern Energy Co. – slide 22
    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…
  23. Q4 2016 Results – Southwestern Energy Co. – slide 23
    Southwest Appalachia Horizontal Well Performance 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 on…
  24. Q4 2016 Results – Southwestern Energy Co. – slide 24
    Southwest Appalachia Type Curves SWN Drilled & Completed Rich Gas Condensate (Normalized to 7,500 ft lateral) SWN Drilled & Completed Rich Gas Condensate (Normalized to 7,500 ft lateral) Historical Production 12 BCFe Type Curve 14…
  25. Q4 2016 Results – Southwestern Energy Co. – slide 25
    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 3 10 2 1 SWN Rayle Coal…
  26. Q4 2016 Results – Southwestern Energy Co. – slide 26
    Northeast Appalachia Average Average Operating Statistics Time Frame 30th-Day Avg Rate Completed Lateral Average RE-RE Completed Well Cost ( of wells) (Rig Days) Length (ft) (MM) 25.6 1st Qtr 2014 7,009 ( 21) 3,859 10.5 6.2…
  27. Q4 2016 Results – Southwestern Energy Co. – slide 27
    Northeast Appalachia Well Performance by County 27
  28. Q4 2016 Results – Southwestern Energy Co. – slide 28
    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…
  29. Q4 2016 Results – Southwestern Energy Co. – slide 29
    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…
  30. Q4 2016 Results – Southwestern Energy Co. – slide 30
    Midstream SWN Marketing 2015 Total volumes marketed (Bcfe) 1,127 YTD Sept 30, 2016 Total volumes marketed (Bcfe) 814 Fayetteville Shale Gathering Gathered volumes at September 30, 2016 (Bcf/d) 1.6 Gathering lines (Miles)…
  31. Q4 2016 Results – Southwestern Energy Co. – slide 31
    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…
  32. Q4 2016 Results – Southwestern Energy Co. – slide 32
    Financial and Operational Summary 9 Months Ended Sept 30, Year Ended Decem ber 31, 2016 2015 2015 2014 2013 ( in millions, except per share amounts) ( in millions, except per share amounts) Revenues 1,752 2,446 3,133 4,038 3,371…
  33. Q4 2016 Results – 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. Q4 2016 Results – 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…
  35. Q4 2016 Results – Southwestern Energy Co. – slide 35
    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, gains (losses) on sale of assets, write-down of…
  36. Q4 2016 Results – Southwestern Energy Co. – slide 36
    Explanation and Reconciliation of Non-GAAP Financial Measures: Net Debt Net debt is defined as short-term debt plus long-term debt less cash and cash equivalents. Southwestern has included information concerning Net debt because it is…
  37. Q4 2016 Results – Southwestern Energy Co. – slide 37
    Explanation and Reconciliation: Proved Developed Finding and Development Costs Proved developed (PDP) finding and development (F&D) costs are computed here by dividing exploration and development capital costs incurred, excluding…

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