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Q1 2017 Earnings Presentation – Southwestern Energy Co.

Southwestern Energy Co. · Apr 28, 2017 · 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. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 1
    1st Quarter 2017 Update A Strong Bridge Forward NYSE: SWN
  2. Q1 2017 Earnings Presentation – 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, production, natural gas…
  3. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 3
    Focus on Premier Quality Assets Reserves & Production 2016 Reserves: 5,253 Bcfe 2016 Production: 875 Bcfe Northeast Appalachia 2016 Reserves 1,574 Bcf (30%) PA 2016 Production 350 Bcf (40%) Net acres 245,805 (12/31/16)…
  4. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 4
    The Road to V+ 4
  5. Q1 2017 Earnings Presentation – 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. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 6
    Southwest Appalachia Core position in premier play targeting stacked pays Gas in Place Map SWN acreage shown in yellow Operational excellence driving Bcf/Section 50 Bcf inventory and margin expansion 100 Bcf 150 Bcf 200 Bcf Total…
  7. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 7
    Southwest Appalachia Innovation driving results Alice Edge wells continue to outperform offsets on average by 30% Pursuing technical and economic limit of completion methods Proppant loading tests up to 5,000 pounds per lateral…
  8. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 8
    Northeast Appalachia Delivering value now & in the future SWN Acreage Gross operated production of 1,138 MMcf/d (948 MMcf/d net) as of Dec 31, 2016 Low cost integrated firm transportation portfolio allows future growth First…
  9. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 9
    0% 20% 50% 80% 10% 30% 40% 60% 70% 90% 100% Well A Well B Well C Well D Well E Well F Well G Well H Well I Well J Well K Well L 73% Well M Well N Q4 2015 Well O Well P Well Q Well R Well S Well…
  10. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 10
    Northeast Appalachia Completions Enhancing economics Optimizing completion and flowback techniques Cramer pad (5 wells) Aggregate initial production rate of 92 MMcf/d Racine pad (3 wells) Outperforming offsets with 75% more…
  11. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 11
    Fayetteville Significant asset with upside promise SWN Acreage Gross operated production was 1,377 MMcf/d (895 MMcf/d net) as of Dec 31, 2016 Aggressively pursuing alternatives to drive enhanced economics Testing additional…
  12. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 12
    Northeast Appalachia Takeaway Low cost portfolio with extensive market reach 1.6 1.4 1.2 Transport Extension Options 1.0 Bcf/d 0.8 Constitution (project not in service) 0.6 Firm Transportation Capacity 0.4 0.2 Firm…
  13. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 13
    Southwest Appalachia Takeaway Increasing Gulf Coast market exposure 1.0 0.9 0.8 0.7 0.6 Columbia Gas Transmission MXP (project not in service) Bcf/d 0.5 0.4 0.3 ET Rover (project not in service) 0.2 0.1 Firm…
  14. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 14
    Improving Basis Differentials Over 70% of our 2017 Appalachia Estimated Weighted Average Sales Differential (excluding transportation) production is planned to be sold into 2017 2018 2019 markets with materially improving basis…
  15. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 15
    Fully Funded 2017 Capital Program Dynamic portfolio allowing flexibility to align activity with commodity prices Appalachian assets expected to grow approximately 17% (using midpoints) over 2016 annual production volumes and…
  16. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 16
    Hedging Protecting balance sheet and targeted returns 200 Hedge Summary 180 2017 2018 2019 Swaps 322 50 160 144 146 2-Way Collars 103 14 139 140 132 3-Way Collars 135 208 80 2.29 x 2.29 x Volumes Hedged, Bcf 2.97 x 2.97…
  17. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 17
    Debt Maturity Schedule Strong liquidity position Cash balance anchors liquidity position No significant maturities before 2020 Significantly improved credit profile based on current strip pricing 2,500 2,000 1,500 MMs…
  18. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 18
    Delivering Value+ Value-driven growth within cash flow Margin expansion through cost reductions and improved well productivity Rigorous financial discipline Enhancing value from vertical integration Driving differentiation…
  19. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 19
    Southwest Appalachia Rich Gas Horizontal well performance Well Results Exceeding Expectations SWN Drilled & Completed Rich Gas Condensate (Normalized to 7,500 ft lateral) Production Mix Gas 20% 36% NGL Oil 44% Average Avg…
  20. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 20
    Southwest Appalachia Lean Gas Horizontal well performance Well Results Exceeding Expectations SWN Drilled & Completed Lean Gas Condensate (Normalized to 7,500 ft lateral) Production Mix 1% Gas 38% NGL 61% Oil Average Avg…
  21. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 21
    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 2 1 1 SWN Rayle Coal 1H 5,141…
  22. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 22
    Northeast Appalachia Continued improvement Operating Statistics of wells Average Average Avg Rate for 1st Avg Rate for 1st Completed Completed Time Frame placed to 30 Days 60 Days Lateral Well Cost 25.6 sales (Mcfe/d) (Mcfe/d)…
  23. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 23
    Northeast Appalachia Well performance by county Production by County 8,000 Company Operated Drilled Wells 7,000 6,000 5,000 Daily Rate, MCFPD 4,000 3,000 2,000 1,000 0 0 250 500 750 1000 1250…
  24. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 24
    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 (ft) 3.2 10.9 2.8 2.8 2.8 1st Qtr 2014 105 4,272 2,616…
  25. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 25
    Fayetteville Takeaway High correlation to Henry Hub 2.5 2.0 1.5 Bcf/d 1.0 Firm Transportation Capacity 0.5 0.0 Sales Locations 100% SWN Firm Reservation Total Firm Annual 100% 100% 100% Firm Sales Rate per…
  26. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 26
    Fayetteville Well performance Mcf/d 5,000 4 Bcf Typecurve 4,500 3 Bcf Typecurve 2 Bcf Typecurve (1) 4,000 Fayetteville Wells Normalized to 5,300 ft. lateral 3,500 3,000 2,500 2,000 1,500 1,000 500…
  27. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 27
    Midstream SWN Marketing 2016 Total volumes marketed (Bcfe) 1,062 2017 Estimated total volumes marketed (Bcfe) 1,050 1,075 Fayetteville Shale Gathering Gathered volumes at December 31, 2016 (Bcf/d) 1.5 Gathering lines (Miles)…
  28. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 28
    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…
  29. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 29
    Financial and Operational Summary Year Ended Decem ber 31, 2016 2015 2014 ( in millions, except per share amounts) Revenues 2,436 3,133 4,038 Adjusted EBITDA(1) 686 1,440 2,320 (2) Adjusted Net Income (7) 71 801 (1) Net Cash…
  30. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 30
    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…
  31. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 31
    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…
  32. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 32
    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…
  33. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 33
    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…
  34. Q1 2017 Earnings Presentation – Southwestern Energy Co. – slide 34
    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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