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March 2019 Investor Update – Southwestern Energy Co.

Southwestern Energy Co. · Mar 26, 2019 · 31 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. March 2019 Investor Update – Southwestern Energy Co. – slide 1
    March 2019 Investor Update Contact: Paige Penchas Vice President, Investor Relations paige_penchasswn.com Phone: (832) 796-4068 NYSE: SWN
  2. March 2019 Investor Update – Southwestern Energy Co. – slide 2
    What Defines SWN Rigorous Our People - Increasing financial Leading Premier quality, capital discipline and technology, large scale efficiency and value focused operating and assets margin capital commercial expansion…
  3. March 2019 Investor Update – Southwestern Energy Co. – slide 3
    SWN at a Glance SWN is an independent energy company Northeast Appalachia with operations focused across 480,000 100% gas 184,024 Net Acres net acres in the Appalachia Basin 2018 Proved Reserves 4.4 Tcf 2019E Production(3) 1,270…
  4. March 2019 Investor Update – Southwestern Energy Co. – slide 4
    Our Strategy in Action Rigorous Financial Organic Growth, Discipline, Liquids-rich Returns-focused Driving Enhanced Well Opportunistic Growth Shareholder Performance, Diligent Cost Management Value Transition to Free…
  5. March 2019 Investor Update – Southwestern Energy Co. – slide 5
    Recent Performance Catalysts Closed sale of Fayetteville Shale receiving 1.65 billion after closing price adjustments Reduced senior notes and bank debt by 2.1 billion Completed 200 million share repurchase program, reducing shares…
  6. March 2019 Investor Update – Southwestern Energy Co. – slide 6
    2018 Highlights Weighted Avg. Realized Production (Bcfe) Price, incl Hedges (/Mcfe) Liquids Revenue (MM) Cash Costs (/Mcfe)(1) 5% 40% Liquids increase 12% 78% 548 3% Increase 946 Increase 2.57 Increase Decrease 897 1.37 308…
  7. March 2019 Investor Update – Southwestern Energy Co. – slide 7
    Strong and Flexible Balance Sheet Net Debt / Adjusted EBITDA Debt Maturity Schedule (MM) 4.5x 2,000 Sr Notes Wtd Avg YTM: 6.3 years(2) Sr Notes Wtd Avg Interest: 6.7%(2) Sr Notes Outstanding: 2.3B(2) 1,500 2.8x 1,000 1.9x…
  8. March 2019 Investor Update – Southwestern Energy Co. – slide 8
    2019 Guidance Diversifying commodity mix, growing liquids portfolio Southwest Appalachia liquids production increasing to 75,600 barrels per day,(1) 20% higher than record levels of 2018 Northeast Appalachia production held flat with…
  9. March 2019 Investor Update – Southwestern Energy Co. – slide 9
    Liquids Production and Realizations Third largest liquids producer in Appalachia 40% increase in liquids production in 2018 5% 10% 200% liquids revenue growth since 2016 Ethane Propane NGL Total liquids production expected to…
  10. March 2019 Investor Update – Southwestern Energy Co. – slide 10
    Driving Well Costs Down Decreasing well costs by 25% to an average 875/ft Longer laterals, direct sand sourcing, water project and vertical integration Increasing average lateral lengths on wells to sales by 35% to over 10,000 ft…
  11. March 2019 Investor Update – Southwestern Energy Co. – slide 11
    Delivering Leading Operational Execution Footage Drilled (ft/day) Completed Stages (stages/day) 7% 11% 37% 60% 1,787 Increase Increase 1,700 Increase Increase 8.4 7.7 1,248 1,246 1,219 6.3 6.4 1,165 1,102 5.5 1,045 5.2 4.6…
  12. March 2019 Investor Update – Southwestern Energy Co. – slide 12
    Vertical Integration Competitive advantages increase capital efficiency Own and operate 7 super-spec Realizing full cost savings from drilling rigs and 1 frac fleet Southwest Appalachia water project Strategic and economic benefit…
  13. March 2019 Investor Update – Southwestern Energy Co. – slide 13
    Appalachia NGL Capacity Ample regional and SWN processing/fractionation capacity Select basin infrastructure shown, Capacity in place locations are approximate Processing capacity Pennant Keystone 10 Bcf/d(1) - In basin…
  14. March 2019 Investor Update – Southwestern Energy Co. – slide 14
    NGL Markets Flow reliability and marketing optionality Ethane Appalachia Liquids Marketing Options Firm capacity on ATEX and Mariner Canadian West with access to Mariner East 1 Petrochemical Markets Northeast Optionality to…
  15. March 2019 Investor Update – Southwestern Energy Co. – slide 15
    Northeast Appalachia Gas Takeaway Access to diversified and premium markets Transportation Cost(1,2,3) 2019: 67% Greater Appalachia Total Firm Takeaway Annual WAVG Rate Year (MMBtu/d) per MMBtu 2019 1,461,000 0.27 2020 1,379,000…
  16. March 2019 Investor Update – Southwestern Energy Co. – slide 16
    Southwest Appalachia Gas Takeaway Right sized with access to premium markets Transportation Cost(1,2) 2019: 9% M2 - Appalachia Total Firm Takeaway Annual WAVG Rate Year (MMBtu/d) per MMBtu 2019 702,000 0.58 2020 785,000 0.58…
  17. March 2019 Investor Update – Southwestern Energy Co. – slide 17
    Appalachia Resource Potential Resource Potential (Tcfe) Resource Breakdown 53 Lower Marcellus 23 Tcfe 42 Upper Marcellus 4 Tcf Upper Devonian 10 Tcfe Utica 16 Tcf YE 2017 YE 2018 Total Inventory Locations 2019 Activity…
  18. March 2019 Investor Update – Southwestern Energy Co. – slide 18
    Measuring Returns Present Value Index and ROACE Returns focused and accountable Project(s) Return Total Company Return Present Value Index (PVI) Return on average capital Measure of long-term value employed (ROACE) creation from…
  19. March 2019 Investor Update – Southwestern Energy Co. – slide 19
    Building Long-Term Shareholder Value Dynamic and disciplined capital allocation Transition back to free cash flow neutral by end of 2020 Strong and flexible balance sheet Diversified commodity risk: gas, NGLs, oil Improving…
  20. March 2019 Investor Update – Southwestern Energy Co. – slide 20
    Appendix 2020
  21. March 2019 Investor Update – Southwestern Energy Co. – slide 21
    An Industry Leader in Corporate Responsibility Freshwater neutral since December Reviewed 100% of chemicals used Gold Certification by IES 2016 for operations since 2016 (Independent Energy Standards) Advancing Technology to…
  22. March 2019 Investor Update – Southwestern Energy Co. – slide 22
    Environmental, Social and Governance Board independence Management compensation 8 out of 9 directors are independent Independent directors approve compensation Bill Way, President and CEO, is sole non- Mix of awards weighted heavily on…
  23. March 2019 Investor Update – Southwestern Energy Co. – slide 23
    Hedge Position Swaps 8% 68.74/Bbl (WTI) Swaps 23% Unhedged 26% Swaps 37% Collars 7% 2.93/Mcf (HH) 65.00/72.30/Bbl (WTI) Natural Gas Oil NGL 2019 2019 2019 Unhedged 85% Collars 37% Unhedged 77% 2.48/2.88/3.21/Mcf (HH)…
  24. March 2019 Investor Update – Southwestern Energy Co. – slide 24
    Southwest Appalachia Super Rich Gas Well performance Well SWNResults DrilledExceeding Expectations & Completed Super Rich Gas(1) Condensate (Normalized to 10,000 ft lateral) Gen 1 Completions (42 wells) Gen 2 Completions (65 wells)…
  25. March 2019 Investor Update – Southwestern Energy Co. – slide 25
    Southwest Appalachia Rich Gas Well performance Well Results Exceeding SWN Drilled Rich Gas(1) Condensate (Normalized to 10,000 ft lateral) Expectations & Completed Gen 1 Completions (22 wells) Gen 2 Completions (15 wells) 32 BCFe…
  26. March 2019 Investor Update – Southwestern Energy Co. – slide 26
    Northeast Appalachia Well performance SWN Drilled & Completed Dry Gas (Normalized to 9,500 ft lateral) Legacy Susquehanna & Bradford (113 Wells) Tioga Area (15 Wells) 15 BCF EUR Curve 20 BCF EUR Curve 25 BCF EUR Curve 32,000…
  27. March 2019 Investor Update – Southwestern Energy Co. – slide 27
    Financial and Operational Summary Year Ended Decem ber 31, 2018 2017 2016 ( in millions, except per share amounts) Revenues 3,862 3,203 2,436 Adjusted EBITDA(1) 1,484 1,247 721 (2) Adjusted Net Income (Loss) Attributable to…
  28. March 2019 Investor Update – Southwestern Energy Co. – slide 28
    Explanation and Reconciliation of Non-GAAP Financial Measures: Net Cash Flow We define net cash flow as cash flow from operating activities adjusted for changes in operating assets and liabilities and restructuring charges. Management…
  29. March 2019 Investor Update – Southwestern Energy Co. – slide 29
    Explanation and Reconciliation of Non-GAAP Financial Measures: Adjusted Net Income Attributable to Common Stock Additional non-GAAP financial measures we may present from time to time are adjusted net income attributable to common stock…
  30. March 2019 Investor Update – Southwestern Energy Co. – slide 30
    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…
  31. March 2019 Investor Update – Southwestern Energy Co. – slide 31
    Explanation and Reconciliation of Non-GAAP Financial Measures: Net debt / Adj. EBITDA Net debt is defined as short-term debt plus long-term debt less cash and cash equivalents. Adjusted EBITDA is defined as net income plus interest,…

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