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2023 Company Outlook – Southwestern Energy Co.

Southwestern Energy Co. · Mar 9, 2023 · 54 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. 2023 Company Outlook – Southwestern Energy Co. – slide 1
    2023 Company Outlook and Investor Presentation March 9, 2023 1
  2. 2023 Company Outlook – Southwestern Energy Co. – slide 2
    Strategic Positioning 4
  3. 2023 Company Outlook – Southwestern Energy Co. – slide 3
    Shareholder Value Proposition Constructive Long-term Macro Outlook 15 Years of Core Inventory in Two Premier Natural Gas Basins Proactively Responding to Lower Prices to Prioritize Free Cash Flow Enterprise Focus to Continue…
  4. 2023 Company Outlook – Southwestern Energy Co. – slide 4
    Our Strategy Enhance corporate and shareholder economic returns CREATE Deliver sustainable free cash flow SUSTAINABLE VALUE Deepen and upgrade the quality and capital efficiency of asset base and inventory Convert resources to…
  5. 2023 Company Outlook – Southwestern Energy Co. – slide 5
    Company Transformation Positioned for the Future Net Production (Bcfe/d) Core Inventory Free Cash Flow (MM) Increased production base by Strengthened core inventory Generating free cash flow 2.3 Bcfe/d depth by more than 900…
  6. 2023 Company Outlook – Southwestern Energy Co. – slide 6
    Largest Dual Basin Natural Gas Producer Appalachia Natural Gas Peer 2023E Net Production (Bcfe/d)(2,3) 80% 20% Net Acres: 766,000 Gas Liquids Companies with multi-basin assets 2023E Net Production: 2.8 Bcfe/day(1) 5.3 4.6 3.8…
  7. 2023 Company Outlook – Southwestern Energy Co. – slide 7
    Portfolio Optionality Across Deep High Return Inventory 4.6 Bcfe/d 15 Years 4.6 Bcfe/d net production(1) core inventory net production(1) Basin, commodity and end market diversification Sales reduce risk and strengthen…
  8. 2023 Company Outlook – Southwestern Energy Co. – slide 8
    Todays Agenda Operational update Clay Carrell / Andy Huggins Depth of quality inventory across both core assets 2023 development program Haynesville update and future value optimization Marketing optionality and flow assurance…
  9. 2023 Company Outlook – Southwestern Energy Co. – slide 9
    Operational Update 11
  10. 2023 Company Outlook – Southwestern Energy Co. – slide 10
    Deep Core Inventory Set Across Both Assets Total Company Inventory Appalachia Inventory Detail Haynesville Inventory Detail 26B pre-tax PV-10 at strip includes only 5 years of inventory out of 15 years of core locations(1)…
  11. 2023 Company Outlook – Southwestern Energy Co. – slide 11
    Proactively Managing Through Commodity Volatility Average Rigs(1) Proactive response to gas pullback 13 2 Capital plan reflects moderated activity 10 - 11 Decrease with expected 2-3% production decline 2 fewer rigs, 0.5 fewer frac…
  12. 2023 Company Outlook – Southwestern Energy Co. – slide 12
    Appalachia Core Dry Gas and Liquids Position Operational Plan(1) 2023E Rigs 3 Frac fleets 2 Wells drilled 53 58 % Marcellus liquids rich 65% Pennsylvania Wells completed 64 69 % Marcellus liquids rich 65% Wells to sales 68 73 Ohio %…
  13. 2023 Company Outlook – Southwestern Energy Co. – slide 13
    Appalachia Operating Areas West Virginia Inventory: 225 Marcellus Super Rich 110 Marcellus Rich 695 Marcellus Dry 1,075 Utica Dry Gas 1,050 Upper Devonian Pennsylvania 2023E Program: Op WI / NRI: 79% 66% Wells to sales: 40…
  14. 2023 Company Outlook – Southwestern Energy Co. – slide 14
    Highest Yield Liquids-rich Acreage in Appalachia Marcellus NGL Yield (Bbl/Mmcf) Marcellus Condensate Yield (Bbl/Mmcf) SWN acreage SWN acreage 50 100+ 120+ 0 Ohio Ohio Pennsylvania Pennsylvania West Virginia West…
  15. 2023 Company Outlook – Southwestern Energy Co. – slide 15
    Haynesville Core Stacked Pay Position Operational Plan(1) 2023E SWN acreage Haynesville Core Rigs 78 Middle Bossier Core Frac fleets 23 Wells drilled 60 65 % Haynesville / Middle Bossier 50% / 50% Wells completed 64 69 % Haynesville…
  16. 2023 Company Outlook – Southwestern Energy Co. – slide 16
    Successful Haynesville Integration and Early Wins Technical achievements Improved well performance driven by flowback and completion optimization initiatives Best-in-basin well performance Only operator of scale with production…
  17. 2023 Company Outlook – Southwestern Energy Co. – slide 17
    Haynesville Operating Areas North Haynesville North Inventory: 190 HNSV 225 MB Haynesville EURs: 1.8 2.2 Bcf/1,000 2023E Program: Op WI / NRI: 92% 71% Wells to sales: 20 Avg. CLAT: 8,750 D&C Cost: 1,775 1,975/ft Desoto…
  18. 2023 Company Outlook – Southwestern Energy Co. – slide 18
    Core Stacked Haynesville and Middle Bossier Opportunity 2022 Wells to Sales Desoto East Well Performance (Mcf/ft)(1) SWN acreage 22 Haynesville 21 Haynesville North Haynesville Core Middle Bossier Core 700 22 Middle Bossier 21…
  19. 2023 Company Outlook – Southwestern Energy Co. – slide 19
    SWN Delivers Leading Well Performance Operator Well Performance (Mcf/ft)(1) 2019 2022 Wells to Sales 700 2019 2020 2021 2022 6 Mo Cumulative Gas (Mcf/ft) 600 SWN consistently improving well performance 500 400 300 200 100 -…
  20. 2023 Company Outlook – Southwestern Energy Co. – slide 20
    Haynesville Operational Improvements Drilling Footage Per Day (ft/day)(1) Drilling Days on Location (days)(1) 600 90 10%+ 10%+ 500 Increase 75 Decrease 400 60 300 45 200 30 100 15 - - 2021 2022 2021 2022 Average Drilled…
  21. 2023 Company Outlook – Southwestern Energy Co. – slide 21
    Haynesville Development Efficiencies Drilling (50 55% of total well costs) Focused on controllable 55% of drilling costs are driven by durations cost areas Targeting 2023 efficiency gains inline with 2022 of 50 70/ft 13% Further…
  22. 2023 Company Outlook – Southwestern Energy Co. – slide 22
    Superior Access to Premium Gulf Coast Markets SWN Gulf Coast Transportation Portfolio(1) LNG Corridor 2023E 2024E LEAP (2) 1.2 Bcf/d 1.5 Bcf/d Momentum NG3 0.3 Bcf/d Acadian 0.2 Bcf/d 0.2 Bcf/d Midcoast 0.2 Bcf/d 0.1 Bcf/d Other…
  23. 2023 Company Outlook – Southwestern Energy Co. – slide 23
    Marketing Update 25
  24. 2023 Company Outlook – Southwestern Energy Co. – slide 24
    Global Gas Pricing Dynamics U.S. and Global Natural Gas Prices 2007 Current Ramp in U.S. LNG exports driven by 115 19 Bcf/d unutilized U.S. unutilized import capacity, shale production, 110 LNG import capacity by Fukushima…
  25. 2023 Company Outlook – Southwestern Energy Co. – slide 25
    U.S. Positioned to Balance Global Gas Markets More than 20 Bcf/d global LNG Global LNG Supply and Demand demand growth expected through Growth From 2022 to 2030(2) 2030 25 Driven by Asia and Europe U.S. best positioned to balance…
  26. 2023 Company Outlook – Southwestern Energy Co. – slide 26
    U.S. Projects In Progress to Fill Growing LNG Demand LNG exports projected to further increase demand Current 13 Bcf/d of capacity is currently in-service Projected increase of 6 Bcf/d for projects under construction; over 20 Bcf/d of…
  27. 2023 Company Outlook – Southwestern Energy Co. – slide 27
    Haynesville Advantaged to Supply Gas to LNG Haynesville is the best positioned U.S. natural gas supply basin for LNG Deep, proven resource base Proximity to operational and planned export capacity growth Supportive business…
  28. 2023 Company Outlook – Southwestern Energy Co. – slide 28
    SWN LNG Supply Competitive Advantages Advantaged Access to the LNG Corridor SWN Deliverability to Gulf Coast / LNG Corridor Large-scale producer with 3.4 Bcf/d current Gulf Coast natural gas sales from Appalachia and Haynesville…
  29. 2023 Company Outlook – Southwestern Energy Co. – slide 29
    Illustrative Global LNG Pricing Structure Recent strong performance of global-priced netbacks; relation between global and Henry Hub pricing can change materially over time International netbacks are economically advantaged at current…
  30. 2023 Company Outlook – Southwestern Energy Co. – slide 30
    LNG Process and Focus Areas TTF / JKM price Increase LNG exposure to up to 2.0 Bcf/d Decision on international pricing exposure Potentially Continue and Risk adjusted If pre-FID negotiate and optimize 1.5 Bcf/d review of…
  31. 2023 Company Outlook – Southwestern Energy Co. – slide 31
    LNG Strategy Objectives CAPTURE BENEFITS of Dual-basin sourced gas supply benefits from supportive long-term natural gas PORTFOLIO fundamentals DIVERSIFICATION Diversify overall gas sales portfolio by contracting at multiple…
  32. 2023 Company Outlook – Southwestern Energy Co. – slide 32
    Intermediate Term Outlook 34
  33. 2023 Company Outlook – Southwestern Energy Co. – slide 33
    Pathway to Strategic Objectives Area Pathway Strategic Objective Maintain production to progress free cash flow, economic Long-term maintenance production; potential Haynesville Activity returns and enterprise value on multi-year basis…
  34. 2023 Company Outlook – Southwestern Energy Co. – slide 34
    Durable Financial Strength Key Financial Objectives Approaching Investment Grade Ratings Reduce debt to target range of 3.5 3.0 Agency Current Rating Outlook Notches to IG Ratings Date billion; maintain 1.5x 1.0x leverage S&P BB+…
  35. 2023 Company Outlook – Southwestern Energy Co. – slide 35
    Free Cash Flow Outlook 5 Year Cumulative FCF (23 27) (MM)(1) FCF Sources and Uses (23 27) (MM)(1) Strip(2) 4 Gas 5 Gas 9,000 9,000 8,000 8,000 7,000 7,000 6,000 6,000 5,000 5,000 4,000 4,000 3,000 3,000 2,000 2,000…
  36. 2023 Company Outlook – Southwestern Energy Co. – slide 36
    Shareholder Value Proposition Constructive Long-term Macro Outlook Near-term supply response will only strengthen long-term outlook 15 Years of Core Inventory in Two Premier Natural Gas Basins Complementary inventory set across…
  37. 2023 Company Outlook – Southwestern Energy Co. – slide 37
    Appendix 39 39
  38. 2023 Company Outlook – Southwestern Energy Co. – slide 38
    2023 Guidance As of February 23, 2023 PRODUCTION Q1 TOTAL YEAR Gas Production (Bcf) 344 354 1,430 1,500 Liquids (% of production) 13.5% 13.0% Total (Bcfe) 398 410 1,650 1,725 CAPITAL (in millions) Appalachia 40 45% Haynesville 55 60%…
  39. 2023 Company Outlook – Southwestern Energy Co. – slide 39
    Responsibly Sourced Gas to Premium Markets 2023E Differential to NYMEX Canada: 1% Transportation (1) Location (2) Total Average Rate Average Basis Average Differential Year per Mcf per Mcf per Mcf Appalachia (0.42) (0.40)…
  40. 2023 Company Outlook – Southwestern Energy Co. – slide 40
    Well Positioned to Supply Growing Natural Gas Demand LNG exports projected to further increase demand US natural gas demand is expected to increase by Current 13 Bcf/d of capacity is currently in-service over 10 Bcf per day by 2025…
  41. 2023 Company Outlook – Southwestern Energy Co. – slide 41
    Advantaged to Reliably Supply Expanding LNG Corridor Cove Point SWNs differentiated positioning to supply growing LNG demand Proximity and access largest Haynesville producer with firm transport to LNG corridor Scale 3 Bcf/d gross gas…
  42. 2023 Company Outlook – Southwestern Energy Co. – slide 42
    FERC Approved LNG Projects Awaiting FID 20 Bcf/d of Potential Next Wave Projects FERC-Approved, Pre-FID US LNG Projects Location FERC-Approved Capacity (Bcf/d) Cameron T4 / T5 Hackberry, LA 1.4 Freeport T4 Freeport, TX 0.7…
  43. 2023 Company Outlook – Southwestern Energy Co. – slide 43
    TTF (Europe) vs Henry Hub (US) Forward netbacks 5-10 for US-sourced LNG sold in Europe U.S. and European Gas Prices(1) 80 70 60 /Mmbtu 50 40 30 20 10 0 (10) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025…
  44. 2023 Company Outlook – Southwestern Energy Co. – slide 44
    U.S. LNG / Gas Value Chain U.S. LNG value chain is becoming disaggregated providing opportunities for independent E&Ps to participate in multiple aspects of value chain 46
  45. 2023 Company Outlook – Southwestern Energy Co. – slide 45
    Global LNG Value Chain Large scale, long lead time projects take significant time from FID to in-service and involve a large array of global participants Note: Illustrative example of 2 Bcf/d LNG Value Chain; U.S. Gulf Coast LNG…
  46. 2023 Company Outlook – Southwestern Energy Co. – slide 46
    Our Approach to ESG Our approach to ESG aligns with our corporate strategy to deliver lasting shareholder value Long-term GHG emission reduction No routine flaring goal of 50% decrease by 2035, consistent with a path to net zero…
  47. 2023 Company Outlook – Southwestern Energy Co. – slide 47
    ESG is a Core Value 49
  48. 2023 Company Outlook – Southwestern Energy Co. – slide 48
    Haynesville Core Acreage Haynesville Haynesville Well Activity Haynesville Well Performance(1) Densely drilled SWN core SWN core drilling inventory drilling inventory SWN Acreage Haynesville Core EUR (Bcf/1,000)…
  49. 2023 Company Outlook – Southwestern Energy Co. – slide 49
    Haynesville Core Acreage Middle Bossier Middle Bossier Well Activity Middle Bossier Well Performance(1) Middle Bossier Middle Bossier Core Core SWN Acreage Middle Bossier Core EUR (Bcf/1,000) Middle Bossier wells 1.7 2.2…
  50. 2023 Company Outlook – Southwestern Energy Co. – slide 50
    Haynesville Resource and Deliverability Hydrocarbon Pore Volume (V/V) Reservoir Pressure (Psi) Bossier Bossier Caddo Caddo Harrison Harrison Panola Panola Rusk Red River Rusk Red River De Soto De Soto Shelby Shelby…
  51. 2023 Company Outlook – Southwestern Energy Co. – slide 51
    Explanation and Reconciliation of Non-GAAP Financial Measures: Net Cash Flow and Free Cash Flow Net cash flow is defined as cash flow from operating activities adjusted for changes in operating assets and liabilities, merger- related…
  52. 2023 Company Outlook – Southwestern Energy Co. – slide 52
    Explanation and Reconciliation of Non-GAAP Financial Measures: Adjusted EBITDA EBITDA is defined as net income (loss) plus interest, income tax expense, depreciation, depletion and amortization. Adjusted EBITDA is defined as EBITDA less…
  53. 2023 Company Outlook – Southwestern Energy Co. – slide 53
    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 (loss) plus…
  54. 2023 Company Outlook – Southwestern Energy Co. – slide 54
    Explanation and Reconciliation of Non-GAAP Financial Measures: Pre-tax PV-10 Another such non-GAAP financial measure is pre-tax PV-10. Management believes that the presentation of PV-10 is relevant and useful to our investors as…

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