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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Southwestern Energy | NYSE:SWN | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.1687 | -2.34% | 7.0513 | 7.23 | 7.023 | 7.09 | 22,647,806 | 00:13:00 |
001-08246 | 71-0205415 | |
(Commission File Number) | (IRS Employer Identification No.) |
10000 Energy Drive Spring, Texas | 77,389 | |
(Address of principal executive offices) | (Zip Code) |
SOUTHWESTERN ENERGY COMPANY | ||||
Dated: April 25, 2019 | By: | /s/ JULIAN M. BOTT | ||
Name: | Julian M. Bott | |||
Title: | Executive Vice President and | |||
Chief Financial Officer |
• | Appalachia production up 14 percent to 182 Bcfe, liquids up 33 percent to 71,740 barrels per day, Appalachia revenue up 13 percent; |
• | Generated Adjusted EBITDA of $319 million, net cash provided by operating activities of $442 million and net cash flow of $309 million; |
• | Invested capital totaling $325 million in the quarter, consistent with front-loaded capital plan; |
• | Improved E&P margin by 14 percent to $1.79 per Mcfe, as a result of improved differentials and lower expenses; |
• | Realized a $46 million, or 32 percent, reduction in general and administrative and interest savings in the first quarter; |
• | Continued strength of balance sheet with net debt to EBITDA of 1.7 times, excluding 2018 Fayetteville EBITDA, liquidity in excess of $2 billion; |
• | Reduced well cost on wells to sales by 10 percent from 2018 full year average, on track to meet guidance of $875 per lateral foot for the year; and |
• | Drilled five wells in excess of 15,000 feet, including an 18,683 foot state record lateral in Pennsylvania. |
FINANCIAL STATISTICS | For the three months ended | |||||||
March 31, | ||||||||
(in millions) | 2019 | 2018 | ||||||
Net income attributable to common stock | $ | 594 | $ | 205 | ||||
Adjusted net income attributable to common stock (non-GAAP) | $ | 145 | $ | 162 | ||||
Adjusted EBITDA (non-GAAP) | $ | 319 | $ | 396 | ||||
Net cash provided by operating activities | $ | 442 | $ | 364 | ||||
Net cash flow (non-GAAP) | $ | 309 | $ | 358 | ||||
Total capital investments (1) | $ | 325 | $ | 338 |
(1) | Capital investments includes increases of $66 million and $33 million for the three months ended March 31, 2019 and 2018, respectively, relating to the change in capital accruals between periods. |
OPERATING STATISTICS | For the three months ended | |||||||
March 31, | ||||||||
2019 | 2018 | |||||||
Production | ||||||||
Gas production (Bcf) | 143 | 197 | ||||||
Oil production (MBbls) | 854 | 613 | ||||||
NGL production (MBbls) | 5,603 | 4,230 | ||||||
Total production (Bcfe) | 182 | 226 | ||||||
Division Production | ||||||||
Northeast Appalachia (Bcf) | 112 | 108 | ||||||
Southwest Appalachia (Bcfe) | 70 | 51 | ||||||
Fayetteville Shale (Bcf) (1) | — | 67 | ||||||
Average unit costs per Mcfe | ||||||||
Lease operating expenses | $ | 0.90 | $ | 0.94 | ||||
General & administrative expenses | $ | 0.19 | (2) | $ | 0.21 | |||
Taxes, other than income taxes | $ | 0.10 | $ | 0.09 | ||||
Full cost pool amortization | $ | 0.57 | $ | 0.48 |
(1) | The Fayetteville Shale assets were sold on December 3, 2018. |
(2) | Excludes $3 million of restructuring charges (including severance) for the three months ended March 31, 2019. |
Realized Prices | For the three months ended | |||||||
March 31, | ||||||||
2019 | 2018 | |||||||
Natural Gas Price: | ||||||||
NYMEX Henry Hub price ($/MMBtu) (1) | $ | 3.15 | $ | 3.00 | ||||
Discount to NYMEX (2) | (0.20 | ) | (0.28 | ) | ||||
Average realized gas price per Mcf, excluding derivatives | $ | 2.95 | $ | 2.72 | ||||
Loss on settled financial basis derivatives ($/Mcf) | (0.03 | ) | (0.11 | ) | ||||
Gain (loss) on settled commodity derivatives ($/Mcf) | (0.08 | ) | 0.06 | |||||
Average realized gas price per Mcf, including derivatives | $ | 2.84 | $ | 2.67 | ||||
Oil Price: | ||||||||
WTI oil price ($/Bbl) | $ | 54.90 | $ | 62.87 | ||||
Discount to WTI | (9.42 | ) | (6.86 | ) | ||||
Average oil price per Bbl, excluding derivatives | $ | 45.48 | $ | 56.01 | ||||
Average oil price per Bbl, including derivatives | $ | 47.82 | $ | 56.01 | ||||
NGL Price: | ||||||||
Average net realized NGL price per Bbl, excluding derivatives | $ | 14.45 | $ | 15.42 | ||||
Average net realized NGL price per Bbl, including derivatives | $ | 15.05 | $ | 15.43 | ||||
Percentage of WTI | 26 | % | 25 | % | ||||
Average net realized C3+ price per Bbl, excluding derivatives | $ | 27.11 | $ | 36.01 | ||||
Average net realized C3+ price per Bbl, including derivatives | $ | 28.01 | $ | 36.00 | ||||
Percentage of WTI | 49 | % | 57 | % | ||||
Total Weighted Average Realized Price: | ||||||||
Excluding derivatives ($/Mcfe) | $ | 2.98 | $ | 2.81 | ||||
Including derivatives ($/Mcfe) | $ | 2.92 | $ | 2.77 |
(1) | Based on last day monthly futures settlement prices. |
(2) | This discount includes a basis differential, a heating content adjustment, physical basis sales, third-party transportation charges and fuel charges, and excludes financial basis derivatives. |
Three Months Ended March 31, 2019 E&P Division Results | Appalachia | |||||||
Northeast | Southwest | |||||||
Gas Production (Bcf) | 112 | 31 | ||||||
Liquids Production | ||||||||
Oil (MBbls) | — | 849 | ||||||
NGL (MBbls) | — | 5,602 | ||||||
Production (Bcfe) | 112 | 70 | ||||||
Gross operated production (MMcfe/d) | 1,497 | 1,237 | ||||||
Net operated production (MMcfe/d) | 1,227 | 767 | ||||||
Capital investments ($ in millions) | ||||||||
Exploratory and development drilling, including workovers | $ | 94 | $ | 154 | ||||
Acquisition and leasehold | 2 | 5 | ||||||
Seismic and other | 1 | — | ||||||
Capitalized interest and expense | 9 | 39 | ||||||
Total capital investments | $ | 106 | $ | 198 | ||||
Gross operated well activity summary | ||||||||
Drilled | 11 | 19 | ||||||
Completed | 11 | 20 | ||||||
Wells to sales | 10 | 9 | ||||||
Average well cost on wells to sales (in millions) | $ | 7.8 | $ | 8.6 | ||||
Average lateral length (in ft) | 7,502 | 8,644 | ||||||
Total weighted average realized price per Mcfe, excluding derivatives | $ | 3.12 | $ | 2.76 |
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(Unaudited) | ||||||||
For the three months ended | ||||||||
March 31, | ||||||||
(in millions, except share/per share amounts) | 2019 | 2018 | ||||||
Operating Revenues: | ||||||||
Gas sales | $ | 430 | $ | 540 | ||||
Oil sales | 39 | 35 | ||||||
NGL sales | 81 | 65 | ||||||
Marketing | 438 | 253 | ||||||
Gas gathering | — | 24 | ||||||
Other | 2 | 3 | ||||||
990 | 920 | |||||||
Operating Costs and Expenses: | ||||||||
Marketing purchases | 441 | 255 | ||||||
Operating expenses | 165 | 189 | ||||||
General and administrative expenses | 37 | 55 | ||||||
Restructuring charges | 3 | — | ||||||
Depreciation, depletion and amortization | 112 | 143 | ||||||
Taxes, other than income taxes | 19 | 23 | ||||||
777 | 665 | |||||||
Operating Income | 213 | 255 | ||||||
Interest Expense: | ||||||||
Interest on debt | 42 | 65 | ||||||
Other interest charges | 1 | 2 | ||||||
Interest capitalized | (29 | ) | (28 | ) | ||||
14 | 39 | |||||||
Loss on Derivatives | (32 | ) | (7 | ) | ||||
Other Income (Loss), Net | 1 | (1 | ) | |||||
Income Before Income Taxes | 168 | 208 | ||||||
Benefit from Income Taxes: | ||||||||
Current | — | — | ||||||
Deferred | (426 | ) | — | |||||
(426 | ) | — | ||||||
Net Income | $ | 594 | $ | 208 | ||||
Participating securities - mandatory convertible preferred stock | — | 3 | ||||||
Net Income Attributable to Common Stock | $ | 594 | $ | 205 | ||||
Earnings Per Common Share | ||||||||
Basic | $ | 1.10 | $ | 0.36 | ||||
Diluted | $ | 1.10 | $ | 0.36 | ||||
Weighted Average Common Shares Outstanding: | ||||||||
Basic | 539,721,751 | 571,297,804 | ||||||
Diluted | 541,320,487 | 573,844,459 |
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited) | ||||||||
March 31, 2019 | December 31, 2018 | |||||||
ASSETS | (in millions) | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 366 | $ | 201 | ||||
Accounts receivable, net | 390 | 581 | ||||||
Derivative assets | 87 | 130 | ||||||
Other current assets | 44 | 44 | ||||||
Total current assets | 887 | 956 | ||||||
Natural gas and oil properties, using the full cost method, including $1,673 million as of March 31, 2019 and $1,755 million as of December 31, 2018 excluded from amortization | 24,486 | 24,180 | ||||||
Gathering systems | 38 | 38 | ||||||
Other | 509 | 487 | ||||||
Less: Accumulated depreciation, depletion and amortization | (20,162 | ) | (20,049 | ) | ||||
Total property and equipment, net | 4,871 | 4,656 | ||||||
Deferred tax assets | 426 | — | ||||||
Other long-term assets | 262 | 185 | ||||||
TOTAL ASSETS | $ | 6,446 | $ | 5,797 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt | $ | 52 | $ | — | ||||
Accounts payable | 626 | 609 | ||||||
Taxes payable | 62 | 58 | ||||||
Interest payable | 58 | 52 | ||||||
Derivative liabilities | 50 | 79 | ||||||
Other current liabilities | 95 | 48 | ||||||
Total current liabilities | 943 | 846 | ||||||
Long-term debt | 2,267 | 2,318 | ||||||
Pension and other postretirement liabilities | 43 | 46 | ||||||
Other long-term liabilities | 256 | 225 | ||||||
Total long-term liabilities | 2,566 | 2,589 | ||||||
Commitments and contingencies | ||||||||
Equity: | ||||||||
Common stock, $0.01 par value; 1,250,000,000 shares authorized; issued 585,548,726 shares as of March 31, 2019 and 585,407,107 as of December 31, 2018 | 6 | 6 | ||||||
Additional paid-in capital | 4,717 | 4,715 | ||||||
Accumulated deficit | (1,548 | ) | (2,142 | ) | ||||
Accumulated other comprehensive loss | (36 | ) | (36 | ) | ||||
Common stock in treasury, 44,353,224 shares as of March 31, 2019 and 39,092,537 shares as of December 31, 2018 | (202 | ) | (181 | ) | ||||
Total equity | 2,937 | 2,362 | ||||||
TOTAL LIABILITIES AND EQUITY | $ | 6,446 | $ | 5,797 |
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited) | ||||||||
For the three months ended | ||||||||
March 31, | ||||||||
(in millions) | 2019 | 2018 | ||||||
Cash Flows From Operating Activities: | ||||||||
Net income | $ | 594 | $ | 208 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation, depletion and amortization | 112 | 143 | ||||||
Amortization of debt issuance costs | 1 | 2 | ||||||
Deferred income taxes | (426 | ) | — | |||||
(Gain) loss on derivatives, unsettled | 22 | (2 | ) | |||||
Stock-based compensation | 2 | 4 | ||||||
Other | 1 | 3 | ||||||
Change in assets and liabilities | 136 | 6 | ||||||
Net cash provided by operating activities | 442 | 364 | ||||||
Cash Flows From Investing Activities: | ||||||||
Capital investments | (258 | ) | (302 | ) | ||||
Proceeds from sale of property and equipment | — | 6 | ||||||
Other | — | 2 | ||||||
Net cash used in investing activities | (258 | ) | (294 | ) | ||||
Cash Flows From Financing Activities: | ||||||||
Change in bank drafts outstanding | 3 | — | ||||||
Purchase of treasury stock | (21 | ) | — | |||||
Preferred stock dividend | — | (27 | ) | |||||
Cash paid for tax withholding | (1 | ) | (1 | ) | ||||
Net cash used in financing activities | (19 | ) | (28 | ) | ||||
Increase in cash and cash equivalents | 165 | 42 | ||||||
Cash and cash equivalents at beginning of year | 201 | 916 | ||||||
Cash and cash equivalents at end of period | $ | 366 | $ | 958 |
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES | ||||||||||||||||||||
SEGMENT INFORMATION | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Exploration | ||||||||||||||||||||
and | Midstream | |||||||||||||||||||
Production | Services | Other | Eliminations | Total | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Three months ended March 31, 2019 | ||||||||||||||||||||
Revenues | $ | 542 | $ | 941 | $ | — | $ | (493 | ) | $ | 990 | |||||||||
Marketing purchases | — | 934 | — | (493 | ) | 441 | ||||||||||||||
Operating expenses | 166 | (1 | ) | — | — | 165 | ||||||||||||||
General and administrative expenses | 34 | 3 | — | — | 37 | |||||||||||||||
Restructuring charges | 3 | — | — | — | 3 | |||||||||||||||
Depreciation, depletion and amortization | 110 | 2 | — | — | 112 | |||||||||||||||
Taxes, other than income taxes | 19 | — | — | — | 19 | |||||||||||||||
Operating income | 210 | 3 | — | — | 213 | |||||||||||||||
Capital investments (1) | 325 | — | — | — | 325 | |||||||||||||||
Three months ended March 31, 2018 | ||||||||||||||||||||
Revenues | $ | 637 | $ | 896 | $ | — | $ | (613 | ) | $ | 920 | |||||||||
Marketing purchases | — | 819 | — | (564 | ) | 255 | ||||||||||||||
Operating expenses | 213 | 25 | — | (49 | ) | 189 | ||||||||||||||
General and administrative expenses | 48 | 7 | — | — | 55 | |||||||||||||||
Depreciation, depletion and amortization | 117 | 26 | (2) | — | — | 143 | ||||||||||||||
Taxes, other than income taxes | 21 | 2 | — | — | 23 | |||||||||||||||
Operating income | 238 | 17 | — | — | 255 | |||||||||||||||
Capital investments (1) | 334 | 4 | — | — | 338 |
(1) | Capital investments includes increases of $66 million and $33 million for the three months ended March 31, 2019 and 2018, respectively, relating to the change in capital accruals between periods. |
(2) | Includes a $10 million impairment related to certain non-core gathering assets. |
Weighted Average Price per MMBtu | ||||||||||||||||||||||
Volume | Sold | Purchased | Sold | Basis | ||||||||||||||||||
(Bcf) | Swaps | Puts | Puts | Calls | Differential | |||||||||||||||||
Natural Gas | ||||||||||||||||||||||
2019 | ||||||||||||||||||||||
Fixed price swaps | 195 | $ | 2.90 | $ | — | $ | — | $ | — | $ | — | |||||||||||
Two-way costless collars | 44 | — | — | 2.78 | 2.92 | — | ||||||||||||||||
Three-way costless collars | 101 | — | 2.46 | 2.88 | 3.22 | — | ||||||||||||||||
Total | 340 | |||||||||||||||||||||
2020 | ||||||||||||||||||||||
Fixed price swaps | 24 | $ | 2.88 | $ | — | $ | — | $ | — | $ | — | |||||||||||
Three-way costless collars | 122 | — | 2.35 | 2.68 | 2.96 | — | ||||||||||||||||
Total | 146 | |||||||||||||||||||||
2021 | ||||||||||||||||||||||
Three-way costless collars | 37 | $ | — | $ | 2.35 | $ | 2.60 | $ | 2.93 | $ | — | |||||||||||
Basis Swaps | ||||||||||||||||||||||
2019 | 85 | $ | — | $ | — | $ | — | $ | — | $ | (0.50 | ) | ||||||||||
2020 | 59 | — | — | — | — | (0.44 | ) | |||||||||||||||
Total | 144 |
Weighted Average Price per Bbl | ||||||||||||||||||
Volume | Sold | Purchased | Sold | |||||||||||||||
(MBbls) | Swaps | Puts | Puts | Calls | ||||||||||||||
Oil | ||||||||||||||||||
2019 | ||||||||||||||||||
Fixed price swaps (1) | 921 | $ | 62.13 | $ | — | $ | — | $ | — | |||||||||
Two-way costless collars | 248 | — | — | 65.00 | 72.30 | |||||||||||||
Three-way costless collars | 412 | — | 45.00 | 55.00 | 63.67 | |||||||||||||
Total | 1,581 | |||||||||||||||||
2020 | ||||||||||||||||||
Fixed price swaps | 366 | $ | 65.68 | $ | — | $ | — | $ | — | |||||||||
Two-way costless collars | 366 | — | — | 60.00 | 69.80 | |||||||||||||
Total | 732 | |||||||||||||||||
Propane | ||||||||||||||||||
2019 | ||||||||||||||||||
Fixed price swaps | 2,028 | $ | 31.25 | $ | — | $ | — | $ | — | |||||||||
2020 | ||||||||||||||||||
Fixed price swaps | 824 | $ | 27.35 | $ | — | $ | — | $ | — | |||||||||
Two-way costless collars | 366 | — | — | 25.20 | 29.40 | |||||||||||||
Total | 1,190 | |||||||||||||||||
Ethane | ||||||||||||||||||
2019 | ||||||||||||||||||
Fixed price swaps | 2,778 | $ | 13.90 | $ | — | $ | — | $ | — | |||||||||
2020 | ||||||||||||||||||
Fixed price swaps | 732 | $ | 13.49 | $ | — | $ | — | $ | — |
(1) | Includes 206 MBbls of purchased fixed price oil swaps hedged at $69.10 per barrel and 1,127 MBbls of sold fixed price oil swaps hedged at $63.41 per barrel. |
Financial basis positions | Volume | Basis Differential | |||||
(excludes physical positions) | (Bcf) | ($/MMbtu) | |||||
Q2 2019 | |||||||
TCO | 2 | $ | (0.38 | ) | |||
Dominion South | 23 | $ | (0.54 | ) | |||
TETCO M3 | 9 | $ | (0.43 | ) | |||
Total | 34 | $ | (0.50 | ) | |||
2019 | |||||||
TCO | 4 | $ | (0.38 | ) | |||
Dominion South | 60 | $ | (0.54 | ) | |||
TETCO M3 | 21 | $ | (0.43 | ) | |||
Total | 85 | $ | (0.50 | ) | |||
2020 | |||||||
TCO | 17 | $ | (0.51 | ) | |||
Dominion South | 18 | $ | (0.58 | ) | |||
TETCO M3 | 24 | $ | (0.27 | ) | |||
Total | 59 | $ | (0.44 | ) |
3 Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
(in millions) | ||||||||
Net income attributable to common stock: | ||||||||
Net income attributable to common stock | $ | 594 | $ | 205 | ||||
Add back: | ||||||||
Participating securities – mandatory convertible preferred stock | — | 1 | ||||||
Restructuring charges | 3 | — | ||||||
Gain on sale of assets, net | (2 | ) | (1 | ) | ||||
(Gain) loss on certain derivatives | 22 | (2 | ) | |||||
Impairment of non-core gathering assets | — | 10 | ||||||
Adjustments due to inventory valuation and other | — | 3 | ||||||
Adjustments due to discrete tax items (1) | (466 | ) | (51 | ) | ||||
Tax impact on adjustments | (6 | ) | (3 | ) | ||||
Adjusted net income attributable to common stock | $ | 145 | $ | 162 |
(1) | 2018 primarily relates to the exclusion of certain discrete tax adjustments associated with the valuation allowance against deferred tax assets. The Company expects its 2019 income tax rate to be 24.5%. |
3 Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
Diluted earnings per share: | ||||||||
Diluted earnings per share | $ | 1.10 | $ | 0.36 | ||||
Add back: | ||||||||
Participating securities – mandatory convertible preferred stock | — | 0.00 | ||||||
Restructuring charges | 0.00 | — | ||||||
Gain on sale of assets, net | (0.00 | ) | (0.00 | ) | ||||
(Gain) loss on certain derivatives | 0.04 | 0.00 | ||||||
Impairment of non-core gathering assets | — | 0.02 | ||||||
Adjustments due to inventory valuation and other | — | 0.00 | ||||||
Adjustments due to discrete tax items (1) | (0.86 | ) | (0.09 | ) | ||||
Tax impact on adjustments | (0.01 | ) | (0.01 | ) | ||||
Adjusted diluted earnings per share | $ | 0.27 | $ | 0.28 |
(1) | 2018 primarily relates to the exclusion of certain discrete tax adjustments associated with the valuation allowance against deferred tax assets. The Company expects its 2019 income tax rate to be 24.5%. |
3 Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
(in millions) | ||||||||
Net cash flow provided by operating activities: | ||||||||
Net cash provided by operating activities | $ | 442 | $ | 364 | ||||
Add back: | ||||||||
Changes in operating assets and liabilities | 136 | 6 | ||||||
Restructuring charges | 3 | — | ||||||
Net cash flow | $ | 309 | $ | 358 |
3 Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
(in millions) | ||||||||
EBITDA: | ||||||||
Net income | $ | 594 | $ | 208 | ||||
Add back: | ||||||||
Interest expense | 14 | 39 | ||||||
Income tax expense (benefit) | (426 | ) | — | |||||
Depreciation, depletion and amortization | 112 | 143 | ||||||
Restructuring charges | 3 | — | ||||||
Gain on sale of assets, net | (2 | ) | (1 | ) | ||||
Loss on foreign currency adjustment | — | 3 | ||||||
(Gain) loss on certain derivatives | 22 | (2 | ) | |||||
Stock based compensation expense | 2 | 6 | ||||||
Adjusted EBITDA | $ | 319 | $ | 396 |
March 31, 2019 | ||||
(in millions) | ||||
Total debt | $ | 2,319 | ||
Subtract: | ||||
Cash and cash equivalents | (366 | ) | ||
Net debt | $ | 1,953 |
March 31, 2019 | ||||
(in millions) | ||||
Net debt | $ | 1,953 | ||
Adjusted EBITDA (1) | $ | 1,131 | ||
Net debt to EBITDA | 1.7x |
(1) | Includes Adjusted EBITDA of $1,408 million for the twelve months ended March 31, 2019 less $277 million of EBITDA generated by Fayetteville E&P and Midstream prior to the December 2018 divestiture. |
1 Year Southwestern Energy Chart |
1 Month Southwestern Energy Chart |
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