Southwestern Energy to Cut Investment Spending

   By Maria Armental 
 

Southwestern Energy Co. (SWN) is cutting its planned 2015 investment spending amid lower gas and oil prices but said it expects production to increase about 23%.

The announcement came as the company reported its profit in the fourth quarter more than doubled as production increases offset lower prices.

The Houston company said it plans to spend $2.02 billion in capital projects in 2015, 17% less than in 2014, and down 22.5% from its December projection of $2.6 billion.

It projects production to increase to between 940 billions of cubic feet equivalent and 955 billions of cubic feet equivalent.

Those figures exclude the impact from its operations in East Texas and Arkoma, which Southwest expects to sell in the second quarter.

Like other natural-gas producers, Southwestern has been hurt by volatile natural-gas prices, which have begun to rebound.

An unseasonably cool summer lowered demand, allowing producers to stockpile gas, pushing prices down. At one point, prices slumped to $3.608 per million British thermal units, the lowest price since November 2013.

In the fourth-quarter period, gas and oil production rose 14% from the year-ago period.

The average realized price, including hedging effects, fell to $3.52 from $3.68 for natural gas, while oil prices fell to $60.51 a barrel from $98.41.

Gas sales rose 4.2% to $672 million, while oil sales rose to $9 million from $4 million a year earlier.

Overall, Southwestern reported a profit of $312 million, or 88 cents a share, up from $144 million, or 41 cents a share. Excluding gains on derivative contracts that haven't been settled and other items, profit fell to 52 cents from 54 cents a year ago.

Operating revenue rose 6% to $962 billion.

Analysts had projected profit of 50 cents a share on $946.4 million in revenue.

Shares fell 0.76% to $26.15 in recent after-hours trading.

Through Thursday's closing, shares were down 38% on year.

Write to Maria Armental at [e-mail]

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