Southwestern Energy Announces Third Quarter 2023 Results
Balancing dual priorities of debt reduction and managing productive capacity
SPRING, Texas–(BUSINESS WIRE)–Southwestern Energy Company (NYSE: SWN) today announced financial and operating results for the third quarter ended September 30, 2023.
- Generated $45 million net income, $106 million adjusted net income (non-GAAP), $513 million adjusted EBITDA (non-GAAP), $477 million net cash provided by operating activities and $23 million free cash flow (non-GAAP)
- Quarter-end total debt $4.1 billion, down from $4.4 billion at year-end 2022
- Reported total net production of 425 Bcfe, or 4.6 Bcfe per day, including 4.0 Bcf per day of gas and 104 MBbls per day of liquids
- Invested $454 million of capital and placed 23 wells to sales, including 15 in Appalachia and 8 in Haynesville
- Released its 10th annual Corporate Responsibility report, highlighting sustainability initiatives and progress, including a 17% reduction in Scope 1 GHG emissions intensity and a 20% reduction in methane intensity in 2022 compared to 2021
“During the third quarter, the Company continued its disciplined approach of optimizing free cash flow generation and activity. This approach balances our dual priorities of debt reduction and managing the productive capacity of the Company in the structurally improving natural gas environment. As we look ahead to next year, Southwestern Energy is well positioned with its deep inventory, firm transportation portfolio and market access to benefit from the expected growing demand from LNG facilities along the Gulf Coast,” said Bill Way, Southwestern Energy President and Chief Executive Officer.
Financial Results
|
|
|
For the three months ended |
|
For the nine months ended |
||||||||||||
|
|
|
September 30, |
|
September 30, |
||||||||||||
|
(in millions) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
|
Net income (loss) |
|
$ |
45 |
|
|
$ |
450 |
|
|
$ |
2,215 |
|
|
$ |
(1,052 |
) |
|
Adjusted net income (non-GAAP) |
|
$ |
106 |
|
|
$ |
360 |
|
|
$ |
547 |
|
|
$ |
1,175 |
|
|
Diluted earnings (loss) per share |
|
$ |
0.04 |
|
|
$ |
0.40 |
|
|
$ |
2.01 |
|
|
$ |
(0.94 |
) |
|
Adjusted diluted earnings per share (non-GAAP) |
|
$ |
0.10 |
|
|
$ |
0.32 |
|
|
$ |
0.50 |
|
|
$ |
1.05 |
|
|
Adjusted EBITDA (non-GAAP) |
|
$ |
513 |
|
|
$ |
824 |
|
|
$ |
1,796 |
|
|
$ |
2,551 |
|
|
Net cash provided by operating activities |
|
$ |
477 |
|
|
$ |
797 |
|
|
$ |
2,039 |
|
|
$ |
2,196 |
|
|
Net cash flow (non-GAAP) |
|
$ |
477 |
|
|
$ |
765 |
|
|
$ |
1,694 |
|
|
$ |
2,380 |
|
|
Total capital investments (1) |
|
$ |
454 |
|
|
$ |
543 |
|
|
$ |
1,714 |
|
|
$ |
1,672 |
|
|
Free cash flow (deficit) (non-GAAP) |
|
$ |
23 |
|
|
$ |
222 |
|
|
$ |
(20 |
) |
|
$ |
708 |
|
|
(1) |
Capital investments include a decrease of $94 million and $33 million for the three months ended September 30, 2023 and 2022, respectively, and a decrease of $122 million and an increase of $44 million for the nine months ended September 30, 2023 and 2022, respectively, relating to the change in accrued expenditures between periods. |
For the quarter ended September 30, 2023, Southwestern Energy recorded net income of $45 million, or $0.04 per diluted share, including a loss on mark-to-market of unsettled derivatives. Excluding this and other one-time items, adjusted net income (non-GAAP) was $106 million, or $0.10 per diluted share, and adjusted EBITDA (non-GAAP) was $513 million. Net cash provided by operating activities was $477 million, net cash flow (non-GAAP) was $477 million and free cash flow (non-GAAP) was $23 million.
As of September 30, 2023, Southwestern Energy had total debt of $4.1 billion and net debt to adjusted EBITDA (non-GAAP) of 1.6x. At the end of the quarter, the Company had $388 million of borrowings under its revolving credit facility and no outstanding letters of credit. Subsequent to quarter end, the Company’s elected commitments and borrowing base were reaffirmed as part of its regularly scheduled fall redetermination at the elected $2.0 billion and $3.5 billion, respectively.
As indicated in the table below, third quarter 2023 weighted average realized price was $2.05 per Mcfe, excluding the impact of derivatives and net of $0.24 per Mcfe of transportation expenses. Including derivatives, weighted average realized price for the third quarter was down 21% from $3.06 per Mcfe in 2022 to $2.43 per Mcfe in 2023 primarily due to lower commodity prices including a 69% decrease in NYMEX Henry Hub and a 10% decrease in WTI.
|
Realized Prices |
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For the three months ended |
|
For the nine months ended |
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|
(includes transportation costs) |
|
September 30, |
|
September 30, |
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|
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
|
Natural Gas Price: |
|
|
|
|
|
|
|
|
||||||||
|
NYMEX Henry Hub price ($/MMBtu) (1) |
|
$ |
2.55 |
|
|
$ |
8.20 |
|
|
$ |
2.69 |
|
|
$ |
6.77 |
|
|
Discount to NYMEX (2) |
|
(0.89 |
) |
|
(0.78 |
) |
|
(0.59 |
) |
|
(0.62 |
) |
||||
|
Average realized gas price, excluding derivatives ($/Mcf) |
|
$ |
1.66 |
|
|
$ |
7.42 |
|
|
$ |
2.10 |
|
|
$ |
6.15 |
|
|
Gain on settled financial basis derivatives ($/Mcf) |
|
0.13 |
|
|
0.10 |
|
|
0.01 |
|
|
0.06 |
|
||||
|
Gain (loss) on settled commodity derivatives ($/Mcf) |
|
0.34 |
|
|
(4.71 |
) |
|
0.23 |
|
|
(3.38 |
) |
||||
|
Average realized gas price, including derivatives ($/Mcf) |
|
$ |
2.13 |
|
|
$ |
2.81 |
|
|
$ |
2.34 |
|
|
$ |
2.83 |
|
|
Oil Price: |
|
|
|
|
|
|
|
|
||||||||
|
WTI oil price ($/Bbl) (3) |
|
$ |
82.26 |
|
|
$ |
91.56 |
|
|
$ |
77.39 |
|
|
$ |
98.09 |
|
|
Discount to WTI (4) |
|
(11.17 |
) |
|
(7.22 |
) |
|
(10.79 |
) |
|
(7.39 |
) |
||||
|
Average realized oil price, excluding derivatives ($/Bbl) |
|
$ |
71.09 |
|
|
$ |
84.34 |
|
|
$ |
66.60 |
|
|
$ |
90.70 |
|
|
Average realized oil price, including derivatives ($/Bbl) |
|
$ |
56.60 |
|
|
$ |
49.06 |
|
|
$ |
57.21 |
|
|
$ |
52.29 |
|
|
NGL Price: |
|
|
|
|
|
|
|
|
||||||||
|
Average realized NGL price, excluding derivatives ($/Bbl) |
|
$ |
20.53 |
|
|
$ |
33.33 |
|
|
$ |
21.19 |
|
|
$ |
37.50 |
|
|
Average realized NGL price, including derivatives ($/Bbl) |
|
$ |
21.41 |
|
|
$ |
26.55 |
|
|
$ |
22.28 |
|
|
$ |
27.64 |
|
|
Percentage of WTI, excluding derivatives |
|
25 |
% |
|
36 |
% |
|
27 |
% |
|
38 |
% |
||||
|
Total Weighted Average Realized Price: |
|
|
|
|
|
|
|
|
||||||||
|
Excluding derivatives ($/Mcfe) |
|
$ |
2.05 |
|
|
$ |
7.33 |
|
|
$ |
2.45 |
|
|
$ |
6.32 |
|
|
Including derivatives ($/Mcfe) |
|
$ |
2.43 |
|
|
$ |
3.06 |
|
|
$ |
2.65 |
|
|
$ |
3.11 |
|
|
(1) |
Based on last day settlement prices from monthly futures contracts. |
|
(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. |
|
(3) |
Based on the average daily settlement price of the nearby month futures contract over the period. |
|
(4) |
This discount primarily includes location and quality adjustments. |
Operational Results
Total net production for the quarter ended September 30, 2023 was 425 Bcfe, of which 86% was natural gas, 12% NGLs and 2% oil. Capital investments totaled $454 million for the third quarter of 2023 with 24 wells drilled, 25 wells completed and 23 wells placed to sales.
|
|
|
For the three months ended |
|
For the nine months ended |
||||||||||||
|
|
|
September 30, |
|
September 30, |
||||||||||||
|
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
|
Production |
|
|
|
|
|
|
|
|
||||||||
|
Natural gas production (Bcf) |
|
368 |
|
|
389 |
|
|
1,086 |
|
|
1,148 |
|
||||
|
Oil production (MBbls) |
|
1,310 |
|
|
1,173 |
|
|
4,169 |
|
|
3,806 |
|
||||
|
NGL production (MBbls) |
|
8,228 |
|
|
7,788 |
|
|
24,715 |
|
|
22,445 |
|
||||
|
Total production (Bcfe) |
|
425 |
|
|
443 |
|
|
1,259 |
|
|
1,306 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Average unit costs per Mcfe |
|
|
|
|
|
|
|
|
||||||||
|
Lease operating expenses (1) |
|
$ |
1.06 |
|
|
$ |
1.02 |
|
|
$ |
1.04 |
|
|
$ |
0.98 |
|
|
General & administrative expenses (2) |
|
$ |
0.10 |
|
|
$ |
0.08 |
|
|
$ |
0.10 |
|
|
$ |
0.08 |
|
|
Taxes, other than income taxes |
|
$ |
0.15 |
|
|
$ |
0.17 |
|
|
$ |
0.15 |
|
|
$ |
0.15 |
|
|
Full cost pool amortization |
|
$ |
0.78 |
|
|
$ |
0.66 |
|
|
$ |
0.77 |
|
|
$ |
0.65 |
|
|
(1) |
Includes post-production costs such as gathering, processing, fractionation and compression. |
|
(2) |
Excludes $27 million in merger-related expenses for the nine months ended September 30, 2022. |
Appalachia – In the third quarter, total production was 262 Bcfe, with NGL production of 90 MBbls per day and oil production of 14 MBbls per day. The Company drilled 12 wells, completed 15 wells and placed 15 wells to sales with an average lateral length of 16,231 feet.
Haynesville – In the third quarter, total production was 163 Bcfe. There were 12 wells drilled, 10 wells completed and 8 wells placed to sales in the quarter with an average lateral length of 9,082 feet.
|
E&P Division Results |
For the three months ended |
|
|
For the nine months ended |
|
||||||||||
|
|
Appalachia |
|
|
Haynesville |
|
|
Appalachia |
|
|
Haynesville |
|
||||
|
Natural gas production (Bcf) |
|
205 |
|
|
|
163 |
|
|
|
597 |
|
|
|
489 |
|
|
Liquids production |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbls) |
|
1,303 |
|
|
|
6 |
|
|
|
4,146 |
|
|
|
21 |
|
|
NGL (MBbls) |
|
8,226 |
|
|
|
2 |
|
|
|
24,707 |
|
|
|
7 |
|
|
Production (Bcfe) |
|
262 |
|
|
|
163 |
|
|
|
770 |
|
|
|
489 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital investments (in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling and completions, including workovers |
$ |
181 |
|
|
$ |
187 |
|
|
$ |
619 |
|
|
$ |
838 |
|
|
Land acquisition and other |
|
21 |
|
|
|
2 |
|
|
|
74 |
|
|
|
5 |
|
|
Capitalized interest and expense |
|
31 |
|
|
|
19 |
|
|
|
91 |
|
|
|
58 |
|
|
Total capital investments |
$ |
233 |
|
|
$ |
208 |
|
|
$ |
784 |
|
|
$ |
901 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross operated well activity summary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilled |
|
12 |
|
|
|
12 |
|
|
|
51 |
|
|
|
42 |
|
|
Completed |
|
15 |
|
|
|
10 |
|
|
|
58 |
|
|
|
49 |
|
|
Wells to sales |
|
15 |
|
|
|
8 |
|
|
|
56 |
|
|
|
53 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total weighted average realized price per Mcfe, excluding derivatives |
$ |
1.91 |
|
|
$ |
2.28 |
|
|
$ |
2.46 |
|
|
$ |
2.43 |
|
|
Wells to sales summary |
|
For the three months ended September 30, 2023 |
||
|
|
Gross wells to sales |
|
Average lateral length (ft) |
|
|
Appalachia |
|
|
|
|
|
Super Rich Marcellus |
|
6 |
|
18,198 |
|
Rich Marcellus |
5 |
|
12,791 |
|
|
Dry Gas Utica(1) |
2 |
|
14,813 |
|
|
Dry Gas Marcellus |
2 |
|
20,353 |
|
|
Haynesville |
8 |
|
9,082 |
|
|
Total |
23 |
|
|
|
|
(1) |
Ohio Utica |
Fourth Quarter 2023 Guidance
Based on current market conditions, Southwestern expects fourth quarter production and price differentials to be within the following ranges. Additionally, the Company updates full year oil differential guidance to $10 to $13 per barrel discount to WTI.
|
PRODUCTION |
For the quarter ended December 31, 2023 |
|
|
Gas production (Bcf) |
344 – 361 |
|
|
Liquids (% of production) |
~14.0% |
|
|
Total (Bcfe) |
400 – 420 |
|
|
|
|
|
|
PRICING |
|
|
|
Natural gas discount to NYMEX including transportation (1) |
$0.58 – $0.70 per Mcf |
|
|
Oil discount to West Texas Intermediate (WTI) including transportation |
$11.50 – $13.50 per Bbl |
|
|
Natural gas liquids realization as a % of WTI including transportation |
22% – 30% |
|
(1) |
Includes impact of transportation costs and expected $0.06 – $0.09 per Mcf gain in Q4 2023 from financial basis hedges. |
Conference Call
Southwestern Energy will host a conference call and webcast on Friday, November 3, 2023 at 10:00 a.m. Central to discuss third quarter 2023 results. To participate, dial US toll-free 877-883-0383, or international 412-902-6506 and enter access code 4941446. The conference call will webcast live at www.swn.com.
A replay will also be available on SWN’s website at www.swn.com following the call.
About Southwestern Energy
Southwestern Energy Company (NYSE: SWN) is a leading U.S. producer and marketer of natural gas and natural gas liquids focused on responsibly developing large-scale energy assets in the nation’s most prolific shale gas basins. SWN’s returns-driven strategy strives to create sustainable value for its stakeholders by leveraging its scale, financial strength and operational execution. For additional information, please visit www.swn.com and www.swncrreport.com.
Forward Looking Statement
This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended. These statements are based on current expectations. The words “anticipate,” “intend,” “plan,” “project,” “estimate,” “continue,” “potential,” “should,” “could,” “may,” “will,” “objective,” “guidance,” “outlook,” “effort,” “expect,” “believe,” “predict,” “budget,” “projection,” “goal,” “forecast,” “model,” “target”, “seek”, “strive,” “would,” “approximate,” and similar words are intended to identify forward-looking statements. Statements may be forward looking even in the absence of these particular words.
Examples of forward-looking statements include, but are not limited to, the expectations of plans, business strategies, objectives and growth and anticipated financial and operational performance, including guidance regarding our strategy to develop reserves, drilling plans and programs (including the number of rigs and frac crews to be used), estimated reserves and inventory duration, projected production and sales volume and growth rates, projected commodity prices, basis and average differential, impact of commodity prices on our business, projected average well costs, generation of free cash flow, our return of capital strategy, including the amount and timing of any redemptions, repayments or repurchases of our common stock, outstanding debt securities or other debt instruments, leverage targets, our ability to maintain or improve our credit ratings, our ability to achieve our debt reduction plan, leverage levels and financial profile, our hedging strategy, our environmental, social and governance (ESG) initiatives and our ability to achieve anticipated results of such initiatives, expected benefits from acquisitions, potential acquisitions, divestitures, potential divestitures and strategic transactions, the timing thereof and our ability to achieve the intended operational, financial and strategic benefits of any such transactions or other initiatives. These forward-looking statements are based on management’s current beliefs, based on currently available information, as to the outcome and timing of future events. All forward-looking statements speak only as of the date of this news release. The estimates and assumptions upon which forward-looking statements are based are inherently uncertain and involve a number of risks that are beyond our control. Although we believe the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance, and we cannot assure you that such statements will be realized or that the events and circumstances they describe will occur. Therefore, you should not place undue reliance on any of the forward-looking statements contained herein.
Factors that could cause our actual results to differ materially from those indicated in any forward-looking statement are subject to all of the risks and uncertainties incident to the exploration for and the development, production, gathering and sale of natural gas, NGLs and oil, most of which are difficult to predict and many of which are beyond our control. These risks include, but are not limited to, commodity price volatility, inflation, the costs and results of drilling and operations, lack of availability of drilling and production equipment and services, the ability to add proved reserves in the future, environmental risks, drilling and other operating risks, legislative and regulatory changes, the uncertainty inherent in estimating natural gas and oil reserves and in projecting future rates of production, the quality of technical data, cash flow and access to capital, the timing of development expenditures, a change in our credit rating, an increase in interest rates, our ability to achieve our debt reduction plan, our ability to increase commitments under our revolving credit facility, our hedging and other financial contracts, our ability to maintain leases that may expire if production is not established or profitably maintained, our ability to transport our production to the most favorable markets or at all, any increase in severance or similar taxes, the impact of the adverse outcome of any material litigation against us or judicial decisions that affect us or our industry generally, the effects of weather or power outages, increased competition, the financial impact of accounting regulations and critical accounting policies, the comparative cost of alternative fuels, credit risk relating to the risk of loss as a result of non-performance by our counterparties, including as a result of financial or banking failures, impacts of world health events, including the COVID-19 pandemic, cybersecurity risks, geopolitical and business conditions in key regions of the world, our ability to realize the expected benefits from acquisitions, divestitures, and strategic transactions, our ability to achieve our GHG emission reduction goals and the costs associated therewith, and any other factors described or referenced under Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and under Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2022.
We have no obligation and make no undertaking to publicly update or revise any forward-looking statements, except as required by applicable law. All written and oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary statement.
|
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES |
||||||||||||||||
|
CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
|
(Unaudited) |
||||||||||||||||
|
|
|
For the three months ended |
|
For the nine months ended |
||||||||||||
|
|
|
September 30, |
|
September 30, |
||||||||||||
|
(in millions, except share/per share amounts) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
|
Operating Revenues: |
|
|
|
|
|
|
|
|||||||||
|
Gas sales |
|
$ |
627 |
|
|
$ |
2,884 |
|
|
$ |
2,323 |
|
|
$ |
7,061 |
|
|
Oil sales |
|
94 |
|
|
100 |
|
|
281 |
|
|
|
349 |
|
|||
|
NGL sales |
|
169 |
|
|
260 |
|
|
523 |
|
|
|
842 |
|
|||
|
Marketing |
|
553 |
|
|
1,298 |
|
|
1,707 |
|
|
|
3,371 |
|
|||
|
Other |
|
— |
|
|
(1 |
) |
|
(4 |
) |
|
|
(1 |
) |
|||
|
|
|
1,443 |
|
|
4,541 |
|
|
4,830 |
|
|
|
11,622 |
|
|||
|
Operating Costs and Expenses: |
|
|
|
|
|
|
|
|
||||||||
|
Marketing purchases |
|
545 |
|
|
1,289 |
|
|
1,693 |
|
|
|
3,366 |
|
|||
|
Operating expenses |
|
444 |
|
|
423 |
|
|
1,280 |
|
|
|
1,206 |
|
|||
|
General and administrative expenses |
|
46 |
|
|
41 |
|
|
133 |
|
|
|
120 |
|
|||
|
Merger-related expenses |
|
— |
|
|
— |
|
|
— |
|
|
|
27 |
|
|||
|
Depreciation, depletion and amortization |
|
338 |
|
|
298 |
|
|
979 |
|
|
|
861 |
|
|||
|
Taxes, other than income taxes |
|
63 |
|
|
76 |
|
|
189 |
|
|
|
198 |
|
|||
|
|
|
1,436 |
|
|
2,127 |
|
|
4,274 |
|
|
|
5,778 |
|
|||
|
Operating Income |
|
7 |
|
|
2,414 |
|
|
556 |
|
|
|
5,844 |
|
|||
|
Interest Expense: |
|
|
|
|
|
|
|
|
||||||||
|
Interest on debt |
|
61 |
|
|
77 |
|
|
184 |
|
|
|
218 |
|
|||
|
Other interest charges |
|
3 |
|
|
3 |
|
|
9 |
|
|
|
10 |
|
|||
|
Interest capitalized |
|
(28 |
) |
|
(30 |
) |
|
(87 |
) |
|
|
(89 |
) |
|||
|
|
|
36 |
|
|
50 |
|
|
106 |
|
|
|
139 |
|
|||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Gain (Loss) on Derivatives |
|
93 |
|
|
(1,903 |
) |
|
1,811 |
|
|
|
(6,709 |
) |
|||
|
Loss on Early Extinguishment of Debt |
|
— |
|
|
— |
|
|
(19 |
) |
|
|
(6 |
) |
|||
|
Other Income (Loss), Net |
|
2 |
|
|
— |
|
|
1 |
|
|
|
(1 |
) |
|||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Income (Loss) Before Income Taxes |
|
66 |
|
|
461 |
|
|
2,243 |
|
|
|
(1,011 |
) |
|||
|
Provision for Income Taxes: |
|
|
|
|
|
|
|
|
||||||||
|
Current |
|
— |
|
|
11 |
|
|
— |
|
|
|
41 |
|
|||
|
Deferred |
|
21 |
|
|
— |
|
|
28 |
|
|
|
— |
|
|||
|
|
|
21 |
|
|
11 |
|
|
28 |
|
|
|
41 |
|
|||
|
Net Income (Loss) |
|
$ |
45 |
|
|
$ |
450 |
|
|
$ |
2,215 |
|
|
$ |
(1,052 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Earnings (Loss) Per Common Share: |
|
|
|
|
|
|
|
|
||||||||
|
Basic |
|
$ |
0.04 |
|
|
$ |
0.41 |
|
|
$ |
2.01 |
|
|
$ |
(0.94 |
) |
|
Diluted |
|
$ |
0.04 |
|
|
$ |
0.40 |
|
|
$ |
2.01 |
|
|
$ |
(0.94 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted Average Common Shares Outstanding: |
|
|
|
|
|
|
|
|
||||||||
|
Basic |
|
1,101,231,113 |
|
|
1,110,259,907 |
|
|
1,100,895,642 |
|
|
|
1,113,705,502 |
|
|||
|
Diluted |
|
1,104,027,634 |
|
|
1,112,522,861 |
|
|
1,102,867,675 |
|
|
|
1,113,705,502 |
|
|||
|
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES |
||||||||
|
CONSOLIDATED BALANCE SHEETS |
||||||||
|
(Unaudited) |
||||||||
|
|
|
|
|
|
||||
|
September 30, |
December 31, |
|||||||
|
2023 |
2022 |
|||||||
|
ASSETS |
|
(in millions) |
||||||
|
Current assets: |
|
|
|
|
||||
|
Cash and cash equivalents |
|
$ |
26 |
|
|
$ |
50 |
|
|
Accounts receivable, net |
|
602 |
|
|
1,401 |
|
||
|
Derivative assets |
|
336 |
|
|
145 |
|
||
|
Other current assets |
|
78 |
|
|
68 |
|
||
|
Total current assets |
|
1,042 |
|
|
1,664 |
|
||
|
Natural gas and oil properties, using the full cost method |
|
37,349 |
|
|
35,763 |
|
||
|
Other |
|
555 |
|
|
527 |
|
||
|
Less: Accumulated depreciation, depletion and amortization |
|
(26,381 |
) |
|
(25,387 |
) |
||
|
Total property and equipment, net |
|
11,523 |
|
|
10,903 |
|
||
|
Operating lease assets |
|
163 |
|
|
177 |
|
||
|
Long-term derivative assets |
|
153 |
|
|
72 |
|
||
|
Other long-term assets |
|
92 |
|
|
110 |
|
||
|
Total long-term assets |
|
408 |
|
|
359 |
|
||
|
TOTAL ASSETS |
|
$ |
12,973 |
|
|
$ |
12,926 |
|
|
LIABILITIES AND EQUITY |
|
|
|
|
||||
|
Current liabilities: |
|
|
|
|
||||
|
Accounts payable |
|
$ |
1,317 |
|
|
$ |
1,835 |
|
|
Taxes payable |
|
135 |
|
|
136 |
|
||
|
Interest payable |
|
26 |
|
|
86 |
|
||
|
Derivative liabilities |
|
219 |
|
|
1,317 |
|
||
|
Current operating lease liabilities |
|
44 |
|
|
42 |
|
||
|
Other current liabilities |
|
17 |
|
|
65 |
|
||
|
Total current liabilities |
|
1,758 |
|
|
3,481 |
|
||
|
Long-term debt |
|
4,114 |
|
|
4,392 |
|
||
|
Long-term operating lease liabilities |
|
116 |
|
|
133 |
|
||
|
Long-term derivative liabilities |
|
186 |
|
|
378 |
|
||
|
Other long-term liabilities |
|
262 |
|
|
218 |
|
||
|
Total long-term liabilities |
|
4,678 |
|
|
5,121 |
|
||
|
Commitments and contingencies |
|
|
|
|
||||
|
Equity: |
|
|
|
|
||||
|
Common stock, $0.01 par value; 2,500,000,000 shares authorized; issued 1,163,077,745 shares as of September 30, 2023 and 1,161,545,588 shares as of December 31, 2022 |
|
12 |
|
|
12 |
|
||
|
Additional paid-in capital |
|
7,185 |
|
|
7,172 |
|
||
|
Accumulated deficit |
|
(324 |
) |
|
(2,539 |
) |
||
|
Accumulated other comprehensive income (loss) |
|
(9 |
) |
|
6 |
|
||
|
Common stock in treasury, 61,614,693 shares as of September 30, 2023 and December 31, 2022 |
|
(327 |
) |
|
(327 |
) |
||
|
Total equity |
|
6,537 |
|
|
4,324 |
|
||
|
TOTAL LIABILITIES AND EQUITY |
|
$ |
12,973 |
|
|
$ |
12,926 |
|
|
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES |
||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
|
(Unaudited) |
||||||||
|
|
|
For the nine months ended |
||||||
|
|
|
September 30, |
||||||
|
(in millions) |
|
2023 |
|
2022 |
||||
|
Cash Flows From Operating Activities: |
|
|
|
|
||||
|
Net income (loss) |
|
$ |
2,215 |
|
|
$ |
(1,052 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
||||
|
Depreciation, depletion and amortization |
|
979 |
|
|
861 |
|
||
|
Amortization of debt issuance costs |
|
5 |
|
|
8 |
|
||
|
Deferred income taxes |
|
28 |
|
|
— |
|
||
|
(Gain) loss on derivatives, unsettled |
|
(1,562 |
) |
|
2,524 |
|
||
|
Stock-based compensation |
|
7 |
|
|
4 |
|
||
|
Loss on early extinguishment of debt |
|
19 |
|
|
6 |
|
||
|
Other |
|
3 |
|
|
2 |
|
||
|
Change in assets and liabilities: |
|
|
|
|
|
|
||
|
Accounts receivable |
|
799 |
|
|
(602 |
) |
||
|
Accounts payable |
|
(362 |
) |
|
506 |
|
||
|
Taxes payable |
|
(2 |
) |
|
28 |
|
||
|
Interest payable |
|
(33 |
) |
|
(22 |
) |
||
|
Inventories |
|
(15 |
) |
|
(8 |
) |
||
|
Other assets and liabilities |
|
(42 |
) |
|
(59 |
) |
||
|
Net cash provided by operating activities |
|
2,039 |
|
|
2,196 |
|
||
|
|
|
|
|
|
||||
|
Cash Flows From Investing Activities: |
|
|
|
|
||||
|
Capital investments |
|
(1,833 |
) |
|
(1,623 |
) |
||
|
Proceeds from sale of property and equipment |
|
123 |
|
|
15 |
|
||
|
Net cash used in investing activities |
|
(1,710 |
) |
|
(1,608 |
) |
||
|
|
|
|
|
|
||||
|
Cash Flows From Financing Activities: |
|
|
|
|
||||
|
Payments on current portion of long-term debt |
|
— |
|
|
(205 |
) |
||
|
Payments on long-term debt |
|
(437 |
) |
|
(71 |
) |
||
|
Payments on revolving credit facility |
|
(3,044 |
) |
|
(10,341 |
) |
||
|
Borrowings under revolving credit facility |
|
3,182 |
|
|
10,061 |
|
||
|
Change in bank drafts outstanding |
|
(50 |
) |
|
62 |
|
||
|
Proceeds from exercise of common stock options |
|
— |
|
|
7 |
|
||
|
Purchase of treasury stock |
|
— |
|
|
(100 |
) |
||
|
Debt issuance/amendment costs |
|
— |
|
|
(14 |
) |
||
|
Cash paid for tax withholding |
|
(4 |
) |
|
(4 |
) |
||
|
Net cash used in financing activities |
|
(353 |
) |
|
(605 |
) |
||
|
|
|
|
|
|
||||
|
Decrease in cash and cash equivalents |
|
(24 |
) |
|
(17 |
) |
||
|
Cash and cash equivalents at beginning of year |
|
50 |
|
|
28 |
|
||
|
Cash and cash equivalents at end of period |
|
$ |
26 |
|
|
$ |
11 |
|
Hedging Summary
A detailed breakdown of derivative financial instruments and financial basis positions as of September 30, 2023, including the remainder of 2023 and excluding those positions that settled in the first, second and third quarters, is shown below. Please refer to the Company’s quarterly report on Form 10-Q to be filed with the Securities and Exchange Commission for more information on the Company’s commodity and basis protection.
|
|
|
|
Weighted Average Price per MMBtu |
||||||||||
|
|
Volume (Bcf) |
|
Swaps |
|
Sold Puts |
|
Purchased Puts |
|
Sold Calls |
||||
|
Natural gas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price swaps |
179 |
|
$ |
3.28 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
Two-way costless collars |
32 |
|
|
— |
|
|
— |
|
|
2.88 |
|
|
3.29 |
|
Three-way costless collars |
47 |
|
|
— |
|
|
2.08 |
|
|
2.50 |
|
|
2.91 |
|
Total |
258 |
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price swaps |
528 |
|
$ |
3.54 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
Two-way costless collars |
44 |
|
|
— |
|
|
— |
|
|
3.07 |
|
|
3.53 |
|
Three-way costless collars |
77 |
|
|
— |
|
|
2.46 |
|
|
3.19 |
|
|
3.99 |
|
Total |
649 |
|
|
|
|
|
|
|
|
|
|
|
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Two-way costless collars |
73 |
|
$ |
— |
|
$ |
— |
|
$ |
3.50 |
|
$ |
5.40 |
|
Three-way costless collars |
106 |
|
|
— |
|
|
2.50 |
|
|
3.75 |
|
|
5.69 |
|
Total |
179 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas financial basis positions |
|
Volume |
|
Basis Differential |
|||
|
|
|
(Bcf) |
|
($/MMBtu) |
|||
|
Q4 2023 |
|
|
|
|
|||
|
Dominion South |
|
33 |
|
|
$ |
(0.75 |
) |
|
TCO |
|
20 |
|
|
$ |
(0.61 |
) |
|
TETCO M3 |
|
15 |
|
|
$ |
(0.18 |
) |
|
Trunkline Zone 1A |
|
3 |
|
|
$ |
(0.29 |
) |
|
Total |
|
71 |
|
|
$ |
(0.57 |
) |
|
2024 |
|
|
|
|
|
|
|
|
Dominion South |
|
46 |
|
|
$ |
(0.71 |
) |
|
2025 |
|
|
|
|
|
|
|
|
Dominion South |
|
9 |
|
|
$ |
(0.64 |
) |
|
Call Options – Natural Gas (Net) |
|
Volume |
|
Weighted Average Strike Price |
|||
|
|
|
(Bcf) |
|
($/MMBtu) |
|||
|
2023 |
|
15 |
|
|
$ |
2.97 |
|
|
2024 |
|
82 |
|
|
|
6.56 |
|
|
2025 |
|
73 |
|
|
|
7.00 |
|
|
2026 |
|
73 |
|
|
|
7.00 |
|
|
Total |
|
243 |
|
|
|
|
|
|
|
|
|
Weighted Average Price per Bbl |
||||||||||
|
|
Volume (MBbls) |
|
Swaps |
|
Sold Puts |
|
Purchased Puts |
|
Sold Calls |
||||
|
Oil |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price swaps |
733 |
|
$ |
67.34 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
Two-way costless collars |
147 |
|
|
— |
|
|
— |
|
|
70.00 |
|
|
80.58 |
|
Three-way costless collars |
291 |
|
|
— |
|
|
34.36 |
|
|
46.05 |
|
|
55.96 |
|
Total |
1,171 |
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price swaps |
1,571 |
|
$ |
71.06 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
Two-way costless collars |
512 |
|
|
— |
|
|
— |
|
|
70.00 |
|
|
85.63 |
|
Total |
2,083 |
|
|
|
|
|
|
|
|
|
|
|
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price swaps |
41 |
|
$ |
77.66 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
Ethane |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price swaps |
2,254 |
|
$ |
10.99 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price swaps |
3,429 |
|
$ |
10.84 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
Propane |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price swaps |
1,782 |
|
$ |
30.44 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price swaps |
3,254 |
|
$ |
31.78 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price swaps |
63 |
|
$ |
26.46 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
Normal Butane |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price swaps |
198 |
|
$ |
40.96 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price swaps |
329 |
|
$ |
40.74 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
Natural Gasoline |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price swaps |
171 |
|
$ |
63.74 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price swaps |
329 |
|
$ |
64.37 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
Contacts
Investor Contact
Brittany Raiford
Vice President, Investor Relations
(832) 796-7906
brittany_raiford@swn.com
