false000000733200000073322023-08-032023-08-03

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

________________________________________________________________
FORM 8-K
 
________________________________________________________________

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of report (Date of earliest event reported): August 3, 2023
 
________________________________________________________________
SOUTHWESTERN ENERGY COMPANY
(Exact name of registrant as specified in its charter)
 
________________________________________________________________
Delaware001-08246 71-0205415
(State or other jurisdiction of incorporation)(Commission File Number) (IRS Employer Identification No.)
 
10000 Energy Drive 
Spring, TX 77389
(Address of principal executive offices)(Zip Code)

(832) 796-1000
(Registrant's telephone number, including area code)
 
Not Applicable
(Former name or former address, if changed since last report)
 
________________________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
         Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
         Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
         Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
         Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, Par Value $0.01SWNNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.




Explanatory Note
The information in this report provided under Item 2.02, including Exhibit 99.1 attached hereto, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
 
SECTION 2 - Financial Information
 
Item 2.02 Results of Operations and Financial Condition.

On August 3, 2023, Southwestern Energy Company (the "Company") issued a press release announcing the Company's financial results for the quarter ended June 30, 2023. The press release is being furnished as Exhibit 99.1.
  
SECTION 9 - Financial Statements and Exhibits
 
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document)
   
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
  SOUTHWESTERN ENERGY COMPANY
Dated: August 3, 2023
 By:  /s/   CARL F. GIESLER, JR.                  
  Name: Carl F. Giesler, Jr.
  Title: Executive Vice President and Chief Financial Officer
    


swnheadera.jpg
NEWS RELEASE

SOUTHWESTERN ENERGY ANNOUNCES SECOND QUARTER 2023 RESULTS
Reduces full-year capital investment guidance ~10%

SPRING, Texas – August 3, 2023...Southwestern Energy Company (NYSE: SWN) today announced financial and operating results for the second quarter ended June 30, 2023.

Generated $231 million net income, $95 million adjusted net income (non-GAAP), $484 million adjusted EBITDA (non-GAAP) and $425 million net cash provided by operating activities
Reported total net production of 423 Bcfe, or 4.6 Bcfe per day, including 4.0 Bcf per day of gas and 106 MBbls per day of liquids
Invested $595 million of capital and placed 50 wells to sales, including 28 in Appalachia and 22 in Haynesville
Reduced full-year capital investment guidance $200 million, or approximately 10%, due to activity reductions, moderating inflation, and operational efficiencies
Closed divestiture of non-core Pennsylvania Utica assets, applying $123 million of net proceeds to debt reduction

“Southwestern Energy continues to improve the resilience and free cash flow generation capacity of our business. With our successes mitigating inflationary pressures and driving operational efficiencies, we expect to deliver our 2023 plan with less activity and corresponding investment. Debt reduction remains our top capital allocation priority, which we accelerated with a non-core asset sale. Our disciplined strategy to manage through the commodity price cycle maintains the Company’s financial strength and productive capacity. We are well positioned to increase shareholder value in the supportive longer-term natural gas environment,” said Bill Way, Southwestern Energy President and Chief Executive Officer.



            
Financial Results
For the three months endedFor the six months ended
June 30,June 30,
(in millions)2023202220232022
Net income (loss)$231 $1,173 $2,170 $(1,502)
Adjusted net income (non-GAAP)$95 $368 $441 $815 
Diluted earnings (loss) per share$0.21 $1.05 $1.97 $(1.35)
Adjusted diluted earnings per share (non-GAAP)$0.09 $0.33 $0.40 $0.73 
Adjusted EBITDA (non-GAAP)$484 $822 $1,283 $1,727 
Net cash provided by operating activities$425 $427 $1,562 $1,399 
Net cash flow (non-GAAP)$453 $754 $1,217 $1,615 
Total capital investments (1)
$595 $585 $1,260 $1,129 
Free cash flow (deficit) (non-GAAP)$(142)$169 $(43)$486 
(1)Capital investments include a decrease of $22 million and an increase of $34 million for the three months ended June 30, 2023 and 2022, respectively, and a decrease of $28 million and an increase of $77 million for the six months ended June 30, 2023 and 2022, respectively, relating to the change in capital accruals between periods.

For the quarter ended June 30, 2023, Southwestern Energy recorded net income of $231 million, or $0.21 per diluted share, including a gain on mark-to-market of unsettled derivatives. Excluding this and other one-time items, adjusted net income (non-GAAP) was $95 million, or $0.09 per diluted share, and adjusted EBITDA (non-GAAP) was $484 million. Net cash provided by operating activities was $425 million, net cash flow (non-GAAP) was $453 million and total capital investments were $595 million.

As of June 30, 2023, Southwestern Energy had total debt of $4.05 billion and net debt to adjusted EBITDA (non-GAAP) of 1.4x. At the end of the quarter, the Company had $310 million of borrowings under its revolving credit facility and $25 million in outstanding letters of credit.

As indicated in the table below, second quarter 2023 weighted average realized price was $1.84 per Mcfe, excluding the impact of derivatives and net of $0.25 per Mcfe of transportation expenses. Including derivatives, weighted average realized price for the second quarter was down 23% from $3.04 per Mcfe in 2022 to $2.33 per Mcfe in 2023 primarily due to lower commodity prices including a 71% decrease in NYMEX Henry Hub and a 32% decrease in WTI.

2


            
Realized PricesFor the three months ended June 30,For the six months ended June 30,
(includes transportation costs)
2023202220232022
Natural Gas Price:
NYMEX Henry Hub price ($/MMBtu) (1)
$2.10 $7.17 $2.76 $6.06 
Discount to NYMEX (2)
(0.63)(0.69)(0.43)(0.56)
Average realized gas price, excluding derivatives ($/Mcf)
$1.47 $6.48 $2.33 $5.50 
Gain (loss) on settled financial basis derivatives ($/Mcf)
(0.02)0.06 (0.05)0.04 
Gain (loss) on settled commodity derivatives ($/Mcf)
0.57 (3.86)0.17 (2.70)
Average realized gas price, including derivatives ($/Mcf)
$2.02 $2.68 $2.45 $2.84 
Oil Price:
WTI oil price ($/Bbl) (3)
$73.78 $108.41 $74.96 $101.35 
Discount to WTI (4)
(10.58)(8.12)(10.41)(7.81)
Average realized oil price, excluding derivatives ($/Bbl)
$63.20 $100.29 $64.55 $93.54 
Average realized oil price, including derivatives ($/Bbl)
$56.82 $56.94 $57.49 $53.73 
NGL Price:
Average realized NGL price, excluding derivatives ($/Bbl)
$18.63 $40.07 $21.51 $39.72 
Average realized NGL price, including derivatives ($/Bbl)
$20.85 $29.23 $22.71 $28.22 
Percentage of WTI, excluding derivatives25 %37 %29 %39 %
Total Weighted Average Realized Price:
Excluding derivatives ($/Mcfe)
$1.84 $6.69 $2.65 $5.80 
Including derivatives ($/Mcfe)
$2.33 $3.04 $2.75 $3.14 
(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 June 30, 2023 was 423 Bcfe, of which 86% was natural gas, 12% NGLs and 2% oil. Capital investments totaled $595 million for the second quarter of 2023 with 38 wells drilled, 46 wells completed and 50 wells placed to sales.
3


            
For the three months endedFor the six months ended
June 30,June 30,
2023202220232022
Production
Natural gas production (Bcf)
365 383 718 759 
Oil production (MBbls)
1,441 1,363 2,859 2,633 
NGL production (MBbls)
8,247 7,738 16,487 14,657 
Total production (Bcfe)
423 438 834 863 
Average unit costs per Mcfe
Lease operating expenses (1)
$1.00 $0.97 $1.03 $0.96 
General & administrative expenses (2)
$0.09 $0.07 $0.09 $0.08 
Taxes, other than income taxes$0.14 $0.15 

$0.15 $0.14 
Full cost pool amortization$0.77 $0.65 $0.76 $0.64 
(1)Includes post-production costs such as gathering, processing, fractionation and compression.
(2)Excludes $2 million and $27 million in merger-related expenses for the three and six months ended June 30, 2022, respectively.

Appalachia – In the second quarter, total production was 257 Bcfe, with NGL production of 90 MBbls per day and oil production of 16 MBbls per day. The Company drilled 20 wells, completed 28 wells and placed 28 wells to sales with an average lateral length of 17,304 feet.

Haynesville – In the second quarter, total production was 166 Bcf. There were 18 wells drilled, 18 wells completed and 22 wells placed to sales in the quarter with an average lateral length of 8,527 feet.

E&P Division ResultsFor the three months ended June 30, 2023For the six months ended June 30, 2023
AppalachiaHaynesvilleAppalachiaHaynesville
Natural gas production (Bcf)
199 166 392 326 
Liquids production
Oil (MBbls)
1,434 2,843 15 
NGL (MBbls)
8,240 16,480 
Production (Bcfe)
257 166 508 326 
Capital investments (in millions)
Drilling and completions, including workovers$219 $292 $438 $651 
Land acquisition and other27 53 
Capitalized interest and expense29 19 60 39 
Total capital investments$275 $312 $551 $693 
Gross operated well activity summary
Drilled20 18 39 30 
Completed28 18 43 39 
Wells to sales28 22 41 45 
Total weighted average realized price per Mcfe, excluding derivatives$1.83 $1.86 $2.75 $2.50 
4


            
Wells to sales summaryFor the three months ended June 30, 2023
Gross wells to salesAverage lateral length
Appalachia
Super Rich Marcellus11 15,445 
Rich Marcellus16,822 
Dry Gas Utica (1)
19,740 
Dry Gas Marcellus20,136 
Haynesville22 8,527 
Total50 
(1)Ohio Utica
2023 Guidance
In the table below, the Company provides third quarter and updated full year 2023 guidance reflecting current market conditions. Bold indicates updated full year guidance.

PRODUCTION3rd QuarterTotal Year
Gas production (Bcf)
360 – 380
1,425 – 1,465
Liquids (% of production)
~13.5%13.5 – 14.0%
Total (Bcfe)
419 – 4391,650 – 1,705
CAPITAL BY DIVISION (in millions)
Appalachia~45%
Haynesville~55%
 Total D&C capital (includes land) $1,750 – $2,020
 Other$50 – $70
 Capitalized interest and expense$200 – $210
Total capital investments$2,000 – $2,300
PRICING
Natural gas discount to NYMEX including transportation (1)
$0.75 – $0.87 per Mcf$0.55 – $0.70 per Mcf
Oil discount to West Texas Intermediate (WTI) including transportation$12.50 – $14.50 per Bbl$12.00 – $15.00 per Bbl
Natural gas liquids realization as a % of WTI including transportation (2)
20% – 28%27% – 35%
EXPENSES
Lease operating expenses$1.05 – $1.11 per Mcfe
General & administrative expense$0.08 – $0.12 per Mcfe
Taxes, other than income taxes$0.16 – $0.20 per Mcfe
Income tax rate (~100% deferred)23.0 %
GROSS OPERATED WELL COUNT (3)
DrilledCompletedWells To SalesEnding DUC Inventory
Appalachia53 – 5759 – 6362 – 6613 – 17
Haynesville52 – 5655 – 5961 – 6517 – 21
   Total Well Count
105 – 113114 – 122123 – 13130 – 38
(1)Includes impact of transportation costs and expected $0.08 $0.12 per Mcf and $0.02 $0.04 per Mcf impact from financial basis hedges for the third quarter and full year of 2023, respectively.
(2)Annual guidance based on $74 per Bbl WTI.
(3)Based on the midpoint of capital investment guidance.

5


            
Conference Call
Southwestern Energy will host a conference call and webcast on Friday, August 4, 2023 at 9:30 a.m. Central to discuss second quarter 2023 results. To participate, dial US toll-free 877-883-0383, or international 412-902-6506 and enter access code 6394673. 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.

Investor Contact
Brittany Raiford
Director, Investor Relations
(832) 796-7906
brittany_raiford@swn.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.
6


            
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.
###



7


            
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the three months endedFor the six months ended
June 30,June 30,
(in millions, except share/per share amounts)2023202220232022
Operating Revenues:
Gas sales$551 $2,485 $1,696 $4,177 
Oil sales92 138 187 249 
NGL sales153 310 354 582 
Marketing475 1,207 1,154 2,073 
Other(2)(2)(4)— 
1,269 4,138 3,387 7,081 
Operating Costs and Expenses:
Marketing purchases481 1,215 1,148 2,077 
Operating expenses418 402 836 783 
General and administrative expenses41 35 87 79 
Merger-related expenses  27 
Depreciation, depletion and amortization328 288 641 563 
Taxes, other than income taxes58 65 126 122 
1,326 2,007 2,838 3,651 
Operating Income (Loss)(57)2,131 549 3,430 
Interest Expense:
Interest on debt60 73 123 141 
Other interest charges3 6 
Interest capitalized(29)(29)(59)(59)
34 48 70 89 
Gain (Loss) on Derivatives317 (879)1,718 (4,806)
Loss on Early Extinguishment of Debt (4)(19)(6)
Other Loss, Net (1)(1)(1)
Income (Loss) Before Income Taxes226 1,199 2,177 (1,472)
Provision (Benefit) for Income Taxes
Current 26  30 
Deferred(5)— 7 — 
(5)26 7 30 
Net Income (Loss)$231 $1,173 $2,170 $(1,502)
Earnings (Loss) Per Common Share
Basic$0.21 $1.05 $1.97 $(1.35)
Diluted$0.21 $1.05 $1.97 $(1.35)
Weighted Average Common Shares Outstanding:
Basic1,101,167,082 1,116,175,758 1,100,725,127 1,115,456,855 
Diluted1,102,724,782 1,118,244,778 1,102,487,313 1,115,456,855 
8


            
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, 2023December 31, 2022
ASSETS(in millions)
Current assets:
Cash and cash equivalents$25 $50 
Accounts receivable, net598 1,401 
Derivative assets423 145 
Other current assets74 68 
Total current assets1,120 1,664 
Natural gas and oil properties, using the full cost method36,899 35,763 
Other545 527 
Less: Accumulated depreciation, depletion and amortization(26,039)(25,387)
Total property and equipment, net11,405 10,903 
Operating lease assets168 177 
Long-term derivative assets205 72 
Other long-term assets103 110 
Total long-term assets476 359 
TOTAL ASSETS$13,001 $12,926 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$1,381 $1,835 
Taxes payable116 136 
Interest payable77 86 
Derivative liabilities270 1,317 
Current operating lease liabilities44 42 
Other current liabilities22 65 
Total current liabilities1,910 3,481 
Long-term debt4,036 4,392 
Long-term operating lease liabilities121 133 
Long-term derivative liabilities205 378 
Other long-term liabilities240 218 
Total long-term liabilities4,602 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 June 30, 2023 and 1,161,545,588 shares as of December 31, 202212 12 
Additional paid-in capital7,182 7,172 
Accumulated deficit(369)(2,539)
Accumulated other comprehensive income (loss)(9)
Common stock in treasury, 61,614,693 shares as of June 30, 2023 and December 31, 2022(327)(327)
Total equity6,489 4,324 
TOTAL LIABILITIES AND EQUITY$13,001 $12,926 


9


            
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the six months ended
June 30,
(in millions)20232022
Cash Flows From Operating Activities:
Net income (loss)$2,170 $(1,502)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization641 563 
Amortization of debt issuance costs4 
Deferred income taxes7 — 
(Gain) loss on derivatives, unsettled(1,631)2,510 
Stock-based compensation5 
Loss on early extinguishment of debt19 
Other2 
Change in assets and liabilities:
Accounts receivable803 (621)
Accounts payable(363)433 
Taxes payable(20)
Interest payable(5)
Inventories(25)(5)
Other assets and liabilities(45)(7)
Net cash provided by operating activities1,562 1,399 
Cash Flows From Investing Activities:
Capital investments(1,286)(1,050)
Proceeds from sale of property and equipment123 
Net cash used in investing activities(1,163)(1,049)
Cash Flows From Financing Activities:
Payments on current portion of long-term debt (204)
Payments on long-term debt(437)(71)
Payments on revolving credit facility(1,946)(5,564)
Borrowings under revolving credit facility2,006 5,510 
Change in bank drafts outstanding(43)29 
Proceeds from exercise of common stock options 
Purchase of treasury stock (20)
Debt issuance/amendment costs (11)
Cash paid for tax withholding(4)(4)
Net cash used in financing activities(424)(328)
Increase (decrease) in cash and cash equivalents(25)22 
Cash and cash equivalents at beginning of year50 28 
Cash and cash equivalents at end of period$25 $50 







10


            
Hedging Summary
A detailed breakdown of derivative financial instruments and financial basis positions as of June 30, 2023, including the remainder of 2023 and excluding those positions that settled in the first and second 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 complete information on the Company’s commodity, basis and interest rate protection.
Weighted Average Price per MMBtu
Purchased
Volume (Bcf)SwapsSold PutsPutsSold Calls
Natural gas
2023
Fixed price swaps348 $3.25 $— $— $— 
Two-way costless collars78 — — 2.83 3.21 
Three-way costless collars95 — 2.08 2.50 2.91 
Total521 
2024
Fixed price swaps528 $3.54 $— $— $— 
Two-way costless collars44 — — 3.07 3.53 
Three-way costless collars11 — 2.25 2.80 3.54 
Total583 
2025
Two-way costless collars73 $— $— $3.50 $5.40 
Three-way costless collars106 — 2.50 3.75 5.69 
Total179 

Natural gas financial basis positionsVolumeBasis Differential
(Bcf)($/MMBtu)
Q3 2023
Dominion South34 $(0.75)
TCO22 $(0.62)
TETCO M316 $(0.66)
Trunkline Zone 1A$(0.29)
Total75 $(0.67)
Q4 2023
Dominion South33 $(0.75)
TCO20 $(0.61)
TETCO M315 $(0.18)
Trunkline Zone 1A$(0.29)
Total71 $(0.57)
2024
Dominion South46 $(0.71)
2025
Dominion South$(0.64)

11


            
Call Options – Natural Gas (Net)VolumeWeighted Average Strike Price
(Bcf)($/MMBtu)
202325 $2.96 
202482 $6.56 
202573 $7.00 
202673 $7.00 
Total253 

Weighted Average Price per Bbl
VolumePurchased
(MBbls)SwapsSold PutsPutsSold Calls
Oil
2023
Fixed price swaps1,466 $67.34 $— $— $— 
Two-way costless collars294 — — 70.00 80.58 
Three-way costless collars582 — 34.36 46.05 55.96 
Total2,342 
2024
Fixed price swaps1,571 $71.06 $— $— $— 
Two-way costless collars146 — — 70.00 78.25 
Total1,717 
2025
Fixed price swaps41 $77.66 $— $— $— 
Ethane
2023
Fixed price swaps4,499 $11.01 $— $— $— 
2024
Fixed price swaps1,305 $10.81 $— $— $— 
Propane
2023
Fixed price swaps3,601 $32.19 $— $— $— 
2024
Fixed price swaps1,460 $33.29 $— $— $— 
Normal Butane
2023
Fixed price swaps396 $40.96 $— $— $— 
2024
Fixed price swaps329 $40.74 $— $— $— 
Natural Gasoline
2023
Fixed price swaps342 $63.74 $— $— $— 
2024
Fixed price swaps329 $64.37 $— $— $— 

12


            
Explanation and Reconciliation of Non-GAAP Financial Measures
The Company reports its financial results in accordance with accounting principles generally accepted in the United States of America (“GAAP”). However, management believes certain non-GAAP performance measures may provide financial statement users with additional meaningful comparisons between current results, the results of the Company’s peers and of prior periods.

One such non-GAAP financial measure is net cash flow. Management presents this measure because (i) it is accepted as an indicator of an oil and gas exploration and production company’s ability to internally fund exploration and development activities and to service or incur additional debt, (ii) changes in operating assets and liabilities relate to the timing of cash receipts and disbursements which the Company may not control and (iii) changes in operating assets and liabilities may not relate to the period in which the operating activities occurred.

Additional non-GAAP financial measures the Company may present from time to time are free cash flow (deficit), net debt, adjusted net income, adjusted diluted earnings per share, adjusted EBITDA and net debt to adjusted EBITDA, all of which exclude certain charges or amounts. Management presents these measures because (i) they are consistent with the manner in which the Company’s position and performance are measured relative to the position and performance of its peers, (ii) these measures are more comparable to earnings estimates provided by securities analysts, and (iii) charges or amounts excluded cannot be reasonably estimated and guidance provided by the Company excludes information regarding these types of items. These adjusted amounts are not a measure of financial performance under GAAP.

Three Months Ended
June 30,
Six Months Ended
June 30,
2023202220232022
Adjusted net income:(in millions)
Net income (loss)$231 $1,173 $2,170 $(1,502)
Add back (deduct):
Merger-related expenses  27 
(Gain) loss on unsettled derivatives (1)
(107)(722)(1,631)2,510 
Loss on early extinguishment of debt 19 
Other (2)
4 7 
Adjustments due to discrete tax items (3)
(57)(263)(494)385 
Tax impact on adjustments24 173 370 (612)
Adjusted net income$95 $368 $441 $815 
(1)Includes ($4) million of non-performance risk adjustment to derivative activities for the six months ended June 30, 2023, and $4 million and $9 million of non-performance risk adjustment to derivative activities for the three and six months ended June 30, 2022, respectively.
(2)Includes $4 million and $5 million for the three and six months ended June 30, 2023, respectively, of G&A related to the development of enterprise resource technology, expensed in the period incurred per GAAP.
(3)The Company’s 2023 income tax rate is 23.0% before the impacts of any valuation allowance.



13


            
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202220232022
Adjusted diluted earnings per share:
Diluted earnings (loss) per share$0.21 $1.05 $1.97 $(1.35)
Add back (deduct):
Merger-related expenses— 0.00  0.03 
(Gain) loss on unsettled derivatives (1)
(0.10)(0.64)(1.48)2.25 
Loss on early extinguishment of debt 0.00 0.02 0.00 
Other (2)
0.00 0.00 0.00 0.00 
Adjustments due to discrete tax items (3)
(0.05)(0.23)(0.45)0.34 
Tax impact on adjustments0.03 0.15 0.34 (0.54)
Adjusted diluted earnings per share$0.09 $0.33 $0.40 $0.73 
(1)Includes ($4) million of non-performance risk adjustment to derivative activities for the six months ended June 30, 2023, and $4 million and $9 million of non-performance risk adjustment to derivative activities for the three and six months ended June 30, 2022, respectively.
(2)Includes $4 million and $5 million for the three and six months ended June 30, 2023, respectively, of G&A related to the development of enterprise resource technology, expensed in the period incurred per GAAP.
(3)The Company’s 2023 income tax rate is 23.0% before the impacts of any valuation allowance.
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202220232022
Net cash flow:(in millions)
Net cash provided by operating activities$425 $427 $1,562 $1,399 
Add back (deduct):
Changes in operating assets and liabilities28 325 (345)189 
Merger-related expenses  27 
Net cash flow$453 $754 $1,217 $1,615 
Three Months EndedSix Months Ended
June 30,June 30,
2023202220232022
Free cash flow (deficit):(in millions)
Net cash flow$453 $754 $1,217 $1,615 
Subtract:
Total capital investments(595)(585)(1,260)(1,129)
Free cash flow (deficit)$(142)$169 $(43)$486 
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202220232022
Adjusted EBITDA:(in millions)
Net income (loss)$231 $1,173 $2,170 $(1,502)
Add back (deduct):
Interest expense34 48 70 89 
Income tax expense (benefit)(5)26 7 30 
Depreciation, depletion and amortization328 288 641 563 
Merger-related expenses  27 
(Gain) loss on unsettled derivatives (1)
(107)(722)(1,631)2,510 
Loss on early extinguishment of debt 19 
Other(1)2 
Stock-based compensation expense4 5 
Adjusted EBITDA$484 $822 $1,283 $1,727 
14


            

(1)Includes ($4) million of non-performance risk adjustment to derivative activities for the six months ended June 30, 2023, and $4 million and $9 million of non-performance risk adjustment to derivative activities for the three and six months ended June 30, 2022, respectively.
12 Months Ended
June 30, 2023
Adjusted EBITDA:(in millions)
Net income$5,521 
Add back (deduct):
Interest expense165 
Income tax expense28 
Depreciation, depletion and amortization1,252 
Gain on unsettled derivatives (1)
(4,165)
Loss on early extinguishment of debt27 
Stock-based compensation expense
Other
Adjusted EBITDA$2,839 
(1)Includes ($13) million of non-performance risk adjustment for the twelve months ended June 30, 2023.
June 30, 2023
Net debt:(in millions)
Total debt (1)
$4,053 
Subtract:
Cash and cash equivalents(25)
Net debt$4,028 
(1)Does not include $17 million of unamortized debt discount and issuance expense.
June 30, 2023
Net debt to Adjusted EBITDA:(in millions)
Net debt$4,028 
Adjusted EBITDA
$2,839 
Net debt to Adjusted EBITDA1.4x
15

v3.23.2
Cover Page
Aug. 03, 2023
Cover [Abstract]  
Amendment Flag false
Entity Central Index Key 0000007332
Document Type 8-K
Document Period End Date Aug. 03, 2023
Entity Registrant Name SOUTHWESTERN ENERGY CO
Entity Incorporation, State or Country Code DE
Entity File Number 001-08246
Entity Tax Identification Number 71-0205415
Entity Address, Address Line One 10000 Energy Drive
Entity Address, City or Town Spring
Entity Address, State or Province TX
Entity Address, Postal Zip Code 77389
City Area Code 832
Local Phone Number 796-1000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, Par Value $0.01
Trading Symbol SWN
Security Exchange Name NYSE
Entity Emerging Growth Company false

Southwestern Energy (NYSE:SWN)
Historical Stock Chart
From Mar 2024 to Apr 2024 Click Here for more Southwestern Energy Charts.
Southwestern Energy (NYSE:SWN)
Historical Stock Chart
From Apr 2023 to Apr 2024 Click Here for more Southwestern Energy Charts.