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Southwestern Energy Co. Message Board

  • bluecheese4u bluecheese4u Feb 20, 2013 6:25 PM Flag

    SOUTHWESTERN ENERGY ANNOUNCES 2012 FINANCIAL AND OPERATING RESULTS

    SOUTHWESTERN ENERGY ANNOUNCES 2012 FINANCIAL AND OPERATING RESULTS

    Houston, Texas – February 20, 2013...Southwestern Energy Company (NYSE: SWN) today announced its financial and operating results for the fourth quarter and the year ended December 31, 2012. Calendar year 2012 highlights include:
    • Gas and oil production of 565 Bcfe, up 13% over 2011
    • Adjusted net income of $485.2 million, which excludes non-cash ceiling test
    impairments of natural gas and oil properties and unrealized net gains on
    derivative contracts (a non-GAAP measure reconciled below)
    • Net cash provided by operating activities before changes in operating assets and
    liabilities of approximately $1.6 billion (a non-GAAP measure reconciled below)
    “Southwestern Energy’s storyline in 2012 was ‘Success in a low gas price environment,’ not ‘Survival hoping for a better product prices,’” remarked Steve Mueller, President and Chief Executive Officer of Southwestern Energy. “We grew production by 13%, set records both for highest average initial producing rates and lowest well costs in the Fayetteville Shale and ramped our Marcellus production dramatically. During 2012, we also posted the second highest cash flow in the company’s history, along with record gathered gas volumes that translated to record cash flows in our Midstream business.
    “I am especially excited about the way we eliminated some of our operating costs. We didn't just reduce costs. A team made up of several disciplines found ways to eliminate the need for two of our three salt water disposal facilities in the Fayetteville Shale. Working with agencies in Arkansas, our staff developed new methods to creatively and effectively reuse the water leading to less road use, less water to dispose of and significant long term cost savings.
    “Our approach in 2013 maintains the sharp focus on innovation both in our operating areas and our exploration projects. Good economic decisions remain imperative, along with staying disciplined and improving the efficiency and safety in our operations. I am very proud of what our employees have accomplished in 2012 and I am very excited about what our team can do in 2013. It looks to be one of the most exciting years in Southwestern Energy’s history.”
    Fourth Quarter of 2012 Financial Results
    For the fourth quarter of 2012, Southwestern reported a net loss of $355.6 million, or $1.02 per diluted share. This included a $849.3 million non-cash ceiling test impairment ($510.4 million net of taxes) of the company’s natural gas and oil properties resulting from lower natural gas prices. The net loss also included a non-cash unrealized loss of $2.6 million ($1.6 million net of taxes) on derivative contracts. Excluding these non-cash items, Southwestern reported net income for the fourth quarter of 2012 of $156.4 million (reconciled below), or $0.44 per diluted share, compared to net income of $158.5 million, or $0.45 per diluted share, for the prior year period. Net cash provided by operating activities before changes in operating assets and liabilities (reconciled below) was $456.9 million for the fourth quarter of 2012, compared to $453.7 million for the same period in 2011.
    E&P Segment – Excluding the non-cash items noted above, operating income from the company’s E&P segment (reconciled below) was $196.8 million for the three months ended December 31, 2012, compared to $195.8 million for the same period in 2011. The increase was primarily due to higher production volumes, partially offset by lower realized natural gas prices and increased operating costs and expenses from higher activity levels.
    Gas and oil production totaled 149.9 Bcfe in the fourth quarter of 2012, up 12% from 133.3 Bcfe in the fourth quarter of 2011, and included 125.1 Bcf from the company’s Fayetteville Shale play, up from 116.5 Bcf in the fourth quarter of 2011. Production from the Marcellus Shale was 19.3 Bcf in the fourth quarter of 2012, compared to 8.1 Bcf in the fourth quarter of 2011.
    Including the effect of hedges, Southwestern’s average realized gas price in the fourth quarter of 2012 was $3.72 per Mcf, down from $4.04 per Mcf in the fourth quarter of 2011. The company’s commodity hedging activities increased its average gas price by $0.76 per Mcf during the fourth quarter of 2012, compared to an increase of $1.00 per Mcf during the same period in 2011. As of February 20, 2013, the company had approximately 185 Bcf of its 2013 forecasted gas production hedged at an average floor price of $5.06 per Mcf and approximately 55 Bcf of its 2014 forecasted gas production hedged at an average floor price of $4.43 per Mcf. As of December 31, 2012, the company had protected approximately 232.7 Bcf of its 2013 expected gas production from the potential of widening basis differentials through hedging activities and sales arrangements at an average basis differential to NYMEX gas prices of approximately $0.05 per Mcf.
    The company typically sells its natural gas at a discount to NYMEX settlement prices. This discount includes a basis differential, third-party transportation charges and fuel charges. Disregarding the impact of hedges, the company’s average price received for its gas production during the fourth quarter of 2012 was approximately $0.44 per Mcf lower than average NYMEX settlement prices, compared to approximately $0.51 per Mcf lower during the fourth quarter of 2011.
    Lease operating expenses per unit of production for the company’s E&P segment were $0.81 per Mcfe in the fourth quarter of 2012, compared to $0.84 per Mcfe in the fourth quarter of 2011. The decrease was primarily due to lower salt water disposal costs.
    General and administrative expenses per unit of production were $0.25 per Mcfe in the fourth quarter of 2012, down from $0.29 per Mcfe in the fourth quarter of 2011. The decrease was primarily due to decreased personnel costs per unit of production.

    swnDOTcom/investors/Press_Releases/2013/02.20.13.pdf

 
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