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New Things

Southwestern Energy. Company. Presentation to. IPAA London Oil & Gas Investment Symposium. NYSE: SWN. New Things. Forward-Looking Statements.

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New Things

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  1. Southwestern Energy Company Presentation to IPAA London Oil & Gas Investment Symposium NYSE: SWN New Things

  2. Forward-Looking Statements All statements, other than historical financial information, may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although the company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein include, but are not limited to, the timing and extent of changes in commodity prices for gas and oil, the extent to which the Fayetteville Shale play can replicate the results of other productive shale gas plays, the potential for significant variability in reservoir characteristics of the Fayetteville Shale over such a large acreage position, the timing and extent of the company’s success in discovering, developing, producing and estimating reserves, property acquisition or divestiture activities, the effects of weather and regulation on the company’s gas distribution segment, increased competition, the impact of federal, state and local government regulation, the financial impact of accounting regulations and critical accounting policies, changing market conditions and prices (including regional basis differentials), the comparative cost of alternative fuels, conditions in capital markets and changes in interest rates, availability of oil field personnel, services, drilling rigs and other equipment, and any other factors listed in the reports filed by the company with the Securities and Exchange Commission (the “SEC”). For additional information with respect to certain of these and other factors, see reports filed by the company with the SEC. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

  3. About Southwestern • Focused on domestic exploration and production of natural gas. • 645 Bcfe of reserves; 92% natural gas; 11.9 R/P at year-end 2004. • E&P strategy built on organic growth through the drillbit. • Over 80% of planned E&P capital allocated to drilling in 2005. • Track record of adding significant reserves at low costs. • Since 1999, we’ve averaged annual production growth of 10%, reserve growth of 13%, 246% reserve replacement, and F&D cost of $1.28 per Mcfe. • Proven management team has increased Southwestern’s market capitalization from $187 million at year-end 1998 to over $3 billion today. • Strategy built on the Formula: The Right Peopledoing the Right Things, wisely investing the cash flow from the underlyingAssetswill create Value +.

  4. 2005 Forecast • Planned CapEx of up to $353.0 million, up 20% from 2004. • Production guidance of 61.0 – 63.0 Bcfe, up 13 – 17% from 2004 production. • Plan to significantly accelerate Fayetteville Shale drilling program. Forward-Looking Statement Current Highlights 2004 • Successful drilling programs in the Arkoma Basin, East Texas and Permian Basin. • Record production and reserves of 54.1 Bcfe and 645 Bcfe, respectively, up 31% and 28% over 2003. • Set records for net income, operating income and EBITDA (1). • Began drilling in Fayetteville Shale play in Arkansas. (1) EBITDA is a non-GAAP financial measure.

  5. Proven Track Record For the Periods Ended December 31 EBITDA ($MM)(1) Reserve Replacement Production (Bcfe) F&D Cost ($/Mcfe) $256.4 388% 61-63E 351% 54.1 $1.34 $152.3 41.2 40.1 224% 39.8 $1.20 $134.6 $1.18 $1.11 35.7 209% 196% $1.02 32.9 $0.99 $103.2 $99.8 150% $76.1 02 03 04 05E 02 03 04 02 03 04 02 03 04 99 00 99 00 99 00 99 00 01 01 01 01 Note: Reserve data excludes reserve revisions. (1) EBITDA is a non-GAAP financial measure. Forward-Looking Statement

  6. SWN is One of the Lowest Cost Operators 1.50 1.30 Lifting Cost per Mcfe of Production (3 year average) 1.10 Lifting Costs ($/Mcfe) 0.90 0.70 0.50 0.30 BR THX REM SWN NFX PPP ECA CHK PXD NBL RRC COG APA APC DVN XTO XEC SFY SM FST DNR 4.50 4.00 3.50 Drillbit F&D Cost per Mcfe (3 year average) 3.00 Drillbit F&D Costs ($/Mcfe) 2.50 2.00 1.50 1.00 0.50 0.00 XTO DNR BR SWN NBL APA RRC APC COG ECA SFY THX CHK SM REM DVN XEC NFX PXD PPP FST Source: John S. Herold Database Note: All data as of December 31, 2002, 2003 and 2004. APC - Anadarko Petroleum, APA - Apache, BR - Burlington Resources, COG - Cabot Oil & Gas, CHK - Chesapeake Energy, XEC - Cimarex Energy, DNR - Denbury Resources, DVN - Devon Energy, ECA - EnCana, FST - Forest Oil, THX - Houston Exploration, NFX - Newfield Exploration, NBL - Noble Energy, PPP - Pogo Producing Co., PXD - Pioneer Natural Resources, RRC - Range Resources, REM - Remington Oil & Gas, SM - St. Mary Land & Exploration, SFY - Swift Energy, XTO - XTO Energy.

  7. About the Company Utility Segment • 145,000 customers in N. Arkansas • 6th fastest growing region in U.S. • Filed $9.7 MM rate case in Dec. 2004 E&P Segment • 2004 Reserves: 645 Bcfe • 92% Natural Gas • 83% Proved Developed • Reserve Life: 11.9 years • 2004 Production: 54.1 Bcfe Arkoma Reserves - 247.0 Bcf (38%) Production - 20.2 Bcf (37%) Gas Distribution Ozark Pipeline East Texas Reserves - 299.1 Bcfe (47%) Production - 22.2 Bcfe (41%) Permian Gulf Coast Reserves - 60.8 Bcfe (9%) Reserves - 38.6 Bcfe (6%) Production - 7.1 Bcfe (13%) Production - 4.6 Bcfe (9%) Forward-Looking Statement

  8. Capital Investments 390 $352.7 Utility & Corporate Property Acquisitions $295.0 Capitalized Expenses 260 Leasehold & Seismic $180.2 ($ Millions) Development Drilling Exploration Drilling 130 $92.5(1) $92.1 Arkoma 17% Arkoma Fayetteville Shale 29% 0 East Texas 43% 2001 2002 2003 2004 2005 Plan Gulf Coast 1% Utility 3% (1) Net of $13.5 million reimbursement from Overton Field partnership. Permian 1% Other E&P 6% Forward-Looking Statement

  9. 2004 Development Wells 2004 Development 83 100 142 East Texas - Overton Field 2002-2004 Overton Field Avg Results* Reserve Replacement: 681% LOE Cost (incl. Taxes) ($/Mcfe): $0.47 F&D Cost ($/Mcfe): $0.99 * Including reserve revisions. LEGEND Existing Wells at Year-End 2003 2005 Development Wells Approx. Reserve Overton Field Well Spacing Potential Reserve Potential Count (Acres) (Net Bcfe) Original Wells 16 640 22 2001 - 2002 Development 33 365 89 2003 Development 57 170 102 Planned 2005 Development 80 75 95 Potential Future Development Locations @ $6.00 Gas with PVI ≥ 1.3 92 60 84 Forward-Looking Statement

  10. Overton Net Production Bcfe 2000 0.3 2001 2.3 2002 5.9 2003 13.6 2004 21.8 2005 Forecast 25 - 27 Added 5th Rig Accelerated Drilling Program with Equity Offering Dec-01 Dec-02 Dec-03 Dec-04 Overton Field Gross Production MMcfe/d 100 80 60 40 20 0 Dec-00 Forward-Looking Statement

  11. Overton Field - Improved Drilling Results Depth (feet) Drilling Days versus Depth 0 1000 • Reduced drilling time by > 50%. • Increased initial production by 200%. • Increased gross reserves by 60% (avg. EUR of 2.0 Bcfe per well in 2004) 2000 3000 4000 5000 FINA Avg: 55 Days 6000 2001 Avg: 35 Days 7000 2002 Avg: 27 Days 2003 Avg: 23 Days 8000 2004 Avg: 19 Days 9000 10000 11000 12000 13000 0 5 10 15 20 25 30 35 40 45 50 55 60 Days Forward-Looking Statement

  12. Arkoma Basin * Including reserve revisions. ** For illustrative purposes only. Shaded area does not delineate actual play area. Forward-Looking Statement

  13. Ranger Anticline Ranger Anticline (inception thru 12/30/04)* Success: 43/50 Net EUR: 62.8 Bcf F&D/Mcf: $.72 1 mile SWN Exploratory Acreage SWN HBP Acreage SWN Producing Wells at 12/31/04 2005 Proposed Wells Ranger Anticline Reserve Well Potential Potential Count (Net Bcfe) Producing Wells at 12/31/02 13 20 Successful Wells in 2003 10 12 Successful Wells in 2004 20 31 2005 Drilling Program 43 48 Potential Future Locations * Including reserve revisions. Other Contingent Locations 133 121 Forward-Looking Statement TOTAL 219 232

  14. Arkoma - Fayetteville Shale Play Wedington Incongruity Forward-Looking Statement

  15. Reserve Replacement PVI How Have We Been Doing? PVI ($/$) F&D ($/Mcfe) Reserve Replacement (%) 400% $2.50 New Management New E&P Team New Strategy 300% $2.00 $1.50 200% $1.00 100% 0% $0.50 1997 1998 1999 2000(1) 2001 2002 2003 2004 F&D Cost Note: All metrics calculated exclude reserve revisions. (1) PVI metrics calculated using pricing in effect at year-end (except for 2000 which was calculated at $3.00 per Mcf natural gas price).

  16. Outlook for 2005 • Production target of 61.0 – 63.0 Bcfe in 2005 (estimated growth of 13 – 17%). 2004 Actual 2005 Guidance $6.14 Gas $6.00 Gas $7.00 Gas $41.36 Oil $40.00 Oil $50.00 Oil • Net Income $100 - $110 MM $120 - $130 MM $103.6 MM • EPS $1.33 - $1.47 $1.60 - $1.73 $1.40 • Operating Income $185 - $195 MM $218 - $228 MM $182.3 MM • Net Cash Flow (1) $260 - $270 MM $290 - $300 MM $237.7 MM • EBITDA (1) $278 - $288 MM $309 - $319 MM $256.4 MM • CapEx $352.7 MM $352.7 MM $295.0 MM Note: Guidance updated as of April 29, 2005. Per share estimates assume 75.0 million weighted average diluted shares outstanding for 2005. 2004 oil and gas prices represent actual average last-day NYMEX closing prices. 2005 oil and gas prices represent NYMEX price assumptions. (1) Net cash flow is net cash flow before changes in operating assets and liabilities. Net cash flow and EBITDA are non-GAAP financial measures. Forward-Looking Statement

  17. Gas Hedges in Place Through 2007 Avg Price per Mcf Percent Hedged Volumes MMcf Hedged Type (or Floor / Ceiling) 12,000 2005 Swaps 12.6 Bcf $5.04 20 - 25% 50 - 55% Collars 32.0 Bcf $4.65 / $8.29 $6.50/$10.85 1.0 Bcf $6.50/$15.05 1.0 Bcf $5.00/$9.00 1.0 Bcf - Swaps 7.0 Bcf $6.27 2006 $5.00/$7.98 1.0 Bcf $5.00/$18.00 1.0 Bcf - Collars 38.0 Bcf $5.18 / $9.67 $6.50/$9.40 1.0 Bcf $6.50/$9.35 1.0 Bcf - Swaps 12.0 Bcf $6.66 2007 $6.00/$10.55 1.0 Bcf $6.00/$16.65 1.0 Bcf $5.00/$8.01 1.0 Bcf $5.00/$9.27 1.0 Bcf - Collars 14.0 Bcf $6.00 / $10.68 10,000 $5.00/$7.72 1.0 Bcf $5.00/$12.15 1.0 Bcf $5.75/$8.44 1.0 Bcf $5.75/$8.30 1.0 Bcf $6.00/$9.79 1.0 Bcf $6.00/$15.65 1.0 Bcf $5.00/$7.80 1.0 Bcf $5.00/$9.00 1.0 Bcf NYMEX $4.50/$8.65 1.0 Bcf $5.00/$11.40 1.0 Bcf Fixed Price Collar $4.50/$10.10 1.0 Bcf $5.50/$7.60 1.0 Bcf $5.50/$7.60 1.0 Bcf $4.50/$8.60 1.0 Bcf $5.75/$9.40 1.0 Bcf $5.75/$15.25 1.0 Bcf $4.75/$6.15 .5 Bcf 8,000 $4.50/$13.50 1.0 Bcf $4.50/$6.32 1.0 Bcf $4.50/$6.32 1.0 Bcf $4.50/$6.78 1.0 Bcf $4.75/$7.35 1.0 Bcf $4.75/$7.42 1.0 Bcf $5.50/$8.75 1.0 Bcf $5.50/$13.50 1.0 Bcf $4.75/$10.00 .5 Bcf $4.50/$9.64 1.0 Bcf $4.75/$8.63 1.0 Bcf $4.75/$12.65 1.0 Bcf $4.50/$6.35 1.5 Bcf $4.50/$5.88 1.5 Bcf $4.50/$5.88 1.5 Bcf $6.00/$8.78 1.0 Bcf $6.00/$8.88 1.0 Bcf $6.00/$10.28 1.0 Bcf $6.00/$15.28 1.0 Bcf 6,000 $4.75/$7.07 2.0 Bcf $4.75/$7.09 2.0 Bcf $4.50/$8.68 1.5 Bcf $6.00/$8.75 1.0 Bcf $6.00/$8.75 1.0 Bcf $6.00/$10.01 1.0 Bcf $6.00/$15.15 1.0 Bcf $4.50/$6.20 1.5 Bcf $4.50/$5.80 1.5 Bcf $4.50/$5.80 1.5 Bcf $4.75/$8.27 2.0 Bcf $4.75/$11.95 2.0 Bcf $4.50/$7.00 1.0 Bcf $4.50/$7.00 1.0 Bcf $6.00/$8.05 1.0 Bcf $6.00/$8.13 1.0 Bcf $6.00/$9.43 1.0 Bcf $6.00/$13.55 1.0 Bcf 4,000 $4.50/$8.50 1.5 Bcf $5.99 .4 Bcf $5.97 .4 Bcf $6.11 .4 Bcf $4.50/$8.00 1.0 Bcf $4.50/$11.95 1.0 Bcf $4.50/$7.40 1.5 Bcf $4.50/$7.40 1.5 Bcf $5.27 .5 Bcf $5.12 .5 Bcf $5.12 .5 Bcf $6.00/$12.45 1.5 Bcf $6.66 1.5 Bcf $6.66 1.5 Bcf $6.95 1.5 Bcf $4.50/$8.40 .5 Bcf $5.14 .5 Bcf $4.94 .5 Bcf $4.94 .5 Bcf $4.99 .5 Bcf $4.79 .5 Bcf $4.78 .5 Bcf $4.50/$12.00 1.5 Bcf $4.50/$8.20 1.5 Bcf $4.50/$8.30 .5 Bcf 2,000 $7.21 1.0 Bcf $7.21 1.0 Bcf $6.00/$11.48 .5 Bcf $6.525 .5 Bcf $6.51 .5 Bcf $6.80 .5 Bcf $4.70 1.0 Bcf $4.70 1.0 Bcf $4.90 1.0 Bcf $4.50/$8.00 1.0 Bcf $6.21 .5 Bcf $6.20 .5 Bcf $7.445 .5 Bcf $6.50 .5 Bcf $5.625 1.0 Bcf $5.89 1.0 Bcf $6.565 1.0 Bcf $5.63 1.0 Bcf $6.235 1.0 Bcf $6.235 1.0 Bcf $7.415 1.0 Bcf $6.54 1.0 Bcf $4.51 1.0 Bcf $4.49 1.0 Bcf $4.74 1.0 Bcf $6.89 .4 Bcf $5.93 .5 Bcf $6.35 .25 Bcf $5.48 .25 Bcf $5.47 .25 Bcf $5.67 .25 Bcf 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2005 2006 2007 Note: Southwestern has approximately 360,000 barrels of oil hedged at a fixed WTI price of $33.17 per barrel in 2005 and 120,000 barrels of oil hedged at a fixed WTI price of $37.30 per barrel in 2006. Forward-Looking Statement

  18. The Road to • Invest in the Highest PVI Projects. • Accelerate Overton Development. • Accelerate Ranger Anticline Development. • Pursue Fayetteville Shale Potential. • Maximize Cash Flow. • Deliver the Numbers. • Production and Reserve Growth. • Add Value for Every Dollar Invested. • Continue to Tell Our Story.

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