Southwestern Energy (SWN) Q2 Results - August 8

[dan_s]

I will be dropping SWN from the Sweet 16 because (a) I want to reduce the portfolios exposure to natural gas and (b) it no longer fits in a growth portfolio. That said, the company is doing the right things to survive an extended period of low gas prices. My comments below are in blue. - Dan

Southwestern Energy reported 2nd quarter net income attributable to common stock of $138 million, or $0.26 per share, and adjusted net income of $40 million, or $0.08 per share. < Compares to my forecast for Q2 of $80 million net income.
Compared to the prior year quarter these results include interest expense savings of $17 million and general and administrative expense savings of $19 million.

Adjusted EBITDA was $186 million, net cash provided by operating activities was $101 million and adjusted net cash flow (nonGAAP) was $173 million. < This compares to my forecast of $226 million cash flow from operations.

Weighted average realized price was $2.17 per Mcfe, which includes transportation costs and the benefit of $0.18 per Mcfe from settled derivatives. By commodity, including the benefit of derivatives, realized gas price was $1.94 per Mcf, oil realizations were $51.60 per Bbl and NGL realizations were $12.62 per Bbl. < I forecast realized gas prices of $2.40 and realized NGL prices of $14.00. I was too high on NGL prices for every company.

For the second half of 2019, 72% of the Company’s natural gas production, 34% of NGLs and 77% of oil are hedged, based on the midpoint of guidance.

At June 30, 2019, the Company had cash of $155 million, an undrawn revolver of $2 billion, total debt of $2.3 billion and a trailing 12 month net debt/EBITDA ratio of 2.0 times, excluding the benefit of EBITDA associated with the Fayetteville Shale.

[dan_s]

Read the Goehring & Rozencwajg: Natural Resource Market Commentary Q2 Report under the View From Houston Tab

[dan_s]

If you'd like to read the full G&R Q2 Report (34 pages), send me an email and I will send it to you: dmsteffens@comcast.net