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): November 6, 2012
SOUTHWESTERN ENERGY COMPANY
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-08246 | 71-0205415 | |
(Commission File Number) | (IRS Employer Identification No.) |
2350 N. Sam Houston Pkwy. E., Suite 125, Houston, Texas | 77032 | |
(Address of principal executive offices) | (Zip Code) |
(281) 618-4700
(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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
The information in this report, including Exhibit 99.1 attached hereto, shall not be deemed to be "filed" for purposes of Section 18 of the Securities and 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 7 - Regulation FD
Item 7.01 Regulation FD Disclosure.
On November 6, 2012, Southwestern Energy Company (the "Company") will make a presentation available to investors. The presentation includes adjusted diluted earnings per share ("Adjusted Diluted EPS"), net cash provided by operating activities before changes in operating assets and liabilities ("Net Cash Flow"), net income before impairment of natural gas and oil properties ("Adjusted Net Income") and earnings before interest, taxes, depreciation, depletion and amortization ("EBITDA"). Net Cash Flow, Adjusted Net Income, Adjusted Diluted EPS and EBITDA are non-GAAP measures that are reconciled on slides 32, 33 and 34 of the presentation, respectively. A copy of the presentation is furnished herewith as Exhibit 99.1.
All statements in the presentation, 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. 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.
Exhibits. The following exhibits are being furnished as part of this Report.
Exhibit |
| Description |
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| Transcript of slideshow accompanying the November 2012 presentation. | |
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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: November 6, 2012 | By: | /s/ R. CRAIG OWEN | ||
Name: | R. Craig Owen | |||
Title: | Senior Vice President and | |||
Chief Financial Officer |
EXHIBIT INDEX
Exhibit |
| Description |
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| Transcript of slideshow accompanying the November 2012 presentation. | |
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EXHIBIT 99.1
Slide Presentation dated November 2012
(Cover)
Southwestern Energy
November 2012 Update
NYSE: SWN
The left side of this slide contains a photograph of a pulley system. Each new line added to a pulley reduces the force needed to successfully lift an object. The basic block and tackle is our formula.
(Slide 1)
Southwestern Energy Company
General Information
Southwestern Energy Company is an integrated natural gas company whose wholly-owned subsidiaries are engaged in natural gas and oil exploration and production and natural gas gathering and marketing.
Market Data as of November 5, 2012
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NYSE: SWN |
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Shares of Common Stock Outstanding | 350,353,301 |
Market Capitalization | $12,515,000,000 |
Institutional Ownership | 91.1% |
Management and Board Ownership | 2.8% |
52-Week Price Range | $25.82 (6/13/12) - $44.21 (10/28/11) |
Investor Contacts
Steve Mueller
President and Chief Executive Officer
Phone: | (281) 618-4800 |
Fax: | (281) 618-4820 |
Brad D. Sylvester, CFA
Vice President, Investor Relations
Phone: | (281) 618-4897 |
Fax: | (281) 618-4820 |
(Slide 2)
Forward-Looking Statements
All statements, other than historical facts and 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. All statements that address activities, outcomes and other matters that should or may occur in the future, including, without limitation, statements regarding the financial position, business strategy, production and reserve growth and other plans and objectives for the companys future operations, are forward-looking statements. 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. The company has no obligation and makes no undertaking to publicly update or revise any forward-looking statements. You should not place undue reliance on forward-looking statements. They are subject to known and unknown risks, uncertainties and other factors that may affect the companys operations, markets, products, services and prices and cause its actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In addition to any assumptions and other factors referred to specifically in connection with forward-looking statements, risks, uncertainties and factors that could cause the companys actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: the timing and extent of changes in market conditions and prices for natural gas and oil (including regional basis differentials); the companys ability to fund the companys planned capital investments; the companys ability to transport its production to the most favorable markets or at all; the timing and extent of the companys success in discovering, developing, producing and estimating reserves; the economic viability of, and the companys success in drilling, the companys large acreage position in the Fayetteville Shale play overall as well as relative to other productive shale gas plays; the impact of government regulation, including any increase in severance or similar taxes, legislation relating to hydraulic fracturing, the climate and over the counter derivatives; the costs and availability of oilfield personnel, services and drilling supplies, raw materials, and equipment, including pressure pumping equipment and crews; the companys ability to determine the most effective and economic fracture stimulation for the Fayetteville Shale formation; the companys future property acquisition or divestiture activities; the impact of the adverse outcome of any material litigation against the company; the effects of weather; increased competition and regulation; the financial impact of accounting regulations and critical accounting policies; the comparative cost of alternative fuels; conditions in capital markets, changes in interest rates and the ability of the companys lenders to provide it with funds as agreed; credit risk relating to the risk of loss as a result of non-performance by the companys counterparties and any other factors listed in the reports the company has filed and may file with the Securities and Exchange Commission (SEC). For additional information with respect to certain of these and other factors, see the 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.
The SEC has generally permitted oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use the terms estimated ultimate recovery, EUR, probable, possible, and non-proven reserves, reserve potential or upside or other descriptions of volumes of reserves potentially recoverable through additional drilling or recovery techniques that the SECs guidelines may prohibit us from including in filings with the SEC. These estimates are by their nature more speculative than estimates of proved reserves and accordingly are subject to substantially greater risk of being actually realized by the company.
The contents of this presentation are current as of November 1, 2012.
(Slide 3)
About Southwestern
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* Focused on exploration and production of natural gas. | |
| * 5.9 Tcfe of reserves; 11.8 R/P at year-end 2011. |
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* E&P strategy built on organic growth through the drillbit. | |
| * Over 80% of planned E&P capital allocated to drilling in 2012. |
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* Track record of adding significant reserves at low costs. | |
| * From 2006 to 2011, weve averaged over 40% annual production and reserve growth and annually replaced over 400% of our production at an F&D cost of $1.31 per Mcfe. |
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* Proven management team has increased Southwesterns market capitalization from $187 million at year-end 1998 to over $12 billion today. | |
* Strategy built on the Formula: | |
| The Right People doing the Right Things, wisely investing the cash flow from the underlying Assets will create Value+. |
Note that the information contained on this slide constitutes a "Forward-Looking Statement".
(Slide 4)
Recent Developments
* First Nine Months of 2012 Highlights | ||
| * Production of 415.1 Bcfe, up 13%, due to strong Fayetteville and Marcellus results. | |
| * Currently drilling on 3 New Ventures ideas the Lower Smackover Brown Dense formation in southern Arkansas and northern Louisiana, the Marmaton/Atoka oil play in Colorado and the Bakken/Three Forks play in Montana. | |
| * One of the lowest cost operators in the industry finding and development costs(1) of $1.31 per Mcfe and cash operating costs(2) of $1.14 per Mcfe. | |
| * Strong balance sheet and financial position as of September 30, 2012: | |
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| * Net debt-to-book capitalization ratio of 32%. |
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| * Cash and restricted cash on hand of approximately $146 million. |
* Strong Growth and Low-Cost Operations Set the Stage for a Record 2012 | |
| * 2012 projected capital investment program of $2.1 billion. |
| * 2012 production projected to grow 13%. |
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(1) | Finding and development costs for the twelve months ended December 31, 2011 includes reserve revisions and excludes capital investments in our sand facility, drilling rig related and ancillary equipment of approximately $21 million. Excluding revisions and capital investments in our sand facility, drilling rig related and ancillary equipment, our finding and development cost was $1.34/Mcfe. |
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(2) | Cash operating costs for the three months ended September 30, 2012, include lease operating expenses ($0.79/Mcfe), general and administrative expenses ($0.21/Mcfe), taxes other than income taxes ($0.09/Mcfe) and net interest expense ($0.05/Mcfe). |
Note that the information contained on this slide constitutes a "Forward-Looking Statement".
(Slide 5)
Proven Track Record
This slide contains bar charts for the periods ended December 31.
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| 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 |
Production (Bcfe) | 36 | 40 | 40 | 41 | 54 | 61 | 72 | 113 | 195 | 300 | 405 | 500 |
Proved Reserves (Bcfe) | 381 | 402 | 415 | 503 | 646 | 827 | 1,026 | 1,450 | 2,185 | 3,657 | 4,937 | 5,893 |
EBITDA ($MM)(1) | $ 104 | $ 134 | $ 99 | $ 151 | $ 255 | $ 346 | $ 415 | $ 675 | $ 1,362 | $ 1,368 | $ 1,612 | $ 1,780 |
F&D Cost ($/Mcfe) | $ 0.92 | $ 1.59 | $ 0.99 | $ 1.32 | $ 1.43 | $ 1.70 | $ 2.72 | $ 2.55 | $ 1.53 | $ 0.86 | $ 1.02 | $ 1.31 |
Note: Reserve data includes reserve revisions and excludes capital investments in our sand facility, drilling rig related and ancillary equipment.
(1) EBITDA is a non-GAAP financial measure. See explanation and reconciliation of EBITDA on page 34.
(Slide 6)
Areas of Operations
This slide contains a map of Arkansas, Louisiana, Oklahoma, Texas and Pennsylvania with shadings to denote the Ark-La-Tex region, the Fayetteville Shale and the Marcellus Shale.
Exploration & Production Segment
* 2011: | 5,893 Bcfe of Reserves |
| Production 500.0 Bcfe |
* 2012 Est. Production: 560-570 Bcfe |
New Ventures
* Brown Dense Approx. 506,000 net acres |
* Colorado Approx. 302,000 net acres |
* New Brunswick Approx. 2.5 million acres |
* Undisclosed Ventures Approx. 488,000 net acres |
Fayetteville Shale
* Reserves: 5,104 Bcf (87%) |
* Production: 436.8 Bcf (87%) |
* Net Acres: 925,842 (12/31/11) |
Ark-La-Tex
* Reserves: 447 Bcfe (7%) |
* Production: 39.8 Bcfe (8%) |
* Net Acres: 285,576 (12/31/11) |
Marcellus Shale
* Reserves: 342 Bcf (6%) |
* Production: 23.4 Bcf (5%) |
* Net Acres: 186,893 (12/31/11) |
* Midstream Services segment provides marketing and gathering services for the E&P business. |
Notes: | ArkLaTex acreage excludes 125,056 net acres in the conventional Arkoma Basin operating area that are also within the companys Fayetteville Shale focus area. Reserves and acreage as of December 31, 2011. Production is a total annual amount for 2011. |
Note that the information contained on this slide constitutes a "Forward-Looking Statement".
(Slide 7)
Capital Investments
This slide contains a bar chart of company capital investments, summarized as follows (in $ Millions):
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| 2012 |
| 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | Plan |
Corporate & Other | $ 16 | $ 32 | $ 16 | $ 17 | $ 30 | $ 73 | $ 69 | $ 74 |
Midstream Services | 16 | 49 | 107 | 183 | 214 | 271 | 161 | 183 |
Drilling Rigs | 35 | 94 | 5 | - | - | - | - | - |
Property Acquisitions | - | 18 | 2 | - | - | 1 | - | - |
Cap. Expense & Other E&P | 34 | 62 | 77 | 153 | 190 | 185 | 220 | 254 |
Leasehold & Seismic | 55 | 70 | 166 | 149 | 114 | 215 | 257 | 107 |
Development Drilling | 293 | 421 | 1,110 | 1,255 | 1,257 | 1,370 | 1,486 | 1,371 |
Exploration Drilling | 34 | 196 | 20 | 39 | 4 | 5 | 14 | 116 |
Total | $ 483 | $ 942 | $ 1,503 | $ 1,796 | $ 1,809 | $ 2,120 | $ 2,207 | $ 2,105 |
Additionally, this slide contains a pie chart of the company's planned 2012 capital investments by area of operation, summarized as follows:
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| % of Total |
| Capital Investments |
Fayetteville Shale | 51% |
Appalachia | 24% |
Midstream | 9% |
New Ventures | 11% |
Corp/Other | 4% |
Other Areas | 1% |
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* E&P capital program heavily weighted to low-risk development drilling in 2012. | |
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* Plan to invest approximately $1.2 billion in the Fayetteville Shale and $600 million in the Marcellus Shale (including Midstream) in 2012. |
Note that the information contained on this slide constitutes a "Forward-Looking Statement".
(Slide 8)
Fayetteville Shale Focus Area
This slide contains a map of the Fayetteville Shale Focus Area in Arkansas. Well locations for all wells drilled from inception of the play through September 30, 2012 are indicated on the map by initial production rate in the following ranges: less than or equal to 3MMcf/d, greater than 3MMcf/d and greater than 6MMcf/d.
* SWN holds approx. 925,000 net acres in the Fayetteville Shale play (approx 1,400 sq. miles).
* Mississippian-age shale, geological equivalent of the Barnett Shale in north Texas.
* SWN discovered the Fayetteville Shale and has first mover advantage average acreage cost of $253 per acre with a 15% royalty and average working interest of 74%.
* We plan to drill approximately 460-470 operated wells in 2012.
Notes: Rates are AOGC Form 13 and Form 3 test rates.
Note that the information contained on this slide constitutes a "Forward-Looking Statement".
(Slide 9)
Fayetteville Shale Continuous Improvement
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| 2007 | 2008 | 2009 | 2010 | 2011 |
Days to Drill | 17 | 14 | 12 | 11 | 8 |
Lateral Length (in feet) | 2,657 | 3,619 | 4,100 | 4,528 | 4,836 |
Well Cost ($ in millions) | $2.9 | $3.0 | $2.9 | $2.8 | $2.8 |
F&D Cost ($ per Mcfe) | $2.05 | $1.21 | $0.69 | $0.86 | $1.13 |
Production (in Bcfe) | 53.5 | 134.5 | 243.5 | 350.2 | 436.8 |
Reserves (in Bcfe) | 716 | 1,545 | 3,117 | 4,345 | 5,104 |
* Continuous improvement in our Fayetteville Shale operations completed lateral length has increased 82% over the last four years while holding total well costs flat.
* Vertical integration and contiguous acreage position allow us significant economies of scale and operating flexibility.
(Slide 10)
Midstream - Adding Value Beyond the Wellhead
This slide contains a map of several counties in Arkansas where the company's Fayetteville Shale Focus Area is located. These counties include Johnson, Pope, Van Buren, Cleburne, Logan, Yell, Conway, Faulkner and White. Lines trace DeSoto Gathering Lines and the Ozark, Centerpoint, Boardwalk, NGPL, MRT and TETCO transmission pipelines. Compression facilities are also indicated on the map.
* | SWNs Fayetteville Shale gathering system is one of the largest in the U.S. |
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* | At September 30, 2012, gathering approximately 2.2 Bcf per day through 1,837 miles of gathering lines, up from approximately 2.0 Bcf per day the same time a year ago. |
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* | SWN has total firm transportation for the Fayetteville Shale of 2.0 Bcf per day. |
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* | Midstream total EBITDA(1) in 2011 was $285 million. Projected EBITDA of $315-$320 million in 2012. |
Note: Map as of September 30, 2012.
(1) EBITDA is a non-GAAP financial measure. See explanation and reconciliation of EBITDA on page 34.
Note that the information contained on this slide constitutes a "Forward-Looking Statement".
(Slide 11)
Marcellus Shale
* | We hold approximately 187,000 net acres in Northeast Pennsylvania. |
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* | At September 30, 2012, we had 50 operated Marcellus Shale horizontal wells on production in Bradford and Susquehanna Counties. Daily gross operated production was approximately 218 MMcf per day. |
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* | Currently running 4 operated rigs with plans to drill up to 60-70 wells in 2012. |
Note that the information contained on this slide constitutes a "Forward-Looking Statement".
(Slide 12)
Marcellus Shale - Horizontal Well Performance
The graph contained in this slide provides average daily production data through September 30, 2012, for the company's horizontal wells drilled in the Marcellus Shale. This graph displays a composite curve showing the results of the company's horizontal wells with less than 9 stages (1 well), 9-12 stages (27 wells), and greater than 12 stages (22 wells).The production data is compared to 10 Bcf, 8 Bcf, 6 Bcf, and 4 Bcf typecurves from the company's reservoir simulation shale gas model.
Additionally, this slide contains a line graph displaying gross production in MMcf/d for the Marcellus Shale from September 1, 2010 to September 30, 2012. Gross operated production of approx. 218 MMcf/d as of September 30, 2012.
Notes: Data as of September 30, 2012.
(Slide 13)
Brown Dense Exploration Project
This slide displays the location of the Lower Smackover Brown Dense play, located on the border of Arkansas and Louisiana, in comparison to East Texas, Arkoma Basin, and Fayetteville Shale plays. The Lower Smackover Brown Dense map highlights oil fields within the following municipalities: Wesson, McKamie-Patton, Walker Creek, Dorcheat-Macedonia, Atlanta, Magnolia, Shuler, Lisbon, El Dorado, Shadow Bend, Champagnolle, and Ora. The map also highlights gas fields within the following municipalities: Rodessa, Red Rock, Shangaloo, and Monroe. Included in the Lower Smackover Brown Dense map is the location of SWNs first well TAd, second well Shut-in, third well WOP, fouth well vertical testing, fifth well vertical testing, and sixth well WOP.
* SWN currently holds 506,000 net acres in Lower Smackover Brown Dense play. Total land cost of approx. $419 per acre; 82% NRI; leases have 4-year terms and 4-year extensions. |
* Targeting oil window in Upper Jurassic age, kerogen-rich carbonate in southern Arkansas and northern Louisiana with horizontal drilling. |
* Targeting 300 to 550 feet thick section at depths of 8,000 - 11,000 feet. |
* Two wells to be placed on production in late-November. |
Note that the information contained on this slide constitutes a "Forward-Looking Statement".
(Slide 14)
Denver Julesburg Basin Exploration Project
This slide displays the location of the Denver Julesburg Basin Exploration Project, located on the border of Colorado, Wyoming, Nebraska, and Kansas. The location of the Las Animas Arch, Ewertz Farm 1-58 #1-26 well (Testing), and Staner 5-58 #1-8 well (Testing) is denoted.
* SWN held 302,000 net acres at 9/30/12 with a total land cost of approx. $172 per acre; 85% NRI; leases with 5-year terms and 3-year extensions. |
* Targeting unconventional oil in late Pennsylvanian-age carbonates and shales with thicknesses of 300 - 750 feet at depths of 8,000 - 10,500 feet. |
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* Currently performing operations on 2 wells. |
(Slide 15)
* Production target of 560-570 Bcfe in 2012 (estimated growth of ~13%).
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| 2011 |
| 2012 Guidance | |
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| Actual |
| NYMEX Price Assumption | |
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| $4.04 Gas |
| $2.75 Gas | $3.00 Gas |
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| $94.01 Oil |
| $95.00 Oil | $95.00 Oil |
Adj. Net Income |
| $637.8 MM |
| $460-$470 MM(1) | $500-$510 MM(1) |
Adj. Diluted EPS |
| $1.82 |
| $1.31-$1.34(1) | $1.43-$1.46(1) |
EBITDA(2) |
| $1,779.6 MM |
| $1,590-$1,600 MM | $1,660-$1,670 MM |
Net Cash Flow (2) |
| $1,766.0 MM |
| $1,560-$1,570 MM | $1,630-$1,640 MM |
CapEx |
| $2,207.2 MM |
| $2,105 MM | $2,105 MM |
Debt % |
| 25% |
| 32%-34%(3) | 31%-33%(3) |
Note that the information contained on this slide constitutes a "Forward-Looking Statement".
(Slide 16)
The Road to V+
* Invest in the Highest PVI Projects. | |
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* Flexibility in 2012 Capital Program. | |
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* Maintain Strong Balance Sheet. | |
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* Deliver the Numbers. | |
| * Production and Reserves. |
| * Maximize Cash Flow. |
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* Continue to Tell Our Story. |
Note that the information contained on this slide constitutes a "Forward-Looking Statement".
(Slide 17)
Appendix
(Slide 18)
Financial & Operational Summary
| Nine Months Ended September 30, |
| Year Ended December 31, |
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| 2012 |
| 2011 |
| 2011 |
| 2010 |
| 2009 |
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Revenues | $ 1,942.0 |
| $ 2,208.8 |
| $ 2,952.9 |
| $ 2,610.7 |
| $ 2,145.8 |
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EBITDA (1) | 1,160.2 |
| 1,325.4 |
| 1,779.6 |
| 1,612.3 |
| 1,368.1 | (2) |
Adjusted Net Income | 330.3 | (2) | 479.2 |
| 637.8 |
| 604.1 |
| 522.7 | (2) |
Net Cash Flow (1) | 1,142.0 |
| 1,312.3 |
| 1,766.0 |
| 1,579.7 |
| 1,441.0 |
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Adjusted Diluted EPS | $ 0.95 | (2) | $ 1.37 |
| $ 1.82 |
| $ 1.73 |
| $ 1.52 | (2) |
Diluted CFPS (1) | $ 3.28 |
| $ 3.75 |
| $ 5.05 |
| $ 4.52 |
| $ 4.13 |
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Production (Bcfe) | 415.1 |
| 366.7 |
| 500.0 |
| 404.7 |
| 300.4 |
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Avg. Gas Price ($/Mcf) | $ 3.34 |
| $ 4.24 |
| $ 4.19 |
| $ 4.64 |
| $ 5.30 |
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Avg. Oil Price ($/Bbl) | $ 102.89 |
| $ 93.54 |
| $ 94.08 |
| $ 76.84 |
| $ 54.99 |
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Finding Cost ($/Mcfe) (3) |
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| $ 1.31 |
| $ 1.02 |
| $ 0.86 |
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Reserve Replacement (%) (3) |
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| 299% |
| 430% |
| 592% |
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Net Debt/Proved Reserves ($/Mcfe) |
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| $ 0.23 |
| $ 0.22 |
| $ 0.27 |
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Net Debt/Avg. Daily Production ($/Mcfe) | $ 1,024 |
| $ 885 |
| $ 969 |
| $ 972 |
| $ 1,197 |
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Net Debt/Total Capitalization | 32% |
| 25% |
| 25% |
| 27% |
| 30% |
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(1) Net cash flow is net cash flow before changes in operating assets and liabilities. Net cash flow, EBITDA and diluted CFPS are non-GAAP financial measures. See explanation and reconciliation of non-GAAP financial measures on pages 32 and 34.
(2) Adjusted net income and adjusted diluted EPS in 2012 exclude a $855.5 million after-tax non-cash ceiling test impairment and the same measures in 2009 exclude a $558.3 million after-tax non-cash ceiling test impairment and both are non-GAAP financial measures. See explanation and reconciliation of adjusted net income and adjusted diluted EPS on page 33.
(3) Includes reserve revisions and excludes capital investments in our sand facility, drilling rig related and ancillary equipment.
(Slide 19)
Gas Hedges in Place Through 2013
This slide contains a bar chart detailing gas hedges in place by quarter for year 2012 and year 2013. A summary of these gas hedges is as follows:
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| Average Price per Mcf | Percent |
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| Type | Hedged Volumes | (or Floor/Ceiling) | Hedged |
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2012 | Swaps | 185.9 Bcf | $5.02 | 33% | 47% |
| Collars | 80.5 Bcf | $5.50 / $6.67 | 14% | |
2013 | Swaps | 185.6 Bcf | $5.06 | - |
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Note that the information contained on this slide constitutes a "Forward-Looking Statement".
(Slide 20)
SWN is One of the Lowest Cost Operators
This slide contains a bar graph that compares SWN to its competitors in terms of Lifting Cost per Mcfe of production (3 year average).
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| Lifting Cost per Mcfe |
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| Of Production |
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Ultra Petroleum |
| $0.86 |
Range Resources |
| $0.89 |
Southwestern Energy Company |
| $0.93 |
Cabot Oil & Gas |
| $0.98 |
Chesapeake Energy |
| $1.05 |
Forest Oil |
| $1.05 |
Noble Energy |
| $1.06 |
EOG Resources |
| $1.19 |
Anadarko Petroleum |
| $1.39 |
SM Energy |
| $1.45 |
Devon Energy |
| $1.49 |
Cimarex Energy |
| $1.56 |
Pioneer Natural Resources |
| $1.72 |
Newfield Exploration |
| $1.84 |
Apache |
| $1.92 |
Sandridge Energy |
| $2.10 |
Marathon |
| $2.16 |
Occidental Petroleum |
| $2.18 |
Murphy |
| $2.22 |
Denbury Resources |
| $3.87 |
This slide also contains a bar graph comparing SWN to its competitors in terms of Finding & Development Cost per Mcfe (3 year average).
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| Finding & Development Cost |
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| per Mcfe |
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| (3 year average) |
Range Resources |
| $0.87 |
Southwestern Energy Company |
| $1.05 |
Cabot Oil & Gas |
| $1.30 |
Ultra Petroleum |
| $1.83 |
Devon Energy |
| $1.94 |
Cimarex Energy |
| $2.09 |
Chesapeake Energy |
| $2.21 |
EOG Resources |
| $2.23 |
Noble Energy |
| $2.29 |
Pioneer Natural Resources |
| $2.34 |
Marathon |
| $2.36 |
Anadarko Petroleum |
| $2.50 |
Denbury Resources |
| $2.62 |
SM Energy |
| $2.83 |
Newfield Exploration |
| $3.05 |
Sandridge Energy |
| $3.32 |
Occidental Petroleum |
| $3.35 |
Murphy |
| $3.44 |
Forest Oil |
| $3.56 |
Apache |
| $3.87 |
Source: Public filings
Note: All data as of December 31, 2009, 2010 and 2011. APC - Anadarko Petroleum, APA - Apache, COG - Cabot Oil & Gas, CHK - Chesapeake Energy, XEC - Cimarex Energy, DNR - Denbury Resources, DVN - Devon Energy, EOG - EOG Resources, FST - Forest Oil, MRO - Marathon Oil, MUR - Murphy Oil, NFX - Newfield Exploration, NBL - Noble Energy, OXY - Occidental Petroleum, PXD - Pioneer Natural Resources, RRC - Range Resources, SD - Sandridge Energy, SM - SM Energy, SWN - Southwestern Energy, UPL - Ultra Petroleum.
Lifting Cost per Mcfe defined as lease operating expenses plus production taxes divided by production.
F&D Cost per Mcfe defined as the three-year sum of costs incurred in natural gas and oil exploration and development divided by the three-year sum of reserve additions from extensions and discoveries, improved recovery, revisions and purchases.
Ark-La-Tex Division
This slide contains a map of the ArkLaTex Division, which is composed of East Texas and Arkoma Basin, in relation to Texas, Oklahoma, Arkansas, and Louisiana. The slide also contains two graphs outlining the production, capital expenditures, and reserves for East Texas and Arkoma Basin for the period extending from 2000 to 2011, summarized as follows:
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| Arkoma Basin | ||||||||||||
| 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | |
Production (Bcfe) | 19.9 | 22.3 | 19.8 | 18.9 | 20.1 | 20.2 | 20.1 | 23.8 | 24.4 | 22 | 19.2 | 16.3 | |
Reserve (Bcfe) | 200.3 | 186 | 188.7 | 211.7 | 239.5 | 271 | 277 | 304 | 281 | 208 | 226 | 194 | |
Capex (in millions) | $17.6 | $28.6 | $18.2 | $32.9 | $53.2 | $64.5 | $97.0 | $148.0 | $133.0 | $40.0 | $ 13.0 | $7.7 |
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| East Texas | ||||||||||||||
| 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | |||
Production (Bcfe) | 0.3 | 2.3 | 5.9 | 13.6 | 22.2 | 28.2 | 32 | 29.9 | 31.6 | 34.9 | 34.3 | 23.5 | |||
Reserve (Bcfe) | 22 | 57.6 | 111 | 196.3 | 299.1 | 368.7 | 383 | 353 | 351 | 330 | 321 | 253 | |||
Capex (in millions) | $6.1 | $ 30.9 | $ 33.6 | $ 97.3 | $ 156.7 | $ 183.6 | $ 204.0 | $ 201.0 | $ 160.0 | $ 167.0 | $ 150.0 | $68.0 |
Arkoma Basin
Acreage: 194,494 net acres (at 12/31/11)
2011 Reserves: 194 Bcf (3% of total)
2011 Production: 16.3 Bcf (3% of total)
East Texas
Acreage: 91,082 net acres (at 12/31/11)
2011 Reserves: 253 Bcfe (4% of total)
2011 Production: 23.5 Bcfe (5% of total)
* Sold Overton Field in May 2012 (24 MMcfe/d and 143 Bcfe).
Notes: Conventional Arkoma acreage excludes 125,056 net acres in the conventional Arkoma Basin operating area that are also within the companys Fayetteville Shale focus area.
Overton Field production as of May 2012; total reserves as of December 2011.
(Slide 22)
New Brunswick, Canada Exploration Project
This slide contains a map of the Province of New Brunswick, Canada. The acreage on which the company has obtained licenses to explore is highlighted on the map: Marysville (2,309,247 acres) and Cocagne (209,271 acres). The McCully Field, Stoney Creek Field, M&NE Pipeline and the Green Road G-41 well are denoted on the map.
* SWN currently holds exploration licenses to over 2.5 million acres within the Maritimes Basin | |
* Principal targets are the conventional and unconventional sandstone and shale reservoirs of the Horton Group (Frederick Brook Shale) | |
* Oil and gas production from fields along southern flank: | |
| * McCully - reserves 190 bcfg |
| * Stoney Creek - cum 800,000 bo, 30 bcfg |
* 3-year initial exploration license to complete work program | |
| * $47MM total work commitment with options for multiple 5-year extension leases |
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Fayetteville Shale - Horizontal Well Performance
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Time Frame | Wells Placed on Production | Average IP Rate (Mcf/d) | 30th-Day Avg Rate (# of wells) | 60th-Day Avg Rate (# of wells) | Avg Lateral Length | ||||
1st Qtr 2007 |
| 58 | 1,261 |
| 1,066 | (58) | 958 | (58) | 2,104 |
2nd Qtr 2007 |
| 46 | 1,497 |
| 1,254 | (46) | 1,034 | (46) | 2,512 |
3rd Qtr 2007 |
| 74 | 1,769 |
| 1,510 | (72) | 1,334 | (72) | 2,622 |
4th Qtr 2007 |
| 77 | 2,027 |
| 1,690 | (77) | 1,481 | (77) | 3,193 |
1st Qtr 2008 |
| 75 | 2,343 |
| 2,147 | (75) | 1,943 | (74) | 3,301 |
2nd Qtr 2008 |
| 83 | 2,541 |
| 2,155 | (83) | 1,886 | (83) | 3,562 |
3rd Qtr 2008 |
| 97 | 2,882 |
| 2,560 | (97) | 2,349 | (97) | 3,736 |
4th Qtr 2008 | (1) | 74 | 3,350 | (1) | 2,722 | (74) | 2,386 | (74) | 3,850 |
1st Qtr 2009 | (1) | 120 | 2,992 | (1) | 2,537 | (120) | 2,293 | (120) | 3,874 |
2nd Qtr 2009 |
| 111 | 3,611 |
| 2,833 | (111) | 2,556 | (111) | 4,123 |
3rd Qtr 2009 |
| 93 | 3,604 |
| 2,624 | (93) | 2,255 | (93) | 4,100 |
4th Qtr 2009 |
| 122 | 3,727 |
| 2,674 | (122) | 2,360 | (120) | 4,303 |
1st Qtr 2010 | (2) | 106 | 3,197 | (2) | 2,388 | (106) | 2,123 | (106) | 4,348 |
2nd Qtr 2010 |
| 143 | 3,449 |
| 2,554 | (143) | 2,321 | (142) | 4,532 |
3rd Qtr 2010 |
| 145 | 3,281 |
| 2,448 | (145) | 2,202 | (144) | 4,503 |
4th Qtr 2010 |
| 159 | 3,472 |
| 2,678 | (159) | 2,294 | (159) | 4,667 |
1st Qtr 2011 |
| 137 | 3,231 |
| 2,604 | (137) | 2,238 | (137) | 4,985 |
2nd Qtr 2011 |
| 149 | 3,014 |
| 2,328 | (149) | 1,991 | (149) | 4,839 |
3rd Qtr 2011 |
| 132 | 3,441 |
| 2,666 | (132) | 2,372 | (132) | 4,847 |
4th Qtr 2011 |
| 142 | 3,646 |
| 2,606 | (142) | 2,243 | (142) | 4,703 |
1st Qtr 2012 |
| 146 | 3,319 |
| 2,421 | (146) | 2,131 | (146) | 4,743 |
2nd Qtr 2012 |
| 131 | 3,500 |
| 2,515 | (131) | 2,225 | (131) | 4,840 |
3rd Qtr 2012 |
| 105 | 3,857 |
| 2,579 | (79) | 2,157 | (43) | 4,974 |
Note: Data as of September 30, 2012.
Additionally, this slide contains a line graph displaying gross production in MMcf/d for the Fayetteville Shale from January 2006 to September 2012. Gross operated production of approx. 2,011 MMcf/d as of September 30, 2012. Periods of production affected by pipeline curtailment issues are denoted.
* Gross operated production of approx. 2,011 MMcf/d as of September 30, 2012.
* 2011 Fayetteville Shale F&D cost of $1.13/Mcf.
Fayetteville Shale - Horizontal Well Performance
The graph contained in this slide provides average daily production data through June 30, 2012, for the company's horizontal wells drilled in the Fayetteville Shale. This graph displays four composite curves, one composite curve showing the SW/XL normalized production from all the company's horizontal wells and three composite curves showing the results of the company's horizontal wells with laterals greater than 3,000 feet, greater than 4,000 feet, and greater than 5,000 feet. The production data is compared to 2 Bcf, 3 Bcf, and 4 Bcf typecurves from the company's reservoir simulation shale gas model. Well counts and respective days of production are also displayed, as follows:
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Days of Production | Total Well Count | Horizontal Wells with Laterals > 3,000 Feet | Horizontal Wells with Laterals > 4,000 Feet | Horizontal Wells with Laterals > 5,000 Feet |
0 | 2,477 | 2,026 | 1,247 | 451 |
100 | 2,382 | 1,980 | 1,221 | 443 |
200 | 2,201 | 1,776 | 1,077 | 374 |
300 | 2,045 | 1,648 | 968 | 321 |
400 | 1,915 | 1,502 | 867 | 267 |
500 | 1,737 | 1,329 | 722 | 207 |
600 | 1,584 | 1,193 | 604 | 150 |
700 | 1,435 | 1,061 | 503 | 120 |
800 | 1,258 | 893 | 376 | 72 |
900 | 1,123 | 775 | 297 | 43 |
1,000 | 1,013 | 678 | 242 | 33 |
1,100 | 888 | 546 | 171 | 16 |
1,200 | 783 | 455 | 116 | 8 |
1,300 | 642 | 329 | 68 | 5 |
1,400 | 566 | 270 | 40 | 5 |
1,500 | 459 | 176 | 15 | 1 |
Note: Data as of June 30, 2012. Excludes wells with mechanical problems (31).
Drilling & Completion Major Cost Categories
Average 2012 Fayetteville Shale Well Cost Estimate
This slide displays the estimated average 2012 major well cost categories as a proportion to the total average well costs.
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|
| Average 2012 Fayetteville Shale Well Cost Estimate |
| (in thousands) |
Fracture Stimulation | $ 688 |
Rig | 285 |
OCTG | 220 |
Environmental & Restoration | 131 |
Drilling Fluids | 122 |
Directional Drilling | 119 |
Wellhead & Surface Equipment | 83 |
Other | 95 |
Water Treatment/Disposal | 107 |
Supervision | 103 |
Surface Rentals | 79 |
Location | 40 |
Wireline | 124 |
Rentals | 52 |
Coil Tubing | 75 |
D&C Fluids | 137 |
Bits | 101 |
Cementing | 64 |
Fuel & Water | 38 |
Trucking & Transportation | 47 |
Formation Evaluation | 47 |
Special Services | 8 |
Land & Damages | 43 |
Major Cost Categories | $ 2,808 |
Note that the information contained on this slide constitutes a "Forward-Looking Statement".
Water Demand: Perspective
The graphs contained in this slide compare the daily statewide demand for water in Arkansas by source to the average daily amount used by Southwestern Energy by source.
Statewide Demand:
11,500 million gallons/day
33% Ground Water
66% Surface Water
SWN Operations Demand:
10 million gallons/day (600 Wells/year)
25% Recycle/Reused Water SGW, FBW, & PW
75% Surface Water
A box accompanying the graphs states:
SWN Operations Less than 0.09% of States water demand
Source: U.S. Geological Survey, Central Arkansas Water, Southwestern Energy Company estimates.
Shallow Ground Water (SGW) Ground water recovered from shallow formations during the air drilling process.
Flow Back Water (FBW) Frac Fluid that is recovered from the well after the fracture stimulation.
Produced Water (PW) Natural formation water that is returned to the surface throughout the producing life of the well.
(Slide 27)
U.S. Gas Consumption and Sources
This slide displays U.S. dry gas production versus U.S. gas consumption in Bcf from 1975 to present. Net imports for the same period are also given. U.S. gas production rising in recent years.
Source: EIA
(Slide 28)
U.S. Electricity Consumption
This line graph shows U.S. electricity consumption in billion kilowatt-hours per month from 1990 to present.
Source: Edison Electric Institute
(Slide 29)
U.S. Electricity Generation
This slide contains a chart showing Electricity Generation by Energy Source as a percentage of total.
Total 4,100 Billion kWh in 2011.
% of Total Electricity Generation | |
Coal | 42% |
Natural Gas | 25% |
Nuclear | 19% |
Hydroelectric | 8% |
Wind | 3% |
Other Renewables (1) | 2% |
Other (2) | 1% |
Additionally, this slide contains a chart displaying a comparison of Electricity Generation Capacities in 2010 compared to Trailing 12 Months Generation.
While coal and nuclear power plants operate at very high capacity, natural gas power plants are only running at 33% of their capacity.
Electricity Generation Capacities | Trailing 12 Month Generation (3) | 2010 Capacity | Unused Capacity |
Nuclear | 90,326 | 101,167 | 11% |
Coal | 178,459 | 316,800 | 44% |
Natural Gas | 133,325 | 407,028 | 67% |
1. | Geothermal, solar, wood and waste |
2. | Petroleum and others gases |
3. | July 2011 June 2012 |
Source: EIA
(Slide 30)
U.S. Gas Drilling and Prices
This line graph denotes the number of rigs drilling for gas and the gas price in dollars per MMBtu through the period 2000 to present.
Source: Baker Hughes, Bloomberg
(Slide 31)
Oil and Gas Price Comparison
This line graph compares the prices of Henry Hub natural gas and WTI crude oil in $/MMBtu and $/Bbl, respectively, for the period 1997 to present.
Source: Bloomberg
(Slide 32)
Explanation and Reconciliation of Non-GAAP Financial Measures: Net Cash Flow
We report our 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 users of this financial information additional meaningful comparisons between current results and the results of our 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 companys 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. These adjusted amounts are not a measure of financial performance under GAAP.
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| 9 Months Ended September 30, |
| 12 Months Ended December 31, | ||||||
| 2012 |
| 2011 |
| 2011 |
| 2010 |
| 2009 |
| (in thousands) |
| (in thousands) | ||||||
Net cash provided by operating activities | $ 1,192,477 |
| $ 1,300,211 |
| $ 1,739,817 |
| $ 1,642,585 |
| $ 1,359,376 |
Add back (deduct): |
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Change in operating assets and liabilities | (50,520) |
| 12,129 |
| 26,201 |
| (62,906) |
| 81,652 |
Net cash flow | $ 1,141,957 |
| $ 1,312,340 |
| $ 1,766,018 |
| $ 1,579,679 |
| $ 1,441,028 |
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| 2012 Guidance | |||||||
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| NYMEX Commodity Price Assumption | |||||||
|
| $2.75 Gas |
| $3.00 Gas | |||||
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| $95.00 Oil |
| $95.00 Oil | |||||
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| ($ in millions) | |||||||
Net cash provided by operating activities |
| $1,560 - $1,570 |
| $1,630- $1,640 | |||||
Add back (deduct): |
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Assumed change in operating assets and liabilities |
| - |
| - | |||||
Net cash flow |
| $1,560 - $1,570 |
| $1,630 -$1,640 |
Note that the information contained on this slide constitutes a "Forward-Looking Statement".
(Slide 33)
Explanation and Reconciliation of Non-GAAP Financial Measures: Adjusted Net Income
Additional non-GAAP financial measures we may present from time to time are net income attributable to Southwestern Energy and diluted earnings per share attributable to Southwestern Energy stockholders, both of which exclude certain charges or amounts. Management presents these measures because (i) they are consistent with the manner in which the Companys performance is measured relative to the performance of its peers, (ii) these measures are more comparable to earnings estimates provided by securities analysts, and (iii) charges or amounts excluded cannot be reasonably estimated and guidance provided by the Company excludes information regarding these types of items. These adjusted amounts are not a measure of financial performance under GAAP.
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| 9 Months Ended |
| 12 Months Ended | |||||
| September 30, 2012 |
| December 31, 2009 | |||||
| ($ in thousands) |
| (per share) |
| ($ in thousands) |
| (per share) | |
Net loss attributable to SWN | $ (525,211) |
| $ (1.51) |
| $ (35,650) |
| $ (0.10) | |
Add back: |
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Impairment of natural gas & oil properties (net of taxes) | 855,522 |
| 2.46 |
| 558,305 |
| 1.62 | |
Adjusted net income | $ 330,311 |
| $ 0.95 |
| $ 522,655 |
| $ 1.52 |
The table below reconciles forecasted adjusted net income with GAAP net income for 2012, assuming various NYMEX price scenarios and the corresponding estimated impact on the company's results for 2012, including current hedges in place:
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| 2012 Guidance | ||
|
| Overall Corporate | ||
|
| NYMEX Commodity Price Assumption | ||
|
| $2.75 Gas |
| $3.00 Gas |
|
| $95.00 Oil |
| $95.00 Oil |
|
| ($ in millions) | ||
Net income (loss) |
| ($396)-($386) |
| ($356)-($346) |
Add back: Impairment of natural gas & oil properties (net of taxes) |
| 856 |
| 856 |
Adjusted net income |
| $460-$470 |
| $500-$510 |
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| 2012 Guidance | ||
|
| Overall Corporate | ||
|
| NYMEX Commodity Price Assumption | ||
|
| $2.75 Gas |
| $3.00 Gas |
|
| $95.00 Oil |
| $95.00 Oil |
|
| (per share) | ||
Diluted loss per share |
| ($1.15)-($1.12) |
| ($1.03)-($1.00) |
Add back: Impairment of natural gas & oil properties (net of taxes) |
| $2.46 |
| $2.46 |
Adjusted diluted earnings per share |
| $1.31-$1.34 |
| $1.43-$1.46 |
Note that the information contained on this slide constitutes a "Forward-Looking Statement".
(Slide 34)
Explanation and Reconciliation of Non-GAAP Financial Measures: EBITDA
EBITDA is defined as net income plus interest, income tax expense, depreciation, depletion and amortization. Southwestern has included information concerning EBITDA because it is used by certain investors as a measure of the ability of a company to service or incur indebtedness and because it is a financial measure commonly used in the energy industry. EBITDA should not be considered in isolation or as a substitute for net income, net cash provided by operating activities or other income or cash flow data prepared in accordance with generally accepted accounting principles or as a measure of the company's profitability or liquidity. EBITDA as defined above may not be comparable to similarly titled measures of other companies. Net income is a financial measure calculated and presented in accordance with generally accepted accounting principles. The table below reconciles historical EBITDA with historical net income.
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| 9 Months ended September 30, |
| 12 Months ended December 31, |
| ||||||||||
| 2012 |
| 2011 |
| 2011(4) |
| 2010 |
| 2009 |
| 2008 |
| 2007 |
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Net income (loss) attributable to SWN | $ (525,211) | (1) | $ 479,236 |
| $ 637,769 |
| $ 604,118 |
| $ (35,650) | (5) | $ 567,946 |
| $ 221,174 |
|
Add back: |
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Net interest expense | 26,305 |
| 19,263 |
| 24,075 |
| 26,163 |
| 18,638 |
| 28,904 |
| 23,873 |
|
Provision (benefit) for income taxes | (320,362) | (2) | 312,733 |
| 413,221 |
| 391,659 |
| (16,363) | (6) | 350,999 |
| 135,855 |
|
Depreciation, depletion and amortization | 1,979,476 | (3) | 514,180 |
| 704,511 |
| 590,332 |
| 1,401,470 | (7) | 414,460 |
| 294,500 |
|
EBITDA | $ 1,160,208 |
| $ 1,325,412 |
| $ 1,779,576 |
| $ 1,612,272 |
| $ 1,368,095 |
| $ 1,362,309 |
| $ 675,402 |
|
| 12 Months ended December 31, |
| ||||||||||||
| 2006 |
| 2005 |
| 2004 |
| 2003 |
| 2002 |
| 2001 |
| 2000 |
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Net income (loss) attributable to SWN | $ 162,636 |
| $ 147,760 |
| $ 103,576 |
| $ 48,897 |
| $ 14,311 |
| $ 35,324 |
| $ 20,461 | (9) |
Add back: |
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Net interest expense | 679 |
| 15,040 |
| 16,992 |
| 17,311 |
| 21,466 |
| 23,699 |
| 24,689 |
|
Provision (benefit) for income taxes | 99,399 |
| 86,431 |
| 59,778 |
| 28,372 | (8) | 8,708 |
| 21,917 |
| 11,457 |
|
Depreciation, depletion and amortization | 151,795 |
| 96,641 |
| 74,919 |
| 56,833 |
| 54,095 |
| 53,003 |
| 47,505 |
|
EBITDA | $ 414,509 |
| $ 345,872 |
| $ 255,265 |
| $ 151,413 |
| $ 98,580 |
| $ 133,943 |
| $ 104,112 | (9) |
The table below reconciles forecasted EBITDA with forecasted net income for 2012, assuming various NYMEX price scenarios and the corresponding estimated impact on the company's results for 2012, including current hedges in place:
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| 2012 Guidance | ||||||||||||
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| Overall Corporate | ||||||||||||
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| NYMEX Commodity Price Assumption |
| Midstream Services Segment(1) | ||||||||||
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| $2.75 Gas |
| $3.00 Gas |
| |||||||||
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| $95.00 Oil |
| $95.00 Oil | ||||||||||
|
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| ($ in millions) | ||||||||||||
Net income (loss) |
|
| $(396)-$(386) | (2) | $(356)-$(346) | (2) | $155-$160 | ||||||||
Add back: |
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Provision for income taxes |
|
| (242)-(235) | (3) | (217)-(211) | (3) | 95-98 | ||||||||
Interest expense |
|
| 31-33 |
| 31-33 |
| 17-19 | ||||||||
Depreciation, depletion and amortization |
|
| 2,200-2,210 | (4) | 2,200-2,210 | (4) | 44-46 | ||||||||
EBITDA |
|
| $1,590-$1,600 |
| $1,660-$1,670 |
| $315-$320 |
(1) | Midstream Services segment results assume NYMEX commodity prices of $2.75 per Mcf for natural gas and $95.00 per barrel for crude oil for 2012. |
Note that the information contained on this slide constitutes a "Forward-Looking Statement".