Acquisitions (Tables)

9 Months Ended

Sep. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Schedule of Business Acquisitions by Acquisition, Equity Interest Issued or Issuable

The following table presents the fair value of consideration transferred to GEPH equity holders as a result of the GEPH Merger:

(in millions, except share, per share amounts)	As of December 31, 2021
Shares of Southwestern common stock issued	99,337,748
NYSE closing price per share of Southwestern common shares on December 31, 2021	$	4.66
	$	463
Cash consideration (1)	1,263
Total consideration	$	1,726

(1)Reflects $6 million of customary post-close cash consideration adjustments.

The following table presents the fair value of consideration transferred to Indigo equity holders as a result of the Indigo Merger:

(in millions, except share, per share amounts)	As of September 1, 2021
Shares of Southwestern common stock issued	337,827,171
NYSE closing price per share of Southwestern common shares on September 1, 2021	$	4.70
	$	1,588
Cash consideration	373
Total consideration	$	1,961

Schedule of Business Acquisitions, by Acquisition

The following table sets forth the preliminary fair value of the assets acquired and liabilities assumed as of the acquisition date. Certain data necessary to complete the purchase price allocation is still under evaluation, including, but not limited to, the final actualization of accrued liabilities and receivable balances as well as the valuation of natural gas and oil properties. The Company will finalize the purchase price allocation during the twelve-month period following the acquisition date, during which time the value of the assets and liabilities may be revised as appropriate.

(in millions)	As of December 31, 2021
Consideration:
Total consideration	$	1,726
Fair Value of Assets Acquired:
Cash and cash equivalents	11
Accounts receivable (1)	180
Other current assets (1)	1
Commodity derivative assets	56
Evaluated oil and gas properties	1,783
Unevaluated oil and gas properties	59
Other property, plant and equipment	2
Other long-term assets	3
Total assets acquired	2,095
Fair Value of Liabilities Assumed:
Accounts payable (1)	178
Other current liabilities	1
Derivative liabilities	75
Revolving credit facility	81
Asset retirement obligations	24
Other noncurrent liabilities (1)	10
Total liabilities assumed	369
Net Assets Acquired and Liabilities Assumed	$	1,726

(1)Reflects purchase price adjustments consisting of a $9 million increase to accounts receivable, a $2 million decrease to other current assets, an $8 million increase to accounts payable and a $5 million increase to other noncurrent liabilities during the nine months ended September 30, 2022.

The following table sets forth the fair value of the assets acquired and liabilities assumed as of the acquisition date. The purchase price allocation is complete as of the third quarter of 2022.

(in millions)	As of September 1, 2021
Consideration:
Total consideration	$	1,961
Fair Value of Assets Acquired:
Cash and cash equivalents	55
Accounts receivable (2)	193
Other current assets	2
Commodity derivative assets	2
Evaluated oil and gas properties	2,724
Unevaluated oil and gas properties (1)	690
Other property, plant and equipment	4
Other long-term assets	27
Total assets acquired	3,697
Fair Value of Liabilities Assumed:
Accounts payable (2)	285
Other current liabilities	55
Derivative liabilities	501
Revolving credit facility	95
Senior unsecured notes	726
Asset retirement obligations	8
Other noncurrent liabilities (2)	66
Total liabilities assumed	1,736
Net Assets Acquired and Liabilities Assumed	$	1,961

(1)Reflects $6 million purchase price adjustment during the nine months ended September 30, 2022 due to finalization of purchase accounting.

(2)Reflects purchase price adjustments consisting of a $1 million increase to accounts receivable, an $11 million increase to accounts payable and a $4 million decrease to other noncurrent liabilities during the nine months ended September 30, 2022 due to finalization of purchase accounting.

Schedule of Acquisition Related Costs

The following table summarizes the merger-related expenses incurred:

	For the three months ended September 30,
	2022						2021
(in millions)	Indigo Merger		GEPH Merger		Total		Montage Merger		Indigo Merger		Total
Professional fees (bank, legal, consulting)	$	—	$	—	$	—	$	—	$	23	$	23
Representation & warranty insurance	—		—		—		—		4		4
Contract buyouts, terminations and transfers	—		—		—		—		5		5
Employee-related	—		—		—		—		1		1
Other	—		—		—		—		2		2
Total merger-related expenses	$	—	$	—	$	—	$	—	$	35	$	35

	For the nine months ended September 30,
	2022						2021
(in millions)	Indigo Merger		GEPH Merger		Total		Montage Merger		Indigo Merger		Total
Transition services	$	—	$	18	$	18	$	—	$	—	$	—
Professional fees (bank, legal, consulting)	—		1		1		1		25		$	26
Representation & warranty insurance	—		—		—		—		4		$	4
Contract buyouts, terminations and transfers	1		2		3		—		5		$	5
Due diligence and environmental	1		1		2		—		—		$	—
Employee-related	—		1		1		1		1		$	2
Other	—		2		2		—		2		$	2
Total merger-related expenses	$	2	$	25	$	27	$	2	$	37	$	39

Business Acquisition, Pro Forma Information

The following table summarizes the unaudited pro forma condensed financial information for the three and nine months ended September 30, 2021 as if the Indigo Merger and the GEPH Merger each had occurred on January 1, 2020:

(in millions)	For the three months ended September 30, 2021		For the nine months ended September 30, 2021
Revenues	$	2,084	$	5,031
Net loss attributable to common stock	$	(2,177)	$	(3,022)
Net loss attributable to common stock per share - basic	$	(1.95)	$	(2.71)
Net loss attributable to common stock per share - diluted	$	(1.95)	$	(2.71)