Southwestern Energy Announces Second Quarter 2024 Results

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Southwestern Energy's Q2 2024 results present a mixed picture, with some concerning trends that investors should carefully consider. The company reported a significant net loss of $608 million, or $0.55 per diluted share, primarily due to a full cost ceiling test impairment. This is a stark contrast to the $231 million net income in Q2 2023.

However, looking at adjusted figures paints a slightly different picture. Adjusted net income (non-GAAP) was $113 million, or $0.10 per diluted share, up from $95 million in Q2 2023. Adjusted EBITDA (non-GAAP) was $413 million, down from $484 million in the same quarter last year.

The company's production declined year-over-year, with total net production at 379 Bcfe, down from 423 Bcfe in Q2 2023. This 10.4% decrease in production is noteworthy and could be a concern for investors if it continues.

On the positive side, Southwestern Energy has maintained a relatively strong balance sheet with a net debt to adjusted EBITDA ratio of 2.1x. This indicates that the company still has financial flexibility despite the challenging market conditions.

The company's decision to proactively adjust activity in response to commodity prices while optimizing productive capacity within annual cash flow demonstrates prudent management in a volatile market. However, investors should monitor how this strategy impacts future production and financial results.

The natural gas market continues to present challenges for producers like Southwestern Energy. The average realized gas price, excluding derivatives, was $1.22 per Mcf in Q2 2024, down from $1.47 per Mcf in Q2 2023. This 17% decrease reflects the ongoing pressure on natural gas prices.

Interestingly, the company's hedging strategy has proven effective in this environment. Including derivatives, the average realized gas price increased slightly from $2.02 per Mcf in Q2 2023 to $2.00 per Mcf in Q2 2024. This highlights the importance of a robust hedging program in mitigating price volatility.

The company's production mix remains heavily weighted towards natural gas at 85%, with NGLs at 13% and oil at 2%. This concentration in natural gas exposes Southwestern Energy to the ongoing challenges in the gas market, including oversupply and weak demand growth.

The reduction in capital investments from $595 million in Q2 2023 to $430 million in Q2 2024 reflects the company's efforts to align spending with cash flow in a lower price environment. However, this reduced investment could impact future production growth and reserve replacement.

The pending merger with Chesapeake Energy adds an element of uncertainty to Southwestern Energy's future. While this merger could potentially create synergies and improve market position, it also introduces integration risks and potential changes in strategy that investors should carefully consider.

08/01/2024 - 04:16 PM

SPRING, Texas--(BUSINESS WIRE)-- Southwestern Energy Company (NYSE: SWN) today announced financial and operating results for the second quarter ended June 30, 2024.

Generated $291 million net cash provided by operating activities, $608 million net loss, $113 million adjusted net income (non-GAAP), and adjusted EBITDA (non-GAAP) of $413 million
Reported total net production of 379 Bcfe, or 4.2 Bcfe per day, including 3.6 Bcf per day of gas and 101 MBbls per day of liquids
Invested $430 million of capital and placed 22 wells to sales, including 19 in Appalachia and 3 in Haynesville
Proactively adjusting activity in response to commodity prices while optimizing productive capacity within annual cash flow

Financial Results

	For the three months ended						For the six months ended
	June 30,						June 30,
(in millions)	2024			2023			2024			2023
Net income (loss)	$	(608	)	$	231		$	(2,143	)	$	2,170
Adjusted net income (non-GAAP)	$	113		$	95		$	244		$	441
Diluted earnings (loss) per share	$	(0.55	)	$	0.21		$	(1.94	)	$	1.97
Adjusted diluted earnings per share (non-GAAP)	$	0.10		$	0.09		$	0.22		$	0.40
Adjusted EBITDA (non-GAAP)	$	413		$	484		$	885		$	1,283
Net cash provided by operating activities	$	291		$	425		$	787		$	1,562
Net cash flow (non-GAAP)	$	378		$	453		$	817		$	1,217
Total capital investments ⁽¹⁾	$	430		$	595		$	968		$	1,260
Free cash flow (deficit) (non-GAAP)	$	(52	)	$	(142	)	$	(151	)	$	(43	)

⁽¹⁾	Capital investments include decreases of $31 million and $22 million for the three months ended June 30, 2024 and 2023, respectively, and decreases of $17 million and $28 million for the six months ended June 30, 2024 and 2023, respectively, relating to the change in capital accruals between periods.

For the quarter ended June 30, 2024, Southwestern Energy recorded a net loss of $608 million, or ($0.55) per diluted share. Adjusting for the impact of the Company’s full cost ceiling test impairment and other one-time items, adjusted net income (non-GAAP) was $113 million, or $0.10 per diluted share, and adjusted EBITDA (non-GAAP) was $413 million. Net cash provided by operating activities was $291 million, net cash flow (non-GAAP) was $378 million and total capital investments were $430 million.

As of June 30, 2024, Southwestern Energy had total debt of $4.2 billion and net debt to adjusted EBITDA (non-GAAP) of 2.1x. At the end of the quarter, the Company had $445 million of borrowings under its revolving credit facility and no outstanding letters of credit.

As indicated in the table below, second quarter 2024 weighted average realized price was $1.70 per Mcfe, excluding the impact of derivatives and net of $0.29 per Mcfe of transportation expenses. Including derivatives, weighted average realized price for the second quarter was up from $2.33 per Mcfe in 2023 to $2.35 per Mcfe in 2024 primarily due to an increase in liquids prices.

Realized Prices	For the three months ended						For the six months ended
(includes transportation costs)	June 30,						June 30,
	2024			2023			2024			2023
Natural Gas Price:
NYMEX Henry Hub price ($/MMBtu)⁽¹⁾	$	1.89		$	2.10		$	2.07		$	2.76
Discount to NYMEX ⁽²⁾	(0.67		)	(0.63		)	(0.58		)	(0.43		)
Average realized gas price, excluding derivatives ($/Mcf)	$	1.22		$	1.47		$	1.49		$	2.33
Loss on settled financial basis derivatives ($/Mcf)	(0.02		)	(0.02		)	(0.02		)	(0.05		)
Gain on settled commodity derivatives ($/Mcf)	0.80			0.57			0.65			0.17
Average realized gas price, including derivatives ($/Mcf)	$	2.00		$	2.02		$	2.12		$	2.45
Oil Price:
WTI oil price ($/Bbl) ⁽³⁾	$	80.57		$	73.78		$	78.76		$	74.96
Discount to WTI ⁽⁴⁾	(10.43		)	(10.58		)	(10.63		)	(10.41		)
Average realized oil price, excluding derivatives ($/Bbl)	$	70.14		$	63.20		$	68.13		$	64.55
Average realized oil price, including derivatives ($/Bbl)	$	66.67		$	56.82		$	64.90		$	57.49
NGL Price:
Average realized NGL price, excluding derivatives ($/Bbl)	$	20.06		$	18.63		$	21.89		$	21.51
Average realized NGL price, including derivatives ($/Bbl)	$	20.41		$	20.85		$	22.01		$	22.71
Percentage of WTI, excluding derivatives	25		%	25		%	28		%	29		%
Total Weighted Average Realized Price:
Excluding derivatives ($/Mcfe)	$	1.70		$	1.84		$	1.94		$	2.65
Including derivatives ($/Mcfe)	$	2.35		$	2.33		$	2.48		$	2.75

⁽¹⁾	Based on last day settlement prices from monthly futures contracts.
⁽²⁾	This discount includes a basis differential, a heating content adjustment, physical basis sales, third-party transportation charges and fuel charges, and excludes financial basis derivatives.
⁽³⁾	Based on the average daily settlement price of the nearby month futures contract over the period.
⁽⁴⁾	This discount primarily includes location and quality adjustments.

Operational Results
Total net production for the quarter ended June 30, 2024 was 379 Bcfe, of which 85% was natural gas, 13% NGLs and 2% oil. Capital investments totaled $430 million for the second quarter of 2024 with 30 wells drilled, 23 wells completed and 22 wells placed to sales.

	For the three months ended				For the six months ended
	June 30,				June 30,
	2024		2023		2024		2023
Production
Natural gas production (Bcf)	324		365		649		718
Oil production (MBbls)	1,261		1,441		2,492		2,859
NGL production (MBbls)	7,908		8,247		15,169		16,487
Total production (Bcfe)	379		423		755		834

Average unit costs per Mcfe
Lease operating expenses ⁽¹⁾	$	1.08	$	1.00	$	1.10	$	1.03
General & administrative expenses ⁽²⁾	$	0.11	$	0.09	$	0.12	$	0.09
Taxes, other than income taxes	$	0.11	$	0.14	$	0.12	$	0.15
Full cost pool amortization	$	0.58	$	0.77	$	0.63	$	0.76

⁽¹⁾	Includes post-production costs such as gathering, processing, fractionation and compression.
⁽²⁾	Excludes $10 million and $19 million in merger-related expenses for the three and six months ended June 30, 2024, respectively.

Appalachia – In the second quarter, total production was 247 Bcfe, with NGL production of 87 MBbls per day and oil production of 14 MBbls per day. The Company drilled 16 wells, completed 15 wells and placed 19 wells to sales with an average lateral length of 16,596 feet and average well cost of $922 per lateral foot.

Haynesville – In the second quarter, total production was 132 Bcf. There were 14 wells drilled, 8 wells completed and 3 wells placed to sales in the quarter with an average lateral length of 8,348 feet and average well cost of $1,788 per lateral foot.

E&P Division Results	For the three months ended June 30, 2024				For the six months ended June 30, 2024
	Appalachia		Haynesville		Appalachia		Haynesville
Natural gas production (Bcf)		192		132		379		270
Liquids production
Oil (MBbls)		1,256		5		2,482		10
NGL (MBbls)		7,908		—		15,168		1
Production (Bcfe)		247		132		485		270

Capital investments (in millions)
Drilling and completions, including workovers	$	163	$	188	$	361	$	420
Land acquisition and other		22		1		68		2
Capitalized interest and expense		31		17		66		37
Total capital investments	$	216	$	206	$	495	$	459

Gross operated well activity summary
Drilled		16		14		31		28
Completed		15		8		30		20
Wells to sales		19		3		25		15

Total weighted average realized price per Mcfe, excluding derivatives	$	1.71	$	1.66	$	2.02	$	1.81


Wells to sales summary	For the three months ended June 30, 2024
	Gross wells to sales	Average lateral length
Appalachia
Super Rich Marcellus	6	16,426
Rich Marcellus	4	14,241
Dry Gas Utica⁽¹⁾	6	20,184
Dry Gas Marcellus	3	12,898
Haynesville	3	8,348
Total	22

⁽¹⁾	Ohio Utica

Guidance
Due to the pending merger with Chesapeake Energy Corporation (“Chesapeake”), Southwestern Energy has discontinued providing guidance. Accordingly, investors are cautioned not to rely on historical forward-looking statements as those forward-looking statements were the estimates of management only as of the date provided and were subject to the specific risks and uncertainties that accompanied such forward-looking statements.

Conference Call
Due to the pending merger with Chesapeake, Southwestern Energy will not host a conference call or webcast to discuss second quarter 2024 results.

About Southwestern Energy
Southwestern Energy Company (NYSE: SWN) is a leading U.S. producer and marketer of natural gas and natural gas liquids focused on responsibly developing large-scale energy assets in the nation’s most prolific shale gas basins. The Company’s returns-driven strategy strives to create sustainable value for its stakeholders by leveraging its scale, financial strength and operational execution. For additional information, please visit www.swn.com and www.swncrreport.com.

Forward Looking Statement
This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended. These statements are based on current expectations. The words “anticipate,” “intend,” “plan,” “project,” “estimate,” “continue,” “potential,” “should,” “could,” “may,” “will,” “objective,” “guidance,” “outlook,” “effort,” “expect,” “believe,” “predict,” “budget,” “projection,” “goal,” “forecast,” “model,” “target”, “seek”, “strive,” “would,” “approximate,” and similar words are intended to identify forward-looking statements. Statements may be forward looking even in the absence of these particular words.

Examples of forward-looking statements include, but are not limited to, the expectations of plans, business strategies, objectives and growth and anticipated financial and operational performance, including guidance regarding our strategy to develop reserves, drilling plans and programs (including the number of rigs and frac crews to be used), estimated reserves and inventory duration, projected production and sales volume and growth rates, projected commodity prices, basis and average differential, impact of commodity prices on our business, projected average well costs, generation of free cash flow, our return of capital strategy, including the amount and timing of any redemptions, repayments or repurchases of our common stock, outstanding debt securities or other debt instruments, leverage targets, our ability to maintain or improve our credit ratings, leverage levels and financial profile, our hedging strategy, our environmental, social and governance (ESG) initiatives and our ability to achieve anticipated results of such initiatives, expected benefits from acquisitions, potential acquisitions and strategic transactions, the timing thereof and our ability to achieve the intended operational, financial and strategic benefits of any such transactions or other initiatives and statements regarding the proposed transaction between Southwestern Energy and Chesapeake, the expected closing of the proposed transaction and the timing thereof and as adjusted descriptions of the post-transaction company and its operations, strategies and plans, integration, debt levels and leverage ratio, capital expenditures, cash flows and anticipated uses thereof, synergies, opportunities and anticipated future performance, including an expected accretion to earnings and free cash flow and dividend payments. These forward-looking statements are based on management’s current beliefs, based on currently available information, as to the outcome and timing of future events. All forward-looking statements speak only as of the date of this news release. The estimates and assumptions upon which forward-looking statements are based are inherently uncertain and involve a number of risks that are beyond our control. Although we believe the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance, and we cannot assure you that such statements will be realized or that the events and circumstances they describe will occur. Therefore, you should not place undue reliance on any of the forward-looking statements contained herein.

Factors that could cause our actual results to differ materially from those indicated in any forward-looking statement are subject to all of the risks and uncertainties incident to the exploration for and the development, production, gathering and sale of natural gas, NGLs and oil, most of which are difficult to predict and many of which are beyond our control, as well as all of the risks and uncertainties associated with the proposed transaction between the Company and Chesapeake. These risks include, but are not limited to, commodity price volatility, inflation, the costs and results of drilling and operations, lack of availability of drilling and production equipment and services, the ability to add proved reserves in the future, environmental risks, drilling and other operating risks, legislative and regulatory changes, the uncertainty inherent in estimating natural gas and oil reserves and in projecting future rates of production, the quality of technical data, cash flow and access to capital, the timing of development expenditures, a change in our credit rating, an increase in interest rates, our ability to increase commitments under our revolving credit facility, our hedging and other financial contracts, our ability to maintain leases that may expire if production is not established or profitably maintained, our ability to transport our production to the most favorable markets or at all, any increase in severance or similar taxes, the impact of the adverse outcome of any material litigation against us or judicial decisions that affect us or our industry generally, the effects of weather or power outages, increased competition, the financial impact of accounting regulations and critical accounting policies, the comparative cost of alternative fuels, credit risk relating to the risk of loss as a result of non-performance by our counterparties, including as a result of financial or banking failures, impacts of world health events, cybersecurity risks, geopolitical and business conditions in key regions of the world, our ability to realize the expected benefits from acquisitions, divestitures, and strategic transactions, our ability to achieve our GHG emission reduction goals and the costs associated therewith, the risk that the Company’s and Chesapeake’s businesses will not be integrated successfully, the risk that cost savings, synergies and growth from the proposed transaction may not be fully realized or may take longer to realize than expected, the risk that the credit ratings of the combined company or its subsidiaries may be different from what the companies expect, the risk that a condition to closing of the proposed transaction may not be satisfied, that either party may terminate the Merger Agreement or that the closing of the proposed transaction might be delayed or not occur at all, potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed transaction, the risk the parties do not receive regulatory approval of the proposed transaction, the occurrence of any other event, change or other circumstances that could give rise to the termination of the Merger Agreement, the risk that changes in Chesapeake’s capital structure and governance could have adverse effects on the market value of its securities, the ability of the Company and Chesapeake to retain customers and retain and hire key personnel and maintain relationships with their suppliers and customers and on the Company’s and Chesapeake’s operating results and business generally, the risk the proposed transaction could distract management from ongoing business operations or cause the Company and/or Chesapeake to incur substantial costs, the risk of any litigation relating to the proposed transaction, the risk that Chesapeake may be unable to reduce expenses or access financing or liquidity, and any other factors described or referenced under Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations” and under Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023.

We have no obligation and make no undertaking to publicly update or revise any forward-looking statements, except as required by applicable law. All written and oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary statement.

Important Additional Information Regarding the Transaction Has Been Filed with the SEC and Where to Find It

In connection with the proposed transaction between Southwestern and Chesapeake, Chesapeake filed a Registration Statement on Form S-4 (the “Registration Statement”) with the SEC that also constitutes a prospectus of Chesapeake common stock. The Registration Statement was declared effective on May 17, 2024, at which time Chesapeake filed a final prospectus and Southwestern filed a definitive proxy statement. Chesapeake and Southwestern commenced mailing of the definitive joint proxy statement/prospectus (the “joint proxy statement/prospectus”) to their respective shareholders on or about May 17, 2024. Each party may also file other relevant documents regarding the proposed transaction with the SEC. This communication is not a substitute for the joint proxy statement/prospectus or for any other document that Southwestern or Chesapeake has filed or may file in the future with the SEC in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT, THE JOINT PROXY STATEMENT/PROSPECTUS, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY SOUTHWESTERN AND CHESAPEAKE WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT SOUTHWESTERN AND CHESAPEAKE, THE PROPOSED TRANSACTION, THE RISKS RELATED THERETO AND RELATED MATTERS.

Investors will be able to obtain free copies of the joint proxy statement/prospectus, as each may be amended from time to time, and other relevant documents filed by Southwestern and Chesapeake with the SEC through the website maintained by the SEC at http://www.sec.gov. Copies of documents filed with the SEC by Southwestern, including the joint proxy statement/prospectus, will be available free of charge from Southwestern’s website at www.swn.com under the “Investors” tab. Copies of documents filed with the SEC by Chesapeake, including the joint proxy statement/prospectus, will be available free of charge from Chesapeake’s website at https://investors.chk.com/.

No Offer or Solicitation
This communication is not intended to and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.




SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	For the three months ended						For the six months ended
	June 30,						June 30,
(in millions, except share/per share amounts)	2024			2023			2024			2023
Operating Revenues:
Gas sales	$	411		$	551		$	995		$	1,696
Oil sales	90			92			172			187
NGL sales	158			153			332			354
Marketing	424			475			1,003			1,154
Other	—			(2		)	(2		)	(4		)
	1,083			1,269			2,500			3,387
Operating Costs and Expenses:
Marketing purchases	433			481			1,021			1,148
Operating expenses	403			418			820			836
General and administrative expenses	45			41			101			87
Merger-related expenses	10			—			19			—
Depreciation, depletion and amortization	226			328			488			641
Impairments	631			—			2,724			—
Taxes, other than income taxes	44			58			93			126
	1,792			1,326			5,266			2,838
Operating Income (Loss)	(709		)	(57		)	(2,766		)	549
Interest Expense:
Interest on debt	61			60			120			123
Other interest charges	2			3			5			6
Interest capitalized	(26		)	(29		)	(53		)	(59		)
	37			34			72			70

Gain (Loss) on Derivatives	(35		)	317			91			1,718
Loss on Early Extinguishment of Debt	—			—			—			(19		)
Other Loss, Net	(3		)	—			(2		)	(1		)

Income (Loss) Before Income Taxes	(784		)	226			(2,749		)	2,177
Provision (Benefit) for Income Taxes:
Current	—			—			—			—
Deferred	(176		)	(5		)	(606		)	7
	(176		)	(5		)	(606		)	7
Net Income (Loss)	$	(608	)	$	231		$	(2,143	)	$	2,170

Earnings (Loss) Per Common Share:
Basic	$	(0.55	)	$	0.21		$	(1.94	)	$	1.97
Diluted	$	(0.55	)	$	0.21		$	(1.94	)	$	1.97

Weighted Average Common Shares Outstanding:
Basic	1,102,737,261			1,101,167,082			1,102,281,059			1,100,725,127
Diluted	1,102,737,261			1,102,724,782			1,102,281,059			1,102,487,313





SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)

	June 30, 2024			December 31, 2023
ASSETS	(in millions)
Current assets:
Cash and cash equivalents	$	15		$	21
Accounts receivable, net		544			680
Derivative assets		363			614
Other current assets		89			100
Total current assets		1,011			1,415
Natural gas and oil properties, using the full cost method		38,737			37,772
Other		578			566
Less: Accumulated depreciation, depletion and amortization		(31,645	)		(28,425	)
Total property and equipment, net		7,670			9,913
Operating lease assets		136			154
Long-term derivative assets		80			175
Deferred tax assets		849			238
Other long-term assets		104			96
Total long-term assets		1,169			663
TOTAL ASSETS	$	9,850		$	11,991
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	389		$	—
Accounts payable		1,170			1,384
Taxes payable		125			128
Interest payable		77			77
Derivative liabilities		89			79
Current operating lease liabilities		42			44
Other current liabilities		30			17
Total current liabilities		1,922			1,729
Long-term debt		3,784			3,947
Long-term operating lease liabilities		93			107
Long-term derivative liabilities		59			100
Other long-term liabilities		227			220
Total long-term liabilities		4,163			4,374
Commitments and contingencies
Equity:
Common stock, $0.01 par value; 2,500,000,000 shares authorized; issued 1,164,596,399 shares as of June 30, 2024 and 1,163,077,745 shares as of December 31, 2023		12			12
Additional paid-in capital		7,206			7,188
Accumulated deficit		(3,125	)		(982	)
Accumulated other comprehensive loss		(1	)		(3	)
Common stock in treasury, 61,614,693 shares as of June 30, 2024 and December 31, 2023		(327	)		(327	)
Total equity		3,765			5,888
TOTAL LIABILITIES AND EQUITY	$	9,850		$	11,991





SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	For the six months ended
	June 30,
(in millions)	2024			2023
Cash Flows From Operating Activities:
Net income (loss)	$	(2,143	)	$	2,170
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization	488			641
Amortization of debt issuance costs	4			4
Impairments	2,724			—
Deferred income taxes	(606		)	7
(Gain) loss on derivatives, unsettled	315			(1,631		)
Stock-based compensation	12			5
Loss on early extinguishment of debt	—			19
Other	4			2
Change in assets and liabilities:
Accounts receivable	136			803
Accounts payable	(139		)	(363		)
Taxes payable	(3		)	(20		)
Interest payable	—			(5		)
Inventories	(1		)	(25		)
Other assets and liabilities	(4		)	(45		)
Net cash provided by operating activities	787			1,562

Cash Flows From Investing Activities:
Capital investments	(980		)	(1,286		)
Proceeds from sale of property and equipment	4			123
Net cash used in investing activities	(976		)	(1,163		)

Cash Flows From Financing Activities:
Payments on long-term debt	—			(437		)
Payments on revolving credit facility	(1,513		)	(1,946		)
Borrowings under revolving credit facility	1,738			2,006
Change in bank drafts outstanding	(37		)	(43		)
Cash paid for tax withholding	(5		)	(4		)
Net cash provided by (used in) financing activities	183			(424		)

Decrease in cash and cash equivalents	(6		)	(25		)
Cash and cash equivalents at beginning of year	21			50
Cash and cash equivalents at end of period	$	15		$	25

Hedging Summary
A detailed breakdown of derivative financial instruments and financial basis positions as of June 30, 2024, including the remainder of 2024 and excluding those positions that settled in the first and second quarters, is shown below. Please refer to the Company’s quarterly report on Form 10-Q to be filed with the Securities and Exchange Commission for complete information on the Company’s commodity, basis and interest rate protection.

		Weighted Average Price per MMBtu
	Volume (Bcf)	Swaps		Sold Puts		Purchased Puts		Sold Calls
Natural gas
2024
Fixed price swaps	267	$	3.60	$	—	$	—	$	—
Two-way costless collars	22		—		—		3.07		3.53
Three-way costless collars	42		—		2.50		3.25		4.24
Total	331
2025
Fixed price swaps	110	$	3.58	$	—	$	—	$	—
Two-way costless collars	73		—		—		3.50		5.40
Three-way costless collars	161		—		2.59		3.66		5.88
Total	344



Call Options – Natural Gas (Net)	Volume	Weighted Average Strike Price
	*(Bcf)*	*($/MMBtu)*
2024	37	$	6.00
2025	73		7.00
2026	73		7.00
Total	183



*Natural gas financial basis positions*	Volume	Basis Differential
	*(Bcf)*	*($/MMBtu)*
2024
Dominion South	23	$	(0.71	)
TCO	18		(0.74	)
TETCO M3	19		(0.70	)
Total	60	$	(0.71	)
2025
Dominion South	9	$	(0.64	)



		Weighted Average Price per Bbl
	Volume (MBbls)	Swaps		Sold Puts		Purchased Puts		Sold Calls
Oil
2024
Fixed price swaps	580	$	71.50	$	—	$	—	$	—
Two-way costless collars	184		—		—		70.00		88.56
Three-way costless collars	534		—		56.72		66.72		88.26
Total	1,298
2025
Fixed price swaps	41	$	77.66	$	—	$	—	$	—
Three-way costless collars	1,324		—		58.96		68.96		92.73
Total	1,365
2026
Three-way costless collars	225	$	—	$	60.00	$	70.00	$	83.32
Ethane
2024
Fixed price swaps	4,085	$	9.77	$	—	$	—	$	—
2025
Fixed price swaps	3,650	$	10.36	$	—	$	—	$	—
Propane
2024
Fixed price swaps	3,119	$	31.25	$	—	$	—	$	—
2025
Fixed price swaps	2,071	$	30.73	$	—	$	—	$	—
Normal Butane
2024
Fixed price swaps	718	$	39.42	$	—	$	—	$	—
2025
Fixed price swaps	548	$	35.28	$	—	$	—	$	—
Natural Gasoline
2024
Fixed price swaps	810	$	61.45	$	—	$	—	$	—
2025
Fixed price swaps	821	$	56.89	$	—	$	—	$	—

Explanation and Reconciliation of Non-GAAP Financial Measures
The Company reports its 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 financial statement users with additional meaningful comparisons between current results, the results of the Company’s 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 company’s 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.

Additional non-GAAP financial measures the Company may present from time to time are free cash flow, net debt, adjusted net income, adjusted diluted earnings per share, adjusted EBITDA and net debt to adjusted EBITDA, all of which exclude certain charges or amounts. Management presents these measures because (i) they are consistent with the manner in which the Company’s position and performance are measured relative to the position and 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.

	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Adjusted net income:	(in millions)
Net income (loss)	$	(608	)	$	231		$	(2,143	)	$	2,170
Add back (deduct):
Merger-related expenses		10			—			19			—
Impairments		631			—			2,724			—
(Gain) loss on unsettled derivatives ⁽¹⁾		285			(107	)		315			(1,631	)
Loss on early extinguishment of debt		—			—			—			19
Other ⁽²⁾		3			4			5			7
Adjustments due to discrete tax items ⁽³⁾		—			(57	)		9			(494	)
Tax impact on adjustments		(208	)		24			(685	)		370
Adjusted net income	$	113		$	95		$	244		$	441

⁽¹⁾	Includes $1 million and $2 million of non-performance risk adjustment to derivative activities for the three and six months ended June 30, 2024, and ($4) million of non-performance risk adjustment to derivative activities for the six months ended June 30, 2023, respectively.
⁽²⁾	Includes $1 million and $2 million of development costs for our enterprise resource technology for the three and six months ended June 30, 2024, respectively, and $4 million and $5 million of development costs for our enterprise resource technology for the three and six months ended June 30, 2023, respectively.
⁽³⁾	The Company’s 2024 income tax rate is 22.4%.

	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Adjusted diluted earnings per share:
Diluted earnings (loss) per share	$	(0.55	)	$	0.21		$	(1.94	)	$	1.97
Add back (deduct):
Merger-related expenses		0.01			—			0.02			—
Impairments		0.57			—			2.46			—
(Gain) loss on unsettled derivatives ⁽¹⁾		0.26			(0.10	)		0.29			(1.48	)
Loss on early extinguishment of debt		—			—			—			0.02
Other ⁽²⁾		0.00			0.00			0.00			0.00
Adjustments due to discrete tax items ⁽³⁾		—			(0.05	)		0.01			(0.45	)
Tax impact on adjustments		(0.19	)		0.03			(0.62	)		0.34
Adjusted diluted earnings per share	$	0.10		$	0.09		$	0.22		$	0.40

⁽¹⁾	Includes $1 million and $2 million of non-performance risk adjustment to derivative activities for the three and six months ended June 30, 2024, and ($4) million of non-performance risk adjustment to derivative activities for the six months ended June 30, 2023, respectively.
⁽²⁾	Includes $1 million and $2 million of development costs for our enterprise resource technology for the three and six months ended June 30, 2024, respectively, and $4 million and $5 million of development costs for our enterprise resource technology for the three and six months ended June 30, 2023, respectively.
⁽³⁾	The Company’s 2024 income tax rate is 22.4%.



	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net cash flow:	(in millions)
Net cash provided by operating activities	$	291	$	425	$	787	$	1,562
Add back (deduct):
Changes in operating assets and liabilities		77		28		11		(345	)
Merger-related expenses		10		—		19		—
Net cash flow	$	378	$	453	$	817	$	1,217



	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Free cash flow (deficit):	(in millions)
Net cash flow	$	378		$	453		$	817		$	1,217
Subtract:
Total capital investments		(430	)		(595	)		(968	)		(1,260	)
Free cash flow (deficit)	$	(52	)	$	(142	)	$	(151	)	$	(43	)



	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Adjusted EBITDA:	(in millions)
Net income (loss)	$	(608	)	$	231		$	(2,143	)	$	2,170
Add back (deduct):
Interest expense		37			34			72			70
Income tax expense (benefit)		(176	)		(5	)		(606	)		7
Depreciation, depletion and amortization		226			328			488			641
Merger-related expenses		10			—			19			—
Impairments		631			—			2,724			—
(Gain) loss on unsettled derivatives ⁽¹⁾		285			(107	)		315			(1,631	)
Loss on early extinguishment of debt		—			—			—			19
Other		3			(1	)		4			2
Stock-based compensation expense		5			4			12			5
Adjusted EBITDA	$	413		$	484		$	885		$	1,283

⁽¹⁾	Includes $1 million and $2 million of non-performance risk adjustment to derivative activities for the three and six months ended June 30, 2024, and ($4) million of non-performance risk adjustment to derivative activities for the six months ended June 30, 2023, respectively.



	12 Months Ended June 30, 2024
Adjusted EBITDA:	(in millions)
Net income	$	(2,756	)
Add back (deduct):
Interest expense		144
Income tax expense		(870	)
Depreciation, depletion and amortization		1,154
Merger-related expenses		19
Impairments		4,434
Gain on unsettled derivatives ⁽¹⁾		(142	)
Stock-based compensation expense		16
Other	10
Adjusted EBITDA	$	2,009

⁽¹⁾	Includes $1 million of non-performance risk adjustment for the twelve months ended June 30, 2024.



	June 30, 2024
Net debt:	(in millions)
Total debt ⁽¹⁾	$	4,188
Subtract:
Cash and cash equivalents	(15		)
Net debt	$	4,173

⁽¹⁾	Does not include $15 million of unamortized debt premium/discount and issuance expense.



	June 30, 2024
Net debt to Adjusted EBITDA:	(in millions)
Net debt	$	4,173
Adjusted EBITDA	$	2,009
Net debt to Adjusted EBITDA	2.1x

View source version on businesswire.com: https://www.businesswire.com/news/home/20240801975043/en/

Investor Contact

Brittany Raiford

Vice President, Investor Relations

(832) 796-7906

brittany_raiford@swn.com

Source: Southwestern Energy Company

FAQ

What was Southwestern Energy's (SWN) net loss in Q2 2024?

Southwestern Energy (SWN) reported a net loss of $608 million in Q2 2024.

How much was SWN's adjusted EBITDA for Q2 2024?

SWN's adjusted EBITDA for Q2 2024 was $413 million.

What was Southwestern Energy's (SWN) total net production in Q2 2024?

SWN's total net production in Q2 2024 was 379 Bcfe, or 4.2 Bcfe per day.

How much capital did SWN invest in Q2 2024?

SWN invested $430 million in capital during Q2 2024.

What was SWN's weighted average realized price per Mcfe in Q2 2024?

SWN's weighted average realized price was $2.35 per Mcfe, including derivatives, in Q2 2024.

Southwestern Energy Announces Second Quarter 2024 Results

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Southwestern Energy Announces Second Quarter 2024 Results

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