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An investor's guide to Southwestern Energy Company

Part 5
An investor's guide to Southwestern Energy Company (Part 5 of 5)

Why Southwestern Energy’s midstream operations are significant

Southwestern Energy’s midstream operations

Southwestern Energy has significant midstream operations that generate revenue from fees collected for transporting natural gas to market and for marketing natural gas. The assets are mostly located in the Fayetteville and Marcellus shales, where SWN’s natural gas production is concentrated. The midstream operations support the company’s E&P operations as well as service a small portion of third-party natural gas transportation and marketing.

2014.01.16 - Southwestern Energy Gas Volumes MarketedEnlarge Graph

As of year-end 2012, the company had invested slightly over $1 billion in its midstream operations in the Fayetteville Shale and ~$200 million in its midstream operations in Pennsylvania and East Texas. Revenues and EBITDA from the company’s midstream operations have grown over the years, as SWN continues to invest in expanding its midstream operations and collect fees on the natural gas it transports and markets. SWN noted in its most recent 10-K that it expects operating income and EBITDA from its midstream segment to continue to grow over the next few years as it continues to drill and produce from the Fayetteville and Marcellus shales.

2014.01.16 - Southwestern Energy Midstream RevenueEnlarge Graph

SWN notes that as of September 30, 2013, its midstream operations gathered ~2.3 billions of cubic feet of natural gas per day through 1,920 miles of gathering lines and 539,000 horsepower of compression equipment. The company projects that its midstream segment will generate ~$355 to $360 million of EBITDA in 2014.

2014.01.16 - Southwestern Energy Midstream EBITDAEnlarge Graph

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