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Chart in Focus: Southwestern Energy’s Operating Netbacks

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What are operating netbacks?

Operating netbacks, also referred to as production netbacks, are oil and gas revenues realized per boe (barrel of oil equivalent) after all costs to bring one boe to the market, subtracted from the realized price.

Operating netback is derived by subtracting field operating expenses, production expenses, production taxes, and transportation expenses from the realized price, including a hedging benefit.

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Southwestern Energy’s operating netback

In 3Q16, Southwestern Energy (SWN) reported an operating netback of ~$0.78 per Mcfe (thousand cubic feet equivalent), which is ~35.0% lower than 3Q15.

For 3Q16, other S&P 500 (SPY) upstream companies such as Marathon Oil (MRO), Pioneer Natural Resources (PXD), and Murphy Oil (MUR) have operating netbacks of $17.23 per boe, $29.76 per boe, and $23.76 per boe, respectively.

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