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Southwestern Energy’s 2Q17 Revenue Expectations

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Revenue estimates

For 2Q17, Wall Street analysts expect Southwestern Energy (SWN) to report revenues of ~$814 million. On a YoY (year-over-year) basis, Southwestern Energy’s 2Q17 revenue expectations are ~56% higher—compared to revenue of ~$522 million in 2Q16. In 2Q16, Southwestern Energy reported the lowest revenue since 2012. Sequentially, Southwestern Energy’s 2Q17 revenues expectations are ~4% lower—compared to its revenue of ~$846 million in 1Q17.

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Southwestern Energy’s revenue in 1Q17

In its recent earnings released in April 2017, Southwestern Energy reported revenues of ~$846 million—higher than Wall Street analysts’ consensus for revenues of ~$768 million. For 1Q17, Southwestern Energy reported natural gas revenues of ~$503 million, liquids revenues of ~$63 million, and marketing and gas gathering revenues of ~$280 million. As a result, ~59% of Southwestern Energy’s revenues came from natural gas sales.

Despite the YoY decrease in Southwestern Energy’s 1Q17 production, a steep increase in realized prices for natural gas (UNG), crude oil (USO), and natural gas liquids had a positive impact on Southwestern Energy’s revenue. The company’s total realized price rose to $2.75 per Mcfe (thousand cubic feet equivalent) in 1Q17—compared to $1.41 per Mcfe in 1Q16.

Upstream revenue mix

Southwestern Energy’s operating revenue from natural gas liquids, natural gas (UNG), and crude oil (USO) sales were ~$566 million in 1Q17—an increase of ~65% compared to 1Q16. Out of its revenue, ~89% or ~$503 million of the operating revenue came from natural gas sales, ~7% or ~$40 million of the operating revenue came from natural gas liquids sales, and only ~4% or ~$23 million of the operating revenue came from crude oil sales.

Southwestern Energy’s peers Devon Energy (DVN), Marathon Oil (MRO), and Encana (ECA) reported revenues of $3.55 billion, $1.07 billion, and $1.30 billion in 1Q17. The Energy Select Sector SPDR ETF (XLE) generally invests at least 95% of its total assets in oil and gas companies.

In the next part, we’ll look at Southwestern Energy’s 2Q17 production guidance.

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