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Why SWN Reported Sequentially Lower Production in 1Q18

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Southwestern Energy’s quarterly production

For 1Q18, Southwestern Energy (SWN) reported production of 226 Bcfe (billion cubic feet equivalent), which is in line with SWN’s 1Q18 production guidance of 226 Bcfe. Sequentially, Southwestern Energy’s 1Q18 production was ~5.0% lower than its 4Q17 production of 239 Bcfe. On a year-over-year basis, Southwestern Energy’s 1Q18 production was ~11.0% higher than its 1Q17 production of 204 Bcfe.

According to SWN’s press release on February 8, the sequential decline in its 1Q18 production can be attributed to “reduction in activity in late 2017, the timing of completions and the impacts from severe winter weather on our operations in the month of January 2018.”

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Fayetteville Shale comprised 67 Bcfe (or ~30.0%) of SWN’s 1Q18 production, Northeast Appalachia comprised 108 Bcfe (or ~48.0%), and Southwest Appalachia comprised 51 Bcfe (or ~22.0%). This compares to 81 Bcfe from Fayetteville Shale, 87 Bcfe from Northeast Appalachia, and 36 Bcfe from Southwest Appalachia in 1Q17.

Southwestern Energy’s 1Q18 production mix

For 1Q18, Southwestern Energy reported natural gas production of 197 Bcf (billion cubic feet), natural gas liquids production of 4,230 Mbbls (thousand barrels), and crude oil production of 613 Mbbls.

In 1Q18, SWN’s production mix contained ~87.0% natural gas. In 1Q18, SWN’s liquids production increased ~37.0%, and its natural gas production increased ~8.0% when compared with 1Q17.

SWN’s 2Q18 and 2018 production guidance

For 2Q18, Southwestern Energy expects production of 225–233 Bcfe. For fiscal 2018, Southwestern Energy expects production of 930–965 Bcfe, a midpoint increase of ~6.0% when compared with 2017.

For fiscal 2018, SWN’s peer ConocoPhillips (COP) expects production of 1,200–1,240 Mboepd, which is expected to result in ~5.0% growth when compared with its disposition-adjusted fiscal 2017 production. ConocoPhillips’s production guidance excludes Libya.

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