NEWS RELEASE 



SOUTHWESTERN ENERGY PIVOTS TO VALUE-ADDING

GROWTH AND ANNOUNCES GUIDANCE FOR 2017



Houston, Texas – February 23, 2017... Southwestern Energy Company (NYSE: SWN) today announced its total capital investment program in 2017 is planned to be approximately $1.175 to $1.275 billion, funded by expected cash flow and $200 million remaining from its 2016 equity raise.  With this investment, Southwestern is targeting total net gas and liquids production of 890 to 910 Bcfe in 2017, an increase over the company’s 2016 production of 875 Bcfe and an increase of approximately 20% when comparing 2017 exit production rates to 2016 exit production rates.  As part of this plan, the Company’s Appalachian area annual production volumes are expected to grow approximately 17% (using midpoints) over 2016 and approximately 40% based on exit production rates.  Assuming a capital budget based on current strip pricing in both 2017 and 2018, the Company anticipates delivering double-digit production growth in 2018.



“We are attacking 2017 with even more vigor and commitment than ever before,” remarked Bill Way, President and Chief Executive Officer of Southwestern Energy.  “With capital discipline as a foundation, we are able to capitalize on the improved commodity price environment and return to value-added growth in 2017 and beyond.  We have many new ideas we are testing, allowing us to further improve on our operational excellence from our premier portfolio of assets and transportation capacity.” 



As we navigate the current commodity market turbulence, we will leverage our improving financial strength, capital efficiency and operational excellence while focusing on economic value creation.  Details on these initiatives, and the expected results associated with this plan, are described below. 









The following tables provide detailed information and guidance for 2017 based on an average natural gas price of $3.25 per Mcf and an average oil price of $55.00 per barrel.





Estimated Production and Capital Investments in 2017





Estimated Production by Quarter in 2017









Operational Update



During 2017, the Company plans to invest $1.1 billion to $1.2 billion in its E&P business, which includes $810 million to $860 million for drilling and completion activities, $220 million to $240 million for capitalized interest and expenses and $115 million to $130 million for land, seismic and other items.  This program includes drilling 110 to 130 wells, to completing 140 to 160 wells and placing 150 to 170 wells to sales.  In Southwest Appalachia, the Company plans to primarily focus its activity in the rich gas window of the play while further testing its Utica acreage with two additional wells.  For the Marcellus wells, the Company expects the average 2017 completed well cost to be $6.6 million per well with approximately 7,400 foot average horizontal lateral length.  In Northeast Appalachia, the 2017 program plans to primarily focus on its core area in Susquehanna County while further delineating its Tioga County acreage. For the Northeast Appalachia wells, the Company expects the average 2017 completed well cost to be $6.3 million per well with approximately 7,200 foot average horizontal lateral length.  In Fayetteville, the Company plans to complete 14 to 16 Moorefield wells with an expected average completed well cost of $4.9 million for an average lateral length of approximately 7,900 feet and 15 to 17 Fayetteville Shale wells with an expected average completed well cost of $3.9 million for an average lateral length of approximately 6,600 feet.  A summary of each area’s gross well counts is provided in the table below.







Hedging Update



As of February 21, 2017, the Company had approximately 560 Bcf of its 2017 forecasted gas production protected at an average swap or purchased put strike price of $3.02 per Mcf.  Including the protected volumes, the Company retained upside exposure on approximately half of its forecasted 2017 volumes.  Additionally, the Company had approximately 272 Bcf of its 2018 forecasted gas production protected at an average swap or purchased put strike price of $2.97 per Mcf, with upside exposure on approximately 82%, or 222 Bcf, of those protected volumes to $3.38 per Mcf. The Company also had approximately 80 Bcf of its 2019 forecasted gas production protected at an average purchased put strike price of $2.93 with upside exposure to $3.34 per Mcf.



A detailed breakdown of the Company’s natural gas derivative financial instruments as of February 21, 2017 is shown below.  Please refer to our annual report on Form 10-K filed with the Securities and Exchange Commission for complete information on the Company’s commodity, basis and interest rate protection.



Note: Amounts may not sum due to rounding



As of February 21, 2017, the Company had also taken steps to mitigate the volatility of basis differentials by protecting basis on approximately 303 Bcf of its 2017 forecasted natural gas production at a basis differential to NYMEX natural gas prices of approximately ($0.60) per Mcf, which includes the impact of both physical and financial basis hedges.  A detailed breakdown of the Company’s financial basis positions as of February 21, 2017 is shown below: 





Below is a summary of the approximate impacts of potential commodity price movements on expected net cash flow based on production estimates and the Company’s hedging activities.







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 and the results of its 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 referenced in this news release are adjusted net income and adjusted EBITDA. Management presents these measures because (i) they are consistent with the manner in which the Company’s performance is measured relative to the 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.

See the reconciliations below of GAAP financial measures to non-GAAP financial measures for the forecasted 2017 annual period. Non-GAAP financial measures should not be considered in isolation or as a substitute for the Company's reported results prepared in accordance with GAAP.









(1) Calculated consistently with provisions of the Company’s principal credit agreements.





Southwestern Energy Company is an independent energy company whose wholly-owned subsidiaries are engaged in natural gas and oil exploration, development and production, natural gas gathering and marketing. Additional information on the company can be found on the Internet at http://www.swn.com.



Contact:



Michael Hancock

Director, Investor Relations

(832) 796-7367

michael_hancock@swn.com

This news release contains forward-looking statements. Forward-looking statements relate to future events and anticipated results of operations, business strategies, and other aspects of our operations or operating results. In many cases you can identify forward-looking statements by terminology such as “anticipate,” “intend,” “plan,” “project,” “estimate,” “continue,” “potential,” “should,” “could,” “may,” “will,” “objective,” “guidance,” “outlook,” “effort,” “expect,” “believe,” “predict,” “budget,” “projection,” “goal,” “forecast,” “target” or similar words. Statements may be forward looking even in the absence of these particular words. Where, in any forward-looking statement, the company expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, there can be no assurance that such expectation or belief will result or be achieved. The actual results of operations can and will be affected by a variety of risks and other matters including, but not limited to, changes in commodity prices; changes in expected levels of natural gas and oil reserves or production; operating hazards, drilling risks, unsuccessful exploratory activities; natural disasters; limited access to capital or significantly higher cost of capital related to illiquidity or uncertainty in the domestic or international financial markets; international monetary conditions; unexpected increases in service or other costs related to drilling and completion activities; potential liability for remedial actions under existing or future environmental regulations; potential liability resulting from pending or future litigation; and general domestic and international economic and political conditions; as well as changes in tax, environmental and other laws applicable to our business. Other factors that could cause actual results to differ materially from those described in the forward-looking statements include other economic, business, competitive and/or regulatory factors affecting our business generally as set forth in our filings with the Securities and Exchange Commission. Unless legally required, Southwestern Energy Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.



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