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Southwestern Energy Slips To Loss On Impairments, Sales Top Estimates

Southwestern Energy Slips To Loss On Impairments, Sales Top Estimates
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2/20/2013 6:04 PM ET

Southwestern Energy Co. (SWN: Quote), said Wednesday it slipped to a loss for the fourth quarter, hurt by impairment charges at its oil and natural gas properties stemming from weak gas prices. Revenues rose from the prior year, aided by increased production, both at its Fayetteville and Marcellus Shale plays.

Excluding items, Southwestern Energy posted a quarterly profit that matched Wall Street estimates, while revenues topped their forecast.

"Southwestern Energy's storyline in 2012 was 'Success in a low gas price environment'", said CEO Steve Mueller.

Moving forward, Mueller said the company's focus in 2013 will be on innovation in operating areas and exploration projects.

Southwestern Energy's results for the quarter were negatively impacted by an $849 million non-cash ceiling test impairment.

Gas and oil production for the quarter meanwhile increased 12 percent to 149.9 Bcfe from 133.3 Bcfe last year, and included 125.1 Bcf from the Fayetteville Shale play.

Including the effect of hedges, average realized gas price during the quarter was $3.72 per Mcf, down from $4.04 per Mcf in the prior year. Commodity hedging activities increased average gas price by $0.76 per Mcf, compared to an increase of $1.00 per Mcf a year ago.

Overall, the Houston, Texas-based company reported fourth-quarter revenues of $773 million, compared with $744 million a year ago. On average, 16 analysts polled by Thomson Reuters estimated revenues of $712.60 million.

Houston, Texas-based Southwestern Energy reported fourth-quarter net loss of $355.6 million or $1.02 per share, compared with net income of $158.5 million or $0.45 per share last year.

Excluding one-time items, adjusted earnings for the quarter were $156.4 million or $0.44 per share. Analysts on consensus estimated earnings of $0.44 per share for the quarter. Analysts' estimates typically exclude special items.

Excluding items, operating income at the company's E&P segment edged up to $197 million from $196 million last year, due to higher production volumes, partly offset by lower realized natural gas prices and increased operating costs.

Operating income at Midstream Services segment, which is comprised of natural gas gathering and marketing activities, was $77.7 million, up from $67.6 million last year, due to the increase in gathering revenues from the Fayetteville and Marcellus Shale properties.

As of date, the company had about 185 Bcf of its 2013 estimated gas production hedged at an average floor price of $5.06 per Mcf, and about 55 Bcf of its 2014 forecasted gas production hedged at an average floor price of $4.43 per Mcf.

At the end of the quarter, Southwestern had estimated proved gas and oil reserves of about 4,018 Bcfe, down from 5,893 Bcfe in the prior year, reflecting downward reserve revisions caused by the effect of lower gas prices, production and asset dispositions.

Southwestern Energy closed Wednesday at $33.09, down 0.57%, on a volume of 4.2 million shares. In after hours, the stock gained 0.04%. In the past year, the stock has traded in a range of $25.63 - $36.87.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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