Southwestern Energy Company (SWN) Q2 2024 earnings summary

Executive summary

• Net loss of $608 million for Q2 2024, driven by a $631 million non-cash impairment and lower realized pricing and production; adjusted net income was $113 million and adjusted EBITDA was $413 million.

• Total net production was 379 Bcfe (85% natural gas), with 22 wells placed to sales in Q2 2024.

• Capital investment for Q2 2024 was $430 million, a 28% decrease from Q2 2023, focused on core Appalachia and Haynesville assets.

• Activity was proactively adjusted in response to commodity prices, optimizing productive capacity within annual cash flow.

• Shareholders approved the proposed merger with Chesapeake Energy; closing expected in the second half of 2024, pending regulatory approvals.

Financial highlights

• Q2 2024 revenues were $1.08 billion, down from $1.27 billion in Q2 2023.

• Net loss per diluted share was $(0.55) versus $0.21 in Q2 2023; adjusted diluted EPS was $0.10, up from $0.09.

• Non-cash full cost ceiling test impairments totaled $631 million in Q2 2024 and $2.7 billion for the first half of 2024.

• Operating cash flow for the first half of 2024 was $787 million, down 50% from $1.56 billion in the prior year period.

• Weighted average realized price (including derivatives) was $2.35 per Mcfe, up from $2.33 per Mcfe in Q2 2023.

Outlook and guidance

• 2024 focus is on aligning capital investment with expected cash flow to maintain production capacity.

• Strategic priorities include capital discipline, debt reduction, maintaining liquidity, and hedging to manage commodity price volatility.

• Management expects further non-cash impairments in Q3 2024 if commodity prices remain low.

• Discontinued forward guidance and earnings calls due to the pending Chesapeake merger.