Southwestern Energy Company (SWN) Q3 2024 earnings summary

Executive summary

• Expand Energy, formed from the merger of Chesapeake and Southwestern, reported 3Q24 combined production of ~6.75 bcfe/d, making it the largest domestic natural gas producer.

• Annual synergy target increased to ~$500 million, with ~$225 million expected in 2025.

• Upgraded to investment grade by S&P and Fitch (BBB-), Moody's Ba1 with positive outlook.

• Enhanced capital returns framework includes a $1B share repurchase program and a $2.30/share annual base dividend.

Financial highlights

• Combined 3Q24 EBITDAX was $827 million; total capex was $618 million.

• Adjusted EBITDAX for 3Q24 was $365 million for legacy Chesapeake and $462 million for legacy Southwestern.

• Net loss for 3Q24 was $114 million (GAAP) for legacy Chesapeake; legacy Southwestern reported a net loss of $280 million.

• Free cash flow for 3Q24 was $124 million; adjusted free cash flow was $98 million.

• Net debt as of 9/30/24 was $906 million; total capitalization was $11.1 billion.

Outlook and guidance

• 4Q24 production guidance: 6,350–6,450 mmcfe/d.

• 2025 preliminary plan: ~7 bcfe/d production, ~$2.7B capex, maintaining 10–12 rigs and 5–6 frac crews.

• Maintenance capex for ~7 bcfe/d expected to be ~$2.8B, including all future synergies.

• 2025 target of $500 million net debt reduction; 75% of remaining FCF to be returned to equity holders.