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Section 1: 8-K (SWN FORM 8-K 2019 EARNINGS RELEASE)


Washington, D.C. 20549


Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): February 27, 2020
(Exact name of registrant as specified in its charter)
Delaware001-08246 71-0205415
(State or other jurisdiction of incorporation)(Commission File Number) (IRS Employer Identification No.)
10000 Energy Drive 
Spring, TX 77389
(Address of principal executive offices)(Zip Code)

(832) 796-1000
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
         Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
         Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
         Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
         Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, Par Value $0.01SWNNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Explanatory Note
The information in this report provided under Item 2.02, including Exhibit 99.1 attached hereto, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
SECTION 2 - Financial Information
Item 2.02 Results of Operations and Financial Condition.

On February 27, 2020, Southwestern Energy Company (the "Company") issued a press release announcing the Company's financial results for the year ended December 31, 2019 (Exhibit 99.1).  The press release is being furnished as Exhibit 99.1.
SECTION 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
104Cover Page Interactive Data File (embedded within the Inline XBRL document)
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: February 27, 2020
 By:       /s/    JULIAN M. BOTT                  
  Name: Julian M. Bott
  Title: Executive Vice President and
    Chief Financial Officer

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Section 2: EX-99.1 (EX-99.1 SWN 2019 EARNINGS RELEASE)


2020 capital investment 20% lower than 2019
Reaffirms capability and commitment to achieving free cash flow neutrality by end of 2020 through operational efficiencies, cost reductions, well outperformance and hedge program benefits

SPRING, Texas – February 27, 2020...Southwestern Energy Company (NYSE: SWN) today announced financial and operating results for the fourth quarter and full year 2019 and issued 2020 guidance.
“Once again, our team achieved results at or above the midpoint of guidance across all metrics highlighting our established culture of outperformance while operating safely and responsibly. Importantly, we further reduced the cost structure of the Company, enhanced well performance while materially lowering well costs, and improved operational efficiencies, all adding to economic inventory,” said Bill Way, Southwestern Energy President and Chief Executive Officer.

“Foundational to the Company’s resilience, especially in the current pricing environment, are a strong balance sheet, capital discipline, unique Tier 1 condensate and liquids rich acreage and a multi-year hedge position. We remain confident in our ability to return the Company to free cash flow by the end of this year and be firmly positioned to deliver an attractive long-term value proposition for shareholders,” Way continued.
Fourth Quarter 2019 Highlights
Reported 208 Bcfe total production, total liquids above guidance at 88 MBbls per day;
Increased condensate production to 1,486 MBbls, greater than 16.2 MBbls per day;
Received weighted average realized price (excluding transportation costs) of $2.85 per Mcfe, including $68 million in settled derivatives, 8% less than prior year despite a 31% decrease in NYMEX Henry Hub;
Full Year 2019 Highlights
Achieved a year-end net debt/EBITDA of 2.3x;
Reduced well costs 27% to $824 per lateral foot with an average lateral length of 10,014 feet;
Invested capital of $1.14 billion, 9% below prior year; delivered wells to sales above the high-end of guidance;
Reported total production of 778 Bcfe, including 23% total liquids growth;
Grew condensate production 38%;
Increased proved reserves to 12.7 Tcfe, including 32% liquids, and replaced 203% of 2019 production volumes;
Lowered Proved Developed F&D by 24% to $0.53 per Mcfe;
Realized an additional $122 million in gross G&A and interest reductions;

Received weighted average realized price (excluding transportation costs) of $2.82 per Mcfe, 3% below prior year, including $180 million in derivative gains; and
Continued environmental stewardship with low methane emissions and another year of freshwater neutrality, bringing total gallons returned to the environment to 11 billion.

2020 Guidance
The following table provides a summary of capital and production guidance. For full guidance, please refer to attachments in this press release. The comparisons below are based on the midpoint of 2020 guidance and 2019 actual results.
Guidance Summary ($2.10 per MMBtu NYMEX and $50 per Bbl WTI)
Total capital investment$860 – $940MM
Total production830 – 865Bcfe
Natural gas642 – 668Bcf
Oil5,625 – 6,025MBbls
NGL25,500 – 26,600MBbls
Capital investments of $860 to $940 million, 20% less than 2019; first half weighted similar to prior years;
Additional 10% well cost reduction, averaging $730 per lateral foot for all wells to sales, including dry gas and liquids-rich areas; costs include all drilling and completion costs, pad construction, facilities installation and initial flowback;
Increasing average lateral length 20% to more than 12,000 feet;
Estimating 90 to 110 wells to sales, with approximately two-thirds located in liquids-rich acreage; reduced cost structure and efficiency improvements allowing for activity levels similar to 2019 with less capital;
Resulting production growth of 9% driven primarily by investment in Southwest Appalachia, with oil and natural gas liquids (NGLs) increasing approximately 25% and 10%, respectively;
Hedge position includes protection on approximately 83%, 100% and 51% of expected natural gas, oil and NGL production;
Expected shallowing of base decline to 25%; and
Decreasing G&A to $0.13 to $0.17 per Mcfe range, down from $0.18 per Mcfe in 2019, including approximately $40 million in reductions implemented earlier this year.
Natural gas hedges, which include swaps and collars, are in place for approximately 83% of expected natural gas production at a floor price of $2.47 per MMBtu for April through the remainder of the year. Ethane hedges are in place for 8,099 MBbls at an average swap price of $8.67 per barrel ($0.21 per gallon). Propane hedges are in place for 5,112 MBbls at an average price of $24.00 per barrel ($0.57 per gallon). Approximately 100% of estimated oil production is hedged with swaps and collars in place at an average floor price of $56.56 per barrel.


2019 Fourth Quarter and Full Year Results
The table below summarizes select financial statistics. Results for 2019 may not be comparable to 2018 due to the December 2018 Fayetteville Shale divestiture.

FINANCIAL STATISTICSFor the three months endedFor the years ended
December 31,December 31,
(in millions)2019201820192018
Net income attributable to common stock$110  $307  $891  $535  
Adjusted net income attributable to common stock (non-GAAP)$99  $176  $328  $590  
Diluted earnings per share$0.20  $0.54  $1.65  $0.93  
Adjusted diluted earnings per share (non-GAAP)$0.18  $0.31  $0.61  $1.02  
Adjusted EBITDA (non-GAAP)$266  $395  
$973  $1,484  
Net cash provided by operating activities$225  $252  $964  $1,223  
Net cash flow (non-GAAP)$246  $359  $913  $1,352  
Total capital investments (2)
$207  $209  $1,140  $1,248  
(1)Includes $86 million and $375 million of Adjusted EBITDA from the divested Fayetteville Shale assets for the three and twelve months ended December 31, 2018, respectively.
(2)Capital investments on the cash flow statement include decreases of $18 million and $74 million for the three months ended December 31, 2019 and 2018, respectively, and an increase of $34 million and a decrease of $53 million for the twelve months ended December 31, 2019 and 2018, respectively, relating to the change in accrued expenditures between periods.
Fourth Quarter 2019 Financial Results
Southwestern Energy recorded net income attributable to common stock of $110 million or $0.20 per diluted share for the quarter ended December 31, 2019. Adjusted net income, which excludes the impact of unsettled derivatives and one-time items, was $99 million or $0.18 per diluted share in 2019 and $176 million or $0.31 per share for the same period in 2018. Excluding the impact of the Fayetteville Shale divestiture, the decrease was primarily related to a decrease in commodity prices, partially offset by a $167 million increase in settled derivatives compared to 2018. Adjusted EBITDA (non-GAAP) was $266 million, net cash provided by operating activities was $225 million and net cash flow (non-GAAP) was $246 million.
Fourth quarter 2019 weighted average realized price (including transportation costs) was $2.12 per Mcfe excluding derivatives compared to $3.15 per Mcfe in 2018. Including derivatives and excluding transportation costs, the weighted average realized price in the fourth quarter of $2.85 per Mcfe was 8% less than prior year despite a 31% decrease in NYMEX Henry Hub.
Full Year 2019 Financial Results
The Company recorded net income attributable to common stock of $891 million, or $1.65 per share, for the year ended December 31, 2019. Adjusted net income for 2019 was $328 million, or $0.61 per share, compared to $590 million, or $1.02 per share, in 2018. The decrease in adjusted net income compared to prior year was primarily the result of a decrease in commodity prices and the divestiture of the Fayetteville Shale, partially offset by a $274 million increase in settled derivatives impact, a 23% increase in liquids production and decreased interest and G&A expense. Adjusted EBITDA (non-GAAP) was $973 million, net cash provided by operating activities was $964 million and net cash flow (non-GAAP) was $913 million.

For the full year 2019, weighted average realized price (including transportation costs) was $2.18 per Mcfe excluding derivatives, an 18% decrease compared to $2.66 per Mcfe in 2018, due to decreased prices across all commodities. The weighted average realized price including derivatives and excluding transportation costs was $2.82 per Mcfe, a decrease of only 3% compared to prior year due to $180 million of derivative gains in 2019.
During the year, the Company reduced senior notes by $114 million, repurchasing $62 million of senior notes at an average discount of 13% and retiring $52 million of notes that were due in 2020. The Company had a leverage ratio of 2.3x at year-end and a weighted average interest rate of 6.7% on its $2.2 billion of senior notes with no significant maturities until 2025. As of December 31, 2019, the Company had $1.8 billion of liquidity available under its $2 billion revolving credit facility, with $34 million borrowed and $172 million letters of credit outstanding.
Realized PricesFor the three months endedFor the years ended
(includes transportation costs)December 31,December 31,
Natural Gas Price:
NYMEX Henry Hub price ($/MMBtu) (1)
$2.50  $3.64  $2.63  $3.09  
Discount to NYMEX (2)
(0.69) (0.66) (0.65) (0.64) 
Realized gas price per Mcf, excluding derivatives$1.81  $2.98  $1.98  $2.45  
Gain (loss) on settled financial basis derivatives ($/Mcf)
0.05  (0.02) —  (0.04) 
Gain (loss) on settled commodity derivatives
0.26  (0.48) 0.20  (0.06) 
Realized gas price per Mcf, including derivatives$2.12  $2.48  $2.18  $2.35  
Oil Price, per Bbl:
WTI oil price ($/Bbl)
$56.96  $58.81  $57.03  $64.77  
Discount to WTI(10.59) (7.94) (10.13) (7.98) 
Realized oil price, excluding derivatives$46.37  $50.87  $46.90  $56.79  
Realized oil price, including derivatives$49.16  $50.37  $49.56  $56.07  
NGL Price, per Bbl:
Realized NGL price, excluding derivatives$12.46  $18.59  $11.59  $17.91  
Realized NGL price, including derivatives$14.83  $18.49  $13.64  $17.23  
Percentage of WTI, excluding derivatives22 %32 %20 %28 %
Total Weighted Average Realized Price:
Excluding derivatives ($/Mcfe)
$2.12  $3.15  $2.18  $2.66  
Including derivatives ($/Mcfe)
$2.44  $2.72  $2.42  $2.57  
(1)Based on last day monthly futures settlement prices.
(2)This discount includes a basis differential, a heating content adjustment, physical basis sales, third-party transportation charges and fuel charges, and excludes financial basis derivatives.
Operational Review
Total production for the quarter ended December 31, 2019 was 208 Bcfe, 23% of which was liquids. NGL production was 6,609 MBbls, or 71.8 MBbls per day, and condensate production was 1,486 MBbls, or 16.2 MBbls per day, each above the high end of guidance.

For the year, Appalachia production was 778 Bcfe, an 11% increase compared to prior year, with all growth coming from liquids-rich assets in Southwest Appalachia. NGL and oil production increased 20% and 38%, respectively, compared to prior year.
Capital investments in the fourth quarter of 2019 were $207 million, bringing full year capital investment to $1,140 million, 9% below prior year. The Company brought 113 wells to sales during the year, above the high end of guidance, while spending less capital due to operational efficiencies.
Operating StatisticsFor the three months endedFor the years ended
December 31,December 31,
Gas production (Bcf)
160  194  609  807  
Oil production (MBbls)
1,486  1,073  4,696  3,407  
NGL production (MBbls)
6,609  5,434  23,620  19,706  
Total production (Bcfe)
208  234  778  946  
Division Production
Northeast Appalachia (Bcf)
116  118  459  459  
Southwest Appalachia (Bcfe)
92  71  319  243  
Fayetteville Shale (Bcf)
—  44  —  243  
Average unit costs per Mcfe
Lease operating expenses
$0.94  $0.93  $0.92  $0.93  
General & administrative expenses$0.19  
Taxes, other than income taxes$0.05  $0.10  

$0.08  $0.09  
Full cost pool amortization$0.54  $0.53  $0.56  $0.51  
(1)G&A per Mcfe excludes restructuring charges of $2 million and $18 million and legal settlement charges of $3 million and $1 million for the three months ended December 31, 2019 and 2018, respectively.
(2)G&A per Mcfe excludes $11 million restructuring charges, $6 million charges related to sale of building and $6 million legal settlement charges for the twelve months ended December 31, 2019 and $36 million restructuring charges and $9 million of legal settlement charges for the twelve months ended December 31, 2018.
(3)TOTI per Mcfe excludes $1 million of restructuring charges for the twelve months ended December 31, 2018.
Southwest Appalachia – In the fourth quarter, total net production for Southwest Appalachia was 92 Bcfe, including over 16 MBbls per day of condensate. The Company placed 16 wells to sales in the fourth quarter, all located in the Company’s super rich acreage, with an average lateral length of 11,213 feet. Eleven of the 16 wells were online for at least 30 days and had an average 30-day rate of 10 MMcfe per day, including 67% liquids, of which 444 barrels per day were condensate.
In 2019, Southwest Appalachia’s total net production increased 31% to 319 Bcfe, 53% of which were liquids. The Company placed 69 wells to sales, including 64 located in the super rich acreage, drilled 66 wells and completed 72 wells in 2019.


Northeast Appalachia – In the fourth quarter, total net production for Northeast Appalachia was 116 Bcf. There were no wells drilled, five wells completed and eight wells placed to sales in the quarter with an average lateral length of 9,841 feet. Of the eight wells to sales, three wells were online for at least 30 days and had an average 30-day rate of 18 MMcf per day.
Production for the year was 459 Bcf, flat with prior year. The Company drilled 39 wells, completed 44 wells and brought 44 wells to sales during 2019.
E&P Division ResultsFor the three months ended December 31, 2019For the year ended December 31, 2019
Gas production (Bcf)
116  44  459  150  
Liquids production
Oil (MBbls)
—  1,480  —  4,673  
NGL (MBbls)
—  6,608  —  23,611  
Production (Bcfe)
116  92  459  319  
Gross operated production December 2019 (MMcfe/d)
1,500  1,545  
Net operated production December 2019 (MMcfe/d)
1,224  958  
Capital investments ($ in millions)
Drilling and completions, including workovers$40  $84  $314  $516  
Land acquisition and other11  15  18  45  
Capitalized interest and expense 36  33  149  
Total capital investments$59  $135  $365  $710  
Gross operated well activity summary
Drilled—  10  39  66  
Completed 10  44  72  
Wells to sales 16  44  69  
Average well cost on wells to sales (in millions)
$7.1  $8.9  $7.3  $8.9  
Average lateral length (in ft)
9,841  11,213  9,029  10,642  
Total weighted average realized price per Mcfe, excluding derivatives$1.92  $2.36  $2.10  $2.30  
2019 Proved Reserves
The Company increased its total proved reserves to 12.7 Tcfe, 7% above year-end 2018 due to additions and positive performance revisions across gas, oil and NGLs. Reserves consisted of 68% natural gas, and 32% liquids, with PV-10 at year-end 2019 of $3.7 billion.
During the year, the Company replaced 203% of production volumes through 1,195 Bcfe of proved reserve additions and net positive revisions of 385 Bcfe. The reserve life index was approximately 16.4 years at year-end 2019.


Proved Reserves SummaryFor the years ended December 31,
Proved reserves (in Bcfe)
12,721  11,921  
Pre-tax (millions)
$3,735  $6,524  
PV of taxes (millions)
(35) (525) 
After-Tax (millions)
$3,700  $5,999  
Percent of estimated proved reserves that are:
Natural gas
NGLs and oil
Proved developed50%47%

2019 Proved Reserves by CommodityNatural GasOilNGLTotal
Proved reserves, beginning of year8,044  69,007  577,063  11,921  
Revisions of previous estimates due to price(480) (2,041) (37,492) (717) 
Revisions of previous estimates other than price685  3,707  65,869  1,102  
Extensions, discoveries and other additions992  6,948  26,941  1,195  
Production(609) (4,696) (23,620) (778) 
Acquisition of reserves in place—  —  —  —  
Disposition of reserves in place(2) —  —  (2) 
Proved reserves, end of year8,630  72,925  608,761  12,721  
Proved developed reserves:
Beginning of year4,395  18,037  175,480  5,557  
End of year4,906  26,124  226,271  6,421  

2019 Proved Reserves by Division (Bcfe)
Other (1)
Proved reserves, beginning of year4,366  7,554   11,921  
Revisions of previous estimates due to price(57) (660) —  (717) 
Revisions of previous estimates other than price127  975  —  1,102  
Extensions, discoveries and other additions862  333  —  1,195  
Production(459) (319) —  (778) 
Acquisition of reserves in place—  —  —  —  
Disposition of reserves in place(2) —  —  (2) 
Proved reserves, end of year4,837  7,883   12,721  
(1)Other includes properties outside of the Appalachian Basin.
The Company’s 2019 proved developed finding and development (PD F&D) costs decreased 24% from the prior year to $0.53 per Mcfe, when excluding the impact of capitalized interest and portions of capitalized G&A costs in accordance with the full cost method of accounting.


Total Company Proved Developed Finding and DevelopmentThree-Year
12 Months Ended December 31,Total
Total PD Adds (Bcfe):
New PD adds
191  177  1,258  1,626  
PUD conversions
1,139  46  2,626  
Total PD Adds
1,632  1,316  1,304  4,252  
Costs Incurred (in millions):
Unproved property acquisition costs$162  $164  $194  $520  
Exploration costs  22  29  
Development costs936  1,014  1,024  2,974  
Capitalized Costs Incurred
$1,100  $1,183  $1,240  $3,523  
Subtract (in millions):
Proved property acquisition costs$—  $—  $—  $—  
Unproved property acquisition costs(162) (164) (194) (520) 
Capitalized interest and expense associated with development and exploration (1)
(81) (93) (103) (277) 
PD Costs Incurred
$857  $926  $943  $2,726  
PD F&D$0.53  $0.70  $0.72  $0.64  
Note: Amounts may not add due to rounding
(1)Adjusting for the impacts of the full cost accounting method for comparability.
(2)Includes increased reserve estimates of 206 Bcfe in the Appalachian Basin associated with productivity enhancements for newly developed PUD locations
Conference Call
Southwestern Energy will host a conference call and webcast on Friday, February 28, 2020 at 9:00 a.m. Central to discuss fourth quarter and fiscal year 2019 results. To participate, dial US toll-free 877-883-0383, or international 412-902-6506 and enter access code 4822579. The conference call will webcast live at
To listen to a replay of the call, dial 877-344-7529, International 412-317-0088, or Canada Toll Free 855-669-9658. Enter replay access code 10138538. The replay will be available until March 20, 2020.
About Southwestern Energy
Southwestern Energy Company is an independent energy company engaged in natural gas, natural gas liquids and oil exploration, development, production and marketing. For additional information, visit our website
Investor Contact
Paige Penchas
Vice President, Investor Relations
(832) 796-4068


Forward Looking Statement
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 (including geographic basis differentials); 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; the risks related to the discontinuation of LIBOR and/or other reference rates that may be introduced following the transition, including increased expenses and litigation and the effectiveness of interest rate hedge strategies; unexpected cost increases; potential liability for remedial actions under existing or future environmental regulations; failure or delay in obtaining necessary regulatory approvals; potential liability resulting from pending or future litigation; general domestic and international economic and political conditions; the impact of a prolonged federal, state or local government shutdown and threats not to increase the federal government’s debt limit; as well as changes in tax, environmental and other laws, including court rulings, 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.


2020 Guidance
1st Quarter2nd Quarter3rd Quarter4th QuarterTotal Year
Natural Gas (Bcf)
150 – 156152 – 158170 – 177170 – 177642 – 668
Oil/Condensate (MBbls)
1,300 – 1,4001,200 – 1,3001,475 – 1,5751,650 – 1,7505,625 – 6,025
NGLs (MBbls)
6,000 – 6,2756,150 – 6,4256,600 – 6,8756,750 – 7,02525,500 – 26,600
Total Production (Bcfe)
194 – 202196 – 205219 – 228221 – 230830 – 865
Total Production (MMcfe/d)
2,132 – 2,2202,154 – 2,2532,380 – 2,4782,402 – 2,5002,268 – 2,363


Northeast Appalachia$235 – $260
Southwest Appalachia$460 – $485
Other$25 – $35
Capitalized interest$85 – $95
Capitalized expense$55 – $65
Total Capital Investments$860 – $940
Northeast Appalachia455 – 470
Southwest Appalachia375 – 395

Natural gas discount to NYMEX including transportation$0.63 – $0.73 per Mcf
Oil discount to West Texas Intermediate (WTI) including transportation$9.50 – $11.50 per Bbl
Natural Gas Liquids realization as a % of WTI including transportation16% – 21%
Lease operating expenses$0.92 – $0.97 per Mcfe
General & administrative expense$0.13 – $0.17 per Mcfe
Taxes, other than income taxes$0.07 – $0.09 per Mcfe
Interest expense - net of capitalization$80 – $90 MM
Income tax rate (~100% deferred)23.5%

DrilledCompletedWells To SalesEnding DUC Inventory
Northeast Appalachia25 – 3530 – 4030 – 400 – 10
Southwest Appalachia50 – 6060 – 7060 – 705 – 15
Total Well Count
75 – 9590 – 11090 – 1105 – 25


For the three months endedFor the years ended
December 31,December 31,
(in millions, except share/per share amounts)2019201820192018
Operating Revenues:
Gas sales$298  $586  $1,241  $1,998  
Oil sales70  55  223  196  
NGL sales83  100  274  352  
Marketing293  417  1,297  1,222  
Gas gathering—  16  —  89  
745  1,175  3,038  3,862  
Operating Costs and Expenses:
Marketing purchases298  421  1,320  1,229  
Operating expenses197  197  720  785  
General and administrative expenses47  44  166  209  
(Gain) loss on sale of operating assets, net(1) (17)  (17) 
Restructuring charges 19  11  39  
Depreciation, depletion and amortization119  134  471  560  
Impairments —  16  171  
Taxes, other than income taxes11  25  62  89  
681  823  2,768  3,065  
Operating Income64  352  270  797  
Interest Expense:
Interest on debt41  51  166  231  
Other interest charges    
Interest capitalized(25) (29) (109) (115) 
19  24  65  124  
Gain (Loss) on Derivatives54  (10) 274  (118) 
Gain (Loss) on Early Extinguishment of Debt (9)  (17) 
Other Loss, Net—  (1) (7) —  
Income Before Income Taxes100  308  480  538  
Provision (Benefit) for Income Taxes:
Current(1)  (2)  
Deferred(9) —  (409) —  
(10)  (411)  
Net Income$110  $307  $891  $537  
Participating securities – mandatory convertible preferred stock—  —  —   
Net Income Attributable to Common Stock$110  $307  $891  $535  
Earnings Per Common Share
Basic$0.20  $0.54  $1.65  $0.93  
Diluted$0.20  $0.54  $1.65  $0.93  
Weighted Average Common Shares Outstanding:
Basic539,434,877  564,863,538  539,345,343  574,631,756  
Diluted540,574,288  567,773,371  540,382,914  576,642,808  


December 31, 2019December 31, 2018
ASSETS(in millions)
Current assets:
Cash and cash equivalents$ $201  
Accounts receivable, net345  581  
Derivative assets278  130  
Other current assets51  44  
Total current assets679  956  
Natural gas and oil properties, using the full cost method, including $1,506 million as of December 31, 2019 and $1,755 million as of December 31, 2018 excluded from amortization25,250  24,180  
Other520  525  
Less: Accumulated depreciation, depletion and amortization(20,503) (20,049) 
Total property and equipment, net5,267  4,656  
Operating lease assets159  —  
Deferred tax assets407  —  
Other long-term assets205  185  
Total long-term assets771  185  
TOTAL ASSETS$6,717  $5,797  
Current liabilities:
Accounts payable$525  $609  
Taxes payable59  58  
Interest payable51  52  
Derivative liabilities125  79  
Current operating lease liabilities34  —  
Other current liabilities54  48  
Total current liabilities848  846  
Long-term debt2,242  2,318  
Long-term operating lease liabilities119  —  
Pension and other postretirement liabilities43  46  
Other long-term liabilities219  225  
Total long-term liabilities2,623  2,589  
Commitments and contingencies
Common stock, $0.01 par value; 1,250,000,000 shares authorized; issued 585,555,923 shares as of December 31, 2019 and 585,407,107 shares as of December 31, 2018  
Additional paid-in capital4,726  4,715  
Accumulated deficit(1,251) (2,142) 
Accumulated other comprehensive loss(33) (36) 
Common stock in treasury, 44,353,224 shares as of December 31, 2019 and 39,092,537 shares as of December 31, 2018(202) (181) 
Total equity3,246  2,362  


For the years ended
December 31,
(in millions)20192018
Cash Flows From Operating Activities:
Net income$891  $537  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization471  560  
Amortization of debt issuance costs  
Impairments16  171  
Deferred income taxes(409) —  
(Gain) loss on derivatives, unsettled(94) 24  
Stock-based compensation 14  
(Gain) loss on early extinguishment of debt(8) 17  
(Gain) loss on sale of assets, net (17) 
Other10  (1) 
Change in assets and liabilities:
Accounts receivable234  (153) 
Accounts payable(141) 65  
Taxes payable—   
Interest payable—  (10) 
Inventories(7) (13) 
Other assets and liabilities(17) 19  
Net cash provided by operating activities964  1,223  
Cash Flows From Investing Activities:
Capital investments(1,099) (1,290) 
Proceeds from sale of property and equipment54  1,643  
Net cash provided by (used in) investing activities(1,045) 359  
Cash Flows From Financing Activities:
Payments on current portion of long-term debt(52) —  
Payments on long-term debt(54) (2,095) 
Payments on revolving credit facility(532) (1,983) 
Borrowings under revolving credit facility566  1,983  
Change in bank drafts outstanding(19) 17  
Debt issuance costs(3) (9) 
Purchase of treasury stock(21) (180) 
Preferred stock dividend—  (27) 
Cash paid for tax withholding(1) (3) 
Other —  
Net cash used in financing activities(115) (2,297) 
Decrease in cash and cash equivalents(196) (715) 
Cash and cash equivalents at beginning of year201  916  
Cash and cash equivalents at end of year$ $201  


Hedging Summary
A detailed breakdown of the Company’s derivative financial instruments and financial basis positions as of February 25, 2020, including 2020 derivative contracts that have settled, is shown below. Please refer to our annual report on Form 10-K to be filed with the Securities and Exchange Commission for complete information on the Company’s commodity, basis and interest rate protection.
Weighted Average Price per MMBtu
Natural gas
Fixed price swaps285  $2.51  $—  $—  $—  
Two-way costless collars31  —  —  2.56  2.85  
Three-way costless collars230  —  2.18  2.54  2.85  
Fixed price swaps30  $2.54  $—  $—  $—  
Two-way costless collars17  —  —  2.50  2.83  
Three-way costless collars264  —  2.18  2.49  2.84  
Three-way costless collars62  $—  $2.15  $2.54  $2.90  

Weighted Average Price per Bbl
Fixed price swaps3,465  $57.83  $—  $—  $—  
Two-way costless collars966  —  —  56.89  59.81  
Three-way costless collars1,471  —  44.06  53.38  58.23  
Fixed price swaps2,328  $53.72  $—  $—  $—  
Three-way costless collars1,445  —  43.52  53.25  58.14  
Fixed price swaps438  $51.74  $—  $—  $—  
Three-way costless collars666  —  42.50  53.20  58.00  
Fixed price swaps4,746  $24.01  $—  $—  $—  
Two-way costless collars366  —  —  25.20  29.40  
Fixed price swaps2,460  $21.77  $—  $—  $—  
Fixed price swaps8,099  $8.67  $—  $—  $—  
Fixed price swaps2,725  $7.48  $—  $—  $—  


Natural gas financial basis positionsVolumeBasis Differential
Dominion South118  $(0.50) 
TCO37  $(0.43) 
TETCO M365  $(0.01) 
Transco Z6 NonNY $2.02  
Total222  $(0.33) 
Dominion South  65  $(0.48) 
TCO   $(0.31) 
TETCO M3  31  $0.98  
Total  101  $(0.02) 
Dominion South  58  $(0.52) 
TETCO M3  30  $(0.41) 
Total  88  $(0.48) 

Natural gas physical basis positionsVolumeBasis Differential
2020271  $(0.15) 
202189  $(0.28) 
202230  $(0.36) 


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, 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 the Company may present from time to time are net debt, adjusted net income, adjusted diluted earnings per share and adjusted EBITDA, all which exclude certain charges or amounts. Management presents these measures because (i) they are consistent with the manner in which the Company’s position and performance are measured relative to the position and 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.
3 Months Ended December 31,12 Months Ended December 31,
2019  2018  2019  2018