Earnings call transcript Q1 2023

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Operator

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Southwestern Energy's First Quarter 2023 Earnings Call. Management will open the call for a question-and-answer session following prepared remarks. In the interest of time, please limit yourself to two questions and re-queue for additional questions. This call is being recorded.

the Investor to Relations. turn Energy's Raiford, now of Director will call Brittany over Southwestern I

You begin. may

Brittany Raiford

Thank you. Good First Quarter morning, and welcome Earnings to Call. XXXX Southwestern Energy's

Chief Chief Joining Officer. Financial Officer; Bill today and Way, me Clay Giesler, are Carrell, Operating Chief Officer; Carl Executive

we started, that comments involve of uncertainties risk outcomes. during filed Before risks the of and we discussed report Commission. out in Securities these many are more Many like statements and I'd get beyond this are of point the and our call to control sections in that forward-looking the and are and make statements detail quarterly forward-looking with Exchange factors our annual reports and affecting the

are developments Although Actual obligation future we believe differ expectations may to are the are they guarantees results update not performance. expressed under or based and assumptions, materially, we of no them. reasonable on

We may comparisons some and facilitate to periods with financial help which non-GAAP measures, also refer peers. across

we to earnings For our release use, our any website. a available in corresponding non-GAAP the GAAP can found reconciliation measures on be measure nearest

over now Bill will call to the turn Way. I

Bill Way

Thank to Southwestern our capital in to morning, you value everyone. you, natural the consistent: sustainable and is the a discipline gas Energy, portfolio creation premier clear advantaged and States. approach two today. joining cost Brittany, apply and in United for good At Thank assets basins

our leverage and large-scale premium economic X operating lower gas shareholders. for assets natural can to natural deliver on we and and gas generate Tier markets focused core liquid are superior strength, our carbon and responsibly value We where and commercial safely gas

of differentiated strategy. operational access. scale, with cash the production of flow repay allocation of consistent the quarter the results portfolio capital high priority and $XXX We quality to delivered Southwestern optionality of our our performance disciplined target million first approximately dual generated reflects reduction Energy's guidance end free debt at debt, with in above basin market and strong

the In efficiency. continued improvement times, in XXX improve Additionally, cycle approximately are the capital yielding to during we first we driving quarter. days quarter, producing additional

drive, supply portion of the year. has continued of chain successful in while the optimize Our we in beginning sourcing with been this business going the both align strategic production impact allows capital spend our year efficiency group ongoing our of our capital to us inflationary addition cash improvement productive to pressure at minimizing to this and expected the These cost flow offsetting efforts, a capacity forward. to

flow cost continue long-term We subside are our increasingly service confident further over strengthening high free the outlook. cash to environment will coming quarters, that the

weakness Despite record inventory strong continue to the commodity structural see we high for near-term price due gas. relatively levels warm natural a support to following winter,

On see production and in year, has account near-term reduction the fundamental last decline longer-term further will activity expect result supply frac the we associated to U.S. and a late essentially seen rig flat lower have production continue year, outlook. and this strengthening remained to natural We gas gas-focused the fleets. side, since that in believe

of at approximately critical Freeport side, to Flow Bcf day, strategy. power of burn. exports our to levels XX.X capacity, LNG pillar returned Freeport our demand the a On have is strong with back of per record persistently choice the supplementing -- markets full assurance

supplier total where at LNG we transportation deliver center, natural place to currently directly facilities natural have of the a demand are Bcf day. Coast to XX% of growing We in our X.X largest production agreements Gulf gas gas to the

LNG per this in year. and reaching Arthur see that FID early With with of some X nearly progress is late online new capacity now export as starting to day Port we month, LNG last come Bcf as

to from supply positions Gulf the both Our Haynesville favorable Southwestern to Appalachia. Coast Energy and demand growing access

indexed LNG continue we active supply pricing. in further remain strong with for discussions internationally and positioning, interest proposals to receive this agreements, Given including

cash are increasing allocation guidance we shared strategy funding activity and near-term level capital from of of including higher response activity. fleet by West our planned and releasing within moderate continue gas activity program maintaining on February, while our lower removing year. to we activity, development to disciplined and focused development Ohio. Guided dry adjusted prudent in capital level As prices These primarily a completion Haynesville, our in flow, our in priority by -- our natural our liquids-rich gas in in frac decreasing adjustments long Virginia liquids-rich our we this

agility price integrated we as can signals to and logistical capital create long-term within the operational going With of to forward. quickly highlights shareholder the both integration The as our asset our flexibility optionality multiyear development support first productive preserving confidence throughout our execute strategic business company's ability well model. the the year Haynesville vertically successful results respond on commodity to strategy capacity business This our of in highly value clearly the year and portfolio while our of the and flexibility, plan this value.

the dual benefits capture our larger basin to continue outlook natural strong on portfolio tangible for to gas. long-term scale positioned well are fundamental We and the of capitalize

turn I'll updates. for over Clay the call to now operational some additional

Clay Carrell

and Bcf we or time natural including liquids. and Thank team X.X and reported with Haynesville year improvements started In X.X per in first drove you, of morning. the per strong barrels of end the guidance. XXX production performance at quarter The Well total, Bill, Bcfe and both Bcfe per of day high net gas XXX,XXX production day good day, of this cycle outperformance. Appalachia

Marcellus. is wells, included XX,XXX of Notably, super the in In placed Monroe the feet. an just and our rich of which with We rich wells sales Ohio with sales This acreage. we placed performing Virginia to expectations first XX we wells pad Marcellus County, two Appalachia, in gas super placed West line in Marcellus rich confirming dry with lateral to our wells sales competitiveness XX first to the under XX in are its Marcellus quarter. average length super and

of the development further portfolio. we been within have Ohio gas This in XXXX, successfully in liquids-rich developing year's dry to Montage Utica illustrates and the acquired we optionality commodity activity our our plan depth, quality Since addition Appalachia inventory.

we the XX to the including strong sales, and Middle an have average the placed continued lateral year in with saw in million XX in Haynesville, the quarter. rates length initial average The eight our of Haynesville wells feet. wells production feet sales team to X,XXX an in Haynesville with for placed In XX rate the first approximately day first cubic per in of Bossier

XX% on a this similar are operational and for efficiencies improvement of improvements. year. and we our time in completed delivered our footage the to both XX% first expect operations On front, In drilling we day cycle anticipated improvements per Haynesville, the year track

quarter, turn-in more resulting additional which the accelerated and completion drove production in efficiencies producing our days, During three performance. sales lines, wells to contributed to

signs we saw of inflation moderation. quarter, In the first positive

Our pursuing supply availability last clearly improved maintaining cost and actively versus and reductions team Supply demand for security. cost is with OCTG year. balanced while has

seen side, completion on cost. the also we've On softening horsepower frac

these are plan year, With the to Haynesville. especially down the our we confident tailwinds, costs in in drive well throughout

are As activity at current expected planned investment Bill we to with capital align strip annual optimizing mentioned, prices. cash flow

activity our result, capital low inflation we capital $X.X cost end of range billion $X.X guidance expect to improvements As billion and reductions. to with complementing near efficiency annual invest the a

a an We frac release are than areas, including frac mid-May in in delaying of Haynesville dry the planned. fleet earlier completion activities fleet additional our gas release and in beginning Pennsylvania in of the

spend lower of activity in the second with quarter these quarter the to adjustments expect of result in capital second slightly than the first capital half year. reduction We most occurring the

expected or would completions in We production expected result of our year impact in, less have activity dry The the this have XX cash flexibility in and a modest and flatter sales is production flow this wells back well to activity than we to guidance. expect our later the profile. the gas second count built should to delays the completion year in not a program to are into quarterly prices XX to If add improve. current back phased half

we have XXXX efficiencies optimize flow. Operationally, on to and strong further cash are to drive continuing focused started

I'll over Carl. call to turn the Now

Carl Giesler

million In we which through to as typically debt we billion. first approximately we Together billion capital move quarter, year, generated increase expect reverse the with Clay. working the inflows, leverage X.Xx, from though through you, free $X.X the to year-end cash Thank year. Leverage flow. seasonal we to at $XXX $X.X of reduced improved

due to return path redeemed our we X.XX% of February, on and outstanding investment all through following our plan notes grade. XXXX, senior In to debt reduction communicated previously

to Turning hedging.

We using have a for high on securing strip preserve level the capitalized of in by contango protection base of participation. upside to collars the level XXXX

of record collars advantage convert and volatility modestly near high also price. have XXXX our to floor taken raise to We swaps

managing gas. outlook business to our We commodity the advantage our of productive improve capacity take longer-term to cycle strength preserve natural price for financial the the constructive are and through

that, open please the call. With

Operator

our take which will from Meade Johnson with At [Operator come time, we Instructions] this Rice. question, will first Charles

Charles Meade

process give sort a it. your going when you how right question where Obviously, think now? of time mind just some could is to a the be Bill, the you're there bit you're that to part complete have thought us of it. to a of there you But on -- would wells in Clay there. is length price insight maybe for that it I into deferring go completions? elaborate a about spoke price? deciding you, Or about you're Just

Clay Carrell

Yes.

the are at, right will go XX half have these that frac own do all is then start what show quickly completions. those are will that up these to improve we with whether our will that with The XX prices in it's flow current cash commodity and second sometime with where at be and where that the now, by quickly But commodity and be of the But year. in I'll doing. off. we are and very with DUCs of But that quarter third driven a the creating, prices forward quarter move fourth the to or cash the would that optionality prices fleets hope So would they're completions, reduction to could and completion year. flow move

Bill Way

a that And reduction into be in if program. of they'll part obviously that roll XXXX and place, stays then

Charles Meade

flow understood just your another where flow position free free goes, the So is but it's cash price your if correctly, of outspend, not I overall the... piece Southwestern's it's also cash or

Bill Way

Yes.

Let the up it out and way. me pick one of move word

our We have no flow. intention of outspending cash

have of available. lower cost, the flow to that performance So concert in gains, cash all the efficiency the we against and with improvements moderate program that optimize we'll the activity continue our

They cash an wells economic. discipline It's so focus investing economic within are the more It's with issue And not perspective, really and capital our criteria. around an allocation on from flow. that. a meet these

Charles Meade

confidence But you bit Got elaborate more if it. us just Clay, thread if frac the service some of I reductions. perhaps horsepower wonder little that gave the with OCTG. running perspective and a or you cost already detail the service there also you a cost the But could confidence I And then up from pick the that could gives bit? what or that are of -- you -- gives have that, in you differentiated you that assets. come what seeing service will perspective

Clay Carrell

arrangements Well, far, with, are saw back which to as we in those all part Like the component to we've it's big utilized where low pumping and proactively contractual And is the of of moderation the talked seen that into guidance activity that OCTG first have solicit is the a another begin service folks at price is we with that January is we've the improvements as cuts, end also. inflation pressure lot that all our mover. went come down. from of updated capital costs reduced openers diesel -- the made some then costs coming reductions. reduction We've coming good our quarter, so opener capital this locking we not move have helping to process end in those providers of about, from of progress reduction a

to price need commodity efforts with there Our and get strong environment. we more line going them that these are space, continue more do in costs think And that so. to bring will stay be in to down we to opportunities the

Operator

from Scott question Our RBC with next Hanold will come Capital Markets.

Scott Hanold

defer just I If sort to this could on of activity. adjusted plan base just Yes. touch

the is strip If at -- and budget, XXXX intent CapEx would your your of look the more And be year? gas would be the be the happens what little course at the the based guidance within back guidance now, next would still degrade on one a if kind the your to would of you bit would question? be you're first right part Like production the through lower of what where step actions? end, prices and overall second albeit

Clay Carrell

Sure.

capital think you a and point capital below range just is, I some said inflation impact on key and We're activity low we end of moderation If the round gas cuts which improvements currently have could yes, next reductions at further would we're further So said of those the on we of a There further wouldn't could and on those of now. down, range more gains, production. Southwest Haynesville, within take dry the Like what that commodity where Northeast drilling some mix completion App, adjustments. will from. And though, where side the do earlier, then some capital see in production come dry reductions come be. in on to be we from gas slowing price continue hopefully I midpoint in right reductions, in we then activities. potentially proactive identified completion could we if would both But App. need of drilling be guidance

commodity having reductions plan. will that that cut going a we're able hopeful up. and firm We're without So those find be to prices activity we to of some to have

Bill Way

is continuously, flow output making we stay optimized and the that cash whole capital flow And our investment. and being within cash that fairly generated versus sure plan required with

Scott Hanold

Okay. you that It and lot you're a sounds of have like knobs pretty guys here. dials aggressively working

So it's on think Bill, just been very been you've strong productive follow-up hear. making. I has a good to capacity. the this question is My point And

'XX, much You that looking especially of capacity 'XX, productive possible, as of maintain want improving to as macro. into kind potentially

assets day? at is So you've think do any -- capacity? Is a level, think your now? you give Southwestern's us X.X you a around sense for just us what where sense can actions And level that again it per that of right high these you done of like reduces Bcf give still far of so productive like a

Bill Way

Yes.

a a any that within in are engine can capital move that and maintain a quite again huge and of I what reasons production 'XX having you've we drive of cash a production, capital cost and is invest really -- managed to kind flow reduction huge that think us one taking restart to to but in capital the present. ability able be taking quite mean, arrest talks is of modest about that a decline plan it that heard about -- talk that well-balanced is a I the high. -- hit, amount in 'XX, two-year result into out manageable

showed, of on a minimize and And so going the benefit able inflation development Certainly, capacity the and to we're program environment. we've gas plan optimized of productive as of price the optimization down, kind the higher coming this. knobs, shape into you impact the forward the feeding that

Scott Hanold

okay. Okay,

So of you the feel pretty confident you've really minimized amount restart costs.

we And so into that's right look not 'XX an issue as now.

Bill Way

of up, mean, cetera. That's on efficiencies, about other right. points that a And back you we've talked that that number really add inflation, can to I is there's which one things item. proof that et the

liquids dual that you're basin that hit position where able inventory, some offset helping producing You our we're to well. activity of as add to to

Operator

will And come of our America. Bank question Leggate next from Doug with

Doug Leggate

by of which sure the the not kind question cost Haynesville. would about to talking I'm this, want Carl, preface or I of you well but in to like Bill take your

costs, at Day. down drilling all targets about days, in were I recollect, some talked Clay of And driving like the Analyst achieving talked You've you're aspirational reducing I the if those. already well a -- which bit, it laid you somewhat out sounds think

mean I guess is, much through efficiency? So what for levels? that you're is that into capital capital as would permanent taking that forward question activity maintenance that the you And my talked look guidance cost costs you out about of post-XXXX how your

Clay Carrell

start, capital don't I'll in that set out-years. we've When we at seen, now. in had of there jump see assumed inflation Analyst inflation Day that think some We just maybe the moderation about the So annual that in the further Doug. that

for baked account and that we inflation not the now efficiency capital ongoing annual gains in moderation into all years full somewhere Day. $XXX so you Analyst all million but And not spend $XXX versus what out-years to in, those about the showed when reduction of were there's million take them, in

Doug Leggate

Carl, Carl. please. for number, looking go I -- material Pretty answer much was ahead, the A

Carl Giesler

translate years, $X guidance cash next, of over And call free flow well X the Yes. we the gave maybe we north billion. to it, that

Douglas Leggate

appreciate for. input. I looking that's And on, second the my -- what Clear, go Carl, I Bill? Thanks, was

Bill Way

go ahead. No,

Doug Leggate

macro My mind. more is a second you Bill, if question, question, really don't

X% relatively guessing, you you it's talked activity focus small you macro your on that if activity industry, guess, the your the probably obviously leave input Haynesville, the have are I to insight for own level. about for expectations there. the Haynesville big You your I privates because in What some And in industry in I'll at it level non-operated I'm this or point? But to AFEs interest gives the working general recollect. particular. are What X%, -- a

Clay Carrell

jump in Yes, I'll Doug, again. there

I of some the down rig the we with where Baker year we count some based updates And got, count on with good our industry recently around on information the news rigs. Haynesville, the dipped XX. think that in XX started that's to

right think X-rig maybe an data. XX that there'll for XX are XX happen as show full to a XX we that publications public rig to the in for Haynesville. bit thought are to we it up line year some in time drop take drop rig It's would little in that high Internally, with that's of It's the a other as Haynesville. industry the So in what drop would up. there. to pointing in showing be There the

now. with So it we are to up it's about continue and drops we thought the going think starting way that those to it's consistent show

Bill Way

pulled public back you as well. then public have have And and the the

were in offer some end So The production have rig the from with maintenance growth were leveling they'll of publics are. mode, depending of lower so view. at I that varying requisite on the point you privates think results a who count the declining, mode, day, in

Doug Leggate

guys. helpful, Really

Carl, end did want that? jump, back Did we to Before I right question. to $X on billion the up say flow? hear first you basically I free cash clarify added just you I my

Carl Giesler

this than that in and capital billion. Clay efficiencies $X compounding reductions talked and the inflation More Price effects health, about.

Operator

Our next with JPMorgan. Jayaram question from come will Arun

Arun Jayaram

I $XXX night you'll The by if still the guidance Haynesville. out wanted $X.XX want is the XX planned of I can million one give want those crew to today CapEx. of the to better of your billion, billion you're maybe what one to than completions. think bit the actions midpoint moving little Clay, maybe change? sense down -- just XX of and removing had. you to moving previously I deferring $X.X maybe to you're like And additional reductions crew pieces. in last understand you're that you, just take get to of see range a that from that It out confirm And I from us completion out capital sounds a through earlier taking that from go budget. Appalachia Is then you indicating

Clay Carrell

Yes.

So that you have right.

nice end your is reduction range the that think of there. million. comment not understand, as of the opening towards through the coming moderation of that is we that year, that are we're basis that make capital we that's from low I realized. the one but inflation correct. will There's reductions the benefit, the down driving I Hopefully, there capital a want thing activity it's more approximately XX% original The plus already for that be have move to you down guidance all sure $XXX

year you providers to we've May-ish you planned. the we talking then actions, is fleet loose around have Haynesville you as service gone original one and that our of that end when frac cuts. And And cut notifications of cuts the about we of we're think and today, over we made about originally in mentioned earlier timing the had already the reduction then than that fleet about about guidance when rig think think a a what those half to would the those And averaging.

February. fleet So frac that's in versus it's another X.X away discussion the of a going we that had

Arun Jayaram

That's you. for Great. helpful. Bill, one

of to that may year. I Golden more be but more get us on your that this if LNG love a you're left a part that on mentioned early, later LNG Pass, You prepared on referring commentary. insights don't comes facility little indicating I you there think know so to

David Talley

Tally. This is David

-- to service, fast commissioning. potentially So a and Golden And start Pass They Plaquemines service. commissioning actually this we won't start into be year, later one; but smaller in also gas. we to and they expect LNG go will taking we're expecting

those up expect to we sooner So ramp maybe than expected.

Arun Jayaram

sense of a magnitude us from give the projects? three those feed you can of gas And

David Talley

hard So gradual commissioning It it the tell. process. mean, over and I to up usually on down that's and is depends time.

Bill Way

be to The a fast going XXX,XXX day. is MMBtu

Operator

Bertrand with will question next Our come Domes Truist. from

Bertrand Donnes

better Just are following because test everyone gave in for from letting benefit Anything future you the kind waiting Henry to on last just higher impression then well in at you Hub of But specific talk first out you a end to just you're contract. Could maybe commentary approach for or up JKM? guys agreements? hash else The guys demand you're your basin. off can from like are looking LNG maybe with gave the comment. to that better indirectly LNG there? the a happy waters the swoop about the positioned, you details premium so a you the and lower deduct Or you're and something

Bill Way

Yes.

We -- business the to domestically a to present that utilities liquefaction any terms so to position liquefaction particular the as of the benefit I We're certainly into this both on arrangements not. terms we supply LNG different market advantage or you the to that our a take we than even meet project with are. Henry greater into position projects, them We're we direction. or end Europe, either window take on markets, of the in to is great of prices both of having and these to think a how at where think talk and we in and do ourselves understand arrangements, or we're a have in going LNG internationally basis in both with go from priced. our risk-adjusted competitive international which brings deeper. of evaluate potentially that and to and side look projects, gas continue But domestic prices has contract status forward is to Hub priced that value Henry us dialogue you buyers some higher Hub-based current want quo, do other that on given will the LNG We going from projects. supply capacity agreement far competitive look domestically

Bertrand Donnes

And Yes, at with -- And out helpful. you looking is Okay. in that's intentional coincide market won't because XXXX. drop the your get Or that then just just a you market book hedge your notable hedge demand typical there's into great is years wondering, LNG thin pick-up? the that is I'm off to don't want too and to price? two a

Bill Way

There's be out several would less perspective. think practice, further out if from it our parts in about to that hedging is we the you a answer. 'XX, hedged One, risk

company, into strength, hedge able than place, we to given at a have where our a lower we've a financial moved in as level the Second, we're done past.

the case -- years year protect, you've actually it dramatic kind trying we protect that year you're gas in to hedge structural to we've trying in that for you're that in there's that volatility last The closer of market closer given in changes can to from where a particular of so appears few that's price, had to you get benefit. important the it's now. to think revenue as the the get seen to Third, that all

to durable, we're fact XX% to that And kind is once financial of then going some able hedge triangulating. where we and you sort strength about use our present And XX% we're XX% the level is different where think done. collars forward, think XX%, the and is to we of and I hedge given it's that may to program swaps. And manage ratable vehicles actively when again

Bertrand Donnes

then third Great. Okay. not And question. a real

news Pipeline yet able there's to Columbia on you have Or Do price of change got. -- in points? a a -- fire. any you the front that's of exposure that? number you were I just And color guys what all kind Just about on

David Talley

Yes. Okay. Thank you.

So yes, so that are of explosion. we aware

our So posting total. Gulf total curtailed about Coast. They're from moves Appalachia they've the down day a X.X XXX,XXX to capacity about as it Bcf

So we that capacity have pipeline. over XXX,XXX little a of on

reduction. impact we our transportation won't So But capacity minor would expect reduction, production. that

other we resupply markets and so our our and around. And Haynesville we from production transport -- from can our move

see expect any don't to we impact. So

Bill Way

strength options around nameplate Yes. pipe. is got clear. happens. The of immediately just on the beyond a transportation that this when particular well almost portfolio our We've And team space, very in that optimizes

Operator

And Goldman our come from Choudhary Sachs. Umang question next will with

Umang Choudhary

couple of XXXX. little questions. housekeeping quarterly cadence into as the year drop production Trying a dig up if in bit cadence year your for a we crews? understand start turn-in-line and have decline you Can you you production pick and I to the don't exit as those the

Clay Carrell

Yes.

commented net versus think this in production a I So original Bcf profile X.X-ish this around what in production We can increase equivalent result half the help. a that that will is was flat of that quarterly second day production our in guidance.

Umang Choudhary

three the of expecting you the working on the correctly quarter you're the the course think I on next which point, point that mentioned of capital the remainder you I the just this quarters. the want Got you. to I over that year. reversed outflow outflow, That's caught helpful. sure I mentioned guess Carl, then be inflow to And be for

Carl Giesler

you capital, of throughout first the largely And to quarter It's very expect Umang, in enjoyed the year will XXX we reverse typical for capital the we given current our working that et -- correct. we business. way or so that in do We benefit. strip. got cetera. manage inflow seasonality our the

Operator

here next with question from come And Jeoffrey TPH. our Lambujon will

Jeoffrey Lambujon

the than in differentials, here is on in first My looks better one quarter. come to have which expectations just

considerations this And attribute just and bit into what you around to could about key that little share how a QX. on year come the will you talk could balance about over you If of you outlook if think your that. the macro

David Talley

Yes, this is David.

differentials higher to expected York than stronger, QX around in our were and England So prices New QX markets. the city-gate and our primarily New mostly were transports Northeast

locations daily Northeast that that during higher-priced winter volatility. at of some were our volumes also We had sold

Jeoffrey Lambujon

be Great. And pieces kind I balance moving would considerations about guideposts there, but some as the of year, key you think of helpful. the just and you out have know

David Talley

Yes.

to it within expect guidance. We be

Bill Way

that. protect hedge well we basis, to And always have as

Jeoffrey Lambujon

as D&C of follow-up, then our get quarter just for foot basins I of the to my And a in was throughout Great. per each QX. snapshot hoping

Just you on how might particularly then I think QX how think looking call, forward, the those you to similar trend last spoke to and Haynesville. the in

far Just how as ranges maybe quickly I'll see the low commentary can service costs to we end we that think on there your before towards about walk you've spoken progress just through. so based the on and that

Clay Carrell

Certainly.

a year. Haynesville, entered quarter of Haynesville And inflation $XXX the foot in the half And forward. to I we highest efficiency $X,XXX a But with the were into So will benefit start as back think in about, now talked the then we gains well range Haynesville as were pulling that cost an we right as every drive new cost then foot we're year. because forward. added QX. move we're our we of But we that's expecting down, will that sure and Appalachia, at foot and the cost we end where in for QX well QX; will we to the into approach fourth had quarter move down the be per in in that around be low the in service as when get

Bill Way

around me the a I and different nuances, cost to business. in Appalachia very that. down of we think the big north their piece and But the ability that certainly, part while clear work all that basin looking And basins of are and to of dual has points the leverage are low the of the every get been is proof that have accomplished costs is one capability cost certainly on to

Clay Carrell

fault the offset the costs performance depth it's just pressure drives and that more zone some Haynesville is that think the Natchitoches that well that in we in higher performance. the the a I well of in reminder acreage. the by But benefited have greater by than

Operator

And next will from our with Research. come here question Pope Seaport Nicholas

Nicholas Pope

liquids-rich I you on kind gas in hoping the was could and between talk bit balance of a guys portion. little dry Appalachia

side. to been going activity I be think X/X at on you've of liquids-rich steady is like the

that. balance more kind towards how thinking putting what maybe of NGL Just about in that's liquids-rich swinging balance liquids-rich part capacity and governing of curious not And potentially oil the the curious between the the the Kind process is side. you're -- the to what's the side? of

Clay Carrell

So up XXXX talked overall activity area on to of sales our the impact start that liquids were that QX and standpoint, year additional as X Haynesville. in XX-XX that coming the From both between I'll XXXX. in The off into increasing. the showed benefits are Appalachia we start that we roughly an in were more and -- versus of that about, recognize we production condensate we and liquids-rich the volumes wells pricing nicely NGL activities with as adding

the maintaining move as price into balancing think commodity will be capacity we're we productive so a what environment we overall towards And better XXXX.

of So look that's as that utilizing part mix. balancing at we the that we're

that We to that's push right we've And prices, we part to mix the potential flexibility shift. we believe adjust that place. if that us further have got NGLs all as the to the that need cetera, et answer, of handle capacity greater

Operator

And our next with comes question Diamond from Paul Citi.

Paul Diamond

there focusing? Is here. area that game reduction completion are of on geographic question talking to would about quick we're decision? a XX time be county a any more or particular Or guys you Just XX

Clay Carrell

county that would in? focused we you say a be Sorry, did

Paul Diamond

geographic particularly area. Yes,

Clay Carrell

to the most that getting of then full about it have of tied the So dry fleet is XX coming the the of we did for where Haynesville we the talked reduction are is like coming rid out more reductions the of from. frac And gas or modeled in XX, mid-May. completion there's year to -- the

Paul Diamond

then quick flow just on question, assurance. topical more And Understood. a

Gulf You guys Coast. talked about XX% of the

kind where of the idea in an you is term. feel guys of get long that for level to trying optimal the Just the

David Talley

is this Hey, Paul, David.

the on to were if that from If they Appalachia, transport from and some -- position additional -- would really Appalachia place, some expansions from Appalachia. go participating that those the transport about were of There that's look aren't Haynesville the our XX%, XXX,XXX. so in right at includes pipeline which forefront there both So would our in so we any now.

have a participated some growth -- already. in few where projects we So see would Haynesville we've that that of we and from coming announced the

Bill Way

both levers will think want of a optimization pull looking into I as So at well. and a how in we develop and there's our lot to them. basins of that go lot to of That

Operator

question Chandra next with will come our Benchmark. And Subash from

Subhasish Chandra

that code? be times describe bringing might are right in is you. process maybe sort of Clay, this a how of if question you for instantaneous ZIP back, Can this DUCs -- prices cycle the

Clay Carrell

Sure.

be in think have quicker because it we company-owned Appalachia, our two fleets will that I in frac area.

and And rigs where decision, the we make pumping. rigged past week a frac our moved we've we're the in drilling so fleets and in up and and/or

able it rigs reason reductions both up early but on be In than that fleets Appalachia. frac we of to area, would wait get we in DUCs the that the quick, quickly as are fleets very third some pick go timing for be continue on I think Haynesville, or of as third-party it on our be frac longer with about. believe that talked just to on until wouldn't the an will timing drilling activity will going those availability we in be and there I then So completions to Appalachia But dependent late XXXX. into opportunity to in will start be and quarter, move

Subhasish Chandra

you words in the of of but and would case your in mouth, case say put variance to Marcellus the sort Not of weeks is in Haynesville? the

Clay Carrell

would I availability. piece, in all to agree the have do But to it's be on will Haynesville that it with weeks. going Yes, Appalachia,

So will... that

Subhasish Chandra

question Bill, for you. Got it. And

on those writing just ice this do on think the it and see A&D you this, in had If sort you we've operators headlines that macro? to you looking this of think thoughts wall sentiment with market. certainly Haynesville the that puts the any what some some general? lot do Do a were about And seen put of in think of you happens given tap of Or play? the

Bill Way

Yes.

from information these having I'll value right goes, other scale we we're our our call results As we're the and capturing all in today's swing in. is shows in then that far from out go area. as and basins two think In now the focus I there, put that

can of got and difficult one. that's volatility or you've for And going in how things in already on on, the watch activities. it you're sale actually especially of two -- number private possibly extreme going we whether what it for with basins, Again, players, that. all transact. with offering the if accretive plays have, those of these into to gets to this be think some on other the I more some on a makes it those It to and what's down you also what's gas it's pieces a if

Operator

Brothers. Our next with Parks will come Tuohy question from Noel

Noel Parks

a We're heading So of kind XXXX wondered products to fairly different if some of on just year getting NGL between bit detail the divergence about your that more into could of you get thoughts pricing. back into rest little marked. maybe

wonder fundamentals. I if So just assumptions about could talk your you those on

Bill Way

couple demand ethane. at there. or you When also gas around supply look to by gets or first of one macro, mind A NGL pressured pet chem things anything to that tied natural gas. weak comes is increased Ethane

higher going into help got to Whether of Asia will you've on of a lot a the play which So not some product. that. or that will recovery country a We provide for support exports on. could improve ethylene, the part think that margins also recession goes

And natural reopening the Asia really And gasoline, the well. get because products, prices inventory On butanes demand and China will crude that's related mild strong gasoline propane, natural lot of present new feedstocks open, on you production gasoline. as again and or it's of out domestic butane when channel and export. that for global of winter. helps there's a help support plastic that to

products. the gasoline And does so so value of rises, those as demand for

Noel Parks

case. and activity might around it almost from May. about and in the like side but it's look to -- quite sounds what heading and like But just affect that is And few your definitely said, talked fair Great. as that you cost worst levels. we're taking prices back pace say the as questions And you've how a already

in coming window. effect at are levels So we're a an volumes. modest point, the it little later whether in talking far as out and fast impact have on we're pushing of a a -- XXXX on a I more getting or sort pretty of on to right, this about the as -- opposed almost mean, to dot long you're when year so And to comes more far impact start in XXXX right? that full tooth narrow decisions decision as your fairly activity it's is on off year, pads to changes XXXX, in as going as

Bill Way

Yes.

again, year And it's its cash think, flow of about we we the on planning impact on think basis. rolling but we this I as on amount two-year impact business volume generate. operate full a

in year that make short-term to really highlights it so also adjustments maintain the and But and that we into sure flow. make can could bigger is sure understand 'XX the to investing price. capacity of continuously again within productive decisions that our plan company always optimized, rise in And we're this feeding impact being larger have pivot impact gas help the cash

Operator

America. Our question Bank will Gregg next come with from Brody of

Gregg Brody

you respect disinflation do end with costs, of -- you if are your Or expect similar operating do the seeing the cost to Just on operating do your side? higher at to be guidance? you reduce activity, the you

Clay Carrell

capital the showing been right hauling. business, there lagging now will we way saltwater around material space. deflation on water disposal, the see in the And side think but hasn't it's that any up that part softening, some LOE So is because in of of we a big

the side, We on will that have on lagging costs benefited but the it's seeing been from we've gas help lower lease LOE capital. use what on

Brittany Raiford

LOE usually usually we Yes. the it then -- and little penny ticks half a our the And back a up Gregg, the in the lighter is or of towards typically year. first half of year two

the still within expect that case range So we the even guidance to this with that to year reduction. but be be activity

Gregg Brody

tapped now? a know mentioned the I pay forward that for slight I discipline year. negative you Got have the at the you're of at more going kind any rest Or you this the you're looking year for things? of -- think we debt out impacting. down expect to it. Do about think And do should way the been Should you then implementing appreciate working capital and capital be you're

Carl Giesler

down to of answer noncore go repayment. And pay proceeds too. to ways is second debt what, XXXX might free Simple -- look and expect, we as potentially -- flow cash sale of from we go any $X the since you'd half for and core always up, of assets will we had, do. billion always Any

Operator

concludes the over to to our question-and-answer closing Way session. remarks. back that conference And like turn for I'd any Bill

Bill Way

tangible interest to for more benefits of of dialogue great And today. and Thanks a you you great look to next our the your thank Have sharing weekend. for want scale your I joining. we capturing forward our quarter. with all for questions, a

Operator

concluded. The presentation. today's Thank conference now for you has attending

You may your now lines. disconnect

Southwestern Energy (SWN) 28 Apr 232023 Q1 Earnings call transcript