Southwestern Energy Company (NYSE:SWN) Q1 2018 Earnings Conference Call - Final Transcript
Apr 27, 2018 • 10:00 am ET
Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Southwestern Energy First Quarter 2018 Earnings Call. My name is Brenda, and I'll be your conference coordinator for today. (Operator Instructions) As a reminder, this conference is being recorded.
I'd like to turn the call over to the Ms. Paige Penchas, Southwestern Energy's VP of IR. You may begin.
Thank you, Brenda. Good morning, and welcome to Southwestern Energy's first quarter 2018 earnings call. Joining me today are Bill Way, President and CEO; Clay Carrell, COO; and Julian Bott, CFO, along with other members of our management team. Yesterday, Southwestern Energy released financial results for the quarter ended March 31, 2018. The release is available on the IR section of the Company's website at swn.com.
(Forward-Looking Cautionary Statements)
We may also refer to some non-GAAP financial measures, which help facilitate comparisons across periods and with peers. For any non-GAAP measures we use, a reconciliation to the nearest corresponding GAAP measure can be found in our earnings release available on our website.
I'll now turn the call over to Bill Way.
Thanks, Paige. Good morning, everyone, and welcome to our first quarter 2018 earnings call and webcast. I'd like to lead off this discussion by sharing our first quarter results, where we once again delivered on our commitment to create value for shareholders, meeting or exceeding all of the commitments that we've made. During the quarter, we announced that we are repositioning the Company to compete and win in a low commodity price environment. The strength and continued growth of our high-quality, high-margin Appalachia assets drives our forward momentum. We're confident that our strategy and the relentless delivery of technical, operational and commercial excellence across our assets will improve returns and increase value for our shareholders.
So today, I want to start off and share more detailed examples of our financial discipline and the work being done that is expanding corporate and asset level margins and driving returns. As you know, we are laser-focused on continued cost reduction opportunities throughout the Company as we reshape and reposition Southwestern Energy for the future. Yesterday, we took deliberate steps to lower our interest expense and cost of capital, improve our liquidity and simplify our balance sheet. The Company entered into a maximum $3.5 billion revolving credit facility, with a $2 billion initial commitment. And Julian will provide more details about this in just a few minutes.
We're accelerating value from our high-quality Appalachia business and adhering to a disciplined returns-based capital allocation strategy, while at the same time, investing within cash flow. In the first quarter, Appalachia assets generated a 36% increase in EBITDA to $294 million, representing approximately 75% of the Company's first quarter consolidated EBITDA. Our teams continue to set new high watermarks for operational execution, growing Appalachia production 29% compared to the first quarter of 2017. And importantly, this production growth included a 37% increase in high-value liquids production. These liquids, which include condensate NGO volumes improved our