Southwestern Energy Company (NYSE:SWN) Q4 2019 Earnings Conference Call - Final Transcript

Feb 28, 2020 • 10:00 am ET


Southwestern Energy Company (NYSE:SWN) Q4 2019 Earnings Conference Call - Final Transcript


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Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Southwestern Energy Fourth Quarter and Year-end 2019 Earnings Call. Management will open up 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. [Operator Instructions]I will now turn the call over to Paige Penchas, Southwestern Energy's Vice President of Investor Relations. You may begin.

Paige Penchas

Thank you, Drew. Good morning and welcome to Southwestern Energy's fourth quarter and fiscal year 2019 earnings call. Joining me today are Bill Way, President and Chief Executive Officer; Clay Carrell, Chief Operating Officer; Julian Bott; Chief Financial Officer; and Jason Kurtz, Head of Marketing and Transportation.

Along with yesterday's earnings and guidance release, we also filed our 10-K, which is available in the Investor Relations section of our website at Before we get started, I'd like to point out that many of the comments during this call are forward-looking statements and involve risks and uncertainties affecting outcomes. Many of these are beyond our control and are discussed in more detail in the Risk Factors and the forward-looking statements sections in our annual report and quarterly filings with the Securities and Exchange Commission. Although we believe the expectations expressed are based on reasonable assumptions, they are not guarantees of future performance and actual results or developments may differ materially. 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 will now turn the call over to Bill Way.

Bill Way

Thank you, Paige. Good morning everyone and thank you for joining our call. We've been very proactive and intentional over the last several years to augment the Company's resilience across a broad range of economic and commodity environments. We've taken several specific actions over that time to high grade the portfolio, fortify the balance sheet and reduce cost, affording us the ability to pursue value enhancing opportunities without distraction.

Today, I would like to provide some reflections on the successful results of the Company and our teams achieved last year and look ahead at our go-forward plans. Southwestern Energy's continued strong quarterly and yearly performance is driving the Company forward to the completion of our two-year transition plan back to cash flow neutrality and reflects a plan, a portfolio and an exceptionally talented team that are agile and resistant, even in the changing environment the industry faces today.

For 2019, we outperformed our expectations by generating cash flow of $913 million of which $246 million was from the fourth quarter. We grew condensate production by 38% and decreased the Company's base production decline rate to 25% going forward. Regarding capital efficiency, we reduced well costs by 27% to $824 per lateral foot. Importantly, this average well cost includes all wells