Southwestern Energy (SWN) Announces Derivative Position Added to Support Acquisition Financing

November 29, 2021 5:01 PM EST

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Southwestern Energy Company (NYSE: SWN) (the “Company”) today announced additional natural gas derivatives implemented by the Company and GEP Haynesville, LLC (“GEP”) to support the repayment of the borrowings contemplated by the Company to help finance its pending acquisition of GEP. The incremental positions are sufficient to cover at least 80% of the expected 2022 to 2024 production from the acquired properties.

“Protecting financial strength is one of the core pillars of our strategy. With these incremental and acquisition-specific hedge positions executed at favorable prices, we have locked in sufficient cash flow to repay acquisition debt in a timely manner, which aligns with our stated goal to reduce our total debt to a target range of $3.0 billion to $3.5 billion,” said Bill Way, Southwestern Energy President and Chief Executive Officer.

Please refer to the Company’s quarterly report on Form 10-Q 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

Volume (Bcf)

Swaps

Sold Puts

Purchased
Puts

Sold Calls

Combined SWN + GEP natural gas derivatives – October 1, 2021 through November 26, 2021(1)

2022

Fixed price swaps

116

$

4.30

$

$

$

Two-way costless collars

3

5.00

6.80

Total

119

2023

Fixed price swaps

183

$

3.47

$

$

$

Two-way costless collars

92

3.25

4.02

Total

275

2024

Fixed price swaps

167

$

3.13

$

$

$

Two-way costless collars

44

3.07

3.64

Total

211

(1)

Represents the combined derivatives entered into on a stand-alone basis by SWN and by GEP from October 1, 2021 to November 26, 2021. Upon acquisition close, GEP’s derivative positions are expected to be novated to SWN.

Weighted Average Price per MMBtu

Volume (Bcf)

Swaps

Sold Puts

Purchased
Puts

Sold Calls

SWN natural gas derivative position as of September 30, 2021

2022

Fixed price swaps

539

$

2.77

$

$

$

Two-way costless collars

141

2.66

3.06

Three-way costless collars

333

2.06

2.51

2.94

Total

1,013

2023

Fixed price swaps

274

$

2.76

$

$

$

Two-way costless collars

83

2.69

2.92

Three-way costless collars

215

2.09

2.54

3.00

Total

572

2024

Fixed price swaps

57

$

2.43

$

$

$

Three-way costless collars

11

2.25

2.80

3.54

Total

68

GEP natural gas derivative position as of September 30, 2021

2022

Fixed price swaps

75

$

2.94

$

$

$

Three-way costless collars

14

2.15

2.65

2.86

Total

89



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