Southwestern Energy Company Earnings Call Nuggets: Well Location Count and Susquehanna County

Southwestern Energy Company (NYSE:SWN) recently reported its second quarter earnings and discussed the following topics in its earnings conference call.

Well Location Count

Scott Hanold – RBC Capital Markets: So, when we look at the Marcellus EUR or I guess, type curve charts in some of these recent wells that you’ve got roughly 18 stages, seem to be performing to 16 Bcf EUR, that’s pretty impressive. I mean, when you step back and look at your acreage, now that you’ve done a little bit more drilling, how much of your acreage do you think, could be that good and if you have a general well location count that could be applicable, that’d be appreciated.

Steven L. Mueller – President and CEO: Just kind of a general comment, certainly the Chesapeake acquisition, which was 162,000 acres, we don’t have a whole lot of new information on that. That’s one of the reason, we’re trying to accelerate our capital budget, but I think it’s safe to say that when we talked in the past, that we had 1,000 wells on the acreage we had before Chesapeake, and Chesapeake we had at least 300, and it’s safe to say, whether it’s the size of the well or the number of well count, there’s probably at least 20% additional in all those categories.

Scott Hanold – RBC Capital Markets: Then, my follow-up is in the Fayetteville. The IP rates in the second quarter were pretty solid. It looks like the 30th and 60th day rates were a little bit lower than some of your prior groupings of wells. Was there anything specific to that?

William J. Way – EVP and COO: Yes. The IP rates are higher and it just represents a geographic mix. We are drilling and completing wells across the play and depending on – as we mentioned last time our focus is on value and so with our low well cost, the opportunity to drill in some of the shallower areas and capture 1.3 or greater PVI benefit is our objective. So the well mix from the previous quarter and into this quarter is impacted by drilling in some of those areas. The real important piece of it is, is that in our current drilling inventory for this entire year we are in excess of our financial metrics in terms of drilling going forward.

Steven L. Mueller – President and CEO: I think Scott, kind of the easy way to think about it, it’ll roll through just like the low IP we did last quarter and I think you will see the 60-day – 30 to 60 day up this next quarter. So it’s just one of those (bottles) as far as I am concerned on the curve.

Susquehanna County

Brian Singer – The Goldman Sachs Group, Inc.: Now one of the key debates is how the wells in the Range Trust in Northeast Susquehanna County compare with some of the higher profile wells we have seen in Southern Susquehanna County. Beyond the 50% in Susquehanna overall as a perspective can you answer more granularity on how far North and Northeast you have tested within particularly the Range area and how are the well performances varying if at all?

Steven L. Mueller – President and CEO: We will kind of tag team as we, Bill and myself, where from a distance across Range Trust and the kind to remind everybody, we got about 120,000 acres total in Susquehanna County or about 23,000, 24,000 in the Southern corner and then the rest is up in the Northeast corner of the county and we’ve been concentrating in the Northeast corner in the last several months. We are about just over halfway north towards the New York line drilling and from – just a pure drilling standpoint and from a geological what are we finding portion of it, wells are looking similar at least that far north. The section does bend going north. The section does get shallower so there is a little less pressure. So, I would expect that the well spacing probably won’t be quite as tight as you go further north. But by the end of the year, we’ll have drilled all the way up to the New York border and we can talk all about that at that point in time. Anything you want to add Bill?

William J. Way – EVP and COO: We are getting fairly consistent performance across the 40 producing wells on average up there, the more we get on compression, the higher the IPs are coming out of the flat or the declines are. But we’ve got – from across really the entire acreage all the way up to the Northeast where Steve has talked about us testing, we are fairly consistent. We’ve seen wells as high as 9.5 million a day and several in the plus 7 million or plus 8 million area across a broad area of this play or this part of the acreage.

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