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Current SWN Stock Info

*Update*

Just one day after selling select gathering assets in the Appalachia for $500 million, Southwestern Energy (ticker: SWN) announced the $218 million sale of conventional operations in East Texas and the Arkoma Basin. Both deals were completed with private companies and are expected to close in Q2’15.

The deals, which total $718 million, fall in line with SWN’s intended divesture plan of $600 to $800 million. In its Q4’14 conference call, SWN management said it expected to reach agreements on both properties no later than Q2’15. The East Texas/Arkoma assets held a listed PV-10 value of about $173 million and were not receiving any part of the company’s $2.0 billion capital plan.

“Combined with the already announced divestiture of our northeast Pennsylvania gathering system, this transaction achieves the net divestiture proceeds targeted as part of the acquisition financing plan,” said Steve Mueller, Chairman and Chief Executive Officer of Southwestern Energy, in a press release. In a previous announcement, Mueller said the gathering system sale placed the company “Well on our way to achieving the $600 to $800 million in divesture proceeds as part of the acquisition financing plan.”

All proceeds from the divesture plan will be used on a $500 million term loan (taken out in December) and the remainder on the company’s revolver, which had $300 million drawn at year-end 2014.

*Original*

Southwestern Energy (ticker: SWN) has sold its gathering assets in two northeastern Pennsylvania counties for proceeds of $500 million, the company announced on March 19, 2015. The transaction is a significant step to completing the company’s divesture plan, as part of financing the sizable purchases last year. The buyer, privately held Howard Midstream Energy Partners (HEP), receives approximately 100 miles of natural gas gathering pipeline with 600 MMcf/d of capacity. The assets are HEP’s entry into the Marcellus Shale, as the company previously operated only in South Texas. An office will be opened in Pennsylvania once the deal is finalized in Q2’15. Its footprint in the Eagle Ford, Escondido, Olmos and Pearsall formations include 500 miles of pipeline, a processing plant and liquid storage terminal.

Southwestern: “Well on our Way”

Southwestern was one of the most active E&Ps on the acquisition front last year, spending more than $5.6 billion to lock down nearly 500,000 net acres in the Appalachia region. In the Q4’14 conference call, Mueller said some pieces of its recent purchases “will be possible disposition candidates,” but the sales would likely not occur until late-2015 at the earliest. “We actually have a gas storage field in Arkansas that under some previous agreements we couldn’t do anything with until about June of this year. You might see us sell that one and some other small assets. Stay tuned on that one and watch the year as it plays out.”

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Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.