Southwestern Energy Company

From Wikimarcellus

Houston, Texas-based Southwestern Energy Company (NYSE: SWN) is a domestic oil and gas exploration and development company.

During the first quarter of 2009, Southwestern had increased its leasehold from 110,000 to 137,000 net acres in Pennsylvania prospective for Marcellus shale. This increase resulted from the purchase of 21,715 net acres of drilling rights in the northeastern Pennsylvania county of Lycoming for $8.2 million. Update: According to a February, 2010 company update, the company's acreage position stood at 149,000 net prospective acres in Pennsylvania at the close of 2009. Some factoids regarding Southwestern's acreage include:

• 5 years average remaining lease term
• 13% average royalty interest
• $594 per acre acquisition cost

In 2008 the company had drilled four wells in Bradford and Susquehanna counties--three were vertical and one had been horizontal. As of the end of 2008 three of these wells were in the process of being production tested, and a forth one was awaiting recompletion. The ratio of Susquehanna to Bradford acreage was 60/40% held in three main acreage blocks.

A March, 2008 report indicated that a wholly-owned subsidiary of Southwestern, Southwestern Energy Production Co. (SEPCO), had drilled an exploratory well in Herrick Township, Susquehanna County, PA.

In December, 2008 the company reported that it had invested $61 million in Pennsylvania Marcellus shale development in 2008 and planned to do another $42 million in 2009. The money was to be used to acquire additional land as well as for seismic testing and drilling two wells.

A June, 2009 report found Southwestern had applied for withdrawal of 380,000 gallon/day from Tunkhannock Creek, Gibson Twp about thirty miles east of Montrose in Susquehanna County, PA. It had been approved by the Susquehanna River Basin Commission for a well on the Price farm.

According to a Southwestern update provided in July, 2009, the company planned to begin drilling on its Marcellus shale acreage in earnest during 2010. The company's major emphasis during 2009 focused on obtaining drilling permits, getting water rights lined up, and evaluating pipeline right-of-way options.

A late October, 2009 company update stated that it was still in a holding pattern from a drilling standpoint, and depending upon a number of factors, planned to upgrade its Marcellus drilling program with three rigs operating in northeastern Pennsylvania during 2010. Drilling in Bradford County had first priority and the company intended to move out from there to other blocks. The Marcellus shale formation is very thick in Southwestern's leasehold--over 400 feet thick in some places with very little faulting. All of the company's future wells were planned to be horizontal.

By December, 2009 in a capital budget update, the company noted that it planned to field one rig in the Marcellus shale starting in January, 2010.

A February, 2010 update mentioned that during the previous year Southwestern had invested $40 million in Pennsylvania mostly for acquiring acreage. It included purchasing 22,800 acres in Lycoming Co. for $8.7 million ($382/acre). This is probably the same northeastern Pennsylvania acquisition mentioned in the second paragraph above, yet the cost per acre appears to be a slightly different. The company was in the process of drilling its first Pennsylvania horizontal well since 2008. It is the Heckman Camp #1 located in Bradford County; it was to be producing by the second quarter of 2010. The company was expecting to drill between 20 and 24 wells in Bradford Co. All were to be located close to the Stagecoach Pipeline on which the company had contracted for 20 Mmcf/d of natgas transport capacity. Southwestern also planned to participate as minority partner in up to 20 Marcellus shale wells mostly located in Susquehanna Co.

• Harold M. Korell is Southwestern's Chairman.
• Steven L, (Steve) Mueller is President and CEO.
• Greg D. Kerley is Executive Vice President and CFO.
• Gene A. Hammons is President of Southwestern Midstream Services Company.
• Elise Mitchell is a spokesperson.