Executive Summary

Q4 2023 headline GAAP loss was driven by a $1.71B full cost ceiling test impairment; adjusted results were positive with adjusted EPS of $0.17 and adjusted EBITDA of $0.61B, reflecting resilient operations and hedge support .
Sequential fundamentals improved: weighted average realized price including derivatives rose to $2.75/Mcfe (Q3: $2.43), while free cash flow strengthened to $162M (Q3: $23M) as spending moderated and pricing stabilized .
Guidance was withdrawn due to the pending merger with Chesapeake; the company did not host a Q4 call, making the deal the primary stock narrative near term .
Liquids mix and Appalachia/Haynesville execution remained steady; year-end debt was $4.0B (net debt/adj. EBITDA 1.6x), supporting balance sheet durability into 2024 with substantial gas hedges in place .

What Went Well and What Went Wrong

What Went Well
- Adjusted profitability and cash generation despite weak gas prices: adj. EPS $0.17, adj. EBITDA $611M, free cash flow $162M in Q4 .
- Sequential price tailwind: realized price including derivatives improved to $2.75/Mcfe from $2.43/Mcfe in Q3 as Henry Hub stabilized and hedges contributed .
- Strategic positioning and market access: management reiterated expected benefit from growing Gulf Coast LNG demand and emphasized disciplined activity to optimize FCF and debt reduction (CEO commentary) .
What Went Wrong
- Large non-cash impairment drove GAAP loss: $1.71B impairment produced ($0.60) GAAP EPS in Q4 and reflected lower SEC price decks; proved reserves fell to 19.7 Tcfe on downward price revisions .
- Production decelerated into year-end: total production fell to 410 Bcfe (Q3: 425 Bcfe), consistent with activity moderation and capacity management .
- Unit costs edged up sequentially: LOE rose to $1.09/Mcfe (Q3: $1.06), and DD&A to $0.79/Mcfe (Q3: $0.78), partly reflecting mix and lower denominator effects at year-end .

Financial Results

Quarterly trend (oldest → newest)

Metric	Q2 2023	Q3 2023	Q4 2023
Operating Revenues ($USD Millions)	$1,269	$1,443	$1,692
GAAP Diluted EPS ($)	$0.21	$0.04	($0.60)
Adjusted Diluted EPS (non-GAAP) ($)	$0.09	$0.10	$0.17
Adjusted EBITDA ($USD Millions)	$484	$513	$611
Net Cash Provided by Operating Activities ($USD Millions)	$425	$477	$477
Free Cash Flow (non-GAAP) ($USD Millions)	($142)	$23	$162
Total Production (Bcfe)	423	425	410
Realized Price incl. derivatives ($/Mcfe)	$2.33	$2.43	$2.75
Realized Price ex-derivatives ($/Mcfe)	$1.84	$2.05	$2.51

Year-over-year (Q4 2023 vs Q4 2022)

Metric	Q4 2022	Q4 2023
Operating Revenues ($USD Millions)	$3,380	$1,692
GAAP Diluted EPS ($)	$2.63	($0.60)
Adjusted Diluted EPS (non-GAAP) ($)	$0.26	$0.17
Adjusted EBITDA ($USD Millions)	$732	$611
Realized Price incl. derivatives ($/Mcfe)	$2.88	$2.75

Segment breakdown (Q4 2023)

Segment	Gas (Bcf)	Oil (MBbls)	NGL (MBbls)	Production (Bcfe)	Total Weighted Avg Realized Price ex-derivatives ($/Mcfe)	Total Capital Investments ($MM)
Appalachia	206	1,422	8,141	264	$2.47	$154
Haynesville	146	9	2	146 Bcf	$2.58	$237

KPIs and unit costs

KPI	Q2 2023	Q3 2023	Q4 2023
LOE ($/Mcfe)	$1.00	$1.06	$1.09
G&A ($/Mcfe)	$0.09	$0.10	$0.10
Taxes other than income ($/Mcfe)	$0.14	$0.15	$0.13
DD&A ($/Mcfe)	$0.77	$0.78	$0.79
Liquids % of production	~14% (FY guide), ~12% actual mix in Q2 text	~12% mix	14% mix (Q4 table shows 86% gas/12% NGL/2% oil)

Non-GAAP adjustments context (Q4): primary add-backs were $1.71B impairment and mark-to-market on unsettled derivatives; reconciliations bridge from ($0.60) GAAP EPS to $0.17 adjusted EPS and to $611M adjusted EBITDA .

Guidance Changes

Metric	Period	Previous Guidance	Current (as of Q4 release)	Change
Gas production (Bcf)	Q4 2023	344–361 (Nov 2 guidance)	Guidance discontinued due to pending CHK merger	Withdrawn
Liquids (% of production)	Q4 2023	~14.0%	Guidance discontinued	Withdrawn
Total production (Bcfe)	Q4 2023	400–420	Guidance discontinued	Withdrawn
Gas discount to NYMEX incl. transport ($/Mcf)	Q4 2023	$0.58–$0.70	Guidance discontinued	Withdrawn
Oil discount to WTI incl. transport ($/Bbl)	Q4 2023	$11.50–$13.50	Guidance discontinued	Withdrawn
NGL realization (% of WTI, incl. transport)	Q4 2023	22%–30%	Guidance discontinued	Withdrawn

Note: Full-year 2023 guidance was updated in August (capex reduced ~10%); with the year complete and merger pending, forward guidance has been halted .

Earnings Call Themes & Trends

Note: Company did not host a Q4 2023 call due to the pending Chesapeake merger .

Topic	Previous Mentions (Q2 2023)	Previous Mentions (Q3 2023)	Current Period (Q4 2023)	Trend
LNG/Gulf Coast demand pull	Management emphasized positioning to benefit from longer-term supportive gas environment and market access .	CEO highlighted being well-positioned for growing LNG demand along the Gulf Coast .	No call; press release focused on results and merger status .	Consistent strategic focus; narrative overshadowed by merger.
Capital allocation & debt reduction	Debt reduction top priority; non-core asset sale proceeds used to reduce debt .	Continued balancing debt reduction and managing productive capacity; total debt down to $4.1B at Q3 .	YE total debt $4.0B; net debt/adj. EBITDA 1.6x .	Ongoing deleveraging progress.
Activity discipline/FCF optimization	Reduced full-year capex ~10% via efficiency and moderating inflation .	Optimizing FCF and activity in a weak gas environment .	FCF improved to $162M in Q4; activity moderated (410 Bcfe vs 425 Bcfe) .	Discipline sustained; FCF trending better.
Hedging & price risk management	Significant 2024 gas swaps/collars established; basis hedges .	Additional hedges reaffirmed; basis protection detailed .	2024 gas hedged ~660 Bcf; liquid hedges and basis positions disclosed .	Robust hedge book maintained.
Regulatory/legal/strategic	—	—	Pending Chesapeake merger; no call; guidance discontinued .	Transaction dominates near-term narrative.

Management Commentary

“Southwestern Energy continues to improve the resilience and free cash flow generation capacity of our business… Debt reduction remains our top capital allocation priority… We are well positioned to increase shareholder value in the supportive longer-term natural gas environment.” – Bill Way, President & CEO (Q2 release) .
“This approach balances our dual priorities of debt reduction and managing the productive capacity of the Company in the structurally improving natural gas environment… well positioned… to benefit from the expected growing demand from LNG facilities along the Gulf Coast.” – Bill Way, President & CEO (Q3 release) .
Q4 release highlighted performance and stewardship, reported adjusted results, and stated that due to the pending merger, the company would not host a call and discontinued guidance .

Q&A Highlights

No Q&A session: Southwestern did not host a Q4 2023 earnings call due to the pending Chesapeake merger .

Estimates Context

Wall Street consensus estimates from S&P Global (Capital IQ) were unavailable via our estimates tool for SWN at the time of analysis. As a result, we cannot provide “vs. consensus” comparisons for revenue or EPS for Q4 2023. If you’d like, we can attempt alternate sources, but our default is S&P Global; here it was unavailable.

Key Takeaways for Investors

Large non-cash impairment masks underlying operating health; adjusted EPS/EBITDA and FCF were solid despite weak gas pricing, aided by hedges and disciplined capex .
Sequential improvement in realized pricing (incl. derivatives) and FCF suggests near-term bottoming in fundamentals as activity remains calibrated to market conditions .
Balance sheet is manageable (YE total debt $4.0B; net debt/adj. EBITDA 1.6x), preserving flexibility into 2024 .
Hedge book provides meaningful 2024 downside protection (~660 Bcf gas hedged; additional liquids and basis positions), reducing cash flow volatility in a still-volatile macro .
Production moderated into Q4 (410 Bcfe vs 425 Bcfe in Q3), consistent with FCF-first posture and price environment; unit costs ticked slightly higher but remain contained .
Strategic catalyst: the pending Chesapeake merger is the dominant stock driver near term; with guidance withdrawn and no call, deal milestones/regulatory timeline and LNG macro are likely to move the stock more than quarter-to-quarter beats/misses .
For trading: monitoring Henry Hub dynamics and LNG export ramp cadence is key; hedge disclosures mitigate downside, while upward price surprises could torque FCF/earnings given leverage to gas .

Additional Data Points

Realized prices detail (Q4): ex-derivatives $2.51/Mcfe; incl. derivatives $2.75/Mcfe; gas ex-derivatives $2.14/Mcf; oil ex-derivatives $67.55/Bbl; NGL ex-derivatives $21.96/Bbl .
Proved reserves at YE 2023: 19.7 Tcfe; after-tax standardized measure (PV-10) $7.3B; declines primarily from downward price revisions .
No forward guidance; investors should not rely on historical forward-looking statements per the Q4 release .

SOUTHWESTERN ENERGY CO (SWN)·Q4 2023 Earnings Summary