Southwestern Energy's Earnings Surge

Increased gas and oil production volumes drove the energy company's earnings higher in the fourth quarter.
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Southwestern Energy

(SWN) - Get Report

reported on February 26, 2009 that Q4 FY08 earnings surged 45.5%, driven by increased gas and oil production volumes, which were partially offset by lower realized natural gas prices. Net income increased to $104.20 million or $0.30 per share from $71.63 million or $0.21 per share a year ago. The latest quarterly earnings missed the consensus estimate of $0.32 per share.

Q4 FY08 total operating revenue grew 24.2% to $500.08 million from $402.78 million a year ago. Gas sales increased 20.8% to $330.08 million. Gas marketing operating revenue and gas gathering operating revenue soared 43.3% and 117.2% to $154.81 million and $11.61 million, respectively. Oil sales operating revenue and transportation operating revenue plunged 81.2% and 65.1% to $2.42 million and $1.16 million, respectively. Exploration and production revenue surged 38.0% to $343.39 million. Midstream services revenue grew 43.5% to $445.72 million. Natural gas distribution and other revenue plunged to $231,000 from $52.73 million in Q4 FY07.

Total equivalent production improved 65.3% to 57.61 billion cubic feet of gas equivalent (Bcfe). Midstream gas marketed volumes rose 66.2% to 76.8 billion cubic feet (Bcf) and gas gathered volumes jumped 135.4% to 71.10 Bcf. Average realized gas price net of hedges dropped 14.1% to $5.93 per thousand cubic feet (Mcf) and average realized oil price declined 32.2% to $61.64 per barrel (Bbl).

FY08 net income more than doubled to $567.95 million or $1.64 per share from $221.17 million or $0.64 per share a year ago. Annual revenue soared 84.2% to $2.31 billion from $1.26 billion in FY07.

SWN targets FY09 total oil and gas production of 280.00 Bcfe to 284.00 Bcfe. The company lowered its capital expenditure to $1.90 billion from its previous forecast of $2.00 billion.