Southwestern Energy Announces Third Quarter 2012 Financial And Operating Results

   Southwestern Energy Announces Third Quarter 2012 Financial And Operating
                                   Results

PR Newswire

HOUSTON, Nov. 1, 2012

HOUSTON, Nov. 1, 2012 /PRNewswire/ --Southwestern Energy Company (NYSE: SWN)
today announced its financial and operating results for the third quarter of
2012. Highlights include:

  oGas and oil production of 144.3 Bcfe, up 12% compared to prior year
  oAdjusted net income of $131.8 million, which excludes a non-cash ceiling
    test impairment of natural gas and oil properties (a non-GAAP measure
    reconciled below)
  oNet cash provided by operating activities before changes in operating
    assets and liabilities of $416.6 million (reconciled below)

For the third quarter of 2012, Southwestern reported a net loss of $144.8
million, or $0.42 per diluted share. The net loss for the three months ended
September 30, 2012 included a $441.5 million non-cash ceiling test impairment
($276.6 million net of taxes) of the company's natural gas and oil properties
resulting from lower natural gas prices. Excluding the non-cash impairment,
Southwestern reported net income for the third quarter of 2012 of $131.8
million (reconciled below), or $0.38 per diluted share, compared to net income
of $175.2 million, or $0.50 per diluted share, for the prior year period.

Net cash provided by operating activities before changes in operating assets
and liabilities (reconciled below) was $416.6 million for the third quarter of
2012, down compared to $472.6 million for the same period in 2011 primarily
due to lower realized gas prices.

"The main drivers of our business continue to move in the right directions,"
remarked Steve Mueller, President and Chief Executive Officer of Southwestern
Energy. "NYMEX gas prices are improving from the lows seen earlier in the year
and our production growth, hedge position and low cost structure all
contributed to increasing earnings and cash flow. The Fayetteville Shale costs
are lower while well results are better and our Marcellus continued its rapid
ascent in activity and production. We also have several New Ventures projects
underway and look forward to learning more about the Brown Dense later in the
year and will have more results from our Colorado and Montana plays in the
first quarter of 2013."

Third Quarter 2012 Financial Results

E&P Segment  – Excluding the non-cash impairment, operating income from the
company's E&P segment (reconciled below) was $145.4 million for the three
months ended September 30, 2012, compared to $228.5 million for the same
period in 2011. The decrease was primarily due to lower realized natural gas
prices and increased operating costs and expenses from higher activity levels,
partially offset by higher production.

Southwestern accounts for its natural gas and oil properties using the
full-cost method of accounting, which requires the company to perform a
ceiling test that limits the amount of its capitalized gas and oil properties
less accumulated amortization and related deferred income taxes to the
aggregate of the present value of future net revenues attributable to proved
natural gas and oil reserves, net of taxes, discounted at 10 percent plus the
lower of cost or market value of unproved properties. The company's non-cash
ceiling test impairment used the average quoted price from the first day of
each month from the previous 12 months for Henry Hub natural gas of $2.83 per
MMBtu and $91.48 per barrel for West Texas Intermediate oil, adjusted for
market differentials, compared to $4.12 per MMBtu and $92.71 per barrel for
West Texas Intermediate oil, adjusted for market differentials, at December
31, 2011.

Gas and oil production totaled 144.3 Bcfe in the third quarter of 2012, up 12%
from 128.9 Bcfe in the third quarter of 2011, and included 123.6 Bcf from the
company's Fayetteville Shale play, up from 111.9 Bcf in the third quarter of
2011. Production from the Marcellus Shale was 15.1 Bcf in the third quarter of
2012, compared to 7.4 Bcf in the third quarter of 2011.

Including the effect of hedges, Southwestern's average realized gas price in
the third quarter of 2012 was $3.40 per Mcf, down 21% from $4.30 per Mcf in
the third quarter of 2011. The company's commodity hedging activities
increased its average gas price by $1.05 per Mcf during the third quarter of
2012, compared to an increase of $0.59 per Mcf during the same period in 2011.
As of September 30, 2012, Southwestern had NYMEX price hedges in place on
notional volumes of approximately 67 Bcf of its remaining 2012 forecasted gas
production hedged at an average floor price of $5.16 per Mcf and approximately
186 Bcf of its 2013 forecasted gas production hedged at an average floor price
of $5.06 per Mcf. As of September 30, 2012, the company had protected
approximately 73 Bcf of its remaining 2012 expected gas production from the
potential of widening basis differentials through hedging activities and sales
arrangements at an average basis differential to NYMEX gas prices of
approximately ($0.03) per Mcf.

The company typically sells its natural gas at a discount to NYMEX settlement
prices. This discount includes a basis differential, third-party
transportation charges and fuel charges. Disregarding the impact of commodity
price hedges, the company's average price received for its gas production
during the third quarter of 2012 was approximately $0.46 per Mcf lower than
average NYMEX settlement prices, compared to approximately $0.49 per Mcf lower
during the third quarter of 2011. In 2012, the company expects its total gas
sales discount to NYMEX to be approximately $0.50 per Mcf.

Lease operating expenses per unit of production for the company's E&P segment
were $0.79 per Mcfe in the third quarter of 2012, compared to $0.86 per Mcfe
in the third quarter of 2011. The decrease was primarily due to lower
compression costs and salt water disposal costs in the Fayetteville Shale
play.

General and administrative expenses per unit of production were $0.21 per Mcfe
in the third quarter of 2012, compared to $0.25 per Mcfe in the third quarter
of 2011. The decrease was primarily due to decreased personnel costs and
professional fees.

Taxes other than income taxes per unit of production were $0.09 per Mcfe in
the third quarter of 2012, compared to $0.11 per Mcfe in the third quarter of
2011. Taxes other than income taxes vary due to changes in severance and ad
valorem taxes that result from the mix of the company's volumes and
fluctuations in commodity prices.

The company's full cost pool amortization rate was $1.28 per Mcfe for both the
third quarters of 2012 and 2011, respectively. The amortization rate is
impacted by the timing and amount of reserve additions and the costs
associated with those additions, revisions of previous reserve estimates due
to both price and well performance, write-downs that result from full cost
ceiling tests, proceeds from the sale of properties that reduce the full cost
pool and the levels of costs subject to amortization. The company cannot
predict its future full cost pool amortization rate with accuracy due to the
variability of each of the factors discussed above, as well as other factors.

Midstream Services  – Operating income for the company's Midstream Services
segment, which is comprised of natural gas gathering and marketing activities,
was $75.5 million for the three months ended September 30, 2012, up 13% from
$66.8 million in the same period in 2011. The increase in operating income was
primarily due to increased gathering revenues related to the company's
Fayetteville and Marcellus Shale properties, partially offset by increased
operating costs and expenses. At September 30, 2012, the company's midstream
segment was gathering approximately 2.2 Bcf per day through 1,837 miles of
gathering lines in the Fayetteville Shale play, compared to gathering
approximately 2.0 Bcf per day a year ago. Gathering volumes, revenues and
expenses for this segment are expected to grow over the next few years largely
as a result of increased development of the company's acreage in the
Fayetteville Shale and Marcellus Shale and the increased development activity
undertaken by other operators in those areas.

First Nine Months of 2012 Financial Results

For the first nine months of 2012, Southwestern reported a net loss of $525.2
million, or $1.51 per diluted share. Excluding non-cash ceiling test
impairments recorded in the second and third quarter of 2012, the company
reported adjusted net income for the first nine months of 2012 of $330.3
million (reconciled below), or $0.95 per diluted share, compared to $479.2
million, or $1.37 per diluted share, for the first nine months of 2011. Net
cash provided by operating activities before changes in operating assets and
liabilities (reconciled below) was approximately $1.1 billion for the first
nine months of 2012, compared to approximately $1.3 billion for the same
period in 2011.

E&P Segment  – Excluding the non-cash impairment, operating income from the
company's E&P segment (reconciled below) was $337.6 million for the nine
months ended September 30, 2012, compared to $629.3 million for the same
period in 2011. The decrease was primarily due to lower average realized gas
prices and increased operating costs and expenses from higher activity levels
which were partially offset by higher production volumes.

Gas and oil production was 415.1 Bcfe in the first nine months of 2012, up 13%
compared to 366.7 Bcfe in the first nine months of 2011, and included 360.4
Bcf from the company's Fayetteville Shale play, up from 320.4 Bcf in the first
nine months of 2011. Production from the Marcellus Shale was 34.3 Bcf in the
first nine months of 2012, compared to 15.2 Bcf in the first nine months of
2011. The company expects its full-year production for 2012 to range between
approximately 560 and 570 Bcfe, an increase of approximately 13% compared to
2011 (using midpoints).

Southwestern's average realized gas price was $3.34 per Mcf, including the
effect of hedges, in the first nine months of 2012 down 21% compared to $4.24
per Mcf in the first nine months of 2011. The company's hedging activities
increased the average gas price realized during the first nine months of 2012
by $1.22 per Mcf, compared to an increase of $0.49 per Mcf during the first
nine months of 2011. Disregarding the impact of hedges, the average price
received for the company's gas production during the first nine months of 2012
was approximately $0.47 per Mcf lower than average monthly NYMEX settlement
prices, compared to approximately $0.46 per Mcf during the first nine months
of 2011.

Lease operating expenses for the company's E&P segment were $0.80 per Mcfe in
the first nine months of 2012, compared to $0.84 per Mcfe in the first nine
months of 2011. The decrease was primarily due to lower compression costs in
the Fayetteville Shale.

General and administrative expenses were $0.26 per Mcfe in both the first nine
months of 2012 and 2011, respectively.

Taxes other than income taxes were $0.10 per Mcfe during the first nine months
of 2012, compared to $0.11 per Mcfe during the first nine months of 2011.

The company's full cost pool amortization rate increased to $1.33 per Mcfe in
the first nine months of 2012, compared to $1.29 per Mcfe in the first nine
months of 2011.

Midstream Services - Operating income for the company's midstream activities
was $216.6 million in the first nine months of 2012, up 20% compared to $180.4
million in the first nine months of 2011. The increase in operating income was
primarily due to increased gathering revenues related to the company's
Fayetteville and Marcellus Shale properties, partially offset by increased
operating costs and expenses.

Capital Structure and Investments – At September 30, 2012, the company had
approximately $1.7 billion in long-term debt and its total debt-to-total
capitalization was 34.3%, compared to 25.3% at December 31, 2011. The company
also had cash and cash equivalents and restricted cash of approximately $145.6
million at September 30, 2012.

Southwestern invested a total of approximately $1.6 billion during both the
first nine months of 2012 and 2011, respectively. The company's 2012 capital
investment program included $1.5 billion invested in its E&P business and $106
million invested in its Midstream Services activities. Southwestern's total
capital investments program for 2012 is expected to be approximately $2.1
billion.

E&P Operations Review

Southwestern invested approximately $1.5 billion in its E&P business during
the first nine months of 2012, of which approximately $832 million was
invested in its Fayetteville Shale play, $368 million in the Marcellus Shale,
$231 million in New Ventures, $11 million in Ark-La-Tex and $12 million in E&P
Services.

Fayetteville Shale Play  – For the third quarter of 2012, Southwestern placed
a total of 105 operated wells on production in the Fayetteville Shale play,
all of which were horizontal wells fracture stimulated using slickwater. At
September 30, 2012, the company's gross production rate from the Fayetteville
Shale play was approximately 2.0 Bcf per day, up from approximately 1.9 Bcf
per day a year ago. The company is currently utilizing 11 drilling rigs in its
Fayetteville Shale play, including 7 that are capable of drilling horizontal
wells. The graph below provides gross production data from the company's
operated wells in the Fayetteville Shale play area through September 30, 2012.

(Photo: http://photos.prnewswire.com/prnh/20121101/DA04503-a)

During the third quarter of 2012, the company's horizontal wells had an
average completed well cost of $2.6 million per well, average horizontal
lateral length of 4,974 feet and average time to drill to total depth of 6.8
days from re-entry to re-entry. This compares to an average completed well
cost of $2.8 million per well, average horizontal lateral length of 4,840 feet
and average time to drill to total depth of 6.9 days from re-entry to re-entry
in the second quarter of 2012. In the third quarter of 2012, the company had
32 operated wells placed on production which had average times to drill to
total depth of 5 days or less from re-entry to re-entry. In total, the company
has had a total of 192 wells drilled to total depth of 5 days or less from
re-entry to re-entry.

The company's wells placed on production during the third quarter of 2012
averaged initial production rates of 3,857 Mcf per day. Results from the
company's drilling activities from 2007 by quarter are shown below.

                  Wells      Average   30th-Day     60th-Day     Average
                                       Avg Rate
Time Frame        Placed on  IP Rate                Avg Rate     Lateral
                                       (# of wells)
                  Production (Mcf/d)                (# of wells) Length
1^st Qtr 2007     58         1,261     1,066 (58)   958 (58)     2,104
2^nd Qtr 2007     46         1,497     1,254 (46)   1,034 (46)   2,512
3^rd Qtr 2007     74         1,769     1,510 (72)   1,334 (72)   2,622
4^th Qtr 2007     77         2,027     1,690 (77)   1,481 (77)   3,193
1^st Qtr 2008     75         2,343     2,147 (75)   1,943 (74)   3,301
2^nd Qtr 2008     83         2,541     2,155 (83)   1,886 (83)   3,562
3^rd Qtr 2008     97         2,882     2,560 (97)   2,349 (97)   3,736
4^th Qtr 2008^(1) 74         3,350^(1) 2,722 (74)   2,386 (74)   3,850
1^st Qtr 2009^(1) 120        2,992^(1) 2,537 (120)  2,293 (120)  3,874
2^nd Qtr 2009     111        3,611     2,833 (111)  2,556 (111)  4,123
3^rd Qtr 2009     93         3,604     2,624 (93)   2,255 (93)   4,100
4^th Qtr 2009     122        3,727     2,674 (122)  2,360 (120)  4,303
1^st Qtr 2010^(2) 106        3,197^(2) 2,388 (106)  2,123 (106)  4,348
2^nd Qtr 2010     143        3,449     2,554 (143)  2,321 (142)  4,532
3^rd Qtr 2010     145        3,281     2,448 (145)  2,202 (144)  4,503
4^th Qtr 2010     159        3,472     2,678 (159)  2,294 (159)  4,667
1^st Qtr 2011     137        3,231     2,604 (137)  2,238(137)   4,985
2^nd Qtr 2011     149        3,014     2,328 (149)  1,991 (149)  4,839
3^rd Qtr 2011     132        3,443     2,666 (132)  2,372 (132)  4,847
4^th Qtr 2011     142        3,646     2,606 (142)  2,243 (142)  4,703
1^st Qtr 2012     146        3,319     2,421 (146)  2,131 (146)  4,743
2^nd Qtr 2012     131        3,500     2,515 (131)  2,225 (131)  4,840
3^rd Qtr 2012     105        3,857     2,579 (79)   2,157(43)    4,974

Note: Results as of September 30, 2012.
     The significant increase in the average initial production rate for the
^(1) fourth quarter of 2008 and the subsequent decrease for the first quarter
     of 2009 primarily reflected the impact of the delay in the Boardwalk
     Pipeline.
     In the first quarter of 2010, the company's results were impacted by the
^(2) shift of all wells to "green completions" and the mix of wells, as a
     large percentage of wells were placed on production in the shallower
     northern and far eastern borders of the company's acreage.



Marcellus Shale  – In northeast Pennsylvania, Southwestern had 50 horizontal
producing wells, 44 wells waiting on either completion or pipeline and 34
wells in progress at September 30, 2012. The company is currently utilizing
four drilling rigs in the Marcellus Shale.

Net production from the area was 15.1 Bcf in the third quarter of 2012,
compared to 7.4 Bcf in the third quarter of 2011. At September 30, 2012, the
company's gross operated production from the area was approximately 218 MMcf
per day. In Susquehanna County, the company currently has approximately 25
wells currently waiting on either completion or the Bluestone Pipeline, which
is estimated to be placed into service into the TGP 300 Pipeline in
late-November. Once the Bluestone Pipeline is in-service, the company expects
that its year-end gross production exit rate will be approximately 300 million
cubic feet of gas per day.

The graph below provides normalized average daily production data through
September 30, 2012, for the company's horizontal wells in the Marcellus Shale.
The "purple curve" indicates results for 22 wells with more than 12 fracture
stimulation stages, the "orange curve" indicates results for 27 wells with 9
to 12 fracture stimulation stages and the "green curve" indicates results for
1 well with less than 9 fracture stimulation stages. The normalized production
curves are intended to provide a qualitative indication of the company's
Marcellus Shale wells' performance and should not be used to estimate an
individual well's estimated ultimate recovery. The 4, 6, 8 and 10 Bcf
typecurves are shown solely for reference purposes and are not intended to be
projections of the performance of the company's wells.

(Photo: http://photos.prnewswire.com/prnh/20121101/DA04503-b)

Ark-La-Tex  –  Total net production from the company's East Texas and
conventional Arkoma Basin properties was 5.7 Bcfe in the third quarter of
2012, compared to 9.6 Bcfe in the third quarter of 2011.

On May 1, 2012, Southwestern sold its oil and natural gas leases, wells and
gathering equipment in its Overton Field in East Texas for approximately $168
million, excluding typical purchase price adjustments. The sale includes
approximately 19,800 net acres in Smith County, Texas. Net production from the
field was approximately 24 MMcfe per day as of the closing date and proved net
reserves were approximately 143 Bcfe as of year-end 2011.

New Ventures  – The company holds 3,814,400 net undeveloped acres in
connection with its New Ventures prospects, of which 2,518,518 net acres were
located in New Brunswick, Canada.

Southwestern has approximately 506,000 net acres targeting the Lower Smackover
Brown Dense formation in southern Arkansas and northern Louisiana. The company
has drilled six wells in the play area to date. The company's first three
wells, which were completed earlier this year, are currently shut-in. The
company's fourth and fifth wells, the Johnson #21-22-1 #1 and the Dean
31-22-1E #1 both located in Union Parish, Louisiana, were drilled to vertical
depths of 10,507 feet and 10,503 feet, respectively. Both wells encountered
higher pressures within the target formation and the company is using these
wells to obtain additional log data and core samples and to optimize fracture
stimulation designs in the vertical sections of the wells. The company
currently plans to re-enter these wells as horizontal wells in 2013. The
company is also completing the Doles 30-22-1H #1, located in Union Parish,
Louisiana, which was drilled to approximately 10,673 feet with a 4,731-foot
completed horizontal lateral. This well also encountered high pressure within
the formation and flowback is planned during the first week in November. In
late-November, the company plans to place both the Doles well and the
company's third well, the BML #31-22 #1-1H, to sales with the expectation of
learning more about the decline characteristics of both wells before year-end.
Southwestern has permitted and plans to drill additional wells in the area in
2013.

The company has approximately 302,000 net acres in the Denver-Julesburg Basin
in eastern Colorado where the company has begun testing a new unconventional
oil play targeting middle and late Pennsylvanian to Permian age carbonates and
shales. The company has completed a horizontal well and a vertical well, both
of which are testing multiple intervals. Evaluation will continue on these two
wells over the next 90 days. Southwestern is permitting and plans to drill
additional wells in the area in 2013.

The company has also drilled and completed a well in Sheridan County, Montana,
targeting the Bakken/Three Forks objectives, which has been flowing back for
approximately 60 days. The company is continuing to lease acreage and plans to
permit and drill additional wells in the area in 2013.

Explanation and Reconciliation of Non-GAAP Financial Measures

The company reports its financial results in accordance with accounting
principles generally accepted in the United States of America ("GAAP").
However, management believes certain non-GAAP performance measures may provide
users of this financial information additional meaningful comparisons between
current results and the results of its peers and of prior periods.

One such non-GAAP financial measure is net cash provided by operating
activities before changes in operating assets and liabilities. Management
presents this measure because (i) it is accepted as an indicator of an oil and
gas exploration and production company's ability to internally fund
exploration and development activities and to service or incur additional
debt, (ii) changes in operating assets and liabilities relate to the timing of
cash receipts and disbursements which the company may not control and (iii)
changes in operating assets and liabilities may not relate to the period in
which the operating activities occurred.

Additional non-GAAP financial measures the company may present from time to
time are net income, diluted earnings per share and its E&P segment operating
income, all which exclude certain charges or amounts. Management presents
these measures because (i) they are consistent with the manner in which the
company's performance is measured relative to the performance of its peers,
(ii) these measures are more comparable to earnings estimates provided by
securities analysts, and (iii) charges or amounts excluded cannot be
reasonably estimated and guidance provided by the company excludes information
regarding these types of items. These adjusted amounts are not a measure of
financial performance under GAAP.

See the reconciliations below of GAAP financial measures to non-GAAP financial
measures for the three and nine months ended September 30, 2012 and September
30, 2011. Non-GAAP financial measures should not be considered in isolation or
as a substitute for the company's reported results prepared in accordance with
GAAP.



                                                 3 Months Ended Sept. 30,
                                                 2012            2011
                                                 (in thousands)
Net income (loss):
Net income (loss)                                $  (144,815)  $   175,173
Add back:
Impairment of natural gas and oil properties     276,644         --
(net of taxes)
Net income, excluding impairment of natural gas  $   131,829   $   175,173
and oil properties





                                                 9 Months Ended Sept. 30,
                                                 2012            2011
                                                 (in thousands)
Net income (loss):
Net income (loss)                                $  (525,211)  $   479,236
Add back:
Impairment of natural gas and oil properties     855,522         --
(net of taxes)
Net income, excluding impairment of natural gas  $   330,311   $   479,236
and oil properties



                                       3 Months Ended Sept. 30,
                                       2012                  2011
Diluted earnings per share:
Net income (loss) per share            $       (0.42)  $      0.50
Add back:
Impairment of natural gas and oil      0.80                  --
properties (net of taxes)
Net income per share, excluding
impairment of natural gas and oil      $        0.38  $      0.50
properties



                                       9 Months Ended Sept. 30,
                                       2012                  2011
Diluted earnings per share:
Net income (loss) per share            $       (1.51)  $      1.37
Add back:
Impairment of natural gas and oil      2.46                  --
properties (net of taxes)
Net income per share, excluding
impairment of natural gas and oil      $        0.95  $      1.37
properties



                                                  3 Months Ended Sept. 30,
                                                  2012           2011
                                                  (in thousands)
Cash flow from operating activities:
Net cash provided by operating activities         $   355,087  $   443,281
Add back (deduct):
Change in operating assets and liabilities        61,523         (29,313)
Net cash provided by operating activities before
changes                                           $   416,610  $   472,594

 in operating assets and liabilities



                                                    9 Months Ended Sept. 30,
                                                    2012          2011
                                                    (in thousands)
Cash flow from operating activities:
Net cash provided by operating activities           $ 1,192,477  $ 1,300,211
Add back (deduct):
Change in operating assets and liabilities          (50,520)      12,129
Net cash provided by operating activities before
changes                                             $ 1,141,957  $ 1,312,340

 in operating assets and liabilities



                                                 3 Months Ended Sept. 30,
                                                 2012            2011
                                                 (in thousands)
E&P segment operating income:
E&P segment operating income (loss)              $  (296,108)  $   228,476
Add back:
Impairment of natural gas and oil properties     441,465         --
E&P segment operating income excluding
impairment                                       $   145,357   $   228,476

 of natural gas and oil properties



                                                 9 Months Ended Sept. 30,
                                                 2012            2011
                                                 (in thousands)
E&P segment operating income:
E&P segment operating income (loss)              $ (1,039,737)   $   629,298
Add back:
Impairment of natural gas and oil properties     1,377,364       --
E&P segment operating income excluding
impairment                                       $   337,627  $   629,298

 of natural gas and oil properties



Southwestern will host a teleconference call on Friday, November 2, 2012, at
10:00 a.m. Eastern to discuss the company's third quarter 2012 results. The
toll-free number to call is 877-407-8035 and the international toll-free
number is 201-689-8035. The teleconference can also be heard "live" on the
Internet at http://www.swn.com.

Southwestern Energy Company is an independent energy company whose
wholly-owned subsidiaries are engaged in oil and gas exploration and
production, natural gas gathering and marketing. Additional information on the
company can be found on the Internet at http://www.swn.com.

All statements, other than historical facts and financial information, may be
deemed to be forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. All statements that address activities,
outcomes and other matters that should or may occur in the future, including,
without limitation, statements regarding the financial position, business
strategy, production and reserve growth and other plans and objectives for the
company's future operations, are forward-looking statements. Although the
company believes the expectations expressed in such forward-looking statements
are based on reasonable assumptions, such statements are not guarantees of
future performance and actual results or developments may differ materially
from those in the forward-looking statements. The company has no obligation
and makes no undertaking to publicly update or revise any forward-looking
statements, other than to the extent set forth below. You should not place
undue reliance on forward-looking statements. They are subject to known and
unknown risks, uncertainties and other factors that may affect the company's
operations, markets, products, services and prices and cause its actual
results, performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by the
forward-looking statements. In addition to any assumptions and other factors
referred to specifically in connection with forward-looking statements, risks,
uncertainties and factors that could cause the company's actual results to
differ materially from those indicated in any forward-looking statement
include, but are not limited to: the timing and extent of changes in market
conditions and prices for natural gas and oil (including regional basis
differentials); the company's ability to transport its production to the most
favorable markets or at all; the timing and extent of the company's success in
discovering, developing, producing and estimating reserves; the economic
viability of, and the company's success in drilling, the company's large
acreage position in the Fayetteville Shale play, overall as well as relative
to other productive shale gas areas; the company's ability to fund the
company's planned capital investments; the impact of federal, state and local
government regulation, including any legislation relating to hydraulic
fracturing, the climate or over the counter derivatives; the company's ability
to determine the most effective and economic fracture stimulation for the
Fayetteville Shale play and the Marcellus Shale play; the costs and
availability of oil field personnel services and drilling supplies, raw
materials, and equipment and services; the company's future property
acquisition or divestiture activities; increased competition; the financial
impact of accounting regulations and critical accounting policies; the
comparative cost of alternative fuels; conditions in capital markets, changes
in interest rates and the ability of the company's lenders to provide it with
funds as agreed; credit risk relating to the risk of loss as a result of
non-performance by the company's counterparties and any other factors listed
in the reports the company has filed and may file with the Securities and
Exchange Commission (SEC). For additional information with respect to certain
of these and other factors, see the reports filed by the company with the SEC.
The company disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.

Financial Summary Follows



OPERATING STATISTICS
(Unaudited)

Southwestern Energy Company
and Subsidiaries
                            Three Months              Nine Months
Periods Ended September 30, 2012         2011         2012         2011
Exploration & Production
Production
Gas production (Bcf)        144.2        128.7        414.7        366.2
Oil production (MBbls)      19           24           59           79
Total equivalent production 144.3        128.9        415.1        366.7
(Bcfe)
Commodity Prices
Average gas price per Mcf,  $   3.40  $   4.30  $   3.34  $   4.24
including hedges
Average gas price per Mcf,  $   2.35  $   3.71  $   2.12  $   3.75
excluding hedges
Average oil price per Bbl   $  99.67   $  88.35   $ 102.89    $  93.54
Operating Expenses per Mcfe
Lease operating expenses    $   0.79  $   0.86  $   0.80  $   0.84
General & administrative    $   0.21  $   0.25  $   0.26  $   0.26
expenses
Taxes, other than income    $   0.09  $   0.11  $   0.10  $   0.11
taxes
Full cost pool amortization $   1.28  $   1.28  $   1.33  $   1.29
Midstream
Gas volumes marketed (Bcf)  171.2        153.3        498.7        450.4
Gas volumes gathered (Bcf)  214.7        190.9        622.9        545.7



STATEMENTS OF OPERATIONS
(Unaudited)

Southwestern Energy Company and
Subsidiaries
                    Three Months                  Nine Months
Periods Ended       2012           2011           2012           2011
September 30,
                    (in thousands, except share/per share amounts)
Operating Revenues
Gas sales           $   491,340  $   551,770  $ 1,384,152   $ 1,544,165
Gas marketing       148,764        176,787        423,503        549,243
Oil sales           1,889          2,157          6,097          7,387
Gas gathering       43,855         36,541         128,293        107,961
                    685,848        767,255        1,942,045      2,208,756
Operating Costs and
Expenses
Gas purchases –     149,651        175,236        423,941        545,518
midstream services
Operating expenses  61,906         63,911         179,478        175,763
General and
administrative      36,121         35,600         129,879        112,955
expenses
Depreciation,
depletion and       200,655        179,113        602,112        514,180
amortization
Impairment of
natural gas and oil 441,465        —              1,377,364      —
properties
Taxes, other than   16,252         17,677         51,154         49,429
income taxes
                    906,050        471,537        2,763,928      1,397,845
Operating Income    (220,202)      295,718        (821,883)      810,911
(Loss)
Interest Expense
Interest on debt    25,463         16,696         69,154         48,380
Other interest      1,058          902            3,096          3,414
charges
Interest            (15,915)       (11,941)       (45,945)       (32,531)
capitalized
                    10,606         5,657          26,305         19,263
Other Income        238            (122)          2,615          321
(Loss), Net
Income (Loss)       (230,570)      289,939        (845,573)      791,969
Before Income Taxes
Provision (Benefit)
for Income Taxes
Current             101            3,491          369            3,691
Deferred            (85,856)       111,275        (320,731)      309,042
                    (85,755)       114,766        (320,362)      312,733
Net income (loss)   $             $   175,173  $             $   479,236
                    (144,815)                    (525,211)
Earnings Per Share
Basic               $          $         $          $     
                    (0.42)        0.50          (1.51)        1.38
Diluted             $          $         $          $     
                    (0.42)        0.50          (1.51)        1.37
Weighted Average
Common Shares
Outstanding
Basic               348,649,630    347,239,793    348,272,192    347,070,330
Diluted             348,649,630    349,998,789    348,272,192    349,891,885



BALANCE SHEETS (Unaudited)

Southwestern Energy Company and
Subsidiaries
September 30,                               2012              2011
                                            (in thousands)
ASSETS
Current Assets ^                            $    846,747  $    836,120
Property and Equipment                      12,506,903        10,444,393
Less: Accumulated depreciation, depletion   (6,414,955)       (4,230,121)
and amortization
                                            6,091,948         6,214,272
Other Assets                                134,256           163,715
                                            $   7,072,951   $   7,214,107
LIABILITIES AND EQUITY
Current Liabilities                         $    761,165  $    766,250
Long-Term Debt                              1,695,342         1,271,000
Deferred Income Taxes                       1,203,703         1,461,205
Other Long-Term Liabilities                 159,462           107,099
Commitments and Contingencies
Equity
Common stock, $0.01 par value; authorized
1,250,000,000 shares; issued 350,415,917    3,504             3,483
shares in 2012 and 348,264,799 in 2011
Additional paid-in capital                  928,322           880,425
Retained earnings                           2,131,003         2,497,681
Accumulated other comprehensive income      192,040           229,750
Common stock in treasury, 66,791 shares in  (1,590)           (2,786)
2012 and 125,984 in 2011
Total Equity                                3,253,279         3,608,553
                                            $   7,072,951   $   7,214,107



STATEMENTS OF CASH FLOWS (Unaudited)

Southwestern Energy Company and
Subsidiaries
                                          Nine Months
Periods Ended September 30,               2012               2011
                                          (in thousands)
Cash Flows From Operating Activities
Net income (loss)                         $    (525,211)  $    479,236
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation, depletion and amortization  604,887            516,891
Impairment of natural gas and oil         1,377,364          —
properties
Deferred income taxes                     (320,731)          309,042
Unrealized gain on derivatives            (2,890)            905
Stock-based compensation                  8,226              6,619
Other                                     312                (353)
Change in assets and liabilities          50,520             (12,129)
Net cash provided by operating activities 1,192,477          1,300,211
Cash Flows From Investing Activities
Capital investments                       (1,623,751)        (1,543,549)
Proceeds from sale of property and        201,161            121,546
equipment
Transfers to restricted cash              (167,774)          (85,040)
Transfers from restricted cash            40,700             15,779
Other                                     5,239              4,940
Net cash used in investing activities     (1,544,425)        (1,486,324)
Cash Flows From Financing Activities
Payments on current portion of long-term  (600)              (600)
debt
Payments on revolving long-term debt      (1,774,000)        (2,575,000)
Borrowings under revolving long-term debt 1,129,000          2,753,600
Change in bank drafts outstanding         1,627              10,621
Proceeds from issuance of long-term debt  998,780            —
Debt issuance costs                       (8,338)            —
Revolving credit facility costs           —                  (10,211)
Proceeds from exercise of common stock    8,422              4,844
options
Net cash provided by financing activities 354,891            183,254
Effect of exchange rate changes on cash   (10)               97
Increase (decrease) in cash and cash      2,933              (2,762)
equivalents
Cash and cash equivalents at beginning of 15,627             16,055
year
Cash and cash equivalents at end of       $     18,560  $     13,293
period







SEGMENT INFORMATION (Unaudited)

Southwestern Energy Company and Subsidiaries
                    Exploration
                                  Midstream
                    &                        Other    Eliminations   Total
                                  Services
                    Production
                    (in thousands)
Quarter Ending September 30, 2012
                                  $         $                    $ 
Revenues            $  492,223  602,339          $  (409,563)  685,848
                                             849
Gas purchases       —             474,628    —        (324,977)      149,651
Operating expenses  113,417       32,221     56       (83,788)       61,906
General &
administrative      30,256        6,615      48       (798)          36,121
expenses
Depreciation,
depletion &         189,714       10,620     321      —              200,655
amortization
Impairment of
natural gas and oil 441,465       —          —        —              441,465
properties
Taxes, other than   13,479        2,767      6        —              16,252
income taxes
Operating Income    $            $        $     $        $ 
(Loss)              (296,108)     75,488           —             (220,202)
                                             418
Capital Investments $  385,585  $        $     $        $ 
^(1)                              31,693     7,608  —             424,886
Quarter Ending September 30, 2011
                                  $         $                    $ 
Revenues            $  555,620  743,831          $  (533,028)  767,255
                                             832
Gas purchases       —             629,899    —        (454,663)      175,236
Operating expenses  111,444       30,001     34       (77,568)       63,911
General &
administrative      32,615        3,718      64       (797)          35,600
expenses
Depreciation,
depletion &         169,391       9,414      308      —              179,113
amortization
Taxes, other than   13,694        3,962      21       —              17,677
income taxes
                                  $        $     $        $ 
Operating Income    $  228,476  66,837           —             295,718
                                             405
Capital Investments $  421,182  $        $     $        $ 
^(1)                              32,158    17,095   —             470,435
Nine Months Ending September 30, 2012
Revenues            $ 1,388,440   $          $     $ (1,086,135)  $
                                  1,637,188   2,552                 1,942,045
Gas purchases       —             1,267,117  —        (843,176)      423,941
Operating expenses  332,588       87,298     163      (240,571)      179,478
General &
administrative      107,604       24,482     181      (2,388)        129,879
expenses
Depreciation,
depletion &         568,654       32,499     959      —              602,112
amortization
Impairment of
natural gas and oil 1,377,364     —          —        —              1,377,364
properties
Taxes, other than   41,967        9,194      (7)      —              51,154
income taxes
Operating Income    $             $         $     $        $ 
(Loss)              (1,039,737)   216,598    1,256  —             (821,883)
Capital Investments $ 1,450,569   $         $     $        $
^(1)                              105,576   30,486   —             1,586,631
Nine Months Ending September 30, 2011
Revenues            $ 1,561,658   $          $     $ (1,539,011)  $
                                  2,183,708   2,401                 2,208,756
Gas purchases       —             1,862,736  —        (1,317,218)    545,518
Operating expenses  308,665       86,478     53       (219,433)      175,763
General &
administrative      96,667        18,449     199      (2,360)        112,955
expenses
Depreciation,
depletion &         486,130       27,170     880      —              514,180
amortization
Taxes, other than   40,898        8,477      54       —              49,429
income taxes
Operating Income    $  629,298  $         $     $        $ 
                                  180,398    1,215   —            810,911
Capital Investments $ 1,365,434   $         $     $        $
^(1)                              137,998   53,506    —            1,556,938

         Capital investments include decreases of $56.2 million and $60.9
         million for the three-month periods ended September 30, 2012 and
^(1)     2011, respectively, and decreases of $40.7 million and $3.0 million
         for the nine-month periods ended September 30, 2012 and 2011,
         respectively, relating to the change in accrued expenditures between
         periods.

SOURCE Southwestern Energy Company

Website: http://www.swn.com
Contact: R. Craig Owen, Senior Vice President, and Chief Financial Officer,
+1-281-618-2808 or Brad D. Sylvester, CFA, Vice President, Investor Relations,
+1-281-618-4897