Southwestern Energy Falls on Brown Dense Results: Dallas Mover
Southwestern Energy Co. (SWN), the biggest natural-gas producer in Arkansas’ Fayetteville Shale, fell the most in more than three months after results from a new oil project didn’t meet some expectations.
The company provided an update after yesterday’s market close on its work in the Lower Smackover Brown Dense formation of Arkansas and Louisiana. Southwestern said its second well in the area had a top 24-hour producing rate of 301 barrels of oil a day and 1.7 million cubic feet of gas a day.
“It’s not up to market expectations of what it could have been,” said Scott Hanold, an analyst at RBC Capital Markets in Minneapolis, who has an outperform, or buy, rating on Southwestern shares and owns none.
It’s too early to say if the project has economic viability, Hanold said. Well results show potential, he said, while more work needs to be done.
Southwestern is exploring for oil in the Brown Dense and in the Denver-Julesburg Basin in Colorado as gas futures have touched 10-year lows this year. The company’s goal is to understand the potential at Brown Dense and in Colorado by the end of the year, Chief Executive Officer Steve Mueller said on a conference call today.
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