By Maria Armental
Southwestern Energy Co. (SWN) is cutting its planned 2015
investment spending amid lower gas and oil prices but said it
expects production to increase about 23%.
The announcement came as the company reported its profit in the
fourth quarter more than doubled as production increases offset
lower prices.
The Houston company said it plans to spend $2.02 billion in
capital projects in 2015, 17% less than in 2014, and down 22.5%
from its December projection of $2.6 billion.
It projects production to increase to between 940 billions of
cubic feet equivalent and 955 billions of cubic feet
equivalent.
Those figures exclude the impact from its operations in East
Texas and Arkoma, which Southwest expects to sell in the second
quarter.
Like other natural-gas producers, Southwestern has been hurt by
volatile natural-gas prices, which have begun to rebound.
An unseasonably cool summer lowered demand, allowing producers
to stockpile gas, pushing prices down. At one point, prices slumped
to $3.608 per million British thermal units, the lowest price since
November 2013.
In the fourth-quarter period, gas and oil production rose 14%
from the year-ago period.
The average realized price, including hedging effects, fell to
$3.52 from $3.68 for natural gas, while oil prices fell to $60.51 a
barrel from $98.41.
Gas sales rose 4.2% to $672 million, while oil sales rose to $9
million from $4 million a year earlier.
Overall, Southwestern reported a profit of $312 million, or 88
cents a share, up from $144 million, or 41 cents a share. Excluding
gains on derivative contracts that haven't been settled and other
items, profit fell to 52 cents from 54 cents a year ago.
Operating revenue rose 6% to $962 billion.
Analysts had projected profit of 50 cents a share on $946.4
million in revenue.
Shares fell 0.76% to $26.15 in recent after-hours trading.
Through Thursday's closing, shares were down 38% on year.
Write to Maria Armental at maria.armental@wsj.com
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