SWN(US:SWN)2023-02-22 16:00Production and Revenue - Average net daily production increased by 40% to 4,748 MMcfe/day in 2022 from 3,397 MMcfe/day in 2021, driven by a 547 Bcfe increase in Haynesville production [125]. - Total operating revenues for 2022 were $14,521 million, up from $6,189 million in 2021, marking an increase of 134.5% [144]. - Average realized natural gas price, excluding derivatives, increased to $5.98 per Mcf in 2022 from $3.31 per Mcf in 2021, reflecting a 80.7% increase [126]. - Average realized oil price, excluding derivatives, increased to $86.95 per Bbl in 2022 from $58.80 per Bbl in 2021, a rise of 47.8% [126]. - The average realized NGL price, including derivatives, was $26.52 per Bbl in 2022, compared to $18.20 per Bbl in 2021, an increase of 46% [126]. - Marketing revenues rose in 2022 due to a 60% increase in the price received for marketed volumes and a 724 Bcfe increase in marketed volumes [147]. - Marketing operating income increased by $49 million in 2022 compared to 2021, driven by a $51 million increase in marketing margin [147]. Capital Investment and Financial Commitments - E&P capital investing rose by 98% in 2022 compared to the previous year, primarily due to increased capital investment from the Indigo and GEPH mergers and inflation impacts [125]. - As of December 31, 2022, the company had natural gas delivery commitments of 1,273 Bcf for 2023, which is well below expected production levels [134]. - The company had total financial protection on future production of 998 Bcfe for 2023, ensuring cash flow stability [129]. - As of December 31, 2022, the company's obligations for demand and similar charges totaled approximately $10.4 billion, with $1,326 million related to future pipeline projects [149]. - The company’s current capital allocation strategy focuses on operating within cash flow from operations, net of changes in working capital [215]. Regulatory and Environmental Challenges - The EPA proposed a rule to reduce methane emissions from oil and gas sources, which could increase operational costs and restrict production capabilities [167]. - The Inflation Reduction Act of 2022 includes a Methane Emissions and Waste Reduction Incentive Program, potentially increasing costs for the oil and gas industry [177]. - The U.S. aims to reduce greenhouse gas emissions by 50-52% below 2005 levels by 2030, impacting the operational landscape for oil and gas companies [180]. - The SEC proposed a rule for mandatory climate-related disclosures, which may increase compliance costs and operational complexities for the company [178]. - The company is subject to various federal and state regulations regarding hydraulic fracturing, which could lead to increased costs and operational delays [174]. - The designation of endangered species could restrict drilling activities and increase operational costs due to compliance requirements [169]. - The company recognizes the need for responsible energy development in light of stakeholder concerns about climate change and regulatory impacts [181]. - Increased regulatory scrutiny on hydraulic fracturing may lead to operational delays and higher compliance costs, affecting financial performance [173]. Operational Performance and Workforce - The company drilled 138 wells and completed 139 wells in 2022, with 69 wells in progress at year-end [125]. - As of December 31, 2022, the company had 1,118 total employees, representing a 19% increase compared to year-end 2021 [190]. - Employee engagement is measured through a bi-annual survey administered by a third-party vendor, with action plans implemented based on feedback [187]. - The company focuses on minimizing workplace incidents and complies with occupational health and safety laws, with leaders held accountable for HSE performance [189]. Market and Competitive Landscape - One customer accounted for 17% of revenues in 2022, up from 12% in 2021, indicating increased reliance on key customers [136]. - The company faces intense competition in the oil and natural gas industry, affecting its ability to market products and secure necessary services [230]. - Changes in U.S. tax laws could adversely affect the company's financial position and future profitability [232]. - The company may experience reduced availability of personnel and services critical to its operations due to pandemics like COVID-19 [256]. Financial Position and Risks - The company had $4.4 billion of debt outstanding as of December 31, 2022, with senior notes maturing from 2025 to 2032 [207]. - The company must maintain a minimum current ratio of no less than 1.00 to 1.00, and a maximum total net leverage ratio of not greater than 4.00 to 1.00 [261]. - The company may need to sell significant assets if it cannot meet its financial obligations due to a reduction in its borrowing base [262]. - The company had total indebtedness of $4.4 billion as of December 31, 2022 [259]. - The company is subject to increased operating costs due to climate change regulations, which could reduce demand for its products [264]. Cybersecurity and Operational Disruptions - The company has not experienced any material losses or interruptions related to cyber-attacks to date, but future incidents could lead to significant operational disruptions and financial losses [241]. - The company is increasingly dependent on digital technologies, which heightens the risk of cyber incidents that could disrupt critical business operations [235]. Environmental Compliance and Liabilities - The company is subject to various environmental laws and regulations, which may impose administrative, civil, and criminal penalties for non-compliance [158]. - Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), the company may face strict liability for hazardous substance releases, potentially leading to significant cleanup costs [160]. - The Resource Conservation and Recovery Act (RCRA) currently excludes certain oil and gas exploration wastes from hazardous waste regulations, but potential legislative changes could increase operational costs [161]. - The Clean Water Act (CWA) requires permits for discharging pollutants into U.S. waters, with penalties for unauthorized discharges, impacting operational compliance costs [162]. - The Oil Pollution Act (OPA) assigns liability for oil spill cleanup costs, with oil accounting for 2% of total production in 2022, down from 4% in 2020 [165].