I work for a competitor, and discussion at our meeting today was swn will be filing for bankruptcy within the coming months.
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Only a moron would think SWN will be bankrupt in the coming months and the only "oil companies" that think they will be bankrupt soon are "oil companies" who will be bankrupt even sooner because they are financial idiots. SWN doesn't even owe on a significant portion of their debt until 2018. AND they have 1.9 Billion in credit remaining. AND they still have the option of offering more shares to raise cash. AND we are entering a La Niña weather pattern which gives an 80-90% chance of a harsh 2016-2017 winter as US natural gas production begins to decline.
Sure, SWN is pretty beaten up but they can handle it for another year or two before they need to start worrying about bankruptcy. The people posting about bankruptcy soon have offered nothing to support their opinions. These people are one of two things, internet trolls or complete morons.
I agree with this...other oil companies are saying bankruptcy for swn soon
But swn is so transparent and honest with their employees.
Those folks who are let go will not get the morning email. That is because when they show up for work, they will not have access to emails anymore and they will be escorted to the nearest exit.
And how do you think they will try to combat those low prices? There will be another round of layoffs. If you think SWN gives two sh--s about the lower level employees you are wrong. They will take care of all the high level managers and SVP's, this we all ready know. Wv and NE Pa will be taking the brunt of this cut, so buckle up boys and gals. Don't expect SWN to be honest about things with you, they probably will just send another email first thing in the morning letting you know today is the day.
Their current budget is based on $2.35. Every $0.25 difference in gas price means $200 million difference in their income. So if the gas price stays at the current level for the rest of the year, the cash burning rate will be closer to $400 million. As to the lenders, if the gas price stays at current level until year end, they will cut back for sure. Besides, if there are no drilling this year, production will be further lowered next year. So my guess is that SWN might be safe this year, but will be hard to tell for 2017. All depending on gas price.
Yeah, I don't see bankruptcy until 2018. This assumes that 1) we continue to be in a sustained low-gas environment (below $2.50), 2) SWN cannot renegotiate their 2018 debt maturities.
But there is a caveat. If the lenders cut back on the 1.9 bln they have left on their revolver then I could see hard times coming quick. The 1.9 bln will get them through their anticipated cash burn of about 150-200 million per year (if you look at gas prices and their estimated guidance)
I wouldn't say he's an idiot SWN isn't in a very good spot, financially things look terrible and bankruptcy is very possible. That or a huge asset sale, problem being SWN's assets aren't very great and their best one in WV they extremely overpaid for .
You and the company you work for are idiots. SWN isn't in danger of going bankrupt in the coming months. Now, in the coming years? Likely if gas prices don't improve.