to see the biggest problem here. It starts at the top!
20 replies (most recent on top)
" 1Q17 average realized price for SWN’s natural gas production was $2.73 per Mcf. That means that the commodity hedging activities made SWN’s average realized natural gas price fall ~6.0%." We reported that we lost $30MM on hedges 1st qtr.
If your drilling for the stock price -- please STOP!! Stock is down 45 % since January.
I know debt covenants probably require some production...
-- but man , don't think it can be handled any worse
Gotta keep drlling for stock/debt..and because our assets are rapidly and steeply declining..must keep drilling even with bad economics. Makes no sense.
Wow, long gone from swn-- just come for the nostalgia of irrational economic games to keep executive jobs. Thanks for providing it !
This does explain why swn is drilling into a low and declining natural gas market ... I think in a year or so we could see an uplift ; but why "give away" gas now
On drilling/completion we need to focus on REAL expenses and REAL gas prices at wellhead (with huge Nymex differentials) to run economics. Running models with NYMEX at $3.50 and $4.00 is not realistic and REAL reserves and risks. Don't know who made call. True economics makes lots of our acreage uneconomic.
Flip a coin, magic 8-ball, dart board or rock, paper scissors?
Which of the above does Way use to guide his decision making this week?
I think and correct me if I'm wrong or add any additional thoughts on this comment I'm posting.
I believe SWN should finish out drilling as quickly as possible in it's Northeast Appalachia acreage. Since it's only got like several hundred wells left to drill from what is shown on the powerpoint for investors. Then redistribute that capital spent on drilled wells and invest more into Southwest Appalachia and the Fayetteville. Though the Fayetteville is not as productive, the wells on average are less expensive to drill and it still has a lot of room left to grow. It is pretty massive at almost 920,000 acres. I think it can still make a great foothold/stronghold for the company.
A good CEO does not have yes men but rathet a great teamWay not so young. Market/players focus on shale plays has changed the business and what is a successful business model.
Remember, no one who is fairly young as a CEO can look back later in life and say they didn't make mistakes. Unfortunately, people and the company were impacted in the meantime.
I'll admit that was me with the analysis... I got back into a position in the business and have seen much of what I laid out be the course of action .... Except the last 2 points. I really intended it to be a positive message ( yes last two were probably unneeded). No one , no company stays the same in this business... I would say its possible to survive, just tough and smart decisions and diligent action and execution by all is needed
BTW, does anyone know what happened to our acreage in the Bakken, the Paradox Basin and acreage position leased in Leon County, Tx. Saw at one time we were marketing a couple of these through Negotiated sales package with Oil and Gas Asset Clearinghouse. Did any of this sale?
We should watch and see if BHP Billiton is able to sale their Fayetteville. We CANNOT sale Fayetteville unless the sales price pays off oursecured banking facility.
Definitely can get leaner getting rid of V+ and a couple other pricey "projects".
Sounds like the guy below me with the analysis is pissed that he isn't upper management or the CEO or some other executive. Probably just trying to get a rise out of people. That's about all it looks like!
Great analysis. We need to start immediately. Way can't do it and only interested in keeping his CEO title. He has said as much to all of us.
That was me, sorry numbering got off!
I would think. The management would have to
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restructure "balance sheet"-- push some debt out again, convert other debt to equity( would devastate stock price, but necessary), sell something ( probably fayetteville).
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reduce costs -- people, building ( if that matters), processes- a "do the same with less mentality" an example- cut unneeded IT initiatives, corp jet leases, water and methane initiatives could be cut and supported in outside consortiums ....
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obviously fayetteville office staff, "v+" staff all to be gone , along with some IT
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remove "exploration/ new ventures" -- just nothing there at least at senior levels.
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then focus on the two Pennsylvanian plays -- cut costs, only drill high value wells
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then sell to Hess, eqt, marathon, chevron , Cabot
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write the history of what was and could have been
Pretty reasonable assessment BUT finnish. What would be objectives of new management? (Pay off debt, sale some assets and shrink company..smaller, leaner and maybe a real E & P) Why would new management come to sinking ship?
Look with the results in hand , the playbook for handling this is is clear, and in motion.
1 Drastic large scale showy move to show your doing something ( 2016- layoffs, re-org, capital restructuring)
2 Results don't play out so the next layer of management starts shuffling ( SVPs, EVP Land etc etc )
Next Step
3 Open and Obvious - "targets and goals" from board that Way will try and meet is totally incapable of achieving ( I expect in fall)
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Way - announces retirement/ or "leaves to pursue other interests' ( Jan 18)
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Outside CEO is brought in at that time ( Jan 18)
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HE takes 30 days to 'evaluate the team" (Feb 18)
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Other retirements - bergeron, vick, gieger leaves ( 4th 17 and into march 18)
8 new upper management brought in ( april 18)
9 Another few rounds of layoffs ( probably a preemptive one in Jan 18, then April 18, and possibly Aug 18)
(rinse and repeat)
---just watch
Way telling us to leave Way out it. I love it!
You are delusional if you believe he is not a big negative on the current status of the company. If it wasn't for WV now, where would we be drilling next year? Yes, paid too much but the market fell out from underneath the entire industry. It is Way's job to figure it out and he cannot.
You'll have an even bigger problem when I'm on top
Really corporate culture proceeded him and bad business decisions along with debt and lack of diversification oil/gas and/or wrong niche Fayetteville for too long. Then buying into other play area and paying too much Kinda not helpful to keep discussing Way.
He gets paid and keeps his job in the top seat. What's wrong with that?