Thread regarding Southwestern Energy Co. layoffs

No answers and continued spin. Strategy work never ends. Way keeps shaking the Magic 8-ball asking it what to do. He restarts strategy work over when he gets the "Don't count on it" and "Cannot predict now" responses. Really, how many times and how many weeks does 5 need to spend on this crap? Keep networking and looking for opportunities! I am and know we are going in a circle at best as we continue our slow death spiral.

Think about it - we can't issue debt to buy anything, we pay over $200 mil per year in interest, can't issue equity because it's already in the toilet, can't sell an asset for very much and vast majority of existing assets do not work at below $3 prices (maybe enough to keep a rig busy in NE PA and WV for a year). Two rigs worth of drilling can't produce enough cash to overcome our interest and G&A. By the way, the 1.3 PVI does NOT include any interest or G&A. Keep that in mind when you hear him babbling about all the wells we have at 1.3 PVI. Don't believe it. What solution has Way provided to us? Be energetic? Use a lot of adjectives when we talk about action? Know your passion? Magic 8-ball is his source!

How is that other joker on 5 able to justify the numerous cross country relos handed out like Halloween candy when it does nothing to strengthen the organization from a talent standpoint and secures certain career dead ends (literally). Just ridiculously undisciplined spending when times are dire (again).

I disagree. The cash that we have is only there because our credit s---s. We have to draw on the bank line of credit and keep the cash there. Our liquidity is worse than early 2016. We went from a $2 billion revolver to a $1.2 billion secured agreement that has to be utilized (that is why the cash shows up). This will have to be redone by late 2018 and guess what - we have a much depleted reserve base to provide credit upon. Hedge position is better, but those positions don't really provide economics for our drilling. It provides some short-term safety from a credit crisis.

We need to put lipstick on this pig and see if someone will offer $6 to end the misery. Yes, that seems low, but is a very healthy premium for a low growth (or more realistically, a no growth/decline profile). There was a way out to reposition us when we had the chance in 2016 or even through the first part of 2017, but the joker on 5 has no idea what he is doing. Just ask him - let him drivel on for a short bit, dig in on the softballs he throws back and it will be apparent to everyone that he is full of it (and himself).

A couple years ago prices had fallen below $2/mcf, SWN had ZERO gas hedged, essentially no cash on hand and was facing a legitimate threat of not being able to fulfill debt obligations. A much more dire situation than today. Today while prices are struggling, SWN has a lot of cash on hand, gas is hedged and debt obligations have been pushed back.

Layoffs aren’t absolutely necessary at this point and other than that the warn act can be avoided with a reduction of less than 33%, the original post is spot on.

Layoffs don’t come without a big cost.

Leaving and going to a company with low debt, lean overhead that is not top heavy and with a balanced oil/gas portfolio or more weighted to oil is BEST. Lots of smaller niche companies arising still funded by equity fund money. Network and be proactive in your job search. Good LUCK to all.

Perfectly explains how a couple of years ago they laid off 100+ people, then the following January, laid off 40% of the company. When the company doesn't have much to look forward to, layoffs are one of the easiest ways to save money long term. WARN act only applies if certain percentage (~30%) of the employees are laid off from a single location. They could easily lay off 1/4 of the company, spread them between offices, and avoid the WARN act. Severance pay isn't mandatory either. Hopefully, the new year brings new job opportunities for the handful of talented people at SWN, if they are smart enough to leave.