So apparently there was a call today and I haven’t seen any comments or insight....
7 replies (most recent on top)
Right and that’s pretty much my point. I don’t see any circumstance where swn has any sort of future .
I suppose some element of it could be part of a combined company’s heritage .. but overall it’s gone.
It’s just hard to understand; 15 years ago the Fayetteville was new and dynamic, there were other properties things felt dynamic and no limits . Now just a dull, shrinking entity.
SWN is becoming a historic gas company, something you can boast to your grandchildren; they will definitely pause X-Box to hear your repeated stories about SWN. “Did I ever tell you about the time I lost a lease at SWN . . .”
What you’re missing is once the balance sheet is cleaned up, the rest of SWN will be sold or taken over. SWN didn’t bring in these new VPs for anything but to sell the company.
Problem I see with that scenario is that about 80 MM$ this quarter in cash flow would go away -- even allowing for some minimal capital that wouldn't be spent . So approximately $300 million of the 1.2 billion in cash flow would go away. That would leave $900 million for 2019 development, or maybe a little less. This would result in production below current projections , and the infamous death spiral starts. CC said there were 7-8 years of locations left ( as I recall from call) , so again, this would eventually limit the ability to roll the debt forward against a decreasing reserve base., second death spiral driver.
Debt was paid down to 3.5 B, depending what the Fayetteville fetches, debt could look very manageable by year’s end.
I can’t tell About the tone of the previous post but objectively my take always were
Actually have outperformed guidance on production and as currently projected will have a slight cash flow positive late in year
Drop to 2 rigs and 2 frac crews in 4th quarter
Upper Devonian well, good results
No comments other than a comment that no comment will be made in Fayetteville sale
Discussion on tioga well performance was good and a j v. added some length to locations
— as a 2016 layoff victim, no a fan of Way , but the quarter was decent I think ... I continue to be unclear about the long range growth of company, however.
I was most interested in Fayetteville and nothing there, I haven’t sorted numbers, but I actually believe the positive cash flow is due to not selling Fayetteville , but leaves the debt bomb out there .. it can be extended .. but will remains weight
Basically SWN is successfully executing the 2018 business plan to the “T”. Actually slightly outperforming original models such that they will have a small amount of unspent/un-invested cash flow that will be applied to outstanding debt. They are looking strong at this point and Momentum is indeed building. No need to sell Fayetteville for anything less than 1.5B, because they will achieve 2.0X debt to Ebitda in a matter of years without sale.