March 10, 2016 – The Street
Stressed Out: Southwestern Energy Has Only One Option to Save Itself
By: Carleton English
How long will it be until Southwestern Energy (SWN) issues equity to save itself?
On Tuesday, Fitch lowered its rating on the Texas-based oil and gas producer to non-investment grade B+ from BBB- and said that weak natural gas prices put pressure on the company's ability to generate liquidity.
Read the full article here: http://realmoney.thestreet.com/articles/03/10/2016/stressed-out-southwestern-energy-has-only-one-option-save-itself
To counter low prices, companies such as Southwestern Energy have had to get creative.
"Producers continue to adjust to reduced capex budgets and low prices by shifting their drilling focus to high-yield drilling sites and otherwise improving efficiencies and lowering costs in order to produce more volume with fewer dollars," Sheetal Nasta of RBN Energy wrote in a report on Wednesday.
Indeed, Southwestern Energy said it is focusing more on its Marcellus and Utica properties. It is worth noting that the assets may be high producing but they came at a cost: Southwestern Energy paid Chesapeake Energy (CHK) $5.4 billion -- through a mix of debt and equity -- in 2014 to acquire them. While Fitch characterized Southwestern Energy's Marcellus and Utica acreage positions as "favorable," it noted that the leveraged acquisition added to the company's "heightened credit risk."
