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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) February 10, 1997
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SOUTHWESTERN ENERGY COMPANY
(Exact name of registrant as specified in its charter)
Arkansas 1 - 8246 71-0205415
(State of incorporation (Commission (I.R.S. Employer
or organization) File Number) Identification No.)
1083 Sain Street, P.O. Box 1408, Fayetteville, Arkansas 72702-1408
(Address of principal executive offices, including zip code)
(501) 521-1141
(Registrant's telephone number, including area code)
No Change
(Former name, former address and former fiscal year; if changed
since last report)
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<PAGE>
Item 5.
Other Events
Reference is made to the press release issued February 10, 1997, filed
herewith as Exhibit 1, announcing the operating results of the registrant for
1996.
Item 7.(c)
Exhibits Reference
(1) Press release dated February 10, 1997 p. 3 - 7
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SOUTHWESTERN ENERGY COMPANY
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(Registrant)
DATE: February 11, 1997 BY: /s/ GREG D. KERLEY
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Greg D. Kerley
Vice President -- Treasurer and
Secretary
NEWS RELEASE For Further Information Contact:
Stanley D. Green
Executive Vice President - Finance
and Corporate Development
(501) 521-1141
SOUTHWESTERN ENERGY COMPANY ANNOUNCES 1996 RESULTS
FAYETTEVILLE, ARKANSAS - February 10, 1997...Southwestern Energy Company
(NYSE:SWN) today reported 1996 net income of $19.2 million, or $.78 per share,
compared to $11.2 million, or $.45 per share, in 1995. Revenues in 1996 were
$189.2 million compared to $153.1 million in 1995. For the quarter ended
December 31, 1996, net income was $6.8 million, or $.28 per share, compared to
$4.8 million, or $.19 per share, for the same period in 1995. Revenues for the
fourth quarter of 1996 were $60.8 million, compared to $45.3 million for the
fourth quarter of 1995.
Southwestern also announced that it added 87.6 billion cubic feet (Bcf)
equivalent oil and gas reserves from drilling and from acquisitions of producing
properties in 1996. After production and downward revisions of previous
estimates, the Company's oil and gas reserves were 346.9 Bcfe at December 31,
1996, up from 307.8 Bcfe at the end of 1995.
Charles E. Scharlau, Chairman and Chief Executive Officer of Southwestern,
said that the year-to-year improvement in operating results was evident in both
of the Company's major business segments: "Our exploration and production
segment benefited from improved natural gas prices while our gas distribution
segment had increased deliveries to end-use customers due to colder weather and
customer growth."
Gas, Oil Production Higher
Gas and oil production in 1996 was 37.1 Bcfe, up from 35.9 Bcfe in 1995.
For the quarter ended December 31, 1996, gas and oil production was 9.6 Bcfe,
compared to 8.8 Bcfe for the same period in 1995.
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<PAGE>
Gas production in 1996 totaled 34.8 Bcf, up from 34.5 Bcf in 1995. For the
quarter ended December 31, 1996, gas production was 8.7 Bcf, compared to 8.4 Bcf
for the same period in 1995. Sales to Southwestern's own utility systems
increased to 16.3 Bcf during 1996, compared to 13.9 Bcf for the same period in
1995. The colder weather in early 1996 resulted in a higher level of withdrawals
from the utility's storage facilities and thus increased its demand for supplies
to replenish those facilities. The increase in sales to the utility were
partially offset by a reduction in sales to unaffiliated purchasers. Sales to
unaffiliated purchasers were 18.5 Bcf in 1996, compared to 20.6 Bcf for the same
period in 1995.
Oil production during 1996 totaled 391,000 barrels, up from 229,000 barrels
in 1995. The increase was due primarily to producing properties acquired during
1995 and 1996.
Southwestern received an average price of $2.26 per thousand cubic feet
(Mcf) for its gas production during 1996, up from $1.72 per Mcf in 1995. The
Company's average sales price for oil production in 1996 was $21.21 per barrel,
up from $17.15 per barrel in 1995.
Property Acquisitions Increase Reserves
The Company owned total oil and gas reserves of 346.9 Bcfe at December 31,
1996, an increase of approximately 13% from 307.8 Bcfe at the end of 1995.
Southwestern's natural gas reserve additions for 1996 were 49.1 Bcf, including
16.4 Bcf from drilling and 32.7 Bcf from purchases of reserves in place. After
production of 34.8 Bcf and net downward revisions of 11.7 Bcf, the Company owned
297.5 Bcf of proved natural gas reserves at December 31, 1996, up from 294.9 Bcf
at the end of 1995.
The Company added 6,350,000 barrels of oil reserves during 1996 through
producing property acquisitions and 61,000 barrels from drilling. After
production of 391,000 barrels, net upward revisions of 74,000 barrels, and
dispositions of 8,000 barrels, the Company's proved oil reserves were 8,238,000
barrels at the end of 1996, up from 2,152,000 barrels at the end of 1995.
Utility Deliveries Up 9%, Reflect Colder Weather and Strong Customer Growth
Deliveries of Southwestern's utility systems during 1996 to sales and
end-use transportation customers reflected continued strong customer growth and
weather which was 5%
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<PAGE>
colder than normal and 6% colder than in 1995. The Company's utility systems
delivered 35.4 Bcf to these customers during 1996, up from 32.6 Bcf in 1995.
Growth in the average number of utility customers was approximately 2% in 1996.
The growth was the result of continued strong economic development in the
Company's service territories, particularly in northwest Arkansas.
The Company's average utility sales rate increased to $4.57 per Mcf during
1996, up from $4.12 per Mcf in 1995. The increase reflected higher prices paid
for purchases of natural gas which are passed through to customers under
automatic adjustment clauses.
Capital Spending Up In 1996; 1997 Budget 28% Lower
Southwestern also reported total capital spending of $124.9 million in
1996 consisting of $110.3 million for exploration and production, $12.8 million
for utility system improvements and $1.8 million for other purposes. The
exploration and production expenditures for 1996 included $45.8 million for
producing property acquisitions. Capital spending budgeted for 1997 totals $90.3
million, a decrease of 28% from actual spending in 1996. Spending plans for 1997
include $75.4 million for exploration and production, $12.3 million for utility
system improvements and $2.6 million for other purposes. The exploration and
production spending budget includes $20.0 million for producing property
acquisitions.
"A substantial part of our exploration and production capital spending in
1996 was directed toward the acquisition of 3-D seismic data and leasehold
acreage for major projects in south Louisiana and along the Texas Gulf Coast,"
said Scharlau. "These costs didn't add reserves in 1996, but have helped us
build a significant inventory of prospects which we have begun to drill in
1997."
Southwestern is a diversified natural gas company whose wholly-owned
subsidiaries are engaged in gas and oil exploration and production, natural gas
gathering, transmission, and marketing, and natural gas distribution.
# # #
Financial Summary Follows
<PAGE>
Page 1 of 2
SOUTHWESTERN ENERGY COMPANY
AND SUBSIDIARIES
<TABLE>
<CAPTION>
Statements of Income (Unaudited)
Three Months Twelve Months
Periods Ended December 31 1996 1995 1996 1995
- --------------------------------------------------------------------------------
($ in thousands, except per share amounts)
<S> <C> <C> <C> <C>
Operating Revenues
Gas sales $ 55,725 $ 42,402 $174,738 $142,455
Oil sales 3,726 1,094 8,294 3,924
Gas transportation 998 1,158 4,210 4,964
Other 359 610 1,984 1,768
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60,808 45,264 189,226 153,111
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Operating Costs and Expenses
Purchased gas costs 17,244 12,769 42,851 37,133
Operating and general 14,406 12,193 50,509 44,436
Depreciation, depletion
and amortization 11,349 8,823 42,394 35,992
Taxes, other than income taxes 1,664 1,263 5,476 4,362
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44,663 35,048 141,230 121,923
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Operating Income 16,145 10,216 47,996 31,188
Interest Expense 3,947 3,127 13,044 11,167
Other Income (Expense) (1,321) 1,191 (4,015) (1,227)
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Income Before Provision
for Income Taxes 10,877 8,280 30,937 18,794
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Provision for Income Taxes
Current (4,859) (4,175) (5,569) (4,908)
Deferred 8,887 7,386 17,320 12,167
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4,028 3,211 11,751 7,259
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Income Before Extraordinary Item 6,849 5,069 19,186 11,535
Extraordinary Loss Due to Early
Retirement of Long-Term Debt
(Net of $185 Tax Benefit) - (295) - (295)
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Net Income $ 6,849 $ 4,774 $ 19,186 $ 11,240
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Earnings Per Share
Income Before Extraordinary Item $0.28 $0.20 $0.78 $0.46
Extraordinary Loss Due to Early
Retirement of Long-Term Debt
(Net of $185 Tax Benefit) - (0.01) - (0.01)
- --------------------------------------------------------------------------------
Net Income $0.28 $0.19 $0.78 $0.45
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Weighted Average Common
Shares Outstanding 24,710,827 24,694,630 24,705,256 25,130,781
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Cash Flows From Operations
(Before Working Capital Changes) $28,455 $19,154 $ 82,958 $ 60,375
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</TABLE>
<PAGE>
Page 2 of 2
SOUTHWESTERN ENERGY COMPANY
AND SUBSIDIARIES
<TABLE>
<CAPTION>
Operating Statistics
Three Months Twelve Months
Periods Ended December 31 1996 1995 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gas Production (Bcf)
Affiliated sales 4.3 4.4 16.3 13.9
Unaffiliated sales 4.4 4.0 18.5 20.6
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Total 8.7 8.4 34.8 34.5
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Average price per Mcf $2.45 $1.92 $2.26 $1.72
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Oil production (MBbls) 162 65 391 229
Average price per Bbl $23.05 $16.90 $21.21 $17.15
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Distribution deliveries (Bcf):
End-use customers 10.8 10.5 35.4 32.6
Off-system deliveries 0.4 1.3 3.6 9.8
Average sales rate $5.00 $3.89 $4.57 $4.12
Average number of customers 170,327 166,155 168,603 164,705
Degree days 1,674 1,749 4,627 4,376
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Capital Expenditures By Segment
Exploration and production $ 45,215 $ 27,574 $110,352 $ 82,237
Gas distribution 3,293 5,620 12,752 18,523
Other 994 141 1,809 866
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$ 49,502 $ 33,335 $124,913 $101,626
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Condensed Balance Sheets (Unaudited)
Current assets $ 72,933 $ 63,896
Investments 6,557 9,114
Property, plant and equipment, net 568,702 485,819
Other assets 11,998 10,264
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Total assets $660,190 $569,093
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Current liabilities $ 41,822 $ 45,410
Long-term debt, less current maturities 275,214 207,757
Deferred income taxes 130,686 117,564
Other liabilities 4,527 3,858
Shareholders' equity 207,941 194,504
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Total liabilities and shareholders' equity $660,190 $569,093
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</TABLE>
