Summary

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	5	+= Background =
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7		-==== Background ====
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9	9	Southwestern Energy Company (including its subsidiaries, collectively, is an independent energy company engaged in natural gas, oil and NGL exploration, development and production, which the company refer to as “E&P.” Southwestern Energy Co is also focused on creating and capturing additional value through its natural gas gathering and marketing businesses, which the company refer to as “Midstream.” The company conduct most of its businesses through subsidiaries, and the company currently operate exclusively in the United States.
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11	11	E&P. The company's primary business is the exploration for and production of natural gas, oil and NGLs, with its current operations focused on the development of unconventional natural gas reservoirs located in Pennsylvania, West Virginia and Arkansas. The company's operations in northeast Pennsylvania, which the company refer to as “Northeast Appalachia,” are primarily focused on the unconventional natural gas reservoir known as the Marcellus Shale. The company's operations in West Virginia and southwest Pennsylvania, which the company refer to as “Southwest Appalachia,” are focused on the Marcellus Shale, the Utica and the Upper Devonian unconventional natural gas and oil reservoirs. The company's operations in Arkansas are primarily focused on an unconventional natural gas reservoir known as the Fayetteville Shale. Southwestern Energy Co has smaller holdings in Colorado and Louisiana, along with additional small acreage leased for potential testing for new resources. The company also have drilling rigs located in Pennsylvania, West Virginia and Arkansas, and the company provide certain oilfield products and services, principally serving its E&P operations.
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13	13	Midstream. Through its affiliated midstream subsidiaries, the company engage in natural gas gathering activities in Arkansas and Louisiana. These activities primarily support its E&P operations and generate revenue from fees associated with the gathering of natural gas. The company's marketing activities capture opportunities that arise through the marketing and transportation of natural gas, oil, and NGLs produced in its E&P operations.
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15		-==== Recent Financial and Operating Results ====
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17	17	Significant second quarter 2018 operating and financial results include:
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28	28	* Excluding the effect of derivatives, realized NGL price of $15.37 and realized oil price of $60.15 increased 37% and 48%, respectively, from the same period in 2017, while realized natural gas prices of $1.99 decreased 15%.
29	29	* E&P segment invested $396 million in capital: drilling 37 wells, completing 56 wells and placing 45 wells to sales.
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31		-==== Outlook ====
	29	+== Outlook ==
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33	33	During the first half of 2018, the company took steps to identify and implement structural, process and organizational changes to reduce costs. In June 2018, the company announced a reduction in workforce that is expected to improve process efficiencies. The company also identified additional non-personnel related savings opportunities that should further decrease costs as they are implemented through early 2019. These changes, coupled with the interest savings related to the repayment of the term loan associated with the 2016 credit facility, its new revolving credit facility and recent credit upgrades, are expected to result in a lower cost structure.
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37	37	In the second half of 2018, the company expect to continue to exercise capital discipline by aligning its 2018 capital investing program with its expected cash flow from operations, net of changes in working capital. The company remain committed to its strategy of investing no more than the cash the company generate and repositioning its portfolio by sharpening its focus on its highest return assets. This includes its continued pursuit of strategic alternatives for its Fayetteville Shale E&P and related Midstream gathering assets. The company plan on utilizing the funds realized from the foregoing to reduce debt, supplement Appalachian Basin development, potentially return capital to shareholders, and for general corporate purposes.
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39		-==== LIQUIDITY AND CAPITAL RESOURCES ====
	37	+= Liquidity and Capital Resources =
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41	41	The company depend on funds generated from its operations, its revolving credit facility and capital markets as its primary sources of liquidity. Although the company currently have approximately $1.5 billion of capacity on its revolving credit facility, the company continue to be committed to its capital discipline strategy of investing within its cash flow from operations net of changes in working capital for the fiscal year 2018, supplemented by $40 million in 2017 cash flow carried forward into 2018.
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49	49	Due to these above factors, Southwestern Energy Co is unable to forecast with certainty its future level of cash flow from operations. Accordingly, the company expect to adjust its discretionary uses of cash depending upon available cash flow. Further, the company may from time to time seek to retire, rearrange or amend some or all of its outstanding debt or debt agreements through cash purchases, and/or exchanges, open market purchases, privately negotiated transactions, tender offers or otherwise. Such transactions, if any, will depend on prevailing market conditions, its liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
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