Southwestern Energy Company Q4 2008 Earnings Call Transcript

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2009-02-28 05:39:14.0

Tags: Revision, Performance, Call Transcript, Earnings, Simmons & Co., Performance Revision, Performance Management, Human Resources, Workforce Management, Seeking Alpha, Southwestern Energy Co.

Question-and-Answer Session

Operator

Thank you, sir. (Operator instructions) Our first question comes from Tom Gardner with Simmons & Company. Please go ahead. Your mike is open.

Tom GardnerSimmons & Company

Good morning, everyone.

Harold Korell

Hi, Tom.

Tom GardnerSimmons & Company

Hey. Harold, I'd like to congratulate you on your retirement plans. You leave quite a legacy at Southwestern and I have great respect and admiration for your accomplishments. And Steve, congratulations on your promotion, and I know you and your team will have great success going forward. Guys, impressive reserve additions this year. Can you give me some help here peeling the onion with respect to your reserve revisions? Essentially, you had about 100 Bcf net additions. Can you give me an idea of upward performance revisions versus negative price related revisions embedded in that number?

Steve Mueller

For the total company, we had about 22 Bcf of negative price revisions. And those were split pretty much evenly between Arkoma and East Texas. Very little was in Desoto. And then, total performance revisions were 120 Bcf total, that direction.

Tom GardnerSimmons & Company

With respect to kind of individual average – I guess average uplift in bookings there on the Fayetteville wells, were those performance revisions primarily related to increasing or decreasing the terminal decline rate assumptions or just trying to get an idea?

Steve Mueller

Yes. It's not really – we haven't done anything to the terminal decline. What really happened, if you think about any given year, and 2008 is a perfect example, we started the year with one kind of completion technique. We ended the year with another kind of completion technique and that's kind of why we gave the numbers where we went–that we talked about the last quarter. Those wells are 2.2 Bcf. When you started booking your PUDs, they do look at each pilot area, but they take the average in those pilot areas and really you're averaging the wells that have the most production. So you're really seeing the weighted average for the first half of 2008 in your PUDs, and in 2007 it was the same kind of case. So I think for the near future, as long as we keep our PUD, EUR, and our IPs increasing, you'll see positive revisions down the road as well.

Operator

And our next question comes from Jeff Hayden with Rodman & Renshaw. Please go ahead, sir. Your mike is open.

 

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