Independent natural gas operator, Southwestern Energy Company SWN priced its underwritten public offering of 86,000,000 shares of its common stock. The closing of the offering is expected on Jul 5, 2016.
Total gross proceeds from the offering will be approximately $1.1 billion. A portion of the proceeds from the transaction is expected to be used to reduce the principal balance of the company's $750 million term loan. The rest would be utilized to purchase for cash a portion of its 3.30% senior notes due 2018, 7.50% senior notes due 2018 and 4.05% senior notes due 2020. As of Mar 31, 2016, the company’s long-term debt was $6.4 billion, which represented a debt-to-capitalization ratio of 84.9%.
Southwestern Energy Company is an independent energy company whose wholly owned subsidiaries are engaged in natural gas and oil exploration, development and production, and natural gas gathering and marketing. During first-quarter 2016, the company’s total production grew 1.7% year over year to 237 billion cubic feet equivalent (Bcfe) on increased Northeast Appalachia volumes.
However, for the second quarter of 2016, total production is expected between 210 Bcfe and 215 Bcfe. Full-year 2016 production is estimated at 815–835 Bcfe. Of the total expected production for 2016, the company anticipates approximately 364–371 Bcfe from Fayetteville Shale, about 324–332 Bcfe from Northeast Appalachia and 125–130 Bcfe from Southwest Appalachia.
Zacks Rank & Key Picks
Southwestern Energy currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks from the broader energy sector are CVR Refining, LP CVRR, Boardwalk Pipeline Partners, LP BWP and Tallgrass Energy GP, LP TEGP. Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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