Southwestern Energy Co. recorded a net loss of $1.5 billion for first quarter 2020, compared to net income of $594 million in the year-ago quarter.
The loss includes a $1.48 billion non-cash full cost ceiling test impairment, $408 million related to tax valuation allowance, a $246 million gain from unsettled derivatives and other one-time items.
Adjusted net income for the quarter, which excludes the items noted above, was $56 million compared to $145 million for the prior year period. The decrease was primarily related to lower commodity prices compared to 2019, partially offset by a $93 million gain in settled derivatives in 2020, compared to a $10 million loss in 2019.
Capital investments totaled $237 million for the first quarter, with 38 wells drilled, 22 wells completed, and 12 wells placed to sales. Full year capital investment is currently expected to be $860 million.
Total production for the quarter was 201 bcfe, of which 78% was natural gas, 18% NGLs, and 4% oil.
Total production in Southwest Appalachia for the quarter was 87 bcfe, half of which was liquids. The company drilled 23 wells, completed 12 wells, and placed seven wells to sales, four in the rich acreage and three in the super rich, with an average lateral length of 13,444 ft. The three super rich wells were online for at least 30 days and had an average 30-day rate of 11 MMcfed, including 68% liquids.
The company plans to shift to high-rate natural gas producing wells, including increased development in the company’s rich acreage in West Virginia. A four-well pad placed to sales in the rich acreage mid-March exceeded expectations, with a combined peak production rate of 170 MMcfed. A typical well in the rich acreage produces 60% natural gas and 40% liquids, with a small contribution from condensate, the company said.
In Northeast Appalachia, first quarter 2020 production was 114 bcf. There were 15 wells drilled, 10 wells completed, and five wells put to sales with an average lateral length of 8,874 ft. Four of the five wells were online for at least 30 days and had an average 30-day rate of 24 MMcfd, a 60% increase compared to prior year quarter.