On Monday, Southwestern Energy announced it will spend $2 billion in 2012 on exploration and production, with plans to double their investment in the Marcellus Shale.
From the Southwestern press release:
Southwestern Energy Company today announced its planned capital investment program and guidance for 2012. The company’s total capital investment program in 2012 is planned to be approximately $2.3 billion, compared to approximately $2.1 billion in 2011. The company’s 2012 capital program includes approximately $2.0 billion for its exploration and production segment, $210 million for its midstream segment and $90 million for corporate purposes.
“I am excited about what lies ahead for Southwestern Energy in 2012. Our low-cost operations and financial flexibility, along with our significant positions in two world-class shale plays and our drilling in several New Ventures plays, give us the ability to create significant value for our stockholders,” stated Steve Mueller, President and Chief Executive Officer of Southwestern Energy.
“Our 2012 capital investments in the Fayetteville Shale will be slightly lower when compared to 2011, while our capital program in the Marcellus Shale in Pennsylvania will almost double and our New Ventures investments will increase due to additional exploratory drilling activities. We plan to be drilling in at least three of our New Ventures ideas during the year including the Brown Dense play in Arkansas and Louisiana, New Brunswick, Canada and a new oil play in 2012. As a result of our planned activities, our 2012 production is expected to be in a range of 570 to 580 Bcfe, which is an increase of approximately 15% compared to our expected 2011 level.”
“Our capital program is flexible and may be adjusted to correspond with significant changes in gas prices. Meanwhile, our hedges in place for 2012 provide a secure level of earnings and cash flow and our vertical integration gives us meaningful protection against higher costs in the future. Our 2012 investments are expected to be funded through cash flow and borrowings on our revolving credit facility. The combination of our best-in-class gas assets and New Venture opportunities, coupled with one of the lowest cost structures in the industry and our strong balance sheet, have us well positioned as we enter 2012,” stated Mueller.*
*Southwestern Energy Press Release (Dec 19, 2011) – Southwestern Energy Announces Capital Program and Guidance for 2012 (PDF)