Southwestern Energy (SWN)

Risks

• Natural gas, oil and NGL prices and basis differentials greatly affect our revenues and thus profits, liquidity, growth, ability to repay our debt and the value of our assets.
• Significant capital investment is required to develop and replace our reserves and conduct our business.
• Our business depends on access to natural gas, oil and NGL gathering, processing and transportation systems and facilities. Changes to access and cost of these systems and facilities could adversely impact our business and financial condition. Our commitments to assure availability of transportation could lead to substantial payments for capacity we do not use if production falls below projected levels.
• Strategic determinations, including the allocation of capital and other resources to strategic opportunities, are challenging in the face of shifting market conditions, and our failure to appropriately allocate capital and resources among our strategic opportunities may adversely affect our financial condition and reduce our future growth rate.
• Certain of our undeveloped assets are subject to leases that will expire over the next several years unless production is established on units containing the acreage.
• Natural gas and oil drilling and producing and transportation operations are complex and can be hazardous and may expose us to liabilities. Incidents related to HSE performance and our asset and operating integrity could adversely impact our business and financial condition.
• Our business depends on the availability of water and the ability to dispose of water. Limitations or restrictions on our ability to obtain or dispose of water may have an adverse effect on our financial condition, results of operations and cash flows.
• A large portion of our producing properties remain concentrated in the Appalachian basin, making us vulnerable to risks associated with operating in limited geographic areas.
• Many of our business operations depend on activities performed by third parties. Changes to availability, costs and performance of personnel, products and services provided by third parties could adversely impact our business and financial condition.
• Changes to the ability of our customers to receive our products or meet their financial, performance and other obligations to us could adversely impact our business and financial condition.
• Competition in the oil and natural gas industry is intense, making it more difficult for us to market natural gas, oil and NGLs, to secure trained personnel and appropriate services, to obtain additional properties and to raise capital.
• We may be unable to dispose of assets on attractive terms, and may be required to retain liabilities for certain matters.
• Changes to applicable U.S. tax laws and regulations could affect our business and future profitability.
• Our ability to use our net operating loss carryforwards and certain other tax attributes will be limited.
• We may experience adverse or unforeseen tax consequences due to further developments affecting our deferred tax assets which could significantly affect our results of operations.
• A cyber incident could result in information theft, data corruption, operational disruption and/or financial loss.
• Terrorist activities could materially and adversely affect our business and results of operations.
• The physical impacts of adverse weather may have a negative impact on our business and results of operations.
• Negative public perception regarding us and/or our industry and increasing attention to ESG matters could have an adverse effect on our business, financial condition and results of operations and damage our reputation.
• Judicial decisions can affect our rights and obligations.
• Common stockholders will be diluted if additional shares are issued.
• Anti-takeover provisions in our organizational documents and under Delaware law may impede or discourage a takeover, which could cause the market price of our common stock to decline.
• Loss of our key executive officers or other personnel, or an inability to attract and retain such officers and personnel, could negatively affect our business.
• The COVID-19 pandemic has negatively affected, and may in the future negatively affect, our business, operating results and financial condition.
• A downgrade in our credit rating could negatively impact our cost of and ability to access capital and our liquidity.
• Any significant reduction in the borrowing base under our 2018 credit facility may negatively impact our ability to fund our operations, and we may not have sufficient funds to repay borrowings under our 2018 credit facility if required as a result of a borrowing base redetermination.
• Our ability to comply with the covenants and other restrictions in our financing agreements may be affected by events beyond our control, including prevailing economic and financial conditions.
• The elimination of LIBOR may adversely affect the cost of our borrowings.
• Climate change legislation or regulations governing the emissions of greenhouse gases could result in increased operating costs and reduce demand for the natural gas, oil and NGLs we produce, and concern in financial and investment markets over greenhouse gasses and fossil fuel production could adversely affect our access to capital and the price of our common stock.
• The trading price and volume of our common stock may be volatile, and you could lose a significant portion of your investment.
• Market views of our industry generally can affect our stock price, liquidity and ability to obtain financing.
• Volatility in the financial markets or in global economic factors could adversely impact our business and financial condition.
• Our commodity price risk management and measurement systems and economic hedging activities might not be effective and could increase the volatility of our results.
• The implementation of derivatives legislation could have an adverse effect on our ability to use derivative instruments to reduce the effect of commodity price, interest rate and other risks associated with our business.
• We may not achieve the anticipated benefits of the Indigo Merger and the GEPH Merger, and the Indigo Merger and the GEPH Merger may disrupt our current plans or operations.