Southwestern Energy Company

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Southwestern Energy's fourth quarter 2022 earnings call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the start key followed by zero. Management will open the call for a question and answer session following prepared remarks. In the interest of time, please limit yourself to two questions and re-queue for additional questions. call is being recorded. I will now turn the call over to Brittany Rayford, Southwestern Energy's Director of Investor Relations. You may begin.

Thank you. Good morning and welcome to Southwestern Energy's fourth quarter 2022 earnings call. Joining me today are Bill Way, Chief Executive Officer, Clay Carroll, Chief Operating Officer, and Carl Giesler, Chief Financial Officer. Before we get started, I'd like to point out that many of the comments we make during this call are forward-looking statements that involve risk and uncertainties affecting outcomes. Many of these are beyond our control and are discussed in more detail in the risk factors and the forward-looking statement sections of our annual report and quarterly reports and as filed with the Securities and Exchange Commission. Although we believe the expectations expressed are based on reasonable assumptions, they are not guarantees of future performance. Actual results or developments may differ materially, and we are under no obligation to update them. We may also refer to some non-GAAP financial measures, which help facilitate comparisons across periods and with peers. For any non-GAAP measures we use, a reconciliation to the nearest corresponding GAAP measure can be found in our earnings release available on our website. I will now turn the call over to Bill Way.

Thank you, Brittany, and good morning, everyone. Thanks for joining us this morning. 2022 was a defining year for Southwestern Energy as we continued executing on our strategy and delivering strong results both financially and operationally. We prioritized debt repayment, reducing debt by over a billion dollars and lowering leverage to 1.3 times. We complemented debt reduction with $125 million of share repurchases during the year. We successfully integrated the transformative acquisitions we completed in the second half of 2021, which expanded our asset base into Haynesville to complement our high-quality Appalachia position. We expect that our large-scale integration and development expertise will enable us to drive further operational efficiencies, just as we continue to do in Appalachia. We believe that these acquisitions extend the longevity and improve the resilience of our business with deepened high-quality inventory, scale cost economics, and expanded optionality. Most importantly, we now have more direct access to the growing Gulf Coast market, including the LNG corridor, where we are already the largest supplier of natural gas to LNG exporters at 1.5 BCF per day. We are strategically positioned to supply increasing energy demands and capitalize on longer-term natural gas fundamentals as well. Over the last decade, U.S. natural gas storage capacity has remained flat while U.S. natural gas supply and demand has more than doubled. The relative contraction in this balancing mechanism for the natural gas market means that smaller changes in relative supply and demand can drive quicker and more significant changes in pricing. Over the last few months, natural gas prices have fallen materially due at least in part to unseasonably warm weather reducing demand below greater gas supply. Similar to the sharp run-up in natural gas prices during the hot summer of 22, we believe the recent pullback also reflects structurally increased volatility in the natural gas market. This volatility highlights why hedging remains core in our enterprise risk management practice. With our improved financial strength, we expect to hedge more moderately going forward in line with our framework. Given the current market and in the near term, we've taken proactive steps to moderate planned activity and associated full-year capital by reducing the drilling program by two rigs on average versus 2022. This is expected to result in a 2% to 3% production decline at the midpoint of guidance. With our planned 2023 activity levels at recent strip prices, we expect to fund our capital program through net cash flow and preserve the company's productive scale to deliver resilient free cash flow longer term. We have additional flexibility and optionality including through our vertical integration business to adjust activity rather quickly. Any further adjustment will incorporate a multi-year outlook for commodity prices and ultimately rest on what we believe will best progress our longer term business and financial objectives. Consistent with our capital allocation strategy, prioritizing debt reduction, We plan to direct free cash flow generated this year to debt repayment. Returning capital to shareholders remains core to our long-term shareholder value proposition as we approach our target debt range of $3.5 to $3 billion. Longer-term, structurally constructive natural gas supply and demand dynamics should remain as energy security and global decarbonization drive continued strong natural gas power burn and LNG export growth. Beyond Freeport facility's imminent return to service, an additional six BCF per day of U.S. LNG export capacity is under construction with anticipated service dates as soon as late 2024. SWIN is well positioned to differentially benefit from these developments with our proximity to the U.S. Gulf Coast and direct access to the growing LNG corridor through our firm transportation portfolio, enabling delivery of natural gas from across our business. We believe the actions we have taken over the past few years have better positioned Swin to navigate the current commodity price volatility and grow the long-term value proposition for our shareholders. Let me now turn the call over to Clay for an operational update.