Southwestern buyback sells 2.8mn shares

US shale producer Southwestern Energy said August 4 that its $1bn share buyback program launched two months ago had attracted around 2.8mn share repurchases, at a total cost of around $20mn.

The shares were bought at an average price point of $7.10/share, and will go toward fulfilling Southwestern's $5.1bn debt pile. Southwestern Energy generated $822mn of adjusted EBITDA during the second quarter, up substantially from $300mn in the year ago period, putting the business in line with full-year guidance. The debt to adjusted EBITDA ratio is now at 1.6x, which has resulted in Moody's upgrading Southwestern's credit score to Ba1.

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Southwestern said net output averaged 4.2bn ft³/day of natural gas and 100,000 barrels/day of liquids, with 87% of extraction attributed to gas. Full-year production guidance has been hiked by 10% with annual gas output now forecast at 1.5 trillion ft^3,with Q3 accounting for around 380 to 390mn ft³.

Capital expenditure came in 10% above expectations and included a $585mn well completion programme that resulted in 42 new wells, spread across the Appalachia and Haynesville basins. The latter now accounts for around 55% of Southwestern's deployed capital, with 45% held at Applachia fields.

Southwestern Energy announced December 31 the completion of a blockbuster Haynesville basin investment, putting down $1.85bn to buy up assets owned by private equity firms. Against the backdrop of debt reduction, the transaction was expected to broaden Southwestern's inventory access.

Since then, tighter gas markets have increased demand for Southwestern's supplies - particularly through its certified gas program, which guarantees wholesale customers a gas product that meets ESG performance objectives. Uniper's North American division bought a slice of Southwestern's responsible basin output in June, gaining access to a portfolio that spans midstream, distribution, downstream and LNG liquefaction export facilities.