Southwestern Energy Case Study

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Q Q4 - OE_Strengths What do you see as Southwestern Energy’s particular strengths as an investment? "Large scale, low cost Northeast gas position." Q5 - OE_Weaknesses What do you see as Southwestern Energy’s particular weaknesses as an investment? "The weaknesses are capital discipline and balance sheet. The problem with capital discipline is a combination of the legacy management's acquisition of the Chesapeake assets and then current management's capex outspend play and then most recently this year's capital budget plans." Q6jj Using a six-point scale where 6=strongly agree and 1=strongly disagree, please tell me the extent to which you agree or disagree that "Sound ESG practices" describes Southwestern Energy. "2 [6-pt scale]. If it…show more content…
"1 [6-pt scale. The capital plan. And we rank the board of Southwestern as one of the worst boards within upstream energy. Even with the CEO change, we feel the Chesapeake acquisition and the way they financed it was just border-level incompetence. Our view, we no longer own Southwestern, and one of the reasons we do not own Southwestern is specifically because of senior management and the board. It's their acquisition but also the capital… We view them as in all of the gas, in a highly fragmented segment, as having the least amount of capital discipline of any gas company we follow." Q8 -…show more content…
We've spoken with management about this. It's difficult because the acquisition and the way it was financed was so dilutive that it did permanently impair, for time horizons, it significantly impaired the ability for Southwestern to be competitive from a corporate-level returns perspective with their peers, and you can see it in the stock over a long period of time. We don't have a lot of confidence. The Chairman of the Board we believe has now bankrupted two companies, and that doesn't give us a lot of confidence. We would need to see an improvement in the balance sheet and improvement in leadership at the company level as well as the

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