Southwestern Reports Record Oil and Gas Reserves
Southwestern Energy's estimated proved oil and gas reserves totaled 1,450 Bcfe at December 31, 2007, up 41% from 1,026 Bcfe at the end of 2006. Approximately 96% of the company's year-end 2007 estimated proved reserves were natural gas and 64% were classified as proved developed, compared to 95% and 65%, respectively, in 2006.
Southwestern operates approximately 90% of its reserves, based on PV-10 value, and the company's average proved reserves-to- production ratio, or average reserve life, approximated 12.8 years at year-end 2007. Netherland, Sewell & Associates, Inc., an independent oil and gas reserve engineering firm, audited the company's estimated proved reserves.
In 2007, Southwestern replaced 474% of its production volumes by adding 507.9 Bcfe of proved natural gas and oil reserves and having net upward revisions of 31.0 Bcfe. The upward reserve revisions during 2007 were primarily due to improved performance of wells in its Fayetteville Shale play. In 2006, the company's reserve replacement ratio was 386%, including revisions. For the period ending December 31, 2007, the company's three-year average reserve replacement ratio, including revisions, was 430%.
Southwestern's finding and development cost was $2.55 per Mcfe in 2007, including reserve revisions, compared to $2.75 per Mcfe in 2006. For the period ending December 31, 2007, the company's three-year finding and development cost, including revisions, was $2.40 per Mcfe.
"2007 was an outstanding year for Southwestern Energy," remarked Harold M. Korell, President and Chief Executive Officer of Southwestern Energy. "Looking at our achievements, we grew our production volumes by 57% to 113.6 Bcfe and our reserves by 41% to 1.45 Tcfe, which represents a reserve replacement ratio of 474%, and we had a finding and development cost of $2.55 per Mcfe."
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