Natural Gas –

Our National

Treasure

2013 EIA

Energy Conference

June 17-18, 2013

Washington, DC

Jim Tramuto

Vice President

Governmental & Regulatory Strategies

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

XO

M

CH

K

AP

C

DV

N

SW

N

BP

SW

N

EC

A

CO

P

BH

P

SW

N

RD

SA

CV

X

WP

X

SW

N

CO

G

EO

G

AP

A

EQ

T

OX

Y

SW

N

RR

C

QE

P

UP

L

EP

XC

O

CN

X

SW

N

NB

L

PX

D

SM

NF

X

XE

C

MR

O

SD

KW

K

PX

P

EG

N

CR

K

BB

G

FS

T

SWN Ranked 5th in U.S. Gas Production

US Lower 48 Gas Production Sorted by 1Q13 (MMcf/d)

SWN is 5th overall as of 1Q13

1Q12

1Q09

1Q10

1Q11

SW

N

SW

N

SW

N

SW

N

SW

N

1Q13

Source: Public company reports, Southwestern Energy

SW

N

1Q08

2

Where do We Deliver? Producers Role in Supplying Gas

3

Where do We Deliver? Producers Role in Supplying Gas

Abundant Supply & Growing

Sources:

ICF: As reported in MIT Energy Initiative, 2010, The Future of Natural Gas, interim report ; Table 2.1

EIA: 2012 AEO, June 2012

PGC: Potential Gas Committee’s Advance Summary and press release of its biennial assessment; see www.potentialgas.org

CERA: IHS CERA, 2010, Fueling North America’s Energy Future: The Unconventional Natural Gas Revolution and the Carbon Agenda

MIT: MIT Energy Initiative, 2010, The Future of Natural Gas, interim report

NPC: Realizing the Potential of North America’s Abundant Natural Gas and Oil Resources Johns Hopkins University ; Prudent Development Study 2011

Estimates of U.S. Recoverable Natural Gas (TCF – trillion cubic feet))

0

500

1000

1500

2000

2500

3000

3500

4000

2002 2004 2006 2008 2010 2012 2009 ICF 2010 CERA 2010 MIT 2012 EIA NPC 2011 Survey High

INGAA ICF 2011 Study

2,074

1,532

2,170 2,102

2,836

2,100 2,203

3,600

Potential Gas Committee Other Estimates

3,350 Potential Shale Gas Resources

Other Potential Natural Gas

Reserves

Total Reserves (uncategorized by

source)

1414 1312

2,689

5

Where Will the Gas Come From?

Source: EIA, Annual Energy Outlook 2013

0

10

20

30

40

50

60

70

80

90

100

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Billi

on

cu

bic

fee

t p

er

day

Shale gas

Tight gas

Alaska

Coalbed methane

Associated with oil Non-associated onshore

Today

6

US Shale Plays

7

Natural Gas Growth Areas

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

Bcfd

, D

ry

Trends in Demand—EIA’s View in 2013

Projected Historic

Projected Data Source: EIA Annual Energy Outlook :2013, early release

Historic Data Source: EIA Natural Gas Monthly, February 2013

U.S. Natural Gas Demand (billion cubic feet per day)

Electric Power

Industrial

Residential

Commercial

Transportation

Gas to Liquids

LNG Exports

8

Why Natural Gas is our National Treasure

9

• The unconventional Gas paradigm has created

a new world with long term low price

implications.

• Shale plays are larger than seen over the last

century and they are getting better in both

quality and efficiencies.

• Producers time frames are months and years.

• Basic industry strategies drive gas prices and

volatility lower.

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

Rig

Co

un

t/1

00

an

d N

YM

EX P

rice

Gas Price, Rig Count and Gas Production

Gas Rigs / 100 Bcfd / 1

10

Today’s Amazing Production Response to Rig Count?

Gas Rigs

Gas Production

-2.5

-2

-1.5

-1

-0.5

0

0.5

1

1.5

2

2.5

19

20

21

22

23

24

25

26

27Ja

n-2

00

6

Ja

n-2

00

7

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00

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n-2

00

9

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n-2

01

0

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n-2

01

1

Ja

n-2

01

2

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n-2

01

3

Ja

n-2

01

4

Ja

n-2

01

5

De

ma

nd

-Pro

d T

cf

TC

F

Demand Compared to 914 Production

Rolling Yearly Average

12 Mo Demand Lwr 48 12 Mo 914 Prod

11

Current Demand compared to Production

EIA Demand

914 Production

Source: EIA – 12 Month Rolling Average of Production and Demand

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

Rig

Co

un

t/1

00

an

d N

YM

EX P

rice

Gas Price, Rig Count and Gas Production

$/Mmbtu Gas Rigs / 100 Bcfd / 1

12

Natural Gas Price Response

Gas Rigs

Gas Price

Production

13

Natural Gas Growth Areas

14

Natural Gas – A National Treasure US Wins

$675 Billion

cost advantage

2008-2012

Baker Hughes

What Must We Do as a Country to Maximize This National Treasure

• Most Producers deliver to liquid sales points through firm

transportation agreements – the market must take the

firm supply from these points.

• Additional mainline pipelines and market area storage

infrastructure is needed to serve the growing load which

results from incremental power generation, industrial,

chemical and commercial loads.

• Innovative regulatory solutions at the state and national

level are needed to supply incentives to put the needed

pipeline and market area storage and infrastructure into

place.

• The gas producing industry has delivered and will

continue to deliver in the future!

15

Contact Information

16

James A. Tramuto

Southwestern Energy Company

Vice President – Governmental & Regulatory Strategies

2350 N. Sam Houston Parkway E, Suite 125

Houston, Texas 77032

281.618.2818 │ Office

281.618.4820 │ Fax

713.818.9993 │ Cell

jtramuto@swn.com

Natural Gas –

Our National

Treasure

2013 EIA

Energy Conference

June 17-18, 2013

Washington, DC

Jim Tramuto

Vice President

Governmental & Regulatory Strategies