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Fall 13 | An informative newsletter for Arkansas land and royalty owners
community involvement
Landmen
A face to SWN’s name
Even as the largest operator in the Fayetteville Shale,
we never forget that process is never more important
than people. This is especially true of our landowner
partners, since they experience first-hand the day-to-
W
hat they do: Serve as the primary point of contact
for landowners, acquire wellsite locations and
establish water-transfer routes for completions
operations. Many times, because they are local, the field
land team is the catchall for landowner-related questions
or issues.
“Our Landmen have done and continue to do a
tremendous job in dealing with these very important
people and allowing landowners to ‘have a face’ to
recognize the SWN name,” said Jim Dewbre, Senior
Vice President of Land. “You only have one time to
make an initial impression so it is essential to start
things right.
day realities of our operations. SWN’s Landman
team (pictured above) is a vital part of SWN’s
commitment to maintain a positive relationship with
landowners and local communities.
payment of royalties and beyond,” Dewbre said. “The
landman’s job never truly ends it just continues
throughout the various episodes or phases of the oil and
gas lifecycle.”
T
he most difficult thing about being a landman:
Dealing with issues that sometimes cannot be
helped. As much as landman would love to make
everyone happy, it is simply impossible to please all
people all the time.
“We take pride in striving to leave people better off
than when we first met them. Simply put, we treat
people how we would like to be treated. These
landowners are folks we’ve grown up around and
ittle known facts about this job: Recognize any of interact with in our personal lives because we live here,
these faces? Most of our landmen are locals from
too,” said Ryan Stacks, Field Land Manager for the
our operating areas, and for many, this is their first
Fayetteville Shale Division.
experience working in the oil and gas industry.
L
“Once we have established that rapport, it is critical we
continue the momentum from the initial meeting to the
continued on pg. 2
NOTICE AND DISCLAIMER: The information contained in this document is as of September 15, 2013, and has not been updated to reflect subsequent
events or revisions of the company’s plans, projections, expectations or other statements that may be deemed to be forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future
events or otherwise. For additional information with respect to Southwestern Energy Company and factors that may affect its performance, see the
reports filed by the company with the Securities and Exchange Commission.
Ryan Stacks
Field Land Manager
Fayetteville Shale
How we maintain our landowner
relationships is a direct reflection of our
Company and how we conduct our
business, so it’s essential to have the
Right People doing the Right Things in
this position. “We really have great
people on our team – it’s not just a
slogan,” Stacks said.
continued from cover
T
he best part of this job: Seeing people’s lives
transformed because of royalty payments. Obviously
no business is immune to complaints, but Ryan’s team is
devoted to working with landowners to remedy any
legitimate issues they may have. But for every landowner
with a complaint, many more have literally come to tears
of joy over their first royalty check. Many times, they’ve
seen the royalties literally save the farm.
Giving
Back…
Back to
School.
2013 School Grants
awarded to 24 school districts
S
outhwestern Energy presented 24 school
districts in the Fayetteville Shale with a total
of $48,000 in grants to prepare for this school
year. Since 2008, SWN has donated $284,000 to
public school districts through the School Grants
initiative to support science, math, engineering or
technology-oriented classroom activities.
S
chool may have been out for the summer, but
SWN has continued to partner with the
communities throughout the Fayetteville Shale.
Especially by way of giving back to local schools.
This summer SWN renewed our commitment to
enhancing education in Arkansas with a three-year,
$100,000 grant to Junior Achievement (JA) of
Arkansas. Since 2007, SWN has been a strong
supporter of JA: donating more than $425,000 and
participation from 85 SWN employees serving as
classroom volunteers, who have provided more
than 3,500 hours of classroom instruction.
Through this partnership, nearly 8,000 students in
North Central Arkansas have learned fundamental
skills in work readiness, entrepreneurship and
financial literacy.
W
hy this job matters to SWN: Landmen in the field
serve as the first line of contact during the
exploration and development of an area. They play a very
large role in educating landowners so they feel
comfortable and prepared when SWN and the industry in
general begins operating on their property and driving
around their town.
In 2013, grants were presented to:
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Concord School District
Heber Springs High School, Heber Springs School District
Quitman High School, Quitman School District
West Side Elementary, West Side School District
Nemo Vista Middle School, Nemo Vista School District
Morrilton High School, South Conway County School District
Wonderview High School, Wonderview School District
Conway High School, Conway School District
Greenbrier High School, Greenbrier School District
Guy-Perkins High School, Guy-Perkins School District
Mt. Vernon High School, Mt. Vernon/Enola School District
Vilonia High School, Vilonia School District
Midland High School, Midland School District
Lamar High School, Lamar School District
Dover School District
Hector High School, Hector School District
Clinton Junior High School, Clinton School District
South Side Elementary School, South Side School District
Bald Knob Elementary School, Bald Knob School District
White County Central School District
Riverview Junior High and High School, Riverview School District
Pangburn Middle School, Pangburn School District
Rose Bud School District
Searcy School District
FSSF
presents record-breaking number of scholarships
S
eventy-six students currently enrolled in the University
of Arkansas Community College at Morrilton (UACCM)
petroleum technology program were awarded scholarships
from the Fayetteville Shale Scholarship Fund (FSSF). This is
the largest number of scholarships awarded since the fund
began in 2006. Members of the Fayetteville Shale Scholarship
Fund Board also announced a $110,000 donation towards
UACCM’s upcoming capital campaign during the luncheon at
the University of Arkansas System office in Little Rock.
fundraisers throughout the year to raise scholarship funds
for students seeking careers in the state’s oil and natural gas
industry.
This contribution from the FSSF Board brings the total donation
amount to $640,000, providing 429 scholarships to students
studying the petroleum technology program at UACCM.
Scholarships support student expenses including tuition, fees,
and books.
Jon Swann, vice president and interim president of the FSSF
board, stated, “Through the board’s fundraising activities,
we have been able to raise enough money to guarantee
scholarships for the next several years. In fact, we have been
so successful, the board has made the decision to allocate
funds to UACCM’s Capital Campaign. We are excited to
support this project, which will provide a number of facility
improvements to further enhance the education UACCM
students receive.”
How we maintain our landowner relationships is a direct
reflection of our Company and how we conduct our
business, so it’s essential to have the Right People doing
the Right Things in this position. “We really have great
people on our team – it’s not just a slogan,” Stacks said.
“You’d have a hard time finding people in the Fayetteville
Shale play communities who don’t hold SWN to the
highest standards because that’s how we’ve always
conducted ourselves.”
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in the community
SWN employees volunteering for Junior Achievement
The Fayetteville Shale Scholarship Fund is a non-profit
organization made up of member companies who work in
the state’s natural gas industry. The group hosts several
from left: Fran Winfield; FSSF Board Treasurer Kristie McClung; FSSF Board Interim President
Donnie Bates; FSSF Board Vice-President Jon Swann; UACCM Chancellor Dr. Larry Davis; UA
System President Dr. Donald Bobbitt; Arkansas Department of Higher Education Interim Director
Shane Broadway.
Southwestern Production Company | Fall 13
3
DRILLING
Scrubber
Although the Caterpillar Dynamic Gas Blending Engine
automatically adjusts to changing gas quality, natural
gas flows through a scrubber first to remove dirt, water,
foreign matter or undesired liquids.
with the power of natural gas
This engine has the capability to
run on LNG or CNG; however, we
are pulling natural gas straight
from the wellhead. This allows us
to keep our wellpad footprint small
and maintain low-cost rig moves.
Wellhead
This engine has the capability to
run on LNG or CNG. However, we
are pulling natural gas straight
from the wellhead. This allows us
to keep our wellpad footprint small
and maintain low-cost rig moves.
S
outhwestern Energy is proudly one
of the first companies to implement
a new natural gas powered engine in
our drilling operations; we have successfully
been using natural gas from the Fayetteville
Shale to drill for gas in the Fayetteville
Shale since June.
The recently deployed Dynamic Gas
Blending Engine from Caterpillar allows us
to generate the power we need to run one
of our rigs with a blend of natural gas and
diesel, and seamlessly use traditional diesel
methods when natural gas isn’t available.
At its maximum gas utilization, the engine
will run on a 70 percent blend of natural gas
and 30 percent diesel.
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This not only reduces our use of diesel,
it lowers the amount of air emissions we
create during the drilling phase of our
operations.
“I think it says something about who we
are as a company. It makes a statement
that we are passionate enough about our
mission to provide energy to our world,
that we are using our own product to power
our operations,” said Marty Carley, Vice
President of SWN Drilling Company. “This is
definitely SWN doing the Right Things.”
When able, we plan to utilize natural gas
to power more of our rigs in the future.
Piping
Installation of piping needed on
location to use this system is
just one example of SWN teams
working together through vertical
integration to utilize and optimize
our abilities and efficiencies.
Intake for Natural Gas
Just because this engine runs on natural gas
doesn’t mean it's short on power. Cranking at
1,200 revolutions per minute (rpm), the Caterpillar
Dynamic Gas Blending Engine produces 885
horsepower running at 60 percent of its
power-load capacity.
Southwestern
SouthwesternProduction
ProductionCompany
Company | | Fall
Fall1313
5
Coming Soon
TO CONWAY
We’re powering our community with
clean-burning natural gas.
Committed to natural gas as a transportation fuel: A brand new
CNG station will be open to the public and conveniently located
next to our building in Conway, Arkansas, at 2125 Sanders Street.
The team of SWN employees who lent a helping hand to the Faulkner County Disabled American Veterans.
Helping our
It’s clean, it’s affordable and now, it’s local.
Veterans
T
his summer SWN employees, vendors and
DAV members worked together for the Disabled
American Veterans (DAV) chapter in Faulkner County to
make various repairs and cosmetic improvements to the
organization’s facility.
The highlight of the day was the delivery of a trailer
modified to securely store aluminum cans the non-profit
collects to raise funds. SWN’s Supply Chain Repair
and Maintenance personnel built the trailer with parts
donated from a variety of vendors.
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The Faulkner
County DAV, a 501(c4)
non-profit, serves as a mobile
office where veterans injured or ill as a result of
their service can receive a variety of support services,
such as transportation assistance to rehabilitation and
education programs. Employees can continue to help
this worthy cause by dropping off their aluminum cans
in the designated receptacles in each break area of the
Conway office.
*Price per gasoline - gallon equivalent will vary
Southwestern Production
Production Company
Company || Fall
Fall 13
13
Southwestern
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Fall 13 | An informative newsletter for Arkansas land and royalty owners
Royalty Owner Q&A
Q:
A:
Why is back-up tax withholding deducted from my
SWN revenue check?
Withholding rules: It is an IRS requirement. When you
open a new account, make an investment, or begin
to receive payments reported on IRS form 1099, the bank or
other business will give you an IRS Form W-9, Request for
Taxpayer Identification Number (TIN) and Certification, or a
similar form such as a Division Order. You must enter your
TIN on the form and, if your account or investment will earn
interest or dividends, you also must sign and certify (under
penalties of perjury) that your TIN is correct and that you are
not subject to back-up tax withholding.
If you do not furnish the payor (SWN) with your TIN in the
required manner, the payor must withhold tax at a flat rate of
28% from your check amount.
Q:
A:
When can I expect my first royalty check for a
recently drilled well?
take up to the six months time period allowed by law. If the
title requirement has not been satisfied by the owner, the
six months time period does not apply and it may be longer
before an owner with a title issue is paid.
SEECO will issue a division order to the owner which sets
out the decimal interest to be paid, the pay status of the
account, a legal description of the property, the operator’s
name, and other information pertaining to the payment of
royalties. SEECO will issue a check around the 25th of each
month if there are no pending title requirements, if we have
a current mailing address for the owner and, if the amount
to be paid equals or exceeds $150.00. Amounts less than
$150.00 are paid out once a year in an annual minimum pay
release unless the owner sends in a written request to get
paid once their account reaches $50.00 or more. These
written requests should be addressed to SWN’s accounting
department.
Generally, first payment is made within 6 months
of first sales. SEECO’s policy is to set-up the well
ownership within its title records based upon title opinions
(and updates thereof) of the drilling unit rendered by outside
title attorneys. Once the well ownership is entered into its
land revenue system, SEECO will pay its owners as of the
month entered and effective the date of first sales. However,
if there are outstanding title/ownership requirements
identified on the title opinion, or if we are lacking current
address information on owners, the check may be delayed.
If there is a title requirement on your interest, you will see
the pay status of “STI” which means Suspense-Title Issue.
An asterisk will lead you to the explanation of the title
requirement(s) that must be met before royalty payments
will be made. A common example of a title requirement is
that of a mortgage subordination which means that a loan
was taken against the property prior to the oil and gas lease.
To satisfy this requirement, the owner must provide SEECO
with a Release of Lien document or Mortgage Subordination
Agreement from the lender/bank. Either one of these
documents should be sent back with the signed division
order.
Arkansas law provides that operators should begin paying
owners within a six month period from date of first sales of
production unless there are title/ownership requirements
that must be met before payment can be made. The
process to determine correct ownership and/or clear title on
some of the Arkansas properties can be complex and may
There are other types of title requirements which may be
reflected on the division order. Each title requirement will
have an explanation of the requirement and how you can
satisfy the requirement in order for SEECO to begin paying
you royalties. Please note that it is the mineral owner’s
responsibility to cure any defects to their title.
Contact us
We want to make it easy for you to
get in touch with our Landowner
Relations Group.
Southwestern Production Company
Attn: Division Orders/Lease Records
2350 N. Sam Houston Parkway East,
Suite 125
Houston, TX 77032
Or e-mail Southwestern
Production Company at:
[email protected]
Check us out on the web:
www.swn.com/owners
Or contact Southwestern
Production Company by phone:
Owner Relations: 866 322 0801
Fax: 281 618 4757
During our office hours, someone in
our Landowner Relations Group will
be happy to speak with you and
assist you as needed.
Office hours:
Monday through Friday
7:30 a.m. to 4:30 p.m. Central time.