Dear Fellow SWN Shareholders,

This past year brought a myriad of historic and unforeseen challenges to navigate for SWN’s management team and board. SWN’s resilience highlighted the capability and commitment of SWN’s management team and all of SWN’s employees as well as the importance of a fully engaged and committed board of directors. Our intentional approach to risk oversight, shareholder value, and focus on key values of operational responsibility, safety, honesty, transparency, and respect for the environment helped ensure SWN’s stability and strategic growth through this challenging time.

Social and Environmental Responsibility

Your Board is committed to ensuring that strong performance is accompanied by responsible governance. We thoughtfully consider the alignment of the Company’s culture, values, and strategy which includes ensuring the safety and wellbeing of SWN’s employees and contractors while minimizing the Company’s impact on the environment and the communities in which it operates.

In 2020, your Board regularly engaged with management regarding SWN’s response to COVID-19, which, as explained more fully in this proxy, included the establishment of remote work protocols for office workers and paid time off for non-exempt workers required to isolate or quarantine. For those employees in the field unable to work remotely, the Company instituted strong safety protocols to mitigate the risk of employee-to-employee transmission, while continuing a heightened focus on overall safety. For the year, SWN’s employees and contractors achieved first quartile, record safety performance and your Board was proud to recognize this achievement at our recent meeting.

Your Board also oversaw the publication of SWN’s seventh annual corporate responsibility report, which highlighted the Company’s position as a leader among its peers in greenhouse gas and methane intensity and the achievement of fresh water neutrality for the fifth year in a row. As with safety, SWN achieved record environmental performance for the year.

Strategy and Performance

Our focus on long-term shareholder value has led to continued improvement in SWN’s existing business and disciplined analysis and execution of strategic opportunities. SWN has continued its multi-year plan to strengthen the balance sheet, optimize the cost structure, and improve margins. This disciplined approach extended to the successful strategic acquisition of Montage Resources, resulting in accretion to per share metrics for shareholders as well as to the balance sheet.

Ongoing emphasis on a long-term strategic hedging program as well as nimble liability management brought stability to both the balance sheet
and the operating plan during the historic commodity price volatility experienced in 2020. Hedge gains totaled $362 million, absolute debt was
reduced through bond purchases, and debt ratios were further reduced via incremental cash flow from the Montage acquisition. The financing
of the Montage transaction was emblematic of a strategy of balancing risk while enhancing shareholder value.

Executive Compensation

Throughout 2020, your Board considered feedback from its shareholders and its independent compensation consultant and approved changes
to the 2021 compensation program to better align with a peer group reflective of the scale of SWN after the sale of the Fayetteville assets.
Highlights of the changes to the 2021 compensation program include:

  • Long-term incentive award grants have been reduced by 20% for the CEO, COO and Senior VP level employees. This is in addition to the 10% reduction for all officers in 2020.
  • There are no changes to base salaries for the second consecutive year.
  • The Annual Incentive program has been modified by replacing the “Production” metric with a “Proved Developed F&D cost” metric and adding an ESG metric for “Methane Intensity.”
  • The Long-term Incentive program now includes “ROCE” and “Reinvestment Ratio” metrics, replacing the ROACE metric in last year’s program.


As described more fully in this proxy, your Board believes effective governance depends on the diversity of thought, experience, and skillset of its members. In 2020, we welcomed Sylvester “Chip” Johnson, who brings over 40 years of energy experience and an entrepreneurial view of the business. His industry perspective helps inform our continued engagement regarding the strategic direction of our industry. Leading governance practices remain a key tenet of your Board’s culture.

On behalf of the Board, I would also like to remember Julian Bott, SWN’s CFO who passed away suddenly in early January. Julian will be remembered for his leadership, his professional capability, but most of all, as a consummate member of the team.

The COVID-19 pandemic has tested us as a country and as a company. Thank you to SWN’s management team and all of the employees of SWN for their tireless efforts during this challenging and demanding year, thank you to fellow shareholders for your continued support, and thank you to everyone in our communities helping with the fight against COVID-19.


Catherine A. Kehr
Chairman of the Board