Methane ManagementIn a Carbon-Constrained World

A Foundation to a Stronger Bridge Forward

Fiji GeorgeDirector, V+ Development Solutions

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Forward-Looking Statements

This presentation includes forward-looking statements. Forward-looking statements relate to future eventsand anticipated results of operations, business strategies, and other aspects of our operations or operatingresults. In many cases you can identify forward-looking statements by terminology such as “anticipate,”“intend,” “plan,” “project,” “estimate,” “continue,” “potential,” “should,” “could,” “may,” “will,” “objective,”“guidance,” “outlook,” “effort,” “expect,” “believe,” “predict,” “budget,” “projection,” “goal,” “forecast,” “target” orsimilar words. Statements may be forward looking even in the absence of these particular words. Where, inany forward-looking statement, the company expresses an expectation or belief as to future results, suchexpectation or belief is expressed in good faith and believed to have a reasonable basis. However, there canbe no assurance that such expectation or belief will result or be achieved. The actual results of operations canand will be affected by a variety of risks and other matters including, but not limited to, changes in commodityprices; changes in expected levels of natural gas and oil reserves or production; operating hazards, drillingrisks, unsuccessful exploratory activities; limited access to capital or significantly higher cost of capital relatedto illiquidity or uncertainty in the domestic or international financial markets; international monetary conditions;unexpected cost increases; potential liability for remedial actions under existing or future environmentalregulations; potential liability resulting from pending or future litigation; and general domestic and internationaleconomic and political conditions; as well as changes in tax, environmental and other laws applicable to ourbusiness. Other factors that could cause actual results to differ materially from those described in the forward-looking statements include other economic, business, competitive and/or regulatory factors affecting ourbusiness generally as set forth in our filings with the Securities and Exchange Commission. Unless legallyrequired, Southwestern Energy Company undertakes no obligation to update publicly any forward-lookingstatements, whether as a result of new information, future events or otherwise.

Cautionary Note to U.S. Investors –The SEC permits oil and gas companies, in their filings with the SEC, todisclose only proved, probable and possible reserves. We use the term "resource" in this presentation that theSEC’s guidelines prohibit us from including in filings with the SEC. U.S. investors are urged to considerclosely the oil and gas disclosures in our Form 10-K and other reports and filings with the SEC. Copies areavailable from the SEC and from the SWN website.

The contents of this presentation are current as of August 1, 2016

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About Southwestern

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500

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4,000

XOM CHK SWN APC EQT Cabot BP DVN Antero COP CVX BHP Consol Range

SWN is 3rd overall as of 2Q16

US Lower 48 Gas Production Sorted by 2Q16 (MMcf/d)

Source: NGSA

Strategy built on the Formula: The Right People doing the Right Things, wisely investing the cash flow from the underlying Assets will create Value +.

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Focus on Premier Quality Assets

Fayetteville Shale2015 Reserves – 3,281 Bcf (53%)2015 Production – 465 Bcf (48%)Net acres – 957,641 (12/31/15)(2)

Southwest Appalachia2015 Reserves – 611 Bcfe (10%)2015 Production – 143 Bcfe (15%)Net acres – 425,098 (12/31/15)(1)

Northeast Appalachia2015 Reserves – 2,319 Bcf (37%)2015 Production – 360 Bcf (37%)Net acres – 270,335 (12/31/15)

Reserves & Production2015 Reserves – 6,215 Bcfe2015 Production – 976 Bcfe2016 Estimated production – 865 - 875 Bcfe

AR

WV

PA

Forward-Looking Statement

(1) Includes acreage from pending West Virginia asset sale.

(2) Includes 202,156 net acres that have previously been reported as a component of our divested conventional Arkoma acreage.

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The Future of Natural Gas

A Bridge Fuel or a New Foundationfor Low-Carbon Energy

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Effect of Fuel SwitchRemoving Over a Billion Tons of CO2 from emissions

Electric power sector carbon dioxide savings since 2005 from less carbon-intensive fossil fuels and from non-carbon generation, 2005-13

Source: US Energy Information Administration, Monthly Energy Review (September 2014), Tables 12.1 and 1.1; Population growth, Census Bureau as of September 3, 2014; GDP, Bureau of Economic Analysis, as of July 31, 2014

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Lifecycle GHG AnalysisPower Sector

Source: T.Skone, NETL, 2016

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GHG Emissions and Methane EmissionsUS Total from Oil & Gas Sources in 2014

• In 2014, the US Oil & Gas methane emissions were ~3.6% of total GHGs• Globally, the IPCC estimates that total methane emissions are ~10% of total

GHGs– Rhodium Group estimates total methane emissions from Oil & Gas is ~1.68 billion metric

tons or ~3.6% of total global GHGs in 2010

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Total US GHG emissions Total methane emissions Total Oil & Gas methane emissions Non-O&G methane emissions

Source: EPA, 2016

Million Metric Tons, CO2e

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Environmental Success Story

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1990 2005 2009 2010 2011 2012 2013 2014

Natural Gas Gross Production & Natural Gas Systems Methane Emissions

Gross Production (tcf) Net Emissions (mm t, CO2e)

Production 46% Methane Emissions 15%

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Paris and Methane

“The United States intends to achieve an economy-wide target of reducing its greenhouse gas emissions by 26%-28% below its 2005 level in 2025 …. Under the Clean Air Act, the United States Environmental Protection Agency is developing standards to address methane emissions from landfills and the oil and gas sector” – US INDC to UNFCC, March 31, 2015

Source: 2016 SECOND BIENNIAL REPORT of the United States of America, Dept. of State

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Why Methane Matters

• Methane is a high global warming potential (GWP) gas

• Concurrent methane and CO2emission reductions may yield greater benefits

• Excessive leakage can erode benefits of natural gas

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CO2 CH4 N2OCFC12 CFC11 15-minorCO2-eq (ppm) Total

Source: IPCC Source: NOAA

Source: Shoemaker et al. (2013)

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Top-down versus Bottom-up

Source: NREL

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Top-down versus Bottom-upParameter Top-down Methods Bottom-up

Method

Employs aircrafts, towers, van measurements outside the facility fence-line and utilizes tracer or atmospheric emission dispersion models to compute the emission rate for the study-area. These may include mass balance methods or facility downwind methods.

Measures emissions for a set of emission sources at site. Estimates for unmeasured sources at the site are developed using indirect means or engineering methods. Area emissions estimated by extrapolating emissions measurements to all devices/facilities within the study-area

Key Limitation (1)Attribution top-down emission estimate to individual facilities or sources, though raster flights can somewhat overcome this limitation

Scale-up of emission sources and activity from the facility/study to national or regional values, though detailed inventory of equipment and activities can overcome this limitation

Key Limitation (2)

Representativeness of time window sampled. Peak emissions caused by episodic events are likely measured since the aircraft measurements are undertaken when there is a vertically well-mixed PBL and consistent winds (around afternoon)

Representativeness of operations and emissions measured, particularly the difficulty characterizing “long tail” of skewed emission distributions, and

the difficulty of measuring large episodic emission sources

Key Advantage (1) Vast area can be measured and integral of all emissions within the study area

Site-access: source specific/detailed activity data and emission measurements. Produces actionable information by relating the fraction of emissions, frequency of large emitters, and the characteristic mix of emission rates to specific locations on facilities

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PBL

INFLOW

Top-down Mass Balance TheoryEmissions = Outflow – Inflow

OUTFLOW

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Model assumptions• Mass conservation principle (steady winds)• Well-mixed PBL (afternoon hours)

MIX OF POTENTIAL CH4 SOURCES(LANDFILLS, OIL & GAS PRODUCTION, LIVESTOCK)

Source: NOAA, SWN

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The ContextEstimated Methane Leakage Rate (2012)

PRODUCTION 0.164 Tcf (0.56%)

PROCESSING0.052 Tcf(0.18%)

TRANSMISSION AND STORAGE

0.116 Tcf(0.44%)

DISTRIBUTION 0.069 Tcf (0.26%)

NATIONAL0.401 Tcf(1.44%)

Source: EPA, April 2014

• In April 2016, the EPA issued updated methane emissions inventory– Methane leakage for CY 2014 is computed at 1.62% or 0.47 Tcf

• Upper bound global average leakage rate was estimated at 5%, with a likely range of 2-4% (Schwietzke et al.)

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Sample of Results from Measurement Studies

Source: EDF (2016)

1.9% = Production-weighted Avg.

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Sample of Results from Measurement Studies

SAMPLE SIZE

STUDY INSTITUTION SECTOR SAMPLE SIZE

NATIONAL EXTRAPOLATED LEAKAGE RATES % OF GROSS PRODUCTION (CENTRAL ESTIMATES)

University of Texas (Allen et al.,2013) Production

190 sites (150 well pads with 489 wells, 27 completions, 9 unloadings and 4 workovers)

0.42%

University of Texas (Allen et al., 2014) Production 377 pneumatic controllers, 107

unloading events 0.38%

Colorado State University (Marchese et al. 2015)

Gathering & Boosting 114 gathering facilities 0.365%

Colorado State University (Marchese et al. 2015)

Processing 16 processing plants 0.11%

Colorado State University

Transmission & Storage

2,292 total measurements (1,279 measurements from 45 compressor stations)

0.35%*

Washington State University Distribution 0.1%-0.22%*

*Reported as percent of throughput

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Oil and Gas Industry Methane Profile

• Millions of potential “affected sources”– 1.3 million oil and gas wells– 5,000+ gathering/boosting facilities– 668 processing facilities– Over 1,800 transmission facilities– Over 400 storage– 111 LNG facilities

• Regional variations– There are significant regional variations among emission sources– Differences likely attributable to:

• Type of natural gas production (i.e. wet gas-vs-dry gas)• Age, number, and type of infrastructure

• Fat-tail phenomenon– Relatively small number of emission sources are responsible for a

disproportionately large number of emissions

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White House/EPA Methane Strategy

Source: The White House [mailto:info@mail.whitehouse.gov], March 02, 2015

• “…a new goal to cut methane emissions from the oil and gas sector by 40 – 45 percent from 2012 levels by 2025”

• “Achieving the Administration’s goal would save up to 180 billion cubic feet of natural gas in 2025.”

• “…Standards for Methane and Ozone-Forming Emissions from New and Modified Sources”

• “Reduce Methane Emissions while Improving Pipeline Safety”

• “Drive Technology to Reduce Natural Gas Losses and Improve Emissions Quantification”

• EPA will work with DOE, DOT, and leading companies, individually and through broader initiatives such as the One Future Initiative and the Downstream Initiative, to develop and verify robust commitments to reduce methane emissions.

Source: The White House The White House, “FACT SHEET: Administration Takes Steps Forward on Climate Action Plan by Announcing Actions to Cut Methane Emissions” January 14, 2015

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ONE Future and EPA’s Methane Challenge program

EPA Methane Challenge

Technology-Based Program

Best Management Practices (BMPs)

Corporate-wide application of control

technologies and work practices by 2020

Reporting of performance through EPA’s modified eGRT

EPA Reporting and Technical Guidance

Performance-Based Programs

ONE Future (OF)

Company decides the application of

appropriate BMPs to meet the goals by 2025

Reporting of company performance through

EPA’s modified eGRT. OF collective

performance through OF website

ONE Future Methane Estimation Protocol

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ONE Future Companies

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ONE FutureAdvancing Policy through science and technology

• EPA finalized ONE Future Program on August 4, 2016– ONE Future is now an EPA approved voluntary reduction program

• Commissioned and released the ICF Methane Abatement Cost Study

• EPA’s One Future Methane Intensity Commitment Supplemental Technical Information– The first ever comprehensive methane emissions estimation

methodology across the entire value chain for all emission sources• ONE Future engaged in technical and policy with DOE,

universities and internally sharing novel practices and technologies – Example: $30k funding for CSU on methane measurement projects

at gathering and boosting facilities that will have significant impact on characterization and regulation of these facilities

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ICF 2016 Methane Abatement Cost (MAC) Analysis Key Takeaways

• ICF builds on its 2014 EDF analysis but updates inputs with current pricing and more recent recoverable gas estimates– Economics of methane recovery at a natural gas price of

$3.00/Mcf, which is more consistent with current market projections

– Well-head price is adjusted for royalties and fees in the production segment to $2.25/Mcf

– Incorporates actual ONE Future member experiences related to costs of various technologies and practices

– Incorporates latest literature on abatement costs and mitigation potential

• Cost-effective abatement technologies are available– Over 88 Bcf of methane reductions across value chain

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• Costs are an average 5x higher than the 2014 ICF estimate for EDF– While the previous EDF study found that the cost of methane

abatement is less than a penny per Mcf of natural gas produced, or $0.66/Mcf of methane reduced, the new ICF study finds the cost to be $3.35/Mcf of methane reduced

– Regional variations exists

• With varied costs and abatement potential, a performance-based metric is the preferred framework for methane mitigation at existing facilities

ICF 2016 Methane Abatement Cost (MAC) Analysis Key Takeaways

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Summary of Final NSPS Regulations under 111(b) – Quad Oa

• EPA finalized first-ever methane specific regulations for oil and gas operations under the Clean Air Act’s New Source Performance Standards (NSPS)

• Regulations apply to new or modified facilities constructed on or after September 18, 2015– The rules do not cover existing wells and gathering facilities that

were operational or commenced construction prior to September 18, 2015

• Key Impacts (relative to existing Quad O regulations for VOCs)– Addition of methane as a pollutant – Leak detection as a mandatory requirement – Oil wells are regulated– Low production well sites are not exempt

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Information Collection Request (ICR)

• EPA has initiated the ICR to “provide the foundation necessary for developing comprehensive regulations to reduce emissions from existing sources”

• 2nd DRAFT of the ICR signed on September 23, 2016– Key changes from 1st DRAFT

• Focus on Low Production Wells (<15 boe/d)• Facility definition includes “ surface sites and the centralized

production areas those wells feed”. – Part I “Operator Survey” will be sent to 15,000 operators and

mandatory response by 30 day of receipt– Part II “Detailed Facility Survey” will be sent to ~ 3,800 operators

and mandatory response needed by 120 days

• ICR response will require close coordination within various groups in companies

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EPA is Considering Regulating All Existing Facilities

• How will EPA employ the ICR results and new science into its decision-making?

• Will EPA review all policy options when considering the unique nature of the industry?– EPA Methane Challenge– Technology-based, performance-based or market-based– The role of states under §111(d) – Role of voluntary programs and early actions

• How can EPA provide flexibility under §111(d)?– How can a regulatory structure that mirrors the emissions

averaging provisions under §60.33b(d)(1) be extended for methane from oil and gas facilities under a potential §111(d)

– How will marginal wells be handled?

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Methane Gap

• Methane gap of about 4-14 million tons of CO2e reduction from the 40-45% goals respectively

• CATF in a report “Minding the Gap” implies that 40-45% equates to reductions of 219-224 bcf which is > Administration’s stated goal of 180 bcf.

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Investors are paying attention….

Source: Societe Generale, Cross Asset Research, October 2015

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Role of Natural GasPrudent Development and Use

Source: NPC (2011)

NATURAL GAS

Economic Prosperity

Environmentally Sustainable

Energy Security

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Thank you!

Questions?

Methane ManagementIn a Carbon-Constrained World

A Foundation to a Stronger Bridge Forward

Fiji GeorgeDirector, V+ Development Solutions

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O&G Efficiency (“Leak Rate”) Improving Globally Over Time

Source: Ed Dlugokencky, NOAA created from Schwietzke et al., 2014 (ES&T)

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Methane Leakage Rates – NETL

Source: T.Skone, NETL, 2016

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Characteristics of Emission Sources

Large number of discrete emission sources

Majority of methane emissions are from a small number of sources (i.e. super-emitters/fat-tails)

Emissions monitoring technologies are still evolving

Emission reduction framework must address these emission characteristics

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The New Rules Impact Additional Emission Sources

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Cost-effectiveness ($/Mcf of methane reduced) Gas Price Sensitivity

Gas Price ONE Future 2016 EDF 2014

$2.25/Mcf $3.35

$3.00/Mcf $3.01 $1.48

$4.00/Mcf $2.55 $0.66

$5.00/Mcf -$0.15

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National MAC Curve by Industry Segment

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National MAC Curve by Technology

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ICF’s Analysis – LDAR Comparisons of 2014 and 2016 Studies

KEY PARAMETERSICF REPORT FOR EDF 2014

ICF REPORT FOR ONE FUTURE 2016

Cost Effectiveness ($/MCF)PRODUCTION $2.52 ($1.30)PROCESSING ($0.98) $5.22 TRANSMISSION & STORAGE ($2.28) $6.94

Total Cost/yrPRODUCTION & GATHERING $2,006 $1,719 PROCESSING $6,017 $12,501 TRANSMISSION & STORAGE $6,017 $10,001

Recovered Gas Value*PRODUCTION $1,340 $3,303 PROCESSING $7,455 NATRANSMISSION & STORAGE $12,416 NA

Other ParametersHOURLY LABOR RATE $77.79 $84.78 Annual Total $191,075 $207,203 Total Cost as Hourly Rate $101.64 $142.06

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Marginal Wells – Zavala-Araiza et al.EDF, 2015

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Low Production (LP) vs non LP wells (sch/hr of Natural Gas Emissions)- Data from Rella,Lan and Yacovitch

non LP NG Emission Rate (scf/hr) LP NG Emission Rate (scf/hr)