At the annual John S. Herold Pacesetters Energy Conference, the theme was rock and roll. So when Harold Korell began describing the "mess" that Southwestern Energy Co. was in when he became chief executive in 1997, he played a tape of the lyrics "I fell into a burning ring of fire" by Johnny Cash.
But by the end of his keynote speech, after describing the company's booming success in the Fayetteville Shale play in Arkansas, Korell was playing Louis Armstrong's "I see skies of blue...."
During the company's return to health, which involved hiring new employees, a utility-side lawsuit settlement, a new E&P strategy and other adventures, he told employees two words: Find gas. And they have, through the stealth project in the Fayetteville, where the company is now producing millions of cubic feet a day.
In September 2005, Southwestern raised some $600 million of public equity to gear up its Fayetteville activity. Today, the company has 880,000 net acres under lease and its portion of the play appears to be 60 miles wide. "If we assume 1.4 billion cubic feet per well on 80-acre spacing, that is 7 trillion cubic feet of gas," he said, while playing "Baby, what a big surprise."
At one low point, the company's market cap was only $190 million, yet Korell noted with some amazement that today, the company may trade up or down by that much valuation in a single day, based on gas prices. The market cap now is about $5 billion.
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