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Debt
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
Debt DEBT
The components of debt as of December 31, 2021 and 2020 consisted of the following:
December 31, 2021
(in millions)Debt InstrumentUnamortized Issuance ExpenseUnamortized
Debt Premium / Discount		Total
Current portion of long-term debt:
4.10% Senior Notes due March 2022
$201 $— $— $201 
Variable rate (3.0% at December 31, 2021) Term Loan B due June 2027
$5 
(1)
$— $— $5 
Total current portion of long-term debt$206 $— $— $206 
Long-term debt:
Variable rate (2.08% at December 31, 2021) 2018 revolving credit facility, due April 2024
$460 $— 
(2)
$— $460 
4.95% Senior Notes due January 2025 (3)
389 (1)— 388 
Variable rate (3.0% at December 31, 2021) Term Loan B due June 2027
545 (7)(1)537 
7.75% Senior Notes due October 2027
440 (4)— 436 
8.375% Senior Notes due September 2028
350 (5)— 345 
5.375% Senior Notes due February 2029
700 (6)25 719 
5.375% Senior Notes due March 2030
1,200 (17)— 1,183 
4.75% Senior Notes due February 2032
1,150 (17)— 1,133 
Total long-term debt$5,234 $(57)$24 $5,201 
Total debt$5,440 $(57)$24 $5,407 
December 31, 2020
(in millions)Debt InstrumentUnamortized Issuance ExpenseUnamortized
Debt Premium / Discount		Total
Long-term debt:
Variable rate (2.11% at December 31, 2020) 2018 revolving credit facility, due April 2024
$700 $— 
(2)
$— $700 
4.10% Senior Notes due March 2022
207 — — 207 
4.95% Senior Notes due January 2025 (3)
856 (4)(1)851 
7.50% Senior Notes due April 2026
618 (6)— 612 
7.75% Senior Notes due October 2027
440 (5)— 435 
8.375% Senior Notes due September 2028
350 (5)— 345 
Total long-term debt$3,171 $(20)$(1)$3,150 
(1)The Term Loan requires quarterly principal repayments of $1.375 million, subject to adjustment for voluntary prepayments, beginning in March 2022.
(2)At December 31, 2021 and 2020, unamortized issuance expense of $10 million and $12 million, respectively, associated with the 2018 credit facility (as defined below) was classified as other long-term assets on the consolidated balance sheet.
(3)Effective in July 2018, the interest rate was 6.20% for the 2025 Notes, reflecting a net downgrade in the Company's bond ratings since their issuance. On April 7, 2020, S&P downgraded the Company's bond rating to BB-, which had the effect of increasing the interest rate on the 2025 Notes to 6.45% following the July 23, 2020 interest payment due date. The first coupon payment to the bondholders at the higher interest rate was paid in January 2021. On September 1, 2021, S&P upgraded the Company’s bond rating to BB, and on January 6, 2022, S&P further upgraded our bond rating to BB+, which will have the effect of decreasing the interest rate on the 2025 Notes to 5.95% beginning with coupon payments paid after January 2022.
The following is a summary of scheduled debt maturities by year as of December 31, 2021 and includes the quarterly Term Loan principal repayments of $1.375 million, subject to adjustment for voluntary prepayments, beginning in March 2022:
(in millions)
2022 (1)
$206 
20236 
2024 (2)
465 
2025395 
20265 
Thereafter4,363 
$5,440 
(1)In January 2022, the remaining $201 million principal balance on the Senior Notes due 2022 was retired using the Company’s 2018 credit facility.
(2)The Company’s 2018 credit facility matures in 2024.
Credit Facility
2018 Credit Facility
In April 2018, the Company entered into a revolving credit facility (the “2018 credit facility”) with a group of banks that, as amended, has a maturity date of April 2024.  The 2018 credit facility has an aggregate maximum revolving credit amount of $3.5 billion, and in October 2021, the banks participating in the 2018 credit facility reaffirmed the elected borrowing base and aggregate commitments to be $2.0 billion. The borrowing base is subject to redetermination at least twice a year, which typically occurs in April and October, and is secured by substantially all of the assets owned by the Company and its subsidiaries. The permitted lien provisions in the senior notes indentures currently limit liens securing indebtedness to the greater of $2.0 billion and 25% of adjusted consolidated net tangible assets.
The Company may utilize the 2018 credit facility in the form of loans and letters of credit. Loans under the 2018 credit facility are subject to varying rates of interest based on whether the loan is a Eurodollar loan or an alternate base rate loan.  Eurodollar loans bear interest at the Eurodollar rate, which is adjusted LIBOR for such interest period plus the applicable margin (as those terms are defined in the 2018 credit facility documentation).  The applicable margin for Eurodollar loans under the 2018 credit facility, as amended, ranges from 1.75% to 2.75% based on the Company’s utilization of the 2018 credit facility.  Alternate base rate loans bear interest at the alternate base rate plus the applicable margin.  The applicable margin for alternate base rate loans under the 2018 credit facility, as amended, ranges from 0.75% to 1.75% based on the Company’s utilization of the 2018 credit facility.
The 2018 credit facility contains customary representations and warranties and covenants including, among others, the following: 
•a prohibition against incurring debt, subject to permitted exceptions;
•a restriction on creating liens on assets, subject to permitted exceptions;  
•restrictions on mergers and asset dispositions; 
•restrictions on use of proceeds, investments, transactions with affiliates, or change of principal business; and
•maintenance of the following financial covenants, commencing with the fiscal quarter ended June 30, 2018:
(1)Minimum current ratio of no less than 1.00 to 1.00, whereby current ratio is defined as the Company’s consolidated current assets (including unused commitments under the credit agreement, but excluding non-cash derivative assets) to consolidated current liabilities (excluding non-cash derivative obligations and current maturities of long-term debt).
(2)Maximum total net leverage ratio of no greater than, with respect to each fiscal quarter ending on or after June 30, 2020, 4.00 to 1.00.  Total net leverage ratio is defined as total debt less cash on hand (up to the lesser of 10% of credit limit or $150 million) divided by consolidated EBITDAX for the last four consecutive quarters.  For purposes of calculating consolidated EBITDAX, the Company can include the Indigo and GEPH consolidated EBITDAX prior to the respective Mergers for the same twelve-month rolling period. EBITDAX, as defined in the Company’s 2018 credit agreement, excludes the effects of interest expense, depreciation, depletion and amortization, income tax, any non-cash impacts from impairments, certain non-cash hedging activities, stock-based compensation expense, non-cash gains or losses on asset sales, unamortized issuance cost, unamortized debt discount and certain restructuring costs. 
The 2018 credit facility contains customary events of default that include, among other things, the failure to comply with the financial covenants described above, non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations and warranties, bankruptcy and insolvency events, material judgments and cross-defaults to material indebtedness.  If an event of default occurs and is continuing, all amounts outstanding under the 2018 credit facility may become immediately due and payable.  As of December 31, 2021, the Company was in compliance with all of the covenants of the credit agreement in all material respects.
Each United States domestic subsidiary of the Company for which the Company owns 100% of its equity guarantees the 2018 credit facility.  Pursuant to requirements under the indentures governing its senior notes, each subsidiary that became a guarantor of the 2018 credit facility also became a guarantor of each of the Company’s senior notes.  
As of December 31, 2021, the Company had $160 million in letters of credit and $460 million in borrowings outstanding under the 2018 credit facility. The Company currently does not anticipate being required to supply a materially greater amount of letters of credit under its existing contracts.
The Company's exposure to the anticipated transition from LIBOR is limited to the 2018 credit facility. The USD-LIBOR settings are expected to be published through June 2023, and Southwestern anticipates using a variation of this rate until the underlying agreements are extended beyond the LIBOR publication date.
Term Loan Credit Agreement
On December 22, 2021, the Company entered into a term loan credit agreement with a group of lenders that provided for a $550 million secured term loan facility which matures in June 2027 (the “Term Loan”). As of December 31, 2021, the Company had borrowings under this Term Loan of $550 million. The net proceeds from the initial loans of $542 million were used to fund a portion of the GEPH Merger on December 31, 2021. Beginning on March 31, 2022, the Term Loan will require minimum quarterly payments of $1.375 million, subject to adjustment for voluntary prepayments. The Term Loan is subject to varying rates of interest based on whether the term loan is a term benchmark loan or an alternate base rate loan. Term benchmark loans bear interest at the adjusted term secured overnight financing rate (which includes a credit spread adjustment and is subject to a floor that is 0.50%) plus an applicable margin equal to 2.50%. Alternate base rate loans bear interest at the alternate base rate plus an applicable margin equal to 1.50%. The current borrowings are considered benchmark loans and are carried an interest rate of 3.00% as of December 31, 2021 (0.50% floor plus 2.50% margin).
The term loan is subject to a quarterly collateral coverage ratio test in which the Company’s PDP PV-10 value, net of derivative mark-to-market value, must be greater than 2.0x its secured debt commitments or all secured debt becomes callable. If necessary, outstanding secured debt principal can be paid down within 45 days of the end of such fiscal quarter to come into compliance with this ratio, either by (i) prepaying the loans, (ii) prepaying the loans under the 2018 credit facility, (iii) prepaying any other secured indebtedness that is secured by a lien, or some combination thereof.

The Company’s obligations under the Term Loan are guaranteed by each of the Company’s subsidiaries that guarantee the obligations under the 2018 credit facility and are secured by liens on substantially all the assets of the Company and the Company’s subsidiaries on an equal basis with the liens securing the obligations under the 2018 credit facility.
Senior Notes
In January 2015, the Company completed a public offering of $1.0 billion aggregate principal amount of its 4.95% Senior Notes due 2025 (the “2025 Notes”).  The interest rate on the 2025 Notes is determined based upon the public bond ratings from Moody’s and S&P.  Downgrades on the 2025 Notes from either rating agency increase interest costs by 25 basis points per downgrade level and upgrades decrease interest costs by 25 basis points per upgrade level, up to the stated coupon rate, on the following semi-annual bond interest payment. Effective in July 2018, the interest rate for the 2015 Notes was 6.20%, reflecting a net downgrade in the Company's bond ratings since their issuance. On April 7, 2020, S&P downgraded the Company's bond rating to BB-, which had the effect of increasing the interest rate on the 2025 Notes to 6.45% following the July 23, 2020 interest payment due date. The first coupon payment to the bondholders at the higher interest rate was paid in January 2021. On September 1, 2021, S&P upgraded the Company’s bond rating to BB, and on January 6, 2022, S&P further upgraded the Company’s bond rating to BB+, which will have the effect of decreasing the interest rate on the 2025 Notes to 5.95% beginning with coupon payments paid after January 2022.  
In the second half of 2019, the Company repurchased $35 million of its 4.95% senior notes due 2025, $11 million of its 7.50% Senior Notes due 2026 and $16 million of its 7.75% Senior Notes due 2027 at a discount for $54 million, and recognized an $8 million gain on extinguishment of debt.
In the first half of 2020, the Company repurchased $6 million of its 4.10% senior notes due 2022, $36 million of its 4.95% senior notes due 2025, $21 million of its 7.50% senior notes due 2026 and $44 million of its 7.75% senior notes due 2027 for $72 million, and recognized a $35 million gain on the extinguishment of debt.
In August 2020, the Company completed a public offering of $350 million aggregate principal amount of its 2028 Notes, with net proceeds from the offering totaling approximately $345 million after underwriting discounts and offering expenses. The 2028 Notes were sold to the public at 100% of their face value. The net proceeds from the notes, in conjunction with the net proceeds from the August 2020 common stock offering and borrowings under the 2018 credit facility, were utilized to fund a redemption of $510 million of Montage's Notes in connection with the closing of the Montage Merger.
On August 30, 2021, Southwestern closed its public offering of $1,200 million aggregate principal amount of its 5.375% Senior Notes due 2030 (the “2030 Notes”), with net proceeds from the offering totaling $1,183 million after underwriting discounts and offering expenses. The proceeds were used to repurchase the remaining $618 million of the Company’s 7.50% Senior Notes due 2026, $167 million of the Company’s 4.95% Senior Notes due 2025 and $6 million of the Company’s 4.10% Senior Notes due 2022 for $845 million, and the Company recognized a $60 million loss on the extinguishment of debt, which included the write-off of $6 million in related unamortized debt discounts and debt issuance costs. The remaining proceeds were used to pay borrowings under its 2018 credit facility and for general corporate purposes.
Upon the close of the Indigo Merger on September 1, 2021, and pursuant to the terms of the Indigo Merger Agreement, Southwestern assumed $700 million in aggregate principal amount of Indigo’s 5.375% Senior Notes due 2029 (“Indigo Notes”). As part of purchase accounting, the assumption of the Indigo Notes resulted in a non-cash fair value adjustment of $26 million, based on the market price of 103.766% on September 1, 2021, the date that the Indigo Merger closed. Subsequent to the Indigo Merger, the Company exchanged the Indigo Notes for approximately $700 million of newly issued 5.375% Senior Notes due 2029, which were registered with the SEC in November 2021.
On December 22, 2021, Southwestern closed its public offering of $1,150 million aggregate principal amount of its 4.75% Senior Notes due 2032 (the “2032 Notes”), with net proceeds from the offering totaling $1,133 million after underwriting discounts and offering expenses. The net proceeds of this offering, along with the net proceeds from the Term Loan, were used to fund the cash consideration portion of the GEPH Merger, which closed on December 31, 2021, and to pay $332 million to fund tender offers for $300 million of our 2025 Notes for which the Company recorded an additional loss on extinguishment of debt of $33 million, which included the write-off of $1 million in related unamortized debt discounts and debt issuance costs. The remaining proceeds were used for general corporate purposes.