Acquisitions (Tables)

6 Months Ended

Jun. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Schedule of Business Acquisitions by Acquisition, Equity Interest Issued or Issuable

The following table presents the fair value of consideration transferred to GEPH equity holders as a result of the GEPH Merger:

(in millions, except share, per share amounts)	As of December 31, 2021
Shares of Southwestern common stock issued	99,337,748
NYSE closing price per share of Southwestern common shares on December 31, 2021	$	4.66
	$	463
Cash consideration (1)	1,259
Total consideration	$	1,722

(1)Reflects $10 million of customary post-close cash consideration adjustments.

The following table presents the fair value of consideration transferred to Indigo equity holders as a result of the Indigo Merger:

(in millions, except share, per share amounts)	As of September 1, 2021
Shares of Southwestern common stock issued	337,827,171
NYSE closing price per share of Southwestern common shares on September 1, 2021	$	4.70
	$	1,588
Cash consideration	373
Total consideration	$	1,961

Schedule of Business Acquisitions, by Acquisition

The following table sets forth the preliminary fair value of the assets acquired and liabilities assumed as of the acquisition date. Certain data necessary to complete the purchase price allocation is still under evaluation, including, but not limited to, the final actualization of accrued liabilities and receivable balances as well as the valuation of natural gas and oil properties. The Company will finalize the purchase price allocation during the twelve-month period following the acquisition date, during which time the value of the assets and liabilities may be revised as appropriate.

(in millions)	As of December 31, 2021
Consideration:
Total consideration	$	1,722
Fair Value of Assets Acquired:
Cash and cash equivalents	11
Accounts receivable	171
Other current assets (2)	1
Commodity derivative assets	56
Evaluated oil and gas properties	1,783
Unevaluated oil and gas properties (1)	61
Other property, plant and equipment	2
Other long-term assets	3
Total assets acquired	2,088
Fair Value of Liabilities Assumed:
Accounts payable (2)	175
Other current liabilities	1
Derivative liabilities	75
Revolving credit facility	81
Asset retirement obligations	24
Other noncurrent liabilities (2)	10
Total liabilities assumed	366
Net Assets Acquired and Liabilities Assumed	$	1,722

(1)Reflects $2 million purchase price adjustment during the six months ended June 30, 2022.

(2)Reflects purchase price adjustments consisting of a $2 million decrease to other current assets, a $5 million increase to accounts payable and a $5 million increase to other noncurrent liabilities during the six months ended June 30, 2022.

The following table sets forth the preliminary fair value of the assets acquired and liabilities assumed as of the acquisition date. Certain data necessary to complete the purchase price allocation is still under evaluation, including, but not limited to, the valuation of natural gas and oil properties and the resolution of certain matters that the Company is indemnified for under the Indigo Merger Agreement. The Company will finalize the purchase price allocation during the twelve-month period following the acquisition date, during which time the value of the assets and liabilities may be revised as appropriate.

(in millions)	As of September 1, 2021
Consideration:
Total consideration	$	1,961
Fair Value of Assets Acquired:
Cash and cash equivalents	55
Accounts receivable	192
Other current assets	2
Commodity derivative assets	2
Evaluated oil and gas properties	2,724
Unevaluated oil and gas properties (1)	697
Other property, plant and equipment	4
Other long-term assets	27
Total assets acquired	3,703
Fair Value of Liabilities Assumed:
Accounts payable (1)	287
Other current liabilities	55
Derivative liabilities	501
Revolving credit facility	95
Senior unsecured notes	726
Asset retirement obligations	8
Other noncurrent liabilities	70
Total liabilities assumed	1,742
Net Assets Acquired and Liabilities Assumed	$	1,961

(1)Reflects $13 million purchase price adjustment during the six months ended June 30, 2022.

Schedule of Acquisition Related Costs

The following table summarizes the merger-related expenses incurred:

	For the three months ended June 30,
	2022						2021
(in millions)	Indigo Merger		GEPH Merger		Total		Montage Merger		Indigo Merger		Total
Professional fees (bank, legal, consulting)	$	—	$	—	$	—	$	1	$	2	$	3
Contract buyouts, terminations and transfers	1		—		1		—		—		—
Due diligence and environmental	—		1		1		—		—		—
Total merger-related expenses	$	1	$	1	$	2	$	1	$	2	$	3

	For the six months ended June 30,
	2022						2021
(in millions)	Indigo Merger		GEPH Merger		Total		Montage Merger		Indigo Merger		Total
Transition services	$	—	$	18	$	18	$	—	$	—	$	—
Professional fees (bank, legal, consulting)	—		1		1		1		2		$	3
Contract buyouts, terminations and transfers	1		2		3		—		—		$	—
Due diligence and environmental	1		1		2		—		—		$	—
Employee-related	—		1		1		1		—		$	1
Other	—		2		2		—		—		$	—
Total merger-related expenses	$	2	$	25	$	27	$	2	$	2	$	4

Business Acquisition, Pro Forma Information

The following table summarizes the unaudited pro forma condensed financial information for the three and six months ended June 30, 2021 as if the Indigo Merger and the GEPH Merger each had occurred on January 1, 2020:

(in millions)	For the three months ended June 30, 2021		For the six months ended June 30, 2021
Revenues	$	1,476	$	2,947
Net loss attributable to common stock	$	(875)	$	(845)
Net loss attributable to common stock per share - basic	$	(0.79)	$	(0.76)
Net loss attributable to common stock per share - diluted	$	(0.79)	$	(0.76)