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In a filing with the Securities and Exchange Commission, Southwestern Energy says it plans to let 1,100 employees go. That follows a smaller round of job cuts in the third quarter of 2015.
"Since this time last year, we've seen the price of natural gas fall from about $3.50 an MCF to less than $2.00 an MCF," says Ed Hirs, an energy economist at the University of Houston. ("MCF" is industry shorthand for "thousand cubic feet").
The steep drop in natural gas prices is only part of Southwestern's problem. "There's a lack of pipeline capacity out of the Marcellus and Utica [Shale] regions [of the Northeastern U.S.], where Southwestern has the bulk of its operations," Hirs says. “Southwestern can drill new wells, but they don't have any place to sell the gas. They don't have the access to get the gas out into the Northeast, or even down to the Gulf Coast where the country is better situated to take the gas and process it."
Executives from Southwestern declined to be interviewed for this story. But in an e-mailed statement, the company did confirm it plans to eliminate more than 300 Houston jobs.
