Image source: Southwestern Energy investor presentation.

What: Shares of Southwestern Energy (NYSE:SWN) are up 13.5% as of 10:45 a.m. ET today after the company reported earnings that were better than expected.

So what: Before getting too excited to hear that an energy company beat expectations, let's remember that the forecast for energy companies in general is very, very low lately. This past quarter, Southwestern posted an adjusted net loss of ($0.08) per share, which was better than the $0.20-per-share loss that was expected. That adjusted loss also strips out some very large charges such as a major asset write-down and a tax item deduction. On a GAAP basis, Southwestern's loss for the quarter was $3.03 per share. 

If there are some positives to take away from this earnings report, it's that the company's production levels ticked up ever so slightly despite huge declines in capital spending. This suggests that it's getting more efficient at capital spending and bringing down operating costs such that it can at least make today's low oil and gas prices somewhat manageable. At the same time, though, it is still struggling and losing money at today's prices, and production is expected to begin to slump as the lack of capital investment starts to bite. 

Now what: It's encouraging to see Southwestern beating Wall Street's very modest expectations, but the fact is that the company needs oil and gas prices to rise significantly before it can repair some of the damage done to its balance sheet. Today's earnings result seems more like a "steady as she goes" sort of moment that shouldn't change anyone's investment thesis. If you are bullish on natural gas prices, then Southwestern's low-cost position will eventually pan out, but that is predicated on something that is completely out of its control.