Southwestern Energy Company Announces Favorable Results for First Quarter 2001; Company Uses Increased Cash Flow to Reduce Debt

Apr 30, 2001, 01:00 ET from Southwestern Energy Company

    HOUSTON, April 30 /PRNewswire/ -- Southwestern Energy Company (NYSE:   SWN)
 today reported net income of $16.0 million, or $.64 of basic earnings per
 share, for the first quarter of 2001, compared to $9.2 million, or $.37 per
 share, reported during the same period in 2000.  Cash flow from operating
 activities, before working capital changes, was $38.6 million during the
 quarter, up 47% from $26.2 million for the first quarter of 2000.
 Additionally, the Company announced that it had reduced its long-term debt by
 nearly $30 million during the first three months of 2001.
     "This first quarter is a good start to 2001.  We are making significant
 progress in reducing our debt and strengthening our balance sheet," stated
 Harold M. Korell, President and Chief Executive Officer of Southwestern
 Energy.  "Our exploration and production operations continue to improve as we
 develop opportunities that create value through the drill bit.  We believe
 2001 has the potential to be an excellent year for Southwestern.  We are
 looking forward to what lies ahead."
 
     Strong E&P Results
     Operating income for the Company's exploration and production segment
 increased to $22.0 million in the first quarter of 2001, up from $8.7 million
 for the same period in 2000.  The Company benefited from both increased
 production and higher commodity prices.  Oil and gas production for the three
 months ended March 31, 2001, was 9.0 billion cubic feet equivalent (Bcfe), up
 from 8.7 Bcfe in the first quarter of 2000.  Oil and gas production averaged
 100.0 million cubic feet equivalent per day (MMcfe/d) during the first quarter
 of 2001, and the Company exited the quarter with an average daily rate of
 105.0 MMcfe/d.
     Southwestern received an average price of $4.48 per thousand cubic feet
 (Mcf) for its gas production during the three months ended March 31, 2001, up
 from $2.62 per Mcf for the same period in 2000.  The Company received an
 average price of $25.82 per barrel for its oil production during the three
 months ended March 31, 2001, compared to $23.03 per barrel for the same period
 in 2000.
     The Company participated in 30 wells during the first quarter of 2001 that
 included 15 producers, 5 dry holes and 10 wells that were still in progress at
 March 31, 2001.  In the Arkoma Basin, the Company drilled 13 wells with 6
 successful producers and 4 still in progress.  Of note, was the Company's
 continued successful development of the Haileyville Prospect area in Pittsburg
 County, Oklahoma, where the three most recently drilled wells are producing at
 a combined rate of approximately 29.0 million cubic feet of gas per day
 (MMcf/d), or 8.3 MMcf/d net to Southwestern's interest.
     In the Permian Basin, the Company was successful on 5 of 7 wells drilled
 with continued primary emphasis in southeast New Mexico, where it has secured
 approximately 100,000 additional acres of land over the last two years through
 exploration joint ventures.  Additional significant drilling activity during
 the first quarter occurred at the Company's Overton Field in Smith County,
 Texas, where the first two wells of a multi-well development plan were
 successfully completed.
     In south Louisiana, the Company successfully completed its State Lease
 16625 #1 development well on its previously announced Malone discovery in
 Assumption Parish.  Southwestern is currently drilling the Norman Breaux #1, a
 development well in the Company's North Grosbec discovery area, also in
 Assumption Parish, and is drilling an exploratory test on its high-potential
 Mahone Prospect in Vermilion Parish.
     Production and operating expenses for the Company's E&P segment increased
 during the quarter to $.51 per Mcfe, compared to $.38 per Mcfe during the
 first quarter of 2000.  The increase was primarily due to the industry-wide
 increase in costs related to normal production operations.  Production taxes
 also increased during the quarter due to higher oil and gas prices, rising to
 $.23 per Mcfe, compared to $.13 per Mcfe in the same period in 2000.  The
 amortization rate per Mcfe for the Company's full cost pool was $1.08 per Mcfe
 compared to $1.03 per Mcfe in the first quarter in 2000.
 
     Utility, Marketing Segments Continue Steady Performance
     Operating income for Southwestern's utility systems was $9.4 million in
 the first quarter of 2001, down from $11.4 million for the same period in
 2001.  The comparative decrease was due to the loss of income from the
 Company's Missouri gas distribution operations that were sold in May 2000.
 Excluding the Missouri operations, the utility's operating income was
 $9.4 million during the first quarter of 2000 even with the same period in
 2001.  Additionally, the Company's marketing operations added $1.1 million in
 reported operating income in the first quarter of 2001, compared to
 $1.0 million in the first quarter of 2000.
     Southwestern has planned a teleconference call on Tuesday, May 1, at 11:30
 a.m. EST to discuss the Company's first quarter results.  The toll-free number
 to call is 888-209-3777 and the reservation number is 18572506.  The
 teleconference can also be heard "live" over the Internet at the Company's
 website: http://www.swn.com.  RealPlayer 8 Basic is required to listen to the
 teleconference and can be downloaded from the website.
     Southwestern Energy Company is primarily focused on natural gas and is
 engaged in oil and gas exploration and production, natural gas gathering,
 transmission, and marketing, and natural gas distribution.  Additional
 information on the Company can be found on the Internet at http://www.swn.com.
     All statements, other than historical financial information, may be deemed
 to be forward-looking statements within the meaning of Section 27A of the
 Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
 Act of 1934, as amended.  Although the Company believes the expectations
 expressed in such forward-looking statements are based on reasonable
 assumptions, such statements are not guarantees of future performance and
 actual results or developments may differ materially from those in the
 forward-looking statements.  Important factors that could cause actual results
 to differ materially from those in the forward-looking statements herein
 include, but are not limited to, the timing and extent of changes in commodity
 prices for gas and oil, the timing and extent of the Company's success in
 discovering, developing, producing, and estimating reserves, property
 acquisition or divestiture activities that may occur, the effects of weather
 and regulation on the Company's gas distribution segment, increased
 competition, legal and economic factors, governmental regulation, the
 financial impact of accounting regulations for derivative instruments,
 changing market conditions, the comparative cost of alternative fuels,
 conditions in capital markets and changes in interest rates, availability of
 oil field services, drilling rigs, and other equipment, as well as various
 other factors beyond the Company's control.  A discussion of these and other
 factors affecting the Company's performance is included in the Company's
 periodic reports filed with the Securities and Exchange Commission including
 its Annual Report on Form 10-K for the year ended December 31, 2000.
 
 
      OPERATING STATISTICS  (Unaudited)
      Southwestern Energy Company and Subsidiaries
 
                                                            Three Months
     Periods Ended March 31                            2001              2000
 
     Exploration & Production
     Production
       Affiliated gas sales (Bcf)                       2.3               3.5
       Unaffiliated gas sales (Bcf)                     5.7               4.3
           Total gas production (Bcf)                   8.0               7.8
 
       Oil production (MBbls)                           161               155
 
       Total equivalent production (Bcfe)               9.0               8.7
     Commodity Prices
       Average gas price per Mcf                      $4.48             $2.62
       Average oil price per Bbl                     $25.82            $23.03
     Operating Expenses per Mcfe
       Production expenses                            $0.51             $0.38
       Production taxes                               $0.23             $0.13
       General & administrative expenses              $0.22             $0.27
       Full cost pool amortization                    $1.08             $1.03
 
 
     Energy Services
     Gas volumes marketed (Bcf)                        11.0              18.2
 
 
     Gas Distribution (A)
     Deliveries (Bcf)
       Sales volumes                                    8.5               7.1
       Transportation volumes
         End-use                                        2.0               2.2
         Off-system                                     ---               1.6
           Total deliveries                            10.5              10.9
     Average number of customers                    136,621           134,054
     Average sales rate per Mcf                       $9.32             $5.48
     Heating weather - degree days                    2,161             1,689
                     - percent of normal                101%               79%
 
     (A)  Gas distribution statistics for 2000 exclude results from the
          Company's Missouri utility operations that were sold in May 2000.
 
 
      STATEMENTS OF INCOME  (Unaudited)
      Southwestern Energy Company and Subsidiaries
 
                                        Three Months           Twelve Months
     Periods Ended March 31           2001       2000        2001        2000
                                    ($ in thousands, except per share amounts)
     Operating Revenues
     Gas sales                      $95,385    $60,292    $235,362    $165,251
     Gas marketing                   35,189     30,004     142,419     113,099
     Oil sales                        4,162      3,579      16,120      11,809
     Gas transportation and other     2,393      3,038      10,198       8,930
                                    137,129     96,913     404,099     299,089
     Operating Costs and Expenses
     Gas purchases - utility         41,128     19,263      80,534      44,273
     Gas purchases - marketing       33,735     28,663     138,293     109,426
     Operating expenses              10,463      8,866      36,405      34,350
     General and administrative
      expenses                        4,827      5,920      23,889      24,470
     Unusual items                      ---        ---     111,288         ---
     Depreciation, depletion and
      amortization                   11,637     11,091      46,415      42,322
     Taxes, other than income taxes   2,740      2,054       9,201       7,063
                                    104,530     75,857     446,025     261,904
     Operating Income (Loss)         32,599     21,056     (41,926)     37,185
     Interest Expense
     Interest on notes payable        6,867      5,201      25,755      20,102
     Other interest charges             291        192       1,687         832
     Interest capitalized              (436)      (637)     (2,246)     (3,105)
                                      6,722      4,756      25,196      17,829
     Other Income (Expense)             380     (1,241)      3,618      (2,892)
     Income (Loss) Before Income
      Taxes                          26,257     15,059     (63,504)     16,464
     Provision (Benefit) for
      Income Taxes
        Current                         ---        872        (872)     (3,961)
        Deferred                     10,244      5,001     (23,662)     10,444
                                     10,244      5,873     (24,534)      6,483
     Income (Loss) Before
      Extraordinary Item             16,013      9,186     (38,970)      9,981
     Extraordinary Loss Due to
      Early Retirement of Debt
        (Net of $569 Tax Benefit)       ---        ---        (890)        ---
     Net Income (Loss)              $16,013     $9,186    $(39,860)     $9,981
     Basic Earnings (Loss) Per Share
     Income (Loss) Before
      Extraordinary Item              $0.64      $0.37      ($1.55)      $0.40
     Extraordinary Loss Due to
      Early Retirement of Debt
        (Net of $569 Tax Benefit)       ---        ---       (0.04)        ---
     Net Income (Loss)                $0.64      $0.37      ($1.59)      $0.40
     Basic Average Common Shares
      Outstanding                25,187,103 25,037,508  25,080,489  24,967,285
     Diluted Earnings (Loss) Per
      Share
     Income (Loss) Before
      Extraordinary Item              $0.63      $0.37      ($1.55)      $0.40
     Extraordinary Loss Due to
      Early Retirement of Debt
        (Net of $569 Tax Benefit)       ---        ---       (0.04)        ---
     Net Income (Loss)                $0.63      $0.37      ($1.59)      $0.40
     Diluted Average Common
      Shares Outstanding         25,495,585 25,037,508  25,080,489  24,967,285
 
 
      BALANCE SHEETS  (Unaudited)
      Southwestern Energy Company and Subsidiaries
 
     March 31                                 2001                      2000
                                                     ($ in thousands)
     ASSETS
 
     Current Assets                         $112,097                   $59,934
     Investments                              15,269                    13,545
     Property, Plant and Equipment, at
      cost                                 1,129,661                 1,105,832
     Less: Accumulated depreciation,
      depletion and amortization             566,093                   530,736
                                             563,568                   575,096
     Other Assets                             12,589                    11,050
                                            $703,523                  $659,625
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
 
     Short-Term Debt                        $141,800                      $---
     Other Current Liabilities                80,042 (A)                47,953
     Long-Term Debt                          225,000                   278,400
     Deferred Income Taxes                   106,532                   131,924
     Other Liabilities                         4,787 (A)                 3,143
     Commitments and Contingencies
     Shareholders' Equity
     Common stock, $.10 par value;
      authorized 75,000,000 shares,
        issued 27,738,084 shares               2,774                     2,774
     Additional paid-in capital               20,208                    20,732
     Retained earnings                       164,365                   205,728
     Accumulated other comprehensive loss    (12,173)(B)                   ---
                                             175,174                   229,234
     Less: Common stock in treasury, at
            cost, 2,550,373 shares in 2001
            and 2,700,731 shares in 2000      28,451                    30,087
           Unamortized cost of restricted
            shares issued under stock
            incentive plan, 228,686 shares
            in 2001 and 179,275 shares
            in 2000                            1,361                       942
                                             145,362                   198,205
                                            $703,523                  $659,625
 
     (A)  Other current liabilities include $17.0 million, and other
          liabilities include $3.0 million, related to the Company's hedging
          activities.  These amounts were recorded under the provisions of SFAS
          No. 133.
     (B)  Accumulated other comprehensive loss represents the Company's net of
          tax position of its cash flow commodity price hedges required to be
          recorded under the provisions of SFAS No. 133.
 
 
      STATEMENTS of CASH FLOWS  (Unaudited)
      Southwestern Energy Company and Subsidiaries
 
                                                         Three Months
     Periods Ended March 31                       2001                   2000
                                                       ($ in thousands)
     Cash Flows From Operating Activities
     Net income                                 $16,013                 $9,186
     Adjustments to reconcile net income to net
      cash provided by operating activities:
         Depreciation, depletion and
          amortization                           12,012                 11,394
         Deferred income taxes                   10,244                  5,001
         Equity in loss of partnership              305                    634
         Change in current assets and liabilities 1,833                  9,360
     Net cash provided by operating activities   40,407                 35,575
 
     Cash Flows From Investing Activities
     Capital expenditures                       (15,314)               (14,557)
     Decrease in gas stored underground           2,534                  2,878
     Other items                                  1,806                  1,420
     Net cash used in investing activities      (10,974)               (10,259)
 
     Cash Flows From Financing Activities
     Net change in revolving debt               (29,200)               (16,300)
     Payment on revolving short-term note           ---                 (7,500)
     Dividends paid                                 ---                 (1,502)
     Net cash used in financing activities      (29,200)               (25,302)
 
     Increase in cash                               233                     14
     Cash at beginning of year                    2,386                  1,240
     Cash at end of year                         $2,619                 $1,254
 
 
      SEGMENT INFORMATION  (Unaudited)
      Southwestern Energy Company and Subsidiaries
 
                          Exploration     Gas      Marketing
                         & Production Distribution & Other Eliminations  Total
                                              ($ in thousands)
     Quarter Ending March 31, 2001
 
     Revenues                $40,740   $81,492   $71,144   $(56,247)   $137,129
       Gas purchases             ---    61,289    69,579    (56,005)     74,863
       Operating expenses      4,631     5,948       ---       (116)     10,463
       General & administrative
        expenses               2,015     2,653       285       (126)      4,827
       Depreciation, depletion
        & amortization        10,046     1,551        40        ---      11,637
       Taxes, other than
        income taxes           2,060       653        27        ---       2,740
     Operating Income        $21,988    $9,398    $1,213       $---     $32,599
 
     Capital Investments     $14,299      $909      $106       $---     $15,314
 
 
     Quarter Ending March 31, 2000
 
     Revenues                $24,761   $53,248   $43,357   $(24,453)    $96,913
       Gas purchases             ---    30,310    41,904    (24,288)     47,926
       Operating expenses      3,343     5,571       ---        (48)      8,866
       General & administrative
        expenses               2,379     3,278       380       (117)      5,920
       Depreciation, depletion
        & amortization         9,240     1,810        41        ---      11,091
       Taxes, other than
        income taxes           1,111       909        34        ---       2,054
     Operating Income         $8,688   $11,370 (A)  $998       $---     $21,056
 
     Capital Investments     $13,111    $1,280      $166       $---     $14,557
 
     (A)  Gas distribution operating income for the first quarter of 2000 would
          have been approximately $9.4 million, excluding the results of the
          Company's Missouri utility operations that were sold in May 2000.
 
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SOURCE Southwestern Energy Company
    HOUSTON, April 30 /PRNewswire/ -- Southwestern Energy Company (NYSE:   SWN)
 today reported net income of $16.0 million, or $.64 of basic earnings per
 share, for the first quarter of 2001, compared to $9.2 million, or $.37 per
 share, reported during the same period in 2000.  Cash flow from operating
 activities, before working capital changes, was $38.6 million during the
 quarter, up 47% from $26.2 million for the first quarter of 2000.
 Additionally, the Company announced that it had reduced its long-term debt by
 nearly $30 million during the first three months of 2001.
     "This first quarter is a good start to 2001.  We are making significant
 progress in reducing our debt and strengthening our balance sheet," stated
 Harold M. Korell, President and Chief Executive Officer of Southwestern
 Energy.  "Our exploration and production operations continue to improve as we
 develop opportunities that create value through the drill bit.  We believe
 2001 has the potential to be an excellent year for Southwestern.  We are
 looking forward to what lies ahead."
 
     Strong E&P Results
     Operating income for the Company's exploration and production segment
 increased to $22.0 million in the first quarter of 2001, up from $8.7 million
 for the same period in 2000.  The Company benefited from both increased
 production and higher commodity prices.  Oil and gas production for the three
 months ended March 31, 2001, was 9.0 billion cubic feet equivalent (Bcfe), up
 from 8.7 Bcfe in the first quarter of 2000.  Oil and gas production averaged
 100.0 million cubic feet equivalent per day (MMcfe/d) during the first quarter
 of 2001, and the Company exited the quarter with an average daily rate of
 105.0 MMcfe/d.
     Southwestern received an average price of $4.48 per thousand cubic feet
 (Mcf) for its gas production during the three months ended March 31, 2001, up
 from $2.62 per Mcf for the same period in 2000.  The Company received an
 average price of $25.82 per barrel for its oil production during the three
 months ended March 31, 2001, compared to $23.03 per barrel for the same period
 in 2000.
     The Company participated in 30 wells during the first quarter of 2001 that
 included 15 producers, 5 dry holes and 10 wells that were still in progress at
 March 31, 2001.  In the Arkoma Basin, the Company drilled 13 wells with 6
 successful producers and 4 still in progress.  Of note, was the Company's
 continued successful development of the Haileyville Prospect area in Pittsburg
 County, Oklahoma, where the three most recently drilled wells are producing at
 a combined rate of approximately 29.0 million cubic feet of gas per day
 (MMcf/d), or 8.3 MMcf/d net to Southwestern's interest.
     In the Permian Basin, the Company was successful on 5 of 7 wells drilled
 with continued primary emphasis in southeast New Mexico, where it has secured
 approximately 100,000 additional acres of land over the last two years through
 exploration joint ventures.  Additional significant drilling activity during
 the first quarter occurred at the Company's Overton Field in Smith County,
 Texas, where the first two wells of a multi-well development plan were
 successfully completed.
     In south Louisiana, the Company successfully completed its State Lease
 16625 #1 development well on its previously announced Malone discovery in
 Assumption Parish.  Southwestern is currently drilling the Norman Breaux #1, a
 development well in the Company's North Grosbec discovery area, also in
 Assumption Parish, and is drilling an exploratory test on its high-potential
 Mahone Prospect in Vermilion Parish.
     Production and operating expenses for the Company's E&P segment increased
 during the quarter to $.51 per Mcfe, compared to $.38 per Mcfe during the
 first quarter of 2000.  The increase was primarily due to the industry-wide
 increase in costs related to normal production operations.  Production taxes
 also increased during the quarter due to higher oil and gas prices, rising to
 $.23 per Mcfe, compared to $.13 per Mcfe in the same period in 2000.  The
 amortization rate per Mcfe for the Company's full cost pool was $1.08 per Mcfe
 compared to $1.03 per Mcfe in the first quarter in 2000.
 
     Utility, Marketing Segments Continue Steady Performance
     Operating income for Southwestern's utility systems was $9.4 million in
 the first quarter of 2001, down from $11.4 million for the same period in
 2001.  The comparative decrease was due to the loss of income from the
 Company's Missouri gas distribution operations that were sold in May 2000.
 Excluding the Missouri operations, the utility's operating income was
 $9.4 million during the first quarter of 2000 even with the same period in
 2001.  Additionally, the Company's marketing operations added $1.1 million in
 reported operating income in the first quarter of 2001, compared to
 $1.0 million in the first quarter of 2000.
     Southwestern has planned a teleconference call on Tuesday, May 1, at 11:30
 a.m. EST to discuss the Company's first quarter results.  The toll-free number
 to call is 888-209-3777 and the reservation number is 18572506.  The
 teleconference can also be heard "live" over the Internet at the Company's
 website: http://www.swn.com.  RealPlayer 8 Basic is required to listen to the
 teleconference and can be downloaded from the website.
     Southwestern Energy Company is primarily focused on natural gas and is
 engaged in oil and gas exploration and production, natural gas gathering,
 transmission, and marketing, and natural gas distribution.  Additional
 information on the Company can be found on the Internet at http://www.swn.com.
     All statements, other than historical financial information, may be deemed
 to be forward-looking statements within the meaning of Section 27A of the
 Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
 Act of 1934, as amended.  Although the Company believes the expectations
 expressed in such forward-looking statements are based on reasonable
 assumptions, such statements are not guarantees of future performance and
 actual results or developments may differ materially from those in the
 forward-looking statements.  Important factors that could cause actual results
 to differ materially from those in the forward-looking statements herein
 include, but are not limited to, the timing and extent of changes in commodity
 prices for gas and oil, the timing and extent of the Company's success in
 discovering, developing, producing, and estimating reserves, property
 acquisition or divestiture activities that may occur, the effects of weather
 and regulation on the Company's gas distribution segment, increased
 competition, legal and economic factors, governmental regulation, the
 financial impact of accounting regulations for derivative instruments,
 changing market conditions, the comparative cost of alternative fuels,
 conditions in capital markets and changes in interest rates, availability of
 oil field services, drilling rigs, and other equipment, as well as various
 other factors beyond the Company's control.  A discussion of these and other
 factors affecting the Company's performance is included in the Company's
 periodic reports filed with the Securities and Exchange Commission including
 its Annual Report on Form 10-K for the year ended December 31, 2000.
 
 
      OPERATING STATISTICS  (Unaudited)
      Southwestern Energy Company and Subsidiaries
 
                                                            Three Months
     Periods Ended March 31                            2001              2000
 
     Exploration & Production
     Production
       Affiliated gas sales (Bcf)                       2.3               3.5
       Unaffiliated gas sales (Bcf)                     5.7               4.3
           Total gas production (Bcf)                   8.0               7.8
 
       Oil production (MBbls)                           161               155
 
       Total equivalent production (Bcfe)               9.0               8.7
     Commodity Prices
       Average gas price per Mcf                      $4.48             $2.62
       Average oil price per Bbl                     $25.82            $23.03
     Operating Expenses per Mcfe
       Production expenses                            $0.51             $0.38
       Production taxes                               $0.23             $0.13
       General & administrative expenses              $0.22             $0.27
       Full cost pool amortization                    $1.08             $1.03
 
 
     Energy Services
     Gas volumes marketed (Bcf)                        11.0              18.2
 
 
     Gas Distribution (A)
     Deliveries (Bcf)
       Sales volumes                                    8.5               7.1
       Transportation volumes
         End-use                                        2.0               2.2
         Off-system                                     ---               1.6
           Total deliveries                            10.5              10.9
     Average number of customers                    136,621           134,054
     Average sales rate per Mcf                       $9.32             $5.48
     Heating weather - degree days                    2,161             1,689
                     - percent of normal                101%               79%
 
     (A)  Gas distribution statistics for 2000 exclude results from the
          Company's Missouri utility operations that were sold in May 2000.
 
 
      STATEMENTS OF INCOME  (Unaudited)
      Southwestern Energy Company and Subsidiaries
 
                                        Three Months           Twelve Months
     Periods Ended March 31           2001       2000        2001        2000
                                    ($ in thousands, except per share amounts)
     Operating Revenues
     Gas sales                      $95,385    $60,292    $235,362    $165,251
     Gas marketing                   35,189     30,004     142,419     113,099
     Oil sales                        4,162      3,579      16,120      11,809
     Gas transportation and other     2,393      3,038      10,198       8,930
                                    137,129     96,913     404,099     299,089
     Operating Costs and Expenses
     Gas purchases - utility         41,128     19,263      80,534      44,273
     Gas purchases - marketing       33,735     28,663     138,293     109,426
     Operating expenses              10,463      8,866      36,405      34,350
     General and administrative
      expenses                        4,827      5,920      23,889      24,470
     Unusual items                      ---        ---     111,288         ---
     Depreciation, depletion and
      amortization                   11,637     11,091      46,415      42,322
     Taxes, other than income taxes   2,740      2,054       9,201       7,063
                                    104,530     75,857     446,025     261,904
     Operating Income (Loss)         32,599     21,056     (41,926)     37,185
     Interest Expense
     Interest on notes payable        6,867      5,201      25,755      20,102
     Other interest charges             291        192       1,687         832
     Interest capitalized              (436)      (637)     (2,246)     (3,105)
                                      6,722      4,756      25,196      17,829
     Other Income (Expense)             380     (1,241)      3,618      (2,892)
     Income (Loss) Before Income
      Taxes                          26,257     15,059     (63,504)     16,464
     Provision (Benefit) for
      Income Taxes
        Current                         ---        872        (872)     (3,961)
        Deferred                     10,244      5,001     (23,662)     10,444
                                     10,244      5,873     (24,534)      6,483
     Income (Loss) Before
      Extraordinary Item             16,013      9,186     (38,970)      9,981
     Extraordinary Loss Due to
      Early Retirement of Debt
        (Net of $569 Tax Benefit)       ---        ---        (890)        ---
     Net Income (Loss)              $16,013     $9,186    $(39,860)     $9,981
     Basic Earnings (Loss) Per Share
     Income (Loss) Before
      Extraordinary Item              $0.64      $0.37      ($1.55)      $0.40
     Extraordinary Loss Due to
      Early Retirement of Debt
        (Net of $569 Tax Benefit)       ---        ---       (0.04)        ---
     Net Income (Loss)                $0.64      $0.37      ($1.59)      $0.40
     Basic Average Common Shares
      Outstanding                25,187,103 25,037,508  25,080,489  24,967,285
     Diluted Earnings (Loss) Per
      Share
     Income (Loss) Before
      Extraordinary Item              $0.63      $0.37      ($1.55)      $0.40
     Extraordinary Loss Due to
      Early Retirement of Debt
        (Net of $569 Tax Benefit)       ---        ---       (0.04)        ---
     Net Income (Loss)                $0.63      $0.37      ($1.59)      $0.40
     Diluted Average Common
      Shares Outstanding         25,495,585 25,037,508  25,080,489  24,967,285
 
 
      BALANCE SHEETS  (Unaudited)
      Southwestern Energy Company and Subsidiaries
 
     March 31                                 2001                      2000
                                                     ($ in thousands)
     ASSETS
 
     Current Assets                         $112,097                   $59,934
     Investments                              15,269                    13,545
     Property, Plant and Equipment, at
      cost                                 1,129,661                 1,105,832
     Less: Accumulated depreciation,
      depletion and amortization             566,093                   530,736
                                             563,568                   575,096
     Other Assets                             12,589                    11,050
                                            $703,523                  $659,625
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
 
     Short-Term Debt                        $141,800                      $---
     Other Current Liabilities                80,042 (A)                47,953
     Long-Term Debt                          225,000                   278,400
     Deferred Income Taxes                   106,532                   131,924
     Other Liabilities                         4,787 (A)                 3,143
     Commitments and Contingencies
     Shareholders' Equity
     Common stock, $.10 par value;
      authorized 75,000,000 shares,
        issued 27,738,084 shares               2,774                     2,774
     Additional paid-in capital               20,208                    20,732
     Retained earnings                       164,365                   205,728
     Accumulated other comprehensive loss    (12,173)(B)                   ---
                                             175,174                   229,234
     Less: Common stock in treasury, at
            cost, 2,550,373 shares in 2001
            and 2,700,731 shares in 2000      28,451                    30,087
           Unamortized cost of restricted
            shares issued under stock
            incentive plan, 228,686 shares
            in 2001 and 179,275 shares
            in 2000                            1,361                       942
                                             145,362                   198,205
                                            $703,523                  $659,625
 
     (A)  Other current liabilities include $17.0 million, and other
          liabilities include $3.0 million, related to the Company's hedging
          activities.  These amounts were recorded under the provisions of SFAS
          No. 133.
     (B)  Accumulated other comprehensive loss represents the Company's net of
          tax position of its cash flow commodity price hedges required to be
          recorded under the provisions of SFAS No. 133.
 
 
      STATEMENTS of CASH FLOWS  (Unaudited)
      Southwestern Energy Company and Subsidiaries
 
                                                         Three Months
     Periods Ended March 31                       2001                   2000
                                                       ($ in thousands)
     Cash Flows From Operating Activities
     Net income                                 $16,013                 $9,186
     Adjustments to reconcile net income to net
      cash provided by operating activities:
         Depreciation, depletion and
          amortization                           12,012                 11,394
         Deferred income taxes                   10,244                  5,001
         Equity in loss of partnership              305                    634
         Change in current assets and liabilities 1,833                  9,360
     Net cash provided by operating activities   40,407                 35,575
 
     Cash Flows From Investing Activities
     Capital expenditures                       (15,314)               (14,557)
     Decrease in gas stored underground           2,534                  2,878
     Other items                                  1,806                  1,420
     Net cash used in investing activities      (10,974)               (10,259)
 
     Cash Flows From Financing Activities
     Net change in revolving debt               (29,200)               (16,300)
     Payment on revolving short-term note           ---                 (7,500)
     Dividends paid                                 ---                 (1,502)
     Net cash used in financing activities      (29,200)               (25,302)
 
     Increase in cash                               233                     14
     Cash at beginning of year                    2,386                  1,240
     Cash at end of year                         $2,619                 $1,254
 
 
      SEGMENT INFORMATION  (Unaudited)
      Southwestern Energy Company and Subsidiaries
 
                          Exploration     Gas      Marketing
                         & Production Distribution & Other Eliminations  Total
                                              ($ in thousands)
     Quarter Ending March 31, 2001
 
     Revenues                $40,740   $81,492   $71,144   $(56,247)   $137,129
       Gas purchases             ---    61,289    69,579    (56,005)     74,863
       Operating expenses      4,631     5,948       ---       (116)     10,463
       General & administrative
        expenses               2,015     2,653       285       (126)      4,827
       Depreciation, depletion
        & amortization        10,046     1,551        40        ---      11,637
       Taxes, other than
        income taxes           2,060       653        27        ---       2,740
     Operating Income        $21,988    $9,398    $1,213       $---     $32,599
 
     Capital Investments     $14,299      $909      $106       $---     $15,314
 
 
     Quarter Ending March 31, 2000
 
     Revenues                $24,761   $53,248   $43,357   $(24,453)    $96,913
       Gas purchases             ---    30,310    41,904    (24,288)     47,926
       Operating expenses      3,343     5,571       ---        (48)      8,866
       General & administrative
        expenses               2,379     3,278       380       (117)      5,920
       Depreciation, depletion
        & amortization         9,240     1,810        41        ---      11,091
       Taxes, other than
        income taxes           1,111       909        34        ---       2,054
     Operating Income         $8,688   $11,370 (A)  $998       $---     $21,056
 
     Capital Investments     $13,111    $1,280      $166       $---     $14,557
 
     (A)  Gas distribution operating income for the first quarter of 2000 would
          have been approximately $9.4 million, excluding the results of the
          Company's Missouri utility operations that were sold in May 2000.
 
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 SOURCE  Southwestern Energy Company