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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) December 21, 1993
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SOUTHWESTERN ENERGY COMPANY
(Exact name of registrant as specified in its charter)
Arkansas 1 - 8246 71-0205415
(State of incorporation (Commission (I.R.S. Employer
or organization) File Number) Identification No.)
1083 Sain Street, P.O. Box 1408, Fayetteville, Arkansas 72702-1408
(Address of principal executive offices, including zip code)
(501) 521-1141
(Registrant's telephone number, including area code)
No Change
(Former name, former address and former fiscal year; if changed
since last report)
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Item 5.
Other Events
Vesta Energy Company ("Vesta") filed on December 21, 1993, and
amended on January 6, 1994, a complaint in the Federal District
Court for the Northern District of Oklahoma against the Registrant,
four of its subsidiaries, and the NOARK Pipeline System ("NOARK").
The complaint makes several allegations and generally claims that
the defendants induced Vesta to enter into a contract to transport
50,000 Million British Thermal Units (MMBtu) of gas per day on
NOARK and a separate contract to purchase 25,000 MMBtu per day of
the total from two of the Registrant's subsidiaries through a
series of false representations. Vesta is seeking rescission of
the contracts, actual damages in excess of $1.0 million and
punitive damages in excess of $1.0 million.
The Registrant believes that Vesta's claim is wholly without
merit and expects NOARK to file a counterclaim seeking enforcement
of the contracts and damages. The Registrant may also seek damages
related to the price paid to two of its subsidiaries for gas
production sold to Vesta. A press release dated January 10, 1994,
and filed as an exhibit per Item 7. of this report, is hereby
incorporated by reference for further details.
Item 7.(c)
Exhibits Reference
(1) Press release dated January 10, 1994. p. 3-4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
SOUTHWESTERN ENERGY COMPANY
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Registrant
DATE: January 19, 1994 BY: /s/ GREGORY D. KERLEY
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Gregory D. Kerley
Vice President -
Treasurer and Secretary,
and Chief Accounting
Officer
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FOR IMMEDIATE RELEASE For Further Information Contact:
January 10, 1994 Stanley D. Green
Executive Vice President - Finance
and Corporate Development
(501) 521-1141
VESTA ENERGY COMPANY FILES COMPLAINT
AGAINST SOUTHWESTERN, NOARK PIPELINE SYSTEM
FAYETTEVILLE, ARKANSAS--Southwestern Energy Company
(Southwestern) (NYSE:SWN) announced that Vesta Energy Company
(Vesta) has filed a complaint in the Federal District Court for the
Northern District of Oklahoma against Southwestern, four of its
subsidiaries, and the NOARK Pipeline System (NOARK). The complaint
also named as defendants Dan B. Grubb, President of Southwestern,
and Grubb NOARK Pipeline, Inc., an entity owned by Mr. Grubb.
Vesta has a contract with NOARK which obligates it to
transport up to 50,000 Million British Thermal Units (MMBtu) of gas
per day on NOARK. Vesta has a separate contract to purchase 25,000
MMBtu per day of the total from two subsidiaries of Southwestern.
The complaint makes several allegations and generally claims that
the defendants induced Vesta to enter into the contracts through a
series of false representations. Vesta is seeking rescission of
the contracts, actual damages in excess of $1.0 million and
punitive damages in excess of $1.0 million.
Southwestern stated that Vesta's claim is wholly without merit
and expects NOARK to file a counterclaim seeking enforcement of the
contracts and damages. Southwestern may also seek damages related
to the price paid to two of Southwestern's subsidiaries for gas
production sold to Vesta.
Southwestern, through a subsidiary, owns a 47.33% general
partnership interest in the limited partnership which constructed
and operates NOARK and serves as managing partner. Vesta owns a 1%
general partnership interest in NOARK. Grubb NOARK Pipeline, Inc.
owned an interest in NOARK prior to the time Mr. Grubb became
President of Southwestern.
Vesta is a unit of Edisto Resources Corporation (Edisto).
Edisto recently emerged from a bankruptcy reorganization and has
recently undergone a number of management changes.
Under its contract with NOARK, Vesta is obligated to pay firm
demand charges on 50,000 MMBtu per day of transportation capacity
at a rate of $.193 per MMBtu, or approximately $293,000 monthly.
For volumes actually transported, Vesta is obligated to pay an
additional $.092 per MMBtu. Vesta's shipments on NOARK had been
averaging approximately 32,000 MMBtu per day, including the 25,000
MMBtu per day purchased from Southwestern's subsidiaries. Vesta
has ceased shipments on NOARK and has ceased payment of its
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contractual firm demand charges. Southwestern intends to continue
to ship the 25,000 MMBtu per day on NOARK and, as is the case under
its sales contract with Vesta, Southwestern will initially continue
to pay the full firm transportation charges to NOARK.
Southwestern said that it did not expect significant
realization problems with receivable balances due from Vesta as
recent sales of its gas production to Vesta have taken place under
an escrow arrangement.
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