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Previous: APPALACHIAN POWER CO, 8-A12B, 1998-02-27 |
Next: ARTS WAY MANUFACTURING CO INC, 10-K, 1998-02-27 |
<PAGE>
FORM U-3A-2
File No. 69-248
SECURITIES & EXCHANGE COMMISSION
Washington, D.C.
Statement by Holding Company Claiming Exemption
Under Rule U-3A-2 from the Provisions of the
Public Utility Holding Company Act of 1935
SOUTHWESTERN ENERGY COMPANY hereby files with the Securities & Exchange
Commission, pursuant to Rule U-3A-2, its statement claiming exemption as a
holding company from the provisions of the Public Utility Holding Company Act of
1935. In support of such claim for exemption, the following information is
submitted:
1. Southwestern Energy Company, an Arkansas corporation, is
located at 1083 Sain Street, Fayetteville, Arkansas (P. O. Box
1408, Fayetteville, Arkansas 72702-1408). Southwestern Energy
Company is a holding company with eight wholly owned
subsidiaries. The wholly owned subsidiaries of the holding
company are Arkansas Western Gas Company, a gas utility; SEECO,
Inc., an Arkansas based gas exploration and production company;
Southwestern Energy Production Company (formerly Arkansas Western
Production Company), an oil and gas exploration and production
company with offices in Oklahoma, Texas and Arkansas; Diamond "M"
Production Company, a Texas based oil and gas exploration and
production company; Southwestern Energy Services Company, an
Oklahoma based gas marketing company; Southwestern Energy
Pipeline Company, a corporation that owns an interest in a
partnership that operates an intrastate natural gas pipeline in
Arkansas; Arkansas Western Pipeline Company, a corporation that
operates an 8-mile interstate pipeline in northeast Arkansas and
southeast Missouri; and A. W. Realty Company, an Arkansas real
estate company which holds real estate interests. Arkansas Gas
Gathering Company is a wholly owned subsidiary of SEECO, Inc.,
and is currently inactive.
The main location of Arkansas Western Gas Company is 1001 Sain
Street, Fayetteville, Arkansas 72701. SEECO, Inc., Arkansas Gas
Gathering Company, Arkansas Western Pipeline Company, and A. W.
Realty Company, occupy the same location as that of Claimant. The
main locations of Southwestern Energy Production Company are 5151
San Felipe, Suite 700, Houston, Texas 77056-3608, and 5600 N.
May Ave., Suite 200, Oklahoma City, Oklahoma 73112-3979. The main
location of Diamond "M" Production Company is 5151 San Felipe,
Suite 700, Houston, Texas 77056-3608. The main location of
Southwestern Energy Services Company and Southwestern Energy
Pipeline Company is 2200 Mid-Continent Tower, 401 South Boston,
Tulsa, Oklahoma 74103.
All of the Claimant's subsidiaries, with the exception of Diamond
"M" Production Company, are Arkansas corporations with
Southwestern Energy Production Company being authorized to do
business in Oklahoma, Texas, Wyoming, Louisiana, North Dakota,
South Dakota, Kansas, New Mexico, Mississippi and Nebraska.
SEECO, Inc., has authority to operate only in Arkansas. Arkansas
Western Gas Company and Arkansas Western Pipeline Company are
also authorized to do business in Missouri and Southwestern
Energy Pipeline Company is also authorized to do business in
Oklahoma. Southwestern Energy Services Company is also authorized
to do business in Oklahoma, Louisiana and Texas. Diamond "M"
Production Company is a Delaware corporation authorized to do
business in Texas.
2. Claimant, Southwestern Energy Company, is the parent company and
owns beneficially and of record 100% of the issued and
outstanding shares of stock of its eight subsidiaries.
Arkansas Western Gas Company (AWG), Claimant's only public
utility subsidiary, operates 6,468 miles of pipeline. This system
includes, in Arkansas, a gathering and storage system with 442
miles of pipeline, 925 miles of transmission pipeline
<PAGE>
- 2 -
and 3,524 miles of distribution pipeline. Additionally the system
includes, in Missouri, 434 miles of transmission pipeline and
1,143 miles of distribution pipeline.
AWG's northwest Arkansas gas utility system gathers its gas
supply in Arkansas from the Arkoma Basin where it also provides
distribution service to communities in that area, including the
towns of Ozark and Clarksville. AWG's transmission and
distribution lines extend north and supply communities in the
northwest part of the state, including the towns of Fayetteville,
Springdale and Rogers. AWG's service area also extends to the
east to the Harrison and Mountain Home areas. This eastern
section of the AWG system receives a portion of its gas supply
from a lateral line off of the NOARK Pipeline System (NOARK) as
discussed below. Through its division, Associated Natural Gas
Company (Associated), AWG provides distribution of natural gas to
communities in northeast Arkansas and parts of Missouri. Major
communities served in northeast Arkansas include Blytheville,
Piggott and Osceola. The Associated distribution system also
serves the "bootheel" area in southeast Missouri, including the
communities of Sikeston, New Madrid and Caruthersville, and
extends north to the Jackson area. In addition, Associated
provides service to Butler, Missouri, near the state's western
border, and Kirksville, Missouri, near the state's northern
border, through connections off of interstate pipelines in those
areas.
At December 31, 1997, Southwestern Energy Pipeline Company (SWPL)
owned a 48% general partnership interest in NOARK, a 258-mile
intrastate pipeline that ties the Claimant's gathering and
transmission pipeline systems in northwest Arkansas to its
distribution systems in northeast Arkansas and southeast
Missouri. NOARK starts near Fort Smith, at the Fort Chaffee
military reservation, and extends east through the Arkoma Basin
and across northern Arkansas. A lateral from NOARK extends north
and connects to AWG's distribution line in the Mountain Home
area. NOARK crosses three interstate pipelines in northeast
Arkansas and ends at an interconnection with Arkansas Western
Pipeline Company's 8-mile interstate pipeline at the
Arkansas/Missouri border. This pipeline transports gas from NOARK
to Associated's distribution system.
3. Arkansas Western Gas Company made gas sales for the 12 months
ended December 31, 1997, as follows:
(a) Natural gas distributed at retail:
Average
Utility Sales Consumers Mcf Sales
Residential 151,116 12,614,206 $ 77,832,088
Commercial 20,771 8,384,850 43,697,989
Industrial 313 6,636,715 26,474,796
------- ---------- ------------
Total 172,200 27,635,771 $148,004,873
======= ========== ============
(b) There were 7,463,242 Mcf of natural gas distributed at
retail outside the state of Arkansas by the public utility
subsidiary.
(c) There were 2,157,292 Mcf of natural gas sold to industrial
consumers outside the state or at the state line by the
public utility subsidiary.
(d) There were 4,134,960 Mcf of natural gas purchased outside
the state or at the state line by the public utility
subsidiary.
4. The Claimant holds no direct or indirect interest in an EWG or a
foreign utility company.
<PAGE>
- 3 -
EXHIBIT A
Consolidating Statements of Income and Surplus along with Consolidating Balance
Sheets for the year ended December 31, 1997.
EXHIBIT B
Financial Data Schedule for the year ended December 31, 1997.
EXHIBIT C
The Claimant holds no direct or indirect interest in an EWG or a foreign utility
company.
The above named Claimant has caused this statement to be duly executed on its
behalf by its authorized officer on this 27th day of February, 1998.
SOUTHWESTERN ENERGY COMPANY
By: /s/ GREGORY D. KERLEY
---------------------------
Gregory D. Kerley
Senior Vice President -
Treasurer and Secretary
ATTEST:
/s/ JEFFREY L. DANGEAU
- ------------------------
Jeffrey L. Dangeau
Assistant Secretary
Notices and correspondence concerning this statement should be addressed to:
Gregory D. Kerley, Senior Vice President - Treasurer and Secretary
Southwestern Energy Company
P. O. Box 1408
Fayetteville, Arkansas 72702-1408
<PAGE>
<TABLE>
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1997
(in thousands)
<CAPTION>
Southwestern Diamond Southwestern
Southwestern Arkansas Energy "M" A.W. Energy
Energy Western Gas Production Production Realty Pipeline
Company Company SEECO, Inc. Company Company Company Company
------------ ----------- ----------- ------------ --------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Operating Revenues:
Gas sales $ - $ 148,005 $ 57,546 $ 28,172 $ 61 $ - $ -
Gas marketing - - - - - - -
Oil sales - - - 11,719 2,539 - -
Gas transportation - 4,255 - - - - -
Other - 1,895 92 - - 320 -
------------ ----------- ----------- ------------ --------- -------- ------------
- 154,155 57,638 39,891 2,600 320 -
------------ ----------- ----------- ------------ --------- -------- ------------
Operating Costs and Expenses:
Gas purchases - utility - 90,558 - - - - -
Gas purchases - marketing - - - - - - -
Operating and general - 37,180 5,934 14,423 2,536 108 59
Depreciation, depletion and
amortization - 6,553 13,377 25,634 1,329 70 -
Taxes, other than income taxes - 2,923 489 3,009 95 51 -
------------ ----------- ----------- ------------ --------- -------- ------------
- 137,214 19,800 43,066 3,960 229 59
------------ ----------- ----------- ------------ --------- -------- ------------
Operating income - 16,941 37,838 (3,175) (1,360) 91 (59)
------------ ----------- ----------- ------------ --------- -------- ------------
Interest Expense:
Interest on long-term debt 19,818 - - - - - -
Intercompany interest (5,089) 5,156 272 (1,342) 466 209 192
Other interest charges 606 390 - 63 - - 1
Interest capitalized - (36) (753) (3,698) - - -
------------ ----------- ----------- ------------ --------- -------- ------------
15,335 5,510 (481) (4,977) 466 209 193
------------ ----------- ----------- ------------ --------- -------- ------------
Other Income (Expense) 2,168 (619) 15 (2) - 78 (4,527)
------------ ----------- ----------- ------------ --------- -------- ------------
Income before provision for income
taxes (13,167) 10,812 38,334 1,800 (1,826) (40) (4,779)
Provision (Benefit) for Income Taxes (5,936) 4,147 15,040 533 (640) (16) (1,875)
------------ ----------- ----------- ------------ --------- -------- ------------
Net Income (Loss) $ (7,231) $ 6,665 $ 23,294 $ 1,267 $ (1,186) $ (24) $ (2,904)
============ =========== =========== ============ ========= ======== ============
<PAGE>
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1997
(in thousands)
<CAPTION>
Arkansas Southwestern
Western Energy
Pipeline Services
Company Company Eliminations Consolidated
--------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Operating Revenues:
Gas sales $ - $ - $(43,486)(b) $ 190,298
Gas marketing - 82,807 (17,372)(b) 65,435
Oil sales - - - 14,258
Gas transportation 383 - (281)(c) 4,357
Other - - (466)(c) 1,841
--------- ---------- ------------ ------------
383 82,807 (61,605) 276,189
--------- ---------- ------------ ------------
Operating Costs and Expenses:
Gas purchases - utility - - (43,752)(b)(c) 46,806
Gas purchases - marketing - 80,426 (17,372)(b) 63,054
Operating and general 44 1,014 (2,131)(c) 59,167
Depreciation, depletion and
amortization 98 16 1,131 (c) 48,208
Taxes, other than income taxes 29 36 386 (c) 7,018
--------- --------- ------------ ------------
171 81,492 (61,738) 224,253
--------- --------- ------------ ------------
Operating income 212 1,315 133 51,936
--------- --------- ------------ ------------
Interest Expense:
Interest on long-term debt - - - 19,818
Intercompany interest 56 80 - -
Other interest charges 3 20 - 1,083
Interest capitalized - - - (4,487)
--------- --------- ------------ ------------
59 100 - 16,414
--------- --------- ------------ ------------
Other Income (Expense) - 3 (2,133) (c)(d) (5,017)
--------- --------- ------------ ------------
Income before provision for income
taxes 153 1,218 (2,000) 30,505
Provision (Benefit) for Income Taxes 60 477 - 11,790
--------- --------- ------------ ------------
Net Income (Loss) $ 93 $ 741 $ (2,000) $ 18,715
========= ========= ============ ============
<FN>
(b)To eliminate intercompany sales and purchases.
(c)To eliminate intercompany income and expense items.
(d)To eliminate intercompany dividends.
</FN>
</TABLE>
<PAGE>
<TABLE>
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1997
(in thousands)
<CAPTION>
Southwestern Diamond Southwestern
Southwestern Arkansas Energy "M" A.W. Energy
Energy Western Gas Production Production Realty Pipeline
Company Company SEECO, Inc. Company Company Company Company
------------ ---------- ----------- ------------ ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Current Assets:
Cash $ 3,694 $ 901 $ - $ 5 $ - $ - $ -
Accounts receivable (1,286) 27,079 1,994 16,365 736 (2,790) (2,212)
Income taxes receivable 3,074 - - - - - -
Inventories, at average cost - 14,509 5,901 55 - - -
Under-recovered purchased gas costs - 9,428 - - - - -
Other 783 1,409 281 2,147 - 2 -
------------ ---------- ----------- ------------ ---------- -------- ------------
Total current assets 6,265 53,326 8,176 18,572 736 (2,788) (2,212)
------------ ---------- ----------- ------------ ---------- -------- ------------
Investments:
Investment in subsidiaries, at cost 413,898 - - - - - -
Advances to (from) subsidiaries - - - - - - -
Other 27 - - - - 49 6,963
------------ ---------- ----------- ------------ ---------- -------- ------------
413,925 - - - - 49 6,963
------------ ---------- ----------- ------------ ---------- -------- ------------
Property, Plant and Equipment:
Oil and gas properties, using the
full cost method - - 238,133 463,086 6,875 - -
Gas utility system - 210,452 - - - - -
Gas in underground storage - 10,560 13,188 - - - -
Other 16,522 - - 2,600 - 6,040 -
------------ ---------- ----------- ------------ ---------- -------- -----------
16,522 221,012 251,321 465,686 6,875 6,040 -
Less - Accumulated depreciation,
depletion and amortization 9,915 72,703 112,638 168,687 1,623 639 -
------------ ---------- ----------- ------------ ---------- -------- -----------
6,607 148,309 138,683 296,999 5,252 5,401 -
------------ ---------- ----------- ------------ ---------- -------- -----------
Other Assets 8,634 2,589 15 1,059 142 - -
------------ ---------- ----------- ------------ ---------- -------- -----------
$ 435,431 $ 204,224 $ 146,874 $ 316,630 $ 6,130 $ 2,662 $ 4,751
============ ========== =========== ============ ========== ======== ===========
<PAGE>
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1997
(in thousands)
<CAPTION>
Arkansas Southwestern
Western Energy
Pipeline Services
Company Company Eliminations Consolidated
--------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Assets
Current Assets:
Cash $ - $ 3 $ - $ 4,603
Accounts receivable 6 5,860 - 45,752
Income taxes receivable - - - 3,074
Inventories, at average cost - - - 20,465
Under-recovered purchased gas costs - - - 9,428
Other 11 - - 4,633
--------- ------------- ------------ ------------
Total current assets 17 5,863 - 87,955
--------- ------------- ------------ ------------
Investments:
Investment in subsidiaries, at cost - - (413,898)(a) -
Advances to (from) subsidiaries - - - -
Other - - - 7,039
--------- ------------- ------------ ------------
- - (413,898) 7,039
--------- ------------- ------------ ------------
Property, Plant and Equipment:
Oil and gas properties, using the
full cost method - - - 708,094
Gas utility system 2,327 - - 212,779
Gas in underground storage - - - 23,748
Other - 157 - 25,319
--------- ------------- ------------ ------------
2,327 157 - 969,940
Less - Accumulated depreciation,
depletion and amortization 410 23 - 366,638
--------- ------------- ------------ ------------
1,917 134 - 603,302
--------- ------------- ------------ ------------
Other Assets 129 2 - 12,570
--------- ------------- ------------ ------------
$ 2,063 $ 5,999 $ (413,898) $ 710,866
========= ============= ============ ============
<FN>
(a)To eliminate investment in subsidiaries.
</FN>
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATING BALANCE SHEET (continued)
DECEMBER 31, 1997
(in thousands)
<CAPTION>
Southwestern Diamond Southwestern
Southwestern Arkansas Energy "M" A.W. Energy
Energy Western Gas Production Production Realty Pipeline
Company Company SEECO, Inc. Company Company Company Company
------------ ----------- ----------- ------------ ---------- ------- ------------
<S> <C> <C> <C> <C>
Liabilities and Shareholders' Equity
Current Liabilities:
Current portion of long-term debt $ 3,071 $ - $ - $ - $ - $ - $ -
Accounts payable 7,613 6,733 5,008 4,939 402 - 26
Taxes payable 489 2,575 422 32 - 66 -
Interest payable 2,424 145 - - - - -
Customer deposits - 5,307 - - - - -
Other (4,375) 8,165 115 311 - - -
------------ ----------- ----------- ------------ ---------- ------- ------------
Total current liabilities 9,222 22,925 5,545 5,282 402 66 26
------------ ----------- ----------- ------------ ---------- ------- ------------
Long-Term Debt, less current
portion above 296,472 78,026 - - - - -
------------ ----------- ----------- ------------ ---------- ------- ------------
Other Liabilities:
Deferred income taxes 1,035 18,850 37,666 73,634 (169) 436 5,906
Deferred investment tax credits - 1,672 - - - - -
Other 710 1,280 - 2,594 - - -
------------ ----------- ----------- ------------ ---------- ------- ------------
1,745 21,802 37,666 76,228 (169) 436 5,906
------------ ----------- ----------- ------------ ---------- ------- ------------
Shareholders' Equity:
Common stock 2,774 24,214 8,244 1 - 1 2
Capital in excess of par 21,475 29,000 22,000 234,545 7,000 1,728 7,573
Retained earnings 137,096 28,257 73,419 574 (1,103) 431 (8,756)
Common stock in treasury, at cost (32,357) - - - - - -
Unamortized cost of shares issued
under stock grant plan (996) - - - - - -
------------ ----------- ----------- ------------ --------- ------- ------------
127,992 81,471 103,663 235,120 5,897 2,160 (1,181)
------------ ----------- ----------- ------------ --------- ------- ------------
$ 435,431 $ 204,224 $ 146,874 $ 316,630 $ 6,130 $2,662 $ 4,751
============ =========== =========== ============ ========= ======= ============
<PAGE>
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET (continued)
DECEMBER 31, 1997
(in thousands)
<CAPTION>
Arkansas Southwestern
Western Energy
Pipeline Services
Company Company Eliminations Consolidated
-------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Liabilities and Shareholders' Equity
Current Liabilities:
Current portion of long-term debt $ - $ - $ - $ 3,071
Accounts payable 13 5,169 - 29,903
Taxes payable (2) 311 - 3,893
Interest payable - - - 2,569
Customer deposits - - - 5,307
Other - 30 - 4,246
-------- ------------ ------------ ------------
Total current liabilities 11 5,510 - 48,989
-------- ------------ ------------ ------------
Long-Term Debt, less current
portion above 660 - (78,686)(a) 296,472
-------- ----------- ------------ ------------
Other Liabilities:
Deferred income taxes 219 7 - 137,584
Deferred investment tax credits - - - 1,672
Other - - - 4,584
-------- ----------- ----------- ------------
219 7 - 143,840
-------- ----------- ----------- ------------
Shareholders' Equity:
Common stock 2 2 (32,466)(a) 2,774
Capital in excess of par 900 - (302,746)(a) 21,475
Retained earnings 271 480 - 230,669
Common stock in treasury, at cost - - - (32,357)
Unamortized cost of shares issued
under stock grant plan - - - (996)
-------- ---------- ----------- ------------
1,173 482 (335,212) 221,565
-------- ---------- ----------- ------------
$ 2,063 $ 5,999 $ (413,898) $ 710,866
======== ========== =========== ============
<FN>
(a)To eliminate investment in subsidiaries.
</FN>
</TABLE>
<PAGE>
<TABLE>
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1997
(in thousands)
<CAPTION>
Southwestern Diamond Southwestern
Southwestern Arkansas Energy "M" A.W. Energy
Energy Western Gas Production Production Realty Pipeline
Company Company Seeco, Inc. Company Company Company Company
------------ ----------- ----------- ------------ ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
RETAINED EARNINGS, beginning of year $ 150,262 $ 21,592 $ 52,125 $ (693) $ 83 $ 455 $ (5,852)
Net income (loss) (7,231) 6,665 23,294 1,267 (1,186) (24) (2,904)
Cash dividends (5,935) - (2,000) - - - -
------------ ----------- ----------- ------------ ---------- -------- ------------
RETAINED EARNINGS, end of year $ 137,096 $ 28,257 $ 73,419 $ 574 $ (1,103) $ 431 $ (8,756)
============ =========== =========== ============ ========== ======== ============
<PAGE>
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1997
(in thousands)
<CAPTION>
Arkansas Southwestern
Western Energy
Pipeline Services
Company Company Eliminations Consolidated
-------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
RETAINED EARNINGS, beginning of year $ 178 $ (261) $ - $ 217,889
Net income (loss) 93 741 (2,000)(d) 18,715
Cash dividends - - 2,000 (d) (5,935)
-------- ------------ ------------ ------------
RETAINED EARNINGS, end of year $ 271 $ 480 $ - $ 230,669
======== ============ ============ ============
<FN>
(d)To eliminate intercompany dividends.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR3
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-ASSETS> $710,866,000
<TOTAL-OPERATING-REVENUES> $276,189,000
<NET-INCOME> $18,715,000
</TABLE>
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