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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) October 15, 1998
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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
Reference is made to the press release issued October 16, 1998, filed
herewith as Exhibit 1.
Item 7.(c)
Exhibits Reference
(1) Press release dated October 16, 1998 p. 3 - 4
SIGNATURES
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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: October 16, 1998 BY: /s/ GREGORY D. KERLEY
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Gregory D. Kerley
Senior Vice President -- Finance
and Chief Financial Officer
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NEWS RELEASE
FOR IMMEDIATE RELEASE For Further Information Contact:
October 16, 1998 Greg D. Kerley
Senior Vice President and
Chief Financial Officer
(501) 521-1141
SOUTHWESTERN ENERGY DISSAPPOINTED BY
ADVERSE JURY VERDICT IN CLASS ACTION ROYALTY LAWSUIT
Company Plans Immediate Appeal Through the Legal System and Will Aggressively
Communicate to Ensure Public Understanding of the Complex Issues
Southwestern Energy Company (NYSE: SWN) today announced that on October
15, 1998, a state court jury in Fort Smith, Arkansas, by a vote of nine to
three, returned a verdict against Southwestern Energy Company ("the Company")
and two of its wholly-owned subsidiaries, SEECO, Inc. and Arkansas Western Gas
Company, in the amount of $62,136,827. If the verdict is upheld on appeal, the
defendants would also be liable for pre-judgment interest in an amount that has
not been determined at this time, but which could be in excess of $30,000,000.
The verdict was returned following a trial on the issues of a class
action lawsuit brought by certain royalty owners of SEECO, Inc., who contend
that the defendants breached implied covenants in certain oil and gas leases,
violated statutory duties regarding the method and timing of paying royalties,
misrepresented or failed to disclose material facts to royalty owners concerning
gas purchase contracts between the Company's subsidiaries, and failed to fulfill
other alleged common law duties to the members of the royalty owner plaintiff
class. The litigation was commenced in May 1996 and was disclosed by the Company
at that time.
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"We are shocked and disappointed by the verdict in this case.
Southwestern and its subsidiaries have always treated SEECO's royalty owners
fairly and have paid royalties in accordance with the law on each and every
dollar which SEECO has received from the sale of natural gas," said Charles E.
Scharlau, Chairman and Chief Executive Officer of Southwestern. "While cases
like this are complex and difficult to understand by their very nature, we
believe that illuminating the facts in the case should enable all interested
parties to see the injustice of the verdict. We intend to communicate
aggressively and to pursue all legal options."
The Company believes that the jury's verdict was wrong as a matter of
law and fact and that incorrect rulings by the trial judge (including
evidentiary rulings and prejudicial jury instructions) provide substantial
grounds for a successful appeal. The Company intends to seek a stay of the
judgment on the jury's verdict and to file and vigorously prosecute an appeal in
the Arkansas Supreme Court.
If the Company is not successful in its appeal from the jury verdict,
the Company's financial condition and results of operations would be materially
and adversely affected.
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