|
|
|
|
|
|
|
|
|
|
|
|
|
<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 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 a minority interest in
the NOARK Pipeline System Limited Partnership (NOARK),which
indirectly owns an interstate natural gas pipeline in Arkansas
and Oklahoma; 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. Arkansas Western Pipeline is a subsidiary
that ceased to exist due to a merger in 1998.
The main location of Arkansas Western Gas Company is 1001 Sain
Street, Fayetteville, Arkansas 72701. SEECO, Inc., Arkansas Gas
Gathering Company, and A. W. Realty Company, occupy the same
location as that of Claimant. The main location of Southwestern
Energy Production Company and Diamond "M" Production Company is
2350 North Sam Houston Parkway East, Suite 300, Houston, Texas
77032. 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, Colorado, 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 is 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 6,566 miles of pipeline. This system
includes, in Arkansas, a gathering and storage system with 390
miles of pipeline, 978 miles of transmission pipeline and 3,602
miles of distribution pipeline. Additionally the system includes,
in Missouri, 436 miles of transmission pipeline and 1,160 miles
of distribution pipeline.
<PAGE>
- 2 -
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 Ozark Pipeline System. 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.
3. Arkansas Western Gas Company made gas sales for the 12 months
ended December 31, 1998, as follows:
(a) Natural gas distributed at retail:
Average
Utility Sales Consumers Mcf Sales
Residential 153,120 11,059,013 $ 71,480,399
Commercial 21,218 7,583,205 39,648,594
Industrial 304 4,203,619 16,129,523
------- ---------- ------------
Total 174,642 22,845,837 $127,258,516
======= ========== ============
(b) The public utility subsidiary distributed 5,573,078 Mcf of
natural gas for revenues of $32,376,000 to retail customers
in the state of Missouri.
(c) The public utility subsidiary distributed 1,000,401 Mcf of
natural gas for revenues of $3,877,000 to industrial
customers in the state of Missouri.
(d) The public utility subsidiary purchased outside the state
4,377,220 Mcf of natural gas costing $9,967,000 and
utilized the services of interstate pipelines to deliver
the gas to its service territory or to storage facilities
pending later delivery.
4. The Claimant holds no direct or indirect interest in an EWG
or a foreign utility company.
EXHIBIT A
Consolidating Statements of Income and Surplus along with Consolidating Balance
Sheets for the year ended December 31, 1998.
EXHIBIT B
Financial Data Schedule for the year ended December 31, 1998.
EXHIBIT C
The Claimant holds no direct or indirect interest in an EWG or a foreign utility
company.
<PAGE>
- 3 -
The above named Claimant has caused this statement to be duly executed on its
behalf by its authorized officer on this 26th day of February, 1999.
SOUTHWESTERN ENERGY COMPANY
By: /s/ GREGORY D. KERLEY
---------------------------
Gregory D. Kerley
Senior Vice President
and Chief Financial Officer
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 and Chief Financial Officer
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, 1998
(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 $ - $ 127,259 $ 48,572 $ 27,810 $ 49 $ - $ -
Gas marketing - - - - - - -
Oil sales - - - 8,050 1,507 - -
Gas transportation - 5,597 - - - - -
Other - 1,855 244 - - 384 -
------------ ----------- ----------- ------------ --------- -------- ------------
- 134,711 48,816 35,860 1,556 384 -
------------ ----------- ----------- ------------ --------- -------- ------------
Operating Costs and Expenses:
Gas purchases - utility - 70,973 - - - - -
Gas purchases - marketing - - - - - - -
Operating and general - 37,901 8,285 15,147 1,667 26 46
Depreciation, depletion and
amortization - 6,616 12,419 25,229 1,120 77 -
Write-down of oil and gas
properties - - - 66,383 - - -
Taxes, other than income - 3,192 463 2,721 71 23 -
------------ ----------- ----------- ------------ --------- -------- ------------
- 118,682 21,167 109,480 2,858 126 46
------------ ----------- ----------- ------------ --------- -------- ------------
Operating income (loss) - 16,029 27,649 (73,620) (1,302) 258 (46)
------------ ----------- ----------- ------------ --------- -------- ------------
Interest Expense:
Interest on long-term debt 19,600 - - - - - -
Intercompany interest (3,473) 4,114 (830) (455) (34) 184 476
Other interest charges 902 501 10 11 - - -
Interest capitalized - (26) (826) (3,032) - - -
------------ ----------- ----------- ------------ --------- -------- ------------
17,029 4,589 (1,646) (3,476) (34) 184 476
------------ ----------- ----------- ------------ --------- -------- ------------
Other Income (Expense) 27,238 (233) (1,862) 22 - 1,107 (3,087)
------------ ----------- ----------- ------------ --------- -------- ------------
Income Before Provision (Benefit)
for Income Taxes 10,209 11,207 27,433 (70,122) (1,268) 1,181 (3,609)
Provision (Benefit) for Income Taxes (6,573) 4,300 10,763 (27,339) (444) 464 (1,416)
------------ ----------- ----------- ------------ --------- -------- ------------
Net Income (Loss) $ 16,782 $ 6,907 $ 16,670 $ (42,783) $ (824) $ 717 $ (2,193)
============ =========== =========== ============ ========= ======== ============
<PAGE>
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1998
(in thousands)
<CAPTION>
Arkansas Southwestern
Western Energy
Pipeline Services
Company Company Eliminations Consolidated
--------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Operating Revenues:
Gas sales $ - $ - $(30,900)(b) $ 172,790
Gas marketing - 97,175 (20,808)(b) 76,367
Oil sales - - - 9,557
Gas transportation 236 - (224)(c) 5,609
Other - - (501)(c) 1,982
--------- ---------- ------------ ------------
236 97,175 (52,433) 266,305
--------- ---------- ------------ ------------
Operating Costs and Expenses:
Gas purchases - utility - - (31,110)(b)(c) 39,863
Gas purchases - marketing - 94,043 (20,808)(b) 73,235
Operating and general 19 1,266 (2,442)(c) 61,915
Depreciation, depletion and
amortization 57 19 1,380 (c) 46,917
Write-down of oil and gas
properties - - - 66,383
Taxes, other than income 19 47 407 (c) 6,943
--------- --------- ------------ ------------
95 95,375 (52,573) 295,256
--------- --------- ------------ ------------
Operating income (loss) 141 1,800 140 (28,951)
--------- --------- ------------ ------------
Interest Expense:
Interest on long-term debt - - - 19,600
Intercompany interest 24 (6) - -
Other interest charges 2 44 - 1,470
Interest capitalized - - - (3,884)
--------- --------- ------------ ------------
26 38 - 17,186
--------- --------- ------------ ------------
Other Income (Expense) - (1) (27,140) (c)(d) (3,956)
--------- --------- ------------ ------------
Income Before Provision (Benefit)
for Income Taxes 115 1,761 (27,000) (50,093)
Provision (Benefit) for Income Taxes 45 704 - (19,496)
--------- --------- ------------ ------------
Net Income (Loss) $ 70 $ 1,057 $ (27,000) $ (30,597)
========= ========= ============ ============
<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, 1998
(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 $ 1,205 $ 414 $ - $ - $ - $ - $ -
Accounts receivable 2,915 23,163 (70) 15,795 649 (1,918) (8,083)
Income taxes receivable 2,008 - - - - - -
Inventories, at average cost - 14,303 8,509 - - - -
Other 1,504 1,257 713 1,698 - 2 -
------------ ---------- ----------- ------------ ---------- -------- ------------
Total current assets 7,632 39,137 9,152 17,493 649 (1,916) (8,083)
------------ ---------- ----------- ------------ ---------- -------- ------------
Investments:
Investment in subsidiaries, at cost 406,019 - - - - - -
Other 189 - - - - 50 13,776
------------ ---------- ----------- ------------ ---------- -------- ------------
406,208 - - - - 50 13,776
------------ ---------- ----------- ------------ ---------- -------- ------------
Property, Plant and Equipment:
Oil and gas properties, using the
full cost method - - 252,354 499,499 7,010 - -
Gas utility system - 217,741 - - - - -
Gas in underground storage - 11,091 13,188 - - - -
Other 17,014 365 128 3,773 - 5,991 -
------------ ---------- ----------- ------------ ---------- -------- -----------
17,014 229,197 265,670 503,272 7,010 5,991 -
Less - Accumulated depreciation,
depletion and amortization 11,807 78,156 125,035 260,290 2,743 716 -
------------ ---------- ----------- ------------ ---------- -------- -----------
5,207 151,041 140,635 242,982 4,267 5,275 -
------------ ---------- ----------- ------------ ---------- -------- -----------
Other Assets 8,591 2,218 22 674 154 - -
------------ ---------- ----------- ------------ ---------- -------- -----------
$ 427,638 $ 192,396 $ 149,809 $ 261,149 $ 5,070 $ 3,409 $ 5,693
============ ========== =========== ============ ========== ======== ===========
<PAGE>
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1998
(in thousands)
<CAPTION>
Arkansas Southwestern
Western Energy
Pipeline Services
Company Company Eliminations Consolidated
--------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Assets
Current Assets:
Cash $ - $ 3 $ - $ 1,622
Accounts receivable - 8,204 - 40,655
Income taxes receivable - - - 2,008
Inventories, at average cost - - - 22,812
Other - - - 5,174
--------- ------------- ------------ ------------
Total current assets - 8,207 - 72,271
--------- ------------- ------------ ------------
Investments:
Investment in subsidiaries, at cost - - (406,019)(a) -
Other - - - 14,015
--------- ------------- ------------ ------------
- - (406,019) 14,015
--------- ------------- ------------ ------------
Property, Plant and Equipment:
Oil and gas properties, using the
full cost method - - - 758,863
Gas utility system - - - 217,741
Gas in underground storage - - - 24,279
Other - 311 - 27,582
--------- ------------- ------------ ------------
- 311 - 1,028,465
Less - Accumulated depreciation,
depletion and amortization - 43 - 478,790
--------- ------------- ------------ ------------
- 268 - 549,675
--------- ------------- ------------ ------------
Other Assets - - - 11,659
--------- ------------- ------------ ------------
$ - $ 8,475 $ (406,019) $ 647,620
========= ============= ============ ============
<FN>
(a) To eliminate investment in subsidiaries.
</FN>
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATING BALANCE SHEET (continued)
DECEMBER 31, 1998
(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 $ 1,536 $ - $ - $ - $ - $ - $ -
Accounts payable 9,241 7,590 6,505 7,403 347 - -
Taxes payable 562 2,072 513 14 - 58 -
Interest payable 2,313 158 - - - - -
Customer deposits - 5,635 - - - - -
Other (1,423) 4,632 221 481 - - -
------------ ----------- ----------- ------------ ---------- ------- ------------
Total current liabilities 12,229 20,087 7,239 7,898 347 58 -
------------ ----------- ----------- ------------ ---------- ------- ------------
Long-Term Debt, less current
portion above 281,900 71,709 - - - - -
------------ ----------- ----------- ------------ ---------- ------- ------------
Other Liabilities:
Deferred income taxes (6,568) 19,295 39,239 59,039 (349) 470 8,727
Deferred investment tax credits - 1,552 - - - - -
Other 415 1,374 - 1,876 - - -
------------ ----------- ----------- ------------ ---------- ------- ------------
(6,153) 22,221 39,239 60,915 (349) 470 8,727
------------ ----------- ----------- ------------ ---------- ------- ------------
Shareholders' Equity:
Common stock 2,774 24,215 8,243 1 - 1 2
Capital in excess of par 21,249 29,000 22,000 234,544 7,000 1,730 7,572
Retained earnings 147,908 25,164 73,088 (42,209) (1,928) 1,150 (10,608)
Common stock in treasury, at cost (31,248) - - - - - -
Unamortized cost of shares issued
under stock grant plan (1,021) - - - - - -
------------ ----------- ----------- ------------ --------- ------- ------------
139,662 78,379 103,331 192,336 5,072 2,881 (3,034)
------------ ----------- ----------- ------------ --------- ------- ------------
$ 427,638 $ 192,396 $ 149,809 $ 261,149 $ 5,070 $3,409 $ 5,693
============ =========== =========== ============ ========= ======= ============
<PAGE>
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET (continued)
DECEMBER 31, 1998
(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 $ - $ - $ - $ 1,536
Accounts payable - 6,694 - 37,780
Taxes payable - 189 - 3,408
Interest payable - - - 2,471
Customer deposits - - - 5,635
Other - 45 - 3,956
-------- ------------ ------------ ------------
Total current liabilities - 6,928 - 54,786
-------- ------------ ------------ ------------
Long-Term Debt, less current
portion above - - (71,709)(a) 281,900
-------- ----------- ------------ ------------
Other Liabilities:
Deferred income taxes - 8 - 119,861
Deferred investment tax credits - - - 1,552
Other - - - 3,665
-------- ----------- ----------- ------------
- 8 - 125,078
-------- ----------- ----------- ------------
Shareholders' Equity:
Common stock - 2 (32,464)(a) 2,774
Capital in excess of par - - (301,846)(a) 21,249
Retained earnings - 1,537 - 194,102
Common stock in treasury, at cost - - - (31,248)
Unamortized cost of shares issued
under stock grant plan - - - (1,021)
-------- ---------- ----------- ------------
- 1,539 (334,310) 185,856
-------- ---------- ----------- ------------
$ - $ 8,475 $ (406,019) $ 647,620
======== ========== =========== ============
<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, 1998
(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 $ 137,096 $ 28,257 $ 73,418 $ 574 $ (1,104) $ 433 $ (8,756)
Net income (loss) 16,782 6,907 16,670 (42,783) (824) 717 (2,193)
Close AWP retained earnings to SWP - - - - - - 341
Cash dividends (5,970) (10,000) (17,000) - - - -
------------ ----------- ----------- ------------ ---------- -------- ------------
RETAINED EARNINGS, end of year $ 147,908 $ 25,164 $ 73,088 $ (42,209) $ (1,928) $ 1,150 $ (10,608)
============ =========== =========== ============ ========== ======== ============
<PAGE>
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1998
(in thousands)
<CAPTION>
Arkansas Southwestern
Western Energy
Pipeline Services
Company Company Eliminations Consolidated
-------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
RETAINED EARNINGS, beginning of year $ 271 $ 480 $ - $ 230,669
Net income (loss) 70 1,057 (27,000)(d) (30,597)
Close AWP retained earnings to SWP (341) - - -
Cash dividends - - 27,000 (d) (5,970)
-------- ------------ ------------ ------------
RETAINED EARNINGS, end of year $ - $ 1,537 $ - $ 194,102
======== ============ ============ ============
<FN>
(d) To eliminate intercompany dividends.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR3
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-ASSETS> $647,620,000
<TOTAL-OPERATING-REVENUES> $266,305,000
<NET-INCOME> ($ 30,597,000)
</TABLE>
|
|