<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 seven 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.
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 seven subsidiaries.
Arkansas Western Gas Company (AWG), Claimant's only public utility
subsidiary, operates 6,621 miles of pipeline. This system includes,
in Arkansas, a gathering and storage system with 388 miles of
pipeline, 977 miles of transmission pipeline and 3,642 miles of
distribution pipeline. Additionally the
<PAGE>
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system includes, in Missouri, 436 miles of transmission pipeline and
1,178 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
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.
In late 1999, the Company entered into a definitive agreement to
sell its Missouri gas distribution assets. The sale requires
regulatory approval and is expected to close in the first half of
2000. The company currently serves approximately 48,000 customers in
Missouri.
3. Arkansas Western Gas Company made gas sales for the 12 months ended
December 31, 1999, as follows:
(a) Natural gas distributed at retail:
<TABLE>
<CAPTION>
Average
Utility Sales Consumers Mcf Sales
<S> <C> <C> <C>
Residential 155,511 10,799,709 $ 70,923,840
Commercial 21,469 7,648,457 40,030,542
Industrial 293 3,499,639 13,470,498
------- ---------- ------------
Total 177,273 21,947,805 $124,424,880
======= ========== ============
</TABLE>
(b) The public utility subsidiary distributed 5,196,181 Mcf of
natural gas for revenues of $31,090,000 to retail customers in
the state of Missouri.
(c) The public utility subsidiary distributed 598,387 Mcf of
natural gas for revenues of $2,680,000 to industrial customers
in the state if Missouri.
(d) The public utility subsidiary purchased outside the state of
Arkansas 4,009,158 Mcf of natural gas costing $9,694,052 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, 1999.
<PAGE>
-3-
EXHIBIT B
Financial Data Schedule for the year ended December 31, 1999.
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 28th day of February, 2000.
SOUTHWESTERN ENERGY COMPANY
By: /s/ GREG D. KERLEY
--------------------------
Greg D. Kerley
Executive Vice President
and Chief Financial Officer
ATTEST:
/s/ GEORGE A. TAAFFE
- --------------------------
George A. Taaffe
Secretary
Notices and correspondence concerning this statement should be addressed to:
Greg D. Kerley, Executive 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, 1999
(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 $ - $ 124,425 $ 43,747 $ 21,177 $ 68 $ - $ -
Gas marketing - - - - - - -
Oil sales - - - 8,083 1,808 - -
Gas transportation - 6,208 - - - - -
Other - 1,787 156 - - 416 -
------------ ----------- ----------- ------------ --------- -------- ------------
- 132,420 43,903 29,260 1,876 416 -
------------ ----------- ----------- ------------ --------- -------- ------------
Operating Costs and Expenses:
Gas purchases - utility - 68,876 - - - - -
Gas purchases - marketing - - - - - - -
Operating and general - 35,792 7,360 12,006 1,893 17 72
Depreciation, depletion and
amortization - 7,186 12,547 20,690 994 90 4
Taxes, other than income - 3,379 503 2,507 87 24 2
------------ ----------- ----------- ------------ --------- -------- ------------
- 115,233 20,410 35,203 2,974 131 78
------------ ----------- ----------- ------------ --------- -------- ------------
Operating Income (Loss) - 17,187 23,493 (5,943) (1,098) 285 (78)
------------ ----------- ----------- ------------ --------- -------- ------------
Interest Expense:
Interest on long-term debt 19,735 - - - - - -
Intercompany interest (4,209) 4,090 (640) 242 (29) - 587
Other interest charges 443 426 9 10 - - -
Interest capitalized - (14) (803) (2,490) - - -
------------ ----------- ----------- ------------ --------- -------- ------------
15,969 4,502 (1,434) (2,238) (29) - 587
------------ ----------- ----------- ------------ --------- -------- ------------
Other Income (Expense) 23,975 (282) (705) 186 (29) 602 (2,008)
------------ ----------- ----------- ------------ --------- -------- ------------
Income (Loss) before Provision (Benefit)
for Income Taxes 8,006 12,403 24,222 (3,519) (1,098) 887 (2,673)
Provision (Benefit) for Income Taxes (6,260) 4,771 9,503 (1,338) (385) 348 (1,049)
------------ ----------- ----------- ------------ --------- -------- ------------
Net Income (Loss) $ 14,266 $ 7,632 $ 14,719 $ (2,181) $ (713) $ 539 $ (1,624)
============ =========== =========== ============ ========= ======== ============
<PAGE>
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1999
(in thousands)
<CAPTION>
Southwestern
Energy
Services
Company Eliminations Consolidated
------------ ------------ ------------
<S> <C> <C> <C>
Operating Revenues:
Gas sales $ - $ (23,519)(b) $ 165,898
Gas marketing 137,526 (40,956)(b) 96,570
Oil sales - - 9,891
Gas transportation - - 6,208
Other - (530)(c) 1,829
------------ ------------ ------------
137,526 (65,005) 280,396
------------ ------------ ------------
Operating Costs and Expenses:
Gas purchases - utility - (23,506)(b)(c) 45,370
Gas purchases - marketing 133,807 (40,956)(b) 92,851
Operating and general 1,430 (613)(c) 57,957
Depreciation, depletion and
amortization 92 - 41,603
Taxes, other than income 55 - 6,557
------------ ------------ ------------
135,384 (65,075) 244,338
------------ ------------ ------------
Operating income 2,142 70 36,058
------------ ------------ ------------
Interest Expense:
Interest on long-term debt - - 19,735
Intercompany interest (41) - -
Other interest charges 35 - 923
Interest capitalized - - (3,307)
------------ ------------ ------------
(6) - 17,351
------------ ------------ ------------
Other Income (Expense) - (24,070)(c)(d) (2,331)
------------ ------------ ------------
Income (Loss) Before Provision (Benefit)
for Income Taxes 2,148 (24,000) 16,376
Provision (Benefit) for Income Taxes 859 - 6,449
------------ ------------ ------------
Net Income (Loss) $ 1,289 $ (24,000) $ 9,927
============ ============ ============
<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, 1999
(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 $ 769 $ 443 $ - $ 25 $ - $ - $ -
Accounts receivable 232 22,689 1,158 8,076 185 3 -
Intercompany accounts receivable 3,497 - (3,503) 8,527 320 (1,255) (8,486)
Income taxes receivable 350 - - - - - -
Inventories, at average cost - 12,632 8,888 - - - -
Other 1,216 1,440 85 981 (1) 2 -
------------ ---------- ----------- ------------ ---------- -------- ------------
Total current assets 6,064 37,204 6,628 17,609 504 (1,250) (8,486)
------------ ---------- ----------- ------------ ---------- -------- ------------
Investments:
Investment in subsidiaries, at cost 424,419 - - - - - -
Other 90 - - - - 49 14,041
------------ ---------- ----------- ------------ ---------- -------- ------------
424,509 - - - - 49 14,041
------------ ---------- ----------- ------------ ---------- -------- ------------
Property, Plant and Equipment:
Oil and gas properties, using the
full cost method - - 262,490 546,597 7,112 - -
Gas utility system - 222,145 - - - - -
Gas in underground storage - 12,663 16,049 - - - -
Other 16,916 809 209 4,573 - 5,955 -
------------ ---------- ----------- ------------ ---------- -------- -----------
16,916 235,617 278,748 551,170 7,112 5,955 -
Less - Accumulated depreciation,
depletion and amortization 12,600 84,204 137,408 281,024 3,735 805 -
------------ ---------- ----------- ------------ ---------- -------- -----------
4,316 151,413 141,340 270,146 3,377 5,150 -
------------ ---------- ----------- ------------ ---------- -------- -----------
Other Assets 8,263 2,114 7 651 104 - -
------------ ---------- ----------- ------------ ---------- -------- -----------
$ 443,152 $ 190,731 $ 147,975 $ 288,406 $ 3,985 $ 3,949 $ 5,555
============ ========== =========== ============ ========== ======== ===========
<PAGE>
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1999
(in thousands)
<CAPTION>
Southwestern
Energy
Services
Company Eliminations Consolidated
------------ ------------ ------------
<S> <C> <C> <C>
Assets
Current Assets:
Cash $ 3 $ - $ 1,240
Accounts receivable 10,996 - 43,339
Intercompany accounts receivable 900 - -
Income taxes receivable - - 350
Inventories, at average cost - - 21,520
Other - - 3,723
------------ ------------ ------------
Total current assets 11,899 - 70,172
------------ ------------ ------------
Investments:
Investment in subsidiaries, at cost - (424,419)(a) -
Other - - 14,180
------------ ------------ ------------
- (424,419) 14,180
------------ ------------ ------------
Property, Plant and Equipment:
Oil and gas properties, using the
full cost method - - 816,199
Gas utility system - - 222,145
Gas in underground storage - - 28,712
Other 364 - 28,826
------------ ------------ ------------
364 - 1,095,882
Less - Accumulated depreciation,
depletion and amortization 151 - 519,927
------------ ------------ ------------
213 - 575,955
------------ ------------ ------------
Other Assets - - 11,139
------------ ------------ ------------
$ 12,112 $ (424,419) $ 671,446
============ ============ ============
<FN>
(a) To eliminate investment in subsidiaries.
</FN>
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATING BALANCE SHEET (continued)
DECEMBER 31, 1999
(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>
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term debt $ 7,500 $ - $ - $ - $ - $ - $ -
Accounts payable 7,223 5,747 4,556 6,134 155 - -
Taxes payable 683 2,104 782 9 - 56 -
Interest payable 2,309 174 - - - - -
Customer deposits - 6,021 - - - - -
Other (1,557) 4,494 266 468 - - -
------------ ----------- ----------- ------------ ---------- -------- ------------
Total current liabilities 16,158 18,540 5,604 6,611 155 56 -
------------ ----------- ----------- ------------ ---------- -------- ------------
Long-Term Debt, less current
portion 294,700 71,109 - - - - -
------------ ----------- ----------- ------------ ---------- -------- ------------
Other Liabilities:
Deferred income taxes (16,615) 22,160 38,320 71,382 (530) 476 10,213
Deferred investment tax credits - 1,433 - - - - -
Other 407 1,478 - 1,257 - - -
------------ ----------- ----------- ------------ ---------- -------- ------------
(16,208) 25,071 38,320 72,639 (530) 476 10,213
------------ ----------- ----------- ------------ ---------- -------- ------------
Shareholders' Equity:
Common stock 2,774 24,214 8,244 1 - 1 2
Additional paid-in capital 20,732 29,000 22,000 253,545 7,000 1,728 7,573
Retained earnings 156,190 22,797 73,807 (44,390) (2,640) 1,688 (12,233)
Common stock in treasury, at cost (30,083) - - - - - -
Unamortized cost of restricted
shares issued under stock
incentive plan (1,111) - - - - - -
------------ ----------- ----------- ------------ --------- -------- ------------
148,502 76,011 104,051 209,156 4,360 3,417 (4,658)
------------ ----------- ----------- ------------ --------- -------- ------------
$ 443,152 $ 190,731 $ 147,975 $ 288,406 $ 3,985 $ 3,949 $ 5,555
============ =========== =========== ============ ========= ======== ============
<PAGE>
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET (continued)
DECEMBER 31, 1999
(in thousands)
<CAPTION>
Southwestern
Energy
Services
Company Eliminations Consolidated
------------ ------------ ------------
<S> <C> <C> <C>
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term debt $ - $ - $ 7,500
Accounts payable 9,254 - 33,069
Taxes payable (128) - 3,506
Interest payable - - 2,483
Customer deposits - - 6,021
Other 96 - 3,767
------------ ------------ ------------
Total current liabilities 9,222 - 56,346
------------ ------------ ------------
Long-Term Debt, less current
portion - (71,109)(a) 294,700
------------ ------------ ------------
Other Liabilities:
Deferred income taxes 63 - 125,469
Deferred investment tax credits - - 1,433
Other - - 3,142
------------ ------------ ------------
63 - 130,044
------------ ------------ ------------
Shareholders' Equity:
Common stock 2 (32,464)(a) 2,774
Additional paid-in capital - (320,846)(a) 20,732
Retained earnings 2,825 - 198,044
Common stock in treasury, at cost - - (30,083)
Unamortized cost of resstricted
shares issued under stock
incentive plan - - (1,111)
------------ ------------ ------------
2,827 (353,310) 190,356
------------ ------------ ------------
$ 12,112 $ (424,419) $ 671,446
============ ============ ============
<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, 1999
(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 $ 147,909 $ 25,165 $ 73,088 $ (42,209) $ (1,927) $ 1,149 $ (10,609)
Net income (loss) 14,266 7,632 14,719 (2,181) (713) 539 (1,624)
Cash dividends (5,985) (10,000) (14,000) - - - -
------------ ----------- ----------- ------------ ---------- -------- ------------
RETAINED EARNINGS, end of year $ 156,190 $ 22,797 $ 73,807 $ (44,390) $ (2,640) $ 1,688 $ (12,233)
============ =========== =========== ============ ========== ======== ============
<PAGE>
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1999
(in thousands)
<CAPTION>
Southwestern
Energy
Services
Company Eliminations Consolidated
------------ ------------ ------------
<S> <C> <C> <C>
RETAINED EARNINGS, beginning of year $ 1,536 $ - $ 194,102
Net income (loss) 1,289 (24,000)(d) 9,927
Cash dividends - 24,000 (d) (5,985)
------------ ------------ ------------
RETAINED EARNINGS, end of year $ 2,825 $ - $ 198,044
============ ============ ============
<FN>
(d) To eliminate intercompany dividends.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR3
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-ASSETS> $671,445,872
<TOTAL-OPERATING-REVENUES> $280,395,642
<NET-INCOME> $9,926,506
</TABLE>
