NEWS RELEASE
SOUTHWESTERN ENERGY TO PURSUE SALE OF UTILITY BUSINESS
Sale Would Generate Cash to Meet Financial Obligations Resulting from Judgment
Against Company
FAYETTEVILLE, ARKANSAS - June 26, 2000...Southwestern Energy Company
(NYSE: SWN) today announced that it has received approval from its Board of
Directors to pursue the sale of its utility business. Proceeds of the sale would
be used to fund a $109 million Sebastian County Circuit Court judgment against
the Company that was affirmed by the Arkansas Supreme Court on June 22. The
Company said as a result of the judgment that it has also suspended its
quarterly dividend.
"This unfavorable ruling requires us to take difficult steps to ensure
the long-term success of the Company," said Harold Korell, Southwestern
President and Chief Executive Officer. "The sale of the utility business would
allow us to fund the judgment, significantly strengthen our financial position,
and focus the Company on its exploration and production business."
The Company said that it is arranging interim financing with its lead
banks to meet its immediate financial obligations which would provide it time
and financial flexibility to pursue the sale of the utility business. The
company also said it will retain the services of an investment bank to assist it
in the sale of the business.
"The decision to sell the utility business sets a clear strategy for
the Company to focus all its efforts on exploration and production," said Mr.
Korell. "Two years ago we began making major changes in our E&P segment which
are now beginning to show positive results. Our drilling results in the first
quarter of 2000 were one of the best in the Company's history, as we replaced
over 200 percent of our year-to-date production. We believe we have a sound E&P
strategy that will offer significant upside to our shareholders."
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In late 1999 and early this year, Southwestern successfully drilled
exploratory wells in south Louisiana at Gloria and North Grosbec and has had
continued success in its Arkoma Basin and Permian Basin investments. The
exploration successes in south Louisiana are of particular note, as they were
the first prospects in this area developed in-house by the Company's new
exploration team. Southwestern's full-year 1999 and first quarter 2000 earnings
were consistent with previous years' levels despite the warmest winter in the
Company's history.
All statements, other than historical financial information, included
in this press release may be deemed to be forward-looking statements within the
meaning of the Securities Litigation Reform Act. These statements reflect the
Company's current views with respect to future events and performance and
involve risks and uncertainties that are detailed in the Company's Securities
and Exchange Commission filings. These risks would include, but are not limited
to, uncertainties with respect to the proposed sale of our utility business, the
timing and extent of the Company's success in discovering, developing, producing
and estimating oil and natural gas reserves. Although these statements are made
in good faith and the Company believes they are reasonable representations of
the Company's expected performance at this time, the Company's actual financial
and operating results could differ materially from those projected as a result
of certain factors. A discussion of those factors is included in the Company's
periodic reports filed with the Securities and Exchange Commission including its
Annual Report on Form 10-K for the year ended December 31, 1999. Additional
Company information can be accessed at http://www.swn.com.
For further information, please contact the following:
Investors and Analysts Media
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Mr. Greg Kerley Mr. Troy McCombs
Executive Vice President and Coltrin & Associates, Inc.
Chief Executive Officer (212) 221-1616
Southwestern Energy Company
(501) 521-1141
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