FOR IMMEDIATE RELEASE         For Further Information Contact: 
     December 6, 1993              Stanley D. Green
                                   Executive Vice President - Finance
                                     and Corporate Development
                                   (501) 521-1141
     
     
     
                   LOCAL ATTORNEYS FILE $210 MILLION REFUND CLAIM
                              WITH ARKANSAS COMMISSION
     
     
          FAYETTEVILLE, ARKANSAS--Southwestern Energy Company (NYSE:SWN)
     today announced that a small local law firm filed a refund
     complaint against Arkansas Western Gas Company (AWG), the Company's
     utility subsidiary, asking the Arkansas Public Service Commission
     (APSC or the Commission) to order AWG to refund amounts related to
     gas costs collected from its customers since 1978.  The claim
     purports to be a class action, although no Arkansas law
     specifically authorizes the pursuit of class action complaints
     before the APSC.
          The Fayetteville law firm of Pearson, Evans & Chadwick, which
     advertises itself as a firm of "personal injury trial lawyers,"
     filed the complaint on behalf of two Fayetteville citizens who
     claim to be customers of AWG and "all others similarly situated." 
          The complaint is based on a recent order of the APSC which
     found AWG's purchases under a contract with SEECO, Inc. (SEECO), an
     affiliated gas production company, to be in violation of Arkansas'
     so-called "least cost purchasing" statute (the Order).  The
     contract between AWG and SEECO, designated as "Contract 59," was
     approved by the Commission in connection with a corporate
     reorganization of Southwestern in 1979.  The Order found the price
     under the contract in question to be too high, but made no finding
     as to the appropriate price. The Order established a procedural
     schedule for the filing of additional testimony and the conduct of
     a hearing to determine "the most equitable pricing methodology" to
     apply to AWG's purchases from its affiliate.  In that order, the
     Commission said "...refunds are not an issue in this Docket.  As
     stated in Order No. 1 of this Docket, AWG's gas purchasing
     practices, affiliate transactions, gas costs and gas cost
     allocation issues...are being addressed on a prospective basis
     only."
          According to the complaint, "the PSC should order AWG to
     refund its ratepayers and customers at least Fourteen Million
     Dollars ($14,000,000) per year since 1978 or Two Hundred Ten
     Million Dollars ($210,000,000) or the amount by which the rates
     charged have exceeded the amount reasonably justified by the Rules 
     of the PSC and the Statutes of Arkansas."  The complaint does not 
     
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     explain how the refund claim was calculated.  No refund amount can
     be calculated from the Order because the Order made no finding as
     to the appropriate price.  The complaint states that the $210
     million claim is "subject to further discovery and future
     amendment."    
          "This is a classic example of a frivolous lawsuit," said
     Charles E. Scharlau, Chairman and Chief Executive Officer of
     Southwestern.  "The complaint reflects a lack of regard for the
     relevant facts and legal principles and misstates certain of the
     facts upon which it is based.  Furthermore, we believe that to
     grant the relief requested by the complaint would violate an
     Arkansas statute which expressly excepts from the APSC's refund
     authority actions which would constitute "retroactive ratemaking,"
     or refunds of rates collected pursuant to previous orders of the
     Commission.  We are, of course, disappointed that we have to devote
     any time to nuisance claims such as this, but will not allow our
     attention to be detracted from more meaningful matters."
          As an example of the factual problems evident in the claim,
     Scharlau referenced two sections of the filing.  The first section
     states "The Federal Energy Regulatory Commission ("FERC") has
     jurisdiction over SEECO with regard to its interstate gas
     distribution business, including transportation services." 
     Scharlau explained that SEECO is not regulated by the FERC, has no
     interstate gas distribution business, and offers no transportation
     services.  The second section of the complaint referenced by
     Scharlau states "AWG's exploration and production activities are
     conducted primarily through its sister corp., SEECO, and various
     other divisions and subsidiaries managed by AWG."  Scharlau
     explained that AWG conducts no exploration and production
     activities and manages no subsidiaries.
          Scharlau said that AWG would promptly file a response to the
     claim and would aggressively pursue its dismissal as well as any
     appropriate sanctions and disciplinary actions against the law
     firm.
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