SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement
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SOUTHWESTERN ENERGY COMPANY
------------------------------------------------
(Name of Registrant as Specified In Its Charter)

------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

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previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
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SOUTHWESTERN ENERGY COMPANY
1083 Sain Street
P. O. Box 1408
Fayetteville, Arkansas 72702-1408

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
ON MAY 25, 1994

The Annual Meeting of Shareholders of Southwestern Energy
Company will be held at the Northwest Arkansas Holiday Inn, Hwy. 71
Bypass at Hwy. 68/412, Springdale, Arkansas, on Wednesday, the 25th
day of May, 1994, at 11:00 a.m., Central Daylight Time, for the
following purposes:

(1) The election of five (5) directors to serve
until the 1995 Annual Meeting or until their
respective successors are duly elected and
qualified; and

(2) To transact such other business as may
properly come before the meeting or any
adjournment or adjournments thereof.

The Board of Directors has fixed the close of business on
March 21, 1994, as the record date for the determination of
shareholders entitled to notice of and to vote at the meeting.

You are cordially invited to attend the meeting. In the event
you will be unable to attend, you are respectfully requested to
mark, sign, date and return the enclosed proxy at your earliest
convenience in the enclosed return envelope.

By Order of the Board of
Directors

GREGORY D. KERLEY
Secretary
April 20, 1994

Southwestern Energy Company

PROXY STATEMENT

This proxy statement is furnished to the shareholders of
Southwestern Energy Company (the "Company") in connection with the
solicitation of proxies to be used in voting at the Annual Meeting
of Shareholders on May 25, 1994, and any adjournment or
adjournments thereof.

The complete mailing address of the principal executive
offices of the Company is:

1083 Sain Street
P. O. Box 1408
Fayetteville, Arkansas 72702-1408

The enclosed proxy is solicited by the Board of Directors of
the Company. A person giving the enclosed proxy has the power to
revoke it at any time before it is exercised.

The Board of Directors has engaged Morrow & Co., Inc., a proxy
solicitation firm, to solicit proxies from brokerage firms, banks
and institutional holders of shares on its behalf at a cost of
$5,000 plus expenses. The cost of this proxy solicitation will be
borne by the Company, including the charges and expenses of
brokerage firms and others for forwarding solicitation material to
beneficial owners of stock. The solicitation will be by mail and
such cost will include the cost of preparing and mailing this proxy
statement and proxy. In addition to the use of the mails, proxies
may be solicited by personal interview, by telephone or by other
means. Although solicitation will be made primarily through the
use of the mail, officers, directors or regular employees of the
Company may solicit proxies personally or by telephone or other
means without additional remuneration for such activity.

A copy of the Company's Annual Report has previously been
mailed to shareholders. This proxy statement is being mailed to
shareholders on April 20, 1994.

VOTING SECURITIES OUTSTANDING
CUMULATIVE VOTING FOR ELECTION OF DIRECTORS AUTHORIZED

On March 21, 1994, the Company had outstanding 25,684,110
shares of common stock ($.10 par value). Each share outstanding on
the record date for the meeting entitles the holder thereof to one
vote upon each matter to be voted upon at the meeting, except that
for the election of directors each such shareholder shall be
entitled to as many votes as shall equal the number of shares of
stock outstanding in his name multiplied by the number of directors
to be elected, and he may cast all such votes for a single director
or he may distribute them among the number to be voted for, or for
any two or more of them, as he may see fit. Unless contrary
instructions are given, persons named as proxies will have
discretionary authority to cumulate votes in the same manner. All
shares represented by effective proxies will be voted at the
meeting or any adjournment thereof as specified therein by the
person giving the proxy. Abstentions and broker non-voted shares
are disregarded in the vote tallies

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and do not have the effect of "no" votes. For purposes of
determining a quorum, a share is present once it is represented for
any purpose at the meeting. Abstentions are counted present for
purposes of determining a quorum. Broker non-voted shares are
counted present if represented at the meeting for any purpose.

Unless revoked, each properly executed proxy will be voted in
the manner directed therein. If no direction is made, each such
proxy will be voted FOR the election of directors.

Only shareholders of record at the close of business on March
21, 1994, will be entitled to vote at the Annual Meeting of
Shareholders.

ELECTION OF DIRECTORS

At the meeting, five (5) directors are to be elected to serve
for the ensuing year and until their respective successors are
elected and qualified. The shares represented by the enclosed
proxy will be voted as instructed by the shareholders for the
election of the nominees named below. If no direction is made,
this proxy will be voted for the election of the nominees named
below. If any nominee becomes unavailable for any reason or if a
vacancy should occur before the election, the shares represented by
the enclosed proxy may be voted for such other person as may be
determined by the holders of such proxies. The Company has no
knowledge that any nominee will be unavailable for election.
Directors shall be elected by plurality vote. Certain information
concerning the nominees for election as directors, is set forth
below.

Nominees For Election

E. J. BALL - Mr. Ball is an Attorney at Law, firm of Ball and
Mourton, Ltd., Fayetteville, Arkansas, and General Counsel of the
Company. He is 77 years old and first became a director in 1971.

JAMES B. COFFMAN - Mr. Coffman is Chairman and Chief Executive
Officer, J.B. Coffman and Associates, Inc., performing petroleum
consulting and investment services in Houston, Texas. He is also
Chairman and Director of CoMac Chemical, providing process
chemicals to the refining industry. Mr. Coffman has held these
positions since 1985. Previously, Mr. Coffman was President and
Chief Executive Officer of Aminoil, Inc., from 1984 until 1985, and
President and Chief Operating Officer, from 1981 until 1984.
Aminoil, Inc.'s principal business was oil and gas exploration and
production. He also held various positions with Exxon Corporation
from 1950 until 1981, lastly, as Vice President and Director of
Exxon Production Research Company. Mr. Coffman served as a
director of The Exploration Company of Louisiana through November,
1990. Mr. Coffman is 68 years old and first became a director in
1986.

JOHN PAUL HAMMERSCHMIDT - Mr. Hammerschmidt is a retired U.S.
Congressman, Third District of Arkansas, who served from 1967-1993.
He has been a director of Dillard's Department Stores Inc., Little
Rock, Arkansas since 1992. He has also been a member of the
Metropolitan Washington Airports Authority Board of Review since
1987. Mr. Hammerschmidt has served as a director of First Federal
Savings and Loan Association, Harrison, Arkansas since 1966. From
1946-1984 he was active in the lumber business, serving as
President of Hammerschmidt Lumber Company, Harrison, Arkansas. Mr.
Hammerschmidt is 71 years old and was first elected to the Board of
Directors in 1992.

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CHARLES E. SANDERS - Mr. Sanders is a retired General Manager
of Springdale Publishing Co., Springdale, Arkansas, and presently
manages his own investments. Mr. Sanders is 74 years old and first
became a director in 1973.

CHARLES E. SCHARLAU - Mr. Scharlau is Chairman of the Board
and Chief Executive Officer of the Company, and a Director of C.H.
Heist Corporation. Mr. Scharlau is 67 years old and first became
a director in 1966.

Shareholders entitled to vote for the election of directors at
the annual meeting may nominate additional candidates provided
written notice of such nomination is received at the Company's
principal executive offices no later than the close of business on
May 5, 1994. The Company's by-laws require that this notice
contain certain information about any proposed nominee and the
shareholder submitting the notice. The Company may also require
any proposed nominee to furnish such other information as may
reasonably be required to determine the proposed nominee's
eligibility to serve as a director of the Company. A copy of the
relevant by-law provisions may be obtained by contacting Gregory D.
Kerley, Secretary, Southwestern Energy Company, 1083 Sain Street,
P. O. Box 1408, Fayetteville, Arkansas 72702-1408, (501) 521-1141.

SECURITY OWNERSHIP OF NOMINEES AND EXECUTIVE OFFICERS

The following table sets forth information as of March 31,
1994 with respect to beneficial ownership of the Company's common
stock by its directors and executive officers.

Number of Shares of $.10
Par Value Common Stock
Beneficially Owned as of 3-31-94
(Sole Voting and Investment Percent
Name of Beneficial Owner Power Except as Noted) of Class
------------------------ ---------------------------- --------

Executive Officers:
Charles E. Scharlau . . . . . . 369,450(1) 1.44%
Dan B. Grubb. . . . . . . . . . 43,337(1) 0.17%
Stanley D. Green. . . . . . . . 79,865(1) 0.31%
B. Brick Robinson . . . . . . . 58,247(1) 0.23%
Gregory D. Kerley . . . . . . . 14,798(1) 0.06%
Directors:
E. J. Ball. . . . . . . . . . . 57,400(2) 0.22%
James B. Coffman. . . . . . . . 23,400 0.09%
John Paul Hammerschmidt . . . . 12,000 0.05%
Charles E. Sanders. . . . . . . 41,856 0.16%
All persons as a group (10 in number)
who are directors or executive officers
of the Company 710,813(3) 2.77%

________________________
<FN>
(1) Of the number of shares reported as beneficially owned, the
named individuals had the right to acquire within 60 days,
through the exercise of stock options, beneficial ownership of
the following number of shares: Mr. Scharlau, 169,650; Mr.
Grubb, 15,000; Mr. Green, 58,800; Mr. Robinson, 45,000; and
Mr. Kerley, 9,600. Also included in the number of shares
reported as

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beneficially owned are the rights of the named individuals to
acquire the following number of shares through the exercise of
stock options immediately upon a "change in control" as defined
under Agreements Concerning Employment and Changes in Control on
page 15 of the proxy statement: Mr. Scharlau, 45,996; Mr. Grubb,
10,216; Mr. Green, 10,216; Mr. Robinson, 13,247; Mr. Kerley 3,247;
and 12,000 each for Messrs. Ball, Coffman, Hammerschmidt and
Sanders.

(2) Mr. Ball is trustee of a family trust holding 12,000 shares
and investment advisor of a grandchildren's trust holding
11,000 shares and disclaims beneficial interest in such
holdings, although they are included in the 57,400 shares
listed as beneficially owned by Mr. Ball.

(3) Of this number, all directors and executive officers as a
group had the right to acquire beneficial ownership of 304,050
shares through the exercise of stock options within 60 days.
Also included in this number is this group's right to acquire
an additional 134,069 shares through the exercise of stock
options immediately upon a "change in control" as defined
under Agreements Concerning Employment and Changes in Control
on page 15 of this proxy statement.

Transactions With Nominees and Executive Officers

Prior to his appointment as President and Chief Operating
Officer of the Company in July, 1992, Mr. Grubb owned an equity
interest in certain business enterprises in which the Company also
owned an equity interest. Upon his appointment as President and
Chief Operating Officer of the Company, the Company acquired Mr.
Grubb's interest in these enterprises. These transactions are
further described below. Mr. Grubb is Chairman, Chief Executive
Officer, and principal shareholder of Grubb Industries, Inc., which
was engaged primarily in the development of energy projects. Mr.
Grubb is also the Chairman, Chief Executive Officer, and principal
shareholder of GRUBB NOARK Pipeline, Inc. which owned, during a
portion of 1992, a 4% general partnership interest in NOARK
Pipeline System, Limited Partnership ("NOARK"), a limited
partnership in which the Company, through a wholly owned
subsidiary, held a 43.33% general partnership interest. NOARK was
formed in 1991 as successor to a general partnership formed in 1989
to construct, own and operate a $100,000,000 intrastate natural gas
pipeline system in Arkansas. Mr. Grubb held a position on NOARK's
management committee as a representative of GRUBB NOARK Pipeline,
Inc. Since inception of the NOARK project, GRUBB NOARK Pipeline,
Inc. and its predecessor in the project, Grubb Industries, Inc.,
have contributed $231,942 to NOARK as equity and were reimbursed
$106,437 for consulting services performed on behalf of NOARK. In
1990, $136,016 in previous capital contributions plus $8,161 in
interest earned on funds invested were returned to Grubb
Industries, Inc. as a result of the entry of a new partner and a
reduction of the partnership interest of Grubb Industries, Inc.
from 15% to 4%. In 1991, $95,926 in previous capital contributions
plus $100 in interest earned on funds invested were returned to
Grubb Industries, Inc. as part of a pro rata return of capital to
all general partners funded by the initial draw under NOARK's
construction financing arrangements.

In 1991, NOARK entered into definitive financing agreements
with The Prudential Insurance Company of America ("Prudential")
under which Prudential lent to NOARK $63,000,000 for construction
of its pipeline system. Prudential is also the partnership's sole
limited partner with an interest of 20%. Under the agreements,
certain of the general partners (including the Company) were
jointly and severally liable for the repayment of construction
advances owed by NOARK. GRUBB NOARK Pipeline, Inc. was severally
liable for the repayment of 4% of such advances prior to the
Company's acquisition of Mr. Grubb's interest in NOARK. In early
1993, the construction advances were converted to long-term
financing in the form of Senior Secured Notes and certain of the
general

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partners (including the Company) severally guaranteed the
availability of certain minimum cash balances to service these
notes. GRUBB NOARK Pipeline, Inc.'s share of such several
guarantee would have been 4% and GRUBB NOARK Pipeline, Inc. would
also have been severally liable for 4% of any deficiency remaining
after any acceleration of NOARK's indebtedness due to its default
had the Company not acquired Mr. Grubb's interest in NOARK.

GRUBB NOARK Pipeline, Inc.'s obligations under the NOARK
related financing agreements were guaranteed by the Company and one
of its wholly owned subsidiaries. The Company's wholly owned
subsidiary and GRUBB NOARK Pipeline, Inc. had entered into a
separate agreement which would have allowed the Company's wholly
owned subsidiary to recover from GRUBB NOARK Pipeline, Inc.'s share
of NOARK's distributions to its partners 200% of any payments made
by the Company or its wholly owned subsidiary on behalf of GRUBB
NOARK Pipeline, Inc. related to these guarantees, plus interest at
the rate of two percentage points above the prime rate of The First
National Bank of Chicago, but not to exceed five percentage points
above the federal reserve discount rate at the time of the
agreement. GRUBB NOARK Pipeline, Inc.'s obligation to repay any
amounts due to the Company or its wholly owned subsidiary related
to these guarantees was secured by its general partnership interest
in NOARK. The Boards of the Company and its wholly owned
subsidiary each concluded that the guarantees provided for the
benefit of Mr. Grubb were in their best interest of and benefited
the Company and its wholly owned subsidiary because (1) Mr. Grubb
had contributed substantial expertise to the planning, construction
and operation of NOARK, based on his prior experience as an
executive of a major pipeline company, (2) fees paid to Mr. Grubb
(through GRUBB NOARK Pipeline, Inc. and its predecessor) were
disproportionately low when compared to the significant value
contributed by Mr. Grubb to NOARK and (3) GRUBB NOARK Pipeline,
Inc. owned a 4% general partnership interest in NOARK and had
provided, and or agreed to provide, the several guarantees
described above.

In 1990, prior to the time Mr. Grubb was appointed President
and Chief Operating Officer of the Company, the Company and other
parties formed NOARK Gas Marketing Company ("NGMC") for the primary
purpose of developing markets to be served through NOARK. NGMC was
a general partnership in which the Company originally owned a
33.33% interest and in which Grubb Industries, Inc. originally
owned a 33.33% interest and acted as managing partner. Since
inception of NGMC, Grubb Industries, Inc. contributed $22,256 to
NGMC as equity. In 1991, NGMC's general partnership agreement was
amended to provide for the entry of another partner. This
amendment lowered the Company's interest in NGMC to 23.33% and
lowered the interest of Grubb Industries, Inc., to 25.00%.

In 1992, upon Mr. Grubb's appointment as President and Chief
Operating Officer of the Company, a wholly owned subsidiary of the
Company purchased GRUBB NOARK Pipeline, Inc.'s 4% general
partnership interest in NOARK, increasing the subsidiary's interest
to 47.33%. Additionally, the Company purchased the 25% general
partnership interest of Grubb Industries, Inc. in NGMC, thereby
increasing its interest to 48.33%. For the general partnership
interest in NGMC, the Company has agreed to pay to Grubb
Industries, Inc. the sum of $7,912 representing the approximate
balance in its capital account as of the date of the acquisition.
No cash consideration was paid to GRUBB NOARK Pipeline, Inc. for
its general partnership interest in NOARK. The Company and its
wholly owned subsidiary also agreed to assume all liabilities and
obligations of GRUBB NOARK Pipeline, Inc., Grubb Industries, Inc.,
and Mr. Grubb incurred in connection with their participation in
NOARK and NGMC as of the date of the acquisitions. Among the
liabilities assumed by the Company and its wholly

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owned subsidiary were GRUBB NOARK Pipeline, Inc.'s obligations
under the NOARK related financing agreements with Prudential as
described above, which the Company and its wholly owned subsidiary
had previously guaranteed. In addition, the Company and its wholly
owned subsidiary may be required to indemnify Mr. Grubb and GRUBB
NOARK Pipeline, Inc. against liability potentially arising from a
lawsuit filed in 1993 by Vesta Energy Company ("Vesta") against
NOARK, the Company, certain of its wholly owned subsidiaries, GRUBB
NOARK Pipeline, Inc., and Mr. Grubb. In this lawsuit, Vesta is
seeking actual and punitive damages in excess of $2,000,000 and
rescission of certain gas transportation and sales contracts. The
Company is unable, at this time, to determine the extent of the
potential liability attributable to GRUBB NOARK Pipeline, Inc. or
Mr. Grubb or the extent of its ultimate obligation to indemnify
GRUBB NOARK Pipeline, Inc. and Mr. Grubb against such potential
liability. The Company may also be required to indemnify Mr. Grubb
against liability arising from this lawsuit pursuant to a separate
indemnification agreement with Mr. Grubb in his capacity as an
officer and former director of the Company and its subsidiaries.
The Company and its subsidiaries are presently advancing all
litigation costs and attorneys fees incurred in connection with
this lawsuit which would otherwise be attributable to GRUBB NOARK
Pipeline, Inc. and Mr. Grubb. The Company is aware of no other
material liabilities or obligations assumed in connection with
these acquisitions.

Please refer to the section Compensation Committee Interlocks
and Insider Participation on page 18 of the proxy statement for a
discussion of Mr. Coffman's consulting relationship with the
Company.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The only persons known to the Company to beneficially own more
than 5% of the Company's common stock as of March 31, 1994, are as
follows:

Number of
Shares
Title of Name and Address of Beneficially Percent of
Class Beneficial Owners Owned Class
- --------------- ----------------------- -------------- ---------

Common . . Capital Investment 1,424,923 5.5%
($.10 par value) Services of America,
Inc.
700 North Water Street
Suite 325
Milwaukee, WI 53202-4206

Capital Investment Services of America, Inc. ("Capital") is an
Investment Adviser registered under the Investment Advisers Act of
1940, which holds the Company's shares on behalf of its clients.
Capital holds sole dispositive power on 1,424,923 shares and sole
voting power on 463,800 shares, with voting power on 961,123 shares
being vested in the clients on whose behalf the shares are held.

COMPENSATION COMMITTEE REPORT

Compensation Philosophy

In determining the compensation of the Chief Executive Officer
(the "CEO") and the other executive officers of the Company and its
subsidiaries, the Compensation Committee of the Board of Directors
(the "Compensation Committee") seeks to align compensation with the
attainment of the

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Company's objectives, the Company's performance and the attraction
and retention of individuals who contribute to the Company's
success. The Compensation Committee believes that compensation
should:

- relate to the value created for shareholders by
being directly tied to the financial performance
and condition of the Company and the particular
executive officer's contribution thereto;

- reward individuals who help the Company achieve its
short-term and long-term objectives and thereby
contribute significantly to the success of the
Company;

- help to attract and retain the most qualified
individuals in the natural gas industry by being
competitive with compensation paid to persons
having similar responsibilities and duties in other
companies in the same and closely related
industries; and

- reflect the qualifications, skills, experience and
responsibilities of the particular executive
officer.

In determining executive compensation, the Company uses peer
group comparisons. The industry group index shown in the
performance chart reported in this proxy statement includes a
number of the companies that are used for compensation analysis.
The Compensation Committee believes that companies operating
exclusively in the oil and gas producing industry are also
appropriate to include in its compensation analysis. Compensation
packages are targeted to the median of the range of compensation
paid by comparable companies. Executive compensation paid by the
Company during 1993 generally corresponded to the high end of the
range of compensation paid by comparable companies due to the
achievement of maximum corporate performance measures under the
Company's Incentive Compensation Plans.

Components of Compensation

Base Salary. In establishing the base salaries of the CEO and
the other executive officers, the Compensation Committee examines
competitive peer group surveys and data in order to determine
whether the total compensation package is competitive with
compensation offered by other companies in the natural gas and oil
and gas producing industries which are similar in terms of the
complexity of their operations and which offer the most direct
competition for competent executives. The Compensation Committee
also takes into account the Company's financial and operating
performance as compared with the industry mean. The Compensation
Committee also considers the diverse skills required of its
executive management to expand the exploration and production
segment of its operations while maintaining satisfactory
performance in the highly regulated gas distribution segment. In
addition, the Compensation Committee considers the particular
executive's performance, responsibilities, qualifications and
experience in the natural gas industry. The Compensation Committee
is periodically advised by outside compensation consultants on its
compensation policies.

Minimum base salaries for Mr. Scharlau and Mr. Grubb have been
incorporated into employment agreements as further described under
the heading "Agreements Concerning Employment and Changes in
Control." Changes in base salary also affect other elements of
compensation including: (i) awards under the Company's Incentive
Compensation Plan; (ii) pension benefits; (iii) company matching
portions of 401(k) contributions; and (iv) life insurance benefits.

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Incentive Compensation Plan. The Company maintains an
Incentive Compensation Plan (the "Incentive Plan") applicable to
executives with responsibility for the Company's major business
segments. The Incentive Plan is intended to encourage and reward
the achievement of (1) year-to-year growth in the Company's actual
reported earnings; (2) returns on equity which are above industry
averages; (3) reserve additions and acquisitions; (4) return on
utility rate base; and (5) pipeline throughput and margins. These
criteria are deemed by the Compensation Committee to be critical to
increasing shareholder value. The Incentive Plan is also designed
to assist in the attraction and retention of qualified employees,
to further link the financial interest and objectives of employees
with those of the Company and to foster accountability and teamwork
throughout the Company. During 1993, predetermined target levels
for these criteria were generally met or exceeded.

The CEO and those executives with responsibilities
directly affecting the Company's operation are assigned target,
minimum and maximum award levels expressed as a percentage of their
base salary. In 1993, the target awards which could be paid based
on attainment of corporate performance measures ranged from 10% to
30% of base salary for these individuals, the minimum awards ranged
from 5% to 15% of base salary, and the maximum awards which could
be paid ranged from 17.5% to 60% of base salary. None of these
awards are paid if corporate performance as determined by the
corporate performance measures is below a specified level. In
addition, the participating executives are eligible for
discretionary awards based upon their individual performance
ranging from 12.5% to 20% of base salary. Payouts under the
Incentive Plan are based on the achievement of corporate financial
profit objectives, business unit results and the Committee's
evaluation of individual performance. Awards are payable in cash,
restricted common stock of the Company, or a combination of cash
and restricted common stock. Restricted common stock awarded under
the Incentive Plan is subject to the provisions of the Company's
1993 Stock Incentive Plan, discussed below, and count toward the
aggregate number of shares authorized under that plan.

Several factors are used to measure the performance of the
Company and its executives. Generally, when multiple factors are
considered, such factors are equally weighted in determining the
Company performance portion of an executive's bonus. In order to
measure corporate financial and operating results for the CEO, the
executive officers named in the compensation tables and other
executives with responsibilities directly affecting all segments of
the Company's operations, the Compensation Committee examines (1)
the Company's return on equity as compared to the performance of a
peer group of the Company as indicated by The Value Line Investment
Survey group of diversified natural gas companies and (2) the
increase in actual reported earnings per share over the previous
year. Those executives with responsibilities directly affecting
only specific segments of the Company's operations are rewarded
based upon the achievement of preestablished performance objectives
specific to their business segment. In measuring the attainment of
the exploration and production segment's goals and objectives, the
Compensation Committee examines (1) finding, development and
acquisition costs as compared to expected results based on industry
standards and, (2) replacement of reserves produced. In measuring
the attainment of the goals of the utility segment, the Committee
examines the segment's return on rate base. Individual performance
measures are both quantifiable and discretionary and are designed
to be reasonably attainable, under the immediate influence of the
executive and related to the success of the individual.

Stock Incentive Plan. The CEO and other executive officers
are also eligible to participate in the Company's 1993 Stock
Incentive Plan (the "Stock Plan"). The Stock Plan is designed to
attract and retain key executive employees by enabling them to
acquire a proprietary interest in the Company and

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by tying executive rewards to shareholder interests. The Stock
Plan provides for the granting of restricted stock, phantom stock,
stock bonuses, options to purchase common stock of the Company, and
limited, tandem, and stand alone stock appreciation rights in such
amounts as determined by the Compensation Committee on a
discretionary basis. Grants made during 1993 were made at a price
equal to the fair market value on the date of grant. In addition,
the Stock Plan provides for the granting of cash bonuses in
connection with awards of restricted stock and stock bonuses when
a participant is required to recognize income for federal income
tax purposes with respect to such awards. The number of shares of
the $.10 par value common stock of the Company which may be issued
under the Stock Plan cannot exceed 1,275,000, subject to adjustment
in the event of any change in the outstanding common stock of the
Company by reason of any stock split, stock dividend,
recapitalization, reclassification, merger, consolidation,
combination or exchange of shares, or any other similar event. In
determining the options granted to executive officers under the
Stock Plan, the Compensation Committee considers a number of
factors in addition to considering the goals of attracting and
retaining such officers and tying their rewards to shareholder
interests. The number of options and restricted shares awarded in
fiscal 1993 were largely based upon an analysis of the value of
long-term incentive plan awards made by the Company's competitive
peer group. In addition, the Compensation Committee evaluated the
performance of the Company, the performance and responsibility of
the particular executive, and the desirability of providing a
particular executive with an adequate incentive to remain in the
employ of the Company.

In 1993, the annual component of the Company's former Annual
and Long-Term Incentive Compensation Plan (the "Prior Plan") was
replaced by the Company's Incentive Compensation Plan, discussed
above. The long-term component of the Prior Plan was replaced by
the Stock Incentive Plan for performance periods beginning after
January 1, 1993. Payouts of awards previously granted and payouts
of awards related to five-year performance periods ending each year
through December 31, 1997, will continue to be made under the Prior
Plan. Key employees were selected annually to participate in the
Prior Plan based on their ability to have a significant impact on
the performance of the Company. Under the long-term incentive
component of the Prior Plan, cash awards are based on the Company's
performance during overlapping five-year periods. A new five-year
performance period began each year on January 1, with the final
five-year performance period beginning January 1, 1993. For all
participants, awards are based equally on the compounded five-year
growth in earnings per share and the cumulative five-year return on
equity. The return on equity performance factor is based on the
composite actual average return on equity for the previous five-
year period of the natural gas (diversified) group of companies as
determined by reference to The Value Line Investment Survey.
Payouts of awards are tied to achieving specified levels of return
on equity and earnings per share (EPS) growth. None of these
awards are paid if return on equity and EPS growth are below
specified levels. Target awards which could be paid based on
attainment of corporate performance measures range from 10% to 40%
of base salary (determined at the beginning of each five-year
performance period), minimum awards range from 5% to 20% of base
salary, while the maximum awards range from 20% to 80% of base
salary. During the five-year performance period ending December
31, 1993, 90% of the specified target EPS growth rate was achieved
and the maximum return on equity performance factor was exceeded.
Any award earned is payable at the rate of 20% per year, commencing
at the end of each five-year performance cycle. The purpose of
this component of the Prior Plan is to balance the focus of senior
managers between annual goals and long-term strategies of the
Company.

- 9 -

Mr. Scharlau's base salary has remained at its present level
of $425,000 for the last two years. Under the Company's Incentive
Compensation Plan, Mr. Scharlau has a targeted annual bonus award
of 50% of base salary, with minimum and maximum awards of 20% and
80%, respectively, depending upon the achievement of corporate
performance measures. Of these awards, 75% is an automatic award
based upon the achievement of corporate financial objectives and
25% is discretionary. The Company's attainment of the performance
measures in fiscal 1993 resulted in the maximum payout and Mr.
Scharlau was awarded a bonus of $255,000, or 60% of his base
salary. Mr. Scharlau also received $130,560 during 1993 as a
payout of awards under the long-term component of the Prior Plan.
Under the long-term component of that plan, he earned an award in
1993 of $191,235, or 58% of his 1989 base salary for the five-year
performance period ending December 31, 1993. This award will be
paid out at the rate of 20% per year through 1998. For this
performance period, minimum, target and maximum awards applicable
to Mr. Scharlau were 20%, 40% and 80% of base salary, respectively.
During this period, 90% of the specified target EPS growth rate was
achieved and the maximum return on equity performance factor was
exceeded. For performance periods beginning after January 1, 1993,
the long-term component of this plan is replaced by the Stock Plan.
Mr. Scharlau was awarded options to purchase 45,996 shares of the
Company's common stock under the Stock Plan, as described above.
The options vest at the earlier of three years from the date of
grant or his retirement from the Company's employ. Limited stock
appreciation rights were granted in tandem with these options. The
number of options awarded in fiscal 1993 was based upon a
competitive analysis of long-term incentive awards made to the
chief executive officers of the Company's competitive peer group
and is consistent with the objectives of the Stock Plan. In
addition to the factors described above, in determining the salary
and other forms of compensation for Mr. Scharlau the Compensation
Committee took into consideration Mr. Scharlau's substantial
experience (42 years) and standing in the industry in general and
with the Company in particular. The Compensation Committee also
considered Mr. Scharlau's increase in responsibilities and the
complexity of his position as a result of the Company's
diversification and growth in recent years, including its recent
expansion in the gas transmission area through a partnership equity
interest.

JOHN PAUL HAMMERSCHMIDT
CHARLES E. SANDERS

Members of the Compensation
Committee

- 10 -

EXECUTIVE COMPENSATION

The following table contains information with respect to
executive compensation paid or set aside by the Company for
services in all capacities during the years 1991, 1992, and 1993 of
the CEO and the next four most highly paid executive officers of
the Company and its subsidiaries whose direct aggregate
remuneration exceeded $100,000 in 1993.

SUMMARY COMPENSATION TABLE
--------------------------
Long-Term Compensation
--------------------------------
Annual Compensation Awards Payouts
--------------------------------- --------------------- ---------

(a) (b) (c) (d) (e) (f) (g) (h) (i)

Number of
Other Restricted Securities
Name and Annual Stock Underlying LTIP All Other
Principal Compensation Awards Options/ Payouts Compensation
Position Year Salary ($) Bonus($) ($) ($)(2) SARs(#)(3) ($) ($)
- --------------------------- ---- ------------ ---------- ---------- --------- ---------- --------- ----------

Charles E. Scharlau 1993 $425,000 $255,000 $7,380 $ - 45,996 $130,560 $8,874(4)
Chairman of the Board, 1992 425,000 236,846 7,380 - 27,000 114,231 2,487
Chief Executive Officer 1991 400,000 209,145 - 30,000 23,000
and Director

Dan B. Grubb 1993 275,000 92,822 51,900(5) 115,097 10,216 - 9,824(6)
President and Chief 1992 125,000(7) 49,912 2,678 - 15,000 - 3,786
Operating Officer 1991 - - - - -

Stanley D. Green 1993 196,000 88,213 51,301(8) 113,556 10,216 23,696 6,996(9)
Executive Vice 1992 170,500 66,283 6,848 - 12,000 19,242 990
President - 1991 150,000 74,769 - 9,000 3,500
Finance and Corporate
Development and Chief
Financial Officer

B. Brick Robinson 1993 204,000 91,800 7,140 - 13,247 - 7,304(10)
Executive Vice 1992 195,000 10,000 7,140 - 9,000 - 15,076
President and Chief 1991 180,000 30,000 - 9,000 -
Operating Officer,
Southwestern Energy
Production Company and
SEECO, Inc. (1)

Gregory D. Kerley 1993 102,000 47,061 11,601(11) 12,861 3,247 - 3,651(12)
Vice President - 1992 94,000 31,513 6,600 - 3,000 - 545
Treasurer and Secretary, 1991 81,000 32,333 - 3,600 -
and Chief Accounting
Officer

________________________
<FN>
(1) Southwestern Energy Production Company and SEECO, Inc. are
wholly owned subsidiaries of the Company.

(2) Restricted stock awards for Messrs. Grubb and Green generally
vest at the end of 5 years. The restricted stock award for Mr.
Kerley vests ratably over 5 years. The value of the restricted
stock of Messrs. Grubb, Green and Kerley at year end was $120,978,
$119,358 and $13,518, respectively.

(3) All Options/SARs have been adjusted for the three-for-one
stock split distributed in 1993.

- 11 -

(4) Includes $6,375 as the Company matching portion of 401(k)
contributions and $2,499 as the cost of life insurance benefits
provided by the Company.

(5) Includes $44,760 as a bonus for the payment of taxes related
to the restricted stock grants made during 1993.

(6) Includes $8,219 as the Company matching portion of 401(k)
contributions and $1,605 as the cost of life insurance.

(7) Represents salary for services rendered from July 1, 1992
through December 31, 1992.

(8) Includes $44,161 as a bonus for the payment of taxes related to
the restricted stock grants made during 1993.

(9) Includes $5,854 as the Company matching portion of 401(k)
contributions and $1,142 as the cost of life insurance.

(10) Includes $6,109 as the Company matching portion of 401(k)
contributions and $1,195 as the cost of life insurance.

(11) Includes $5,001 as a bonus for the payment of taxes related to
the restricted stock grants made during 1993.

(12) Includes $3,054 as the Company matching portion of 401(k)
contributions and $597 as the cost of life insurance.

OPTION/SAR GRANTS IN LAST FISCAL YEAR
--------------------------------------
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term (3)
- ------------------------------------------------------------------------------------ ---------------------
(a) (b) (c) (d) (e) (f) (g)

% of Total
Number of Options/
Securities SARs
Underlying Granted to Exercise
Options/ Employees or Base
SARs in Fiscal Price Expiration
Name Granted (1) Year ($/Sh) (2) Date 5% ($) 10% ($)
- ------------------- ----------- ----------- ---------- ----------- ---------- ----------

Charles E. Scharlau 45,996 44.9% $17.125 12/14/2003 $495,369 $1,255,361

Dan B. Grubb 10,216 10.0% $17.125 12/14/2003 110,024 278,824

Stanley D. Green 10,216 10.0% $17.125 12/14/2003 110,024 278,824

B. Brick Robinson 13,247 12.9% $17.125 12/14/2003 142,668 361,548

Gregory D. Kerley 3,247 3.2% $17.125 12/14/2003 34,970 88,620

- 12 -

"change in control." All grants made prior to 1993 are presently
exercisable and expire on the earlier of (a) ten years and one day
from the date of grant; or (b) termination of employment other than
for retirement due to age or disability. All 1993 grants expire
after ten years from the date of grant but may expire earlier upon
termination of employment. Limited stock appreciation rights were
granted in tandem with all options granted in 1993.

(2) The exercise price reflects the fair market value of the
Company's common stock on the date of grant.

(3) Realizable values are reported net of the option exercise
price, but before taxes associated with exercise. The dollar
amounts shown are the result of calculations using 5% and 10% rates
of appreciation as specified by the Securities and Exchange
Commission and are not intended to forecast possible future
appreciation, if any, of the Company's stock price. Realization by
optionees of the amounts shown are dependent on future increases in
the price of the Company's common stock and the continued
employment of the optionee with the Company.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
--------------------------------------------------------------------------------

(a) (b) (c) (d) (e)

Number of Unexercised
Number of Securities Underlying Value of Unexercised In-the-Money
Securities Options/SARs at FY-End (#) Options/SARs at FY-End ($) (2)
Underlying ---------------------------------- --------------------------------
Options/SARs Value
Name Exercised Realized ($) Exercisable (1) Unexercisable(1) Exercisable(1) Unexercisable(1)
- ------------------- ------------ ------------ --------------- ----------------- -------------- ----------------

Charles E. Scharlau 43,650 $447,938 169,650 45,996 $1,408,781 $40,247

Dan B. Grubb - - 15,000 10,216 77,813 8,939

Stanley D. Green - - 58,800 10,216 505,613 8,939

B. Brick Robinson - - 45,000 13,247 360,000 11,591

Gregory D. Kerley - - 9,600 3,247 65,025 2,841

________________________
<FN>
(1) All 1993 grants except those to Mr. Scharlau and Mr. Robinson vest and
become exercisable ratably over the three years beginning one year from the
date of grant or immediately upon a "change in control" as defined under
Agreements Concerning Employment and Changes in Control on page 15 of the
proxy statement. All 1993 grants to Mr. Scharlau and Mr. Robinson vest at
the earlier of three years from the date of the grant or at retirement or
immediately upon a "change in control" and are exercisable three years from
the date of grant or immediately upon a "change in control." All grants made
prior to 1993 are presently exercisable and expire on the earlier of (a) ten
years and one day from the date of grant; or (b) termination of employment
other than for retirement due to age or disability. All 1993 grants expire
after ten years from the date of grant but may expire earlier upon
termination of employment. Limited stock appreciation rights were granted in
tandem with all options granted in 1993.

(2) Values are calculated as the difference between the exercise price of
the options/SARs and the market value of the Company's common stock as of
December 31, 1993 ($18.00/share).

- 13 -

LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
------------------------------------------------------

Estimated Future Payouts
under Non-Stock Price-Based Plans (2)
-------------------------------------

(a) (b) (c) (d) (e) (f)

Performance
Number of or Other
Shares, Units Period Until
or Other Maturation or Threshold Target Maximum
Name Rights (1) Payout ($) ($) ($)
- ---------------------- ------------- ------------- ---------- ---------- ---------

Charles E. Scharlau $191,235 1994-98 $85,000 $170,000 $340,000

Dan B. Grubb (3) - - 34,375 68,750 137,500

Stanley D. Green 39,840 1994-98 24,500 49,000 98,000

B. Brick Robinson (3) - - - - -

Gregory D. Kerley (3) - - 5,100 10,200 20,400

________________________
<FN>
(1) Specified awards are payable in the years 1994 through 1998 at
the rate of 20% per year and relate to the five-year performance
period beginning January 1, 1989, and ending December 31, 1993.
Payments scheduled to be made in 1994 were made in December, 1993.
The awards were calculated as a percentage of the participants'
1989 base salary.

(2) Estimated awards relate to the performance period beginning
January 1, 1993, and ending on December 31, 1997, and are
calculated as a percentage of the participants' 1993 base salary.
The estimated awards, if earned, will be payable at the rate of 20%
per year beginning in 1998. The long-term component of the
Company's Annual and Long-Term Incentive Compensation Plan was
replaced for performance periods beginning after January 1, 1993 by
the Stock Plan. Payouts will continue under the long-term
component of the Annual and Long-Term Incentive Compensation Plan
for five-year performance periods ending each year through December
31, 1997.

(3) Messrs. Grubb, Robinson and Kerley were not participants in
the long-term incentive component of the Company's Annual and Long-
Term Incentive Compensation Plan for the performance period ending
on December 31, 1993. Mr. Robinson is not a participant in that
component for the performance period beginning January 1, 1993.

The long-term incentive awards described above were awarded
pursuant to the Company's former Annual and Long-Term Incentive
Compensation Plan. For discussion of this Plan, refer to page 9 of
this proxy statement under Compensation Committee Report.

Agreements Concerning Employment and Changes in Control

On December 18, 1990, the Company entered into a five-year
employment agreement with Mr. Scharlau commencing January 1, 1991,
under which Mr. Scharlau will be paid a minimum base salary of
$400,000 per year and will be entitled to participate in any of the
Company's compensation or benefit plans for which he otherwise
qualifies. On July 8, 1992, the Company entered into a four-year
employment agreement with Mr. Grubb under which Mr. Grubb will be
paid a minimum base salary of $250,000 per year and will be
entitled to participate in any of the Company's compensation or
benefit plans for which he otherwise qualifies.

On August 4, 1989, the Company entered into Severance
Agreements with Messrs. Scharlau, Green, and Robinson. Effective
July 8, 1992, the Company entered into a Severance Agreement with

- 14 -

Mr. Grubb. The Severance Agreements provide that if within three
years after a "change in control" of the Company the officer's
employment is terminated by the Company without cause, the officer
is entitled to a payment equal to the product of 2.99 and the
officer's "base amount" as defined under Section 280G of the
Internal Revenue Code of 1986 (the "Code"). Generally, Section
280G defines the term "base amount" as the officer's average W-2
compensation over the five-year period preceding his termination of
employment. In addition, the officer will be entitled to continued
participation in certain insurance plans and fringe benefits from
the date of his termination of employment until the earliest of (a)
the expiration of three years, (b) his death or (c) the date he is
afforded a comparable benefit at comparable cost by a subsequent
employer.

Messrs. Scharlau, Grubb, and Robinson also are entitled to the
severance benefits described above if within three years after a
"change in control" they voluntarily terminate employment with the
Company for any reason. Mr. Green also is entitled to the
severance benefits described above if within one year after a
"change in control" he voluntarily terminates employment with the
Company for "good reason," or if in the next two succeeding years
he voluntarily terminates employment with the Company for any
reason.

For purposes of the severance agreements, a "change in
control" includes (i) the acquisition by any person (other than, in
certain cases, an employee of the Company) of 20% or more of the
company's voting securities; (ii) approval by the company's
shareholders of an agreement to merge or consolidate the Company
with another corporation (other than certain corporations
controlled by or under common control with the Company); (iii)
certain changes in the composition of the Board of Directors of the
Company; (iv) any changes which would be required to be reported to
the shareholders of the Company in a proxy statement; and (v) a
determination by a majority of the Board of Directors that there
has been a "change in control" or that there will be a "change in
control" upon the occurrence of certain specified events and such
events occur. "Good reason" includes (i) a reduction in the
employee's employment status or responsibilities, (ii) a reduction
in the employee's base salary, (iii) a change in the employee's
principal work location, and (iv) certain adverse changes in the
Company's incentive or other benefit plans.

The Company's Annual and Long-Term Incentive Compensation Plan
provides that:

(a) Upon a participant's involuntary termination of
employment other than for cause, or voluntary termination
for "good reason" on or after a "change of control" or as
otherwise provided in a severance agreement between the
participant and the Company, all determined but unpaid
incentive awards shall be paid immediately, and any
undetermined awards shall be determined and paid based on
projected performance factors calculated in accordance
with the plan;

(b) On or after a "change in control," all awards accrued but
unpaid and all awards thereafter accrued shall be 100%
vested and nonforfeitable; and

(c) On or after a "change in control," the Compensation
Committee of the Company's Board of Directors and the
Company's Chief Executive Officer as they existed
immediately prior to such "change in control" shall
retain their authority to administer the plan.

For purposes of the Company's Annual and Long-Term Incentive
Compensation Plan, the terms "change in control" and "good reason"
have the meanings contained in the Company's Severance Agreements
as defined above.

- 15 -

The Company's 1993 Stock Incentive Plan provides that all
outstanding stock options and all limited, tandem and stand alone
stock appreciation rights become exercisable immediately upon a
"change in control." The Stock Plan also provides that all shares
of restricted and phantom stock which have not previously vested or
been cancelled or forfeited shall vest immediately upon a "change
in control." For purposes of the Stock Plan, a "change in control"
has the same meaning contained in the Company's Severance
Agreements as defined above.

The Company's 1993 Incentive Compensation Plan provides that
all restrictions on shares of restricted stock granted pursuant to
the Incentive Plan shall lapse upon a "change in control", as
defined in the Company's Severance Agreements.

STOCK PERFORMANCE CHART

The following chart compares for the last five years the
performance of the Company's common stock to the S&P 500 Index and
to The Value Line Natural Gas, Diversified, Industry Index (see
footnote (1) below). The chart assumes that the value of the
investment in the Company's common stock and each index was $100 at
December 31, 1988, and that all dividends were reinvested.

STOCK PERFORMANCE CHART
-----------------------

Indexed \ Cumulative Returns

Company\Index Name 1988 1989 1990 1991 1992 1993
- ---------------------------- ------ ------ ------ ------ ------ ------

Southwestern Energy Company 100 183.59 181.15 185.81 233.35 328.55

S&P 500 Index 100 131.69 127.60 166.47 179.15 197.21

Value Line Natural Gas,
Diversified, Industry Index 100 144.92 121.54 109.36 128.83 155.74
________________________
<FN>
(1) The following companies are included in the Value Line Natural
Gas, Diversified, Industry Index: Arkla, Inc., Burlington
Resources, The Coastal Corporation, The Columbia Gas System, Inc.,
Consolidated Natural Gas Company, Eastern Enterprises, Enron Corp.,
ENSERCH Corporation, Equitable Resources, Inc., KN Energy, Inc.,
Mitchell Energy & Development Corporation, National Fuel Gas
Company, Panhandle Eastern Corporation, Seagull Energy Corporation,
Sonat Inc., Southwestern Energy Company, Tenneco Inc., Transco
Energy Company, Valero Energy Corporation, and The Williams
Companies, Inc.

- 16 -

Pension Plans

The estimated annual benefits payable upon retirement in 1993 to
persons in specified remuneration and years of service
classifications are as follows:

PENSION PLAN TABLE
------------------

Years of Service Upon Retirement
Average Annual --------------------------------------------------------------------------------
Salary upon
Retirement 15 20 25 30 35 40
---------------- --------- ----------- ----------- ----------- ------------ -----------

$ 30,000 $ 6,750 $ 9,000 $ 11,250 $ 13,500 $ 15,750 $ 18,000
60,000 13,500 18,000 22,500 27,000 31,500 36,000
90,000 20,250 27,000 33,750 40,500 47,250 54,000
120,000 27,000 36,000 45,000 54,000 63,000 72,000
150,000 33,750 45,000 56,250 67,500 78,750 90,000
180,000 40,500 54,000 67,500 81,000 94,500 108,000
210,000 47,250 63,000 78,750 94,500 110,250 126,000
240,000 54,000 72,000 90,000 108,000 126,000 144,000
270,000 60,750 81,000 101,250 121,500 141,750 162,000
300,000 67,500 90,000 112,500 135,000 157,500 180,000
330,000 74,250 99,000 123,750 148,500 173,250 198,000
360,000 81,000 108,000 135,000 162,000 189,000 216,000
390,000 87,750 117,000 146,250 175,500 204,750 234,000
420,000 94,500 126,000 157,500 189,000 220,500 252,000
450,000 101,250 135,000 168,750 202,500 236,250 270,000
480,000 108,000 144,000 180,000 216,000 252,000 288,000
510,000 114,750 153,000 191,250 229,500 267,750 306,000
540,000 121,500 162,000 202,500 243,000 283,500 324,000

Current
Years of Remuneration
Credited Covered Under
Name Service the Plan (1)
- ------------------- -------- -------------

Charles E. Scharlau 40 $425,000

Dan B. Grubb 2 275,000

Stanley D. Green 12 196,000

B. Brick Robinson 6 204,000

Gregory D. Kerley 4 102,000

_________________
<FN>
(1) The Code limits both the amount of compensation that may be
used for purposes of calculating a participant's Pension Plan
benefit and the maximum annual benefit payable to a participant
under the Pension Plan. For the 1993 plan year, (i) a
participant's compensation in excess of $235,840 is disregarded for
purposes of determining average compensation, and (ii) the maximum
annual Pension Plan benefit permitted under the Code is $115,641.
The numbers presented in the table disregard these limitations
because the Company's Supplemental Retirement Plan, discussed
below, provides participants with a supplemental retirement benefit
to compensate them for the limitation on benefits imposed by the
Code.

- 17 -

The Company's Pension Plan provides for defined benefits to
eligible officers and employees in the event of retirement at a
specified age based on number of years of service and average
monthly compensation during the five years of highest pay in the
last ten years before terminating. Contributions to the plan
cannot be allocated to individual participants because funding is
based on average and not individual participation. No
contributions from the Company to the plan were required in 1993.

On May 31, 1989, the Company adopted a Supplemental Retirement
Plan which provides benefits equal to the amount which would be
payable under the Pension Plan in the absence of certain
limitations of the Code, less the amount actually paid under the
Pension Plan. In the event of a "change in control" as defined
under Agreements Concerning Employment and Changes in Control on
page 15 of the proxy statement, the benefits of a participant then
employed by the Company would be determined as if the participant
had credit for three additional years of service. During 1993, a
contribution of $1,200,000 was made to a secular trust to fund a
portion of the vested accrued benefits of Charles E. Scharlau.

The remuneration covered by the Pension Plan includes wages
and salaries but excludes incentive awards, bonuses and fees. The
benefit amounts listed above are not subject to any deductions for
Social Security benefits or other offset amounts.

COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION

During 1993, the Compensation Committee consisted, through
December 7, 1993, of Messrs. Charles E. Sanders, Chairman, E. J.
Ball, and James B. Coffman. On December 8, 1993, Mr. Ball and Mr.
Coffman resigned from the Compensation Committee and Mr. John Paul
Hammerschmidt was appointed. Mr. Ball is General Counsel to the
Company and a partner in the law firm of Ball and Mourton, Ltd.
During 1993, the Company paid $20,473 in legal fees to Ball and
Mourton, Ltd.

On November 8, 1989, Southwestern Energy Production Company
("SEPCO"), a wholly owned subsidiary of the Company, entered into
a consulting agreement with J.B. Coffman & Associates, Inc.
("Coffman"), the principal shareholder of which is Mr. James B.
Coffman. This consulting agreement was cancelled in 1993 at the
request of Mr. Coffman. Under this agreement, Coffman agreed to
act as advisor and consultant to SEPCO with respect to potential
acquisitions of oil and gas exploration and production prospects.
The agreement provided that in the event SEPCO acquired properties
or prospects as a result of Coffman's efforts or as a result of the
efforts of third parties introduced by Coffman, Coffman would be
reimbursed for its expenses and in addition would be assigned, for
exploration prospects, an overriding royalty interest equal to 1%
of the revenue interest acquired by SEPCO in such prospects where
such revenue interest was 66-2/3% or less and an overriding royalty
interest equal to 2% of the revenue interest acquired by SEPCO in
such prospects where such revenue interest was greater than 66-
2/3%, and also that for the purchase of producing properties by
SEPCO, Coffman would be assigned an overriding royalty interest
equal to 1% of the revenue interest acquired by SEPCO in such
properties, increasing to 2% when the gross revenues received by
SEPCO from such properties equaled the purchase price paid by SEPCO
for such properties. Pursuant to this agreement, in 1990 SEPCO
assigned to Coffman 2% of a 77.37% average net revenue interest it
acquired in

- 18 -

1,065 acres in Brazoria County, Texas, and 2% of a 76% net revenue
interest in 744 acres in Noxubee and Kemper Counties, Mississippi.
Coffman was paid $9,853 pursuant to this agreement in 1993 from the
interests assigned to it in 1990.

BOARD OF DIRECTORS

The Board of Directors has a standing audit committee (the
"Audit Committee") composed of noncompany members of the Board.
The Audit Committee is responsible to the Board for reviewing the
accounting and auditing procedures and financial reporting
practices of the Company and for recommending the appointment of
the independent auditors. The Audit Committee meets periodically
with the Company's management, internal auditors and independent
auditors to review the work of each and to satisfy itself that said
parties are properly discharging their responsibilities. The
independent auditors have direct access to the Audit Committee and
periodically meet with the Audit Committee without management
representatives present. The Audit Committee is currently composed
of Messrs. James B. Coffman, Chairman, John Paul Hammerschmidt, and
Charles E. Sanders.

The Board of Directors has a compensation committee (the
"Compensation Committee") which is responsible for recommending to
the Board of Directors officer compensation and discretionary
awards under the various incentive plans. Messrs. John Paul
Hammerschmidt and Charles E. Sanders, Chairman, presently serve on
this committee.

The Board of Directors also has a retirement committee (the
"Retirement Committee") which is responsible for administering the
Company's pension plans and for recommending retirement policy to
the Board of Directors. Messrs. E. J. Ball, Charles E. Sanders and
Charles E. Scharlau presently serve on this committee.

The Company has no standing nominating committee. Candidates
for nomination for Board positions are considered by the Board as
a whole. The Board will consider qualified candidates recommended
by shareholders. Any shareholder wishing to recommend a candidate
may do so by letter addressed to Gregory D. Kerley, Secretary,
Southwestern Energy Company, 1083 Sain Street, P. O. Box 1408,
Fayetteville, Arkansas 72702-1408. Such letter should state in
detail the qualifications of the candidate. Shareholders entitled
to vote for the election of directors at the annual meeting may
nominate additional candidates independent of the board of
directors. Shareholder nominees to be presented to the 1994 annual
meeting must be submitted pursuant to the procedures described
under the sub-heading "Nominees for Election." Shareholders
entitled to vote for the election of directors at the 1995 annual
meeting may present independent nominees to the 1995 annual meeting
provided that notice of such nomination is received at the
Company's principal executive offices not less than 50 nor more
than 75 days prior to the 1995 meeting date. If less than 65 days
notice of the 1995 annual meeting is given, written notice of any
such nomination must be received no later than the close of
business on the 15th day following the day on which notice of the
meeting date was mailed. The Company's by-laws require that this
notice contain certain information about any proposed nominee and
the shareholder submitting the notice. The Company may also
require any proposed nominee to furnish such other information as
may reasonably be required to determine the proposed nominee's
eligibility to serve as a director of the Company. A copy of the
relevant by-law provisions may be obtained by contacting Gregory D.
Kerley, Secretary, Southwestern Energy Company, 1083 Sain Street,
P. O. Box 1408, Fayetteville, Arkansas, 72702-1408, 501-521-1141.

- 19 -

In 1993, for his service as a director, each director was paid
$24,000 in cash and each outside director was granted an option to
purchase 12,000 shares of the Company's common stock at $17.50 per
share, representing the fair market value on the date of grant.
Such options were granted in tandem with limited stock appreciation
rights. In addition, each outside member of the Audit,
Compensation and Retirement Committees is paid $500 per diem for
his participation on each committee. During 1993, the Board of
Directors held seven meetings, the Audit Committee held two
meetings, the Compensation Committee held two meetings and the
Retirement Committee held one meeting.

RELATIONSHIP WITH INDEPENDENT AUDITORS

Arthur Andersen & Co., with offices at 6450 South Lewis, Suite
300, Tulsa, Oklahoma 74136-1068, has been the independent auditor
of the Company since 1979. Representatives will be present at the
Annual Meeting of Shareholders and will have an opportunity to make
a statement to the shareholders if they so desire. The
representatives will also be available to respond to appropriate
questions from the shareholders. There have been no disagreements
with the auditors on accounting and financial disclosure.

PROPOSALS FOR 1995 ANNUAL MEETING

Proposals of shareholders intended to be presented at the 1995
Annual Meeting of Shareholders must be received by the Company at
its principal offices not later than December 21, 1994, for
inclusion in the 1995 proxy statement and form of proxy. Proposals
intended to be the subject of a separate solicitation may be
brought before the 1995 annual meeting by shareholders provided
that written notice of any such proposal is received at the
Company's principal executive offices not less than 50 nor more
than 75 days prior to the called meeting date. If less than 65
days notice of the 1995 annual meeting is given, written notice of
any such proposal must be received no later than the close of
business on the 15th day following the day on which notice of the
annual meeting date was mailed. The Company's by-laws require that
notices of shareholder proposals contain certain information about
any proposal and the proposing shareholder. A copy of the relevant
by-law provisions may be obtained by contacting Gregory D. Kerley,
Secretary, Southwestern Energy Company, 1083 Sain Street, P. O. Box
1408, Fayetteville, Arkansas 72702-1408, 501-521-1141.

OTHER BUSINESS

While the Notice of Annual Meeting of Shareholders calls for
transaction of such other business as may properly come before the
meeting, the Company's management has no knowledge of any matters
to be presented for action by shareholders at the meeting other
than as set forth in this statement. If any other business should
come before the meeting, the persons named in the proxy have
discretionary authority to vote in accordance with their best
judgment. Shareholders may bring additional proposals before the
meeting provided written notice of any such proposal is received at
the Company's principal executive offices no later than the close
of business on May 5, 1994. The Company's by-laws require that
this notice must contain certain information about any proposal and

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the proposing shareholder. A copy of the relevant by-law
provisions may be obtained by contacting Gregory D. Kerley,
Secretary, Southwestern Energy Company, 1083 Sain Street, P. O. Box
1408, Fayetteville, Arkansas 72702-1408, 501-521-1141.

Any shareholder who has not received a copy of the Company's
Annual Report or wishes to obtain a copy of the Company's Form 10-K
may obtain a copy of either free of charge by contacting Mr.
Gregory D. Kerley, Secretary, Southwestern Energy Company, 1083
Sain Street, P. O. Box 1408, Fayetteville, Arkansas 72702-1408.

By Order of the Board of
Directors

GREGORY D. KERLEY
Secretary
Dated: April 20, 1994

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SOUTHWESTERN ENERGY COMPANY
1083 Sain Street
P. O. Box 1408
Fayetteville, Arkansas 72702-1408

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints each of E. J. Ball and Charles
E. Scharlau as Proxies, with power of substitution, and hereby
authorizes them to represent and to vote, as designated below, all
the shares of common stock of Southwestern Energy Company held of
record by the undersigned on March 21, 1994, at the Annual Meeting
of Shareholders to be held on May 25, 1994, or any adjournment or
adjournments thereof.

1. ELECTION OF DIRECTORS

E. Ball C. Sanders For / / Withheld / /
J. Coffman C. Scharlau
J. Hammerschmidt

FOR, except vote WITHHELD from the following nominee(s):______________

FOR, with exercise of cumulative voting privilege. Indicate number
of votes cast for each nominee. ________________________________________

In their discretion, the Proxies are authorized to vote on
such other business as may properly come before the meeting.

The signer hereby revokes all proxies heretofore given by the
signer to vote at said meeting or any adjournments thereof. This
proxy is revocable at any time before it is exercised, the signer
retaining the right to attend the meeting and vote in person.

This proxy when properly executed will be voted in the manner
directed herein. If no direction is made, this proxy will be voted
FOR the election of directors.

NOTE: Please sign exactly as name appears hereon. Joint owners
should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in full
corporate name by president or other authorized officer.
If a partnership, please sign in partnership name by
authorized person.

SIGNATURE(S)________________________________________DATE __________

PLEASE MARK, SIGN, DATE AND
RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.

SOUTHWESTERN ENERGY COMPANY
APPENDIX TO DEFINITIVE PROXY STATEMENT

Stock Performance Chart
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See the information in tabular format on page 16 of this Proxy Statement.