NEWS RELEASE



FOR IMMEDIATE RELEASE                          For Further Information Contact:
August 27, 1997                                Stanley D. Green
                                               Executive Vice President-Finance
                                                    and Corporate Development
                                               (501) 521-1141


            SOUTHWESTERN ENERGY COMPANY TO COMMENCE CIVIL LITIGATION
              AGAINST FORMER EMPLOYEES AND INDEPENDENT CONTRACTORS


         FAYETTEVILLE,  Ark.,  August 27,  1997 -  Southwestern  Energy  Company
(NYSE:SWN)  announced today that the Company's Board of Directors has authorized
the  commencement  of civil  litigation  against  certain  former  employees  of
Southwestern  Energy Production Company (SEPCO),  a Houston-based  subsidiary of
Southwestern,  and certain independent contractors who provided land acquisition
services to SEPCO in connection with its ongoing exploration activities in south
Louisiana.  The litigation  will allege  overbilling  and  misrepresentation  of
expenses related to certain of the Company's south Louisiana projects.

         The Company,  which is continuing its own detailed investigation of the
alleged  misconduct,  has also been authorized by the Board to turn over certain
materials  to the  appropriate  law  enforcement  authorities,  and the  Company
intends to cooperate fully in any investigation that may result.

         Said Chairman and Chief  Executive  Officer  Charles E.  Scharlau:  "We
suspect that the misconduct of former employees and independent  contractors may
have  artificially  inflated  costs on certain  projects and we intend to pursue
recovery of the alleged overcharges. We have

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conferred  with our  auditors  and do not  expect  any  material  impact  on our
financial  position  or  results  of  operation,  although  we cannot  yet speak
definitively about the financial impact of these events."

         Scharlau  added:  "In  April,  we  introduced  new  management  for our
exploration and production operations when we named Harold Korell Executive Vice
President and Chief Operating Officer of Southwestern. We will continue with our
reorganization  of  these  activities  and  will  remain  focused  on our  south
Louisiana  projects.  Despite the unfortunate  development  announced  today, we
remain confident that our south Louisiana projects still provide the opportunity
for  Southwestern  and industry  partners to find  significant  new gas reserves
through the use of 3-D seismic exploration  technology.  The preliminary results
of our  investigation  have not diminished our enthusiasm  about these projects,
and we are encouraged by continuing  negotiations with three potential  partners
who could help us bring them to fruition."

         He  continued:  "Our Company has been a victim of  dishonest  practices
and, with our  litigation,  in addition to recovering  our losses,  we intend to
send a strong  message to the industry  that we will not tolerate  misconduct by
employees or independent contractors."

         Southwestern  also announced  today that B. Brick  Robinson,  Executive
Vice President in charge of SEPCO, will retire effective  September 1, 1997, and
that David Reinkemeyer,  Exploration Manager,  resigned from the Company on July
30,  1997.  Neither  Robinson  nor  Reinkemeyer  is  expected to be named in the
Company's civil complaint.

         Southwestern  Energy Company is a diversified natural gas company whose
wholly owned subsidiaries are engaged in gas and oil exploration and production,
natural  gas   gathering,   transmission,   and   marketing,   and  natural  gas
distribution.


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