NEWS RELEASE

FOR IMMEDIATE RELEASE                       For Further Information Contact:
October 16, 1998                            Greg D. Kerley
                                            Senior Vice President and
                                              Chief Financial Officer
                                            (501) 521-1141


                    SOUTHWESTERN ENERGY DISSAPPOINTED BY
            ADVERSE JURY VERDICT IN CLASS ACTION ROYALTY LAWSUIT

 Company Plans Immediate Appeal Through the Legal System and Will Aggressively
      Communicate to Ensure Public Understanding of the Complex Issues

         Southwestern Energy Company (NYSE: SWN) today announced that on October
15,  1998,  a state  court jury in Fort  Smith,  Arkansas,  by a vote of nine to
three,  returned a verdict against  Southwestern  Energy Company ("the Company")
and two of its wholly-owned  subsidiaries,  SEECO, Inc. and Arkansas Western Gas
Company,  in the amount of $62,136,827.  If the verdict is upheld on appeal, the
defendants would also be liable for pre-judgment  interest in an amount that has
not been determined at this time, but which could be in excess of $30,000,000.
         The  verdict  was  returned  following a trial on the issues of a class
action lawsuit  brought by certain  royalty  owners of SEECO,  Inc., who contend
that the defendants  breached  implied  covenants in certain oil and gas leases,
violated  statutory duties regarding the method and timing of paying  royalties,
misrepresented or failed to disclose material facts to royalty owners concerning
gas purchase contracts between the Company's subsidiaries, and failed to fulfill
other alleged  common law duties to the members of the royalty  owner  plaintiff
class. The litigation was commenced in May 1996 and was disclosed by the Company
at that time.





         "We  are  shocked  and  disappointed  by  the  verdict  in  this  case.
Southwestern  and its  subsidiaries  have always treated  SEECO's royalty owners
fairly  and have paid  royalties  in  accordance  with the law on each and every
dollar which SEECO has received  from the sale of natural  gas," said Charles E.
Scharlau,  Chairman and Chief Executive  Officer of  Southwestern.  "While cases
like this are complex and  difficult  to  understand  by their very  nature,  we
believe that  illuminating  the facts in the case should  enable all  interested
parties  to  see  the  injustice  of  the  verdict.  We  intend  to  communicate
aggressively and to pursue all legal options."
         The Company  believes that the jury's  verdict was wrong as a matter of
law  and  fact  and  that  incorrect  rulings  by  the  trial  judge  (including
evidentiary  rulings and  prejudicial  jury  instructions)  provide  substantial
grounds  for a  successful  appeal.  The  Company  intends to seek a stay of the
judgment on the jury's verdict and to file and vigorously prosecute an appeal in
the Arkansas Supreme Court.
         If the Company is not  successful  in its appeal from the jury verdict,
the Company's  financial condition and results of operations would be materially
and adversely affected.

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