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                        SOUTHWESTERN ENERGY COMPANY
             ------------------------------------------------
             (Name of Registrant as Specified In Its Charter)


   -----------------------------------------------------------------------
   (Name of Person(s) Filing Proxy Statement if other than the Registrant)


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                           Southwestern Energy Company
                   2350 N. Sam Houston Parkway East, Suite 300
                              Houston, Texas 77032


                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                                 ON MAY 15, 2002

     The Annual Meeting of Shareholders  of Southwestern  Energy Company will be
held at the Northwest Arkansas Holiday Inn, Hwy. 540, Springdale,  Arkansas,  on
Wednesday,  the 15th day of May, 2002, at 11:00 a.m., Central Daylight Time, for
the following purposes:

         (1) To elect six (6)  directors to serve until the 2003 Annual  Meeting
             of  Shareholders  or until  their  respective  successors  are duly
             elected and qualified;

         (2) To approve an  amendment  to the  Company's  Amended  and  Restated
             Articles of Incorporation  to provide for authority to issue,  from
             time to time, up to 10,000,000  shares of Preferred Stock with such
             rights,  preferences and priorities as the Board of Directors shall
             designate; and

         (3) 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 7, 2002, as
the record date for the determination of shareholders  entitled to notice of and
to vote at the meeting.

     The Company's 2001 Annual Report, which is not part of the proxy soliciting
material, is enclosed.

     You are cordially  invited to attend the meeting.  If you cannot attend, it
is important that your shares be represented  and voted at the meeting.  You can
vote your shares by completing and returning the proxy card sent to you. You can
revoke a proxy at any time prior to its exercise at the meeting by following the
instructions in the accompanying proxy statement.

                                             By Order of the Board of Directors

                                                         MARK K. BOLING
                                                     Senior Vice President,
                                                  General Counsel & Secretary
March 29, 2002





                                TABLE OF CONTENTS



                                                                         
PROXY QUESTIONS............................................................    1

PROPOSAL NO. 1 - ELECTION OF DIRECTORS....................................     3

SHARE OWNERSHIP OF MANAGEMENT AND DIRECTORS...............................     5

GOVERNANCE OF THE COMPANY
         Board Committees.................................................     6
         Audit Committee Report...........................................     7
         Relationship with Independent Public Accountants.................     7
         Compensation Committee Report....................................     7
         Director Compensation............................................    10

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS...........................    11

EXECUTIVE COMPENSATION
         Summary Compensation Table.......................................    12
         Option/SAR Grants in Last Fiscal Year............................    14
         Aggregated Option/SAR Exercises in Last Fiscal Year and
              Fiscal Year-End Option/SAR Values...........................    15

STOCK PERFORMANCE GRAPH...................................................    16

PROPOSAL NO. 2 - AUTHORIZE PREFERRED STOCK................................    16

AGREEMENTS CONCERNING EMPLOYMENT AND CHANGES IN CONTROL...................    18

PENSION PLANS.............................................................    19

PROPOSALS FOR 2003 ANNUAL MEETING.........................................    20

SHAREHOLDERS SHARING AN ADDRESS...........................................    20

OTHER BUSINESS............................................................    21

APPENDIX A - Preferred Stock Provisions...................................   A-1






                           Southwestern Energy Company

                                 PROXY STATEMENT


WHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING?

     Shareholders  who own  common  shares  as of March 7,  2002 may vote at the
meeting.  There were 25,502,070 shares of common stock outstanding on that date.
Each share has one vote except for the election of directors.

WHEN ARE THE ENCLOSED SOLICITATION MATERIALS FIRST GIVEN TO SHAREHOLDERS?

     The  Notice of Annual  Meeting  was first sent to  shareholders  on Friday,
March 15, 2002. The enclosed annual report and proxy voting form,  together with
this  Notice of Annual  Meeting and Proxy  Statement,  were sent,  or given,  to
shareholders on Friday, March 29, 2002.

WHAT IS A  QUORUM  OF  SHAREHOLDERS,  AND HOW MANY  VOTES  DOES IT TAKE TO ELECT
DIRECTORS   AND  PASS  THE   PROPOSAL  TO  AMEND  THE   COMPANY'S   ARTICLES  OF
INCORPORATION?

     A quorum is the  presence  at the  Annual  Meeting in person or by proxy of
shareholders  entitled to cast a majority of all the votes  entitled to be cast.
Since there were 25,502,070 shares of common stock outstanding on March 7, 2002,
a quorum is 12,751,036.  Broker  non-votes,  abstentions and  withhold-authority
votes  COUNT for  purposes  of  determining  a quorum.  We must have a quorum to
conduct the meeting.  If a quorum of shareholders is present at the meeting,  we
need a  plurality  of all the votes  cast to elect  each  director  and a simple
majority  of all  votes  cast to  pass  the  Preferred  Stock  proposal.  Broker
non-votes, abstentions and withhold-authority votes DO NOT COUNT as votes cast.

HOW DO I VOTE?

     You must be present,  or  represented  by proxy,  at the Annual  Meeting in
order to vote your shares.  Since many of our  shareholders are unable to attend
the meeting in person, we send proxy cards to all of our shareholders.

IF MY SHARES ARE HELD IN "STREET NAME" BY MY BROKER, WILL MY BROKER VOTE FOR ME?

     If you do not return your proxy card,  your broker has  discretion  to vote
for the election of directors. Your broker does not, however, have discretion to
vote for the proposal to authorize Preferred Stock.

WHAT IS A PROXY?

     A proxy is a person you appoint to vote on your behalf.  When you vote, you
will be designating  Kenneth R. Mourton and Charles E. Scharlau as your proxies.
We solicit proxies so that all common shares may be voted at the Annual Meeting.
You must complete and return the enclosed proxy card.

HOW WILL MY PROXY VOTE MY SHARES?

     Your proxies will vote according to the instructions on your proxy card. If
you  complete  and return your proxy card but do not  indicate  your vote on the
matters,  your proxies will vote "FOR" the six  directors and "FOR" the proposal
to  authorize  Preferred  Stock.  Also your  proxy  card will give your  proxies
authority  to vote,  using  their  best  judgment,  on any other  business  that
properly comes before the meeting.

                                       1

HOW DO I VOTE USING MY PROXY CARD?

     There are three steps.

     1. a.   Proposal No. 1

             The  names of  six  directors to serve for the next year are listed
             on your proxy card.

             To vote for all six  directors,  you check the box marked "FOR." To
             withhold your vote from all six directors, (not vote for or against
             the directors) mark the box "WITHHELD."

             To vote for some of the  directors  and not others,  mark the "FOR"
             box,  and  write  in the  name(s)  of the  director(s)  you wish to
             withhold  your  vote  from  on  the  line  provided.   To  exercise
             cumulative  voting (the number of shares  owned  multiplied  by the
             number of directors to be elected)  mark the "FOR" box and write in
             how many  votes  you wish to cast  for  each  director  on the line
             provided.

        b.   Proposal No. 2

             The proposal to amend the Company's  Amended and Restated  Articles
             of Incorporation  to provide for  authorization of up to 10,000,000
             shares of Preferred Stock is listed on your proxy card.

             To vote for the proposal,  you check the box marked  "FOR."  If you
             are opposed to the proposal,  check the box  "AGAINST."  If you are
             unsure how to vote, check the box marked "ABSTAIN."

     2.  Sign and date your proxy  card.  IF YOU DO NOT SIGN AND DATE YOUR PROXY
         CARD, YOUR VOTES CANNOT BE COUNTED.  EACH PROPERLY  EXECUTED PROXY WILL
         BE VOTED IN THE MANNER  DIRECTED.  IF NO DIRECTION  IS MADE,  EACH SUCH
         PROXY  WILL BE VOTED  "FOR" THE  ELECTION  OF  DIRECTORS  AND "FOR" THE
         PROPOSAL TO AUTHORIZE PREFERRED STOCK.

     3.  Mail your proxy card in the pre-addressed, postage-paid envelope.

CAN I VOTE BY PROXY EVEN IF I PLAN TO ATTEND THE ANNUAL MEETING?

     Yes. If  you vote by  proxy,  you do not  need to fill  out a ballot at the
Annual Meeting unless you want to change your vote.

WHO IS SOLICITING MY PROXY, HOW IS IT BEING SOLICITED, AND WHO PAYS THE COSTS?

     Southwestern Energy Company,  on behalf of the Board of Directors,  through
its directors,  officers and employees, is soliciting proxies primarily by mail.
However,  proxies may also be  solicited in person,  by telephone or  facsimile.
Morrow & Co., Inc., a proxy solicitation firm, will be assisting us for a fee of
approximately $15,000 plus out-of-pocket  expenses.  Southwestern Energy Company
pays the cost of soliciting proxies.

                                      2

                                 PROPOSAL NO. 1

                              ELECTION OF DIRECTORS

     At the  meeting,  six (6)  directors  are to be  elected  to serve  for the
ensuing  year  and  until  their  respective  successors  are duly  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 below.

                              Nominees For Election

     LEWIS  E.  EPLEY,  JR.  - Mr.  Epley is an  Attorney  at Law and a  private
investor.  He has served as President of the Carroll County Bar  Association and
Special  Associate  Justice of the Supreme Court of Arkansas.  He is a director,
since 1964, and Vice Chairman of the Board of Directors, since 1993, of the Bank
of  Eureka  Springs.  He is a past  Chairman  and past  member  of the  Board of
Trustees  of the  University  of  Arkansas.  He is  currently  a director of the
University of Arkansas Foundation, a director of the Washington Regional Medical
Foundation and director and past President of the Northwest  Arkansas  Radiation
Therapy  Institute  (NARTI).  He also currently  serves as Chairman of the NARTI
Foundation  Board.  Mr. Epley is 65 years old and was first elected to the Board
of Directors in 1998.

     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,  Inc.,  Little  Rock,  Arkansas,  since 1992;  First  Federal Bank of
Arkansas,  Harrison,  Arkansas,  since 1966; American  Freightways  Corporation,
Harrison,  Arkansas,  since 1997; and Metropolitan  Washington Airport Authority
since 1997. Mr. Hammerschmidt is 79 years old and was first elected to the Board
of Directors in 1992.

     ROBERT L.  HOWARD - Mr.  Howard is a retired  Vice  President  of Shell Oil
Company.  From  1992  to  1995  he  was  Vice  President,  Domestic  Operations,
Exploration  and  Production of Shell,  and President of Shell Western Inc., and
Shell  Offshore,  Inc. In these  positions he was  responsible  for all domestic
exploration and production activities. From 1985-1991, Mr. Howard was President,
Shell  Offshore  Inc.,  and was  responsible  for all offshore  exploration  and
production  in the Gulf of  Mexico,  the East  Coast,  and  Florida.  During Mr.
Howard's  36  years  with  Shell,  he  held  various  positions  within  Shell's
exploration and production  operations,  including General Manager,  Exploration
and Production,  Mid-Continent  Division,  and General Manager,  Exploration and
Production,  Rocky Mountain Division and Alaska Division. Mr. Howard served as a
director of Camco International,  Inc. of Houston,  Texas, from 1995 until 1998;
and  currently  serves as a director  of Ocean  Energy,  Inc.  (formerly  United
Meridian Corp.) of Houston, Texas, since 1996; and McDermott International, Inc.
of New  Orleans,  Louisiana,  since 1997.  He is 65 years old and first became a
director in 1995.

     HAROLD M. KORELL - Mr. Korell is the President and Chief Executive  Officer
of the  Company.  Mr.  Korell  joined  Southwestern  in 1997 as  Executive  Vice
President and Chief Operating Officer.  On May 22, 1998, Mr. Korell was promoted
to  President  and Chief  Operating  Officer and was named  President  and Chief
Executive Officer effective January 1, 1999.  Previously,  Mr. Korell was Senior
Vice  President - Operations of American  Exploration  Company,  Executive  Vice
President of McCormick  Resources,  and held various  technical  and  managerial
positions with Tenneco Oil Company  including  Vice President - Production,  and
various positions with Mobil  Corporation.  Mr. Korell is 57 years old and first
became a director in October 1998.

     KENNETH R.  MOURTON - Mr.  Mourton is an  Attorney  at Law with the firm of
Ball and Mourton, Ltd., PLLC,  Fayetteville,  Arkansas and is a certified public
accountant (inactive).  He is the Managing Principal

                                       3

Attorney for this firm. Mr. Mourton also owns and operates several businesses in
various states related to beer distribution, lodging, warehousing and travel. He
is also a Board  member  of the  Arkansas  Rural  Endowment  Fund,  a  nonprofit
corporation created by the State of Arkansas to help lower income rural Arkansas
children obtain college and university  educations.  Mr. Mourton is 51 years old
and was first elected to the Board of Directors in 1995.

     CHARLES E. SCHARLAU - Mr. Scharlau retired as President and Chief Executive
Officer of the Company on December 31, 1998. He continues to serve as a director
of the Company.  He began his career as the Company's  legal counsel in 1951 and
was involved in all facets of the Company's  business for over 47 years. In 1966
he was named  Executive  Vice  President  and first  elected a  director  of the
Company.  In 1972 he was elected  President  and Chief  Executive  Officer.  Mr.
Scharlau is currently of counsel with the firm of Conner and Winters PLLC. He is
also a director since 1980 of ABLEST Inc.,  Clearwater,  Florida;  member of the
Board of Trustees of the  University of Arkansas  since 1998; and Chairman since
1999 of the Executive Committee for the Northwest Arkansas Council. Mr. Scharlau
is 74 years old.

     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 April 15, 2002. 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
Mr. Mark K. Boling, Secretary,  Southwestern Energy Company, 2350 N. Sam Houston
Parkway East, Suite 300, Houston, Texas 77032, (281) 618-4700.

                                       4

                    SHARE OWNERSHIP OF MANAGEMENT AND DIRECTORS

     The  following  table sets  forth  information  as of March 7,  2002,  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 3-7-02
                                       (Sole Voting and Investment       Percent
    Name of Beneficial Owner            Power Except as Noted)(1)       of Class
    ------------------------         -------------------------------    --------
                                                                     
Executive Officers:
   Harold M. Korell................................       731,982          2.87%
   Greg D. Kerley .................................       347,047          1.36%
   Richard F. Lane.................................       164,870           .65%
   Charles V. Stevens .............................        86,160           .34%
   Alan H. Stevens.................................       234,180           .92%

Directors and Nominees:
   Lewis E. Epley, Jr..............................        53,183           .21%
   John Paul Hammerschmidt.........................       100,000           .39%
   Robert L. Howard................................        78,000           .30%
   Kenneth R. Mourton..............................        77,000           .30%
   Charles E. Scharlau.............................       668,502          2.62%
All persons as a group (10 in number) who are
directors, nominees or executive officers of the
Company  ..........................................     2,540,924 (2)      9.96%

------------------------

(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. Korell,  328,167;  Mr. Kerley,  151,205;  Mr. Lane, 53,667; Mr. Charles
     Stevens,  49,785;  Mr. Alan Stevens,  170,834;  Mr. Epley, Jr., 17,000; Mr.
     Hammerschmidt,  77,000; 53,000 each for Messrs. Howard and Mourton, and Mr.
     Scharlau,   449,996.   Included  in  the  number  of  shares   reported  as
     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":  Mr. Korell,  210,333;  Mr.
     Kerley,  131,592;  Mr. Lane, 58,083; Mr. Charles Stevens,  20,912; Mr. Alan
     Stevens, 33,416; 23,000 each for Messrs. Epley, Jr., Hammerschmidt,  Howard
     and  Mourton;  and Mr.  Scharlau,  20,000.  Also  included in the number of
     shares reported as beneficially  owned are the following  restricted shares
     with  respect  to which the named  individuals  have  voting  power but not
     investment power: Mr. Korell, 79,200; Mr. Kerley, 43,383; Mr. Lane, 42,800;
     Mr.  Charles  Stevens,  5,067;  and Mr.  Alan  Stevens,  2,583.  The  named
     individuals  acquire  investmen power for these shares  immediately  upon a
     "change in control."

(2)  Of this number,  all directors  and  executive  officers as a group had the
     right to acquire  beneficial  ownership  of  1,403,654  shares  through the
     exercise of stock options  within 60 days.  Also included in this number is
     this group's  right to acquire an  additional  566,336  shares  through the
     exercise of stock options immediately upon a "change in control" as defined
     under "Agreements Concerning Employment and Changes in Control."

                Transactions With Nominees and Executive Officers

     During 2001, the Company and related entities,  for certain legal services,
paid  $11,414  to the law  firm of  Conner  and  Winters  PLLC of  Fayetteville,
Arkansas,  of which Mr. Charles Scharlau is of counsel.  Mr. Greg Scharlau,  Mr.
Scharlau's son, is a partner in Conner and Winters PLLC.

                                       5


                            GOVERNANCE OF THE COMPANY

                                BOARD COMMITTEES

     Audit  Committee - The Board of Directors  has a standing  audit  committee
(the "Audit  Committee")  composed of  noncompany  members of the Board whom are
independent as defined by the New York Stock Exchange rules. 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 public accountants. The Board of Directors of the
Company  has  determined  that  all  members  of the  Audit  Committee  have  no
relationship  to the  Company  that may  interfere  with the  exercise  of their
independence  from  management  and  the  Company.  The  Audit  Committee  meets
periodically with the Company's management and independent public accountants to
review the Company's financial  information and systems of internal controls and
ensure  both  parties  are  properly  discharging  their  responsibilities.  The
independent  public  accountants  have direct access to the Audit  Committee and
periodically  meet with the Audit Committee without  management  representatives
present.  Fees for the last  fiscal  year  were:  Audit  --  $157,000;  Other --
$223,935,  which included audit related -- $37,000;  and all other  non-audit --
$186,935 of which $153,935  related to benefit plan services.  No fees were paid
for financial  information  design and  implementation.  The Audit  Committee is
currently composed of Messrs.  Kenneth R. Mourton, a certified public accountant
(inactive)  and Audit  Committee  Chairman,  Lewis E. Epley,  Jr., and Robert L.
Howard.

     Compensation  Committee  -  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.  Robert L. Howard,  Compensation  Committee
Chairman,  John Paul  Hammerschmidt,  and Kenneth R. Mourton  presently serve on
this committee.

     Retirement  Committee  - The  Board  of  Directors  also  has a  retirement
committee (the "Retirement  Committee")  which is responsible for  administering
the  Company's  pension and  retirement  plans and for  recommending  retirement
policy  to the Board of  Directors.  Messrs.  Charles  E.  Scharlau,  Retirement
Committee Chairman,  Lewis E. Epley, Jr., and Kenneth R. Mourton presently serve
on this committee.

     Nominating  Committee - The Company has no standing  nominating  committee.
The Board as a whole  considers  candidates for nomination for Board  positions.
The Board will consider qualified  candidates  recommended by shareholders.  Any
shareholder  wishing to recommend a candidate  may do so by letter  addressed to
Mr. Mark K.  Boling,  Secretary,  Southwestern  Energy  Company,  2350 North Sam
Houston Parkway East, Suite 300, Houston,  Texas 77032. 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  2002  Annual  Meeting  must  be  submitted  pursuant  to the
procedures described under the subheading, "Nominees For Election." Shareholders
entitled to vote for the election of  directors  at the 2002 Annual  Meeting may
present independent  nominees to the 2002 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 2002  meeting  date.  If less
than 65 days notice of the 2002 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 is  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  Mr. Mark K.  Boling,  Secretary,  Southwestern  Energy
Company,  2350 North Sam Houston Parkway East, Suite 300, Houston,  Texas 77032,
(281) 618-4700.

                                       6

                             AUDIT COMMITTEE REPORT

     The  Audit  Committee  has  reviewed  and  discussed  with  management  the
Company's  audited  financial  statements  as of and for the  fiscal  year ended
December 31, 2001.  The Committee  also has discussed  with  independent  public
accountants for the Company the matters required to be discussed by Statement on
Auditing Standards No. 61, Communication with Audit Committees,  as amended. The
Committee  has  received  the  written  disclosures  and  the  letter  from  the
independent   public  accountants  for  the  Company  required  by  Independence
Standards   Board  Standard  No.  1,   "Independence   Discussions   with  Audit
Committees,"  as  amended,   and  has  discussed  with  the  independent  public
accountants that firm's independence from management and the Company,  including
consideration of non-audit fees on that firm's independence.

     Based on the review and discussions referred to in the above paragraph, the
Committee  recommends  to the  Board  of  Directors  that the  year-end  audited
financial statements be included in the Company's Annual Report on Form 10-K for
the fiscal year ended  December 31,  2001,  for filing with the  Securities  and
Exchange Commission.
                                                  KENNETH R. MOURTON, CHAIRMAN
                                                       LEWIS E. EPLEY, JR.
                                                        ROBERT L. HOWARD
                                                  Members of the Audit Committee


                RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS

     Arthur  Andersen LLP, with offices at 6450 South Lewis,  Suite 300,  Tulsa,
Oklahoma  74136-1068,  has been the  independent  public  accounting firm of the
Company  since  1979.   The  Board  of  Directors  has  decided  to  review  the
qualifications of the major national  accounting firms to serve as the Company's
independent  public  accountant  for the fiscal year ending  December  31, 2002,
rather than re-appointing  Arthur Andersen LLP ("Andersen").  This determination
is based  primarily  on the current  controversy  and  viability  of Andersen in
connection   with  its  audit   relationship   with   Enron   Corportion.   Upon
recommendation  of the Audit  Committee,  the Board has requested  management to
solicit bids for audit services for 2002 and make a  recommendation  to the full
Board.  The Board's choice of an independent  public  accounting firm to perform
the  annual  financial  statement  audit for 2002 will be  announced  as soon as
feasible.

     Andersen issued unqualified reports on the Company's consolidated financial
statements  for each of the years ended 1999,  2000,  and 2001 and their reports
did not contain  modifications  as to  uncertainty,  audit  scope or  accounting
principles. Representatives of Authur Andersen LLP will be present at the Annual
Meeting of  Shareholders  and will have an  opportunity  to make a statement  to
shareholders if they so desire.  The  representatives  will also be available to
respond to questions from  shareholders.  There have been no disagreemnets  with
the independent public accountants on accounting and financial disclosure.


                          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  makes  recommendations  to the Board of Directors,  and
final  compensation  decisions  are made by the  full  Board.  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;

                                       7

     -       help to attract and retain the most  qualified  individuals  in the
             natural  gas  and  oil  and  gas  producing   industries  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  for each of the three  components of  compensation  described below
(i.e.,  base salary,  incentive  compensation  plan (bonus) and stock  incentive
plan).  The industry  group indices shown in the  performance  chart reported in
this  Proxy  Statement  include  a  number  of the  companies  that are used for
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 2001 generally corresponded to the 50th to 75th percentile
of compensation paid by comparable  companies.  The Compensation  Committee also
takes into account the Company's financial and operating performance as compared
with  the  industry  mean  and  the  individual  performance  of  the  Company's
executives  as  compared  to  the  Compensation   Committee's   expectations  of
performance for top level executives in general. The Compensation Committee also
seeks  the  advice  of  outside  compensation  consultants  on its  compensation
policies and  receives  evaluations  from the  appropriate  level of  management
concerning  the  performance  of  executives  within  their  range of  reporting
responsibilities.

     Changes made to the Internal Revenue Code in 1993 could  potentially  limit
the ability of the Company to deduct,  for federal income tax purposes,  certain
compensation  in excess of $1,000,000 per year paid to individuals  named in the
summary  compensation  table. The Company believes that some of the compensation
paid to the CEO  exceeded  the  $1,000,000  limit  during  2001.  The Company is
currently reviewing ways to maximize the deductibility of compensation  payments
without compromising the Company's or the Compensation  Committee's  flexibility
in designing effective compensation plans that can meet the Company's objectives
and respond quickly to marketplace  needs.  Although the Compensation  Committee
will from time to time review the advisability of making changes in compensation
plans to reflect  changes  in  government-mandated  policies,  it will not do so
unless it feels that such changes are in the best interest of the Company and/or
its shareholders.

                           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.  In addition,  the Compensation  Committee  considers the particular
executive's performance, responsibilities, qualifications, and experience in the
oil and gas industry and the diverse skills  required to expand the  exploration
and  production  segment  of  its  operations  while  maintaining   satisfactory
performance in the highly regulated gas distribution segment.

     The  Compensation  Committee  recognizes that changes in base salary 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) and Nonqualified Plan contributions,  and (iv) life insurance
and disability benefits. As such, adjustments to base salary are only made after
consideration of the impact to the executive's entire package.

     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
designed to help the Company attract and retain 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.  As
such, the Incentive Plan is designed to encourage and reward the  achievement of
(1) cash flow  targets,  (2) a defined  reserve  replacement  ratio,  (3) target
returns on capital  investment,  (4) a favorable return on equity as compared to
the Company's peer group, (5) goals for production, reserve addition, and return
on capital

                                       8

invested in the  exploration  and production  group,  (6) an adequate  financial
return in its utility segment while maximizing utility  throughput,  and (7) gas
marketing margins. These criteria are deemed by the Compensation Committee to be
critical to increasing shareholder value, and the applicability of each of these
criteria  in  determining  awards to any  particular  executive  depends  on the
responsibilities of that executive.

     Each  participant in the Incentive Plan is assigned  target,  minimum,  and
maximum  total award levels  expressed as a percentage  of their base salary.  A
portion  of each  award  under  the  Incentive  Plan  for the CEO and  executive
officers is an  organizational  performance  award based upon the achievement of
the individual corporate financial  objectives  specified for the executive.  If
the actual level achieved for a specified  corporate  performance measure is not
at least equal to the predetermined  minimum level, then the proportionate award
represented by the performance  measure will not be paid. An additional  portion
is discretionary based on a subjective evaluation of the executive's  individual
performance by the Compensation  Committee.  Awards under the Incentive Plan are
payable in cash,  restricted  common stock of the Company,  or a combination  of
cash and restricted common stock.

     In 2001, the organizational performance awards which could be paid based on
attainment  of the  corporate  performance  measures  specified  for each of the
executives  ranged from  18.75% to 60% of base salary at target,  9.4% to 35% of
base  salary at minimum,  and 30% to 105% of base  salary at  maximum.  When the
organizational performance award is added to the discretionary awards, which are
based upon the  executive's  individual  performance,  the combined  award could
achieve a total bonus ranging from 31.25% to 100% of base salary at target.

     For 2001,  awards under the  Incentive  Plan for the CEO and certain of the
named executive officers were set to be determined by the following  performance
thresholds as compared to predetermined criteria established by the Compensation
Committee: (1) cash flow per share, (2) reserve replacement ratio, (3) return on
capital  investment,  and (4)  return on  equity.  Because  these  factors  were
weighted  equally,  a proportionate  award is earned for each identified  factor
where performance reaches the pre-established levels. In 2001, the cash flow per
share,  reserve  replacement,  return on capital investment and return on equity
performance  levels  were  surpassed.   The  Compensation  Committee  based  the
discretionary  awards for these  executives  on a subjective  evaluation  of the
executive's   performance.   Discretionary  awards  may  be  influenced  by  the
performance  of individual  business  segments,  but are  primarily  intended to
provide an incentive to recognize exceptional performance by an individual.

     Stock  Incentive  Plan.  The CEO and  other  executive  officers  are  also
eligible to participate  in the Company's 2000 Stock  Incentive Plan (the "Stock
Plan").  The Stock Plan is  designed  to attract  and  retain key  employees  by
enabling  them to acquire a  proprietary  interest  in the  Company and by tying
rewards to  shareholder  interests.  The Stock Plan provides for the granting of
restricted  stock,  phantom  stock,  or options to purchase  common stock of the
Company  and stock  appreciation  rights in such  amounts as  determined  by the
Compensation  Committee  on a  discretionary  basis.  Grants  relating  to  2001
performance were made at a price equal to the "Fair Market Value" (as defined in
the Stock  Plan) of the  Company's  common  stock on the date of the grant.  The
Stock Plan allows 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 or state 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  1,250,000,  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.
The 2000 Stock Incentive Plan replaced the 1993 Stock Plan.

     In determining  the options  granted to key employees under the Stock Plan,
the  Compensation  Committee  considers  a number  of  factors  in  addition  to
considering the goals of attracting and retaining such employees and tying their
rewards to shareholder  interests.  The number of options and restricted  shares
awarded in fiscal  2001 were based  partially  upon an  analysis of the value of
long-term  incentive plan awards made by the Company's

                                       9

competitive  peer  group.   The   Compensation   Committee  also  evaluated  the
performance of the Company, the performance and responsibility of the particular
employee,  and the  desirability  of  providing a  particular  employee  with an
adequate incentive to stay with the Company.

     Mr.  Korell's  base  salary was  $433,000  for 2001,  and has  remained  at
$433,000 for 2002. Mr. Korell had a targeted  annual bonus award of 100% of base
salary, with minimum and maximum awards of 30% and 140%, respectively, depending
upon the  achievement  of corporate  performance  measures.  Of these awards,  a
portion is an organizational performance award based upon the achievement of the
corporate  financial  objectives as described under the  subheading,  "Incentive
Compensation  Plan" above, and a portion is discretionary  based on a subjective
evaluation of Mr.  Korell's  performance by the  Compensation  Committee and the
Board of  Directors  and may be  influenced  by the  performance  of  individual
business segments. The Company's attainment of the performance measures in 2001,
plus the discretionary component resulted in Mr. Korell being awarded a bonus of
$536,000, or 124% of his base salary.

   In addition to the factors described above, in determining the salary
and other forms of compensation for Mr. Korell, the Compensation Committee took
into consideration Mr. Korell's substantial experience and standing in the
industry.

                                                  ROBERT L. HOWARD, CHAIRMAN
                                                    JOHN PAUL HAMMERSCHMIDT
                                                      KENNETH R. MOURTON
                                           Members of the Compensation Committee


                              DIRECTOR COMPENSATION

     Directors receive  compensation as indicated in the table below.  Directors
who retire with certain qualifications are appointed to the position of Director
Emeritus.  A Director Emeritus is paid an annual fee of $2,000 for the remainder
of his life and such  health care  benefits as the Company  provides to its full
time employees. Mr. E.J. Ball was appointed to the position of Director Emeritus
upon his  retirement  in 1995 and Mr.  Charles E. Sanders was  appointed to this
position upon his  retirement in 1998.  Mr. Ball and Mr. Mourton are partners in
the law firm of Ball and Mourton,  Ltd., PLLC.  During 2001, the Company did not
pay any legal fees to Ball and Mourton, Ltd., PLLC.


                          Outside Director Compensation

                  Each Board   Each Audit, Compensation,   Annual Stock  Options
                     Meeting   and Retirement Committee      Granted Directors
Annual Retainer     Attended       Meeting Attended           Serving at 12/31
---------------   ----------   -------------------------   ---------------------
                                                  
   $24,000          $1,000             $1,000              8,000 options vesting
                                                                  25%/year


     In 2001, for their services as directors,  Messrs.  Lewis E. Epley, Jr. and
John Paul  Hammerschmidt  were  each paid  $34,000.  Messrs.  Robert L.  Howard,
Kenneth R.  Mourton,  and Charles E.  Scharlau  were paid  $37,000,  $36,000 and
$30,000,  respectively. As an advisor to the Company, Mr. Scharlau also received
consulting fees of $234,000 under a consulting  agreement with the Company which
expires in May, 2002;  $4,118 for the Company portion of health  insurance;  and
$15,445 as a payout of an award  previously  granted under the Company's  former
Annual and Long-Term Incentive Compensation Plan. Messrs. E. J. Ball and Charles
E.  Sanders were each paid $2,000 for their  services as Directors  Emeritus and
$4,118  for the  Company  portion of health  insurance.  Each  outside  director
serving as of December 31, 2001,  was granted an option to purchase 8,000 shares
of the Company's common stock at $10.90 per share,  representing the Fair Market
Value of the Company's  common stock on the date of the grant.  During 2001, the
Board of Directors held seven meetings,  the Audit Committee held five meetings,
the Compensation  Committee held two meetings,  and the Retirement Committee did
not hold any meetings.

                                       10

                 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

     The following  persons were known by the Company to  beneficially  own more
than 5% of the Company's common stock as of December 31, 2001, pursuant to their
filed Schedule 13G under the Securities Exchange Act of 1934:


                                                    Amount  and       Percent
   Title of      Name and Address of                 Nature of           of
    Class          Beneficial Owner                  Beneficial        Class
                                                     Ownership
------------    -------------------------------     -------------     -------
                                                             
Common Stock    FMR Corporation                     2,512,700 (1)        9.9%
                82 Devonshire Street
                Boston, MA  02109-3605

Common Stock    Dimensional Fund Advisors, Inc.     1,945,500 (2)        7.6%
                1299 Ocean Avenue
                11th Floor
                Santa Monica, CA  90401

Common Stock    Westport Asset Management, Inc.     1,823,700 (3)        7.2%
                253 Riverside Avenue
                Westport, CT  06880

Common Stock    Alliance Capital Management L.P.    1,695,266 (4)        6.7%
                1345 Avenue of the Americas
                New York, NY  10105



(1)  FMR  Corporation  is the parent  holding  company of Fidelity  Management &
     Research  Company,  an investment  advisor  registered under the Investment
     Advisors Act of 1940.  FMR holds sole voting power on 1,271,300  shares and
     sole dispositive power on 2,512,700 shares.

(2)  Dimensional  Fund Advisors,  Inc.  (Dimensional)  is an investment  advisor
     registered  under the Investment  Advisors Act of 1940.  Dimensional  holds
     sole  voting and  dispositive  power on all shares.  Dimensional  disclaims
     beneficial ownership of all such securities.

(3)  Westport  Asset  Management,  Inc.  (Westport)  is  an  investment  advisor
     registered under the Investment  Advisors Act of 1940.  Westport holds sole
     voting power on 672,100 shares, shared voting power on 940,600 shares, sole
     dispositive  power on  672,100  shares,  and  shared  disposition  power of
     1,151,600 shares.

(4)  Alliance  Capital  Management  L.P.  (Alliance)  is an  investment  advisor
     registered under the Investment  Advisors Act of 1940 and is majority owned
     by AXA Financial,  Inc. Alliance has sole voting power on 1,400,000 shares,
     shared voting power on 16,755 shares,  sole dispositive  power on 1,629,866
     shares, and shared dispositive power on 65,400 shares.

                                       11

                             EXECUTIVE COMPENSATION
     The  following  table  contains   information  with  respect  to  executive
compensation  paid or set aside by the Company for services in all capacities of
the CEO and the next four most highly paid executive officers of the Company and
its  subsidiaries,  and one former  executive of the  Company,  during the years
indicated below.


                           SUMMARY COMPENSATION TABLE
                                                                                    Long-Term Compensation
                                                                              -----------------------------------
                                               Annual Compensation                    Awards            Payouts
                                         ---------------------------------    -----------------------   ---------
           (a)                   (b)        (c)       (d)         (e)           (f)           (g)          (h)         (i)
                                                                              Restricted   Securities
                                                                 Annual         Stock      Underlying     LTIP      All Other
    Name and Principal                    Salary      Bonus   Compensation      Awards      Options/     Payouts   Compensation
         Position                Year       ($)        ($)        ($)           ($)(4)      SARs (#)       ($)          ($)
---------------------------     ------   --------  --------  -------------    ----------   ----------  ---------  ------------
                                                                                          
Harold M. Korell                 2001    433,000   536,000        417,107(5)    638,168       33,750           -        18,879(6)
 President, Chief Executive      2000    418,000   265,000         92,975       109,703      200,000           -        15,244
 Officer and Director            1999    410,000   160,000         51,854        57,000      129,750           -        14,957

Greg D. Kerley                   2001    272,000   239,000        233,645(7)    354,752       18,750         826        95,611(8)
 Executive Vice President        2000    252,000   143,000         48,737        55,781      100,000       2,446         9,190
 and Chief Financial Officer     1999    235,000   100,000         26,763        28,500       68,250       2,446         8,573

Richard F. Lane                  2001    225,584   200,000        231,162(9)    354,752      18,750            -         8,189(10)
 Executive Vice President,       2000    177,000    86,000         34,573        48,344      50,000            -         6,455
 Southwestern Energy Production  1999    167,733    40,000         24,255        30,000      18,000            -         6,139
 Company and SEECO, Inc.(1)

Charles V. Stevens               2001    136,000    25,000         21,496(11)    23,136       1,200            -         4,952(12)
 Senior Vice President,          2000    130,000    40,000         21,085        22,312       8,000            -         4,470
 Arkansas Western Gas Company(1) 1999    122,000    40,000         13,457        12,000       8,000            -         4,480

Alan H. Stevens                  2001    135,625    46,000          1,537             -           -            -        32,932(13)
 Former President and Chief      2000    290,000   168,000         14,694        11,156      16,000            -        40,046
 Chief Operating Officer,        1999    264,000   100,000         24,924        28,500      68,250            -        40,661
 Southwestern Energy
 Production Company and
 SEECO, Inc. (1)(2)

George A. Taaffe                 2001    208,000    52,000          6,457             -           -            -       171,791(14)
 Senior Vice President,          2000    200,000    70,000         32,672        37,187      15,000            -        16,837
 General Counsel and             1999     72,820    21,400         24,369        32,325      18,600            -         7,231
 Secretary (3)

------------------------

(1)  Southwestern Energy Production  Company,  SEECO, Inc., and Arkansas Western
     Gas Company are wholly-owned subsidiaries of the Company.

(2)  Effective March 1, 2001, Mr. Alan Stevens  resigned as  President and Chief
     Operating  Officer of  Southwestern  Energy  Production  Company and SEECO,
     Inc.,  but  continues  as a  part-time  employee  of the  Company  and is a
     Director of Southwestern Energy Production Company and SEECO, Inc.

(3)  Mr. Taaffe died October 30, 2001.  Effective  January 1, 2002,  Mr. Mark K.
     Boling  joined the Company as Senior Vice  President,  General  Counsel and
     Secretary.

(4)  The  restricted  stock awards  issued in 2001 vest ratably over four years.
     The  value of all  nonvested  restricted  shares  held by  Messrs.  Korell,
     Kerley,  Lane,  Charles Stevens,  Alan Stevens,  and Taaffe at December 31,
     2001,  was  $823,680,   $451,183,   $445,120,   $52,697,  $26,863  and  $0,
     respectively.  The Company does not  currently  pay dividends on its common
     stock.

                                       12

(5)  Includes $409,727 as a bonus for the payment of income taxes related to the
     restricted stock grants made during 2001.

(6)  Includes  $12,971 as the  Company  matching  portion of  Nonqualified  Plan
     contributions,  $2,801 as the cost of life insurance, and $3,107 for moving
     and relocation expenses.

(7)  Includes $226,265 as a bonus for the payment of income taxes related to the
     restricted stock grants made during 2001.

(8)  Includes $8,135 as the Company  matching portion of 401(k) and Nonqualified
     Plan contributions,  $1,759 as the cost of life insurance,  and $85,717 for
     moving and relocation expenses.

(9)  Includes $223,782 as a bonus for the payment of income taxes related to the
     restricted stock grants made during 2001.

(10) Includes   $6,701  as  the   Company   matching   portion  of  401(k)  Plan
     contributions and $1,488 as the cost of life insurance.

(11) Includes  $15,376 as a bonus for the payment of income taxes related to the
     restricted stock grants made during 2001.

(12) Includes $4,072 as the Company  matching portion of 401(k) and Nonqualified
     Plan contributions and $880 as the cost of life insurance.

(13) Includes  $4,397 as the  Company  matching  portion  of  Nonqualified  Plan
     contributions,  $501 as the  cost  of life  insurance,  $3,034  of  imputed
     interest  income related to a $125,000 loan the Company made to Mr. Stevens
     in connection with his  employment,  of which $25,000 was forgiven in 2001.
     Under the terms of the loan agreement, the $125,000 loan is forgiven at the
     rate of 20% per year.

(14) Includes $5,100 as the Company's matching  portion of 401(k) contributions,
     $1,121 as the cost of life  insurance,  $3,570 of imputed  interest  income
     related to a loan the Company  made to Mr.  Taaffe in  connection  with his
     employment,  forgiveness of the $75,000 loan upon Mr. Taaffe's death during
     2001, and $87,000 related to other amounts earned by Mr. Taaffe at the time
     of his death.

                                       13




                      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)      (h)

                                   % of Total
                       Number of     Options/
                      Securities      SARs
                      Underlying   Granted to     Exercise
                       Options/     Employees     or Base
                         SARs       in Fiscal      Price     Expiration
     Name             Granted(1)      Year       ($/Sh)(2)      Date      0%($)     5%($)     10% ($)
------------------    ----------   ----------    ---------   ----------   ------   -------   --------
                                                                        
Harold M. Korell         33,750         19.8%        9.64     12/20/11        -    204,611   518,524

Greg D. Kerley           18,750         11.0%        9.64     12/20/11        -    113,673   288,069

Richard F. Lane          18,750         11.0%        9.64     12/20/11        -    113,673   288,069

Charles V. Stevens        1,200          0.7%        9.64     12/20/11        -      7,275    18,436

Alan H. Stevens               -            -            -            -        -          -         -

George A. Taaffe              -            -            -            -        -          -         -

------------------------

(1)  All 2001  grants  vest and become  exercisable  ratably  over  three  years
     beginning one year from the date of grant or immediately  upon a "change in
     control." All 2001 grants expire after ten years from the date of grant but
     may expire earlier upon termination of employment.

(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 0%, 5% and 10% rates of appreciation  from the exercise
     price 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.  The assumed annual  appreciation of 5% and 10% on the options
     granted  at  $9.64  would  result  in  the  price  of the  Company's  stock
     increasing to $15.71 and $25.01, respectively.  Realization by optionees of
     the amounts  shown is  dependent  on future  increases  in the price of the
     Company's  common stock and the  continued  employment of the optionee with
     the Company.  The options have no value if the Company's  common stock does
     not appreciate, as shown in the 0% column.

                                       14



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

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

                                                             Number of Securities                    Value of Unexercised
                                                            Underlying Unexercised                In-the-Money Options/SARs
                                                          Options/SARs at FY-End (#)                  at FY-End ($) (3)
                                                      -----------------------------------   --------------------------------------
                        Shares
                    Acquired on         Value
       Name         Exercise (#)    Realized ($)(1)   Exercisable (2)    Unexercisable (2)    Exercisable (2)    Unexercisable (2)
------------------  ------------    ---------------   ---------------    -----------------    ---------------    -----------------
                                                                                               
Harold M. Korell               -                 -           328,167              210,333            809,663              610,949

Greg D. Kerley                 -                 -           151,205              131,592            360,702              311,848

Richard F. Lane                -                 -            53,667               58,083            133,051              139,399

Charles V. Stevens             -                 -            49,785               20,912             52,670               28,446

Alan H. Stevens                -                 -           170,834               33,416            277,752              131,698

George A. Taaffe               -                 -                 -                    -                  -                    -

------------------------

(1)  Reflects the  difference  between  exercise price and issuance price on the
     number of shares exercised. During 2001 no options were exercised.

(2)  Option  grants  generally  vest and become  exercisable  ratably over 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."   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 through  2001 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 through 1999.

(3)  Values are calculated as the  difference  between the exercise price of the
     options and the market value of the  Company's  common stock as of December
     31, 2001 ($10.40/share).

                                       15

                             STOCK PERFORMANCE GRAPH

     The following  graph compares for the last five years,  the  performance of
the Company's common stock to the S&P Smallcap 600 Index and the Dow Jones Oil -
Secondary  Index.  The Chart  assumes  that the value of the  investment  in the
Company's  common stock and each index was $100 at December  31, 1996,  and that
all dividends were reinvested.



                                     1996   1997   1998   1999   2000   2001
                                     ----   ----   ----   ----   ----   ----
                                                      
Southwestern Energy Company          $100   $ 87   $ 52   $ 47   $ 75   $ 75

S&P Smallcap 600 Index                100    126    124    139    156    188

Dow Jones Oil - Secondary Index       100    100     68     79    126    116






                                 PROPOSAL NO. 2

              PROPOSAL TO AMEND THE COMPANY'S AMENDED AND RESTATED
               ARTICLES OF INCORPORATION TO PROVIDE FOR AUTHORITY
                            TO ISSUE PREFERRED STOCK

     The Board of Directors ("Board")  recommends that the shareholders  approve
an  amendment  to the Amended and  Restated  Articles  of  Incorporation  of the
Company  ("Articles")  authorizing  a new class of  capital  stock as  preferred
stock, with $.01 par value ("Preferred  Stock").  The proposed  amendment to the
Articles  gives the  Board the  authority  to issue up to  10,000,000  shares of
Preferred  Stock in such series and in such amounts as the Board may,  from time
to time, determine.  Under the Company's current Articles,  the Company does not
have any shares of capital stock designated as Preferred Stock.

     If the proposed  amendment is approved by the shareholders,  the Board will
have the  authority  to issue  one or more  series of  Preferred  Stock to those
persons  and for  such  consideration  as it may  determine  in its  discretion,
without further action by the  shareholders,  except such shareholder  action as
may be required by law or contractual  arrangements.  The proposed amendment, if
adopted,  will also provide significant  flexibility to the Board in structuring
the terms of Preferred Stock that may be issued by the Company.

     The Board will have the right to  establish,  for each series of  Preferred
Stock issued from  time to time,  the series  designation  and number of shares;
dividend rights and rates;  voting,  conversion and redemption  rights,  if

                                       16

any;  liquidation  rights;  powers,  preferences  and  relative,  participating,
optional or other special rights, if any; and any qualifications, limitations or
restrictions  on those  rights.  The Company  will amend its Articles to add the
10,000,000  shares of Preferred Stock to the Company's total authorized  capital
stock. The shares of Preferred Stock may be issued with conversion  rights which
could adversely  affect the voting power of holders of common stock. The text of
the proposed amendment is attached as Appendix A to this Proxy Statement.

 The  Company  currently  has no plans to issue any shares of the  Preferred
Stock nor does the Company have any commitments, arrangements, understandings or
agreements  which would  require the issuance of shares of the  Preferred  Stock
contemplated  by the amendment.  The Company  believes that the  availability of
Preferred  Stock  will  provide  the  Company  with  increased   flexibility  in
connection with future financing and similar  corporate  transactions.  Because,
except as discussed  below,  the Preferred  Stock may be issued without  further
action by shareholders, the Company will be able to respond quickly to corporate
opportunities  and changing  market  conditions.  If  shareholder  approval were
required before a series of Preferred Stock could be issued,  a delay of several
months  would be likely.  Changes in market  conditions  during  this time could
result in terms proposed to and approved by shareholders  that, when the process
ends, are no longer acceptable to investors. Additionally, obtaining shareholder
approval  involves  significant  expense,  which will be saved if the  Preferred
Stock is  pre-authorized.  If the  proposed  amendment  is  approved,  shares of
Preferred  Stock  could be issued by action of the Board at any time and for any
purpose,  subject to the  Articles  and other  applicable  requirements  without
further approval or action by shareholders.

     The  amendment  to the  Articles  does not,  by  itself,  change any of the
current rights of holders of the Company's common stock.  However, any Preferred
Stock which  ultimately  is issued would have  preference  over the common stock
upon  liquidation  and in the payment of dividends and could have special voting
rights (for instance,  in the event  required  dividends are not paid) and other
rights that take  precedence  over those of the common stock.  Accordingly,  the
issuance of  Preferred  Stock could  decrease  the amount of earnings and assets
allocable or available for distribution to holders of the Company's common stock
and adversely affect other rights and preferences,  including voting rights,  of
the common stock.


                    Possible Anti-Takeover Effect of Proposal

     The Board does not believe that the establishment of the class of Preferred
Stock  will have a  significant  impact on any  attempt  to gain  control of the
Company.  It is possible,  however,  that the  availability  of  authorized  but
unissued  shares  of  Preferred  Stock  could   discourage  third  parties  from
attempting to gain such control since the Board could  authorize the issuance of
shares of  Preferred  Stock with  conversion  rights in a private  placement  or
otherwise  to one or more  persons.  Such an issuance of shares could dilute the
voting power of a person attempting to acquire control of the Company,  increase
the cost of acquiring such control or otherwise hinder such efforts.


                      Adoption of Amendment by Shareholders

     The  affirmative  vote of a majority  of the shares of common  stock of the
Company in attendance or  represented at the meeting is required for adoption of
the proposed amendment to the Articles authorizing the Preferred Stock.

THE BOARD OF DIRECTORS  UNANIMOUSLY  RECOMMENDS A VOTE "FOR" THE ADOPTION OF THE
PROPOSED AMENDMENT TO THE ARTICLES AUTHORIZING THE PREFERRED STOCK.

                                       17

             AGREEMENTS CONCERNING EMPLOYMENT AND CHANGES IN CONTROL

     Effective  February 17, 1999,  the Company  entered into amended  Severance
Agreements with Messrs.  Korell and Kerley that replaced  substantially  similar
severance  agreements  which were currently in place.  The Company  entered into
Severance  Agreements with Messrs.  Lane and Charles Stevens on January 15, 2001
and February 17, 1999,  respectively.  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,  Messrs.  Korell,  Kerley
and  Lane  are  entitled  to a  payment  equal  to the  product  of 2.99 and the
officer's "base amount," while Mr. Stevens is entitled to a payment equal to the
product of 2.0 and his "base  amount."  "Base amount" is  defined as base salary
as of the  executive's  termination  date  plus the  maximum  bonus  opportunity
available to the executive under the Incentive  Compensation  Plan. In addition,
the officer will be entitled to  continued  participation  in certain  insurance
plans and fringe benefits from the date of the  termination of employment  until
the earliest of (a) the expiration of three years, (b) death, or (c) the date he
is afforded a comparable benefit at comparable cost by a subsequent employer.

     The named executives are also entitled to the severance  benefits described
above if  within  three  years  after a "change  in  control"  they  voluntarily
terminate employment with the Company for "good 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 15% 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 change in control 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.

     Effective  March 1, 2001,  the Company  entered into an agreement  with Mr.
Alan Stevens  regarding  his  part-time  employment.  Under the  agreement,  Mr.
Stevens is paid an annual  salary of $77,500,  he remains a  participant  in the
Company's  Incentive  Compensation  Plan, and his options and  restricted  stock
continue to vest pursuant to the existing agreements.  Mr. Stevens' agreement is
currently set to expire on December 31, 2002.  Mr.  Stevens also has a severance
agreement which provides for  compensation at two times his annual salary should
his  employment be  terminated  by the Company  without cause after a "change in
control."

     The  Company's  2000 Stock  Incentive  Plan and 1993 Stock  Incentive  Plan
provide  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 Plans also provide 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 Incentive Compensation Plan adopted in 1993 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.  This  plan  also  provides  that  upon  a  participant's
termination  of  employment  under  certain  conditions on or after a "change in
control" 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.

                                       18

                                  PENSION PLANS

     Prior to January 1, 1998,  the Company  maintained  a  traditional  defined
benefit plan (the "Pension Plan") with benefits payable based upon average final
compensation  and years of  service.  Effective  January  1, 1998,  the  Company
amended its Pension Plan to become a "cash balance" plan on a prospective  basis
for its  non-bargaining  employees.  A cash balance plan provides benefits based
upon a fixed percentage of an employee's annual compensation.

     Employees who were  participants  in the Pension Plan as of January 1, 1998
are  entitled to annual  benefits  payable  upon  retirement  based upon current
remuneration and years of service through December 31, 1997 as follows:



                                    Years of Service Through December 31, 1997
                  ----------------------------------------------------------------------------

  Remuneration         5            10           15           20          30            40
--------------    -----------  -----------  -----------  -----------  -----------  -----------
                                                                 
    $ 120,000       $  9,000     $ 18,000     $ 27,000     $ 36,000     $ 54,000     $ 72,000
      150,000         11,250       22,500       33,750       45,000       67,500       90,000
      180,000         13,500       27,000       40,500       54,000       81,000      108,000
      210,000         15,750       31,500       47,250       63,000       94,500      126,000
      240,000         18,000       36,000       54,000       72,000      108,000      144,000
      270,000         20,250       40,500       60,750       81,000      121,500      162,000
      300,000         22,500       45,000       67,500       90,000      135,000      180,000
      330,000         24,750       49,500       74,250       99,000      148,500      198,000
      360,000         27,000       54,000       81,000      108,000      162,000      216,000
      390,000         29,250       58,500       87,750      117,000      175,500      234,000
      420,000         31,500       63,000       94,500      126,000      189,000      252,000
      450,000         33,750       67,500      101,250      135,000      202,500      270,000
      480,000         36,000       72,000      108,000      144,000      216,000      288,000


                                                    Years of
                                                    Credited        Current
                                                    Service       Remuneration
                                                    Through       Covered Under
                               Name                 12/31/97      the Plans (1)
                               ----                ------------   --------------

                        Harold M. Korell                 1          433,000
                        Greg D. Kerley                   8          272,000
                        Richard F. Lane                  -          225,584
                        Charles V. Stevens              26          136,000
                        Alan H. Stevens                  -          135,625


----------------

(1)  The  Internal   Revenue  Code  (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  2001  plan  year,  (i) a
     participant's  compensation  in  excess  of  $170,000  is  disregarded  for
     purposes of determining  average  compensation  and (ii) the maximum annual
     Pension Plan  benefit  permitted  under the Code is  $140,000.  The numbers
     presented in the table  disregard these  limitations  because the Company's
     Supplemental   Retirement   Plan  ("SERP"),   discussed   below,   provides
     participants with a supplemental  retirement benefit to compensate them for
     the limitation on benefits imposed by the Code.

     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  through  December  31,  1997 and  average  monthly
compensation  during the five years of highest pay in the last ten years  before
terminating.

                                       19

     Under  the cash  balance  provisions  of the  Pension  Plan,  which  became
effective  January 1, 1998,  each  participant has a hypothetical  account,  for
recordkeeping  purposes only, to which credits are allocated annually based upon
a percentage of the  participant's  remuneration.  The applicable  percentage is
equal to 6% plus an additional  percentage for  participants in the Pension Plan
as of January 1, 1998. The additional  percentage is based upon a  participant's
age,  and is designed to  approximate  any lost  benefits due to the change to a
cash balance plan.  The  additional  percentage is equal to 6.3% for Mr. Korell,
3.7% for Mr. Kerley, and 4.3% for Mr. Charles Stevens.

     All balances in the cash balance account also earn a fixed rate of interest
which is credited  annually.  The  interest  rate for a  particular  year is the
annual rate of interest of the 30-year  treasury  securities for November of the
prior year. Interest is credited as long as the participant's balance remains in
the Pension Plan.

     At retirement or termination of employment, the vested amount credited to a
participant  is  payable  to the  participant  in the  form of a lump  sum or in
lifetime monthly payments.  The estimated annual benefit payable upon retirement
related to the cash balance  provisions of the Pension Plan and SERP at December
31, 2001, is $78,227 for Mr. Korell,  $108,458 for Mr.  Kerley,  $59,648 for Mr.
Lane, $34,080 for Mr. Charles Stevens,  and $16,118 for Mr. Alan Stevens.  These
projections  are based on the following  assumptions;  (1)  participant  remains
employed  until age 65;  (2) the 2001  remuneration  remains  constant;  and (3)
interest credit of 6.00% for all years.

     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," 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.

     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.

                        PROPOSALS FOR 2003 ANNUAL MEETING

     Shareholder's proposals intended to be presented at the 2003 Annual Meeting
of  Shareholders  must be received by the Company at its  principal  offices not
later than November 30, 2002, for inclusion in the 2003 Proxy Statement and form
of proxy. Proposals intended to be the subject of a separate solicitation may be
brought  before the 2003 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 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 Mr. Mark K.
Boling,  Secretary,  Southwestern Energy Company, 2350 North Sam Houston Parkway
East, Suite 300, Houston, Texas 77032, (281) 618-4700.


                         SHAREHOLDERS SHARING AN ADDRESS

     The practice of sending only one copy of the annual  report,  Form 10-K and
proxy  statement  to  shareholders  who  share a  single  address  is  known  as
"householding".  Householding  is designed to reduce the Company's  printing and
postage  costs.  Shareholders  may request or discontinue  householding,  or may
request a separate copy of the annual  report,  Form 10-K or proxy  statement as
follows:

     -    Record shareholders who wish to discontinue or commence  householding,
          or any record  shareholder  residing at a household  address who would
          like to request prompt  delivery of a copy of the annual report,  Form
          10-K or proxy statement, should contract our transfer agent, EquiServe
          at 1-800-446-2617.


                                       20

     -    Shareholders  owning  their  shares  through  a bank,  broker or other
          holder of record who wish to either  discontinue or begin householding
          should contact their record holder.  Any such householded  shareholder
          may request prompt delivery of a copy of the annual report,  Form 10-K
          or proxy  statement  by  contacting  the  Company at  479-521-1141  or
          281-618-4700.

                                 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 Proxy 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 April 15,
2002.  The  Company's  by-laws  require  that this notice must  contain  certain
information  about any proposal  and the  proposing  shareholder.  A copy of the
relevant  by-law  provisions  may be obtained by contacting  Mr. Mark K. Boling,
Secretary,  Southwestern  Energy  Company,  2350 North Sam Houston Parkway East,
Suite 300, Houston, Texas 77032, (281) 618-4700.

     Any shareholder who has not received a copy of the Company's  Annual Report
and Form 10-K may obtain a copy free of charge by contacting Mr. Mark K. Boling,
Southwestern  Energy Company,  2350 North Sam Houston  Parkway East,  Suite 300,
Houston, Texas 77032.

                                              By Order of the Board of Directors

                                                         MARK K. BOLING
                                                      Senior Vice President,
                                                   General Counsel & Secretary
Dated:  March 29, 2002

                                       21

                                   APPENDIX A

                           Preferred Stock Provisions

     In the event that  shareholders  approve the  amendment to the Articles set
forth as Proposal 2, SECTION A of ARTICLE SIXTH of the Articles would be amended
to provide as follows:

     SIXTH:  SECTION A: The total amount of the authorized  capital stock of the
corporation is Eighty-Five Million (85,000,000) shares which shall be classified
as follows:

     (i)    Seventy-Five  Million  (75,000,000)  shares shall be  designated  as
            common  stock,  with a par  value  of ten  cents  ($.10)  per  share
            (hereinafter  referred to as "Common  Stock").  Each share of Common
            Stock shall have one vote;

     (ii)   Ten Million (10,000,000) shares  shall be  designated  as  preferred
            stock, with a par  value of one cent ($.01) per s hare  (hereinafter
            referred to as  "Preferred  Stock"),  as further  designated  by the
            Board of Directors of the Company in accordance herewith.

     (iii)  The Board of Directors  is hereby  expressly  authorized  to provide
            for,  designate and issue out of the authorized but unissued  shares
            of Preferred Stock,  one or more series of Preferred Stock,  subject
            to the terms and conditions  set forth herein.  Before any shares of
            any such series are issued,  the Board of  Directors  shall fix, and
            hereby is expressly  empowered to fix, by resolution or resolutions,
            the following provisions of the shares of any such series:

             (a)  the  designation  of such  series,  the  number  of  shares to
                  constitute  such  series  and the  stated  value  thereof,  if
                  different from the par value thereof;

             (b)  whether the shares of such series shall have voting  rights or
                  powers, in addition to any voting rights required by law, and,
                  if so, the terms of such voting rights or powers, which may be
                  full or limited;

             (c)  the  dividends,  if any,  payable on such series,  whether any
                  such  dividends  shall be  cumulative,  and,  if so, from what
                  dates,  the  conditions  and dates upon  which such  dividends
                  shall be  payable,  the  preference  or  relation  which  such
                  dividends  shall  bear to the  dividends  payable on any other
                  series of  Preferred  Stock or on any other  class of stock of
                  the Company or any series of such class;

             (d)  whether  the  shares  of  such  series  shall  be  subject  to
                  redemption by the Company,  and, if so, the times,  prices and
                  other conditions of such redemption;

             (e)  the amount or amounts payable upon shares of such series upon,
                  and the rights of the holders of such series in, the voluntary
                  or involuntary liquidation, dissolution or winding up, or upon
                  any  distribution  of  the  assets  of  the  Company  and  the
                  preference or relation which such amount or amounts shall bear
                  to the  amount  or  amounts  payable  on any  other  series of
                  Preferred  Stock or on any other class of stock of the Company
                  or any series of such class;

             (f)  whether  the  shares of such  series  shall be  subject to the
                  operation  of a  retirement  or sinking  fund and,  if so, the
                  extent to and manner in which any such  retirement  or sinking
                  fund shall be applied to the  purchase  or  redemption  of the
                  shares  of such  series  for  retirement  or  other  corporate
                  purposes  and  the  terms  and  provisions   relative  to  the
                  operation thereof;

             (g)  whether the shares of such series shall be  convertible  into,
                  or  exchangeable  for,  shares of Preferred Stock of any other
                  series  or any  other  class of stock  of the  Company  or any
                  series of such class or any other  securities  and, if so, the
                  price or prices or the rate or rates of conversion or exchange
                  and the method,  if any, of adjusting the same,  and any other
                  terms and conditions of such conversion or exchange;

                                      A-1

             (h)  the  limitations  and  restrictions,  if any, to be  effective
                  while  any  shares of such  series  are  outstanding  upon the
                  payment of dividends or the making of other  distributions on,
                  and upon the purchase,  redemption or other acquisition by the
                  Company of, the Common Stock or shares of  Preferred  Stock of
                  any other series or any other class of stock of the Company or
                  any series of such class;

             (i) the conditions or restrictions,  if any, to be effective while
                  any shares of such series are outstanding upon the creation of
                  indebtedness  of the  Company  or  upon  the  issuance  of any
                  additional stock,  including  additional shares of such series
                  or of any other series of the Preferred  Stock or of any class
                  of stock of the Company or any series of such class; and

             (j)  any other  powers,  designations,  preferences  and  relative,
                  participating,  optional  or  other  special  rights,  and any
                  qualifications, limitations or restrictions thereof.

     Preferred Stock redeemed or otherwise  acquired by the Company shall assume
the status of authorized but unissued  Preferred Stock and shall be unclassified
as to series and may  thereafter,  subject  to the  provisions  of this  ARTICLE
SIXTH, as it may be amended,  be reissued in the same manner as other authorized
but unissued Preferred Stock.

                                      A-2

                           SOUTHWESTERN ENERGY COMPANY
                     2350 N. Houston Parkway East, Suite 300
                              Houston, Texas 77032

           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

     The  undersigned  hereby appoints each of Kenneth R. Mourton 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 7, 2002,
at the  Annual  Meeting  of  Shareholders  to be held on May  15,  2002,  or any
adjournment or adjournments thereof.


        Nominees:
                        L. Epley, Jr.                    H. Korell
                        J. Hammerschmidt                 K. Mourton
                        R. Howard                        C. Scharlau


     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 and FOR the amendment to the Company's  Amended and Restated  Articles
of Incorporation to provide authority to issue Preferred Stock.

                                                                ----------------
                                                                :  SEE REVERSE :
                                                                :      SIDE    :
                                                                ----------------


      ---   Please mark your                                     4929
     : X :  votes as in this                                    ______
      ---   example.

     You are encouraged to specify your choices by marking the appropriate  box,
but you need not mark  either  box if you wish to vore FOR the  election  of all
nominees and FOR proposal 2. The proxies cannot vote your shares unless you sign
and return this card.


--------------------------------------------------------------------------------
                                                         _               _
1.   Election of Directors (see reverse side)       For |_|    Withheld |_|

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

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

2.   Proposal  to amend the  Company's  Amended       FOR     AGAINST    ABSTAIN
     and Restated Articles of Incorporation            _         _          _
     to provide for authority to issue up to          |_|       |_|        |_|
     10,000,000 shares of Preferred Stock.

     NOTE:Please sign exactly as your 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 an authorized
          person.

     ___________________________________________________________________________

     SIGNATURE(S) _____________________________________________  DATE __________

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


Southwestern Energy Company
P.O. Box 1408
Fayetteville, AR 72702-1408



March 29, 2002

Securities & Exchange Commission
ATTN: Filing Desk, Stop 1-4
450 Fifth Street, N.W.
Washington, DC 20549-1004

Gentlemen:

Enclosed is Southwestern Energy Company's Definitive Proxy Statement and Form of
Proxy.  The Proxy Statement  will be mailed to  shareholders on  March 29, 2002.
Southwestern's  Annual  Shareholders  Meeting is  scheduled  for  May  15, 2002.

This filing is being  effected by direct  transmission to the Commission's EDGAR
System.

Very truly yours,

Stan Wilson
Controller