7332--3/6/2006--SOUTHWESTERN_ENERGY

related topics

{gas, price, oil}

{acquisition, growth, future}

{personnel, key, retain}

{cost, regulation, environmental}

{cost, contract, operation}

{loss, insurance, financial}

{debt, indebtedness, cash}

{competitive, industry, competition}

Natural gas and oil prices are volatile. Volatility in natural gas and oil prices can adversely affect our results and the price of our common stock. This volatility also makes valuation of natural gas and oil producing properties difficult and can disrupt markets. A substantial or extended decline in natural gas and oil prices would have a material adverse affect on us. Lower natural gas and oil prices may cause us to record ceiling test write-downs. We may have difficulty financing our planned capital expenditures which could adversely affect our growth. Although our estimated natural gas and oil reserve data is independently audited, our estimates may still prove to be inaccurate. Our future level of indebtedness may adversely affect operations and limit our growth. If we fail to find or acquire additional reserves, our reserves and production will decline materially from their current levels. Our drilling plans for the Fayetteville Shale play are subject to change. We may have difficulty drilling all of the wells that are necessary to hold our Fayetteville Shale acreage before the initial lease terms expire, which could result in the loss of certain leasehold rights. If our Fayetteville Shale drilling program fails to produce a significant supply of natural gas, our investments in our gas gathering operations could be lost, which could have an adverse effect on our results of operations, financial condition and cash flows. Our exploration, development and drilling efforts and our operations of our wells may not be profitable or achieve our targeted returns. We incur substantial costs to comply with government regulations, especially regulations relating to environmental protection, and could incur even greater costs in the future. Natural gas and oil drilling and producing operations involve various risks. We cannot control activities on properties we do not operate. Failure to fund capital expenditure requirements may result in reduction or forfeiture of our interests in some of our non-operated projects. Shortages of oil field equipment, services and qualified personnel could adversely affect our results of operations. Our business could be adversely affected by competition with other companies. We have recently made significant investments in our drilling rig operations; however, we are still dependent on third party drilling companies. We also lack experience in owning and operating drilling rigs. We depend upon our management team and our operations require us to attract and retain experienced technical personnel. Our hedging activities may prevent us from benefiting from price increases and may expose us to other risks.

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7332--3/6/2006--SOUTHWESTERN_ENERGY_CO