8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): May 25, 2006

SOUTHWESTERN ENERGY COMPANY

(Exact name of registrant as specified in its charter)

Arkansas

(State or other jurisdiction of incorporation)

1-8246	71-0205415
(Commission File Number)	(IRS Employer Identification No.)

2350 N. Sam Houston Pkwy. E., Suite 300, Houston, Texas	77032
(Address of principal executive offices)	(Zip Code)

(281) 618-4700

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

       o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

SECTION 1 - Registrant's Business and Operations

Item 1.01 Entry Into A Material Definitive Agreement.

        On May 25, 2006, upon the recommendation of the Nominating and Governance Committee, the Board of Directors of Southwestern Energy Company ("the Company") approved the terms of the compensation to be paid to each non-management director of the Board in respect of his/her service on the Board.  A summary describing the elements of such compensation is filed as Exhibit 10.1 to this report and is hereby incorporated by reference.

SECTION 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.
10.1	Description of Compensation Payable to Non-Management Directors.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SOUTHWESTERN ENERGY COMPANY
Dated: May 31, 2006	By:	/s/ GREG D. KERLEY
	Name:	Greg D. Kerley
	Title:	Executive Vice President and
		Chief Financial Officer

EX-10

Exhibit 10.1

Non-Management Director Compensation

        On May 25, 2006, upon the recommendation of the Nominating and Governance Committee, the Board of Directors approved the terms of the compensation to be paid to each non-management director of the Board in respect of his/her service on the Board.  The following is a summary of the elements of such compensation:

Annual Retainer	Presiding Director Annual Retainer	Audit Committee Chairman Annual Retainer	Compensation and Nominating Committee Chairman Annual Retainer	Retirement Committee Chairman Annual Retainer	Each Telephonic Board Meeting Attended	Each Board Meeting and each Compensation, Nominating and Governance and Retirement Committee Meeting Attended	Each Audit Committee Meeting Attended
$50,000	$6,000	$10,000	$6,000	$2,000	$500	$1,200	$1,250

        Each year, each non-management director also receives long-term incentive compensation. The total annual compensation (i.e. total cash compensation plus long-term incentive compensation) payable to the non-management directors is based upon total compensation received by non-management directors at 16 peer group companies as provided by independent compensation consultants and is set between the 70^th to 75^th percentile for 2006 ("Baseline Compensation").  The amount of the long-term incentive compensation payable each year is equal to the difference between (i) Baseline Compensation and (ii) the total cash payable to the non-management directors for such year.  The value of the long-term incentive compensation payable each year is allocated 50% to stock option awards and 50% to restricted stock awards, with the number of options and shares awarded being determined by reference to the market val ue of the Company's stock on the date of the award.