Basis of Presentation and New Accounting Standards

6 Months Ended

Jun. 30, 2011

Basis of Presentation and New Accounting Standards

Basis of Presentation and New Accounting Standards

(1)   BASIS OF PRESENTATION AND NEW ACCOUNTING STANDARDS

Southwestern Energy Company (including its subsidiaries, collectively, "Southwestern" or the "Company") is an independent energy company primarily focused on the exploration and production of natural gas. The Company engages in natural gas and oil exploration and production, gas gathering and gas marketing through its subsidiaries. Southwestern's exploration, development and production ("E&P") activities are principally focused on the development of an unconventional natural gas play in Arkansas. The Company also is actively engaged in E&P activities in Texas, Pennsylvania and, to a lesser extent, in Oklahoma.  In 2010, the Company commenced an exploration program in New Brunswick, Canada, its first operations outside of the United States.  Southwestern's gas marketing and gas gathering businesses ("Midstream Services") are located in the core areas of its E&P operations.

The accompanying unaudited condensed consolidated financial statements were prepared using accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission. Certain information relating to the Company's organization and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been appropriately condensed or omitted in this Quarterly Report on Form 10-Q. The Company believes the disclosures made are adequate to make the information presented not misleading.

The unaudited condensed consolidated financial statements contained in this report include all normal and recurring material adjustments that, in the opinion of management, are necessary for a fair statement of the financial position, results of operations and cash flows for the interim periods presented herein. It is recommended that these unaudited condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010 ("2010 Annual Report on Form 10-K").

The Company's significant accounting policies, which have been reviewed and approved by the Audit Committee of the Company's Board of Directors, are summarized in Note 1 in the Notes to the Consolidated Financial Statements included in the Company's 2010 Annual Report on Form 10-K. The Company evaluates subsequent events through the date the financial statements are issued

On January 1, 2011, the Company implemented certain provisions of Accounting Standards Update No. 2010-06, "Fair Value Measurements and Disclosures (Topic 820) – Improving Disclosures about Fair Value Measurements" ("Update 2010-06").  Update 2010-06 requires entities to provide a reconciliation of purchases, sales, issuance and settlements of anything valued with a Level 3 method, which is used to price the hardest to value instruments. The implementation did not have an impact on the Company's results of operations, financial position or cash flows.