10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
Form 10-Q
(Mark One)
[X]   Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period endedJune 30, 2013
Or
[  ] Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from __________ to __________
Commission file number:  1-08246
Southwestern Energy Company
(Exact name of registrant as specified in its charter)
Delaware		71-0205415
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
2350 North Sam Houston Parkway East, Suite 125, Houston, Texas		77032
(Address of principal executive offices)		(Zip Code)
(281) 618-4700
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yesx     No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yesx  No o Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer x	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o     No x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
Class		Outstanding as of July 30, 2013
Common Stock, Par Value $0.01		351,512,483

SOUTHWESTERN ENERGY COMPANY
INDEX TO FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2013
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	44
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	47
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 3.	Defaults Upon Senior Securities	47
Item 4.	Mine Safety Disclosures	47
Item 5.	Other Information	47
Item 6.	Exhibits	47

CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS

All statements, other than historical fact or present financial information, may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements that address activities, outcomes and other matters that should or may occur in the future, including, without limitation, statements regarding the financial position, business strategy, production and reserve growth and other plans and objectives for our future operations, are forward-looking statements. Although we believe the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance. We have no obligation and make no undertaking to publicly update or revise any forward-looking statements, except as may be required by law.

Forward-looking statements include the items identified in the preceding paragraph, information concerning possible or assumed future results of operations and other statements in this Form 10-Q identified by words such as “anticipate,” “project,” “intend,” “estimate,” “expect,” “believe,” “predict,” “budget,” “projection,” “goal,” “plan,” “forecast,” “target” or similar expressions.

You should not place undue reliance on forward-looking statements. They are subject to known and unknown risks, uncertainties and other factors that may affect our operations, markets, products, services and prices and cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In addition to any assumptions and other factors referred to specifically in connection with forward-looking statements, risks, uncertainties and factors that could cause our actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to:

· the timing and extent of changes in market conditions and prices for natural gas and oil (including regional basis differentials);

· our ability to fund our planned capital investments;

· our ability to transport our production to the most favorable markets or at all;

· the timing and extent of our success in discovering, developing, producing and estimating reserves;

· the economic viability of, and our success in drilling, our large acreage position in the Fayetteville Shale play overall as well as relative to other productive shale gas plays;

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· the impact of government regulation, including any increase in severance or similar taxes, legislation relating to hydraulic fracturing, the climate and over the counter derivatives;

· the costs and availability of oilfield personnel, services and drilling supplies, raw materials, and equipment, including pressure pumping equipment and crews;

· our ability to determine the most effective and economic fracture stimulation for the Fayetteville Shale play and Marcellus Shale play;

· our future property acquisition or divestiture activities;

· the impact of the adverse outcome of any material litigation against us;

· the effects of weather;

· increased competition and regulation;

· the financial impact of accounting regulations and critical accounting policies;

· the comparative cost of alternative fuels;

· conditions in capital markets, changes in interest rates and the ability of our lenders to provide us with funds as agreed;

· credit risk relating to the risk of loss as a result of non-performance by our counterparties; and

· any other factors listed in the reports we have filed and may file with the Securities and Exchange Commission (“SEC”).

We caution you that forward-looking statements contained in this Form 10-Q are subject to all of the risks and uncertainties, many of which are beyond our control, incident to the exploration for and development, production and sale of natural gas and oil. These risks include, but are not limited to, commodity price volatility, third-party interruption of sales to market, inflation, lack of availability of goods and services, environmental risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in estimating proved natural gas and oil reserves and in projecting future rates of production and timing of development expenditures and the other risks described in our Annual Report on Form 10-K for the year ended December 31, 2012 (the “2012 Annual Report on Form 10-K”), and all quarterly reports on Form 10-Q filed subsequently thereto, including this Form 10-Q (“Form 10-Qs”).

Should one or more of the risks or uncertainties described above or elsewhere in this Form 10-Q occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. We specifically disclaim all responsibility to publicly update any information contained in a forward-looking statement or any forward-looking statement in its entirety and therefore disclaim any resulting liability for potentially related damages.

All forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary statement.

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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
	For the three months ended				For the six months ended
	June 30,				June 30,
	2013		2012		2013		2012
	(in thousands, except share/per share amounts)
Operating Revenues:
Gas sales	$	614,178	$	435,392	$	1,118,674	$	897,526
Gas marketing		200,979		126,688		380,820		274,739
Oil sales		2,684		1,680		8,034		4,208
Gas gathering		44,200		42,316		88,162		84,438
		862,041		606,076		1,595,690		1,260,911
Operating Costs and Expenses:
Gas purchases – midstream services		200,110		127,614		380,066		274,290
Operating expenses		82,155		56,614		146,379		117,572
General and administrative expenses		47,570		44,932		84,785		93,758
Depreciation, depletion and amortization		186,867		207,830		366,334		401,457
Impairment of natural gas and oil properties		–		800,652		–		800,652
Taxes, other than income taxes		20,022		14,480		40,849		34,902
		536,724		1,252,122		1,018,413		1,722,631
Operating Income (Loss)		325,317		(646,046)		577,277		(461,720)
Interest Expense:
Interest on debt		25,049		23,956		49,146		43,691
Other interest charges		1,044		1,047		2,154		2,038
Interest capitalized		(16,815)		(16,642)		(33,001)		(30,030)
		9,278		8,361		18,299		15,699
Other Gain (Loss), Net		354		2,577		(179)		2,377
Gain (Loss) on Derivatives		93,449		(6,348)		63,655		(4,714)
Income (Loss) Before Income Taxes		409,842		(658,178)		622,454		(479,756)
Provision for Income Taxes:
Current		16,334		100		16,470		268
Deferred		147,877		(253,146)		232,838		(182,596)
		164,211		(253,046)		249,308		(182,328)
Net Income (Loss)	$	245,631	$	(405,132)	$	373,146	$	(297,428)
Earnings (Loss) Per Share:
Basic	$	0.70	$	(1.16)	$	1.07	$	(0.85)
Diluted	$	0.70	$	(1.16)	$	1.06	$	(0.85)
Weighted Average Common Shares Outstanding:
Basic		350,448,806		348,162,723		350,241,768		348,081,399
Diluted		351,082,807		348,162,723		350,911,892		348,081,399

See the accompanying notes which are an integral part of these

unaudited condensed consolidated financial statements.

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SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
	For the three months ended					For the six months ended
	June 30,					June 30,
	2013		2012			2013		2012
	(in thousands)
Net income (loss)	$	245,631	$	(405,132)	$	373,146	$	(297,428)
Change in derivatives:
Settlements (1)		(27,801)		(117,944)		(74,974)		(215,886)
Ineffectiveness (2)		1,219		1,620		438		(1,537)
Change in fair value of derivative instruments (3)		67,572		(36,481)		22,091		130,453
Total change in derivatives		40,990		(152,805)		(52,445)		(86,970)
Change in value of pension and other postretirement liabilities:
Amortization of prior service cost included in net periodic pension cost (4)		267		254		534		508
Change in currency translation adjustment		(1,418)		(516)		(2,447)		(35)
Comprehensive income (loss)	$	285,470	$	(558,199)	$	318,788	$	(383,925)

(1) Net of ($18.5),($76.7), ($50.0) and ($140.4)  million in taxes for the three months ended June 30, 2013 and 2012, and six months ended June 30, 2013 and 2012, respectively. 

(2) Net of $0.8, $1.1, $0.3 and ($1.0) million in taxes for the three months ended June 30, 2013 and 2012, and six months ended June 30, 2013 and 2012, respectively. 

(3) Net of $45.0, ($23.7), $14.7, and $84.8 million in taxes for the three months ended June 30, 2013 and 2012, and six months ended June 30, 2013 and 2012, respectively.

(4) Net of $0.2, $0.1, $0.4, and $0.3 million in taxes for the three months ended June 30, 2013 and 2012, and six months ended June 30, 2013 and 2012, respectively. 

See the accompanying notes which are an integral part of these

unaudited condensed consolidated financial statements.

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SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
	June 30,		December 31,
	2013		2012
ASSETS	(in thousands)
Current assets:
Cash and cash equivalents	$	25,685	$	53,583
Restricted cash		–		8,542
Accounts receivable		445,936		377,638
Inventories		38,100		28,141
Hedging asset		246,455		282,693
Other		36,657		58,315
Total current assets		792,833		808,912
Natural gas and oil properties, using the full cost method, including $1,149.8 million in 2013 and $1,023.9 million in 2012 excluded from amortization		12,402,850		11,283,114
Gathering systems		1,242,468		1,148,261
Other		623,071		597,064
Less: Accumulated depreciation, depletion and amortization		(7,574,133)		(7,191,463)
Total property and equipment, net		6,694,256		5,836,976
Other assets		148,102		91,639
TOTAL ASSETS	$	7,635,191	$	6,737,527
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	574,713	$	459,569
Taxes payable		80,570		62,980
Interest payable		33,358		34,431
Advances from partners		–		68,919
Current deferred income taxes		95,970		106,123
Other current liabilities		62,444		35,749
Total current liabilities		847,055		767,771
Long-term debt		1,897,734		1,668,273
Deferred income taxes		1,260,546		1,049,138
Pension and other postretirement liabilities		34,369		33,174
Other long-term liabilities		221,892		183,299
Total long-term liabilities		3,414,541		2,933,884
Commitments and contingencies (Note 11)
Equity:
Common stock, $0.01 par value; authorized 1,250,000,000 shares; issued 351,529,457 shares in 2013 and 351,100,391 in 2012		3,515		3,511
Additional paid-in capital		952,838		934,939
Retained earnings		2,322,296		1,949,150
Accumulated other comprehensive income		95,446		149,804
Common stock in treasury, 14,442 shares in 2013 and 64,715 in 2012		(500)		(1,532)
Total equity		3,373,595		3,035,872
TOTAL LIABILITIES AND EQUITY	$	7,635,191	$	6,737,527
See the accompanying notes which are an integral part of these
unaudited condensed consolidated financial statements.

5

SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	For the six months ended
	June 30,
	2013		2012
	(in thousands)
Cash Flows From Operating Activities
Net income (loss)	$	373,146	$	(297,428)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization		368,305		403,250
Impairment of natural gas and oil properties		–		800,652
Deferred income taxes		232,838		(182,596)
Unrealized gain on derivatives		(62,560)		(2,031)
Stock-based compensation		5,962		5,549
Other		1,198		(2,049)
Change in assets and liabilities:
Accounts receivable		(68,309)		69,166
Inventories		(6,222)		8,088
Accounts payable		48,193		(1,349)
Taxes payable		17,590		20,762
Interest payable		(383)		4,762
Advances from partners		(68,919)		31,995
Other assets and liabilities		36,713		(21,381)
Net cash provided by operating activities		877,552		837,390
Cash Flows From Investing Activities
Capital investments		(1,175,634)		(1,140,661)
Proceeds from sale of property and equipment		–		174,337
Transfers to restricted cash		–		(167,750)
Transfers from restricted cash		8,542		23,366
Other		5,628		8,895
Net cash used in investing activities		(1,161,464)		(1,101,813)
Cash Flows From Financing Activities
Payments on current portion of long-term debt		(600)		(600)
Payments on revolving long-term debt		(1,233,150)		(1,273,700)
Borrowings under revolving long-term debt		1,463,150		602,200
Change in bank drafts outstanding		21,214		(30,730)
Proceeds from issuance of long-term debt		–		998,780
Debt issuance costs		–		(8,338)
Proceeds from exercise of common stock options		5,283		2,698
Net cash provided by financing activities		255,897		290,310
Effect of exchange rate changes on cash		117		(15)
Increase (decrease) in cash and cash equivalents		(27,898)		25,872
Cash and cash equivalents at beginning of year		53,583		15,627
Cash and cash equivalents at end of period	$	25,685	$	41,499

See the accompanying notes which are an integral part of

theseunaudited condensed consolidated financial statements.

6

SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(Unaudited)

Accumulated

Common Stock

Additional

Other

Common

Shares

Paid-In

Retained

Comprehensive

Stock in

Issued

Amount

Capital

Earnings

Income (Loss)

Treasury

Total

(in thousands)

Balance at December 31, 2012

351,100

$

3,511

$

934,939

$

1,949,150

$

149,804

$

(1,532)

$

3,035,872

Comprehensive income (loss):

Net income

–

–

–

373,146

–

–

373,146

Other comprehensive loss

–

–

–

–

(54,358)

–

(54,358)

Total comprehensive income

–

–

–

–

–

–

318,788

Stock-based compensation

–

–

11,696

–

–

–

11,696

Exercise of stock options

467

4

5,279

–

–

–

5,283

Issuance of restricted stock

4

–

–

–

–

–

–

Cancellation of restricted stock

(42)

–

–

–

–

–

–

Treasury stock – non-qualified plan

–

–

924

–

–

1,032

1,956

Balance at June 30, 2013

351,529

$

3,515

$

952,838

$

2,322,296

$

95,446

$

(500)

$

3,373,595

See the accompanying notes which are an integral part of these

unaudited condensed consolidated financial statements.

7

SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1) BASIS OF PRESENTATION

Southwestern Energy Company (including its subsidiaries, collectively, “we”, “Southwestern” or the “Company”) is an independent energy company engaged in natural gas and oil exploration, development and production. The Company engages in natural gas and oil exploration and production, natural gas gathering and natural gas marketing through its subsidiaries. Southwestern’s exploration, development and production (“E&P”) activities are principally focused within the United States on development of an unconventional gas reservoir located on the Arkansas side of the Arkoma Basin, which the Company refers to as the Fayetteville Shale play.  The Company is actively engaged in exploration and production activities in Pennsylvania, where we are targeting the unconventional gas reservoir known as the Marcellus Shale, and to a lesser extent in Texas and in Arkansas and Oklahoma in the Arkoma Basin.  The Company also actively seeks to find and develop new oil and natural gas plays with significant exploration and exploitation potential.  Southwestern’s natural gas gathering and marketing (“Midstream Services”) activities primarily support the Company’s E&P activities in Arkansas, Pennsylvania and Texas.  

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, 2012 (“2012 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 2012 Annual Report on Form 10-K.

Certain reclassifications have been made to the prior year financial statements to conform to the 2013 presentation. The effects of the reclassifications were not material to the Company’s unaudited condensed consolidated financial statements.

(2) ACQUISITIONS AND DIVESTITURES

In April 2013, the Company entered into a definitive purchase agreement to acquire natural gas properties located in Pennsylvania prospective for the Marcellus Shale for approximately $93.0 million, subject to closing conditions.  The Company utilized its revolving credit facility to finance the acquisition.  The Company closed on the acquisition during the second quarter of 2013 and accounted for it as an asset acquisition.

In May 2012, the Company sold certain oil and natural gas leases, wells and gathering equipment in East Texas for approximately $166.0 million.  The assets included in the sale represented all of the Company’s interests and related assets in the Overton Field in Smith County. The net production from the sold assets was approximately 24.0 MMcfe per day as of the closing date and our net proved reserves were approximately 143.0 Bcfe at December 31, 2011. 

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(3) PREPAID EXPENSES

The components of prepaid expenses included in other current assets as of June 30, 2013 and December 31, 2012 consisted of the following:

	June 30,		December 31,
	2013		2012
		(in thousands)
Prepaid drilling costs	$	18,107	$	30,101
Prepaid insurance		2,825		9,507
Total	$	20,932	$	39,608

(4) INVENTORY

Inventory recorded in current assets includes $3.7 million at June  30, 2013 and $5.6 million at December 31, 2012 for natural gas in underground storage owned by the Company’s E&P segment, and $34.4 million at June  30, 2013 and $22.5 million at December 31, 2012 for tubular and other equipment used in the E&P segment.

Other assets include $15.9 million at June  30, 2013 and $13.8 million at December 31, 2012, respectively, for inventory held by the Midstream Services segment consisting primarily of pipe that will be used to construct gathering systems for the Fayetteville Shale play.

(5) NATURAL GAS AND OIL PROPERTIES

The Company utilizes the full cost method of accounting for costs related to the exploration, development and acquisition of natural gas and oil reserves. Under this method, all such costs (productive and nonproductive), including salaries, benefits and other internal costs directly attributable to these activities are capitalized on a country by country basis and amortized over the estimated lives of the properties using the units-of-production method. These capitalized costs, less accumulated amortization and related deferred income taxes, are subject to a ceiling test that limits such pooled costs to the aggregate of the present value of future net revenues attributable to proved natural gas and oil reserves, net of taxes, discounted at 10 percent plus the lower of cost or market value of unproved properties. Any costs in excess of the ceiling are written off as a non-cash expense. The expense may not be reversed in future periods, even though higher natural gas and oil prices may subsequently increase the ceiling. Full cost companies must use the average quoted price from the first day of each month from the previous 12 months, including the impact of derivatives qualifying as cash flow hedges, to calculate the ceiling value of their reserves.

Using the average quoted price from the first day of each month from the previous 12 months for Henry Hub natural gas of $3.44 per MMBtu and $88.13 per barrel for West Texas Intermediate oil, adjusted for market differentials, the Company’s net book value of its United States natural gas and oil properties did not exceed the ceiling amount and did not result in a ceiling test impairment at June  30, 2013. Cash flow hedges of natural gas production in place increased the ceiling value by $150.8 million, net of tax, at June  30, 2013.Decreases in average quoted prices from June 30, 2013 levels as well as changes in production rates, levels of reserves, capitalized costs, the evaluation of costs excluded from amortization, future development costs, service costs and taxes could result in future ceiling test impairments.

Using the average quoted price from the first day of each month from the previous 12 months for Henry Hub natural gas of $3.15 per MMBtu and $92.17 per barrel for West Texas Intermediate oil, adjusted for market differentials, the Company’s net book value of its United States natural gas and oil properties exceeded the ceiling by approximately $496.4 million (net of tax) at June 30, 2012 and resulted in a non-cash ceiling test impairment.  Cash flow hedges of natural gas production in place increased the ceiling by $354.8 million at June 30, 2012.

All of the Company’s costs directly associated with the acquisition and evaluation of properties in Canada relating to its exploration program at June  30, 2013 were unproved and did not exceed the ceiling amount.  If the exploration program in Canada is unsuccessful on all or a portion of these properties, a ceiling test impairment may result in the future.

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(6) EARNINGS PER SHARE

The following table presents the computation of earnings per share for the three- and six-month periods ended June  30, 2013 and 2012:

	For the three months ended				For the six months ended
	June 30,				June 30,
	2013		2012		2013		2012
Net income (loss) (in thousands)	$	245,631	$	(405,132)	$	373,146	$	(297,428)
Number of common shares:
Weighted average outstanding		350,448,806		348,162,723		350,241,768		348,081,399
Issued upon assumed exercise of outstanding stock options		386,999		–		481,528		–
Effect of issuance of nonvested restricted common stock		247,002		–		188,596		–
Weighted average and potential dilutive outstanding(1)		351,082,807		348,162,723		350,911,892		348,081,399
Earnings (loss) per share:
Basic	$	0.70	$	(1.16)	$	1.07	$	(0.85)
Diluted	$	0.70	$	(1.16)	$	1.06	$	(0.85)

(1) Options for 1,599,246shares and 29,251 shares of restricted stock were excluded from the calculation for the three months ended June 30, 2013 because they would have had an antidilutive effect.  Due to the net loss for the three months ended June 30, 2012, options for 1,723,316 shares and 156,047 shares of restricted stock were antidilutive and excluded from the calculation.  Options for2,079,849 shares and 246,347 shares of restricted stock were excluded from the calculation for the six months ended June 30, 2013 because they would have had an antidilutive effect.  Due to the net loss for the six months ended June 30, 2012, options for 1,783,073 shares and 121,078 shares of restricted stock were antidilutive and excluded from the calculation.

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(7) DERIVATIVES AND RISK MANAGEMENT

The Company is exposed to volatility in market prices and basis differentials for natural gas and crude oil which impacts the predictability of its cash flows related to the sale of natural gas and oil, and is exposed to volatility in interest rate risks. These risks are managed by the Company’s use of certain derivative financial instruments.  At June  30, 2013 and December 31, 2012, the Company’s derivative financial instruments consisted of price swaps, basis swaps, fixed price call options, and interest rate swaps. A description of the Company’s derivative financial instruments is provided below:

Fixed price swaps	The Company receives a fixed price for the contract and pays a floating market price to the counterparty.
Floating price swaps	The Company receives a floating market price from the counterparty and pays a fixed price.
Costless-collars	Arrangements that contain a fixed floor price (put) and a fixed ceiling price (call). If the market price exceeds the call strike price or falls below the put strike price, the Company receives the fixed price and pays the market price. If the market price is between the call and the put strike price, no payments are due from either party.
Basis swaps	Arrangements that guarantee a price differential for natural gas from a specified delivery point. The Company receives a payment from the counterparty if the price differential is greater than the stated terms of the contract and pays the counterparty if the price differential is less than the stated terms of the contract.
Fixed price call options	The Company sells fixed price call options in exchange for a premium. At the time of settlement, if the market price exceeds the fixed price of the call option, the Company pays the counterparty such excess on sold fixed price call options. If the market price settles below the fixed price of the call option, no payment is due from either party.
Interest rate swaps	Interest-rate swaps are used to fix or float interest rates on existing or anticipated indebtedness. The purpose of these instruments is to manage the Company’s existing or anticipated exposure to unfavorable interest-rate changes.

GAAP requires that all derivatives be recognized in the balance sheet as either an asset or liability and be measured at fair value. Under GAAP, certain criteria must be satisfied in order for derivative financial instruments to be classified and accounted for as either a cash flow or a fair value hedge. Accounting for qualifying hedges requires a derivative’s gains and losses to be recorded either in earnings or as a component of other comprehensive income. Gains and losses on derivatives that are not elected for hedge accounting treatment or that do not meet hedge accounting requirements are recorded in earnings.

The Company utilizes counterparties for its derivative instruments that it believes are credit-worthy at the time the transactions are entered into and the Company closely monitors the credit ratings of these counterparties. Additionally, the Company performs both quantitative and qualitative assessments of these counterparties based on their credit ratings and credit default swap rates where applicable. However, the events in the financial markets in recent years demonstrate there can be no assurance that a counterparty will be able to meet its obligations to the Company.

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The balance sheet classification of the assets related to derivative financial instruments are summarized below at June  30, 2013 and December 31, 2012:

	Derivative Assets
	June 30, 2013			December 31, 2012
	Balance Sheet Classification	Fair Value		Balance Sheet Classification	Fair Value
	(in thousands)
Derivatives designated as hedging instruments:
Fixed price swaps	Hedging asset	$	189,541	Hedging asset		$	279,443
Fixed price swaps	Other assets		12,214	Other assets			8,550
Total derivatives designated as hedging instruments		$	201,755			$	287,993
Derivatives not designated as hedging instruments:
Basis swaps	Hedging asset	$	8,402	Hedging asset		$	3,250
Fixed price swaps	Hedging asset		48,512	Hedging asset			–
Basis swaps	Other assets		2,565	Other assets			901
Fixed price swaps	Other assets		39,276	Other assets			–
Interest rate swaps	Other assets		6,218	Other assets			–
Total derivatives not designated as hedging instruments		$	104,973			$	4,151
Total derivative assets		$	306,728			$	292,144
	Derivative Liabilities
	June 30, 2013			December 31, 2012
	Balance Sheet Classification	Fair Value		Balance Sheet Classification	Fair Value
	(in thousands)
Derivatives not designated as hedging instruments:
Basis swaps	Other current liabilities	$	69	Other current liabilities		$	138
Fixed price call options	Other long-term liabilities		38,856	Other long-term liabilities			4,128
Interest rate swaps	Other current liabilities		308	Other current liabilities			–
Interest rate swaps	Other long-term liabilities		3,294	Other long-term liabilities			–
Total derivatives not designated as hedging instruments		$	42,527			$	4,266
Total derivative liabilities		$	42,527			$	4,266

Cash Flow Hedges

The reporting of gains and losses on cash flow derivative hedging instruments depends on whether the gains or losses are effective at offsetting changes in the cash flows of the hedged item. The effective portion of the gains and losses on the derivative hedging instruments are recorded in other comprehensive income until recognized in earnings during the period that the hedged transaction takes place. The ineffective portion of the gains and losses from the derivative hedging instrument is recognized in earnings immediately.

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As of June  30, 2013, the Company had cash flow hedges on the following volumes of natural gas production (in Bcf):

Year	Fixed price swaps
2013	168.8
2014	51.1

As of June  30, 2013, the Company recorded a net gain in accumulated other comprehensive income related to its hedging activities of $119.7 million. This amount is net of a deferred income tax liability recorded as of June  30, 2013 of $79.8 million. The amount recorded in accumulated other comprehensive income will be relieved over time and recognized in the statement of operations as the physical transactions being hedged occur. Assuming the market prices of natural gas futures as of June  30, 2013 remain unchanged, the Company would expect to transfer an aggregate after-tax net gain of $112.5 million from accumulated other comprehensive income to earnings during the next 12 months. Gains or losses from derivative instruments designated as cash flow hedges are reflected as adjustments to gas sales in the unaudited condensed consolidated statements of operations. Volatility in earnings and other comprehensive income may occur in the future as a result of the Company’s derivative activities.

The following tables summarize the before tax effect of all cash flow hedges on the unaudited condensed consolidated financial statements for the three- and six-month periods ended June  30, 2013 and 2012:

		Gain (Loss) Recognized in Other Comprehensive Income
		(Effective Portion)
		For the three months ended				For the six months ended
		June 30,				June 30,
Derivative Instrument		2013		2012		2013		2012
		(in thousands)
Fixed price swaps		$	112,621	$	(47,829)	$	38,719	$	171,128
Costless-collars		$	–	$	(12,370)	$	–	$	44,141
	Classification of Gain	Gain Reclassified from Accumulated Other
	Reclassified from	Comprehensive Income into Earnings
	Accumulated Other	(Effective Portion)
	Comprehensive Income	For the three months ended				For the six months ended
	into Earnings	June 30,				June 30,
Derivative Instrument	(Effective Portion)	2013		2012		2013		2012
		(in thousands)
Fixed price swaps	Gas Sales	$	46,335	$	128,894	$	124,956	$	235,205
Costless-collars	Gas Sales	$	–	$	65,732	$	–	$	121,042
		Gain (Loss) Recognized in Earnings
		(Ineffective Portion)
	Classification of Gain (Loss)	For the three months ended				For the six months ended
	Recognized in Earnings	June 30,				June 30,
Derivative Instrument	(Ineffective Portion)	2013		2012		2013		2012
		(in thousands)
Fixed price swaps	Gas Sales	$	(2,032)	$	(2,303)	$	(731)	$	1,996
Costless-collars	Gas Sales	$	–	$	(371)	$	–	$	540

Fair Value Hedges

For fair value hedges, the gain or loss on the derivative instrument as well as the offsetting gain or loss on the hedged item are recognized in earnings immediately.For the three- and six-months ended June 30, 2012, the impact on earnings was not material and as of June 30, 2013 and December 31, 2012, the Company had no fair value hedges.

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Other Derivative Contracts

Although the Company’s basis swaps meet the objective of managing commodity price exposure, these trades are typically not entered into concurrent with the Company’s derivative instruments that qualify as cash flow hedges and therefore do not generally qualify for hedge accounting. Basis swap derivative instruments that do not qualify as cash flow hedges are recorded on the balance sheet at their fair values under hedging assets, other assets and other current liabilities, as applicable, and all realized and unrealized gains and losses related to these contracts are recognized immediately in the unaudited condensed consolidated statements of operations as a component of gain (loss) on derivatives.  

As of June  30, 2013, the Company had basis swaps on natural gas production that did not qualify for hedge accounting treatment of 14.1 Bcf and 15.2 Bcf in 2013 and 2014, respectively.

As of June  30, 2013, the Company had fixed price call options on199.8 Bcf of 2015 natural gas production that did not qualify for hedge accounting treatment and 181.6 Bcf of 2014 natural gas production on fixed price swaps not designated for hedge accounting.

The Company is a party to an interest rate swap with counterparty banks. The interest rate swap was entered into in order to mitigate the Company’s exposure to volatility in interest rates related to its building lease. The interest rate swap has a notional amount of $170 million and expires on June 20, 2020. The Company did not designate the interest rate swap for hedge accounting.  Changes in the fair value of the interest rate swap are included in gain (loss) on derivatives in theunaudited condensed consolidated statements of operations.  The Company had no interest rate swaps in 2012. 

The following table summarizes the before tax effect of basis swaps, fixed price call options that did not qualify for hedge accounting,fixed price swaps not designated for hedge accounting,  and interest rate swaps not designated for hedge accounting on the unaudited condensed consolidated statements of operations for the three- and six-month periods ended June  30, 2013 and 2012:

		Unrealized Gain (Loss)
		Recognized in Earnings
	Income Statement	For the three months ended				For the six months ended
	Classification	June 30,				June 30,
Derivative Instrument	of Unrealized Gain (Loss)	2013		2012		2013		2012
		(in thousands)
Basis swaps	Gain (Loss) on Derivatives	$	9,835	$	(218)	$	6,885	$	1,005
Fixed price call options	Gain (Loss) on Derivatives	$	22,354	$	–	$	(34,728)	$	–
Fixed price swaps	Gain (Loss) on Derivatives	$	58,556	$	–	$	87,787	$	–
Interest Rate Swaps	Gain (Loss) on Derivatives	$	2,616	$	–	$	2,616	$	–
		Realized Gain
		Recognized in Earnings
	Income Statement	For the three months ended				For the six months ended
	Classification	June 30,				June 30,
Derivative Instrument	of Realized Gain	2013		2012		2013		2012
		(in thousands)
Basis swaps	Gain (Loss) on Derivatives	$	88	$	131	$	1,095	$	1,149

As of June 30, 2013, the Company had fixed price swaps not designatedfor hedge accounting on the following volumes of natural gas production (in Bcf):

Year	Fixed price swaps not designated for hedge accounting
2014	181.6

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(8) RECLASSIFICATIONS FROM ACCUMULATED OTHER COMPREHENSIVE INCOME

In February 2013, the FASB issued Accounting Standards Update No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“Update 2013-02”), which finalizes proposed ASU No. 2012-240, and seeks to improve the transparency of reporting reclassifications out of accumulated other comprehensive income. Update 2013-02 requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under U.S. GAAP to be reclassified in its entirety to net income.

The following tables detail the components of accumulated other comprehensive income and the related tax effects for the six-months ended June 30, 2013:

	For the six months ended
	June 30, 2013
	Gains and (Losses) on Cash Flow Hedges		Pension and Other Postretirement		Foreign Currency		Total
	(in thousands) (1)
Beginning balance, December 31, 2012	$	172,166	$	(22,311)	$	(51)	$	149,804
Other comprehensive income (loss) before reclassifications		22,091		–		(2,447)		19,644
Amounts reclassified from accumulated other comprehensive income (loss) (2)		(74,536)		534		–		(74,002)
Net current-period other comprehensive income (loss)		(52,445)		534		(2,447)		(54,358)
Ending balance, June 30, 2013	$	119,721	$	(21,777)	$	(2,498)	$	95,446

(1) All amounts are net-of-tax.

(2) See separate table below for details about these reclassifications.

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The following table details the amounts reclassified from accumulated other comprehensive income into earnings for the six-months ended June 30, 2013:

Details about Accumulated Other Comprehensive Income		Amount Reclassified from Accumulated Other Comprehensive Income	Affected Line Item in the Consolidated Statement of Operations
Gains (losses) on cash flow hedges
Settlements	$	124,956	Gas sales
Ineffectiveness		(731)	Gas sales
		124,225	Income before income taxes
		49,689	Provision for income taxes
	$	74,536	Net income
Pension and other postretirement
Amortization of prior service cost included in net periodic pension cost (1)	$	(890)	General and administrative expenses
		(890)	Loss before income taxes
		(356)	Provision for income taxes
	$	(534)	Net loss
Total reclassifications for the period	$	74,002	Net income

(1) This accumulated other comprehensive income component is included in the computation of net periodic pension cost (see footnote 13 for additional details.)  

(9) FAIR VALUE MEASUREMENTS

The carrying amounts and estimated fair values of the Company’s financial instruments as of June 30, 2013 and December 31, 2012 were as follows:

	June 30,				December 31,
	2013				2012
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
	(in thousands)
Cash and cash equivalents	$	25,685	$	25,685	$	53,583	$	53,583
Restricted cash	$	–	$	–	$	8,542	$	8,542
Unsecured revolving credit facility	$	230,000	$	230,000	$	–	$	–
Senior notes	$	1,668,934	$	1,791,429	$	1,669,473	$	1,917,005
Derivative instruments	$	264,201	$	264,201	$	287,878	$	287,878

The carrying values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, other current assets and current liabilities on the unaudited condensed consolidated balance sheets approximate fair value because of their short-term nature. For debt and derivative instruments, the following methods and assumptions were used to estimate fair value:

Debt: The fair values of the Company’s senior notes were based on the market for the Company’s publicly-traded debt as determined based on yield of the Company’s 7.5% Senior Notes due 2018, which was 3.1% at June  30, 2013 and 2.6% at December 31, 2012, and its 4.10% Senior Notes due 2022, which was 4.2% at June  30, 2013. The carrying value of the borrowings under the Company’s unsecured revolving credit facility at June  30, 2013, approximate fair value because the interest rate is variable and reflective of market rates.  The Company considers the fair value of its debt to be a Level 2 measurement on the fair value hierarchy. 

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Derivative Instruments: The fair value of all derivative instruments is the amount at which the instrument could be exchanged currently between willing parties. The amounts are based on quoted market prices, best estimates obtained from counterparties and an option pricing model, when necessary, for price option contracts.

GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. As presented in the tables below, this hierarchy consists of three broad levels:

Level 1 valuations - Consist of unadjusted quoted prices in active markets for identical assets and liabilities and have the highest priority.

Level 2 valuations - Consist of quoted market information for the calculation of fair market value.

Level 3 valuations - Consist of internal estimates and have the lowest priority.

Pursuant to GAAP, the Company has classified its derivatives into these levels depending upon the data utilized to determine their fair values. The Company’s Level 2 fair value measurements include fixed-price and floating-price swaps and are estimated using internal discounted cash flow calculations using the NYMEX futures index.The Company utilizes discounted cash flow models for valuing its interest rate derivatives. The net derivative values attributable to the Company's interest rate derivative contracts as of June 30, 2013 are based on (i) the contracted notional amounts, (ii) active market-quoted London Interbank Offered Rate ("LIBOR") yield curves and (iii) the applicable credit-adjusted risk-free rate yield curve. The Company's interest rate derivative asset and liability measurements represent Level 2 inputs in the hierarchy. The Company’s Level 3 fair value measurements include fixed price call options and basis swaps. The Company’s fixed price call options are valued using the Black-Scholes model, an industry standard option valuation model, and takes into account inputs such as contract terms, including maturity, and market parameters, including assumptions of the NYMEX futures index, interest rates, volatility and credit worthiness.  The Company’s basis swaps are estimated using internal discounted cash flow calculations based upon forward commodity price curves. 

The accounting group, reporting to the Vice President and Controller, is responsible for determining the Company’s Level 3 fair value measurements.  Inputs to the Black-Scholes model, including the volatility input, which is the significant unobservable input for Level 3 fair value measurements, are obtained from a third-party pricing source, with independent verification of most significant inputs on a monthly basis. An increase (decrease) in volatility would resultin an increase (decrease) in fair value measurement, respectively.

Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):

	June 30, 2013
	Fair Value Measurements Using:
	Quoted Prices		Significant
	in Active		Other		Significant
	Markets		Observable Inputs		Unobservable Inputs		Assets (Liabilities)
	(Level 1)		(Level 2)		(Level 3)		at Fair Value
Derivative assets	$	–	$	295,761	$	10,967	$	306,728
Derivative liabilities		–		(3,602)		(38,925)		(42,527)
Total	$	–	$	292,159	$	(27,958)	$	264,201
	December 31, 2012
	Fair Value Measurements Using:
	Quoted Prices		Significant
	in Active		Other		Significant
	Markets		Observable Inputs		Unobservable Inputs		Assets (Liabilities)
	(Level 1)		(Level 2)		(Level 3)		at Fair Value
Derivative assets	$	–	$	287,993	$	4,151	$	292,144
Derivative liabilities		–		–		(4,266)		(4,266)
Total	$	–	$	287,993	$	(115)	$	287,878

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The table below presents reconciliations for the change in net fair value of derivative assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three-and six-month periods ended June  30, 2013 and June  30, 2012. The fair values of Level 3 derivative instruments are estimated using proprietary valuation models that utilize both market observable and unobservable parameters. Level 3 instruments presented in the table consist of net derivatives valued using pricing models incorporating assumptions that, in the Company’s judgment, reflect the assumptions a reasonable marketplace participant would have used at June  30, 2013 and June  30, 2012.

	For the three months ended				For the six months ended
	June 30,				June 30,
	2013		2012		2013		2012
	(in thousands)
Balance at beginning of period	$	(60,147)	$	184,543	$	(115)	$	182,119
Total gains or losses (realized/unrealized):
Included in earnings		32,277		65,274		(26,748)		123,736
Included in other comprehensive income		–		(77,731)		–		(77,441)
Purchases, issuances, and settlements:
Purchases		–		–		–		–
Issuances		–		–		–		–
Settlements		(88)		(65,864)		(1,095)		(122,192)
Transfers into/out of Level 3		–		–		–		–
Balance at end of period	$	(27,958)	$	106,222	$	(27,958)	$	106,222
Change in unrealized gains included in earnings relating to derivatives still held as of June 30	$	32,189	$	(590)	$	(27,843)	$	1,544

(10) DEBT

The components of debt as of June  30, 2013 and December 31, 2012 consisted of the following:

	June 30,		December 31,
	2013		2012
	(in thousands)
Short-term debt:
7.15% Senior Notes due 2018	$	1,200	$	1,200
Total short-term debt		1,200		1,200
Long-term debt:
Variable rate (2.17% at June 30, 2013) unsecured revolving credit facility		230,000		–
7.5% Senior Notes due 2018		600,000		600,000
7.35% Senior Notes due 2017		15,000		15,000
7.125% Senior Notes due 2017		25,000		25,000
7.15% Senior Notes due 2018		28,800		29,400
4.10% Senior Notes due 2022		1,000,000		1,000,000
Unamortized discount		(1,066)		(1,127)
Total long-term debt		1,897,734		1,668,273
Total debt	$	1,898,934	$	1,669,473

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Issuance of Senior Notes and Subsidiary Guarantees 

The indentures governing the Company’s senior notes contain covenants that, among other things, restrict the ability of the Company and/or its subsidiaries’ ability to incur liens, to engage in sale and leaseback transactions and to merge, consolidate, or sell assets.  All of the Company’s senior notes are currently guaranteed by its subsidiaries, SEECO, Inc. (“SEECO”), Southwestern Energy Production Company (“SEPCO”) and Southwestern Energy Services Company (“SES”).  If no default or event of default has occurred and is continuing, these guarantees will be released (i) automatically upon any sale, exchange, or transfer of all of the Company’s equity interests in the guarantor; (ii) automatically upon the liquidation and dissolution of a guarantor; (iii) following delivery of notice to the trustee of the release of the guarantor of its obligations under the Company’s credit facility; and (iv) upon legal or covenant defeasance or other satisfaction of the obligations under the notes.

Please refer to Note 17, “Condensed Consolidating Financial Information” in this Form 10-Q for additional information.

In March 2012, the Company issued $1.0 billion of 4.10% Senior Notes due 2022 in a private placement. The 4.10% Senior Notes are redeemable at the Company’s election, in whole or in part, at any time prior to December 15, 2021, at a redemption price equal to the greater of: (1) 100% of the principal amount of the notes to be redeemed then outstanding; and (2) the sum of the present values of the remaining scheduled payments of principal and interest on the notes to be redeemed (not including any portion of such payments of interest accrued to the date of redemption) discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) as determined in accordance with the indenture, plus 35 basis points, plus, in either of such cases, accrued and unpaid interest to the date of redemption on the notes to be redeemed. In addition, if the Company undergoes a “change of control,” as defined in the indenture, holders of the 4.10% Senior Notes will have the option to require the Company to purchase all or any portion of the notes at a purchase price equal to 101% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the change of control date. Payment obligations with respect to the 4.10% Senior Notes are currently guaranteed by the Company’s subsidiaries, SEECO, SEPCO and SES, which guarantees may be unconditionally released in certain circumstances. The indentures governing the 4.10% Senior Notes and the Company’s other senior notes contain covenants that, among other things, restrict the ability of the Company and/or its subsidiaries toincur liens, to engage in sale and leaseback transactions and to merge, consolidate or sell assets. In December 2012, the Company completed its offer to exchange up to $1.0 billion aggregate principal amount of its 4.10% Senior Notes due 2022 (the “Exchange Notes”, which were registered under the Securities Act of 1933, as amended (the “Act”), for any and all of its outstanding 4.10% Senior Notes due 2022, which were issued in a private placement in March 2012 (the “PrivateNotes”). The Exchange Notes have substantially identical terms to the Private Notes, except that the offering of the Exchange Notes was registered under the Act, and the Exchange Notes are not subject to any transfer restrictions. The Company exchanged $999,500,000 of Private Notes for Exchange Notes, and has no further obligations under the relatedregistration rights agreement.

Credit Facility 

In February 2011, the Company amended and restated its unsecured revolving credit facility, increasing the borrowing capacity to $1.5 billion and extending the maturity date to February 2016 (“Credit Facility”).  The amount available under the Credit Facility may be increased to $2.0 billion at any time upon the Company’s agreement with its existing or additional lenders. The interest rate on the Credit Facility is calculated based upon our debt rating and is currently 200 basis points over the current London Interbank Offered Rate (LIBOR) and was 200 basis points over LIBOR at June  30, 2013. The Credit Facility is guaranteed by the Company’s subsidiary, SEECO and requires additional subsidiary guarantors if certain guaranty coverage levels are not satisfied.  The facility contains covenants which impose certain restrictions on the Company. Under the credit agreement, the Company may not issue total debt in excess of 60% of its total adjusted capital and must maintain a ratio of earnings before interest, taxes, depreciation and amortization (EBITDA) to interest expense of 3.5 or above. The terms of the Credit Facility also include covenants that restrict the ability of the Company and its material subsidiaries to merge, consolidate or sell all or substantially all of their assets, restrict the ability of the Company and its subsidiaries to incur liens and restrict the ability of the Company’s subsidiaries to incur indebtedness.  As of June  30, 2013, the Company was in compliance with the covenants of its debt agreements.  While the Company believes all of the lenders under the Credit Facility have the ability to provide funds, it cannot predict whether each will be able to meet its obligation under the facility.

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(11) COMMITMENTS AND CONTINGENCIES

Commitments

In the first quarter of 2010, the Company was awarded exclusive licenses by the Province of New Brunswick in Canada to conduct an exploration program covering approximately 2.5 million acres in the province. The licenses require the Company to make certain capital investments in New Brunswick of approximately $47.0 millionin the aggregate over a three year period. In order to obtain the licenses, the Company provided promissory notes payable on demand to the Minister of Finance of the Province of New Brunswick with an aggregate principal amount of$44.5 million Canadian dollars. The promissory notes secure the Company's capital expenditure obligations under the licenses and are returnable to the Company to the extent the Company performs such obligations. If the Company fails to fully perform, the Minister of Finance may retain a portion of the applicable promissory notes in an amount equal to any deficiency. The Company commenced its Canada exploration program in 2010 and no liability has been recognized in connection with the promissory notes due to the Company’s investments in New Brunswick as of June 30, 2013 and its future investment plans.  In December 2012, we received twoone-year extensions to our exploration license agreements which expire on March 16, 2014 and March 16, 2015, respectively.

In response to the Company’s well performance, SES and SEPCO entered into new and amended natural gas transportation and gathering arrangements with third party pipelines, during the second quarter of 2013, in support of the Company’s production in the Marcellus Shale Play.  As of June 30, 2013, SES’s and SEPCO’s obligations for demand and similar charges under the firm transportation agreements and gathering agreements totaled approximately $3.1 billion and the Company has guarantee obligations of up to $100.0million of that amount.

Environmental Risk

The Company is subject to laws and regulations relating to the protection of the environment. Environmental and cleanup related costs of a non-capital nature are accrued when it is both probable that a liability has been incurred and when the amount can be reasonably estimated. Management believes any future remediation or other compliance related costs will not have a material effect on the financial position or reported results of operations of the Company.

Litigation

Tovah Energy

In February 2009, SEPCO was added as a defendant in a Third Amended Petition in the matter of Tovah Energy, LLC and Toby Berry-Helfand v. David Michael Grimes, et, al.  In the Sixth Amended Petition, filed in July 2010, in the 273rd District Court in Shelby County, Texas (collectively, the “Sixth Petition”), plaintiff alleged that, in 2005, they provided SEPCO with proprietary data regarding two prospects in the James Lime formation pursuant to a confidentiality agreement and that SEPCO refused to return the proprietary data to the plaintiff, subsequently acquired leases based upon such proprietary data and profited therefrom.  Among other things, the plaintiff’s allegations in the Sixth Petition included various statutory and common law claims, including, but not limited to claims of misappropriation of trade secrets, violation of the Texas Theft Liability Act, breach of fiduciary duty and confidential relationships, various fraud based claims and breach of contract, including a claim of breach of a purported right of first refusal on all interests acquired by SEPCO between February 2005 and February 2006.  In the Sixth Petition, plaintiff sought actual damages of over $55.0 million as well as other remedies, including special damages and punitive damages of four times the amount of actual damages established at trial.

Immediately before the commencement of the trial in November 2010, plaintiff was permitted, over SEPCO’s objections, to file a Seventh Amended Petition claiming actual damages of $46.0 million and also seeking the equitable remedy of disgorgement of all profits for the misappropriation of trade secrets and the breach of fiduciary duty claims. In December 2010, the jury found in favor of the plaintiff with respect to all of the statutory and common law claims and awarded $11.4 million in compensatory damages. The jury did not, however, award the plaintiff any special, punitive or other damages. In addition, the jury separately determined that SEPCO’s profits for purposes of disgorgement were $381.5 million. This profit determination does not constitute a judgment or an award. The plaintiff’s entitlement to disgorgement of profits as an equitable remedy will be determined by the judge and it is within the judge’s discretion to award none, some or all the amount of profit to the plaintiff.  In December 2010, the plaintiff filed a motion to enter the judgment based on the jury’s verdict.  In February 2011, SEPCO filed a motion for a judgment notwithstanding the verdict and a motion to disregard certain findings.  In March 2011, the plaintiff filed an amended motion for judgment and intervenor filed its motion for judgment seeking not only the monetary damages and the profits determined by the jury but also seeking, as a new remedy, a constructive trust for profits from 143 wells as well

20

as future drilling and sales of properties in the prospect areas.  At the suggestion of the judge, all parties voluntarily agreed to participate in non-binding mediation efforts.  The mediation occurred in April 2011 and was unsuccessful. In June 2011, SEPCO received by mail a letter dated June 2011 from the judge, in which he made certain rulings with respect to the post-verdict motions and responses filed by the parties. In his rulings, the judge denied SEPCO’s motion for judgment, judgment notwithstanding the verdict and to disregard certain findings. Plaintiff’s and intervenor’s claim for a constructive trust was denied but the judge ruled that plaintiff and intervenor shall recover from SEPCO $11.4 million and a reasonable attorney’s fee of 40% of the total damages awarded and are entitled to recover on their claim for disgorgement.  The judge instructed that SEPCO calculate the profit on the designated wells for each respective period.  SEPCO performed the calculation and provided it to the judge in June 2011.  In July 2011, plaintiff and intervenor filed a letter with the court raising objections to the accounting provided by SEPCO, to which SEPCO filed a response in July 2011.  In July 2011, the judge sent a letter to the parties in which he ruled that after reviewing the parties’ respective position letters, he was awarding $23.9 million in disgorgement damages in favor of the plaintiff and intervenor.  In the July 2011 letter, the judge instructed the plaintiff and intervenor to prepare a judgment for his approval prior to July 2011 consistent with his findings in his June 2011 letter and the disgorgement award.  In August 2011, a judgment was entered pursuant to which plaintiff and intervenor are entitled to recover approximately $11.4 million in actual damages and approximately $23.9 million in disgorgement as well as prejudgment interest and attorneys' fees which currently are estimated to be up to $8.9 million and all costs of court of the plaintiff and intervenor.  In September 2011, SEPCO filed a motion for a new trial and in November 2011 filed a notice of appeal.  In November 2011, the court approved SEPCO’s supersedeas bond in the amount of $14.1 million, which stays execution on the judgment pending appeal.  The bond covers the $11.4 million judgment for actual damages, plus $1.3 million in pre-judgment interest, $1.3 million in post-judgment interest (estimating two years for the duration of appeal), and court costs. 

In June 2012, SEPCO filed its appellate brief and, in June 2012, plaintiff and intervenor filed a cross-appellate brief seeking limited remand to reassess the disgorgement determination. The parties filed their responses to the appellate and cross appellate briefs in November 2012.  Oral argument was held before the Tyler Court of Appeals on March 8, 2013.  On July 10, 2013, the Tyler Court of Appeals ordered that (1) the judgment awarding plaintiff and intervenor $23.9 million as disgorgement of illicit gains be reversed and judgment rendered that they take nothing, (2) the award of $11.4 million for actual damages, insofar as it is based on the jury’s findings of breach of fiduciary duty, fraud, breach of contract, and theft of trade secret is reversed and judgment rendered that plaintiff and intervenor take nothing under those theories of recovery, (3) the award of $11.4 million to plaintiff and intervenor as damages for misappropriation of trade secret is affirmed, (4) the case be remanded to the trial court for a determination and award of attorney’s fees for SEPCO as the prevailing party under the Texas Theft Liability Act, and (5) in all other respects, the judgment is affirmed.  On July 25, 2013, SEPCO filed its motion for rehearing with the Tyler Court of Appeals, seeking reversal of every part of plaintiff and intervenor’s recovery.  Plaintiff and intervenor filed an unopposed motion for an extension of their deadline to file a motion for rehearing, which the Tyler Court of Appeals has granted; their deadline to file their motion is now August 26, 2013.

Based on the Company's understanding and judgment of the facts and merits of this case, including appellate defenses, and after considering the advice of counsel, the Company has determined that, although reasonably possible after exhaustion of all appeals, an adverse final outcome to this lawsuit is not probable.  As such, the Company has not accrued any amounts with respect to this lawsuit.  If the plaintiff and intervenor were to ultimately prevail in the appellate process, the Company currently estimates, based on the judgments to date, that SEPCO’s potential liability would be up to $45.5 million, including interest and attorney’s fees. The Company’s assessment may change in the future due to occurrence of certain events, such as denied appeals, and such re-assessment could lead to the determination that the potential liability is probable and could be material to the Company's results of operations, financial position or cash flows.

Bureau of Land Management

In March 2010, the Company’s subsidiary, SEECO, was served with a subpoena from a federal grand jury in Little Rock, Arkansas.  Based on the documents requested under the subpoena and subsequent discussions described below, the Company believes the grand jury is investigating matters involving approximately 27 horizontal wells operated by SEECO in Arkansas, including whether appropriate leases or permits were obtained therefore and whether royalties and other production attributable to federal lands have been properly accounted for and paid.  The Company believes it has fully complied with all requests related to the federal subpoena and delivered its affidavit to that effect. The Company and representatives of the Bureau of Land Management and the U.S. Attorney have had discussions since the production of the documents pursuant to the subpoena.  In January 2011, the Company voluntarily produced additional materials informally requested by the government arising from these discussions.  Although, to the Company’s knowledge, no proceeding in this matter has been initiated against SEECO, the Company cannot predict whether or when one might be

21

initiated. The Company intends to fully comply with any further requests and to cooperate with any related investigation. No assurance can be made as to the time or resources that will need to be devoted to this inquiry or the impact of the final outcome of the discussions or any related proceeding.

Other

We are subject to various litigation, claims and proceedings that have arisen in the ordinary course of business. Management believes, individually or in aggregate, such litigation, claims and proceedings will not have a material adverse impact on our financial position, results of operations or cash flows but these matters are subject to inherent uncertainties and management’s view may change in the future. If an unfavorable final outcome were to occur, there exists the possibility of a material impact on our financial position, results of operations or cash flows for the period in which the effect becomes reasonably estimable. We accrue for such items when a liability is both probable and the amount can be reasonably estimated.

(12) SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Supplemental disclosures of cash flow information:

	For the three months ended				For the six months ended
	June 30,				June 30,
	2013		2012		2013		2012
	(in thousands)
Cash paid for interest	$	5,875	$	3,368	$	50,218	$	29,820
Cash paid for income taxes		965		–		17,306		68
Noncash property changes		10,325		3,220		46,182		20,789

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(13) PENSION PLAN AND OTHER POSTRETIREMENT BENEFITS

The Company has defined pension and postretirement benefit plans which cover substantially all of the Company’s employees. Net periodic pension and other postretirement benefit costs include the following components for the three-and six-month periods ended June  30, 2013 and 2012:  

	Pension Benefits
	For the three months ended				For the six months ended
	June 30,				June 30,
	2013		2012		2013		2012
	(in thousands)
Service cost	$	3,448	$	2,735	$	6,895	$	5,471
Interest cost		1,026		1,012		2,052		2,025
Expected return on plan assets		(1,534)		(1,356)		(3,068)		(2,713)
Amortization of prior service cost		26		72		52		143
Amortization of net loss		385		305		770		610
Net periodic benefit cost	$	3,351	$	2,768	$	6,701	$	5,536
	Postretirement Benefits
	For the three months ended				For the six months ended
	June 30,				June 30,
	2013		2012		2013		2012
	(in thousands)
Service cost	$	574	$	458	$	1,148	$	916
Interest cost		110		99		220		199
Amortization of transition obligation		–		16		–		32
Amortization of prior service cost		3		4		7		7
Amortization of net loss		30		23		60		46
Net periodic benefit cost	$	717	$	600	$	1,435	$	1,200

As of June  30, 2013, the Company has contributed $6.0 million to the pension plan and $0.1 million to the postretirement benefit plan, and expects to contribute $12.0 million to the pension plan and $0.1 million to the postretirement benefit plan.

The Company maintains a non-qualified deferred compensation supplemental retirement savings plan (“Non-Qualified Plan”) for certain key employees who may elect to defer and contribute a portion of their compensation, as permitted by the plan. Shares of the Company’s common stock purchased under the terms of the Non-Qualified Plan are presented as treasury stock and totaled 14,442 shares at June  30, 2013 compared to 64,715 shares at December 31, 2012.

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(14) STOCK-BASED COMPENSATION

The Company recognized the following amounts in employee stock-based compensation costs for the three-and six-months ended June  30, 2013 and 2012:

	For the three months ended				For the six months ended
	June 30,				June 30,
	2013		2012		2013		2012
	(in thousands)
Stock-based compensation cost – expensed	$	2,968	$	2,705	$	5,962	$	5,549
Stock-based compensation cost – capitalized	$	2,872	$	2,442	$	5,734	$	5,306

As of June  30, 2013, there was $43.7 million of total unrecognized compensation cost related to the Company’s unvested stock option and restricted stock grants. This cost is expected to be recognized over a weighted-average period of 2.5 years.

The following table summarizes stock option activity for the first sixmonths ended June  30,  2013 and provides information for options outstanding as of June  30, 2013:

		Weighted
		Average
	Number	Exercise
	of Options	Price
Outstanding at December 31, 2012	3,649,520	$	29.84
Granted	5,210		34.84
Exercised	(466,887)		11.32
Forfeited or expired	(39,369)		37.95
Outstanding at June 30, 2013	3,148,474		32.50
Exercisable at June 30, 2013	1,931,580	$	30.62

The following table summarizes restricted stock activity for the six months ended June  30, 2013 and provides information for unvested shares as of June  30, 2013:  

		Weighted
		Average
	Number	Grant Date
	of Shares	Fair Value
Unvested shares at December 31, 2012	1,117,515	$	35.64
Granted	13,540		36.60
Vested	(26,044)		36.17
Forfeited	(41,501)		35.88
Unvested shares at June 30, 2013	1,063,510	$	35.63

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(15) SEGMENT INFORMATION

The Company’s reportable business segments have been identified based on the differences in products or services provided. Revenues for the E&P segment are derived from the production and sale of natural gas and crude oil. The Midstream Services segment generates revenue through the marketing of both Company and third-party produced natural gas volumes and through gathering fees associated with the transportation of natural gas to market.

Summarized financial information for the Company’s reportable segments is shown in the following table. The accounting policies of the segments are the same as those described in Note 1 of the Notes to Consolidated Financial Statements included in Item 8 of the 2012 Annual Report on Form 10-K. Management evaluates the performance of its segments based on operating income, defined as operating revenues less operating costs. Income before income taxes, for the purpose of reconciling the operating income amount shown below to consolidated income before income taxes, is the sum of operating income, interest expense and interest and other income (loss). The “Other” column includes items not related to the Company’s reportable segments including real estate and corporate items.

	Exploration
	and		Midstream
	Production		Services		Other			Total
	(in thousands)
Three months ended June 30, 2013:
Revenues from external customers	$	616,894	$	245,120	$	27		$	862,041
Intersegment revenues		1,664		641,655		60			643,379
Operating income (loss)		252,546		72,889		(118)			325,317
Other income, net		296		58		–			354
Gain on derivatives		93,449		–		–			93,449
Depreciation, depletion and amortization expense		174,267		12,495		105			186,867
Interest expense(2)		6,345		2,743		190			9,278
Provision (benefit) for income taxes(2)		138,636		25,711		(136)			164,211
Assets		6,006,318		1,383,930		244,943	(3)		7,635,191
Capital investments(4)		631,221		56,906		6,766			694,893
Three months ended June 30, 2012:
Revenues from external customers	$	437,035	$	169,004	$	37		$	606,076
Intersegment revenues		(1,448)		319,391		816			318,759
Operating income (loss)(1)		(718,277)		71,821		410			(646,046)
Other income (loss), net		(64)		(5)		2,646			2,577
Loss on derivatives		(6,348)		–		–			(6,348)
Depreciation, depletion and amortization expense		196,201		11,309		320			207,830
Impairment of natural gas and oil properties		800,652		–		–			800,652
Interest expense(2)		4,430		3,578		353			8,361
Provision (benefit) for income taxes(2)		(279,493)		25,414		1,033			(253,046)
Assets		6,120,697		1,114,364		404,149	(3)		7,639,210
Capital investments(4)		531,845		47,719		9,069			588,633

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	Exploration
	and		Midstream
	Production		Services		Other			Total
	(in thousands)
Six months ended June 30, 2013:
Revenues from external customers	$	1,126,988	$	468,654	$	48		$	1,595,690
Intersegment revenues		3,173		1,139,028		113			1,142,314
Operating income (loss)		428,304		149,196		(223)			577,277
Other loss, net		(82)		(97)		–			(179)
Gain on derivatives		63,655		–		–			63,655
Depreciation, depletion and amortization expense		341,717		24,407		210			366,334
Interest expense(2)		12,521		5,388		390			18,299
Provision (benefit) for income taxes(2)		194,452		55,114		(258)			249,308
Assets		6,006,318		1,383,930		244,943	(3)		7,635,191
Capital investments(4)		1,106,554		95,373		11,022			1,212,949
Six months ended June 30, 2012:
Revenues from external customers	$	901,666	$	359,177	$	68		$	1,260,911
Intersegment revenues		(735)		675,672		1,635			676,572
Operating income (loss)(1)		(603,668)		141,110		838			(461,720)
Other income (loss), net		(247)		(23)		2,647			2,377
Loss on derivatives		(4,714)		–		–			(4,714)
Depreciation, depletion and amortization expense		378,940		21,879		638			401,457
Impairment of natural gas and oil properties		800,652		–		–			800,652
Interest expense(2)		7,752		7,245		702			15,699
Provision (benefit) for income taxes(2)		(234,655)		51,262		1,065			(182,328)
Assets		6,120,697		1,114,364		404,149	(3)		7,639,210
Capital investments(4)		1,064,984		73,883		22,878			1,161,745

(1) The operating loss for the E&P segment for the three and six months ended June 30, 2012 includes a $800.7 million non-cash ceiling test impairment of our natural gas and oil properties.

(2) Interest expense and the provision for income taxes by segment are allocated as they are incurred at the corporate level.

(3) Other assets represent corporate assets not allocated to segments and assets, including restricted cash and investments in cash equivalents, for non reportable segments.

(4) Capital investments includes increases of $7.5 million and $0.2 million for the three-month periods ended June 30, 2013 and 2012, respectively, and increases of $40.4 million and $15.5 million for the six-month periods ended June 30, 2013 and 2012, respectively, relating to the change in accrued expenditures between periods.

Included in intersegment revenues of the Midstream Services segment are $559.0 million and $245.5 million for the three months ended June  30, 2013 and 2012, respectively, and $978.5 million and $531.6 million for the six months ended June 30, 2013 and 2012, respectively, for marketing of the Company’s E&P sales. Corporate assets include cash and cash equivalents, restricted cash, furniture and fixtures, prepaid debt and other costs. Corporate general and administrative costs, depreciation expense and taxes other than income are allocated to the segments. For the three months ended June  30, 2013 and 2012, capital investments within the E&P segment include$5.6million and$2.3 million, respectively, related to the Company’s activities in Canada.  For the six months ended June 30, 2013 and 2012, capital investments within the E&P segment include $7.9 million and $4.7 million, respectively, relating to the Company’s activities in Canada. At June  30, 2013, E&P segment assets include $51.3 million and at June  30, 2012, assets include $33.2  million related to the Company’s activities in Canada.

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(16) NEW ACCOUNTING PRONOUNCEMENTS ADOPTED

In February 2013, the FASB issued Accounting Standards Update No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“Update 2013-02”), which finalizes  proposed ASU No. 2012-240, and seeks to improve the transparency of reporting reclassifications out of accumulated other comprehensive income. Update 2013-02 replaces the presentation requirements in ASU No. 2011-05,Comprehensive Income (Topic 220): Presentation of Comprehensive Income, and ASU No. 2011-12, ComprehensiveIncome (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out ofAccumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. Update 2013-02 requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respectiveline items in net income if the amount being reclassified is required under U.S. GAAP to be reclassified in its entirety to net income. For public entities, Update 2013-02 is effective prospectively for reporting periods beginning after December15, 2012, with early adoption permitted. The implementation of the disclosure requirement did not have amaterial impact on the Company’s consolidated results of operations, financial position or cash flows. 

In January 2013, the FASB issued Accounting Standards Update No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (“Update 2013-01”), which finalizes Proposed ASU No.2012-250 and clarifies the scope of transactions that are subject to disclosures concerning offsetting. Update 2013-01 addresses implementation issues regarding the scope of ASU No. 2011-11, Balance Sheet (Topic 210): Disclosures aboutOffsetting Assets and Liabilities, issued in December 2011. Update 2013-01 clarifies that the scope of the disclosures underU.S. GAAP is limited to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowingand securities lending transactions that are offset either in accordance with FASB ASC Section 210-20-45, Balance Sheet—Offsetting—Other Presentation Matters, or FASB ASC Section 815-10-45, Derivatives and Hedging—Overall—Other Presentation Matters, or are subject to a master netting arrangement or similar agreement. Update 2013-01 requiresan entity (1) to apply the amendments for annual reporting periods beginning on or after January 1, 2013 and (2) to providethe required disclosures retrospectively for all comparative periods presented. The implementation of the disclosure requirement did not have a material impact on the Company’s consolidated results of operations, financial position or cash flows.

(17) CONDENSED CONSOLIDATING FINANCIAL INFORMATION

The Company is providing condensed consolidating financial information for SEECO, SEPCO and SES, its subsidiaries that are currently guarantors of the Company’s registered public debt, and for its other subsidiaries that are not guarantors of such debt. These wholly owned subsidiary guarantors have jointly and severally, fully and unconditionally guaranteed the Company’s 7.35% Senior Notes, 7.125% Senior Notes and 4.10% Senior Notes. The subsidiary guarantees (i) rank equally in right of payment with all of the existing and future senior debt of the subsidiary guarantors; (ii) rank senior to all of the existing and future subordinated debt of the subsidiary guarantors; (iii) are effectively subordinated to any future secured obligations of the subsidiary guarantors to the extent of the value of the assets securing such obligations; and (iv) are structurally subordinated to all debt and other obligations of the subsidiaries of the guarantors.

The Company has not presented separate financial and narrative information for each of the subsidiary guarantors because it believes that such financial and narrative information would not provide any additional information that would be material in evaluating the sufficiency of the guarantees. The following condensed consolidating financial information summarizes the results of operations, financial position and cash flows for the Company’s guarantor and non-guarantor subsidiaries.

27

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Unaudited)
	Parent		Guarantors		Non-Guarantors		Eliminations		Consolidated
	(in thousands)
Three months ended June 30, 2013:
Operating revenues	$	–	$	818,087	$	126,845	$	(82,891)	$	862,041
Operating costs and expenses:
Gas purchases – midstream services		–		200,584		–		(474)		200,110
Operating expenses		–		124,780		39,773		(82,398)		82,155
General and administrative expenses		–		40,946		6,643		(19)		47,570
Depreciation, depletion and amortization		–		174,382		12,485		–		186,867
Taxes, other than income taxes		–		16,990		3,032		–		20,022
Total operating costs and expenses		–		557,682		61,933		(82,891)		536,724
Operating income		–		260,405		64,912		–		325,317
Other income, net		–		298		56		–		354
Gain on derivatives		–		93,449		–		–		93,449
Equity in earnings of subsidiaries		245,631		–		–		(245,631)		–
Interest expense		–		7,587		1,691		–		9,278
Income before income taxes		245,631		346,565		63,277		(245,631)		409,842
Provision for income taxes		–		142,283		21,928		–		164,211
Net income		245,631		204,282		41,349		(245,631)		245,631
Comprehensive income	$	285,470	$	245,273	$	39,930	$	(285,203)	$	285,470
Three months ended June 30, 2012:
Operating revenues	$	–	$	563,822	$	115,596	$	(73,342)	$	606,076
Operating costs and expenses:
Gas purchases – midstream services		–		127,757		–		(143)		127,614
Operating expenses		–		101,816		27,203		(72,405)		56,614
General and administrative expenses		–		39,041		6,685		(794)		44,932
Depreciation, depletion and amortization		–		196,245		11,585		–		207,830
Impairment of natural gas and oil properties		–		800,652		–		–		800,652
Taxes, other than income taxes		–		11,648		2,832		–		14,480
Total operating costs and expenses		–		1,277,159		48,305		(73,342)		1,252,122
Operating income (loss)		–		(713,337)		67,291		–		(646,046)
Other income (loss), net		–		(65)		2,642		–		2,577
Loss on derivatives		–		(6,348)		–		–		(6,348)
Equity in earnings of subsidiaries		(405,132)		–		–		405,132		–
Interest expense		–		4,505		3,856		–		8,361
Income (loss) before income taxes		(405,132)		(724,255)		66,077		405,132		(658,178)
Provision (benefit) for income taxes		–		(278,220)		25,174		–		(253,046)
Net income (loss)		(405,132)		(446,035)		40,903		405,132		(405,132)
Comprehensive income (loss)	$	(558,199)	$	(598,840)	$	40,387	$	558,453	$	(558,199)

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CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Unaudited)
	Parent		Guarantors		Non-Guarantors		Eliminations		Consolidated
	(in thousands)
Six months ended June 30, 2013:
Operating revenues	$	–	$	1,508,231	$	248,214	$	(160,755)	$	1,595,690
Operating costs and expenses:
Gas purchases – midstream services		–		380,748		–		(682)		380,066
Operating expenses		–		235,321		71,095		(160,037)		146,379
General and administrative expenses		–		72,812		12,009		(36)		84,785
Depreciation, depletion and amortization		–		341,904		24,430		–		366,334
Taxes, other than income taxes		–		34,705		6,144		–		40,849
Total operating costs and expenses		–		1,065,490		113,678		(160,755)		1,018,413
Operating income		–		442,741		134,536		–		577,277
Other loss, net		–		(78)		(101)		–		(179)
Gain on derivatives		–		63,655		–		–		63,655
Equity in earnings of subsidiaries		373,146		–		–		(373,146)		–
Interest expense		–		14,525		3,774		–		18,299
Income before income taxes		373,146		491,793		130,661		(373,146)		622,454
Provision for income taxes		–		200,329		48,979		–		249,308
Net income		373,146		291,464		81,682		(373,146)		373,146
Comprehensive income	$	318,788	$	239,020	$	79,234	$	(318,254)	$	318,788
Six months ended June 30, 2012:
Operating revenues	$	–	$	1,176,633	$	228,721	$	(144,443)	$	1,260,911
Operating costs and expenses:
Gas purchases – midstream services		–		274,660		–		(370)		274,290
Operating expenses		–		204,872		55,184		(142,484)		117,572
General and administrative expenses		–		80,749		14,598		(1,589)		93,758
Depreciation, depletion and amortization		–		379,082		22,375		–		401,457
Impairment of natural gas and oil properties		–		800,652		–		–		800,652
Taxes, other than income taxes		–		28,646		6,256		–		34,902
Total operating costs and expenses		–		1,768,661		98,413		(144,443)		1,722,631
Operating income (loss)		–		(592,028)		130,308		–		(461,720)
Other income (loss), net		–		(239)		2,616		–		2,377
Loss on derivatives		–		(4,714)		–		–		(4,714)
Equity in earnings of subsidiaries		(297,428)		–		–		297,428		–
Interest expense		–		8,260		7,439		–		15,699
Income (loss) before income taxes		(297,428)		(605,241)		125,485		297,428		(479,756)
Provision (benefit) for income taxes		–		(231,328)		49,000		–		(182,328)
Net income (loss)		(297,428)		(373,913)		76,485		297,428		(297,428)
Comprehensive income (loss)	$	(383,925)	$	(460,883)	$	76,450	$	384,433	$	(383,925)

29

CONDENSED CONSOLIDATING BALANCE SHEETS
(Unaudited)
	Parent		Guarantors		Non- Guarantors		Eliminations		Consolidated
	(in thousands)
June 30, 2013:
ASSETS
Cash and cash equivalents	$	25,303	$	–	$	382	$	–	$	25,685
Accounts receivable		2,642		420,119		23,175		–		445,936
Inventories		–		36,045		2,055		–		38,100
Other current assets		5,331		270,094		7,687		–		283,112
Total current assets		33,276		726,258		33,299		–		792,833
Intercompany receivables		2,510,744		66		30,746		(2,541,556)		–
Property and equipment		231,348		12,617,326		1,419,715		–		14,268,389
Less: Accumulated depreciation, depletion and amortization		(95,880)		(7,264,007)		(214,246)		–		(7,574,133)
		135,468		5,353,319		1,205,469		–		6,694,256
Investments in subsidiaries (equity method)		2,632,570		–		–		(2,632,570)		–
Other assets		33,704		98,372		16,026		–		148,102
Total assets	$	5,345,762	$	6,178,015	$	1,285,540	$	(5,174,126)	$	7,635,191
LIABILITIES AND EQUITY
Accounts payable	$	132,447	$	461,157	$	95,037	$	–	$	688,641
Other current liabilities		3,758		152,810		1,846		–		158,414
Total current liabilities		136,205		613,967		96,883		–		847,055
Intercompany payables		–		2,541,556		–		(2,541,556)		–
Long-term debt		1,897,734		–		–		–		1,897,734
Deferred income taxes		(130,850)		993,255		398,141		–		1,260,546
Other liabilities		69,078		172,997		14,186		–		256,261
Total liabilities		1,972,167		4,321,775		509,210		(2,541,556)		4,261,596
Commitments and contingencies
Total equity		3,373,595		1,856,240		776,330		(2,632,570)		3,373,595
Total liabilities and equity	$	5,345,762	$	6,178,015	$	1,285,540	$	(5,174,126)	$	7,635,191

30

CONDENSED CONSOLIDATING BALANCE SHEETS
(Unaudited)
	Parent		Guarantors		Non- Guarantors		Eliminations		Consolidated
	(in thousands)
December 31, 2012:
ASSETS
Cash and cash equivalents	$	47,491	$	5,988	$	104	$	–	$	53,583
Restricted Cash		8,542		–		–		–		8,542
Accounts receivable		2,677		353,607		21,354		–		377,638
Inventories		2		26,975		1,164		–		28,141
Other current assets		7,461		321,396		12,151		–		341,008
Total current assets		66,173		707,966		34,773		–		808,912
Intercompany receivables		2,259,713		42		27,077		(2,286,832)		–
Property and equipment		220,837		11,491,222		1,316,380		–		13,028,439
Less: Accumulated depreciation, depletion and amortization		(82,178)		(6,923,106)		(186,179)		–		(7,191,463)
		138,659		4,568,116		1,130,201		–		5,836,976
Investments in subsidiaries (equity method)		2,309,947		–		–		(2,309,947)		–
Other assets		35,136		42,247		14,256		–		91,639
Total assets	$	4,809,628	$	5,318,371	$	1,206,307	$	(4,596,779)	$	6,737,527
LIABILITIES AND EQUITY
Accounts payable	$	140,367	$	375,604	$	41,009	$	–	$	556,980
Other current liabilities		3,758		205,623		1,410		–		210,791
Total current liabilities		144,125		581,227		42,419		–		767,771
Intercompany payables		–		2,108,360		178,472		(2,286,832)		–
Long-term debt		1,668,273		–		–		–		1,668,273
Deferred income taxes		(116,207)		820,279		345,066		–		1,049,138
Other liabilities		77,565		124,505		14,403		–		216,473
Total liabilities		1,773,756		3,634,371		580,360		(2,286,832)		3,701,655
Commitments and contingencies
Total equity		3,035,872		1,684,000		625,947		(2,309,947)		3,035,872
Total liabilities and equity	$	4,809,628	$	5,318,371	$	1,206,307	$	(4,596,779)	$	6,737,527

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CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(Unaudited)
	Parent		Guarantors		Non-Guarantors		Eliminations		Consolidated
	(in thousands)
Six months ended June 30, 2013:
Net cash provided by (used in) operating activities	$	(30,843)	$	651,169	$	257,226	$	–	$	877,552
Investing activities:
Capital investments		(12,156)		(1,084,093)		(79,385)		–		(1,175,634)
Transfers from restricted cash		8,542		–		–		–		8,542
Other		(73)		1,894		3,807		–		5,628
Net cash used in investing activities		(3,687)		(1,082,199)		(75,578)		–		(1,161,464)
Financing activities:
Intercompany activities		(243,555)		425,042		(181,487)		–		–
Payments on current portion of long-term debt		(600)		–		–		–		(600)
Payments on revolving long-term debt		(1,233,150)		–		–		–		(1,233,150)
Borrowing under revolving long-term debt		1,463,150		–		–		–		1,463,150
Other Items		26,497		–		–		–		26,497
Net cash provided by (used in) financing activities		12,342		425,042		(181,487)		–		255,897
Effect of exchange rate changes on cash		–		–		117		–		117
Increase (decrease) in cash and cash equivalents		(22,188)		(5,988)		278		–		(27,898)
Cash and cash equivalents at beginning of year		47,491		5,988		104		–		53,583
Cash and cash equivalents at end of period	$	25,303	$	–	$	382	$	–	$	25,685
Six months ended June 30, 2012:
Net cash provided by (used in) operating activities	$	(51,093)	$	624,945	$	263,538	$	–	$	837,390
Investing activities:
Capital investments		(18,079)		(1,032,169)		(90,413)		–		(1,140,661)
Proceeds from sale of property and equipment		–		168,391		5,946		–		174,337
Transfers to restricted cash		(167,750)		–		–		–		(167,750)
Transfers from restricted cash		23,366		–		–		–		23,366
Other		90		(2,287)		11,092		–		8,895
Net cash used in investing activities		(162,373)		(866,065)		(73,375)		–		(1,101,813)
Financing activities:								–
Intercompany activities		(54,667)		245,329		(190,662)		–		–
Payments on current portion of long-term debt		(600)		–		–		–		(600)
Payments on revolving long-term debt		(1,273,700)		–		–		–		(1,273,700)
Borrowings under revolving long-term debt		602,200		–		–		–		602,200
Proceeds from issuance of long-term debt		998,780		–		–		–		998,780
Other items		(36,370)		–		–		–		(36,370)
Net cash provided by (used in) financing activities		235,643		245,329		(190,662)		–		290,310
Effect of exchange rate changes on cash		–		–		(15)		–		(15)
Increase (decrease) in cash and cash equivalents		22,177		4,209		(514)		–		25,872
Cash and cash equivalents at beginning of year		14,711		–		916		–		15,627
Cash and cash equivalents at end of period	$	36,888	$	4,209	$	402	$	–	$	41,499

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following updates information as to Southwestern Energy Company’s financial condition provided in our 2012 Annual Report on Form 10-K and analyzes the changes in the results of operations between the three- and six-month periods ended June 30, 2013 and 2012. For definitions of commonly used natural gas and oil terms used in this Form 10-Q, please refer to the “Glossary of Certain Industry Terms” provided in our 2012 Annual Report on Form 10-K.

The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in forward-looking statements for many reasons, including the risks described in the “Cautionary Statement About Forward-Looking Statements” in the forepart of this Form 10-Q, in Item 1A, “Risk Factors” in Part I and elsewhere in our 2012 Annual Report on Form 10-K, and Item 1A, “Risk Factors” in Part II in this Form 10-Q and any other Form 10-Q filed during the fiscal year. You should read the following discussion with our unaudited condensed consolidated financial statements and the related notes included in this Form 10-Q.

OVERVIEW

Background

Southwestern Energy Company is an independent energy company engaged in natural gas andoilexploration, development and production, or E&P. We are also focused on creating and capturing additional value through our natural gas gathering and marketing businesses, which we refer to as Midstream Services. We operate principally in two segments: E&P and Midstream Services.   

Our primary business is the exploration for and production of natural gas and oil, with our current operations being principally focused within the United States on development of an unconventional gas reservoir located on the Arkansas side of the Arkoma Basin, which we refer to as the Fayetteville Shale play.  We are also actively engaged in exploration and production activities in Pennsylvania, where we are targeting the unconventional gas reservoir known as the Marcellus Shale, and to a lesser extent in Texas and in Arkansas and Oklahoma in the Arkoma Basin.  We have recently commenced exploration operations in Arkansas and Louisiana testing an unconventional oil play targeting the Lower Smackover Brown Dense, or LSBDformation, as well as in Colorado and Montana.  In 2010, we commenced an exploration program in New Brunswick, Canada, which representsour first operations outside of the United States.

We are focused on providing long-term growth in the net asset value of our business. We derive the vast majority of our operating income and cash flow from the natural gas production of our E&P business and expect this to continue in the future. We expect that growth in our operating income and revenues willdependprimarilyon natural gas prices and our ability to increase our natural gas production. We expect our natural gas production volumes will continue to increase due to our ongoing development of the Fayetteville Shale play in Arkansas and the Marcellus Shale play in Pennsylvania. The price we expect to receive for our natural gas is a critical factor in the capital investments we make in order to develop our properties and increase our production. In recent years, there has been volatility in natural gas prices as evidenced byNew York Mercantile Exchange, or NYMEX,natural gas prices ranging from a high of $13.58 per MMBtu in 2008 to a recent low of$1.91per MMBtu inApril2012. Natural gas prices fluctuate due to a variety of factors we cannot control or predict. These factors, which include increased supplies of natural gas due to greater exploration and development activities, weather conditions, political and economic events, and competition from other energy sources, impact supply and demand for natural gas, which in turn determines the sale prices for our production. In addition to the factors identified above, the prices we realize for our production are affected by our hedging activities as well as locational differences in market prices.

Three Months Ended June 30, 2013 Compared with Three Months Ended June 30, 2012

We reported a net income of $245.6 million for the three months ended June 30, 2013, or $0.70 per diluted share, compared to a  net loss of $405.1 million, or $1.16 per diluted share, for the comparable period in 2012.  

Our natural gas and oil production increased to 160.1 Bcfe for the three months ended June 30, 2013, up 17% from 137.4 Bcfe for the three months ended June 30, 2012.The 22.7 Bcfe increase in our second quarter 2013 production was primarily due to a 24.0Bcf increase in net production from our Marcellus Shale properties and a  0.3 Bcf increase in net production from our Fayetteville Shale properties, which more than offset a 1.6 Bcfe decrease in net production from our Ark-La-Tex properties primarily due to the sale of certain East Texas oil and natural gas properties in 2012.  

33

The average price realized for our gas production, including the effects of hedges, increased 23% to $3.85 per Mcf for the three months ended June 30, 2013 compared to $3.12 per Mcf for the same period in 2012.

Our E&P segment reported operating income of $252.5 million for the three months ended June 30, 2013, up from an operating loss of $718.3 million for the three months ended June 30, 2012.  The loss for the three months ended June 30, 2012 included an $800.7 million non-cash ceiling test impairment of our natural gas and oil properties.  Excluding the $800.7 non-cash ceiling test impairment, operating income for the three months ended June 30, 2013 increased $170.2 million as a result of an increase in revenue of $110.5 million from increased prices from the sale of our natural gas production, an increase in revenue of $71.4 million from higher natural gas production volumes, offset slightly by an increase in operating costs and expenses of $12.8 million due toincreased compression and gathering costs.

Operating income for our Midstream Services segment was $72.9 million for the three months ended June 30, 2013, up from $71.8 million for the three months ended June 30, 2012, primarily due to an increase of $11.8 million in gas gathering revenues and an increase of $3.4 million in the margin generated from our gas marketing activities, which was partially offset by a $14.1 million increase in operating costs and expenses associated with an increase in gas volumes gathered, exclusive of gas purchase costs.

Capital investments were $694.9 million for the three months ended June 30, 2013, of which $631.2 million was invested in our E&P segment, compared to $588.6 million for the same period of 2012, of which $531.8 million was invested in our E&P segment.

Six Months Ended June 30, 2013 Compared with Six Months Ended June 30, 2012

We reported a net income of $373.1 million for the six months ended June 30, 2013, or $1.06 per diluted share, compared to net loss of $297.4 million, or $0.85 per diluted share, for the comparable period in 2012.  

Our natural gas and oil production increased to 307.9 Bcfe for the six months ended June 30, 2013, up 14% from 270.8 Bcfe for the six months ended June 30, 2012.The 37.1 Bcfe increase in our 2013 production was primarily due to a 38.2Bcf increase in net production from our Marcellus Shale properties and a 3.3 Bcf increase in net production from our Fayetteville Shale properties, which more than offset a 4.4 Bcfe decrease in net production from our Ark-La-Tex properties primarily due to the sale of certain East Texas oil and natural gas properties in 2012. The average price realized for our gas production, including the effects of hedges, increased 11% to $3.65 per Mcf for the six months ended June 30, 2013 compared to $3.29 per Mcf for the same period in 2012.

Our E&P segment reported operating income of $428.3 million for the six months ended June 30, 2013, up from an operating loss of $603.7 million for the six months ended June 30, 2012.  The loss for the six months ended June 30, 2012 included an $800.7 million non-cash ceiling test impairment of our natural gas and oil properties.  Excluding the $800.7 non-cash ceiling test impairment, operating income for the six months ended June 30, 2013 increased $231.3 million as a result of an increase in revenue of $101.4 million from increased prices realized from the sale of our natural gas production, an increase in revenue of $122.1 million from higher natural gas production volumes, an increase in revenues of $3.8 million from higher oil and NGL volumes, and a decrease in operating costs and expenses of $2.1 million due primarily to lower salt water disposal costs.

Operating income for our Midstream Services segment was $149.2 million for the six months ended June 30, 2013, up from $141.1 million for the six months ended June 30, 2012, primarily due to an increase of $20.9 million in gas gathering revenues and an increase of $2.8 million in the margin generated from our gas marketing activities, which was partially offset bya $15.6 million increase in operating costs and expenses associated with an increase in gas volumes gathered, exclusive of gas purchase costs.

Net cash provided by operating activities increased 5% to $877.6 million for the six months ended June 30, 2013, up from $837.4 million for the same period in 2012,  due to an increase in net income adjusted for non-cash expenses primarily resulting from increased revenues due to higher realized gas prices, higher natural gas production and gathering volumes, offset slightly by a decrease in changes in working capital.Capital investments were $1,212.9 million for the six months ended June 30, 2013, of which $1,106.6 million was invested in our E&P segment, compared to $1,161.7 million for the same period of 2012, of which $1,065.0 million was invested in our E&P segment.

34

RESULTS OF OPERATIONS

The following discussion of our results of operations for our segments is presented before intersegment eliminations. We evaluate our segments as if they were stand alone operations and accordingly discuss their results prior to any intersegment eliminations. Interest expense, income tax expense and stock-based compensation are discussed on a consolidated basis.

Exploration and Production
	For the three months				For the six months
	ended June 30,				ended June 30,
	2013		2012		2013		2012
Revenues (in thousands)	$	618,558	$	435,587	$	1,130,161	$	900,931
Impairment of natural gas and oil properties (in thousands)	$	–	$	800,652	$	–	$	800,652
Operating costs and expenses (in thousands)	$	366,012	$	353,212	$	701,857	$	703,947
Operating income (loss) (in thousands)	$	252,546	$	(718,277)	$	428,304	$	(603,668)
Gain (loss) on derivatives(1)	$	88	$	–	$	1,095	$	–
Gas production (Bcf)		159.8		137.2		307.3		270.5
Oil production (MBbls)		24		16		65		40
NGL production (MBbls)		8		–		28		–
Total production (Bcfe)		160.1		137.4		307.9		270.8
Average realized gas price per Mcf, including hedges (2)	$	3.85	$	3.12	$	3.65	$	3.29
Average realized gas price per Mcf, excluding hedges	$	3.58	$	1.76	$	3.24	$	2.00
Average oil price per Bbl	$	99.31	$	104.44	$	104.11	$	104.41
Average NGL price per Bbl	$	37.63	$	–	$	45.04	$	–
Average unit costs per Mcfe:
Lease operating expenses	$	0.85	$	0.79	$	0.83	$	0.81
General & administrative expenses	$	0.24	$	0.27	$	0.23	$	0.29
Taxes, other than income taxes	$	0.11	$	0.08	$	0.11	$	0.11
Full cost pool amortization	$	1.05	$	1.38	$	1.07	$	1.36

(1)Represents the realized commodity derivative income (loss) associated with derivatives not designated or not qualifying for hedge accounting.

(2)Had we included the unrealized effects of hedging contracts not designated or not qualifying for hedge accounting, our average price for total natural gas would have been $4.42,$3.12, $3.85, and $3.30 per Mcf for the three months ended June 30, 2013 and 2012, and the six months ended June 30, 2013 and 2012, respectively.

Revenues

Revenues for our E&P segment were $618.6 million for the three months ended June 30, 2013,up  $183.0 million, or 42%, compared to the same period in 2012. Increased prices realized from the sale of our natural gas production increased revenues by $110.5 million, and higher natural gas production volumes increased revenues by $71.4 million.  E&P revenues were $1.1 billion for the six months ended June 30, 2013, up $229.2 million, or 25%. The increase in revenue was driven by a $101.4 million increase from prices realized from the sale of our natural gas production, a $122.1 million increase from higher natural gas production volumes,  and a $3.8 million increase from higher oil and NGL volumes.  We expect our natural gas production volumes to continue to increase due to our development and growth of our shale properties.  Natural gas prices are difficult to predict and subject to wide price fluctuations. As of July 30, 2013, we had hedged 168.8 Bcf of our remaining 2013 gas production and 232.7 Bcf of our 2014 gas production to limit our exposure to price fluctuations. We refer you to Note 7 to the unauditedcondensed consolidated financial statements included in this Form 10-Q and to the discussion of “Commodity Prices” provided below for additional information.

35

Production

For the three months ended June 30, 2013, our natural gas and oil production increased 17% to 160.1 Bcfe, up from 137.4 Bcfe from the same period in 2012, and was produced entirely by our properties in the United States. The 22.7 Bcfe increase in our 2013 production was primarily due to a 24.0 Bcf increase in net production from our Marcellus Shale properties and a 0.3 Bcf increase in net production from our Fayetteville Shale properties, which more than offset a 1.6 Bcfe decrease in net production from our Ark-La-Tex properties. Net production from our Fayetteville Shale and Marcellus Shale properties was 121.2 Bcf and 33.9 Bcf, respectively, for the three months ended June 30, 2013 compared to 121.0 Bcf and 9.9 Bcf, respectively, for the same period in 2012.For the six months ended June 30, 2013, our natural gas and oil production increased 14% to 307.9 Bcfe, up from 270.8 Bcfe from the same period in 2012, and was produced entirely by our properties in the United States. The 37.1 Bcfe increase in our 2013 production was primarily due to a 38.2 Bcf increase in net natural gas production from our Marcellus Shale properties and a 3.3 Bcf increase in net production from our Fayetteville Shale play, which more than offset a 4.4 Bcfe decrease in net production from our Ark-La-Tex properties. Net production from our Fayetteville Shale and Marcellus Shale properties was 240.1 Bcf and 57.4 Bcf, respectively, for the six months ended June 30, 2013 compared to 236.8 Bcf and 19.2 Bcf, respectively, for the same period in 2012.

Commodity Prices

The average realized price for our natural gas production, including the effects of cash flow hedges, increased to $3.85 per Mcf for the three months ended June 30, 2013, as compared to $3.12 for the same period in 2012.  The increase was the result of a $1.82 per Mcf increase in average natural gas prices, excluding hedges, partially offset by a $1.09per Mcf decrease in the impact of our price hedging activities.  The average price realized for our natural gas production, excluding the effects of hedges, increased 103% to $3.58 per Mcf for the three months ended June 30, 2013, as compared to the same period in 2012.  Our cash flow hedges increased the average realized natural gas price $0.27 per Mcf for the three months ended June 30, 2013 compared to an increase of $1.36 per Mcf for the same period in 2012.  The average price realized for our natural gas production, including the effects of hedges, increased 11% to $3.65 per Mcf for the six months ended June 30, 2013, as compared to the same period in 2012. The increase in the average price realized for six months ended June 30, 2013, as compared to the same period in 2012, primarily reflects the $1.24 Mcf increase in average gas prices, excluding hedges, which was partially offset by the $0.88 Mcf decreased effect of our price hedging activities. Our hedging activities increased the average natural gas price $0.41 per Mcf for the six months ended June 30, 2013 compared to an increase of $1.29 per Mcf for the same period in 2012. We periodically enter into various hedging and other financial arrangements with respect to a portion of our projected natural gas and crude oil production in order to ensure certain desired levels of cash flow and to minimize the impact of price fluctuations, including fluctuations in locational basis differentials (we refer you to Item 3 and Note 7 to the unaudited condensed consolidated financial statements included in this Form 10-Q for additional discussion).

Our E&P segment receives a sales price for our natural gas at a discount to average monthly NYMEX settlement prices due to locational basis differentials, while transportation charges and fuel charges also reduce the price received.  Excluding the impact of hedges, the average price received for our natural gas production for the six months ended June 30, 2013 of $3.24 per Mcf was approximately $0.47 lower than the average monthly NYMEX settlement price, primarily due to locational basis differentials and transportation costs.  We protected approximately 51% of our natural gas production for the six months ended June 30, 2013 from the impact of widening basis differentials through our hedging activities and sales arrangements. For the remainder of 2013, we expect our total natural gas sales discount to NYMEX to be approximately $0.55 per Mcf.  At June 30, 2013, we had basis protected on approximately 128 Bcf of our remaining 2013 expected natural gas production through financial hedging activities and physical sales arrangements at a differential to NYMEX natural gas prices of approximately ($0.06) per Mcf, excluding transportation and fuel charges.Additionally, at June 30, 2013, we had basis protected on approximately 74 Bcf and 17 Bcf of our 2014 and 2015 expected natural gas production, respectively, through financial hedging activities and physical sales arrangements.

In addition to the basis hedges discussed above, at June 30, 2013, we had NYMEX fixed price hedges in place on notional volumes of 168.8 Bcf of our remaining 2013 natural gas production at an average price of $4.68 per MMBtu and notional volumes of 232.7 Bcf of our 2014 natural gas production at an average price of $4.41per MMBtu.

36

Operating Income

Our E&P segment reported operating income of $252.5 million for the three months ended June 30, 2013, up from an operating loss of $718.3 million for the three months ended June 30, 2012.  The loss for the three months ended June 30, 2012 included an $800.7 million non-cash ceiling test impairment of our natural gas and oil properties.  Excluding the $800.7 non-cash ceiling test impairment, operating income for the three months ended June 30, 2013 increased $170.2 million as a result of an increase in revenue of $110.5 million from increased prices realized from the sale of our natural gas production, an increase in revenue of $71.4 million from higher natural gas production volumes, offset slightly by an increase in operating costs and expenses of $12.8 million primarily due to increased compression costs.Our E&P segment reported operating income of $428.3 million for the six months ended June 30, 2013, up from an operating loss of $603.7 million for the six months ended June 30, 2012.  The loss for the six months ended June 30, 2012 included an $800.7 million non-cash ceiling test impairment of our natural gas and oil properties.  Excluding the $800.7 non-cash ceiling test impairment, operating income for the six months ended June 30, 2013 increased $231.3 million as a result of an increase in revenue of $101.4 million from increased prices realized from the sale of our natural gas production, an increase in revenue of $122.1 million from higher natural gas production volumes, an increase in revenues of $3.8 million from higher oil and NGL volumes and prices, and adecrease in operating costs and expenses of $2.1 million primarily due to lower salt water disposal costs.

Operating Costs and Expenses

Lease operating expenses per Mcfe for our E&P segment were $0.85 for the three months ended June 30, 2013 compared to $0.79 for the same period in 2012.  The increase in lease operating expense per unit of production for the three months ended June 30, 2013 as compared to the same period of 2012, was primarily due to increase in compression and gathering cost in our Marcellus Shale play, offset slightly by a decrease in salt water disposal cost in our Fayetteville Shale play.  Lease operating expense per Mcfe for our E&P segment were $0.83 for the six months ended June 30, 2013 compared to $0.81 for the same period in 2012, was primarily due to an increase in gathering cost related to our Marcellus Shale play, offset slightly by a decrease in salt water disposal cost.

General and administrative expenses per Mcfe for our E&P segment were $0.24 for the three months ended June 30, 2013 compared to $0.27 for the same period in 2012 primarily due a decrease in personnel costs and information system costs.  General and administrative expenses per Mcfe was $0.23 for the six months ended June 30, 2013 compared to $0.29 for same period in 2012 primarily due to a  decrease in personnel costs and information system costs.In total general and administrative expenses for our E&P segment were $39.1 million for the three months ended June 30, 2013 compared to $37.4 million for the same period in 2012, and were $69.6 million for the six months ended June 30, 2013 compared to $77.3 million for the same period in 2012. The decrease in general and administrative expenses for the six months ended June 30, 2013 as compared to the same period of 2012, was primarily a result of decreased personnel costs and information system costs.

Taxes other than income taxes per Mcfe increased to $0.11 for the three months ended June 30, 2013 compared to $0.08 for the same period in 2012and remained flat at $0.11 for the six months ended June 30, 2013 compared to the same period in 2012. Taxes other than income taxes per Mcfe vary from period to period due to changes in severance and ad valorem taxes that result from the mix of our production volumes and fluctuations in commodity prices.

Our full cost pool amortization rate averaged $1.05 per Mcfe for the three months ended June 30, 2013 compared to $1.38 for the same period in 2012. For the first six months of 2013, our full cost pool amortization rate averaged $1.07 per Mcfe compared to $1.36 per Mcfe for the same period in 2012. The amortization rate is impacted by the timing and amount of reserve additions and the costs associated with those additions, revisions of previous reserve estimates due to both price and well performance, write-downs that result from full cost ceiling tests, proceeds from the sale of properties that reduce the full cost pool and the levels of costs subject to amortization.  We cannot predict our future full cost pool amortization rate with accuracy due to the variability of each of the factors discussed above, as well as other factors, including but not limited to the uncertainty of the amount of future reserves. 

Unevaluated costs excluded from amortization were $1,149.8 million atJune 30, 2013 compared to $1,023.9 million at December 31, 2012.  The increase in unevaluated costs since December 31, 2012 primarily resulted from our acquisition of Marcellus acreage in the second quarter 2013 and anincrease in our wells in progress.  Unevaluated costs excluded from amortization at June 30, 2013 included $45.8 million related to our properties in Canada, compared to $40.4 million at December 31, 2012.

The timing and amount of production and reserve additions and revisions could have a material adverse impact on our per unit costs.

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Midstream Services
	For the three months ended				For the six months ended
	June 30,				June 30,
	2013		2012		2013		2012
	($ in thousands, except volumes)
Revenues – marketing	$	760,274	$	373,696	$	1,359,887	$	807,973
Revenues – gathering	$	126,501	$	114,699	$	247,795	$	226,876
Gas purchases – marketing	$	750,181	$	366,994	$	1,341,644	$	792,489
Operating costs and expenses	$	63,705	$	49,580	$	116,842	$	101,250
Operating income	$	72,889	$	71,821	$	149,196	$	141,110
Gas volumes marketed (Bcf)		188.7		168.0		368.5		327.5
Gas volumes gathered (Bcf)		223.4		206.2		437.4		408.2

Revenues

Revenues from our marketing activities were up 103% to $760.3 million for the three months ended June 30, 2013 and were up 68% to $1,359.9 million for the six months ended June 30, 2013 compared to the same period in 2012.  For the three months ended June 30, 2013, the volumes marketed increased 12% and the price received for volumes marketed increased 82% compared to the same period in 2012.For the six months ended June 30, 2013, the volumes marketed increased 13% and the price received for volumes marketed increased 49% compared to the same period in 2012. Increases and decreases in marketing revenues due to changes in commodity prices are largely offset by corresponding changes in gas purchase expenses. Of the total volumes marketed, production from our affiliated E&P operated wells accounted for 97% and 93% of the marketed volumes for the three months ended June 30, 2013 and 2012, respectively. For the six months ended June 30, 2013 and 2012, production from our affiliated E&P operated wells accounted for 96% and 95% of the marketed volumes, respectively.

Revenues from our gathering activities were up 10% to $126.5 million for the three months ended June 30, 2013 and up 9% to $247.8 million for the six months ended June 30, 2013 compared to respective periods in 2012. The increase in gathering revenues resulted primarily from an 8% increase in gas volumes gathered for the three months ended June 30, 2013 and a 7% increase in gas volumes for the six months ended June 30, 2013 compared to the same period in 2012.  A majority of the increase in gathering revenues for the three months and six months ended June 30, 2013 resulted from increases in volumes gathered due to our development and growth of our shale properties. Gathering volumes, revenues and expenses for this segment are expected to continue to grow as reserves related to our shale properties are developed and production increases.

Operating Income

Operating income from our Midstream Services segment increased to $72.9 million for the three months ended June 30, 2013  compared to $71.8 million for the same period in 2012and increased to $149.2 million for the six months ended June 30, 2013 compared to $141.1 million for the same period in 2012. Operating income was higher due to increases in gas volumes gathered which primarily resulted from our rising E&P production volumes. The $1.1 million increase in operating income for the three months ended June 30, 2013 was primarily due to an increase of $11.8 million in gathering revenues and an increase of $3.4 million in the margin generated from our gas marketing activities, which was partially offset by a $14.1 million increase in operating costs and expenses associated with an increase in gas volumes gathered, exclusive of gas purchase costs. The $8.1 million increase in operating income for the six months ended June 30, 2013 was primarily due to an increase of $20.9 million in gathering revenues and an increase of $2.8 million in the margin generated from our gas marketing activities, which was partially offset by a $15.6 million increase in operating costs and expenses, exclusive of gas purchase costs, associated with the increase in gas volumes gathered.

The margin generated from gas marketing activities was $10.1 million for the three months ended June 30, 2013 compared to $6.7 million for the three months ended June 30, 2012. The margin generated from gas marketing activities was $18.2 million for the six months ended June 30, 2013 compared to $15.5 million for the six months ended June 30, 2012. Margins are primarily driven by volumes of natural gas marketed and may fluctuate depending on the prices paid for commodities and the ultimate disposition of those commodities. We enter into hedging activities from time to time with respect to our natural gas marketing activities to provide margin protection. We refer you to Item 3, “Quantitative and Qualitative Disclosures about Market Risks” included in this Form 10-Q for additional information.

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Interest Expense

Interest expense, net of capitalization, increased to $9.3 million for the three months ended June 30, 2013, compared to $8.4 million for the same period in 2012and increased to $18.3 million for the six months ended June 30, 2013 compared to $15.7 million for the same period in 2012. The increase in interest expense, net of capitalization, for the three- and six-month periods ended June 30, 2013 was primarily due to our increased borrowing level, partially offset by an increase in capitalized interest. We capitalized interest of $16.8 million and $33.0 million for the three- and six- month periods ended June 30, 2013, compared to $16.6 million and $30.0 million for the same periods in 2012. The increases in capitalized interest were primarily due to the increase in our unevaluated property balance during 2013.

Income Taxes

Our effective tax rates were 40.0% and 38.0% for the six months ended June 30, 2013 and 2012, respectively.  For the six months ended June 30, 2013, we recorded an income tax expense of $249.3  million compared to an income tax benefit of $182.3 million for the same period in 2012.

Stock-Based Compensation Expense

We recognized expense of $3.0 million and capitalized $2.9 million for stock-based compensation during the three-month period ended June 30, 2013 compared to $2.7 million expense and $2.4 million capitalized for the comparable period in 2012. We recognized expense of $6.0 million and capitalized $5.7 million for stock-based compensation costs

recognized during the six-month period ended June 30, 2013 compared to $5.5 million expense and $5.3 million capitalized for the comparable period in 2012. We refer you to Note 14 in the unaudited condensed consolidated financial statements included in this Form 10-Q for additional discussion of our equity based compensation plans.

New Accounting Standards

In February 2013, the FASB issued Accounting Standards Update No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“Update 2013-02”), which finalizes  proposed ASU No. 2012-240, and seeks to improve the transparency of reporting reclassifications out of accumulated other comprehensive income. Update 2013-02 replaces the presentation requirements in ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income, and ASU No. 2011-12, ComprehensiveIncome (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out ofAccumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. Update 2013-02 requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respectiveline items in net income if the amount being reclassified is required under U.S. GAAP to be reclassified in its entirety to net income. For public entities, Update 2013-02 is effective prospectively for reporting periods beginning after December15, 2012, with early adoption permitted. The implementation of the disclosure requirement did not have amaterial impact on the Company’s consolidated results of operations, financial position or cash flows. 

In January 2013, the FASB issued Accounting Standards Update No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (“Update 2013-01”), which finalizes Proposed ASU No.2012-250 and clarifies the scope of transactions that are subject to disclosures concerning offsetting. Update 2013-01 addresses implementation issues regarding the scope of ASU No. 2011-11, Balance Sheet (Topic 210): Disclosures aboutOffsetting Assets and Liabilities, issued in December 2011. Update 2013-01 clarifies that the scope of the disclosures underU.S. GAAP is limited to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowingand securities lending transactions that are offset either in accordance with FASB ASC Section 210-20-45, Balance Sheet—Offsetting—Other Presentation Matters, or FASB ASC Section 815-10-45, Derivatives and Hedging—Overall—Other Presentation Matters, or are subject to a master netting arrangement or similar agreement. Update 2013-01 requiresan entity (1) to apply the amendments for annual reporting periods beginning on or after January 1, 2013 and (2) to providethe required disclosures retrospectively for all comparative periods presented. The implementation of the disclosure requirement did not have a material impact on the Company’s consolidated results of operations, financial position or cash flows.

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LIQUIDITY AND CAPITAL RESOURCES

We depend primarily on internally-generated funds, our Credit Facility and funds accessed through debt and equity markets as our primary sources of liquidity.

For the remainder of 2013, assuming natural gas prices remain at current levels, we intend to draw on a portion of the funds available under our Credit Facility to fund our planned capital investments (discussed below under “Capital Investments”).  We refer you to Note 10 to the unaudited condensed consolidated financial statements included in this Form 10-Q and the section below under “Financing Requirements” for additional discussion of our Credit Facility.

Net cash provided by operating activities  increased 5% to $877.6 million for the six months ended June 30, 2013 compared to $837.4 million for the same period in 2012,  is primarily due to an increase in net income adjusted for non-cash expenses primarily resulting from increased revenues due to higher realized gas prices, higher natural gas production and gathering volumes, offset slightly by a decrease in changes in working capital.During the six months ended June 30, 2013, requirements for our capital investments were funded primarily from our cash generated by operating activities, cash and cash equivalents, and net proceeds from borrowings under our Credit Facility. For the six months ended June 30, 2013, cash generated from our operating activities funded 75% of our cash requirements for capital investments and 73% for the six months ended June 30, 2012.

We believe that our operating cash flow, cash equivalents, and available funds under our Credit Facility will be adequate to meet our capital and operating requirements for 2013. The credit status of the financial institutions participating in our Credit Facility could adversely impact our ability to borrow funds under the Credit Facility. While we believe all of the lenders under the facility have the ability to provide funds, we cannot predict whether each will be able to meet its obligation.

Our cash flow from operating activities is highly dependent upon the market prices that we receive for our natural gas and oil production. Natural gas and oil prices are subject to wide fluctuations and are driven by market supply and demand factors which are impacted by the overall state of the economy. The price received for our production is also influenced by our commodity hedging activities, as more fully discussed in Item 3, “Quantitative and Qualitative Disclosures about Market Risks” and Note 7 in the unaudited condensed consolidated financial statements included in this Form 10-Q. Our commodity hedging activities are subject to the credit risk of our counterparties being financially unable to complete the transaction. We actively monitor the credit status of our counterparties, performing both quantitative and qualitative assessments based on their credit ratings and credit default swap rates where applicable, and to date have not had any credit defaults associated with our transactions. However, any future failures by one or more counterparties could negatively impact our cash flow from operating activities.

Additionally, our short-term cash flows are dependent on the timely collection of receivables from our customers and partners. We actively manage this risk through credit management activities and through the date of this filing have not experienced any significant write-offs for non-collectable amounts. However, any sustained inaccessibility of credit by our customers and partners could adversely impact our cash flows.

Due to the above factors, we are unable to forecast with certainty our future level of cash flow from operations. Accordingly, we will adjust our discretionary uses of cash dependent upon available cash flow.

Capital Investments

Our capital investments were $1.2 billion for the six months ended June 30, 2013 and 2012.  Our E&P segment investments were $1.1 billion for the six months ended June 30, 2013 and 2012.  Our E&P segment capitalized internal costs of $86.3 million for the six months ended June 30, 2013 compared to $80.7 million for the comparable period in 2012. These internal costs were directly related to acquisition, exploration and development activities and are included as part of the cost of natural gas and oil properties.

Our capital investments for 2013 are planned to be approximately $2.2 billion, consisting of $2.0 billion for E&P, $160 million for Midstream Services and $90 million for corporate and other purposes. Of the approximate $2.0 billion for E&P, we expect to allocate approximately $900 million to our Fayetteville Shale play and approximately $870 million to our Marcellus Shale play.  Our planned level of capital investments in 2013 is expected to allow us to continue our progress in the Fayetteville Shale and Marcellus Shale programs and explore and develop other existing natural gas and oil properties and generate new drilling prospects. Our remaining 2013 capital investment program is expected to be funded through cash flow from operations and borrowings under our revolving credit facility. The planned capital program for 2013 is flexible and can be modified.  We will reevaluate our proposed investments as needed to take into account

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prevailing market conditions and, if natural gas prices change significantly in 2013, we could change our planned investments.

Financing Requirements

Our total debt outstanding was $1.9 billion at June 30, 2013 compared to $1.7billion at December 31, 2012. In February 2011, we amended and restated our unsecured revolving credit facility, increasing the borrowing capacity to $1.5 billion and extending the maturity date to February 2016.  The amount available under the revolving credit facility may be increased to $2.0 billion at any time upon the Company’s agreement with its existing or additional lenders. We had $230.0 million outstanding under our revolving credit facility at June 30, 2013 compared to no borrowings on our credit facility at December 31, 2012.  

The interest rate on our Credit Facility is calculated based upon our public debt rating and is currently 200 basis points over LIBOR. Our publicly traded notes are rated BBB- by Standard and Poor’s and we have a long term debt rating of Baa3 by Moody’s. Any downgrades in our public debt ratings could increase our cost of funds under the Credit Facility.

Our Credit Facility contains covenants which impose certain restrictions on us. Under the Credit Facility, we must keep our total debt at or below 60% of our total capital, and must maintain a ratio of EBITDA to interest expense of 3.5 or above. Our Credit Facility’s financial covenants with respect to capitalization percentages exclude hedging activities, pension and other postretirement liabilities as well as the effects of non-cash entries that result from any full cost ceiling impairments occurring after the date of the agreement. At June 30, 2013, our capital structure as determined under our Credit Facility was 30% debt and 70% equity, which excluded hedging activities, pension and other postretirement liabilities, and if applicable, the effect of the non-cash full cost ceiling impairment. We were in compliance with all of the covenants of our Credit Facility at June 30, 2013. Although we do not anticipate any violations of our financial covenants, our ability to comply with those covenants is dependent upon the success of our exploration and development program and upon factors beyond our control, such as the market prices for natural gas and oil.  If we are unable to borrow under our Credit Facility, we may have to decrease our capital investment plans.

In March 2012, we issued $1 billion of 4.10% Senior Notes due 2022 in a private placement. A portion of the net proceeds of the offering were used to repay the amounts outstanding under the Company’s revolving credit facility and the remaining proceeds were used for general corporate purposes.  

At June 30, 2013, our capital structure consisted of 36% debt and 64% equity (exclusive of cash and cash equivalents and restricted cash) and $25.7million in cash and cash equivalents and restricted cash, compared to 35% debt and 65% equity at December 31, 2012.  Equity at June 30, 2013 included an accumulated other comprehensive gain of $119.7 million related to our hedging activities, partially offset by $21.8 million related to our pension and other postretirement liabilities. The amount recorded in equity for our hedging activities is based on current market values for our hedges at June 30, 2013 and does not necessarily reflect the value that we will receive or pay when the hedges are ultimately settled, nor does it take into account revenues to be received associated with the physical delivery of sales volumes hedged.

Our hedges allow us to ensure a certain level of cash flow to fund our operations.  At June 30, 2013, we had NYMEX commodity price hedges in place on 168.8 Bcf of our remaining targeted 2013 natural gas production and 232.7 Bcf of our expected 2014 natural gas production.  The amount of long-term debt we incur will be largely dependent upon commodity prices and our capital investment plans.

Contractual Obligations and Contingent Liabilities and Commitments

We have various contractual obligations in the normal course of our operations and financing activities. There have been no material changes to our contractual obligations from those disclosed in our 2012 Annual Report on Form 10-K.

Contingent Liabilities and Commitments

In the first quarter of 2010, the Company was awarded exclusive licenses by the Province of New Brunswick in Canada to conduct an exploration program covering approximately2.5million acres in the province. The licenses require the Company to make certain capital investments in New Brunswick of approximately $47million in the aggregate over a three year period. In order to obtain the licenses, the Company provided promissory notes payable on

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demand to the Minister of Finance of the Province of New Brunswick with an aggregate principal amount of$44.5millionCanadian dollars. The promissory notes secure the Company's capital expenditure obligations under the licenses and are returnable to the Company to the extent the Company performs such obligations. If the Company fails to fully perform, the Minister of Finance may retain a portion of the applicable promissory notes in an amount equal to any deficiency. The Company commenced its Canada exploration program in 2010 and no liability has been recognized in connection with the promissory notes due to the Company’s investments in New Brunswick as of June 30, 2013 and its future investment plans. In December 2012, we received two one-year extensions to our exploration license agreements which expire on March 16, 2014 and March 16, 2015, respectively.  

Substantially all of our employees are covered by defined pension and postretirement benefit plans. As of June 30, 2013, the Company has contributed $6.0 million to the pension plan and $0.1 million to the postretirement benefit plan, and expects to contribute $12.0 million to the pension plan and $0.1 million to the postretirement benefit plan.At June 30, 2013, we recognized a liability of $34.7 million as a result of the underfunded status of our pension and other postretirement benefit plans compared to a liability of $33.5 million at December 31, 2012.

We are subject to litigation, claims and proceedings (including with respect to environmental matters) that arise in the ordinary course of business. Management believes, individually or in aggregate, such litigation, claims and proceedings will not have a material adverse impact on our financial position, results of operations, or cash flows, but these matters are subject to inherent uncertainties and management’s view may change in the future.  If an unfavorable final outcome were to occur, there exists the possibility of a material impact on our financial position, results of operations or cash flows for the period in which the effect becomes reasonably estimable. We accrue for such items when a liability is both probable and the amount can be reasonably estimated.  For further information regarding commitments and contingencies, we refer you to Note 11 in the unaudited condensed consolidated financial statements included in this Form 10-Q.

Working Capital

We had negative working capital of $54.2 million at June 30, 2013 and positive working capital of $41.1 million at December 31, 2012. Current assets decreased by $16.1 million during the six months ended June 30, 2013 primarily due to a $36.2 million decrease in current hedging asset, a $36.4 million decrease in cash, cash equivalents and restricted cash, and a $21.7 million decrease in other current assets. These decreases were partially offset by a $68.3 million increase in accounts receivable and a $10.0 million increase in inventory.  Current liabilities increased by $79.3 million during the six months ended June 30, 2013 primarily as a result of a $115.1 million increase in accounts payable, a $17.6 million increase in taxes payable, and a $26.7 million increase in other current liabilities, offset slightly by a $68.9 million decrease in advances from partners, a $10.2 million decrease in current deferred income taxes, and a $1.1 million decrease in interest payable.  We maintain access to funds that may be needed to meet capital requirements through our Credit Facility described in “Financing Requirements” above.

Natural Gas in Underground Storage

We record our natural gas stored in inventory that is owned by the E&P segment at the lower of weighted average cost or market. The natural gas in inventory for the E&P segment is used primarily to supplement production in meeting the segment’s contractual commitments, especially during periods of colder weather. In determining the lower of cost or market for storage gas, we utilize the natural gas futures market in assessing the price we expect to be able to realize for our natural gas in inventory. A decline in the future market price of natural gas could result in write-downs of our natural gas in underground storage carrying cost.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Market risks relating to our operations result primarily from the volatility in commodity prices, basis differentials and interest rates, as well as credit risk concentrations. We use natural gas and crude oil swap agreements and options and interest rate swaps to reduce the volatility of earnings and cash flow due to fluctuations in the prices of natural gas and oil and in interest rates. Our Board of Directors has approved risk management policies and procedures to utilize financial products for the reduction of defined commodity price risk. The Board of Directors has approved our use of financial products for the reduction of interest rate risks.These policies prohibit speculation with derivatives and limit swap agreements to counterparties with appropriate credit standings.

Credit Risk

Our financial instruments that are exposed to concentrations of credit risk consist primarily of trade receivables and derivative contracts associated with commodities trading. Concentrations of credit risk with respect to receivables are limited due to the large number of our customers and their dispersion across geographic areas. No single customer accounted for greater than 10% of revenues for the six months ended June 30, 2013.  See “Commodities Risk” below for discussion of credit risk associated with commodities trading.

Interest Rate Risk

At June 30, 2013, we had approximately $1.9 billion of total debt with a weighted average interest rate of 5.1%. Our revolving credit facility has a floating interest rate (2.17% at June 30, 2013).  At June 30, 2013, we had borrowings outstanding of $230.0 million under our Credit Facility.

Interest rate swaps may be used to adjust interest rate exposures when deemed appropriate. At June 30, 2013, the Company had a net derivative asset position of $2.6 million related to interest-rate swaps. A 10% increase or decrease in interest rates would not result in a material increase or decrease in the aggregate fair value of outstanding interest-rate swap agreements. For a summary of the Company’s open interest-rate derivative positions, see Note 7—Derivative Instruments in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.

Commodities Risk

We use over-the-counter natural gas and crude oil swap agreements and options to hedge sales of our production and to hedge activity in our Midstream Services segment against the inherent price risks of adverse price fluctuations or locational pricing differences between a published index and the NYMEX futures market. These swaps and options include (1) transactions in which one party will pay a fixed price (or variable price) for a notional quantity in exchange for receiving a variable price (or fixed price) based on a published index (referred to as price swaps), (2) transactions in which parties agree to pay a price based on two different indices (referred to as basis swaps) and (3) the purchase and sale of index-related puts and calls (collars) that provide a “floor” price, below which the counterparty pays funds equal to the amount by which the price of the commodity is below the contracted floor, and a “ceiling” price above which we pay to the counterparty the amount by which the price of the commodity is above the contracted ceiling.

The primary market risks relating to our derivative contracts are the volatility in market prices and basis differentials for natural gas and crude oil. However, the market price risk is offset by the gain or loss recognized upon the related sale or purchase of the natural gas or sale of the oil that is hedged. Credit risk relates to the risk of loss as a result of non-performance by our counterparties. The counterparties are primarily major commercial banks, investment banks and integrated energy companies which management believes present minimal credit risks. The credit quality of each counterparty and the level of financial exposure we have to each counterparty are closely monitored to limit our credit risk exposure. Additionally, we perform both quantitative and qualitative assessments of these counterparties based on their credit ratings and credit default swap rates where applicable. We have not incurred any counterparty losses related to non-performance and do not anticipate any losses given the information we have currently. However, given the recent volatility in the financial markets, we cannot be certain that we will not experience such losses in the future.

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Exploration and Production

The following table provides information about our financial instruments that are sensitive to changes in commodity prices and that are used to hedge prices for natural gas production. The table presents the notional amount in Bcf, the weighted average contract prices and the fair value by expected maturity dates. At June 30, 2013, the net fair value of our financial instruments related to natural gas production was a $261.6million asset.

	Volume (Bcf)	Weighted Average Price to be Swapped ($/MMBtu)		Weighted Average Floor Price ($/MMBtu)		Weighted Average Ceiling Price ($/MMBtu)		Weighted Average Basis Differential ($/MMBtu)		Fair value at June 30, 2013 ($ in millions)
Natural Gas (Bcf):
Fixed Price Swaps:
2013	168.8	$	4.68	$	–	$	–	$	–	$	174.7
2014	232.7	$	4.41	$	–	$	–	$	–	$	114.8
Basis Swaps:
2013	14.1	$	–	$	–	$	–	$	0.05	$	5.0
2014	15.2	$	–	$	–	$	–	$	0.04	$	5.9
Fixed Price Call Options:
2015	199.8	$	–	$	5.09	$	–	$	–	$	(38.8)

At June 30, 2013, our basis swaps did not qualify for hedge accounting treatment. Changes in the fair value of derivatives that do not qualify as cash flow hedges are recorded in gas and oil sales. For the six months ended June 30, 2013, we recorded an unrealized loss of $34.7 million related to fixed price call options that did not qualify for hedge accounting treatment, an unrealized gain of $87.8 million related to fixed price swaps not designated for hedge accounting, an unrealized gain of $6.9 million related to the basis swaps that did not qualify for hedge accounting treatment and an unrealized loss of $0.7 million related to the change in estimated ineffectiveness of our cash flow hedges. Typically, our hedge ineffectiveness results from changes at the end of a reporting period in the price differentials between the index price of the derivative contract, which is primarily a NYMEX price, and the index price for the point of sale for the cash flow that is being hedged.

Item 4. Controls and Procedures.

Material Weakness in Internal Control over Financial Reporting

As previously discussed in Item 8. “Financial Statements and Supplementary Data” of our 2012 Annual Report on Form 10-K, we reported a material weakness, solely related to the review of the tax benefit associated with capitalized intangible drilling costs within the ceiling calculation of the full cost ceiling test.  As discussed below, we have concluded that the controls related to our previously identified material weakness are designed and operating effectively and, therefore, have concluded that, as of June 30, 2013, such material weakness has been remediated.

Evaluation of  Disclosure Controls and Procedures

 We have performed an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act). Our disclosure controls and procedures are the controls and other procedures that we have designed to ensure that we record, process, accumulate and communicate information to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures and submission within the time periods specified in the SEC’s rules and forms. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those determined to be effective can provide only a level of reasonable assurance with respect to financial statement preparation and presentation.  Based on the evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of June 30, 2013 at the reasonable assurance level.

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Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended June 30, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Remediation of Previously Identified Material Weakness

During the six months ended June 30, 2013, we continued efforts to address the material weakness in our internal control over financial reportingas identified by management in conjunction with the preparation of our 2012 Annual Report on Form 10-K solely related to the review of the tax benefit associated with capitalized intangible drilling costs within the ceiling calculation of the full cost ceiling test.  These efforts have included enhanced analytical analysis and improved cross-functional management review of this tax benefit within the ceiling calculation of the full cost ceiling test.  We have tested the internal controls related to the remediation of this deficiency and have found them to be effective and have concluded that the previously identified and disclosed material weakness has been remediated as of June 30, 2013.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

The Company is subject to laws and regulations relating to the protection of the environment. Our policy is to accrue environmental and cleanup related costs of a non-capital nature when it is both probable that a liability has been incurred and when the amount can be reasonably estimated. Management believes any future remediation or other compliance related costs will not have a material effect on our financial position, results of operations, and cash flows.

Tovah Energy

In February 2009, SEPCO was added as a defendant in a Third Amended Petition in the matter of Tovah Energy, LLC and Toby Berry-Helfand v. David Michael Grimes, et, al.  In the Sixth Amended Petition, filed in July 2010, in the 273rd District Court in Shelby County, Texas (collectively, the “Sixth Petition”), plaintiff alleged that, in 2005, they provided SEPCO with proprietary data regarding two prospects in the James Lime formation pursuant to a confidentiality agreement and that SEPCO refused to return the proprietary data to the plaintiff, subsequently acquired leases based upon such proprietary data and profited therefrom.  Among other things, the plaintiff’s allegations in the Sixth Petition included various statutory and common law claims, including, but not limited to claims of misappropriation of trade secrets, violation of the Texas Theft Liability Act, breach of fiduciary duty and confidential relationships, various fraud based claims and breach of contract, including a claim of breach of a purported right of first refusal on all interests acquired by SEPCO between February 2005 and February 2006.  In the Sixth Petition, plaintiff sought actual damages of over $55.0 million as well as other remedies, including special damages and punitive damages of four times the amount of actual damages established at trial.

Immediately before the commencement of the trial in November 2010, plaintiff was permitted, over SEPCO’s objections, to file a Seventh Amended Petition claiming actual damages of $46.0 million and also seeking the equitable remedy of disgorgement of all profits for the misappropriation of trade secrets and the breach of fiduciary duty claims. In December 2010, the jury found in favor of the plaintiff with respect to all of the statutory and common law claims and awarded $11.4 million in compensatory damages. The jury did not, however, award the plaintiff any special, punitive or other damages. In addition, the jury separately determined that SEPCO’s profits for purposes of disgorgement were $381.5 million. This profit determination does not constitute a judgment or an award. The plaintiff’s entitlement to disgorgement of profits as an equitable remedy will be determined by the judge and it is within the judge’s discretion to award none, some or all the amount of profit to the plaintiff.  In December 2010, the plaintiff filed a motion to enter the judgment based on the jury’s verdict.  In February 2011, SEPCO filed a motion for a judgment notwithstanding the verdict and a motion to disregard certain findings.  In March 2011, the plaintiff filed an amended motion for judgment and intervenor filed its motion for judgment seeking not only the monetary damages and the profits determined by the jury but also seeking, as a new remedy, a constructive trust for profits from 143 wells as well as future drilling and sales of properties in the prospect areas.  At the suggestion of the judge, all parties voluntarily agreed to participate in non-binding mediation efforts.  The mediation occurred in April 2011 and was unsuccessful. In June 2011, SEPCO received by mail a letter dated June 2011 from the judge, in which he made certain rulings with respect to the post-verdict motions and responses filed by the parties. In his rulings, the judge denied SEPCO’s motion for judgment, judgment notwithstanding the verdict and to disregard certain findings. Plaintiff’s and intervenor’s claim for a constructive trust was denied but the judge ruled that plaintiff and intervenor shall recover from SEPCO $11.4

45

million and a reasonable attorney’s fee of 40% of the total damages awarded and are entitled to recover on their claim for disgorgement.  The judge instructed that SEPCO calculate the profit on the designated wells for each respective period.  SEPCO performed the calculation and provided it to the judge in June 2011.  In July 2011, plaintiff and intervenor filed a letter with the court raising objections to the accounting provided by SEPCO, to which SEPCO filed a response in July 2011.  In July 2011, the judge sent a letter to the parties in which he ruled that after reviewing the parties’ respective position letters, he was awarding $23.9 million in disgorgement damages in favor of the plaintiff and intervenor.  In the July 2011 letter, the judge instructed the plaintiff and intervenor to prepare a judgment for his approval prior to July 2011 consistent with his findings in his June 2011 letter and the disgorgement award.  In August 2011, a judgment was entered pursuant to which plaintiff and intervenor are entitled to recover approximately $11.4 million in actual damages and approximately $23.9 million in disgorgement as well as prejudgment interest and attorneys' fees which currently are estimated to be up to $8.9 million and all costs of court of the plaintiff and intervenor.  In September 2011, SEPCO filed a motion for a new trial and in November 2011 filed a notice of appeal.  In November 2011, the court approved SEPCO’s supersedeas bond in the amount of $14.1 million, which stays execution on the judgment pending appeal.  The bond covers the $11.4 million judgment for actual damages, plus $1.3 million in pre-judgment interest, $1.3 million in post-judgment interest (estimating two years for the duration of appeal), and court costs. 

In June 2012, SEPCO filed its appellate brief and, in June 2012, plaintiff and intervenor filed a cross-appellate brief seeking limited remand to reassess the disgorgement determination. The parties filed their responses to the appellate and cross appellate briefs in November 2012.  Oral argument was held before the Tyler Court of Appeals on March 8, 2013.  On July 10, 2013, the Tyler Court of Appeals ordered that (1) the judgment awarding plaintiff and intervenor $23.9 million as disgorgement of illicit gains be reversed and judgment rendered that they take nothing, (2) the award of $11.4 million for actual damages, insofar as it is based on the jury’s findings of breach of fiduciary duty, fraud, breach of contract, and theft of trade secret is reversed and judgment rendered that plaintiff and intervenor take nothing under those theories of recovery, (3) the award of $11.4 million to plaintiff and intervenor as damages for misappropriation of trade secret is affirmed, (4) the case be remanded to the trial court for a determination and award of attorney’s fees for SEPCO as the prevailing party under the Texas Theft Liability Act, and (5) in all other respects, the judgment is affirmed.  On July 25, 2013, SEPCO filed its motion for rehearing with the Tyler Court of Appeals, seeking reversal of every part of plaintiff and intervenor’s recovery.  Plaintiff and intervenor filed an unopposed motion for an extension of their deadline to file a motion for rehearing, which the Tyler Court of Appeals has granted; their deadline to file their motion is now August 26, 2013.

Based on the Company's understanding and judgment of the facts and merits of this case, including appellate defenses, and after considering the advice of counsel, the Company has determined that, although reasonably possible after exhaustion of all appeals, an adverse final outcome to this lawsuit is not probable.  As such, the Company has not accrued any amounts with respect to this lawsuit.  If the plaintiff and intervenor were to ultimately prevail in the appellate process, the Company currently estimates, based on the judgments to date, that SEPCO’s potential liability would be up to $45.5 million, including interest and attorney’s fees. The Company’s assessment may change in the future due to occurrence of certain events, such as denied appeals, and such re-assessment could lead to the determination that the potential liability is probable and could be material to the Company's results of operations, financial position or cash flows.

Bureau of Land Management

In March 2010, the Company’s subsidiary, SEECO, was served with a subpoena from a federal grand jury in Little Rock, Arkansas.  Based on the documents requested under the subpoena and subsequent discussions described below, the Company believes the grand jury is investigating matters involving approximately 27 horizontal wells operated by SEECO in Arkansas, including whether appropriate leases or permits were obtained therefore and whether royalties and other production attributable to federal lands have been properly accounted for and paid.  The Company believes it has fully complied with all requests related to the federal subpoena and delivered its affidavit to that effect. The Company and representatives of the Bureau of Land Management and the U.S. Attorney have had discussions since the production of the documents pursuant to the subpoena.  In January 2011, the Company voluntarily produced additional materials informally requested by the government arising from these discussions.  Although, to the Company’s knowledge, no proceeding in this matter has been initiated against SEECO, the Company cannot predict whether or when one might be initiated. The Company intends to fully comply with any further requests and to cooperate with any related investigation. No assurance can be made as to the time or resources that will need to be devoted to this inquiry or the impact of the final outcome of the discussions or any related proceeding.

46

ITEM 1A. RISK FACTORS.

There were no additions or material changes to the Company’s risk factors as disclosed in Item 1A of Part I in the Company’s 2012 Annual Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES.

Our sand mining operations, in support of our E&P business, are subject to regulation by the Federal Mine Safety and Health Administration under the Federal Mine Safety and Health Act of 1977. Information concerning mine safety violations or other regulatory matters required by section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.106) is included in Exhibit 95.1 to this Form 10-Q.

ITEM 5. OTHER INFORMATION.

Not applicable.

ITEM 6. EXHIBITS.

(10.1)      Southwestern Energy Company 2013 Incentive Plan.(Incorporated by reference to Annex A of the Registrant’s Proxy Statement filed April 8, 2013)

(10.2*)    Southwestern Energy Company 2013 Incentive Plan Guidelines for Performance Unit Awards.

(10.3*)    Southwestern Energy Company 2013 Incentive Plan Guidelines for Annual Incentive Awards.

(10.4*)    Southwestern Energy Company 2013 Incentive Plan Form of Incentive Stock Option Award Agreement.

(10.5*)    Southwestern Energy Company 2013 Incentive Plan Form of NonQualified Stock Option Award Agreement.

(10.6*)    Southwestern Energy Company 2013 Incentive Plan Form of NonQualified Stock Option Award Agreement for Directors.

(10.7*)    Southwestern Energy Company 2013 Incentive Plan Form of Restricted Stock Award Agreement.

(10.8*)    Southwestern Energy Company 2013 Incentive Plan Form of Restricted Stock Award Agreement for Directors.

(10.9*)    Southwestern Energy Company 2013 Incentive Plan Form of Restricted Stock Unit Award Agreement.

(10.10*)  Southwestern Energy Company 2013 Incentive Plan Form of Restricted Stock Unit Award Agreement for Directors.

(31.1)Certification of CEO filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

(31.2)Certification of CFO filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

(32.1)Certification of CEO and CFO furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(95.1)Mine Safety Disclosure.

(101.INS)Interactive Data File Instance Document.

(101.SCH)Interactive Data File Schema Document.

(101.CAL)Interactive Data File Calculation Linkbase Document.

(101.LAB)Interactive Data File Label Linkbase Document.

(101.PRE)Interactive Data File Presentation Linkbase Document.

(101.DEF)Interactive Data File Definition Linkbase Document.

____________

*Filed herewith

47

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 thereunto duly authorized.

SOUTHWESTERN ENERGY COMPANY

Registrant

Dated:	August 1, 2013	/s/ R. CRAIG OWEN
		R. Craig Owen
		Senior Vice President
		and Chief Financial Officer

48

EX-31

Exhibit 31.1

CERTIFICATION

I, Steve Mueller, certify that:
	1. I have reviewed this quarterly report on Form 10-Q of Southwestern Energy Company;
	2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
	3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
	4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
		(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
		(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
		(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
		(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
	5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
		(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
		(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date:	August 1, 2013		/s/ STEVE MUELLER
				Steve Mueller
				President and Chief Executive Officer

EX-31

Exhibit 31.2

CERTIFICATION

I, R. Craig Owen, certify that:
	1. I have reviewed this quarterly report on Form 10-Q of Southwestern Energy Company;
	2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
	3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
	4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
		(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
		(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
		(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
		(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
	5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
		(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
		(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date:	August 1, 2013		/s/ R. CRAIG OWEN
				R. Craig Owen
				Senior Vice President and Chief Financial Officer

EX-32

Exhibit 32.1

CERTIFICATION
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

          Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of Southwestern Energy Company, a Delaware corporation (the "Company"), does hereby certify that:

          The Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 (the "Form 10-Q") of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:      August 1, 2013	/s/ STEVE MUELLER
	Steve Mueller
	President and Chief Executive Officer
Dated:      August 1, 2013	/s/ R. CRAIG OWEN
	R. Craig Owen
	Senior Vice President and Chief Financial Officer

EX-95

EXHIBIT 95.1

Mine Safety Disclosure

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), each operator of a mine is required to include certain mine safety results in its periodic reports filed with the U.S. Securities and Exchange Commission (“SEC”). Our mining operations are subject to regulation by the federal Mine Safety and Health Administration (“MSHA”) under the Federal Mine Safety and Health Act of 1977 (“Mine Act”). Below, we present the following items regarding certain mining safety and health matters for the three months ended June 30, 2013:  

• total number of violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a mine safety or health hazard under section 104 of the Mine Act for which we have received a citation from MSHA;

• total number of orders issued under section 104(b) of the Mine Act, which covers violations that had previously been cited under section 104(a) that, upon follow-up inspection by MSHA, are found not to have been totally abated within the prescribed time period, which results in the issuance of an order requiring the mine operator to immediately withdraw all persons (except certain authorized persons) from the mine;

• total number of citations and orders for unwarrantable failure of the mine operator to comply with mandatory health or safety standards under section 104(d) of the Mine Act;

• total number of flagrant violations (i.e., reckless or repeated failure to make reasonable efforts to eliminate a known violation of a mandatory health or safety standard that substantially and proximately caused, or reasonably could have been expected to cause, death or serious bodily injury) under section 110(b)(2) of the Mine Act;

• total number of imminent danger orders (i.e., the existence of any condition or practice in a mine which could reasonably be expected to cause death or serious physical harm before such condition or practice can be abated) issued under section 107(a) of the Mine Act;

• total dollar value of proposed assessments from MSHA under the Mine Act;

• total number of mining-related fatalities; and

• total number of pending legal actions before the Federal Mine Safety and Health Review Commission involving such mine.

Southwestern Energy Company
Mine Safety Disclosure
Three Months Ended June 30, 2013
(Unaudited)
(Whole dollars)

			Section 104(d) Citations and Orders					Received Notice of Potential to Have Pattern Under Section 104(e)
	Section 104 S&S Citations	Section 104(b) Orders		Section 110(b)(2) Violations	Section 107(a) Orders	Total Dollar Value of Proposed MSHA Assessments(2)	Total Number of Mining Related  Fatalities		Legal Actions Pending as of the Last Day of the Periods	Legal Actions Initiated During Period
Operation(1)											Legal Actions Resolved During Period
DeSoto Sand, LLC	0	0	0	0	0	$0	0	0	0	0	0
Total						$0

(1)

The definition of mine under section 3 of the Mine Act includes the mine, as well as other items used in, or to be used in, or resulting from, the work of extracting minerals, such as land, structures, facilities, equipment, machines, tools, and preparation facilities. Unless otherwise indicated, any of these other items associated with a single mine have been aggregated in the totals for that mine.

(2)

Amounts included are the total dollar value of proposed or outstanding assessments received from MSHA on or before June 30, 2013 regardless of whether the assessment has been challenged or appealed, for alleged violations occurring during the three month period ended June 30, 2013.

In addition, as required by the reporting requirements regarding mine safety included in§1503(a)(2) of the Dodd-Frank Act, the following is a list for the three months ended June 30, 2013, of each mine of which we or a subsidiary of ours is an operator, that has received written notice from MSHA of:

(a) a pattern of violations of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of mine health or safety hazards under §104(e) of the Mine Act:           None

(b) the potential to have such a pattern:           None

Citations and orders can be contested and appealed, and as part of that process, are sometimes reduced in severity and amount, and are sometimes dismissed. The number of citations, orders, and proposed assessments vary by inspector and also vary depending on the size and type of the operation.

EX-10

SOUTHWESTERN ENERGY COMPANY

GUIDELINES FOR PERFORMANCE UNIT AWARDS

1.

Purpose of the Plan

Southwestern Energy Company (“Southwestern”) maintains the Southwestern Energy Company 2013 Incentive Plan (the “Plan”) to promote the interests of Southwestern and its stockholders by providing the employees and eligible non-employee directors of Southwestern and its subsidiaries (the “Company”), with incentives and rewards to encourage them to continue in the service of the Company.  The Plan is designed to serve this goal by providing such employees and eligible non-employee directors with a proprietary interest in pursuing the long-term growth, profitability and financial success of the Company.

These Guidelines for Performance Unit Awards (the “Guidelines”) are intended to implement the Plan by providing employees of the Company who are eligible to participate in the Plan with long-term compensation awards in the form of units, the value of which depends upon the financial performance of the Company in comparison to the Performance Measures (as defined in the Plan) specified for a specified time period (the “Performance Units”) and as further described in these Guidelines.

These Guidelines are adopted pursuant to relevant provisions of the Plan and are to be interpreted and applied in accordance with the terms and provisions thereof.  Specifically, these Guidelines provide for the grant of Performance Units under Section 8 and 9 of the Plan. Unless otherwise provided herein, capitalized terms used in these Guidelines will have the meaning given such terms in the Plan. If there is any conflict between these Guidelines and the Plan, the terms and provisions of the Plan shall control.

2.

Eligibility

The employees who shall be eligible to receive Performance Units pursuant to the Plan shall be those employees of the Company that the Committee shall select from time to time (“Participants”).  All Performance Units granted under the Plan shall be evidenced by a separate document that shall specify the grant of Performance Units to the Participant, the applicable Performance Measures set by the Committee and other conditions to which the grant is subject, in such form as the Committee shall from time to time approve (such document, a “Grant Agreement”).

3.

Performance Units

Each grant of a Performance Unit shall comply with and be subject to the following terms and conditions:

(a)

Grants

(i)

For each Performance Period, the Committee shall determine whether to grant any Performance Units and, if Performance Units are granted, such grant shall be evidenced by a Grant Agreement between Southwestern and

1

the Participant.  The number of Performance Units to be granted to a Participant shall be determined by the Committee based on the Participant's role and responsibilities and competitive levels of long-term compensation.  No fractional Performance Units shall be granted.

(ii)

Within 90 days following the beginning of a Performance Period, and in any case before 25% of a Performance Period has elapsed, the Committee shall determine the Performance Measures to be used for the Performance Period, the weighting of such Performance Measures, and the Performance Targets ,which shall be specified in the Grant Agreement.  Unless otherwise specified by the Committee or in the Grant Agreement, each Performance Period will be a thirty-six (36) month period starting on the first day of Southwestern’s fiscal year immediately following the date of grant of an award of Performance Units.

(b)

Interests of a Participant

The Company shall create individual accounts on its books to reflect the number of Performance Units credited to each Participant for any Performance Period.  

(c)

Vesting

Except as provided in Sections 5 and 3(d) herein, or as specified in the Grant Agreement, each Participant's right to the Performance Units awarded for any Performance Period shall vest one-third per year starting on the day of the first anniversary of the date of grant, provided that the Participant has not terminated employment.

(d)

Effect of Termination of Employment

(i)

Unless the Committee provides otherwise on or after the date of grant, in the event that the employment of a Participant with the Company shall terminate for any reason other than Cause, Disability, Retirement or death, all unvested Performance Units granted to such Participant shall expire at the commencement of business on the date of such termination, and no payment shall be made to the Participant with respect thereto.  Except as otherwise provided herein or in the Grant Agreement, Southwestern shall make payment respecting vested Performance Units, upon expiration of the original Performance Period under the original terms for such vested Performance Units, and in no event later than two and one-half months following the last day of the original Performance Period.

(ii)

In the event of the termination of a Participant’s employment for Cause, all outstanding vested and unvested Performance Units granted to such Participant shall expire at the commencement of business on the date of such termination, and no payment shall be made to the Participant with respect thereto.

2

(iii)

In the event that the employment of a Participant with the Company shall terminate on account of the death, Disability or Retirement of the Participant, a portion of the unvested Performance Units granted to such Participant, to the extent not forfeited or cancelled on or prior to such termination pursuant to any provision hereof or the applicable Grant Agreement, shall vest on the date of such termination.  The portion referred to in the preceding sentence shall be determined separately under each Grant Agreement and shall be equal to the product of (a) the total number of Performance Units granted to such Participant under the applicable Grant Agreement and (b) a fraction, the numerator of which is the total number of days that have elapsed between the Grant Date of such Grant Agreement and the date such Participant’s employment terminated and the denominator of which is the total number of days between the Grant Date of such Grant Agreement and the final Vesting Date under such Grant Agreement.  Except as otherwise provided herein or in the Grant Agreement, Southwestern shall make payment respecting vested Performance Units, upon expiration of the original Performance Period under the original terms for such vested Performance Units, and in no event later than two and one-half months following the last day of the original Performance Period.

4.

Performance Unit Benefit

(a)

Payment Value

The Performance Units will have a value (the “Payment Value”), expressed in dollars, at the end of the applicable Performance Period contingent upon the attainment of the Performance Measures, as specified in the Participant’s Grant Agreement and determined by the Committee.  The Payment Value will be determined by multiplying the target value by the percentage or percentages assigned to the level of the Company’s actual financial performance, based on the Performance Measures and associated percentages assigned to the various levels of performance of such Performance Measures at the beginning of the Performance Period. If the attainment of a Performance Measure occurs between the stated levels, the Payment Value will be determined by linear extrapolation.

(b)

Payout Calculation and Payment

(i)

The Committee shall use Southwestern’s year-end audited financial statements in determining the extent to which the Performance Measures were achieved during the relevant Performance Period and shall certify in writing whether and the extent to which the Performance Measures for each Performance Period have been met.

(ii)

Except as otherwise provided herein or in the Grant Agreement, Southwestern shall pay the Participant a lump sum cash payment equal to the total amount of Payment Value due the Participant at the conclusion of a Performance Period on such date following the certification of the Performance Measures as the Committee shall designate, but in no event later than two and one-half months following the last day of such Performance Period.

(iii)

The Committee may permit a Participant to elect to defer receipt of some or all of the payment due under this Section under such terms and conditions as the Company may prescribe in accordance with the requirements of Section 409A of the Code.

3

5.

Effect of Change in Control

Upon the occurrence of a Change in Control, each Performance Unit granted under the Plan and outstanding at such time shall become fully and immediately vested.  In full satisfaction of amounts due under the Performance Units, Southwestern shall pay the Participant the target value (as specified in the Grant Agreement) or, if greater, in the sole discretion of the Committee, an amount that the Committee determines to be the projected amount that would have been payable had the Performance Period run its cycle.  Such amounts shall be paid within five (5) business days following a Change in Control.

6.

Withholding

In accordance with Section 16 of the Plan, Participants shall be solely responsible for any applicable taxes (including without limitation income and excise taxes) and penalties, and any interest that accrues thereon, which they incur in connection with the receipt, vesting, settlement or exercise of any payment under these Guidelines.  Appropriate withholding and deductions will be taken from such payments.

7.

Amendment of the Guidelines

The Committee may at any time terminate, revise or amend the Guidelines in any respect whatsoever; provided however that any such change or modification shall comply with the provisions of Section 409A of the Code.  Nothing herein shall restrict the Committee’s authority to administer the Guidelines pursuant to Section 4 of the Plan, which authority may be exercised without amendment to the Guidelines. However, no action hereunder may, without the consent of a Participant, reduce the Participant's rights under any previously granted and outstanding Performance Units.

8.

Transferability of Performance Unit

During the lifetime of a Participant, each Performance Unit granted to the Participant shall only be exercisable by such Participant.  No Performance Unit shall be assignable or transferable otherwise than by will or by the laws of descent and distribution.

9.

Adjustment

Pursuant to Section 9 of the Plan, the Committee will adjust the Performance Targets for the relevant Performance Period to exclude the impact of charges for restructurings, discontinued

4

operations, extraordinary items, all non-cash charges resulting from any write-down of oil and gas properties and all other non-cash components of Accumulated Other Comprehensive Income (AOCI), other unusual or non-recurring items, and the cumulative effect of accounting changes, each as defined by generally accepted account principles and as identified in Southwestern’s audited financial statements, including the notes thereto.

10.

Performance-Based Compensation

Notwithstanding anything in these Guidelines to the contrary, any Award of Performance Units intended to qualify as Performance-Based Compensation will be subject to Section 9 of the Plan and any amount payable with respect to an Award that is intended to qualify as Performance-Based Compensation shall be determined in a manner permitted by Section 162(m) of the Code.

11.

Section 409A of the Code

The benefits provided hereunder shall be paid in such a manner as to satisfy Section 409A of the Code or an exception to the application of Section 409A of the Code. To the extent that these benefits become subject to Section 409A of the Code, the Guidelines and the Plan shall be interpreted and construed to the fullest extent allowed under Section 409A of the Code and the applicable guidance thereunder to satisfy the requirements of an exception or to comply with Section 409A of the Code and the applicable guidance thereunder and to avoid any additional tax thereunder. To the extent compliance with the requirements of Treas. Reg. Section 1.409A-3(i)(2) (or any successor provision) is necessary to avoid the application of an additional tax under Section 409A of the Code to payments due following a “separation from service” (as that term is defined in Section 1.409A-1(h) of the Treasury Regulations), then notwithstanding any other provision of the Guidelines or the Plan, any such payments that are otherwise due within six (6) months following the separation from service will be deferred and paid to the Participant in a lump sum immediately following that six (6) month period.

12.

Effective Date and Term of Plan

These Guidelines were adopted by the Board on February 19, 2013 subject to the approval of the Plan by the stockholders of Southwestern.  

5

EX-10

SOUTHWESTERN ENERGY COMPANY.

GUIDELINES FOR ANNUAL INCENTIVE AWARDS

1.

Purpose of Arrangement.

Southwestern Energy Company (“Southwestern”) maintains the Southwestern Energy Company 2013 Incentive Plan (the “Plan”) to promote the interests of Southwestern and its stockholders by providing the employees and eligible non-employee directors of Southwestern and its subsidiaries (the “Company”), with incentives and rewards to encourage them to continue in the service of the Company.  The Plan is designed to serve this goal by providing such employees and eligible non-employee directors with a proprietary interest in pursuing the long-term growth, profitability and financial success of the Company.

These Guidelines for Annual Incentive Awards (the “Guidelines”) are intended to implement the Plan by providing Covered Employees under the Plan with an annual cash incentive, as further described in these Guidelines.

These Guidelines are adopted pursuant to relevant provisions of the Plan and are to be interpreted and applied in accordance with the terms and provisions thereof.  Specifically, these Guidelines provide for the grant of cash incentive awards pursuant to Sections 8 and 9 of the Plan. Unless otherwise provided herein, capitalized terms used in these Guidelines will have the meaning given such terms in the Plan. If there is any conflict between these Guidelines and the Plan, the terms and provisions of the Plan shall control.

2.

Awards

Each Award made pursuant to the Guidelines (a “Bonus Award”) is intended to qualify as Performance-Based Compensation and shall be determined in any manner permitted by Section 162(m) of the Code and in accordance with Section 9 of the Plan.

3.

Eligibility

The CEO shall recommend and the Committee shall approve the Covered Employees for each Performance Period.  In addition, the Committee, in its sole discretion, may designate any other employees of the Company as a Bonus Participant for any such Performance Period (together with the Covered Employees, the “Bonus Participants”).  No person shall be entitled to any Bonus Award for any year unless he or she is so designated as a Bonus Participant for that year.

4.

Performance-Based Compensation

(a)

Performance Period

Each Performance Period shall equal one fiscal year of Southwestern; provided however that with respect to a Bonus Participant who becomes employed by the Company or through promotion or otherwise becomes eligible for a Bonus Award following the first day of a Performance Period, the amount of the Bonus Award earned in respect of the Performance

Period for the calendar year of initial employment or promotion will be determined by multiplying the Bonus Award by a fraction, the numerator of which is the number of days during the Performance Period the Bonus Participant is employed and the denominator of which is the total number of days in such Performance Period. Any exceptions shall be approved by the Committee.

(b)

Performance Measures 

Within 90 days following the beginning of a Performance Period, and in any case before 25% of a Performance Period has elapsed, the Committee shall establish, (i) Performance Measures and Performance Targets for such Performance Period which shall fund a pool of the aggregate maximum amount of Bonus Awards that may be paid (the “Bonus Pool”), and (ii) the percentage of the Bonus Pool to be allocated to each Bonus Participant (the “Bonus Percentage”).

Subject to Section 4(d) below, the Bonus Participant will be paid a Bonus Award with respect to each Performance Period equal his or her Bonus Percentage of the Bonus Pool; provided that each Bonus Award shall be capped at a certain dollar amount determined by the Committee and which shall in no event exceed the individual limit set forth in Section 3(b) of the Plan.

(c)

Certification of Performance Targets 

In the manner required by Section 162(m) of the Code, the Committee shall, promptly after the date on which the necessary financial statements and other information used to evaluate the Performance Measures for a Performance Period become available, certify in writing the extent to which the Performance Targets have been achieved.  The Committee shall determine the amount of the Bonus Award payable to each Bonus Participant.

(d)

Committee Discretion 

(i)

   The Committee may, in its discretion, reduce or eliminate (but not increase) the amount payable to any Bonus Participant with respect to a Bonus Award in accordance with Section 9(b) of the Plan, including to reflect (i) the Committee’s evaluation of the Bonus Participant’s individual performance, (ii) Company or business unit performance or (iii) any other events, circumstances or factors which the Committee believes to be appropriate in determining the amount of the Bonus Award to be paid for that Performance Period.

(ii)

   In addition, pursuant to Section 9 of the Plan, the Committee will adjust the Performance Targets for the relevant Performance Period to exclude the impact of charges for restructurings, discontinued operations, extraordinary items, all non-cash charges resulting from any write-down of oil and gas properties and all other non-cash components of Accumulate Other Comprehensive Income (AOCI), other unusual or non-recurring items, and the cumulative effect of accounting changes, each as defined by generally accepted account principles and as identified in Southwestern’s audited financial statements, including the notes thereto.

2

5.

Vesting and Payment of the Bonus Award

(a)

Vesting

Unless the Committee determines otherwise, no Bonus Award shall be payable to any Bonus Participant who is not an active employee of the Company at the end of the Performance Period in respect of which such Bonus Award is payable.

(b)

Payment  

The amount of the Bonus Award payable in respect of any Performance Period shall be paid to each Bonus Participant as soon as practicable following the determination of the amount thereof and the certification by the Committee pursuant to Section 4(c) hereof, but in any event no later than two and one-half months following the last day of such Performance Period.  

6.

Effect of Termination of Employment

(a)

Terminations in Connection with a Change in Control

In the event a Bonus Participant's employment is terminated on or within one year following a Change in Control the provisions of (i) the Bonus Participant’s individual severance agreement, for those Bonus Participants with whom the Company has entered into a severance agreement or (ii) the Company’s Change in Control Severance Plan for those Bonus Participants with whom the Company has not entered into an individual severance agreement, shall govern the treatment of any unpaid Bonus Awards.

(b)

Other Terminations

In the event of a Bonus Participant’s termination of employment prior to the payment date for any Bonus Award for any other reason than those set forth in Section 6(a) above, any unpaid Bonus Award shall be subject to forfeiture at the discretion of the Committee.

7.

Withholding

In accordance with Section 16 of the Plan, Bonus Participants shall be solely responsible for any applicable taxes and penalties, and any interest that accrues thereon, which they incur in connection with the receipt, vesting, or settlement of any payment under these Guidelines.  Appropriate withholding and deductions will be taken from such payments.

8.

Amendment of the Guidelines

The Committee may at any time terminate, revise or amend the Guidelines in any respect whatsoever; provided however that any such change or modification shall comply with the provisions of Sections 162(m) and 409A of the Code.  Nothing herein shall restrict the Committee’s authority to administer the Guidelines pursuant to Section 4 of the Plan, which authority may be exercised without amendment to the Guidelines.

3

9.

No Assignment

The interest of any Bonus Participant under the Plan shall not be assignable either by voluntary or involuntary assignment or by operation of law.

10.

Section 409A of the Code

The benefits provided hereunder shall be paid in such a manner as to satisfy Section 409A of the Code or an exception to the application of Section 409A of the Code. To the extent that these benefits become subject to Section 409A of the Code, the Guidelines and the Plan shall be interpreted and construed to the fullest extent allowed under Section 409A of the Code and the applicable guidance thereunder to satisfy the requirements of an exception or to comply with Section 409A of the Code and the applicable guidance thereunder and to avoid any additional tax thereunder. To the extent compliance with the requirements of Treas. Reg. Section 1.409A-3(i)(2) (or any successor provision) is necessary to avoid the application of an additional tax under Section 409A of the Code to payments due following a “separation from service” (as that term is defined in Section 1.409A-1(h) of the Treasury Regulations), then notwithstanding any other provision of the Guidelines or the Plan, any such payments that are otherwise due within six (6) months following the separation from service will be deferred and paid to the Bonus Participant in a lump sum immediately following that six (6) month period.

11.

Effective Date and Term of Plan

These Guidelines were adopted by the Board on February 19, 2013 subject to the approval of the Plan by the stockholders of Southwestern.  

4

EX-10

SOUTHWESTERN ENERGY COMPANY 2013 INCENTIVE PLAN

INCENTIVE STOCK OPTION AWARD AGREEMENT

SOUTHWESTERN ENERGY COMPANY, a Delaware corporation (“Southwestern”), has on this [___] day of [_____________], [____] (the “Award Date”) granted to [_______________] (the “Participant”) an  Incentive Stock Option Award  to purchase [______] shares of Southwestern’s Common Stock ($.01 par value) (the “Award”).  This Award is subject to the terms of this Incentive Stock Option Award Agreement (the “Agreement”) and is made pursuant to the Southwestern Energy Company 2013 Incentive Plan (the “Plan”) which is incorporated into this Agreement by reference. Any capitalized terms used herein that are otherwise undefined shall have the meaning provided in the Plan.

1.

Acceptance of Terms and Conditions.  By acknowledging and accepting this Award, you agree to be bound by the terms and conditions of this Agreement, the Plan (including without limitation, Section 12 of the Plan), and all conditions established by Southwestern in connection with Awards issued under the Plan, and you further acknowledge and agree that this Award does not confer any legal or equitable right (other than those rights constituting the Award itself) against Southwestern or any Subsidiary (collectively, the “Company”) directly or indirectly, or give rise to any cause of action at law or in equity against the Company. To vest in this Award as described in this Agreement, you must accept the Award. If you fail to accept the Award prior to the first Vesting Date, it will be cancelled and forfeited.

2.

Exercise Price.  The exercise price per share of Common Stock underlying this Award shall be $______.

3.

Expiration Date.  Any portion of this Award, whether vested or unvested, that has not sooner expired pursuant to Section 6 or Section 7 of this Agreement shall expire no later than the seventh (7th) anniversary of the Award Date (the “Expiration Date”).

4.

Vesting.  Except as otherwise provided in Sections 6 and 8 of this Agreement, on each of the dates set forth below (each a “Vesting Date”), subject to the Participant’s continued employment with the Company, this Award will become vested and exercisable with respect to the below-stated percentage of the total number of shares of Common Stock underlying the Award, until 100% of the Award has become vested and exercisable:

Percentage of Total Shares Underlying the Award	Vesting Date
[%]	[Vest Date]
[%]	[Vest Date]
[%]	[Vest Date]

5.

Conversion to Non-Qualified Stock Options.  Pursuant to Section 6(e) of the Plan, if any portion of the Award results in the aggregate Fair Market Value of shares of Common Stock underlying Incentive Stock Option Awards that become exercisable for the first time by the Participant during any calendar year exceeding $100,000, then such portion of the Award will automatically be deemed to be an award of Non-Qualified Stock Options, but all other terms and provisions of this Award shall remain unchanged; provided that, notwithstanding Section 10 of this Agreement, such Non-Qualified Stock Options may be transferred in accordance with Section 6(d) of the Plan.

6.

Termination of Employment.  

(a)

Termination for Cause.  If the Participant’s employment with the Company is terminated by the Company for Cause, any outstanding portion of the Award, whether vested or unvested, shall expire at the commencement of business on the date of such termination.

(b)

Termination due to Death, Disability or Retirement.  If the Participant’s employment with the Company is terminated as a result of the Participant’s death, Disability, or Retirement, the Award shall become fully vested and exercisable by the Participant or the Participant’s estate or beneficiary under his or her will until the Expiration Date. However, if the Participant's employment with the Company is terminated as a result of the Participant's Retirement, the Award will be treated as a Non-Qualified Stock Option if exercised following the three (3) month anniversary of the Participant's date of termination of employment. 

(c)

Termination due to Early Retirement.  If the Participant’s employment with the Company is terminated as a result of the Participant’s Early Retirement, any portion of the Award which is vested and exercisable as of the date of such termination shall remain exercisable until the first anniversary of the Participant’s date of termination of employment, and shall expire on the earlier of such anniversary date or the Expiration Date, provided that such vested portion of the Award will be treated as a Non-Qualified Stock Option if exercised following the three (3) month anniversary of the Participant's date of termination of employment. Any portion of the Award which is unvested as of the date of such termination shall expire on the close of business of the Participant’s date of termination of employment.

(d)

Other Terminations.  If the Participant’s employment with the Company is terminated for any reason other than those specified in Section 6(a)-(c) above, any portion of the Award that is vested and exercisable on the date of such termination shall remain exercisable for three (3) months following the Participant’s date of termination of employment, but not beyond the Expiration Date. Any portion of the Award which is unvested on the date of such termination shall expire on the close of business of the Participant’s date of termination of employment.

7.

Subsidiaries.  Unless the Committee determines otherwise, any Award held by a Participant employed by an entity that is a Subsidiary will expire immediately on the date such entity ceases to be a Subsidiary of Southwestern.

8.

Change in Control.  Upon a Change in Control, the Award shall fully vest and become exercisable until its expiration, termination or cancellation pursuant to the terms of the Plan, provided that no Award may be exercisable after the Expiration Date.

9.

Exercisability.  To the extent vested and exercisable on the effective date of exercise, the Award may be exercised in whole or in part, provided that no partial exercise shall be for an aggregate Exercise Price of less than $1,000.  The partial exercise of any Award shall not cause the expiration, termination or cancellation of the remaining portion hereof.  

(a)

Method of Exercise.  This Award may be exercised by delivering notice to the Southwestern’s principal office, to the attention of its Secretary, or as otherwise directed, no less than one (1) business days in advance of the effective date of the proposed exercise.  Such notice shall specify the number of shares of Common Stock with respect to which the Award is being exercised and the effective date of the proposed exercise and shall be signed (including through an electronic medium) by the Participant.  

(b)

Payment of Exercise Price.  Payment of the Exercise Price in connection with the exercise of all or a portion of this Award shall be made on the effective date of such exercise in accordance with Section 6(c)(3) of the Plan.

10.

Limitations on Transfer.  During the lifetime of the Participant, the Award shall be exercisable only by the Participant and may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent and distribution.

11.

Responsibility for Taxes.  The Participant shall be solely responsible for any applicable taxes (including, without limitation, income and excise taxes) and penalties, and any interest that accrues thereon, which he or she incurs in connection with the receipt, vesting, or exercise of the Award, in accordance with Section 16 of the Plan.

12.

Conformity with the Plan. This Agreement is intended to conform in all respects with, and is subject to, all applicable provisions of the Plan. If there is any conflict between the terms and conditions of the Plan and this Agreement the terms of the Plan, as interpreted by the Committee, shall govern.

13.

No Rights to Continued Employment. Nothing in this Agreement or in the Plan shall confer upon the Participant any right with respect to the continuation of the Participant’s employment by or service to the Company or interfere in any way with the right of the Company at any time to terminate the Participant’s employment or service or to increase or decrease the compensation of the Participant from the rate in existence at the time of the grant of this Award.

14.

Consent to Transfer Personal Data. The Participant acknowledges and consents to the collection, use, processing and transfer of personal data as described in this Section 14. The Company holds certain personal information about the Participant for the purpose of managing and administering the Plan (the “Data”). The Company may transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. The Participant authorizes the Company and any third parties to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Participant’s participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares of Common Stock on the Participant’s behalf to a broker or other third party with whom the Participant may elect to deposit any shares of Common Stock acquired or received pursuant to the Plan.

15.

Confidentiality. The Participants agrees not to disclose the existence or terms of the Award to any other employees of the Company or third parties with the exception of the Participant’s accountants, attorneys, or spouse, and shall ensure that none of them discloses such existence or terms to any other person, except as required to comply with legal requirements.

16.

Failure to Comply; Recoupment.  

(a)

In addition to the remedies provided for in the Plan, if the Participant fails to comply with any of the terms and conditions of the Plan or this Agreement, unless such failure is remedied within ten (10) days after the Participant is notified of such failure by the Committee, such failure to comply shall be grounds for the cancellation and forfeiture of the Award, in whole or in part, as the Committee may determine.

(b)

Notwithstanding anything herein to the contrary, the Company will be entitled to the extent permitted or required by applicable law or Company policy as in effect from time to time to recoup compensation of whatever kind paid by the Company at any time to a Participant under the Plan, including any benefits the Participant may receive in connection with the grant or exercise of the Award pursuant to this Agreement.

17.

Rights as a Stockholder.  Except as otherwise expressly provided in this Agreement or the Plan, the Participant shall not have any rights as a stockholder with respect to any shares of Common Stock covered by or relating to this Award granted pursuant to the Plan until the date (if any) of the issuance of such shares of Common Stock or the date as of which the Company records the Participant or his or her nominee as the owner of such shares of Common Stock, free and clear of any restrictions or conditions pursuant to the Plan or this Agreement, in its books and records.  

18.

Modification. This Agreement and the Plan constitute the entire agreement of the parties with respect to the subject matter hereof.  The Committee may amend, modify or terminate this Agreement in accordance with Section 17 of the Plan, provided that no such amendment or modification shall adversely affect the right of the Participant under this Agreement without the Participant’s written consent other than as set forth in Section 17(b) of the Plan.

19.

Governing Law. All matters arising under this Agreement, including matters of validity, construction and interpretation, shall be governed by the internal laws of the State of Delaware, without regard to any state’s conflict of law principles.

20.

Electronic Delivery and Acceptance.  Southwestern may, in its sole and absolute discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means and/or require the Participant to accept this Award or any future Award by electronic means.  The Participant hereby consents to receive such documents by electronic delivery and agrees that acceptance of this Award and any future Award may be through an on-line or electronic system established and maintained by Southwestern or a third party designated by Southwestern.

21.

Severability.  Whenever feasible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

22.

Waiver.  The waiver by the Company with respect to your compliance with any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach of such party of a provision of this Agreement.

23.

Participant Acknowledgment.  By accepting this Agreement, the Participant agrees to be bound to all of the terms and conditions of this Agreement and the Plan as the same may be amended from time to time.

IN WITNESS WHEREOF, Southwestern has caused this Agreement to be executed by its undersigned duly authorized officer as of the ____ day of ________, 20____.

ATTEST:

SOUTHWESTERN ENERGY COMPANY

By:  

_____________________________

By:  

_______________________________

On this ____ day of ____________, _____, the undersigned hereby acknowledges, accepts, and agrees to all terms and provisions of the foregoing Agreement.

______________________________________

[Employee]

EX-10

SOUTHWESTERN ENERGY COMPANY 2013 INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AWARD AGREEMENT

SOUTHWESTERN ENERGY COMPANY, a Delaware corporation (“Southwestern”), has on this [___] day of [_____________], [____] (the “Award Date”) granted to [_______________] (the “Participant”) a Nonqualified Stock Option  to purchase [______] shares of Southwestern’s Common Stock ($.01 par value) (the “Award”).  This Award is subject to the terms of this Nonqualified Stock Option Award Agreement (the “Agreement”) and is made pursuant to the Southwestern Energy Company 2013 Incentive Plan (the “Plan”) which is incorporated into this Agreement by reference. Any capitalized terms used herein that are otherwise undefined shall have the meaning provided in the Plan.

1.

Acceptance of Terms and Conditions.  By acknowledging and accepting this Award, you agree to be bound by the terms and conditions of this Agreement, the Plan (including without limitation, Section 12 of the Plan), and all conditions established by Southwestern in connection with Awards issued under the Plan, and you further acknowledge and agree that this Award does not confer any legal or equitable right (other than those rights constituting the Award itself) against Southwestern or any Subsidiary (collectively, the “Company”) directly or indirectly, or give rise to any cause of action at law or in equity against the Company. To vest in this Award as described in this Agreement, you must accept it. If you fail to accept the Award prior to the first Vesting Date, it will be cancelled and forfeited.

2.

Exercise Price.  The exercise price per share of Common Stock underlying this Award shall be $______.

3.

Expiration Date.  Any portion of this Award, whether vested or unvested, that has not sooner expired pursuant to Section 5 or Section 6 of this Agreement shall expire no later than the seventh (7th) anniversary of the Award Date (the “Expiration Date”).

4.

Vesting.  Except as otherwise provided in Sections 5 and 7 of this Agreement, on each of the dates set forth below (each a “Vesting Date”), subject to the Participant’s continued employment with the Company, this Award will become vested and exercisable with respect to the below-stated percentage of the total number of shares of Common Stock underlying the Award, until 100% of the Award has become vested and exercisable:

Percentage of Total Shares Underlying the Award	Vesting Date
[%]	[Vest Date]
[%]	[Vest Date]
[%]	[Vest Date]

5.

Termination of Employment.  

(a)

Termination for Cause.  If the Participant’s employment with the Company is terminated by the Company for Cause, any outstanding portion of the Award, whether vested or unvested, shall expire at the commencement of business on the date of such termination.

(b)

Termination due to Death, Disability or Retirement.  If the Participant’s employment with the Company is terminated as a result of the Participant’s death, Disability, or Retirement, the Award shall become fully vested and exercisable by the Participant or the Participant’s estate or beneficiary under his or her will until the Expiration Date.

(c)

Termination due to Early Retirement.  If the Participant’s employment with the Company is terminated as a result of the Participant’s Early Retirement, any portion of the Award which is vested and exercisable as of the date of such termination shall remain exercisable until the first anniversary of the Participant’s date of termination of employment, and shall expire on the earlier of such anniversary date or the Expiration Date. Any portion of the Award which is unvested as of the date of such termination shall expire on the close of business of the Participant’s date of termination of employment.

(d)

Other Terminations.  If the Participant’s employment with the Company is terminated for any reason other than those specified in Section 5(a)-(c) above, any portion of the Award that is vested and exercisable on the date of such termination shall remain exercisable for three (3) months following the Participant’s date of termination of employment, but not beyond the Expiration Date. Any portion of the Award which is unvested on the date of such termination shall expire on the close of business of the Participant’s date of termination of employment.

6.

Subsidiaries.  Unless the Committee determines otherwise, any Awards held by a Participant employed by an entity that is a Subsidiary will expire immediately on the date such entity ceases to be a Subsidiary of Southwestern.

7.

Change in Control.  Upon a Change in Control, the Award shall fully vest and become exercisable until its expiration, termination or cancellation pursuant to the terms of the Plan, provided that no Award may be exercisable after the Expiration Date.

8.

Exercisability.  To the extent vested and exercisable on the effective date of exercise, the Award may be exercised in whole or in part, provided that no partial exercise shall be for an aggregate Exercise Price of less than $1,000.  The partial exercise of the Award shall not cause the expiration, termination or cancellation of the remaining portion hereof.  

(a)

Method of Exercise.  This Award may be exercised by delivering notice to the Southwestern’s principal office, to the attention of its Secretary, or as otherwise directed, no less than one (1) business day in advance of the effective date of the proposed exercise.  Such notice shall specify the number of shares of Common Stock with respect to which this Award is being exercised and the effective date of the proposed exercise and shall be signed (including through an electronic medium) by the Participant.  

(b)

Payment of Exercise Price.  Payment of the Exercise Price in connection with the exercise of all or a portion of this Award shall be made on the effective date of such exercise in accordance with Section 6(c)(3) of the Plan.

9.

Limitations on Transfer.  The Award is only transferable pursuant to the terms and conditions of Section 6(d) of the Plan.

10.

Responsibility for Taxes.  The Participant shall be solely responsible for any applicable taxes (including, without limitation, income and excise taxes) and penalties, and any interest that accrues thereon, which he or she incurs in connection with the receipt, vesting, or exercise of the Award, in accordance with Section 16 of the Plan.

11.

Conformity with the Plan. This Agreement is intended to conform in all respects with, and is subject to, all applicable provisions of the Plan. If there is any conflict between the terms and conditions of the Plan and this Agreement the terms of the Plan, as interpreted by the Committee, shall govern.

12.

No Rights to Continued Employment. Nothing in this Agreement or in the Plan shall confer upon the Participant any right with respect to the continuation of the Participant’s employment by or service to the Company or interfere in any way with the right of the Company at any time to terminate the Participant’s employment or service or to increase or decrease the compensation of the Participant from the rate in existence at the time of the grant of this Award.

13.

Consent to Transfer Personal Data. The Participant acknowledges and consents to the collection, use, processing and transfer of personal data as described in this Section 13. The Company holds certain personal information about the Participant for the purpose of managing and administering the Plan (the “Data”). The Company may transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. The Participant authorizes the Company and any third parties to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Participant’s participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares of Common Stock on the Participant’s behalf to a broker or other third party with whom the Participant may elect to deposit any shares of Common Stock acquired or received pursuant to the Plan.

14.

Confidentiality. The Participant agrees not to disclose the existence or terms of the Award to any other employees of the Company or third parties with the exception of the Participant’s accountants, attorneys, or spouse, and shall ensure that none of them discloses such existence or terms to any other person, except as required to comply with legal requirements.

15.

Failure to Comply; Recoupment.  

(a)

In addition to the remedies provided for in the Plan, if the Participant fails to comply with any of the terms and conditions of the Plan or this Agreement, unless such failure is remedied within ten (10) days after the Participant is notified of such failure by the Committee, such failure to comply shall be grounds for the cancellation and forfeiture of the Award, in whole or in part, as the Committee may determine.

(b)

Notwithstanding anything herein to the contrary, the Company will be entitled to the extent permitted or required by applicable law or Company policy as in effect from time to time to recoup compensation of whatever kind paid by the Company at any time to a Participant under the Plan, including any benefits the Participant may receive in connection with the grant or exercise of the Award pursuant to this Agreement.

16.

Rights as a Stockholder.  Except as otherwise expressly provided in this Agreement or the Plan, the Participant shall not have any rights as a stockholder with respect to any shares of Common Stock covered by or relating to this Award granted pursuant to the Plan until the date (if any) of the issuance of such shares of Common Stock or the date as of which the Company records the Participant or his or her nominee as the owner of such shares of Common Stock, free and clear of any restrictions or conditions pursuant to the Plan or this Agreement, in its books and records.  

17.

Modification. This Agreement and the Plan constitute the entire agreement of the parties with respect to the subject matter hereof.  The Committee may amend, modify or terminate this Agreement in accordance with Section 17 of the Plan, provided that no such amendment or modification shall adversely affect the right of the Participant under this Agreement without the Participant’s written consent other than as set forth in Section 17(b) of the Plan.

18.

Governing Law. All matters arising under this Agreement, including matters of validity, construction and interpretation, shall be governed by the internal laws of the State of Delaware, without regard to any state’s conflict of law principles.

19.

Electronic Delivery and Acceptance.  Southwestern may, in its sole and absolute discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means and/or require the Participant to accept this Award or any future Award by electronic means.  The Participant hereby consents to receive such documents by electronic delivery and agrees that acceptance of this Award and any future Award may be through an on-line or electronic system established and maintained by Southwestern or a third party designated by Southwestern.

20.

Severability.  Whenever feasible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

21.

Waiver.  The waiver by the Company with respect to your compliance with any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach of such party of a provision of this Agreement.

22.

Participant Acknowledgment.  By accepting this Agreement, the Participant agrees to be bound to all of the terms and conditions of this Agreement and the Plan as the same may be amended from time to time.

IN WITNESS WHEREOF, Southwestern has caused this Agreement to be executed by its undersigned duly authorized officer as of the ____ day of ________, 20____.

ATTEST:

SOUTHWESTERN ENERGY COMPANY

By:  

_____________________________

By:  

_______________________________

On this ____ day of ____________, _____, the undersigned hereby acknowledges, accepts, and agrees to all terms and provisions of the foregoing Agreement.

______________________________________

[Employee]

EX-10

SOUTHWESTERN ENERGY COMPANY 2013 INCENTIVE PLAN

DIRECTOR NONQUALIFIED STOCK OPTION AWARD AGREEMENT

SOUTHWESTERN ENERGY COMPANY, a Delaware corporation (“Southwestern”), has on this [___] day of [_____________], [____] (the “Award Date”) granted to [_______________] (the “Participant”) a Nonqualified Stock Option  to purchase [______] shares of Southwestern’s Common Stock ($.01 par value) (the “Award”).  This Award is subject to the terms of this Nonqualified Stock Option Award Agreement (the “Agreement”) and is made pursuant to the Southwestern Energy Company 2013 Incentive Plan (the “Plan”) which is incorporated into this Agreement by reference. Any capitalized terms used herein that are otherwise undefined shall have the meaning provided in the Plan.

1.

Acceptance of Terms and Conditions.  By acknowledging and accepting this Award, you agree to be bound by the terms and conditions of this Agreement, the Plan (including without limitation, Section 12 of the Plan), and all conditions established by Southwestern in connection with Awards issued under the Plan, and you further acknowledge and agree that this Award does not confer any legal or equitable right (other than those rights constituting the Award itself) against Southwestern or any Subsidiary (collectively, the “Company”) directly or indirectly, or give rise to any cause of action at law or in equity against the Company. To vest in this Award as described in this Agreement, you must accept it. If you fail to accept the Award prior to the first Vesting Date, it will be cancelled and forfeited.

2.

Exercise Price.  The exercise price per share of Common Stock underlying this Award shall be $______.

3.

Expiration Date.  Any portion of this Award, whether vested or unvested, that has not sooner expired pursuant to Section 5 or Section 6 of this Agreement shall expire no later than the seventh (7th) anniversary of the Award Date (the “Expiration Date”).

4.

Vesting.  Except as otherwise provided in Sections 5 and 6 of this Agreement, on each of the dates set forth below (each a “Vesting Date”), subject to the Participant’s continued service on the Board of Directors of Southwestern ( the “Board”) , this Award will become vested and exercisable with respect to the below-stated percentage of the total number of shares of Common Stock underlying the Award, until 100% of the Award has become vested and exercisable:

Percentage of Total Shares Underlying the Award	Vesting Date
[%]	[Vest Date]
[%]	[Vest Date]
[%]	[Vest Date]

5.

Discontinuance of Participant’s Term.  

(a)

Removal from the Board.  If the Participant is removed from the Board by the shareholders of the Company, any outstanding portion of the Award, whether vested or unvested, shall expire at the commencement of business on the date of such removal.

(b)

Death, Disability or Retirement.  If the term of the Participant’s membership on the Board expires or is discontinued as a result of the Participant’s death, Disability, or Retirement, the Award shall become fully vested and exercisable by the Participant or the Participant’s estate or beneficiary under his or her will until the Expiration Date.

(c)

Expiration or Discontinuation of Participant’s Term on the Board.  If the term of the Participant’s membership on the Board expires or is discontinued, because (i) the Participant loses an election for a position on the Board, (ii) resigns from the Board prior to his having both attained age 65 and completed three years of service as a director, or (iii) fails to seek reelection to the Board of Directors for a term commencing prior to his having both attained age 65 and completed three years of service as a director (in any case, other than on account of death or Disability), any portion of the Award that is vested and exercisable on the date of the expiration or discontinuance of such Participant’s membership on the Board shall remain exercisable for three (3) months following the expiration or discontinuance of such Participant’s membership on the Board, but not beyond the Expiration Date. Any portion of the Award which is unvested on the date of expiration or discontinuance of such Participant’s membership on the Board shall expire on the close of business of the Participant’s date of expiration or discontinuance of such Participant’s membership on the Board.

6.

Change in Control.  Upon a Change in Control, the Award shall fully vest and become exercisable until its expiration, termination or cancellation pursuant to the terms of the Plan, provided that no Award may be exercisable after the Expiration Date.

7.

Exercisability.  To the extent vested and exercisable on the effective date of exercise, the Award may be exercised in whole or in part, provided that no partial exercise shall be for an aggregate Exercise Price of less than $1,000.  The partial exercise of the Award shall not cause the expiration, termination or cancellation of the remaining portion hereof.  

(a)

Method of Exercise.  This Award may be exercised by delivering notice to the Southwestern’s principal office, to the attention of its Secretary, or as otherwise directed, no less than one (1) business day in advance of the effective date of the proposed exercise.  Such notice shall specify the number of shares of Common Stock with respect to which this Award is being exercised and the effective date of the proposed exercise and shall be signed (including through an electronic medium) by the Participant.  

(b)

Payment of Exercise Price.  Payment of the Exercise Price in connection with the exercise of all or a portion of this Award shall be made on the effective date of such exercise in accordance with Section 6(c)(3) of the Plan.

8.

Limitations on Transfer.  The Award is only transferable pursuant to the terms and conditions of Section 6(d) of the Plan.

9.

Responsibility for Taxes.  The Participant shall be solely responsible for any applicable taxes (including, without limitation, income and excise taxes) and penalties, and any interest that accrues thereon, which he or she incurs in connection with the receipt, vesting, or exercise of the Award, in accordance with Section 16 of the Plan.

10.

Conformity with the Plan. This Agreement is intended to conform in all respects with, and is subject to, all applicable provisions of the Plan. If there is any conflict between the terms and conditions of the Plan and this Agreement the terms of the Plan, as interpreted by the Committee, shall govern.

11.

Consent to Transfer Personal Data. The Participant acknowledges and consents to the collection, use, processing and transfer of personal data as described in this Section 11. The Company holds certain personal information about the Participant for the purpose of managing and administering the Plan (the “Data”). The Company may transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. The Participant authorizes the Company and any third parties to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Participant’s participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares of Common Stock on the Participant’s behalf to a broker or other third party with whom the Participant may elect to deposit any shares of Common Stock acquired or received pursuant to the Plan.

12.

Confidentiality. The Participant agrees not to disclose the existence or terms of the Award to any other members of the Board, employees of the Company or third parties with the exception of the Participant’s accountants, attorneys, or spouse, and shall ensure that none of them discloses such existence or terms to any other person, except as required to comply with legal requirements.

13.

Failure to Comply; Recoupment.  

(a)

In addition to the remedies provided for in the Plan, if the Participant fails to comply with any of the terms and conditions of the Plan or this Agreement, unless such failure is remedied within ten (10) days after the Participant is notified of such failure by the Committee, such failure to comply shall be grounds for the cancellation and forfeiture of the Award, in whole or in part, as the Committee may determine.

(b)

Notwithstanding anything herein to the contrary, the Company will be entitled to the extent permitted or required by applicable law or Company policy as in effect from time to time to recoup compensation of whatever kind paid by the Company at any time to a Participant under the Plan, including any benefits the Participant may receive in connection with the grant or exercise of the Award pursuant to this Agreement.

14.

Rights as a Stockholder.  Except as otherwise expressly provided in this Agreement or the Plan, the Participant shall not have any rights as a stockholder with respect to any shares of Common Stock covered by or relating to this Award granted pursuant to the Plan until the date (if any) of the issuance of such shares of Common Stock or the date as of which the Company records the Participant or his or her nominee as the owner of such shares of Common Stock, free and clear of any restrictions or conditions pursuant to the Plan or this Agreement, in its books and records.  

15.

Modification. This Agreement and the Plan constitute the entire agreement of the parties with respect to the subject matter hereof.  The Committee may amend, modify or terminate this Agreement in accordance with Section 17 of the Plan, provided that no such amendment or modification shall adversely affect the right of the Participant under this Agreement without the Participant’s written consent other than as set forth in Section 17(b) of the Plan.

16.

Governing Law. All matters arising under this Agreement, including matters of validity, construction and interpretation, shall be governed by the internal laws of the State of Delaware, without regard to any state’s conflict of law principles.

17.

Electronic Delivery and Acceptance.  Southwestern may, in its sole and absolute discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means and/or require the Participant to accept this Award or any future Award by electronic means.  The Participant hereby consents to receive such documents by electronic delivery and agrees that acceptance of this Award and any future Award may be through an on-line or electronic system established and maintained by Southwestern or a third party designated by Southwestern.

18.

Severability.  Whenever feasible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

19.

Waiver.  The waiver by the Company with respect to your compliance with any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach of such party of a provision of this Agreement.

20.

Participant Acknowledgment.  By accepting this Agreement, the Participant agrees to be bound to all of the terms and conditions of this Agreement and the Plan as the same may be amended from time to time.

IN WITNESS WHEREOF, Southwestern has caused this Agreement to be executed by its undersigned duly authorized officer as of the ____ day of ________, 20____.

ATTEST:

SOUTHWESTERN ENERGY COMPANY

By:  

_____________________________

By:  

_______________________________

On this ____ day of ____________, _____, the undersigned hereby acknowledges, accepts, and agrees to all terms and provisions of the foregoing Agreement.

______________________________________

[Director]

EX-10

SOUTHWESTERN ENERGY COMPANY 2013 INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

SOUTHWESTERN ENERGY COMPANY, a Delaware corporation (“Southwestern”), has on this [___] day of [_____________], [____] (the “Award Date”) granted to [_______________] (the “Participant”) a Restricted Stock Award  with respect to shares of Southwestern’s Common Stock ($.01 par value) (the “Award”).  This Award is subject to the terms of this Restricted Stock Award Agreement (the “Agreement”) and is made pursuant to the Southwestern Energy Company 2013 Incentive Plan (the “Plan”) which is incorporated into this Agreement by reference. Any capitalized terms used herein that are otherwise undefined shall have the meaning provided in the Plan.

1.

Acceptance of Terms and Conditions.  By acknowledging and accepting this Award, you agree to be bound by the terms and conditions of this Agreement, the Plan (including without limitation, Section 12 of the Plan), and all conditions established by Southwestern in connection with Awards issued under the Plan, and you further acknowledge and agree that this Award does not confer any legal or equitable right (other than those rights constituting the Award itself) against Southwestern or any Subsidiary (collectively, the “Company”) directly or indirectly, or give rise to any cause of action at law or in equity against the Company. To vest in the shares of Restricted Stock described in this Agreement, you must accept this Award. If you fail to accept this Award prior to the first Vesting Date, the Award will be cancelled and forfeited.

2.

Grant.  Subject to the restrictions, limitations, terms and conditions specified in the Plan and this Agreement, effective as of the Award Date, Southwestern hereby grants the Participant ______ shares of Restricted Stock each with the following Fair Market Value on the Award Date of $_____.

3.

Vesting.  Except as otherwise provided in Sections 5 and 7 of this Agreement, the shares of Restricted Stock will vest, and all restrictions thereon shall lapse, ratably at [___]% per year over a period of [____ (__)] years beginning on the first anniversary of the Award Date (each anniversary, a “Vesting Date”), subject to the Participant’s continued employment with the Company.  The Award will be fully vested on the [_____ (___)] anniversary of the Award Date.

4.

Delivery.  Each share of Restricted Stock shall be held in custody by Southwestern or its transfer agent as custodian until all restrictions have lapsed.  Promptly following each Vesting Date (or the date of vesting under Section 5 or Section 7 of this Agreement), subject to the Participant’s compliance with Section 9 hereof, Southwestern shall cause a number of shares of Common Stock equal to the number of shares of vested Restricted Stock to be delivered to the Participant’s Equity Account.

5.

Termination of Employment.  

(a)

Termination due to Death, Disability or Retirement.  If the Participant’s employment with the Company is terminated as a result of the Participant’s death, Disability, or Retirement, all unvested shares of Restricted Stock held by such Participant on the date of such termination shall become fully vested and all restrictions thereon shall lapse.

(b)

Other Terminations.  If the Participant’s employment with the Company is terminated for any reason other than those specified in Section 5(a) above, all shares of Restricted Stock which are unvested on the date of the Participant’s termination of employment shall be forfeited on the date of such termination of employment, without any payment of consideration by the Company to the Participant.

6.

Subsidiaries.  Unless the Committee determines otherwise, any unvested shares of Restricted Stock held by a Participant employed by an entity that is a Subsidiary will terminate and be forfeited immediately on the date such entity ceases to be a Subsidiary of Southwestern.

7.

Change in Control.  Upon a Change in Control, all unvested shares of Restricted Stock under this Award shall fully vest and all restrictions shall lapse.

8.

Limitations on Transfer.  Prior to vesting of a share of Restricted Stock, such share of Restricted Stock may not be transferred, encumbered or disposed of by the Participant under any circumstances or in any way and any transfer of the Participant’s rights with respect to such share of Restricted Stock, whether voluntary or involuntary, by operation of law or otherwise, will result in the cancellation and forfeiture of this Award and all rights relating thereto, and the transfer shall be of no force or effect.

9.

Responsibility for Taxes.  The Participant shall be solely responsible for any applicable taxes (including, without limitation, income and excise taxes) and penalties, and any interest that accrues thereon, which he or she incurs in connection with the receipt or vesting of this Award or delivery of the shares of Common Stock underlying this Award, in accordance with Section 16 of the Plan.

10.

Conformity with the Plan. This Agreement is intended to conform in all respects with, and is subject to, all applicable provisions of the Plan. If there is any conflict between the terms and conditions of the Plan and this Agreement the terms of the Plan, as interpreted by the Committee, shall govern.

11.

Section 83(b) Election. The Participant may file a Section 83(b) election with the Internal Revenue Service within thirty (30) days of the date hereof, electing thereby to be taxed on the Fair Market Value of the shares of Restricted Stock as of the Award Date.  Absent such an election, ordinary income will be measured and recognized by the Participant as of each Vesting Date (or the date of vesting under Section 5 or Section 7 of this Agreement).  If the Participant makes a Section 83(b) election and later forfeits any unvested shares of Restricted Stock upon termination of employment to the Company pursuant to Section 5 hereof, the Participant could suffer adverse tax consequences.  The Participant is strongly encouraged to seek the advice of his or her own tax consultants in connection with this Award and the advisability of filing of an election under Section 83(b) of the Internal Revenue Code. The Participant is solely responsible for filing the election under Section 83(b) of the Internal Revenue Code, even if the Participant requests Southwestern make this filing on his or her behalf.

12.

Voting Rights.  The terms and conditions of this Agreement and the Plan, including the risk of forfeiture and restrictions on transfer prior to vesting, will not affect the right of the Participant to exercise his or her voting rights in respect of the shares of Restricted Stock granted under this Agreement.    

13.

No Rights to Continued Employment. Nothing in this Agreement or in the Plan shall confer upon the Participant any right with respect to the continuation of the Participant’s employment by or service to the Company or interfere in any way with the right of the Company at any time to terminate the Participant’s employment or service or to increase or decrease the compensation of the Participant from the rate in existence at the time of the grant of this Award.

14.

Consent to Transfer Personal Data. The Participant acknowledges and consents to the collection, use, processing and transfer of personal data as described in this Section 14. The Company holds certain personal information about the Participant for the purpose of managing and administering the Plan (the “Data”). The Company may transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. The Participant authorizes the Company and any third parties to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Participant’s participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares of Common Stock on the Participant’s behalf to a broker or other third party with whom the Participant may elect to deposit any shares of Common Stock acquired or received pursuant to the Plan.

15.

Confidentiality. The Participant agrees not to disclose the existence or terms of this Award to any other employees of the Company or third parties with the exception of the Participant’s accountants, attorneys, or spouse, and shall ensure that none of them discloses such existence or terms to any other person, except as required to comply with legal process.

16.

Failure to Comply; Recoupment.  

(a)

In addition to the remedies provided for in the Plan, if the Participant fails to comply with any of the terms and conditions of the Plan or this Agreement, unless such failure is remedied within ten (10) days after the Participant is notified of such failure by the Committee, such failure to comply shall be grounds for the cancellation and forfeiture of this Award, in whole or in part, as the Committee may determine.

(b)

Notwithstanding anything herein to the contrary, the Company will be entitled to the extent permitted or required by applicable law or Company policy as in effect from time to time to recoup compensation of whatever kind paid by the Company at any time to a Participant under the Plan, including any benefits the Participant may receive in connection with the grant or vesting of shares of Restricted Stock pursuant to this Agreement.

17.

Modification. This Agreement and the Plan constitute the entire agreement of the parties with respect to the subject matter hereof.  The Committee may amend, modify or terminate this Agreement in accordance with Section 17 of the Plan, provided that no such amendment or modification shall adversely affect the right of the Participant under this Agreement without the Participant’s written consent other than as set forth in Section 17(b) of the Plan.  

18.

Governing Law. All matters arising under this Agreement, including matters of validity, construction and interpretation, shall be governed by the internal laws of the State of Delaware, without regard to any state’s conflict of law principles.

19.

Electronic Delivery and Acceptance.  Southwestern may, in its sole and absolute discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means and/or require the Participant to accept this Award or any future Award by electronic means.  The Participant hereby consents to receive such documents by electronic delivery and agrees that acceptance of this Award and any future Award may be through an on-line or electronic system established and maintained by Southwestern or a third party designated by Southwestern.

20.

Severability.  Whenever feasible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

21.

Waiver.  The waiver by the Company with respect to your compliance with any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach of such party of a provision of this Agreement.

22.

Participant Acknowledgment.  By accepting this Agreement, the Participant agrees to be bound to all of the terms and conditions of this Agreement and the Plan as the same may be amended from time to time.

IN WITNESS WHEREOF, Southwestern has caused this Agreement to be executed by its undersigned duly authorized officer as of the ____ day of ________, 20____.

ATTEST:

SOUTHWESTERN ENERGY COMPANY

By:  

_____________________________

By:  _______________________________

_______________________________

On this ____ day of ____________, _____, the undersigned hereby acknowledges, accepts, and agrees to all terms and provisions of the foregoing Agreement.

______________________________________

[Employee]

EX-10

SOUTHWESTERN ENERGY COMPANY 2013 INCENTIVE PLAN

DIRECTOR RESTRICTED STOCK AWARD AGREEMENT

SOUTHWESTERN ENERGY COMPANY, a Delaware corporation (“Southwestern”), has on this [___] day of [_____________], [____] (the “Award Date”) granted to [_______________] (the “Participant”) a Restricted Stock Award  with respect to shares of Southwestern’s Common Stock ($.01 par value) (the “Award”).  This Award is subject to the terms of this Restricted Stock Award Agreement (the “Agreement”) and is made pursuant to the Southwestern Energy Company 2013 Incentive Plan (the “Plan”) which is incorporated into this Agreement by reference. Any capitalized terms used herein that are otherwise undefined shall have the meaning provided in the Plan.

1.

Acceptance of Terms and Conditions.  By acknowledging and accepting this Award, you agree to be bound by the terms and conditions of this Agreement, the Plan (including without limitation, Section 12 of the Plan), and all conditions established by Southwestern in connection with Awards issued under the Plan, and you further acknowledge and agree that this Award does not confer any legal or equitable right (other than those rights constituting the Award itself) against Southwestern or any Subsidiary (collectively, the “Company”) directly or indirectly, or give rise to any cause of action at law or in equity against the Company. To vest in the shares of Restricted Stock described in this Agreement, you must accept this Award. If you fail to accept this Award prior to the first Vesting Date, the Award will be cancelled and forfeited.

2.

Grant.  Subject to the restrictions, limitations, terms and conditions specified in the Plan and this Agreement, effective as of the Award Date, Southwestern hereby grants the Participant ______ shares of Restricted Stock each with the following Fair Market Value on the Award Date of $_____.

3.

Vesting.  Except as otherwise provided in Sections 5 and 7 of this Agreement, the shares of Restricted Stock will vest, and all restrictions thereon shall lapse, ratably at [___]% per year over a period of [____ (__)] years beginning on the first anniversary of the Award Date (each anniversary, a “Vesting Date”), subject to the Participant’s continued service on the Board of Directors of Southwestern ( the “Board”).  The Award will be fully vested on the [_____ (___)] anniversary of the Award Date.

4.

Delivery.  Each share of Restricted Stock shall be held in custody by Southwestern or its transfer agent as custodian until all restrictions have lapsed.  Promptly following each Vesting Date (or the date of vesting under Section 5 or Section 7 of this Agreement), subject to the Participant’s compliance with Section 9 hereof, Southwestern shall cause a number of shares of Common Stock equal to the number of shares of vested Restricted Stock to be delivered to the Participant’s Equity Account.

5.

Discontinuance of Participant’s Term.  

(a)

Death, Disability or Retirement If the term of the Participant’s membership on the Board expires or is discontinued as a result of the Participant’s death, Disability, or Retirement, all unvested shares of Restricted Stock held by such Participant on the date of the expiration or discontinuance of such Participant’s membership on the Board shall become fully vested and all restrictions thereon shall lapse.

(b)

Other Expiration or Discontinuation of Participant’s Term on the Board.  If the term of the Participant’s membership on the Board expires or is discontinued for any reason other than those specified in Section 5(a) above, all shares of Restricted Stock which are unvested on the date of the expiration or discontinuance of such Participant’s membership on the Board shall be forfeited on the date of such expiration or discontinuance of the Participant’s membership on the Board, without any payment of consideration by the Company to the Participant.

6.

Change in Control.  Upon a Change in Control, all unvested shares of Restricted Stock under this Award shall fully vest and all restrictions shall lapse.

7.

Limitations on Transfer.  Prior to vesting of a share of Restricted Stock, such share of Restricted Stock may not be transferred, encumbered or disposed of by the Participant under any circumstances or in any way and any transfer of the Participant’s rights with respect to such share of Restricted Stock, whether voluntary or involuntary, by operation of law or otherwise, will result in the cancellation and forfeiture of this Award and all rights relating thereto, and the transfer shall be of no force or effect.

8.

Responsibility for Taxes.  The Participant shall be solely responsible for any applicable taxes (including, without limitation, income and excise taxes) and penalties, and any interest that accrues thereon, which he or she incurs in connection with the receipt or vesting of this Award or delivery of the shares of Common Stock underlying this Award, in accordance with Section 16 of the Plan.

9.

Conformity with the Plan. This Agreement is intended to conform in all respects with, and is subject to, all applicable provisions of the Plan. If there is any conflict between the terms and conditions of the Plan and this Agreement the terms of the Plan, as interpreted by the Committee, shall govern.

10.

Section 83(b) Election. The Participant may file a Section 83(b) election with the Internal Revenue Service within thirty (30) days of the date hereof, electing thereby to be taxed on the Fair Market Value of the shares of Restricted Stock as of the Award Date.  Absent such an election, ordinary income will be measured and recognized by the Participant as of each Vesting Date (or the date of vesting under Section 5 or Section 7 of this Agreement).  If the Participant makes a Section 83(b) election and later forfeits any unvested shares of Restricted Stock upon the expiration or discontinuance of such Participant’s membership on the Board pursuant to Section 5 hereof, the Participant could suffer adverse tax consequences.  The Participant is strongly encouraged to seek the advice of his or her own tax consultants in connection with this Award and the advisability of filing of an election under Section 83(b) of the Internal Revenue Code. The Participant is solely responsible for filing the election under Section 83(b) of the Internal Revenue Code, even if the Participant requests Southwestern make this filing on his or her behalf.

11.

Voting Rights.  The terms and conditions of this Agreement and the Plan, including the risk of forfeiture and restrictions on transfer prior to vesting, will not affect the right of the Participant to exercise his or her voting rights in respect of the shares of Restricted Stock granted under this Agreement.    

12.

Consent to Transfer Personal Data. The Participant acknowledges and consents to the collection, use, processing and transfer of personal data as described in this Section 14. The Company holds certain personal information about the Participant for the purpose of managing and administering the Plan (the “Data”). The Company may transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. The Participant authorizes the Company and any third parties to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Participant’s participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares of Common Stock on the Participant’s behalf to a broker or other third party with whom the Participant may elect to deposit any shares of Common Stock acquired or received pursuant to the Plan.

13.

Confidentiality. The Participant agrees not to disclose the existence or terms of this Award to any other members of the Board or third parties with the exception of the Participant’s accountants, attorneys, or spouse, and shall ensure that none of them discloses such existence or terms to any other person, except as required to comply with legal process.

14.

Failure to Comply; Recoupment.  

(a)

In addition to the remedies provided for in the Plan, if the Participant fails to comply with any of the terms and conditions of the Plan or this Agreement, unless such failure is remedied within ten (10) days after the Participant is notified of such failure by the Committee, such failure to comply shall be grounds for the cancellation and forfeiture of this Award, in whole or in part, as the Committee may determine.

(b)

Notwithstanding anything herein to the contrary, the Company will be entitled to the extent permitted or required by applicable law or Company policy as in effect from time to time to recoup compensation of whatever kind paid by the Company at any time to a Participant under the Plan, including any benefits the Participant may receive in connection with the grant or vesting of shares of Restricted Stock pursuant to this Agreement.

15.

Modification. This Agreement and the Plan constitute the entire agreement of the parties with respect to the subject matter hereof.  The Committee may amend, modify or terminate this Agreement in accordance with Section 17 of the Plan, provided that no such amendment or modification shall adversely affect the right of the Participant under this Agreement without the Participant’s written consent other than as set forth in Section 17(b) of the Plan.  

16.

Governing Law. All matters arising under this Agreement, including matters of validity, construction and interpretation, shall be governed by the internal laws of the State of Delaware, without regard to any state’s conflict of law principles.

17.

Electronic Delivery and Acceptance.  Southwestern may, in its sole and absolute discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means and/or require the Participant to accept this Award or any future Award by electronic means.  The Participant hereby consents to receive such documents by electronic delivery and agrees that acceptance of this Award and any future Award may be through an on-line or electronic system established and maintained by Southwestern or a third party designated by Southwestern.

18.

Severability.  Whenever feasible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

19.

Waiver.  The waiver by the Company with respect to your compliance with any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach of such party of a provision of this Agreement.

20.

Participant Acknowledgment.  By accepting this Agreement, the Participant agrees to be bound to all of the terms and conditions of this Agreement and the Plan as the same may be amended from time to time.

IN WITNESS WHEREOF, Southwestern has caused this Agreement to be executed by its undersigned duly authorized officer as of the ____ day of ________, 20____.

ATTEST:

SOUTHWESTERN ENERGY COMPANY

By:  

_____________________________

By:  _______________________________

_______________________________

On this ____ day of ____________, _____, the undersigned hereby acknowledges, accepts, and agrees to all terms and provisions of the foregoing Agreement.

______________________________________

Participant

EX-10

SOUTHWESTERN ENERGY COMPANY 2013 INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

SOUTHWESTERN ENERGY COMPANY, a Delaware corporation (“Southwestern”), has on this [___] day of [_____________], [____] (the “Award Date”) granted to [_______________], (the “Participant”) a Restricted Stock Unit Award  with respect to shares of Southwestern’s Common Stock ($.01 par value) (“the “Award”).  This Award is subject to the terms of this Restricted Stock Unit Award Agreement (the “Agreement”) and is made pursuant to the Southwestern Energy Company 2013 Incentive Plan (the “Plan”) which is incorporated into this Agreement by reference. Any capitalized terms used herein that are otherwise undefined shall have the meaning provided in the Plan.

1.

Acceptance of Terms and Conditions.  By acknowledging and accepting this Award, you agree to be bound by the terms and conditions of this Agreement, the Plan (including without limitation, Section 12 of the Plan), and all conditions established by Southwestern in connection with Awards issued under the Plan, and you further acknowledge and agree that this Award does not confer any legal or equitable right (other than those rights constituting the Award itself) against Southwestern or any Subsidiary (collectively, the “Company”) directly or indirectly, or give rise to any cause of action at law or in equity against the Company. To vest in the Restricted Stock Units (“RSUs”) described in this Agreement, you must accept this Award. If you fail to accept this Award prior to the first Vesting Date, the Award will be cancelled and forfeited.

2.

Grant.  Subject to the restrictions, limitations, terms and conditions specified in the Plan and this Agreement, effective as of the Award Date, Southwestern hereby grants the Participant ______ RSUs.

3.

Vesting.  Except as otherwise provided in Sections 5 and 7 of this Agreement, on each of the dates set forth below (each a “Vesting Date”), subject to the Participant’s continued employment with the Company, the Participant will become vested in the below-stated percentage of the total number of RSUs granted with respect to this Award, until the Participant is 100% vested in the RSUs:

Percentage of Total RSUs Granted under Award	Vesting Date
[%]	[Vest Date]
[%]	[Vest Date]
[%]	[Vest Date]

4.

Settlement of RSUs.  Within thirty (30) days following the vesting of any RSUs granted pursuant to this Agreement under Section 2, Section 5 or Section 7, of this Agreement, subject to Section 9 hereof, Southwestern will issue and deliver to the Participant a share of Common Stock with respect to each vested RSU.

5.

Termination of Employment.  

(a)

Termination due to Death, Disability or Retirement.  If the Participant’s employment with the Company is terminated as a result of the Participant’s death, Disability, or Retirement, all unvested RSUs on the date of such termination shall become fully vested and will be settled in accordance with Section 4 above.

(b)

Other Terminations.  If the Participant’s employment with the Company is terminated for any reason other than those specified in Section 5(a) above, all unvested RSUs on the date of the Participant’s termination of employment shall be forfeited on the date of such termination of employment, without any payment of consideration by the Company to the Participant.

6.

Subsidiaries.  Unless the Committee determines otherwise, any unvested RSUs held by a Participant employed by an entity that is a Subsidiary will terminate and be forfeited immediately on the date such entity ceases to be a Subsidiary of Southwestern.

7.

Change in Control.  Upon a Change in Control, as defined in the Plan, all unvested RSUs shall fully vest and will be settled in accordance with Section 4 above.

8.

Limitations on Transfer.  Prior to vesting of the RSUs granted pursuant to this Award, the RSUs may not be transferred by the Participant under any circumstances and any transfer of the Participant’s rights with respect to these RSUs, whether voluntary or involuntary, by operation of law or otherwise, will result in the cancellation and forfeiture of this Award and the transfer shall be of no force or effect.

9.

Responsibility for Taxes.  The Participant shall be solely responsible for any applicable taxes (including, without limitation, income and excise taxes) and penalties, and any interest that accrues thereon, which he or she incurs in connection with the vesting, or settlement of this Award, in accordance with Section 16 of the Plan.  However, upon the exercise or settlement of any Award in cash, or any payment with respect to any Award, the Company shall have the right to withhold from any payment required to be made pursuant thereto an amount sufficient to satisfy the federal, state, local and/or non-U.S. withholding tax requirements, if any, attributable to such exercise, settlement or payment.  

10.

Section 409A of the Code.  The benefits provided hereunder shall be paid in such a manner as to satisfy Section 409A of the Code or an exception to the application of Section 409A of the Code. To the extent that these benefits become subject to Section 409A of the Code, this Agreement and the Plan shall be interpreted and construed to the fullest extent allowed under Section 409A of the Code and the applicable guidance thereunder to satisfy the requirements of an exception or to comply with Section 409A of the Code and the applicable guidance thereunder and to avoid any additional tax thereunder.  Notwithstanding the foregoing or any provision of this Agreement or the Plan to the contrary, in no event shall the Company be liable to a Participant on account of an Award’s failure to (i) qualify for favorable U.S. or non-U.S. tax treatment or (ii) avoid adverse tax treatment under U.S. or non-U.S. law, including, without limitation, Section 409A of the Code.  In addition, n otwithstanding anything in this Agreement to the contrary, if a Participant is a Specified Employee at the time of his or her Separation from Service, any payment(s) with respect to any Award subject to Section 409A of the Code to which such Participant would otherwise be entitled by reason of such Separation from Service shall be made on the date that is six (6) months after the Participant’s Separation from Service (or, if earlier, the date of the Participant’s death).

11.

Conformity with the Plan. This Agreement is intended to conform in all respects with, and is subject to, all applicable provisions of the Plan. If there is any conflict between the terms and conditions of the Plan and this Agreement the terms of the Plan, as interpreted by the Committee, shall govern.

12.

No Rights to Continued Employment. Nothing in this Agreement or in the Plan shall confer upon the Participant any right with respect to the continuation of the Participant’s employment by or service to the Company or interfere in any way with the right of the Company at any time to terminate the Participant’s employment or service or to increase or decrease the compensation of the Participant from the rate in existence at the time of the grant of this Award.

13.

Consent to Transfer Personal Data. The Participant acknowledges and consents to the collection, use, processing and transfer of personal data as described in this Section 13. The Company holds certain personal information about the Participant for the purpose of managing and administering the Plan (the “Data”). The Company may transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. The Participant authorizes the Company and any third parties to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Participant’s participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares of Common Stock on the Participant’s behalf to a broker or other third party with whom the Participant may elect to deposit any shares of Common Stock acquired or received pursuant to the Plan.

14.

Confidentiality. The Participant agrees not to disclose the existence or terms of this Award to any other employees of the Company or third parties with the exception of the Participant’s accountants, attorneys, or spouse, and shall ensure that none of them discloses such existence or terms to any other person, except as required to comply with legal process.

15.

Failure to Comply; Recoupment.  

(a)

In addition to the remedies provided for in the Plan, if the Participant fails to comply with any of the terms and conditions of the Plan or this Agreement, unless such failure is remedied within ten days after the Participant is notified of such failure by the Committee, such failure to comply shall be grounds for the cancellation and forfeiture of this Award, in whole or in part, as the Committee may determine.

(b)

Notwithstanding anything herein to the contrary, the Company will be entitled to the extent permitted or required by applicable law or Company policy as in effect from time to time to recoup compensation of whatever kind paid by the Company or any of its Subsidiaries at any time to a Participant under the Plan, including any benefits the Participant may receive in connection with the grant or vesting of RSUs pursuant to this Agreement.

16.

Rights as a Stockholder.  Except as otherwise expressly provided in this Agreement or the Plan, the Participant shall not have any rights as a stockholder with respect to any shares of Common Stock covered by or relating to this Award granted pursuant to the Plan until the date (if any) of the issuance of such shares of Common Stock or the date as of which the Company records the Participant or his or her nominee as the owner of such shares of Common Stock, free and clear of any restrictions or conditions pursuant to the Plan or this Agreement, in its books and records.  

17.

Modification. This Agreement and the Plan constitute the entire agreement of the parties with respect to the subject matter hereof.  The Committee may amend, modify or terminate this Agreement in accordance with Section 17 of the Plan, provided that no such amendment or modification shall adversely affect the right of the Participant under this Agreement without the Participant’s written consent other than as set forth in Section 17(b) of the Plan.

18.

Governing Law. All matters arising under this Agreement, including matters of validity, construction and interpretation, shall be governed by the internal laws of the State of Delaware, without regard to any state’s conflict of law principles.

19.

Electronic Delivery and Acceptance.  Southwestern may, in its sole and absolute discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means and/or require the Participant to accept this Award or any future Award by electronic means.  The Participant hereby consents to receive such documents by electronic delivery and agrees that acceptance of this Award and any future Award may be through an on-line or electronic system established and maintained by Southwestern or a third party designated by Southwestern.

20.

Severability.  Whenever feasible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

21.

Waiver.  The waiver by the Company with respect to your compliance with any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach of such party of a provision of this Agreement.

22.

Participant Acknowledgment.  By accepting this Agreement, the Participant agrees to be bound to all of the terms and conditions of this Agreement and the Plan as the same may be amended from time to time.

IN WITNESS WHEREOF, Southwestern has caused this Agreement to be executed by its undersigned duly authorized officer as of the ____ day of ________, 20____.

ATTEST:

SOUTHWESTERN ENERGY COMPANY

By:  

_____________________________

By:  

_______________________________

On this ____ day of ____________, _____, the undersigned hereby acknowledges, accepts, and agrees to all terms and provisions of the foregoing Agreement.

______________________________________

[Employee]

EX-10

SOUTHWESTERN ENERGY COMPANY 2013 INCENTIVE PLAN

DIRECTOR RESTRICTED STOCK UNIT AWARD AGREEMENT

SOUTHWESTERN ENERGY COMPANY, a Delaware corporation (“Southwestern”), has on this [___] day of [_____________], [____] (the “Award Date”) granted to [_______________], (the “Participant”) a Restricted Stock Unit Award  with respect to shares of Southwestern’s Common Stock ($.01 par value) (“the “Award”).  This Award is subject to the terms of this Restricted Stock Unit Award Agreement (the “Agreement”) and is made pursuant to the Southwestern Energy Company 2013 Incentive Plan (the “Plan”) which is incorporated into this Agreement by reference. Any capitalized terms used herein that are otherwise undefined shall have the meaning provided in the Plan.

1.

Acceptance of Terms and Conditions.  By acknowledging and accepting this Award, you agree to be bound by the terms and conditions of this Agreement, the Plan (including without limitation, Section 12 of the Plan), and all conditions established by Southwestern in connection with Awards issued under the Plan, and you further acknowledge and agree that this Award does not confer any legal or equitable right (other than those rights constituting the Award itself) against Southwestern or any Subsidiary (collectively, the “Company”) directly or indirectly, or give rise to any cause of action at law or in equity against the Company. To vest in the Restricted Stock Units (“RSUs”) described in this Agreement, you must accept this Award. If you fail to accept this Award prior to the first Vesting Date, the Award will be cancelled and forfeited.

2.

Grant.  Subject to the restrictions, limitations, terms and conditions specified in the Plan and this Agreement, effective as of the Award Date, Southwestern hereby grants the Participant ______ RSUs.

3.

Vesting.  Except as otherwise provided in Sections 5 and 7 of this Agreement, on each of the dates set forth below (each a “Vesting Date”), subject to the Participant’s continued service on the Board of Directors of Southwestern ( the “Board”), the Participant will become vested in the below-stated percentage of the total number of RSUs granted with respect to this Award, until the Participant is 100% vested in the RSUs:

Percentage of Total RSUs Granted under Award	Vesting Date
[%]	[Vest Date]
[%]	[Vest Date]
[%]	[Vest Date]

4.

Settlement of RSUs.  Within thirty (30) days following the vesting of any RSUs granted pursuant to this Agreement under Section 2, Section 5 or Section 7, of this Agreement, subject to Section 9 hereof, Southwestern will issue and deliver to the Participant a share of Common Stock with respect to each vested RSU.

5.

Discontinuance of Participant’s Term.  

(a)

Death, Disability or Retirement If the term of the Participant’s membership on the Board expires or is discontinued as a result of the Participant’s death, Disability, or Retirement, all unvested RSUs held by such Participant on the date of the expiration or discontinuance of such Participant’s membership on the Board shall become fully vested and will be settled in accordance with Section 4 above.

(b)

Other Terminations.  Other Expiration or Discontinuation of Participant’s Term on the Board.  If the term of the Participant’s membership on the Board expires or is discontinued for any reason other than those specified in Section 5(a) above, all unvested RSUs on the date of the expiration or discontinuance of such Participant’s membership on the Board shall be forfeited on the date of such expiration or discontinuance of the Participant’s membership on the Board, without any payment of consideration by the Company to the Participant.

6.

Change in Control.  Upon a Change in Control, as defined in the Plan, all unvested RSUs shall fully vest and will be settled in accordance with Section 4 above.

7.

Limitations on Transfer.  Prior to vesting of the RSUs granted pursuant to this Award, the RSUs may not be transferred by the Participant under any circumstances and any transfer of the Participant’s rights with respect to these RSUs, whether voluntary or involuntary, by operation of law or otherwise, will result in the cancellation and forfeiture of this Award and the transfer shall be of no force or effect.

8.

Responsibility for Taxes.  The Participant shall be solely responsible for any applicable taxes (including, without limitation, income and excise taxes) and penalties, and any interest that accrues thereon, which he or she incurs in connection with the vesting, or settlement of this Award, in accordance with Section 16 of the Plan.  However, upon the exercise or settlement of any Award in cash, or any payment with respect to any Award, the Company shall have the right to withhold from any payment required to be made pursuant thereto an amount sufficient to satisfy the federal, state, local and/or non-U.S. withholding tax requirements, if any, attributable to such exercise, settlement or payment.  

9.

Section 409A of the Code.  The benefits provided hereunder shall be paid in such a manner as to satisfy Section 409A of the Code or an exception to the application of Section 409A of the Code. To the extent that these benefits become subject to Section 409A of the Code, this Agreement and the Plan shall be interpreted and construed to the fullest extent allowed under Section 409A of the Code and the applicable guidance thereunder to satisfy the requirements of an exception or to comply with Section 409A of the Code and the applicable guidance thereunder and to avoid any additional tax thereunder.  Notwithstanding the foregoing or any provision of this Agreement or the Plan to the contrary, in no event shall the Company be liable to a Participant on account of an Award’s failure to (i) qualify for favorable U.S. or non-U.S. tax treatment or (ii) avoid adverse tax treatment under U.S. or non-U.S. law, including, without limitation, Section 409A of the Code.  

10.

Conformity with the Plan. This Agreement is intended to conform in all respects with, and is subject to, all applicable provisions of the Plan. If there is any conflict between the terms and conditions of the Plan and this Agreement the terms of the Plan, as interpreted by the Committee, shall govern.

11.

Consent to Transfer Personal Data. The Participant acknowledges and consents to the collection, use, processing and transfer of personal data as described in this Section 13. The Company holds certain personal information about the Participant for the purpose of managing and administering the Plan (the “Data”). The Company may transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. The Participant authorizes the Company and any third parties to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Participant’s participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares of Common Stock on the Participant’s behalf to a broker or other third party with whom the Participant may elect to deposit any shares of Common Stock acquired or received pursuant to the Plan.

12.

Confidentiality. The Participant agrees not to disclose the existence or terms of this Award to any other members of the Board or third parties with the exception of the Participant’s accountants, attorneys, or spouse, and shall ensure that none of them discloses such existence or terms to any other person, except as required to comply with legal process.

13.

Failure to Comply; Recoupment.  

(a)

In addition to the remedies provided for in the Plan, if the Participant fails to comply with any of the terms and conditions of the Plan or this Agreement, unless such failure is remedied within ten days after the Participant is notified of such failure by the Committee, such failure to comply shall be grounds for the cancellation and forfeiture of this Award, in whole or in part, as the Committee may determine.

(b)

Notwithstanding anything herein to the contrary, the Company will be entitled to the extent permitted or required by applicable law or Company policy as in effect from time to time to recoup compensation of whatever kind paid by the Company or any of its Subsidiaries at any time to a Participant under the Plan, including any benefits the Participant may receive in connection with the grant or vesting of RSUs pursuant to this Agreement.

14.

Rights as a Stockholder.  Except as otherwise expressly provided in this Agreement or the Plan, the Participant shall not have any rights as a stockholder with respect to any shares of Common Stock covered by or relating to this Award granted pursuant to the Plan until the date (if any) of the issuance of such shares of Common Stock or the date as of which the Company records the Participant or his or her nominee as the owner of such shares of Common Stock, free and clear of any restrictions or conditions pursuant to the Plan or this Agreement, in its books and records.  

15.

Modification. This Agreement and the Plan constitute the entire agreement of the parties with respect to the subject matter hereof.  The Committee may amend, modify or terminate this Agreement in accordance with Section 17 of the Plan, provided that no such amendment or modification shall adversely affect the right of the Participant under this Agreement without the Participant’s written consent other than as set forth in Section 17(b) of the Plan.

16.

Governing Law. All matters arising under this Agreement, including matters of validity, construction and interpretation, shall be governed by the internal laws of the State of Delaware, without regard to any state’s conflict of law principles.

17.

Electronic Delivery and Acceptance.  Southwestern may, in its sole and absolute discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means and/or require the Participant to accept this Award or any future Award by electronic means.  The Participant hereby consents to receive such documents by electronic delivery and agrees that acceptance of this Award and any future Award may be through an on-line or electronic system established and maintained by Southwestern or a third party designated by Southwestern.

18.

Severability.  Whenever feasible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

19.

Waiver.  The waiver by the Company with respect to your compliance with any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach of such party of a provision of this Agreement.

20.

Participant Acknowledgment.  By accepting this Agreement, the Participant agrees to be bound to all of the terms and conditions of this Agreement and the Plan as the same may be amended from time to time.

IN WITNESS WHEREOF, Southwestern has caused this Agreement to be executed by its undersigned duly authorized officer as of the ____ day of ________, 20____.

ATTEST:

SOUTHWESTERN ENERGY COMPANY

By:  

_____________________________

By:  

_______________________________

On this ____ day of ____________, _____, the undersigned hereby acknowledges, accepts, and agrees to all terms and provisions of the foregoing Agreement.

______________________________________

Participant

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Fair Value Measurements

6 Months Ended

Jun. 30, 2013

Fair Value Measurements [Abstract]

Fair Value Measurements

(9) FAIR VALUE MEASUREMENTS

The carrying amounts and estimated fair values of the Company’s financial instruments as of June 30, 2013 and December 31, 2012 were as follows:

	June 30,				December 31,
	2013				2012
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
	(in thousands)
Cash and cash equivalents	$	25,685	$	25,685	$	53,583	$	53,583
Restricted cash	$	–	$	–	$	8,542	$	8,542
Unsecured revolving credit facility	$	230,000	$	230,000	$	–	$	–
Senior notes	$	1,668,934	$	1,791,429	$	1,669,473	$	1,917,005
Derivative instruments	$	264,201	$	264,201	$	287,878	$	287,878

The carrying values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, other current assets and current liabilities on the unaudited condensed consolidated balance sheets approximate fair value because of their short-term nature. For debt and derivative instruments, the following methods and assumptions were used to estimate fair value:

Debt: The fair values of the Company’s senior notes were based on the market for the Company’s publicly-traded debt as determined based on yield of the Company’s 7.5% Senior Notes due 2018, which was 3.1% at June  30, 2013 and 2.6% at December 31, 2012, and its 4.10% Senior Notes due 2022, which was 4.2% at June  30, 2013. The carrying value of the borrowings under the Company’s unsecured revolving credit facility at June  30, 2013, approximate fair value because the interest rate is variable and reflective of market rates.  The Company considers the fair value of its debt to be a Level 2 measurement on the fair value hierarchy. 

Derivative Instruments: The fair value of all derivative instruments is the amount at which the instrument could be exchanged currently between willing parties. The amounts are based on quoted market prices, best estimates obtained from counterparties and an option pricing model, when necessary, for price option contracts.

GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. As presented in the tables below, this hierarchy consists of three broad levels:

Level 1 valuations - Consist of unadjusted quoted prices in active markets for identical assets and liabilities and have the highest priority.

Level 2 valuations - Consist of quoted market information for the calculation of fair market value.

Level 3 valuations - Consist of internal estimates and have the lowest priority.

Pursuant to GAAP, the Company has classified its derivatives into these levels depending upon the data utilized to determine their fair values. The Company’s Level 2 fair value measurements include fixed-price and floating-price swaps and are estimated using internal discounted cash flow calculations using the NYMEX futures index.The Company utilizes discounted cash flow models for valuing its interest rate derivatives. The net derivative values attributable to the Company's interest rate derivative contracts as of June 30, 2013 are based on (i) the contracted notional amounts, (ii) active market-quoted London Interbank Offered Rate ("LIBOR") yield curves and (iii) the applicable credit-adjusted risk-free rate yield curve. The Company's interest rate derivative asset and liability measurements represent Level 2 inputs in the hierarchy. The Company’s Level 3 fair value measurements include fixed price call options and basis swaps. The Company’s fixed price call options are valued using the Black-Scholes model, an industry standard option valuation model, and takes into account inputs such as contract terms, including maturity, and market parameters, including assumptions of the NYMEX futures index, interest rates, volatility and credit worthiness.  The Company’s basis swaps are estimated using internal discounted cash flow calculations based upon forward commodity price curves. 

The accounting group, reporting to the Vice President and Controller, is responsible for determining the Company’s Level 3 fair value measurements.  Inputs to the Black-Scholes model, including the volatility input, which is the significant unobservable input for Level 3 fair value measurements, are obtained from a third-party pricing source, with independent verification of most significant inputs on a monthly basis. An increase (decrease) in volatility would resultin an increase (decrease) in fair value measurement, respectively.

Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):

	June 30, 2013
	Fair Value Measurements Using:
	Quoted Prices		Significant
	in Active		Other		Significant
	Markets		Observable Inputs		Unobservable Inputs		Assets (Liabilities)
	(Level 1)		(Level 2)		(Level 3)		at Fair Value
Derivative assets	$	–	$	295,761	$	10,967	$	306,728
Derivative liabilities		–		(3,602)		(38,925)		(42,527)
Total	$	–	$	292,159	$	(27,958)	$	264,201
	December 31, 2012
	Fair Value Measurements Using:
	Quoted Prices		Significant
	in Active		Other		Significant
	Markets		Observable Inputs		Unobservable Inputs		Assets (Liabilities)
	(Level 1)		(Level 2)		(Level 3)		at Fair Value
Derivative assets	$	–	$	287,993	$	4,151	$	292,144
Derivative liabilities		–		–		(4,266)		(4,266)
Total	$	–	$	287,993	$	(115)	$	287,878

The table below presents reconciliations for the change in net fair value of derivative assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three-and six-month periods ended June  30, 2013 and June  30, 2012. The fair values of Level 3 derivative instruments are estimated using proprietary valuation models that utilize both market observable and unobservable parameters. Level 3 instruments presented in the table consist of net derivatives valued using pricing models incorporating assumptions that, in the Company’s judgment, reflect the assumptions a reasonable marketplace participant would have used at June  30, 2013 and June  30, 2012.

	For the three months ended				For the six months ended
	June 30,				June 30,
	2013		2012		2013		2012
	(in thousands)
Balance at beginning of period	$	(60,147)	$	184,543	$	(115)	$	182,119
Total gains or losses (realized/unrealized):
Included in earnings		32,277		65,274		(26,748)		123,736
Included in other comprehensive income		–		(77,731)		–		(77,441)
Purchases, issuances, and settlements:
Purchases		–		–		–		–
Issuances		–		–		–		–
Settlements		(88)		(65,864)		(1,095)		(122,192)
Transfers into/out of Level 3		–		–		–		–
Balance at end of period	$	(27,958)	$	106,222	$	(27,958)	$	106,222
Change in unrealized gains included in earnings relating to derivatives still held as of June 30	$	32,189	$	(590)	$	(27,843)	$	1,544

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Fair Value Measurements (Assets and Liabilities Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3), Reconciliation) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Fair Value Measurements [Abstract]
Balance at beginning of period	$ (60,147)	$ 184,543	$ (115)	$ 182,119
Total gains or losses (realized/unrealized): Included in earnings	32,277	65,274	(26,748)	123,736
Total gains or losses (realized/unrealized): Included in other comprehensive income		(77,731)		(77,441)
Purchases, issuances, and settlements:
Purchases
Issuances
Settlements	(88)	(65,864)	(1,095)	(122,192)
Balance at end of period	(27,958)	106,222	(27,958)	106,222
Change in unrealized gain included in earnings relating to derivatives still held as of June 30	$ 32,189	$ (590)	$ (27,843)	$ 1,544

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Settlements tax	$ (18.5)	$ (76.7)	$ (50.0)	$ (140.4)
Ineffectiveness tax	0.8	1.1	0.3	(1.0)
Change in fair value of derivative instruments tax	45.0	(23.7)	14.7	84.8
Amortization of prior service cost included in net periodic pension cost tax	$ 0.2	$ 0.1	$ 0.4	$ 0.3

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Divestiture

6 Months Ended

Jun. 30, 2013

Divestiture [Abstract]

Divestiture

(2) ACQUISITIONS AND DIVESTITURES

In April 2013, the Company entered into a definitive purchase agreement to acquire natural gas properties located in Pennsylvania prospective for the Marcellus Shale for approximately $93.0 million, subject to closing conditions.  The Company utilized its revolving credit facility to finance the acquisition.  The Company closed on the acquisition during the second quarter of 2013 and accounted for it as an asset acquisition.

In May 2012, the Company sold certain oil and natural gas leases, wells and gathering equipment in East Texas for approximately $166.0 million.  The assets included in the sale represented all of the Company’s interests and related assets in the Overton Field in Smith County. The net production from the sold assets was approximately 24.0 MMcfe per day as of the closing date and our net proved reserves were approximately 143.0 Bcfe at December 31, 2011. 

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New Accounting Pronouncements Adopted

6 Months Ended

Jun. 30, 2013

New Accounting Pronouncements Adopted [Abstract]

New Accounting Pronouncements Adopted

(16) NEW ACCOUNTING PRONOUNCEMENTS ADOPTED

In February 2013, the FASB issued Accounting Standards Update No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“Update 2013-02”), which finalizes  proposed ASU No. 2012-240, and seeks to improve the transparency of reporting reclassifications out of accumulated other comprehensive income. Update 2013-02 replaces the presentation requirements in ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income, and ASU No. 2011-12, ComprehensiveIncome (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out ofAccumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. Update 2013-02 requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respectiveline items in net income if the amount being reclassified is required under U.S. GAAP to be reclassified in its entirety to net income. For public entities, Update 2013-02 is effective prospectively for reporting periods beginning after December15, 2012, with early adoption permitted. The implementation of the disclosure requirement did not have amaterial impact on the Company’s consolidated results of operations, financial position or cash flows. 

In January 2013, the FASB issued Accounting Standards Update No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (“Update 2013-01”), which finalizes Proposed ASU No.2012-250 and clarifies the scope of transactions that are subject to disclosures concerning offsetting. Update 2013-01 addresses implementation issues regarding the scope of ASU No. 2011-11, Balance Sheet (Topic 210): Disclosures aboutOffsetting Assets and Liabilities, issued in December 2011. Update 2013-01 clarifies that the scope of the disclosures underU.S. GAAP is limited to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowingand securities lending transactions that are offset either in accordance with FASB ASC Section 210-20-45, Balance Sheet—Offsetting—Other Presentation Matters, or FASB ASC Section 815-10-45, Derivatives and Hedging—Overall—Other Presentation Matters, or are subject to a master netting arrangement or similar agreement. Update 2013-01 requiresan entity (1) to apply the amendments for annual reporting periods beginning on or after January 1, 2013 and (2) to providethe required disclosures retrospectively for all comparative periods presented. The implementation of the disclosure requirement did not have a material impact on the Company’s consolidated results of operations, financial position or cash flows.

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Commitments and Contingencies (Details)	1 Months Ended			3 Months Ended	6 Months Ended	12 Months Ended
	Dec. 31, 2010 USD ($)	Mar. 31, 2010 CAD item acre	Feb. 28, 2009	Mar. 31, 2010 CAD acre	Jun. 30, 2013 USD ($)	Dec. 31, 2012 item	Dec. 31, 2010 USD ($)	Mar. 23, 2012	Nov. 30, 2011 USD ($)	Aug. 24, 2011 USD ($)	Jul. 12, 2011 USD ($)	Jun. 02, 2011 USD ($)	Mar. 11, 2011 item	Nov. 30, 2010 Seventh Amended Petition [Member] USD ($)	Feb. 28, 2009 Sixth Amended Petition [Member] USD ($)
Unrecorded capital investments obligation, Exploration program acres coverage (acres)		2,500,000		2,500,000
Unrecorded capital investments obligation		47,000,000		47,000,000
Period licenses require capital investments be made, years				3 years
Number of extensions to exploration license agreememnts						2
Extension of exploration license, period						1 year
Unrecorded promissory note payable		44,500,000		44,500,000
Duration of firm transportation agreement, years								15 years
Obligation under transportation agreements					3,100,000,000
Guarantee obligations relative to the firms transportation agreements and gathering project and services					100,000,000
Litigation, Allegations			plaintiff alleged that, in 2005, they provided SEPCO with proprietary data regarding two prospects in the James Lime formation pursuant to a confidentiality agreement and that SEPCO refused to return the proprietary data to the plaintiff, subsequently acquired leases based upon such proprietary data and profited therefrom.  Among other things, the plaintiff's allegations in the Sixth Petition included various statutory and common law claims, including, but not limited to claims of misappropriation of trade secrets, violation of the Texas Theft Liability Act, breach of fiduciary duty and confidential relationships, various fraud based claims and breach of contract, including a claim of breach of a purported right of first refusal on all interests acquired by SEPCO between February 2005 and February 2006.
Litigation, Monetary damages claimed by plaintiffs														46,000,000	55,000,000
Litigation settlement	11,400,000
Litigation, Interest and Attorney's Fees claimed by plaintiffs										8,900,000		11,400,000
Litigation, portion of profits considered for disgorgement							381,500,000
Disgorgement damages awarded in favor of the plantiff and intervenor											23,900,000
Percentage of attorney fees recoverable by plantiff												40
Number of wells for constructive trust profits													143
Number of horizontal wells operated by SEECO in Arkansas		27
Value of SEPCO's supersedeas bond									14,100,000
Pre-judgement interest covered by SEPCO's supersedeas bond									1,300,000
Post-judgement interest covered by SEPCO's supersedeas bond									1,300,000
Litigation, SEPCO's estimated gross liability including interest and attorney's fees.					$ 45,500,000

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Debt

6 Months Ended

Jun. 30, 2013

Debt [Abstract]

Debt

(10) DEBT

The components of debt as of June  30, 2013 and December 31, 2012 consisted of the following:

	June 30,		December 31,
	2013		2012
	(in thousands)
Short-term debt:
7.15% Senior Notes due 2018	$	1,200	$	1,200
Total short-term debt		1,200		1,200
Long-term debt:
Variable rate (2.17% at June 30, 2013) unsecured revolving credit facility		230,000		–
7.5% Senior Notes due 2018		600,000		600,000
7.35% Senior Notes due 2017		15,000		15,000
7.125% Senior Notes due 2017		25,000		25,000
7.15% Senior Notes due 2018		28,800		29,400
4.10% Senior Notes due 2022		1,000,000		1,000,000
Unamortized discount		(1,066)		(1,127)
Total long-term debt		1,897,734		1,668,273
Total debt	$	1,898,934	$	1,669,473

Issuance of Senior Notes and Subsidiary Guarantees 

The indentures governing the Company’s senior notes contain covenants that, among other things, restrict the ability of the Company and/or its subsidiaries’ ability to incur liens, to engage in sale and leaseback transactions and to merge, consolidate, or sell assets.  All of the Company’s senior notes are currently guaranteed by its subsidiaries, SEECO, Inc. (“SEECO”), Southwestern Energy Production Company (“SEPCO”) and Southwestern Energy Services Company (“SES”).  If no default or event of default has occurred and is continuing, these guarantees will be released (i) automatically upon any sale, exchange, or transfer of all of the Company’s equity interests in the guarantor; (ii) automatically upon the liquidation and dissolution of a guarantor; (iii) following delivery of notice to the trustee of the release of the guarantor of its obligations under the Company’s credit facility; and (iv) upon legal or covenant defeasance or other satisfaction of the obligations under the notes.

Please refer to Note 17, “Condensed Consolidating Financial Information” in this Form 10-Q for additional information.

In March 2012, the Company issued $1.0 billion of 4.10% Senior Notes due 2022 in a private placement. The 4.10% Senior Notes are redeemable at the Company’s election, in whole or in part, at any time prior to December 15, 2021, at a redemption price equal to the greater of: (1) 100% of the principal amount of the notes to be redeemed then outstanding; and (2) the sum of the present values of the remaining scheduled payments of principal and interest on the notes to be redeemed (not including any portion of such payments of interest accrued to the date of redemption) discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) as determined in accordance with the indenture, plus 35 basis points, plus, in either of such cases, accrued and unpaid interest to the date of redemption on the notes to be redeemed. In addition, if the Company undergoes a “change of control,” as defined in the indenture, holders of the 4.10% Senior Notes will have the option to require the Company to purchase all or any portion of the notes at a purchase price equal to 101% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the change of control date. Payment obligations with respect to the 4.10% Senior Notes are currently guaranteed by the Company’s subsidiaries, SEECO, SEPCO and SES, which guarantees may be unconditionally released in certain circumstances. The indentures governing the 4.10% Senior Notes and the Company’s other senior notes contain covenants that, among other things, restrict the ability of the Company and/or its subsidiaries toincur liens, to engage in sale and leaseback transactions and to merge, consolidate or sell assets. In December 2012, the Company completed its offer to exchange up to $1.0 billion aggregate principal amount of its 4.10% Senior Notes due 2022 (the “Exchange Notes”, which were registered under the Securities Act of 1933, as amended (the “Act”), for any and all of its outstanding 4.10% Senior Notes due 2022, which were issued in a private placement in March 2012 (the “PrivateNotes”). The Exchange Notes have substantially identical terms to the Private Notes, except that the offering of the Exchange Notes was registered under the Act, and the Exchange Notes are not subject to any transfer restrictions. The Company exchanged $999,500,000 of Private Notes for Exchange Notes, and has no further obligations under the relatedregistration rights agreement.

Credit Facility 

In February 2011, the Company amended and restated its unsecured revolving credit facility, increasing the borrowing capacity to $1.5 billion and extending the maturity date to February 2016 (“Credit Facility”).  The amount available under the Credit Facility may be increased to $2.0 billion at any time upon the Company’s agreement with its existing or additional lenders. The interest rate on the Credit Facility is calculated based upon our debt rating and is currently 200 basis points over the current London Interbank Offered Rate (LIBOR) and was 200 basis points over LIBOR at June  30, 2013. The Credit Facility is guaranteed by the Company’s subsidiary, SEECO and requires additional subsidiary guarantors if certain guaranty coverage levels are not satisfied.  The facility contains covenants which impose certain restrictions on the Company. Under the credit agreement, the Company may not issue total debt in excess of 60% of its total adjusted capital and must maintain a ratio of earnings before interest, taxes, depreciation and amortization (EBITDA) to interest expense of 3.5 or above. The terms of the Credit Facility also include covenants that restrict the ability of the Company and its material subsidiaries to merge, consolidate or sell all or substantially all of their assets, restrict the ability of the Company and its subsidiaries to incur liens and restrict the ability of the Company’s subsidiaries to incur indebtedness.  As of June  30, 2013, the Company was in compliance with the covenants of its debt agreements.  While the Company believes all of the lenders under the Credit Facility have the ability to provide funds, it cannot predict whether each will be able to meet its obligation under the facility.

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Reclassifications From Accumulated Other Comprehensive Income (Components of AOCI And Related Tax Effects) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Beginning balance	$ 149,804	[1]
Other comprehensive income (loss) before reclassification	19,644	[1]
Amounts reclassified from accumulated other comprehensive income (loss)	(74,002)	[1],[2]
Net current period other comprehensive income (loss)	(54,358)	[1]
Ending balance	95,446	[1]
Gains and Losses on Cash Flow Hedges [Member]
Beginning balance	172,166	[1]
Other comprehensive income (loss) before reclassification	22,091	[1]
Amounts reclassified from accumulated other comprehensive income (loss)	(74,536)	[1],[2]
Net current period other comprehensive income (loss)	(52,445)	[1]
Ending balance	119,721	[1]
Pension and Other Postretirement [Member]
Beginning balance	(22,311)	[1]
Amounts reclassified from accumulated other comprehensive income (loss)	534	[1],[2]
Net current period other comprehensive income (loss)	534	[1]
Ending balance	(21,777)	[1]
Foreign Currency [Member]
Beginning balance	(51)	[1]
Other comprehensive income (loss) before reclassification	(2,447)	[1]
Net current period other comprehensive income (loss)	(2,447)	[1]
Ending balance	$ (2,498)	[1]

[1] For the six months endedJune 30, 2013Gains and (Losses) on Cash Flow HedgesPension and Other PostretirementForeign CurrencyTotal(in thousands) (1)Beginning balance, December 31, 2012$ 172,166 $ (22,311)$ (51)$ 149,804 Other comprehensive income (loss) before reclassifications 22,091  -   (2,447) 19,644 Amounts reclassified from accumulated other comprehensive income (loss) (2) (74,536) 534  -   (74,002)Net current-period other comprehensive income (loss) (52,445) 534  (2,447) (54,358)Ending balance, June 30, 2013$ 119,721 $ (21,777)$ (2,498)$ 95,446 All amounts are net-of-tax.

[2] See separate table below for details about these reclassifications.

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Supplemental Disclosures of Cash Flow Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Supplemental Disclosures of Cash Flow Information [Abstract]
Cash paid for interest	$ 5,875	$ 3,368	$ 50,218	$ 29,820
Cash paid for income taxes	965		17,306	68
Noncash property changes	$ 10,325	$ 3,220	$ 46,182	$ 20,789

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Prepaid Expenses (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Prepaid Expenses [Abstract]
Prepaid drilling costs	$ 18,107	$ 30,101
Prepaid insurance	2,825	9,507
Total	$ 20,932	$ 39,608

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Earnings Per Share

	For the three months ended				For the six months ended
	June 30,				June 30,
	2013		2012		2013		2012
Net income (loss) (in thousands)	$	245,631	$	(405,132)	$	373,146	$	(297,428)
Number of common shares:
Weighted average outstanding		350,448,806		348,162,723		350,241,768		348,081,399
Issued upon assumed exercise of outstanding stock options		386,999		–		481,528		–
Effect of issuance of nonvested restricted common stock		247,002		–		188,596		–
Weighted average and potential dilutive outstanding(1)		351,082,807		348,162,723		350,911,892		348,081,399
Earnings (loss) per share:
Basic	$	0.70	$	(1.16)	$	1.07	$	(0.85)
Diluted	$	0.70	$	(1.16)	$	1.06	$	(0.85)

(1) Options for 1,599,246shares and 29,251 shares of restricted stock were excluded from the calculation for the three months ended June 30, 2013 because they would have had an antidilutive effect.  Due to the net loss for the three months ended June 30, 2012, options for 1,723,316 shares and 156,047 shares of restricted stock were antidilutive and excluded from the calculation.  Options for2,079,849 shares and 246,347 shares of restricted stock were excluded from the calculation for the six months ended June 30, 2013 because they would have had an antidilutive effect.  Due to the net loss for the six months ended June 30, 2012, options for 1,783,073 shares and 121,078 shares of restricted stock were antidilutive and excluded from the calculation.

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Prepaid Expenses (Tables)

6 Months Ended

Jun. 30, 2013

Prepaid Expenses [Abstract]

Prepaid Expenses Table

	June 30,		December 31,
	2013		2012
		(in thousands)
Prepaid drilling costs	$	18,107	$	30,101
Prepaid insurance		2,825		9,507
Total	$	20,932	$	39,608

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Derivatives and Risk Management (Before Tax Effect of Basis Swaps that do not Qualify for Hedge Accounting Consolidated Statements of Operations) (Details) (Gas Sales [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Basis Swaps [Member]
Derivative [Line Items]
Unrealized Gain (Loss) Recognized in Earnings	$ 9,835	$ (218)	$ 6,885	$ 1,005
Realized Gain Recognized in Earnings	88	131	1,095	1,149
Fixed Price Call Options [Member]
Derivative [Line Items]
Unrealized Gain (Loss) Recognized in Earnings	22,354		(34,728)
Fixed Price Swaps [Member]
Derivative [Line Items]
Unrealized Gain (Loss) Recognized in Earnings	58,556		87,787
Interest Rate Swaps [Member]
Derivative [Line Items]
Unrealized Gain (Loss) Recognized in Earnings	$ 2,616		$ 2,616

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2013

Stock-Based Compensation [Abstract]

Employee Stock-Based Compensation Costs

	For the three months ended				For the six months ended
	June 30,				June 30,
	2013		2012		2013		2012
	(in thousands)
Stock-based compensation cost – expensed	$	2,968	$	2,705	$	5,962	$	5,549
Stock-based compensation cost – capitalized	$	2,872	$	2,442	$	5,734	$	5,306

Summary of Stock Option Activity, Options Outstanding

		Weighted
		Average
	Number	Exercise
	of Options	Price
Outstanding at December 31, 2012	3,649,520	$	29.84
Granted	5,210		34.84
Exercised	(466,887)		11.32
Forfeited or expired	(39,369)		37.95
Outstanding at June 30, 2013	3,148,474		32.50
Exercisable at June 30, 2013	1,931,580	$	30.62

Summary of Restricted Stock Activity and Unvested Shares

		Weighted
		Average
	Number	Grant Date
	of Shares	Fair Value
Unvested shares at December 31, 2012	1,117,515	$	35.64
Granted	13,540		36.60
Vested	(26,044)		36.17
Forfeited	(41,501)		35.88
Unvested shares at June 30, 2013	1,063,510	$	35.63

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Natural Gas and Oil Properties (Narrative) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Discount rate of natural gas and oil reserves	10.00%
Period of time needed to calculate ceiling value of reserves	12 months
Cash flow hedges impact on ceiling value	$ 150.8	$ 354.8
Net capitalized costs of our natural gas and oil properties in excess of ceiling value		$ 496.4
West Texas Intermediate Oil [Member]
Full cost ceiling test, Price	88.13	92.17
Henry Hub Natural Gas [Member]
Full cost ceiling test, Price	3.44	3.15

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Reclassifications From Accumulated Other Comprehensive Income (Amounts Reclassified From AOCI Into Earnings) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013		Jun. 30, 2012
Gas sales	$ 614,178		$ 435,392		$ 1,118,674		$ 897,526
General and administrative expenses	47,570		44,932		84,785		93,758
Loss before income taxes	409,842		(658,178)		622,454		(479,756)
Provision for income taxes	164,211	[1]	(253,046)	[1]	249,308	[1]	(182,328)	[1]
Net loss	245,631		(405,132)		373,146		(297,428)
Parent [Member]
Loss before income taxes	245,631		(405,132)		373,146		(297,428)
Net loss	245,631		(405,132)		373,146		(297,428)
Reclassification out of Accumulated Other Comprehensive Income [Member]
Net loss					74,002
Reclassification out of Accumulated Other Comprehensive Income [Member] | Gains and Losses on Cash Flow Hedges [Member]
Loss before income taxes					124,225
Provision for income taxes					49,689
Net loss					74,536
Reclassification out of Accumulated Other Comprehensive Income [Member] | Pension and Other Postretirement [Member]
General and administrative expenses					(890)	[2]
Loss before income taxes					(890)
Provision for income taxes					(356)
Net loss					(534)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Settlements [Member] | Gains and Losses on Cash Flow Hedges [Member]
Gas sales					124,956
Reclassification out of Accumulated Other Comprehensive Income [Member] | Ineffectiveness [Member] | Gains and Losses on Cash Flow Hedges [Member]
Gas sales					$ (731)

[1] Interest expense and the provision for income taxes by segment are allocated as they are incurred at the corporate level.

[2] This accumulated other comprehensive income component is included in the computation of net periodic pension cost (see footnote 13 for additional details.)

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Debt (Tables)

6 Months Ended

Jun. 30, 2013

Debt [Abstract]

Components Of Debt

	June 30,		December 31,
	2013		2012
	(in thousands)
Short-term debt:
7.15% Senior Notes due 2018	$	1,200	$	1,200
Total short-term debt		1,200		1,200
Long-term debt:
Variable rate (2.17% at June 30, 2013) unsecured revolving credit facility		230,000		–
7.5% Senior Notes due 2018		600,000		600,000
7.35% Senior Notes due 2017		15,000		15,000
7.125% Senior Notes due 2017		25,000		25,000
7.15% Senior Notes due 2018		28,800		29,400
4.10% Senior Notes due 2022		1,000,000		1,000,000
Unamortized discount		(1,066)		(1,127)
Total long-term debt		1,897,734		1,668,273
Total debt	$	1,898,934	$	1,669,473

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Condensed Consolidating Financial Information (Condensed Consolidating Balance Sheets) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2012		Dec. 31, 2011
Cash and cash equivalents	$ 25,685	$ 53,583	$ 41,499		$ 15,627
Restricted cash		8,542
Accounts receivable	445,936	377,638
Inventories	38,100	28,141
Other current assets	283,112	341,008
Total current assets	792,833	808,912
Property and equipment	14,268,389	13,028,439
Less: Accumulated depreciation, depletion and amortization	(7,574,133)	(7,191,463)
Total property and equipment, net	6,694,256	5,836,976
Other assets	148,102	91,639
TOTAL ASSETS	7,635,191	6,737,527	7,639,210	[1]
Accounts payable	688,641	556,980
Other current liabilities	158,414	210,791
Total current liabilities	847,055	767,771
Long-term debt	1,897,734	1,668,273
Deferred income taxes	1,260,546	1,049,138
Other liabilities	256,261	216,473
Total liabilities	4,261,596	3,701,655
Commitments and Contingencies
Total Equity	3,373,595	3,035,872
TOTAL LIABILITIES AND EQUITY	7,635,191	6,737,527
Parent [Member]
Cash and cash equivalents	25,303	47,491	36,888		14,711
Restricted cash		8,542
Accounts receivable	2,642	2,677
Inventories		2
Other current assets	5,331	7,461
Total current assets	33,276	66,173
Intercompany receivables	2,510,744	2,259,713
Property and equipment	231,348	220,837
Less: Accumulated depreciation, depletion and amortization	(95,880)	(82,178)
Total property and equipment, net	135,468	138,659
Investments in subsidiaries (equity method)	2,632,570	2,309,947
Other assets	33,704	35,136
TOTAL ASSETS	5,345,762	4,809,628
Accounts payable	132,447	140,367
Other current liabilities	3,758	3,758
Total current liabilities	136,205	144,125
Long-term debt	1,897,734	1,668,273
Deferred income taxes	(130,850)	(116,207)
Other liabilities	69,078	77,565
Total liabilities	1,972,167	1,773,756
Total Equity	3,373,595	3,035,872
TOTAL LIABILITIES AND EQUITY	5,345,762	4,809,628
Guarantors [Member]
Cash and cash equivalents		5,988	4,209
Accounts receivable	420,119	353,607
Inventories	36,045	26,975
Other current assets	270,094	321,396
Total current assets	726,258	707,966
Intercompany receivables	66	42
Property and equipment	12,617,326	11,491,222
Less: Accumulated depreciation, depletion and amortization	(7,264,007)	(6,923,106)
Total property and equipment, net	5,353,319	4,568,116
Other assets	98,372	42,247
TOTAL ASSETS	6,178,015	5,318,371
Accounts payable	461,157	375,604
Other current liabilities	152,810	205,623
Total current liabilities	613,967	581,227
Intercompany payables	2,541,556	2,108,360
Deferred income taxes	993,255	820,279
Other liabilities	172,997	124,505
Total liabilities	4,321,775	3,634,371
Total Equity	1,856,240	1,684,000
TOTAL LIABILITIES AND EQUITY	6,178,015	5,318,371
Non-Guarantors [Member]
Cash and cash equivalents	382	104	402		916
Accounts receivable	23,175	21,354
Inventories	2,055	1,164
Other current assets	7,687	12,151
Total current assets	33,299	34,773
Intercompany receivables	30,746	27,077
Property and equipment	1,419,715	1,316,380
Less: Accumulated depreciation, depletion and amortization	(214,246)	(186,179)
Total property and equipment, net	1,205,469	1,130,201
Other assets	16,026	14,256
TOTAL ASSETS	1,285,540	1,206,307
Accounts payable	95,037	41,009
Other current liabilities	1,846	1,410
Total current liabilities	96,883	42,419
Intercompany payables		178,472
Deferred income taxes	398,141	345,066
Other liabilities	14,186	14,403
Total liabilities	509,210	580,360
Total Equity	776,330	625,947
TOTAL LIABILITIES AND EQUITY	1,285,540	1,206,307
Eliminations [Member]
Intercompany receivables	(2,541,556)	(2,286,832)
Investments in subsidiaries (equity method)	(2,632,570)	(2,309,947)
TOTAL ASSETS	(5,174,126)	(4,596,779)
Intercompany payables	(2,541,556)	(2,286,832)
Total liabilities	(2,541,556)	(2,286,832)
Total Equity	(2,632,570)	(2,309,947)
TOTAL LIABILITIES AND EQUITY	$ (5,174,126)	$ (4,596,779)

[1] Capital investments includes increases of $7.5 million and $0.2 million for the three-month periods ended June 30, 2013 and 2012, respectively, and increases of $40.4 million and $15.5 million for the six-month periods ended June 30, 2013 and 2012, respectively, relating to the change in accrued expenditures between periods.

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Condensed Consolidating Financial Information (Condensed Consolidating Statement of Operations) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013		Jun. 30, 2012
Operating Revenues	$ 862,041		$ 606,076		$ 1,595,690		$ 1,260,911
Gas purchases - midstream services	200,110		127,614		380,066		274,290
Operating expenses	82,155		56,614		146,379		117,572
General and administrative expenses	47,570		44,932		84,785		93,758
Depreciation, depletion and amortization	186,867		207,830		366,334		401,457
Impairment of natural gas and oil properties			800,652				800,652	[1]
Taxes, other than income taxes	20,022		14,480		40,849		34,902
Total operating costs and expenses	536,724		1,252,122		1,018,413		1,722,631
Operating Income (Loss)	325,317		(646,046)	[2]	577,277		(461,720)	[2]
Other Gain (Loss), Net	354	[1]	2,577	[1]	(179)	[1]	2,377	[1]
Commodity derivative gain (loss)	93,449		(6,348)		63,655		(4,714)
Interest expense	9,278	[1]	8,361	[1]	18,299	[1]	15,699	[1]
Income (Loss) Before Income Taxes	409,842		(658,178)		622,454		(479,756)
Provision for income taxes	164,211	[1]	(253,046)	[1]	249,308	[1]	(182,328)	[1]
Net income (loss)	245,631		(405,132)		373,146		(297,428)
Comprehensive income (loss)	285,470		(558,199)		318,788		(383,925)
Parent [Member]
Equity in earnings of subsidiaries	245,631		(405,132)		373,146		(297,428)
Income (Loss) Before Income Taxes	245,631		(405,132)		373,146		(297,428)
Net income (loss)	245,631		(405,132)		373,146		(297,428)
Comprehensive income (loss)	285,470		(558,199)		318,788		(383,925)
Guarantors [Member]
Operating Revenues	818,087		563,822		1,508,231		1,176,633
Gas purchases - midstream services	200,584		127,757		380,748		274,660
Operating expenses	124,780		101,816		235,321		204,872
General and administrative expenses	40,946		39,041		72,812		80,749
Depreciation, depletion and amortization	174,382		196,245		341,904		379,082
Impairment of natural gas and oil properties			800,652				800,652
Taxes, other than income taxes	16,990		11,648		34,705		28,646
Total operating costs and expenses	557,682		1,277,159		1,065,490		1,768,661
Operating Income (Loss)	260,405		(713,337)		442,741		(592,028)
Other Gain (Loss), Net	298		(65)		(78)		(239)
Commodity derivative gain (loss)	93,449		(6,348)		63,655		(4,714)
Interest expense	7,587		4,505		14,525		8,260
Income (Loss) Before Income Taxes	346,565		(724,255)		491,793		(605,241)
Provision for income taxes	142,283		(278,220)		200,329		(231,328)
Net income (loss)	204,282		(446,035)		291,464		(373,913)
Comprehensive income (loss)	245,273		(598,840)		239,020		(460,883)
Non-Guarantors [Member]
Operating Revenues	126,845		115,596		248,214		228,721
Operating expenses	39,773		27,203		71,095		55,184
General and administrative expenses	6,643		6,685		12,009		14,598
Depreciation, depletion and amortization	12,485		11,585		24,430		22,375
Taxes, other than income taxes	3,032		2,832		6,144		6,256
Total operating costs and expenses	61,933		48,305		113,678		98,413
Operating Income (Loss)	64,912		67,291		134,536		130,308
Other Gain (Loss), Net	56		2,642		(101)		2,616
Interest expense	1,691		3,856		3,774		7,439
Income (Loss) Before Income Taxes	63,277		66,077		130,661		125,485
Provision for income taxes	21,928		25,174		48,979		49,000
Net income (loss)	41,349		40,903		81,682		76,485
Comprehensive income (loss)	39,930		40,387		79,234		76,450
Eliminations [Member]
Operating Revenues	(82,891)		(73,342)		(160,755)		(144,443)
Gas purchases - midstream services	(474)		(143)		(682)		(370)
Operating expenses	(82,398)		(72,405)		(160,037)		(142,484)
General and administrative expenses	(19)		(794)		(36)		(1,589)
Total operating costs and expenses	(82,891)		(73,342)		(160,755)		(144,443)
Equity in earnings of subsidiaries	(245,631)		405,132		(373,146)		297,428
Income (Loss) Before Income Taxes	(245,631)		405,132		(373,146)		297,428
Net income (loss)	(245,631)		405,132		(373,146)		297,428
Comprehensive income (loss)	$ (285,203)		$ 558,453		$ (318,254)		$ 384,433

[1] Interest expense and the provision for income taxes by segment are allocated as they are incurred at the corporate level.

[2] The operating loss for the E&P segment for the three and six months ended June 30, 2012 includes a $800.7 million non-cash ceiling test impairment of our natural gas and oil properties.

XML

Derivatives and Risk Management (Balance Sheet Classification) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Derivative [Line Items]
Derivative assets	$ 306,728	$ 292,144
Derivative liabilities	42,527	4,266
Designated as Hedging Instrument [Member]
Derivative [Line Items]
Derivative assets	201,755	287,993
Designated as Hedging Instrument [Member] | Fixed Price Swaps [Member] | Hedging Asset [Member]
Derivative [Line Items]
Derivative assets	189,541	279,443
Designated as Hedging Instrument [Member] | Fixed Price Swaps [Member] | Other Assets
Derivative [Line Items]
Derivative assets	12,214	8,550
Not Designated as Hedging Instrument [Member]
Derivative [Line Items]
Derivative assets	104,973	4,151
Derivative liabilities	42,527	4,266
Not Designated as Hedging Instrument [Member] | Fixed Price Swaps [Member] | Hedging Asset [Member]
Derivative [Line Items]
Derivative assets	48,512
Not Designated as Hedging Instrument [Member] | Fixed Price Swaps [Member] | Other Assets
Derivative [Line Items]
Derivative assets	39,276
Not Designated as Hedging Instrument [Member] | Fixed Price Call Options [Member] | Long-Term Hedging Liability [Member]
Derivative [Line Items]
Derivative liabilities	38,856	4,128
Not Designated as Hedging Instrument [Member] | Basis Swaps [Member] | Hedging Asset [Member]
Derivative [Line Items]
Derivative assets	8,402	3,250
Not Designated as Hedging Instrument [Member] | Basis Swaps [Member] | Other Assets
Derivative [Line Items]
Derivative assets	2,565	901
Not Designated as Hedging Instrument [Member] | Basis Swaps [Member] | Hedging Liability [Member]
Derivative [Line Items]
Derivative liabilities	69	138
Not Designated as Hedging Instrument [Member] | Interest Rate Swaps [Member] | Other Assets
Derivative [Line Items]
Derivative assets	6,218
Not Designated as Hedging Instrument [Member] | Interest Rate Swaps [Member] | Hedging Liability [Member]
Derivative [Line Items]
Derivative liabilities	308
Not Designated as Hedging Instrument [Member] | Interest Rate Swaps [Member] | Long-Term Hedging Liability [Member]
Derivative [Line Items]
Derivative liabilities	$ 3,294

XML

Condensed Consolidating Financial Information

6 Months Ended

Jun. 30, 2013

Condensed Consolidating Financial Information [Abstract]

Condensed Consolidating Financial Information

(17) CONDENSED CONSOLIDATING FINANCIAL INFORMATION

The Company is providing condensed consolidating financial information for SEECO, SEPCO and SES, its subsidiaries that are currently guarantors of the Company’s registered public debt, and for its other subsidiaries that are not guarantors of such debt. These wholly owned subsidiary guarantors have jointly and severally, fully and unconditionally guaranteed the Company’s 7.35% Senior Notes, 7.125% Senior Notes and 4.10% Senior Notes. The subsidiary guarantees (i) rank equally in right of payment with all of the existing and future senior debt of the subsidiary guarantors; (ii) rank senior to all of the existing and future subordinated debt of the subsidiary guarantors; (iii) are effectively subordinated to any future secured obligations of the subsidiary guarantors to the extent of the value of the assets securing such obligations; and (iv) are structurally subordinated to all debt and other obligations of the subsidiaries of the guarantors.

The Company has not presented separate financial and narrative information for each of the subsidiary guarantors because it believes that such financial and narrative information would not provide any additional information that would be material in evaluating the sufficiency of the guarantees. The following condensed consolidating financial information summarizes the results of operations, financial position and cash flows for the Company’s guarantor and non-guarantor subsidiaries.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Unaudited)
	Parent		Guarantors		Non-Guarantors		Eliminations		Consolidated
	(in thousands)
Three months ended June 30, 2013:
Operating revenues	$	–	$	818,087	$	126,845	$	(82,891)	$	862,041
Operating costs and expenses:
Gas purchases – midstream services		–		200,584		–		(474)		200,110
Operating expenses		–		124,780		39,773		(82,398)		82,155
General and administrative expenses		–		40,946		6,643		(19)		47,570
Depreciation, depletion and amortization		–		174,382		12,485		–		186,867
Taxes, other than income taxes		–		16,990		3,032		–		20,022
Total operating costs and expenses		–		557,682		61,933		(82,891)		536,724
Operating income		–		260,405		64,912		–		325,317
Other income, net		–		298		56		–		354
Gain on derivatives		–		93,449		–		–		93,449
Equity in earnings of subsidiaries		245,631		–		–		(245,631)		–
Interest expense		–		7,587		1,691		–		9,278
Income before income taxes		245,631		346,565		63,277		(245,631)		409,842
Provision for income taxes		–		142,283		21,928		–		164,211
Net income		245,631		204,282		41,349		(245,631)		245,631
Comprehensive income	$	285,470	$	245,273	$	39,930	$	(285,203)	$	285,470
Three months ended June 30, 2012:
Operating revenues	$	–	$	563,822	$	115,596	$	(73,342)	$	606,076
Operating costs and expenses:
Gas purchases – midstream services		–		127,757		–		(143)		127,614
Operating expenses		–		101,816		27,203		(72,405)		56,614
General and administrative expenses		–		39,041		6,685		(794)		44,932
Depreciation, depletion and amortization		–		196,245		11,585		–		207,830
Impairment of natural gas and oil properties		–		800,652		–		–		800,652
Taxes, other than income taxes		–		11,648		2,832		–		14,480
Total operating costs and expenses		–		1,277,159		48,305		(73,342)		1,252,122
Operating income (loss)		–		(713,337)		67,291		–		(646,046)
Other income (loss), net		–		(65)		2,642		–		2,577
Loss on derivatives		–		(6,348)		–		–		(6,348)
Equity in earnings of subsidiaries		(405,132)		–		–		405,132		–
Interest expense		–		4,505		3,856		–		8,361
Income (loss) before income taxes		(405,132)		(724,255)		66,077		405,132		(658,178)
Provision (benefit) for income taxes		–		(278,220)		25,174		–		(253,046)
Net income (loss)		(405,132)		(446,035)		40,903		405,132		(405,132)
Comprehensive income (loss)	$	(558,199)	$	(598,840)	$	40,387	$	558,453	$	(558,199)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Unaudited)
	Parent		Guarantors		Non-Guarantors		Eliminations		Consolidated
	(in thousands)
Six months ended June 30, 2013:
Operating revenues	$	–	$	1,508,231	$	248,214	$	(160,755)	$	1,595,690
Operating costs and expenses:
Gas purchases – midstream services		–		380,748		–		(682)		380,066
Operating expenses		–		235,321		71,095		(160,037)		146,379
General and administrative expenses		–		72,812		12,009		(36)		84,785
Depreciation, depletion and amortization		–		341,904		24,430		–		366,334
Taxes, other than income taxes		–		34,705		6,144		–		40,849
Total operating costs and expenses		–		1,065,490		113,678		(160,755)		1,018,413
Operating income		–		442,741		134,536		–		577,277
Other loss, net		–		(78)		(101)		–		(179)
Gain on derivatives		–		63,655		–		–		63,655
Equity in earnings of subsidiaries		373,146		–		–		(373,146)		–
Interest expense		–		14,525		3,774		–		18,299
Income before income taxes		373,146		491,793		130,661		(373,146)		622,454
Provision for income taxes		–		200,329		48,979		–		249,308
Net income		373,146		291,464		81,682		(373,146)		373,146
Comprehensive income	$	318,788	$	239,020	$	79,234	$	(318,254)	$	318,788
Six months ended June 30, 2012:
Operating revenues	$	–	$	1,176,633	$	228,721	$	(144,443)	$	1,260,911
Operating costs and expenses:
Gas purchases – midstream services		–		274,660		–		(370)		274,290
Operating expenses		–		204,872		55,184		(142,484)		117,572
General and administrative expenses		–		80,749		14,598		(1,589)		93,758
Depreciation, depletion and amortization		–		379,082		22,375		–		401,457
Impairment of natural gas and oil properties		–		800,652		–		–		800,652
Taxes, other than income taxes		–		28,646		6,256		–		34,902
Total operating costs and expenses		–		1,768,661		98,413		(144,443)		1,722,631
Operating income (loss)		–		(592,028)		130,308		–		(461,720)
Other income (loss), net		–		(239)		2,616		–		2,377
Loss on derivatives		–		(4,714)		–		–		(4,714)
Equity in earnings of subsidiaries		(297,428)		–		–		297,428		–
Interest expense		–		8,260		7,439		–		15,699
Income (loss) before income taxes		(297,428)		(605,241)		125,485		297,428		(479,756)
Provision (benefit) for income taxes		–		(231,328)		49,000		–		(182,328)
Net income (loss)		(297,428)		(373,913)		76,485		297,428		(297,428)
Comprehensive income (loss)	$	(383,925)	$	(460,883)	$	76,450	$	384,433	$	(383,925)

CONDENSED CONSOLIDATING BALANCE SHEETS
(Unaudited)
	Parent		Guarantors		Non- Guarantors		Eliminations		Consolidated
	(in thousands)
June 30, 2013:
ASSETS
Cash and cash equivalents	$	25,303	$	–	$	382	$	–	$	25,685
Accounts receivable		2,642		420,119		23,175		–		445,936
Inventories		–		36,045		2,055		–		38,100
Other current assets		5,331		270,094		7,687		–		283,112
Total current assets		33,276		726,258		33,299		–		792,833
Intercompany receivables		2,510,744		66		30,746		(2,541,556)		–
Property and equipment		231,348		12,617,326		1,419,715		–		14,268,389
Less: Accumulated depreciation, depletion and amortization		(95,880)		(7,264,007)		(214,246)		–		(7,574,133)
		135,468		5,353,319		1,205,469		–		6,694,256
Investments in subsidiaries (equity method)		2,632,570		–		–		(2,632,570)		–
Other assets		33,704		98,372		16,026		–		148,102
Total assets	$	5,345,762	$	6,178,015	$	1,285,540	$	(5,174,126)	$	7,635,191
LIABILITIES AND EQUITY
Accounts payable	$	132,447	$	461,157	$	95,037	$	–	$	688,641
Other current liabilities		3,758		152,810		1,846		–		158,414
Total current liabilities		136,205		613,967		96,883		–		847,055
Intercompany payables		–		2,541,556		–		(2,541,556)		–
Long-term debt		1,897,734		–		–		–		1,897,734
Deferred income taxes		(130,850)		993,255		398,141		–		1,260,546
Other liabilities		69,078		172,997		14,186		–		256,261
Total liabilities		1,972,167		4,321,775		509,210		(2,541,556)		4,261,596
Commitments and contingencies
Total equity		3,373,595		1,856,240		776,330		(2,632,570)		3,373,595
Total liabilities and equity	$	5,345,762	$	6,178,015	$	1,285,540	$	(5,174,126)	$	7,635,191

CONDENSED CONSOLIDATING BALANCE SHEETS
(Unaudited)
	Parent		Guarantors		Non- Guarantors		Eliminations		Consolidated
	(in thousands)
December 31, 2012:
ASSETS
Cash and cash equivalents	$	47,491	$	5,988	$	104	$	–	$	53,583
Restricted Cash		8,542		–		–		–		8,542
Accounts receivable		2,677		353,607		21,354		–		377,638
Inventories		2		26,975		1,164		–		28,141
Other current assets		7,461		321,396		12,151		–		341,008
Total current assets		66,173		707,966		34,773		–		808,912
Intercompany receivables		2,259,713		42		27,077		(2,286,832)		–
Property and equipment		220,837		11,491,222		1,316,380		–		13,028,439
Less: Accumulated depreciation, depletion and amortization		(82,178)		(6,923,106)		(186,179)		–		(7,191,463)
		138,659		4,568,116		1,130,201		–		5,836,976
Investments in subsidiaries (equity method)		2,309,947		–		–		(2,309,947)		–
Other assets		35,136		42,247		14,256		–		91,639
Total assets	$	4,809,628	$	5,318,371	$	1,206,307	$	(4,596,779)	$	6,737,527
LIABILITIES AND EQUITY
Accounts payable	$	140,367	$	375,604	$	41,009	$	–	$	556,980
Other current liabilities		3,758		205,623		1,410		–		210,791
Total current liabilities		144,125		581,227		42,419		–		767,771
Intercompany payables		–		2,108,360		178,472		(2,286,832)		–
Long-term debt		1,668,273		–		–		–		1,668,273
Deferred income taxes		(116,207)		820,279		345,066		–		1,049,138
Other liabilities		77,565		124,505		14,403		–		216,473
Total liabilities		1,773,756		3,634,371		580,360		(2,286,832)		3,701,655
Commitments and contingencies
Total equity		3,035,872		1,684,000		625,947		(2,309,947)		3,035,872
Total liabilities and equity	$	4,809,628	$	5,318,371	$	1,206,307	$	(4,596,779)	$	6,737,527

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(Unaudited)
	Parent		Guarantors		Non-Guarantors		Eliminations		Consolidated
	(in thousands)
Six months ended June 30, 2013:
Net cash provided by (used in) operating activities	$	(30,843)	$	651,169	$	257,226	$	–	$	877,552
Investing activities:
Capital investments		(12,156)		(1,084,093)		(79,385)		–		(1,175,634)
Transfers from restricted cash		8,542		–		–		–		8,542
Other		(73)		1,894		3,807		–		5,628
Net cash used in investing activities		(3,687)		(1,082,199)		(75,578)		–		(1,161,464)
Financing activities:
Intercompany activities		(243,555)		425,042		(181,487)		–		–
Payments on current portion of long-term debt		(600)		–		–		–		(600)
Payments on revolving long-term debt		(1,233,150)		–		–		–		(1,233,150)
Borrowing under revolving long-term debt		1,463,150		–		–		–		1,463,150
Other Items		26,497		–		–		–		26,497
Net cash provided by (used in) financing activities		12,342		425,042		(181,487)		–		255,897
Effect of exchange rate changes on cash		–		–		117		–		117
Increase (decrease) in cash and cash equivalents		(22,188)		(5,988)		278		–		(27,898)
Cash and cash equivalents at beginning of year		47,491		5,988		104		–		53,583
Cash and cash equivalents at end of period	$	25,303	$	–	$	382	$	–	$	25,685
Six months ended June 30, 2012:
Net cash provided by (used in) operating activities	$	(51,093)	$	624,945	$	263,538	$	–	$	837,390
Investing activities:
Capital investments		(18,079)		(1,032,169)		(90,413)		–		(1,140,661)
Proceeds from sale of property and equipment		–		168,391		5,946		–		174,337
Transfers to restricted cash		(167,750)		–		–		–		(167,750)
Transfers from restricted cash		23,366		–		–		–		23,366
Other		90		(2,287)		11,092		–		8,895
Net cash used in investing activities		(162,373)		(866,065)		(73,375)		–		(1,101,813)
Financing activities:								–
Intercompany activities		(54,667)		245,329		(190,662)		–		–
Payments on current portion of long-term debt		(600)		–		–		–		(600)
Payments on revolving long-term debt		(1,273,700)		–		–		–		(1,273,700)
Borrowings under revolving long-term debt		602,200		–		–		–		602,200
Proceeds from issuance of long-term debt		998,780		–		–		–		998,780
Other items		(36,370)		–		–		–		(36,370)
Net cash provided by (used in) financing activities		235,643		245,329		(190,662)		–		290,310
Effect of exchange rate changes on cash		–		–		(15)		–		(15)
Increase (decrease) in cash and cash equivalents		22,177		4,209		(514)		–		25,872
Cash and cash equivalents at beginning of year		14,711		–		916		–		15,627
Cash and cash equivalents at end of period	$	36,888	$	4,209	$	402	$	–	$	41,499

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Millions, except Share data, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
CONDENSED CONSOLIDATED BALANCE SHEETS
Natural gas and oil properties, using the full cost method, costs excluded from amortization	$ 1,149.8	$ 1,023.9
Common Stock, Par Value	$ 0.01	$ 0.01
Common Stock, Authorized, Shares	1,250,000,000	1,250,000,000
Common Stock, Issued, Shares	351,529,457	351,100,391
Common Stock in Treasury, Shares	14,442	64,715

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CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (USD $) In Thousands, except Share data, unless otherwise specified	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income	Common Stock in Treasury	Total
Balance at Dec. 31, 2012	$ 3,511	$ 934,939	$ 1,949,150	$ 149,804	$ (1,532)	$ 3,035,872
Balance, shares at Dec. 31, 2012	351,100
Comprehensive income (loss):
Net income			373,146			373,146
Other comprehensive loss				(54,358)		(54,358)	[1]
Total comprehensive income						318,788
Stock-based compensation		11,696				11,696
Exercise of stock options, shares	467
Exercise of stock options	4	5,279				5,283
Issuance of restricted stock, shares	4
Cancellation of restricted stock, shares	(42)
Treasury stock - non-qualified plan		924			1,032	1,956
Balance at Jun. 30, 2013	$ 3,515	$ 952,838	$ 2,322,296	$ 95,446	$ (500)	$ 3,373,595
Balance, shares at Jun. 30, 2013	351,529

[1] For the six months endedJune 30, 2013Gains and (Losses) on Cash Flow HedgesPension and Other PostretirementForeign CurrencyTotal(in thousands) (1)Beginning balance, December 31, 2012$ 172,166 $ (22,311)$ (51)$ 149,804 Other comprehensive income (loss) before reclassifications 22,091  -   (2,447) 19,644 Amounts reclassified from accumulated other comprehensive income (loss) (2) (74,536) 534  -   (74,002)Net current-period other comprehensive income (loss) (52,445) 534  (2,447) (54,358)Ending balance, June 30, 2013$ 119,721 $ (21,777)$ (2,498)$ 95,446 All amounts are net-of-tax.

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Prepaid Expenses

6 Months Ended

Jun. 30, 2013

Prepaid Expenses [Abstract]

Prepaid Expenses

(3) PREPAID EXPENSES

The components of prepaid expenses included in other current assets as of June 30, 2013 and December 31, 2012 consisted of the following:

	June 30,		December 31,
	2013		2012
		(in thousands)
Prepaid drilling costs	$	18,107	$	30,101
Prepaid insurance		2,825		9,507
Total	$	20,932	$	39,608

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Basis of Presentation

6 Months Ended

Jun. 30, 2013

Basis of Presentation [Abstract]

Basis of Presentation

(1) BASIS OF PRESENTATION

Southwestern Energy Company (including its subsidiaries, collectively, “we”, “Southwestern” or the “Company”) is an independent energy company engaged in natural gas and oil exploration, development and production. The Company engages in natural gas and oil exploration and production, natural gas gathering and natural gas marketing through its subsidiaries. Southwestern’s exploration, development and production (“E&P”) activities are principally focused within the United States on development of an unconventional gas reservoir located on the Arkansas side of the Arkoma Basin, which the Company refers to as the Fayetteville Shale play.  The Company is actively engaged in exploration and production activities in Pennsylvania, where we are targeting the unconventional gas reservoir known as the Marcellus Shale, and to a lesser extent in Texas and in Arkansas and Oklahoma in the Arkoma Basin.  The Company also actively seeks to find and develop new oil and natural gas plays with significant exploration and exploitation potential.  Southwestern’s natural gas gathering and marketing (“Midstream Services”) activities primarily support the Company’s E&P activities in Arkansas, Pennsylvania and Texas.  

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, 2012 (“2012 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 2012 Annual Report on Form 10-K.

Certain reclassifications have been made to the prior year financial statements to conform to the 2013 presentation. The effects of the reclassifications were not material to the Company’s unaudited condensed consolidated financial statements.

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Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013		Jun. 30, 2012
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net income (loss)	$ 245,631		$ (405,132)		$ 373,146		$ (297,428)
Number of common shares, Weighted average outstanding	350,448,806		348,162,723		350,241,768		348,081,399
Number of common shares, Issued upon assumed exercise of outstanding stock options	386,999				481,528
Number of common shares, Effect of issuance of nonvested restricted common stock	247,002				188,596
Number of common shares, Weighted average and potential dilutive outstanding	351,082,807	[1]	348,162,723	[1]	350,911,892	[1]	348,081,399	[1]
Basic	$ 0.70		$ (1.16)		$ 1.07		$ (0.85)
Diluted	$ 0.70		$ (1.16)		$ 1.06		$ (0.85)
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, shares	1,599,246		1,723,316		2,079,849		1,783,073
Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, shares	29,251		156,047		246,347		121,078
Parent [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net income (loss)	$ 245,631		$ (405,132)		$ 373,146		$ (297,428)

[1] Options for 1,599,246 shares and 29,251 shares of restricted stock were excluded from the calculation for the three months ended June 30, 2013 because they would have had an antidilutive effect. Due to the net loss for the three months ended June 30, 2012, options for 1,723,316 shares and 156,047 shares of restricted stock were antidilutive and excluded from the calculation. Options for 2,079,849 shares and 246,347 shares of restricted stock were excluded from the calculation for the six months ended June 30, 2013 because they would have had an antidilutive effect. Due to the net loss for the six months ended June 30, 2012, options for 1,783,073 shares and 121,078 shares of restricted stock were antidilutive and excluded from the calculation.

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Derivatives and Risk Management (Tables)

6 Months Ended

Jun. 30, 2013

Derivatives And Risk Management [Abstract]

Balance Sheet Classification of Derivative Financial Instruments

	Derivative Assets
	June 30, 2013			December 31, 2012
	Balance Sheet Classification	Fair Value		Balance Sheet Classification	Fair Value
	(in thousands)
Derivatives designated as hedging instruments:
Fixed price swaps	Hedging asset	$	189,541	Hedging asset		$	279,443
Fixed price swaps	Other assets		12,214	Other assets			8,550
Total derivatives designated as hedging instruments		$	201,755			$	287,993
Derivatives not designated as hedging instruments:
Basis swaps	Hedging asset	$	8,402	Hedging asset		$	3,250
Fixed price swaps	Hedging asset		48,512	Hedging asset			–
Basis swaps	Other assets		2,565	Other assets			901
Fixed price swaps	Other assets		39,276	Other assets			–
Interest rate swaps	Other assets		6,218	Other assets			–
Total derivatives not designated as hedging instruments		$	104,973			$	4,151
Total derivative assets		$	306,728			$	292,144
	Derivative Liabilities
	June 30, 2013			December 31, 2012
	Balance Sheet Classification	Fair Value		Balance Sheet Classification	Fair Value
	(in thousands)
Derivatives not designated as hedging instruments:
Basis swaps	Other current liabilities	$	69	Other current liabilities		$	138
Fixed price call options	Other long-term liabilities		38,856	Other long-term liabilities			4,128
Interest rate swaps	Other current liabilities		308	Other current liabilities			–
Interest rate swaps	Other long-term liabilities		3,294	Other long-term liabilities			–
Total derivatives not designated as hedging instruments		$	42,527			$	4,266
Total derivative liabilities		$	42,527			$	4,266

Cash Flow Hedges, Volumes of Natural Gas Production (in Bcf)

Year	Fixed price swaps
2013	168.8
2014	51.1

Before Tax Effect of Cash Flow Hedges on Consolidated Financial Statements

		Gain (Loss) Recognized in Other Comprehensive Income
		(Effective Portion)
		For the three months ended				For the six months ended
		June 30,				June 30,
Derivative Instrument		2013		2012		2013		2012
		(in thousands)
Fixed price swaps		$	112,621	$	(47,829)	$	38,719	$	171,128
Costless-collars		$	–	$	(12,370)	$	–	$	44,141
	Classification of Gain	Gain Reclassified from Accumulated Other
	Reclassified from	Comprehensive Income into Earnings
	Accumulated Other	(Effective Portion)
	Comprehensive Income	For the three months ended				For the six months ended
	into Earnings	June 30,				June 30,
Derivative Instrument	(Effective Portion)	2013		2012		2013		2012
		(in thousands)
Fixed price swaps	Gas Sales	$	46,335	$	128,894	$	124,956	$	235,205
Costless-collars	Gas Sales	$	–	$	65,732	$	–	$	121,042
		Gain (Loss) Recognized in Earnings
		(Ineffective Portion)
	Classification of Gain (Loss)	For the three months ended				For the six months ended
	Recognized in Earnings	June 30,				June 30,
Derivative Instrument	(Ineffective Portion)	2013		2012		2013		2012
		(in thousands)
Fixed price swaps	Gas Sales	$	(2,032)	$	(2,303)	$	(731)	$	1,996
Costless-collars	Gas Sales	$	–	$	(371)	$	–	$	540

Before Tax Effect of Basis Swaps Not Qualifying for Hedge Accounting

		Unrealized Gain (Loss)
		Recognized in Earnings
	Income Statement	For the three months ended				For the six months ended
	Classification	June 30,				June 30,
Derivative Instrument	of Unrealized Gain (Loss)	2013		2012		2013		2012
		(in thousands)
Basis swaps	Gain (Loss) on Derivatives	$	9,835	$	(218)	$	6,885	$	1,005
Fixed price call options	Gain (Loss) on Derivatives	$	22,354	$	–	$	(34,728)	$	–
Fixed price swaps	Gain (Loss) on Derivatives	$	58,556	$	–	$	87,787	$	–
Interest Rate Swaps	Gain (Loss) on Derivatives	$	2,616	$	–	$	2,616	$	–
		Realized Gain
		Recognized in Earnings
	Income Statement	For the three months ended				For the six months ended
	Classification	June 30,				June 30,
Derivative Instrument	of Realized Gain	2013		2012		2013		2012
		(in thousands)
Basis swaps	Gain (Loss) on Derivatives	$	88	$	131	$	1,095	$	1,149

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Supplemental Disclosures of Cash Flow Information (Tables)

6 Months Ended

Jun. 30, 2013

Supplemental Disclosures of Cash Flow Information [Abstract]

Schedule of Supplemental Disclosures of Cash Flow Information

	For the three months ended				For the six months ended
	June 30,				June 30,
	2013		2012		2013		2012
	(in thousands)
Cash paid for interest	$	5,875	$	3,368	$	50,218	$	29,820
Cash paid for income taxes		965		–		17,306		68
Noncash property changes		10,325		3,220		46,182		20,789

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Divestiture (Details) (USD $) In Millions, unless otherwise specified	1 Months Ended
	Apr. 30, 2013	May 31, 2012 MMcf	Dec. 31, 2011
Divestiture [Abstract]
Cost to acquire natural gas properties through definitive purchase agreement	$ 93.0
Proceeds from sale of oil and gas property and equipment		$ 166.0
Divested assets, Production in MMcfe per day		24.0
Divested assets, Proved net reserves in Bcfe			143.0

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Debt (Components Of Debt) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012	Mar. 31, 2012
Debt Instrument [Line Items]
Total short-term debt	$ 1,200	$ 1,200
Unamortized discount	(1,066)	(1,127)
Total long-term debt	1,897,734	1,668,273
Total debt	1,898,934	1,669,473
Variable Rate 2.17% [Member]
Debt Instrument [Line Items]
Variable rate (2.17% at June 30, 2013) unsecured revolving credit facility	230,000
Debt instrument, interest rate, stated percentage	2.17%
7.5% Senior Notes due 2018 [Member]
Debt Instrument [Line Items]
Senior Notes	600,000	600,000
Debt instrument, interest rate, stated percentage	7.50%
7.35% Senior Notes due 2017 [Member]
Debt Instrument [Line Items]
Senior Notes	15,000	15,000
Debt instrument, interest rate, stated percentage	7.35%
7.125% Senior Notes due 2017 [Member]
Debt Instrument [Line Items]
Senior Notes	25,000	25,000
Debt instrument, interest rate, stated percentage	7.125%
7.15% Senior Notes due 2018 [Member]
Debt Instrument [Line Items]
Total short-term debt	1,200	1,200
Senior Notes	28,800	29,400
Debt instrument, interest rate, stated percentage	7.15%
4.10% Senior Notes Due 2022 [Member]
Debt Instrument [Line Items]
Senior Notes	1,000,000	1,000,000	1,000,000
Debt instrument, interest rate, stated percentage	4.10%		4.10%
Parent [Member]
Debt Instrument [Line Items]
Total long-term debt	$ 1,897,734	$ 1,668,273

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Fair Value Measurements (Narrative) (Details)	Jun. 30, 2013 7.5% Senior Notes due 2018 [Member]	Dec. 31, 2012 7.5% Senior Notes due 2018 [Member]	Jun. 30, 2013 4.10% Senior Notes Due 2022 [Member]	Mar. 31, 2012 4.10% Senior Notes Due 2022 [Member]
Debt instrument , interest rate percentage	7.50%		4.10%	4.10%
Yield, Publicly-traded debt market	3.10%	2.60%	4.20%

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Derivatives and Risk Management (Before Tax Effect of all Cash Flow Hedges on the Condensed Consolidated Financial Statements) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Fixed Price Swaps [Member]
Derivative [Line Items]
Gain (Loss) Recognized in Other Comprehensive Income (Effective Portion)	$ 112,621	$ (47,829)	$ 38,719	$ 171,128
Costless Collar [Member]
Derivative [Line Items]
Gain (Loss) Recognized in Other Comprehensive Income (Effective Portion)		(12,370)		44,141
Gas Sales [Member] | Fixed Price Swaps [Member]
Derivative [Line Items]
Gain Reclassified from Accumulated Other Comprehensive Income into Earnings (Effective Portion)	46,335	128,894	124,956	235,205
Gain (Loss) Recognized in Earnings (Ineffective Portion)	(2,032)	(2,303)	(731)	1,996
Gas Sales [Member] | Costless Collar [Member]
Derivative [Line Items]
Gain Reclassified from Accumulated Other Comprehensive Income into Earnings (Effective Portion)		65,732		121,042
Gain (Loss) Recognized in Earnings (Ineffective Portion)		$ (371)		$ 540

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013		Jun. 30, 2012
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Net income (loss)	$ 245,631		$ (405,132)		$ 373,146		$ (297,428)
Change in derivatives:
Settlements	(27,801)	[1]	(117,944)	[1]	(74,974)	[1]	(215,886)	[1]
Ineffectiveness	1,219	[2]	1,620	[2]	438	[2]	(1,537)	[2]
Change in fair value of derivative instruments	67,572	[3]	(36,481)	[3]	22,091	[3]	130,453	[3]
Total change in derivatives	40,990		(152,805)		(52,445)		(86,970)
Change in value of pension and other postretirement liabilities:
Amortization of prior service cost included in net periodic pension cost	267	[4]	254	[4]	534	[4]	508	[4]
Change in currency translation adjustment	(1,418)		(516)		(2,447)		(35)
Comprehensive income (loss)	$ 285,470		$ (558,199)		$ 318,788		$ (383,925)

[1] Net of ($18.5), ($76.7), ($50.0) and ($140.4) million in taxes for the three months ended June 30, 2013 and 2012, and six months ended June 30, 2013 and 2012, respectively.

[2] Net of $0.8, $1.1, $0.3 and ($1.0) million in taxes for the three months ended June 30, 2013 and 2012, and six months ended June 30, 2013 and 2012, respectively.

[3] Net of $45.0, ($23.7), $14.7, and $84.8 million in taxes for the three months ended June 30, 2013 and 2012, and six months ended June 30, 2013 and 2012, respectively.

[4] Net of $0.2, $0.1, $0.4, and $0.3 million in taxes for the three months ended June 30, 2013 and 2012, and six months ended June 30, 2013 and 2012, respectively.

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Earnings Per Share

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Earnings Per Share

(6) EARNINGS PER SHARE

The following table presents the computation of earnings per share for the three- and six-month periods ended June  30, 2013 and 2012:

	For the three months ended				For the six months ended
	June 30,				June 30,
	2013		2012		2013		2012
Net income (loss) (in thousands)	$	245,631	$	(405,132)	$	373,146	$	(297,428)
Number of common shares:
Weighted average outstanding		350,448,806		348,162,723		350,241,768		348,081,399
Issued upon assumed exercise of outstanding stock options		386,999		–		481,528		–
Effect of issuance of nonvested restricted common stock		247,002		–		188,596		–
Weighted average and potential dilutive outstanding(1)		351,082,807		348,162,723		350,911,892		348,081,399
Earnings (loss) per share:
Basic	$	0.70	$	(1.16)	$	1.07	$	(0.85)
Diluted	$	0.70	$	(1.16)	$	1.06	$	(0.85)

(1) Options for 1,599,246shares and 29,251 shares of restricted stock were excluded from the calculation for the three months ended June 30, 2013 because they would have had an antidilutive effect.  Due to the net loss for the three months ended June 30, 2012, options for 1,723,316 shares and 156,047 shares of restricted stock were antidilutive and excluded from the calculation.  Options for2,079,849 shares and 246,347 shares of restricted stock were excluded from the calculation for the six months ended June 30, 2013 because they would have had an antidilutive effect.  Due to the net loss for the six months ended June 30, 2012, options for 1,783,073 shares and 121,078 shares of restricted stock were antidilutive and excluded from the calculation.

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013		Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 25,685		$ 53,583
Restricted cash			8,542
Accounts receivable	445,936		377,638
Inventories	38,100		28,141
Hedging asset	246,455		282,693
Other	36,657		58,315
Total current assets	792,833		808,912
Property and Equipment:
Natural gas and oil properties, using the full cost method, including $1,149.8 million in 2013 and $1,023.9 million in 2012 excluded from amortization	12,402,850		11,283,114
Gathering systems	1,242,468		1,148,261
Other	623,071		597,064
Less: Accumulated depreciation, depletion and amortization	(7,574,133)		(7,191,463)
Total property and equipment, net	6,694,256		5,836,976
Other Assets	148,102		91,639
TOTAL ASSETS	7,635,191		6,737,527
Current liabilities:
Accounts payable	574,713		459,569
Taxes payable	80,570		62,980
Interest payable	33,358		34,431
Advances from partners			68,919
Current deferred income taxes	95,970		106,123
Other current liabilities	62,444		35,749
Total current liabilities	847,055		767,771
Long-term debt	1,897,734		1,668,273
Other Liabilities:
Deferred income taxes	1,260,546		1,049,138
Pension and other postretirement liabilities	34,369		33,174
Other long-term liabilities	221,892		183,299
Total long-term liabilities	3,414,541		2,933,884
Commitments and contingencies (Note 11)
Equity:
Common stock, $0.01 par value; authorized 1,250,000,000 shares; issued 351,529,457 shares in 2013 and 351,100,391 in 2012	3,515		3,511
Additional paid-in capital	952,838		934,939
Retained earnings	2,322,296		1,949,150
Accumulated other comprehensive income	95,446	[1]	149,804	[1]
Common stock in treasury, 14,442 shares in 2013 and 64,715 in 2012	(500)		(1,532)
Total equity	3,373,595		3,035,872
TOTAL LIABILITIES AND EQUITY	$ 7,635,191		$ 6,737,527

[1] For the six months endedJune 30, 2013Gains and (Losses) on Cash Flow HedgesPension and Other PostretirementForeign CurrencyTotal(in thousands) (1)Beginning balance, December 31, 2012$ 172,166 $ (22,311)$ (51)$ 149,804 Other comprehensive income (loss) before reclassifications 22,091  -   (2,447) 19,644 Amounts reclassified from accumulated other comprehensive income (loss) (2) (74,536) 534  -   (74,002)Net current-period other comprehensive income (loss) (52,445) 534  (2,447) (54,358)Ending balance, June 30, 2013$ 119,721 $ (21,777)$ (2,498)$ 95,446 All amounts are net-of-tax.

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Pension Plan and Other Postretirement Benefits (Details) (USD $)			3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2013 Pension Benefits [Member]	Jun. 30, 2012 Pension Benefits [Member]	Jun. 30, 2013 Pension Benefits [Member]	Jun. 30, 2012 Pension Benefits [Member]	Jun. 30, 2013 Other Postretirement Benefits [Member]	Jun. 30, 2012 Other Postretirement Benefits [Member]	Jun. 30, 2013 Other Postretirement Benefits [Member]	Jun. 30, 2012 Other Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost			$ 3,448,000	$ 2,735,000	$ 6,895,000	$ 5,471,000	$ 574,000	$ 458,000	$ 1,148,000	$ 916,000
Interest cost			1,026,000	1,012,000	2,052,000	2,025,000	110,000	99,000	220,000	199,000
Expected return on plan assets			(1,534,000)	(1,356,000)	(3,068,000)	(2,713,000)
Amortization of transition obligation								16,000		32,000
Amortization of prior service cost			26,000	72,000	52,000	143,000	3,000	4,000	7,000	7,000
Amortization of net loss			385,000	305,000	770,000	610,000	30,000	23,000	60,000	46,000
Net periodic benefit cost			3,351,000	2,768,000	6,701,000	5,536,000	717,000	600,000	1,435,000	1,200,000
Defined benefit plan, Expected employer contributions			12,000,000		12,000,000		100,000		100,000
Employer contributions					$ 6,000,000				$ 100,000
Common stock purchased under non-qualified plan, Treasury stock, Shares	14,442	64,715

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013		Jun. 30, 2012
Operating Revenues:
Gas sales	$ 614,178		$ 435,392		$ 1,118,674		$ 897,526
Gas marketing	200,979		126,688		380,820		274,739
Oil sales	2,684		1,680		8,034		4,208
Gas gathering	44,200		42,316		88,162		84,438
Total Operating Revenues	862,041		606,076		1,595,690		1,260,911
Operating Costs and Expenses:
Gas purchases - midstream services	200,110		127,614		380,066		274,290
Operating expenses	82,155		56,614		146,379		117,572
General and administrative expenses	47,570		44,932		84,785		93,758
Depreciation, depletion and amortization	186,867		207,830		366,334		401,457
Impairment of natural gas and oil properties			800,652				800,652	[1]
Taxes, other than income taxes	20,022		14,480		40,849		34,902
Total operating costs and expenses	536,724		1,252,122		1,018,413		1,722,631
Operating Income (Loss)	325,317		(646,046)	[2]	577,277		(461,720)	[2]
Interest Expense:
Interest on debt	25,049		23,956		49,146		43,691
Other interest charges	1,044		1,047		2,154		2,038
Interest capitalized	(16,815)		(16,642)		(33,001)		(30,030)
Total Interest Expense	9,278	[1]	8,361	[1]	18,299	[1]	15,699	[1]
Other Gain (Loss), Net	354	[1]	2,577	[1]	(179)	[1]	2,377	[1]
Gain (Loss) on Derivatives	93,449		(6,348)		63,655		(4,714)
Income (Loss) Before Income Taxes	409,842		(658,178)		622,454		(479,756)
Provision for Income Taxes:
Current	16,334		100		16,470		268
Deferred	147,877		(253,146)		232,838		(182,596)
Total provision for income taxes	164,211	[1]	(253,046)	[1]	249,308	[1]	(182,328)	[1]
Net Income (Loss)	$ 245,631		$ (405,132)		$ 373,146		$ (297,428)
Earnings (Loss) Per Share:
Basic	$ 0.70		$ (1.16)		$ 1.07		$ (0.85)
Diluted	$ 0.70		$ (1.16)		$ 1.06		$ (0.85)
Weighted Average Common Shares Outstanding:
Basic	350,448,806		348,162,723		350,241,768		348,081,399
Diluted	351,082,807	[3]	348,162,723	[3]	350,911,892	[3]	348,081,399	[3]

[1] Interest expense and the provision for income taxes by segment are allocated as they are incurred at the corporate level.

[2] The operating loss for the E&P segment for the three and six months ended June 30, 2012 includes a $800.7 million non-cash ceiling test impairment of our natural gas and oil properties.

[3] Options for 1,599,246 shares and 29,251 shares of restricted stock were excluded from the calculation for the three months ended June 30, 2013 because they would have had an antidilutive effect. Due to the net loss for the three months ended June 30, 2012, options for 1,723,316 shares and 156,047 shares of restricted stock were antidilutive and excluded from the calculation. Options for 2,079,849 shares and 246,347 shares of restricted stock were excluded from the calculation for the six months ended June 30, 2013 because they would have had an antidilutive effect. Due to the net loss for the six months ended June 30, 2012, options for 1,783,073 shares and 121,078 shares of restricted stock were antidilutive and excluded from the calculation.

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Fair Value Measurements (Carrying Amount and Estimated Fair Values of Financial Instruments) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Restricted cash		$ 8,542
Carrying Amount [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	25,685	53,583
Restricted cash		8,542
Unsecured revolving credit facility	230,000
Senior notes	1,668,934	1,669,473
Derivative instruments	264,201	287,878
Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	25,685	53,583
Restricted cash		8,542
Unsecured revolving credit facility	230,000
Senior notes	1,791,429	1,917,005
Derivative instruments	$ 264,201	$ 287,878

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Reclassifications From Accumulated Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2013

Reclassifications From Accumulated Other Comprehensive Income [Abstract]

Components of AOCI and Related Tax Effects

	For the six months ended
	June 30, 2013
	Gains and (Losses) on Cash Flow Hedges		Pension and Other Postretirement		Foreign Currency		Total
	(in thousands) (1)
Beginning balance, December 31, 2012	$	172,166	$	(22,311)	$	(51)	$	149,804
Other comprehensive income (loss) before reclassifications		22,091		–		(2,447)		19,644
Amounts reclassified from accumulated other comprehensive income (loss) (2)		(74,536)		534		–		(74,002)
Net current-period other comprehensive income (loss)		(52,445)		534		(2,447)		(54,358)
Ending balance, June 30, 2013	$	119,721	$	(21,777)	$	(2,498)	$	95,446

(1) All amounts are net-of-tax.

See separate table below for details about these reclassifications.

Amounts Reclassified from AOCI into Earnings

Details about Accumulated Other Comprehensive Income		Amount Reclassified from Accumulated Other Comprehensive Income	Affected Line Item in the Consolidated Statement of Operations
Gains (losses) on cash flow hedges
Settlements	$	124,956	Gas sales
Ineffectiveness		(731)	Gas sales
		124,225	Income before income taxes
		49,689	Provision for income taxes
	$	74,536	Net income
Pension and other postretirement
Amortization of prior service cost included in net periodic pension cost (1)	$	(890)	General and administrative expenses
		(890)	Loss before income taxes
		(356)	Provision for income taxes
	$	(534)	Net loss
Total reclassifications for the period	$	74,002	Net income

(1) This accumulated other comprehensive income component is included in the computation of net periodic pension cost (see footnote 13 for additional details.)  

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Segment Information

6 Months Ended

Jun. 30, 2013

Segment Information [Abstract]

Segment Information

(15) SEGMENT INFORMATION

The Company’s reportable business segments have been identified based on the differences in products or services provided. Revenues for the E&P segment are derived from the production and sale of natural gas and crude oil. The Midstream Services segment generates revenue through the marketing of both Company and third-party produced natural gas volumes and through gathering fees associated with the transportation of natural gas to market.

Summarized financial information for the Company’s reportable segments is shown in the following table. The accounting policies of the segments are the same as those described in Note 1 of the Notes to Consolidated Financial Statements included in Item 8 of the 2012 Annual Report on Form 10-K. Management evaluates the performance of its segments based on operating income, defined as operating revenues less operating costs. Income before income taxes, for the purpose of reconciling the operating income amount shown below to consolidated income before income taxes, is the sum of operating income, interest expense and interest and other income (loss). The “Other” column includes items not related to the Company’s reportable segments including real estate and corporate items.

	Exploration
	and		Midstream
	Production		Services		Other			Total
	(in thousands)
Three months ended June 30, 2013:
Revenues from external customers	$	616,894	$	245,120	$	27		$	862,041
Intersegment revenues		1,664		641,655		60			643,379
Operating income (loss)		252,546		72,889		(118)			325,317
Other income, net		296		58		–			354
Gain on derivatives		93,449		–		–			93,449
Depreciation, depletion and amortization expense		174,267		12,495		105			186,867
Interest expense(2)		6,345		2,743		190			9,278
Provision (benefit) for income taxes(2)		138,636		25,711		(136)			164,211
Assets		6,006,318		1,383,930		244,943	(3)		7,635,191
Capital investments(4)		631,221		56,906		6,766			694,893
Three months ended June 30, 2012:
Revenues from external customers	$	437,035	$	169,004	$	37		$	606,076
Intersegment revenues		(1,448)		319,391		816			318,759
Operating income (loss)(1)		(718,277)		71,821		410			(646,046)
Other income (loss), net		(64)		(5)		2,646			2,577
Loss on derivatives		(6,348)		–		–			(6,348)
Depreciation, depletion and amortization expense		196,201		11,309		320			207,830
Impairment of natural gas and oil properties		800,652		–		–			800,652
Interest expense(2)		4,430		3,578		353			8,361
Provision (benefit) for income taxes(2)		(279,493)		25,414		1,033			(253,046)
Assets		6,120,697		1,114,364		404,149	(3)		7,639,210
Capital investments(4)		531,845		47,719		9,069			588,633

	Exploration
	and		Midstream
	Production		Services		Other			Total
	(in thousands)
Six months ended June 30, 2013:
Revenues from external customers	$	1,126,988	$	468,654	$	48		$	1,595,690
Intersegment revenues		3,173		1,139,028		113			1,142,314
Operating income (loss)		428,304		149,196		(223)			577,277
Other loss, net		(82)		(97)		–			(179)
Gain on derivatives		63,655		–		–			63,655
Depreciation, depletion and amortization expense		341,717		24,407		210			366,334
Interest expense(2)		12,521		5,388		390			18,299
Provision (benefit) for income taxes(2)		194,452		55,114		(258)			249,308
Assets		6,006,318		1,383,930		244,943	(3)		7,635,191
Capital investments(4)		1,106,554		95,373		11,022			1,212,949
Six months ended June 30, 2012:
Revenues from external customers	$	901,666	$	359,177	$	68		$	1,260,911
Intersegment revenues		(735)		675,672		1,635			676,572
Operating income (loss)(1)		(603,668)		141,110		838			(461,720)
Other income (loss), net		(247)		(23)		2,647			2,377
Loss on derivatives		(4,714)		–		–			(4,714)
Depreciation, depletion and amortization expense		378,940		21,879		638			401,457
Impairment of natural gas and oil properties		800,652		–		–			800,652
Interest expense(2)		7,752		7,245		702			15,699
Provision (benefit) for income taxes(2)		(234,655)		51,262		1,065			(182,328)
Assets		6,120,697		1,114,364		404,149	(3)		7,639,210
Capital investments(4)		1,064,984		73,883		22,878			1,161,745

(1) The operating loss for the E&P segment for the three and six months ended June 30, 2012 includes a $800.7 million non-cash ceiling test impairment of our natural gas and oil properties.

(2) Interest expense and the provision for income taxes by segment are allocated as they are incurred at the corporate level.

(3) Other assets represent corporate assets not allocated to segments and assets, including restricted cash and investments in cash equivalents, for non reportable segments.

(4) Capital investments includes increases of $7.5 million and $0.2 million for the three-month periods ended June 30, 2013 and 2012, respectively, and increases of $40.4 million and $15.5 million for the six-month periods ended June 30, 2013 and 2012, respectively, relating to the change in accrued expenditures between periods.

Included in intersegment revenues of the Midstream Services segment are $559.0 million and $245.5 million for the three months ended June  30, 2013 and 2012, respectively, and $978.5 million and $531.6 million for the six months ended June 30, 2013 and 2012, respectively, for marketing of the Company’s E&P sales. Corporate assets include cash and cash equivalents, restricted cash, furniture and fixtures, prepaid debt and other costs. Corporate general and administrative costs, depreciation expense and taxes other than income are allocated to the segments. For the three months ended June  30, 2013 and 2012, capital investments within the E&P segment include$5.6million and $2.3 million, respectively, related to the Company’s activities in Canada.  For the six months ended June 30, 2013 and 2012, capital investments within the E&P segment include $7.9 million and $4.7 million, respectively, relating to the Company’s activities in Canada. At June  30, 2013, E&P segment assets include $51.3 million and at June  30, 2012, assets include $33.2  million related to the Company’s activities in Canada.

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Derivatives and Risk Management (Cash Flow Hedges on Volumes of Natural Gas Production) (Details)	Jun. 30, 2013 ft3
Year 2013 [Member]
Derivative [Line Items]
Volume of Natural Gas Production (in Bcf), Cash Flow Hedges	168,800,000,000
Year 2014 [Member]
Derivative [Line Items]
Volume of Natural Gas Production (in Bcf), Cash Flow Hedges	51,100,000,000

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Debt (Narrative) (Details) (USD $)	1 Months Ended			6 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Feb. 28, 2011	Jun. 30, 2013	Jun. 30, 2013 4.10% Senior Notes Due 2022 [Member]	Dec. 31, 2012 4.10% Senior Notes Due 2022 [Member]	Mar. 31, 2012 4.10% Senior Notes Due 2022 [Member]	Jun. 30, 2013 Credit Facility [Member]	Feb. 28, 2011 Credit Facility [Member]
Debt Instrument [Line Items]
Senior Notes					$ 1,000,000,000	$ 1,000,000,000	$ 1,000,000,000
Debt instrument, interest rate, stated percentage					4.10%		4.10%
Senior notes redemption date	Dec. 15, 2021		Feb. 01, 2016
Principal amount of notes to be redeemed then outstanding	100.00%
Duration of assumed year, days	360 days
Duration of assumed month, days		30 days
Company exhanged Private Notes for Exchange Notes				999,500,000
Basis Points				35				200
Purchase price upon exercise of option	101.00%
Unsecured revolving credit facility, borrowing capacity			$ 1,500,000,000						$ 2,000,000,000
Debt percentage of capital structure			60.00%
EBITDA to Interest Expense Ratio			3.5

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Condensed Consolidating Financial Information (Condensed Consolidating Statements of Cash Flows) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Net cash provided by (used in) operating activities	$ 877,552	$ 837,390
Capital investments	(1,175,634)	(1,140,661)
Proceeds from sale of property and equipment		(174,337)
Transfers to restricted cash		(167,750)
Transfers from restricted cash	8,542	23,366
Other	5,628	8,895
Net cash used in investing activities	(1,161,464)	(1,101,813)
Payments on current portion of long-term debt	(600)	(600)
Payments on revolving long-term debt	(1,233,150)	(1,273,700)
Borrowings under revolving long-term debt	1,463,150	602,200
Proceeds from issuance of long-term debt		998,780
Other Items	26,497	(36,370)
Net cash provided by (used in) financing activities	255,897	290,310
Effect of exchange rate changes on cash	117	(15)
Increase (decrease) in cash and cash equivalents	(27,898)	25,872
Cash and cash equivalents at beginning of year	53,583	15,627
Cash and cash equivalents at end of period	25,685	41,499
Parent [Member]
Net cash provided by (used in) operating activities	(30,843)	(51,093)
Capital investments	(12,156)	(18,079)
Transfers to restricted cash		(167,750)
Transfers from restricted cash	8,542	23,366
Other	(73)	90
Net cash used in investing activities	(3,687)	(162,373)
Intercompany activities	(243,555)	(54,667)
Payments on current portion of long-term debt	(600)	(600)
Payments on revolving long-term debt	(1,233,150)	(1,273,700)
Borrowings under revolving long-term debt	1,463,150	602,200
Proceeds from issuance of long-term debt		998,780
Other Items	26,497	(36,370)
Net cash provided by (used in) financing activities	12,342	235,643
Increase (decrease) in cash and cash equivalents	(22,188)	22,177
Cash and cash equivalents at beginning of year	47,491	14,711
Cash and cash equivalents at end of period	25,303	36,888
Guarantors [Member]
Net cash provided by (used in) operating activities	651,169	624,945
Capital investments	(1,084,093)	(1,032,169)
Proceeds from sale of property and equipment		(168,391)
Other	1,894	(2,287)
Net cash used in investing activities	(1,082,199)	(866,065)
Intercompany activities	425,042	245,329
Net cash provided by (used in) financing activities	425,042	245,329
Increase (decrease) in cash and cash equivalents	(5,988)	4,209
Cash and cash equivalents at beginning of year	5,988
Cash and cash equivalents at end of period		4,209
Non-Guarantors [Member]
Net cash provided by (used in) operating activities	257,226	263,538
Capital investments	(79,385)	(90,413)
Proceeds from sale of property and equipment		(5,946)
Other	3,807	11,092
Net cash used in investing activities	(75,578)	(73,375)
Intercompany activities	(181,487)	(190,662)
Net cash provided by (used in) financing activities	(181,487)	(190,662)
Effect of exchange rate changes on cash	117	(15)
Increase (decrease) in cash and cash equivalents	278	(514)
Cash and cash equivalents at beginning of year	104	916
Cash and cash equivalents at end of period	$ 382	$ 402

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Inventory (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Inventory [Abstract]
Current assets inventory, underground storage	$ 3.7	$ 5.6
Current assets inventory, tubulars & other equipment	34.4	22.5
Other assets non-current inventory, gathering systems pipe	$ 15.9	$ 13.8

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2013

Segment Information [Abstract]

Summary Financial Information for Company's Reportable Segments Table

	Exploration
	and		Midstream
	Production		Services		Other			Total
	(in thousands)
Three months ended June 30, 2013:
Revenues from external customers	$	616,894	$	245,120	$	27		$	862,041
Intersegment revenues		1,664		641,655		60			643,379
Operating income (loss)		252,546		72,889		(118)			325,317
Other income, net		296		58		–			354
Gain on derivatives		93,449		–		–			93,449
Depreciation, depletion and amortization expense		174,267		12,495		105			186,867
Interest expense(2)		6,345		2,743		190			9,278
Provision (benefit) for income taxes(2)		138,636		25,711		(136)			164,211
Assets		6,006,318		1,383,930		244,943	(3)		7,635,191
Capital investments(4)		631,221		56,906		6,766			694,893
Three months ended June 30, 2012:
Revenues from external customers	$	437,035	$	169,004	$	37		$	606,076
Intersegment revenues		(1,448)		319,391		816			318,759
Operating income (loss)(1)		(718,277)		71,821		410			(646,046)
Other income (loss), net		(64)		(5)		2,646			2,577
Loss on derivatives		(6,348)		–		–			(6,348)
Depreciation, depletion and amortization expense		196,201		11,309		320			207,830
Impairment of natural gas and oil properties		800,652		–		–			800,652
Interest expense(2)		4,430		3,578		353			8,361
Provision (benefit) for income taxes(2)		(279,493)		25,414		1,033			(253,046)
Assets		6,120,697		1,114,364		404,149	(3)		7,639,210
Capital investments(4)		531,845		47,719		9,069			588,633

	Exploration
	and		Midstream
	Production		Services		Other			Total
	(in thousands)
Six months ended June 30, 2013:
Revenues from external customers	$	1,126,988	$	468,654	$	48		$	1,595,690
Intersegment revenues		3,173		1,139,028		113			1,142,314
Operating income (loss)		428,304		149,196		(223)			577,277
Other loss, net		(82)		(97)		–			(179)
Gain on derivatives		63,655		–		–			63,655
Depreciation, depletion and amortization expense		341,717		24,407		210			366,334
Interest expense(2)		12,521		5,388		390			18,299
Provision (benefit) for income taxes(2)		194,452		55,114		(258)			249,308
Assets		6,006,318		1,383,930		244,943	(3)		7,635,191
Capital investments(4)		1,106,554		95,373		11,022			1,212,949
Six months ended June 30, 2012:
Revenues from external customers	$	901,666	$	359,177	$	68		$	1,260,911
Intersegment revenues		(735)		675,672		1,635			676,572
Operating income (loss)(1)		(603,668)		141,110		838			(461,720)
Other income (loss), net		(247)		(23)		2,647			2,377
Loss on derivatives		(4,714)		–		–			(4,714)
Depreciation, depletion and amortization expense		378,940		21,879		638			401,457
Impairment of natural gas and oil properties		800,652		–		–			800,652
Interest expense(2)		7,752		7,245		702			15,699
Provision (benefit) for income taxes(2)		(234,655)		51,262		1,065			(182,328)
Assets		6,120,697		1,114,364		404,149	(3)		7,639,210
Capital investments(4)		1,064,984		73,883		22,878			1,161,745

(1) The operating loss for the E&P segment for the three and six months ended June 30, 2012 includes a $800.7 million non-cash ceiling test impairment of our natural gas and oil properties.

(2) Interest expense and the provision for income taxes by segment are allocated as they are incurred at the corporate level.

(3) Other assets represent corporate assets not allocated to segments and assets, including restricted cash and investments in cash equivalents, for non reportable segments.

(4) Capital investments includes increases of $7.5 million and $0.2 million for the three-month periods ended June 30, 2013 and 2012, respectively, and increases of $40.4 million and $15.5 million for the six-month periods ended June 30, 2013 and 2012, respectively, relating to the change in accrued expenditures between periods.

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Condensed Consolidating Financial Information (Tables)

6 Months Ended

Jun. 30, 2013

Condensed Consolidating Financial Information [Abstract]

Condensed Consolidating Statements of Operations

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Unaudited)
	Parent		Guarantors		Non-Guarantors		Eliminations		Consolidated
	(in thousands)
Three months ended June 30, 2013:
Operating revenues	$	–	$	818,087	$	126,845	$	(82,891)	$	862,041
Operating costs and expenses:
Gas purchases – midstream services		–		200,584		–		(474)		200,110
Operating expenses		–		124,780		39,773		(82,398)		82,155
General and administrative expenses		–		40,946		6,643		(19)		47,570
Depreciation, depletion and amortization		–		174,382		12,485		–		186,867
Taxes, other than income taxes		–		16,990		3,032		–		20,022
Total operating costs and expenses		–		557,682		61,933		(82,891)		536,724
Operating income		–		260,405		64,912		–		325,317
Other income, net		–		298		56		–		354
Gain on derivatives		–		93,449		–		–		93,449
Equity in earnings of subsidiaries		245,631		–		–		(245,631)		–
Interest expense		–		7,587		1,691		–		9,278
Income before income taxes		245,631		346,565		63,277		(245,631)		409,842
Provision for income taxes		–		142,283		21,928		–		164,211
Net income		245,631		204,282		41,349		(245,631)		245,631
Comprehensive income	$	285,470	$	245,273	$	39,930	$	(285,203)	$	285,470
Three months ended June 30, 2012:
Operating revenues	$	–	$	563,822	$	115,596	$	(73,342)	$	606,076
Operating costs and expenses:
Gas purchases – midstream services		–		127,757		–		(143)		127,614
Operating expenses		–		101,816		27,203		(72,405)		56,614
General and administrative expenses		–		39,041		6,685		(794)		44,932
Depreciation, depletion and amortization		–		196,245		11,585		–		207,830
Impairment of natural gas and oil properties		–		800,652		–		–		800,652
Taxes, other than income taxes		–		11,648		2,832		–		14,480
Total operating costs and expenses		–		1,277,159		48,305		(73,342)		1,252,122
Operating income (loss)		–		(713,337)		67,291		–		(646,046)
Other income (loss), net		–		(65)		2,642		–		2,577
Loss on derivatives		–		(6,348)		–		–		(6,348)
Equity in earnings of subsidiaries		(405,132)		–		–		405,132		–
Interest expense		–		4,505		3,856		–		8,361
Income (loss) before income taxes		(405,132)		(724,255)		66,077		405,132		(658,178)
Provision (benefit) for income taxes		–		(278,220)		25,174		–		(253,046)
Net income (loss)		(405,132)		(446,035)		40,903		405,132		(405,132)
Comprehensive income (loss)	$	(558,199)	$	(598,840)	$	40,387	$	558,453	$	(558,199)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Unaudited)
	Parent		Guarantors		Non-Guarantors		Eliminations		Consolidated
	(in thousands)
Six months ended June 30, 2013:
Operating revenues	$	–	$	1,508,231	$	248,214	$	(160,755)	$	1,595,690
Operating costs and expenses:
Gas purchases – midstream services		–		380,748		–		(682)		380,066
Operating expenses		–		235,321		71,095		(160,037)		146,379
General and administrative expenses		–		72,812		12,009		(36)		84,785
Depreciation, depletion and amortization		–		341,904		24,430		–		366,334
Taxes, other than income taxes		–		34,705		6,144		–		40,849
Total operating costs and expenses		–		1,065,490		113,678		(160,755)		1,018,413
Operating income		–		442,741		134,536		–		577,277
Other loss, net		–		(78)		(101)		–		(179)
Gain on derivatives		–		63,655		–		–		63,655
Equity in earnings of subsidiaries		373,146		–		–		(373,146)		–
Interest expense		–		14,525		3,774		–		18,299
Income before income taxes		373,146		491,793		130,661		(373,146)		622,454
Provision for income taxes		–		200,329		48,979		–		249,308
Net income		373,146		291,464		81,682		(373,146)		373,146
Comprehensive income	$	318,788	$	239,020	$	79,234	$	(318,254)	$	318,788
Six months ended June 30, 2012:
Operating revenues	$	–	$	1,176,633	$	228,721	$	(144,443)	$	1,260,911
Operating costs and expenses:
Gas purchases – midstream services		–		274,660		–		(370)		274,290
Operating expenses		–		204,872		55,184		(142,484)		117,572
General and administrative expenses		–		80,749		14,598		(1,589)		93,758
Depreciation, depletion and amortization		–		379,082		22,375		–		401,457
Impairment of natural gas and oil properties		–		800,652		–		–		800,652
Taxes, other than income taxes		–		28,646		6,256		–		34,902
Total operating costs and expenses		–		1,768,661		98,413		(144,443)		1,722,631
Operating income (loss)		–		(592,028)		130,308		–		(461,720)
Other income (loss), net		–		(239)		2,616		–		2,377
Loss on derivatives		–		(4,714)		–		–		(4,714)
Equity in earnings of subsidiaries		(297,428)		–		–		297,428		–
Interest expense		–		8,260		7,439		–		15,699
Income (loss) before income taxes		(297,428)		(605,241)		125,485		297,428		(479,756)
Provision (benefit) for income taxes		–		(231,328)		49,000		–		(182,328)
Net income (loss)		(297,428)		(373,913)		76,485		297,428		(297,428)
Comprehensive income (loss)	$	(383,925)	$	(460,883)	$	76,450	$	384,433	$	(383,925)

Condensed Consolidating Balance Sheets

CONDENSED CONSOLIDATING BALANCE SHEETS
(Unaudited)
	Parent		Guarantors		Non- Guarantors		Eliminations		Consolidated
	(in thousands)
June 30, 2013:
ASSETS
Cash and cash equivalents	$	25,303	$	–	$	382	$	–	$	25,685
Accounts receivable		2,642		420,119		23,175		–		445,936
Inventories		–		36,045		2,055		–		38,100
Other current assets		5,331		270,094		7,687		–		283,112
Total current assets		33,276		726,258		33,299		–		792,833
Intercompany receivables		2,510,744		66		30,746		(2,541,556)		–
Property and equipment		231,348		12,617,326		1,419,715		–		14,268,389
Less: Accumulated depreciation, depletion and amortization		(95,880)		(7,264,007)		(214,246)		–		(7,574,133)
		135,468		5,353,319		1,205,469		–		6,694,256
Investments in subsidiaries (equity method)		2,632,570		–		–		(2,632,570)		–
Other assets		33,704		98,372		16,026		–		148,102
Total assets	$	5,345,762	$	6,178,015	$	1,285,540	$	(5,174,126)	$	7,635,191
LIABILITIES AND EQUITY
Accounts payable	$	132,447	$	461,157	$	95,037	$	–	$	688,641
Other current liabilities		3,758		152,810		1,846		–		158,414
Total current liabilities		136,205		613,967		96,883		–		847,055
Intercompany payables		–		2,541,556		–		(2,541,556)		–
Long-term debt		1,897,734		–		–		–		1,897,734
Deferred income taxes		(130,850)		993,255		398,141		–		1,260,546
Other liabilities		69,078		172,997		14,186		–		256,261
Total liabilities		1,972,167		4,321,775		509,210		(2,541,556)		4,261,596
Commitments and contingencies
Total equity		3,373,595		1,856,240		776,330		(2,632,570)		3,373,595
Total liabilities and equity	$	5,345,762	$	6,178,015	$	1,285,540	$	(5,174,126)	$	7,635,191

CONDENSED CONSOLIDATING BALANCE SHEETS
(Unaudited)
	Parent		Guarantors		Non- Guarantors		Eliminations		Consolidated
	(in thousands)
December 31, 2012:
ASSETS
Cash and cash equivalents	$	47,491	$	5,988	$	104	$	–	$	53,583
Restricted Cash		8,542		–		–		–		8,542
Accounts receivable		2,677		353,607		21,354		–		377,638
Inventories		2		26,975		1,164		–		28,141
Other current assets		7,461		321,396		12,151		–		341,008
Total current assets		66,173		707,966		34,773		–		808,912
Intercompany receivables		2,259,713		42		27,077		(2,286,832)		–
Property and equipment		220,837		11,491,222		1,316,380		–		13,028,439
Less: Accumulated depreciation, depletion and amortization		(82,178)		(6,923,106)		(186,179)		–		(7,191,463)
		138,659		4,568,116		1,130,201		–		5,836,976
Investments in subsidiaries (equity method)		2,309,947		–		–		(2,309,947)		–
Other assets		35,136		42,247		14,256		–		91,639
Total assets	$	4,809,628	$	5,318,371	$	1,206,307	$	(4,596,779)	$	6,737,527
LIABILITIES AND EQUITY
Accounts payable	$	140,367	$	375,604	$	41,009	$	–	$	556,980
Other current liabilities		3,758		205,623		1,410		–		210,791
Total current liabilities		144,125		581,227		42,419		–		767,771
Intercompany payables		–		2,108,360		178,472		(2,286,832)		–
Long-term debt		1,668,273		–		–		–		1,668,273
Deferred income taxes		(116,207)		820,279		345,066		–		1,049,138
Other liabilities		77,565		124,505		14,403		–		216,473
Total liabilities		1,773,756		3,634,371		580,360		(2,286,832)		3,701,655
Commitments and contingencies
Total equity		3,035,872		1,684,000		625,947		(2,309,947)		3,035,872
Total liabilities and equity	$	4,809,628	$	5,318,371	$	1,206,307	$	(4,596,779)	$	6,737,527

Condensed Consolidating Statements of Cash Flows

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(Unaudited)
	Parent		Guarantors		Non-Guarantors		Eliminations		Consolidated
	(in thousands)
Six months ended June 30, 2013:
Net cash provided by (used in) operating activities	$	(30,843)	$	651,169	$	257,226	$	–	$	877,552
Investing activities:
Capital investments		(12,156)		(1,084,093)		(79,385)		–		(1,175,634)
Transfers from restricted cash		8,542		–		–		–		8,542
Other		(73)		1,894		3,807		–		5,628
Net cash used in investing activities		(3,687)		(1,082,199)		(75,578)		–		(1,161,464)
Financing activities:
Intercompany activities		(243,555)		425,042		(181,487)		–		–
Payments on current portion of long-term debt		(600)		–		–		–		(600)
Payments on revolving long-term debt		(1,233,150)		–		–		–		(1,233,150)
Borrowing under revolving long-term debt		1,463,150		–		–		–		1,463,150
Other Items		26,497		–		–		–		26,497
Net cash provided by (used in) financing activities		12,342		425,042		(181,487)		–		255,897
Effect of exchange rate changes on cash		–		–		117		–		117
Increase (decrease) in cash and cash equivalents		(22,188)		(5,988)		278		–		(27,898)
Cash and cash equivalents at beginning of year		47,491		5,988		104		–		53,583
Cash and cash equivalents at end of period	$	25,303	$	–	$	382	$	–	$	25,685
Six months ended June 30, 2012:
Net cash provided by (used in) operating activities	$	(51,093)	$	624,945	$	263,538	$	–	$	837,390
Investing activities:
Capital investments		(18,079)		(1,032,169)		(90,413)		–		(1,140,661)
Proceeds from sale of property and equipment		–		168,391		5,946		–		174,337
Transfers to restricted cash		(167,750)		–		–		–		(167,750)
Transfers from restricted cash		23,366		–		–		–		23,366
Other		90		(2,287)		11,092		–		8,895
Net cash used in investing activities		(162,373)		(866,065)		(73,375)		–		(1,101,813)
Financing activities:								–
Intercompany activities		(54,667)		245,329		(190,662)		–		–
Payments on current portion of long-term debt		(600)		–		–		–		(600)
Payments on revolving long-term debt		(1,273,700)		–		–		–		(1,273,700)
Borrowings under revolving long-term debt		602,200		–		–		–		602,200
Proceeds from issuance of long-term debt		998,780		–		–		–		998,780
Other items		(36,370)		–		–		–		(36,370)
Net cash provided by (used in) financing activities		235,643		245,329		(190,662)		–		290,310
Effect of exchange rate changes on cash		–		–		(15)		–		(15)
Increase (decrease) in cash and cash equivalents		22,177		4,209		(514)		–		25,872
Cash and cash equivalents at beginning of year		14,711		–		916		–		15,627
Cash and cash equivalents at end of period	$	36,888	$	4,209	$	402	$	–	$	41,499

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Natural Gas and Oil Properties

6 Months Ended

Jun. 30, 2013

Natural Gas And Oil Properties [Abstract]

Natural Gas and Oil Properties

(5) NATURAL GAS AND OIL PROPERTIES

The Company utilizes the full cost method of accounting for costs related to the exploration, development and acquisition of natural gas and oil reserves. Under this method, all such costs (productive and nonproductive), including salaries, benefits and other internal costs directly attributable to these activities are capitalized on a country by country basis and amortized over the estimated lives of the properties using the units-of-production method. These capitalized costs, less accumulated amortization and related deferred income taxes, are subject to a ceiling test that limits such pooled costs to the aggregate of the present value of future net revenues attributable to proved natural gas and oil reserves, net of taxes, discounted at 10 percent plus the lower of cost or market value of unproved properties. Any costs in excess of the ceiling are written off as a non-cash expense. The expense may not be reversed in future periods, even though higher natural gas and oil prices may subsequently increase the ceiling. Full cost companies must use the average quoted price from the first day of each month from the previous 12 months, including the impact of derivatives qualifying as cash flow hedges, to calculate the ceiling value of their reserves.

Using the average quoted price from the first day of each month from the previous 12 months for Henry Hub natural gas of $3.44 per MMBtu and $88.13 per barrel for West Texas Intermediate oil, adjusted for market differentials, the Company’s net book value of its United States natural gas and oil properties did not exceed the ceiling amount and did not result in a ceiling test impairment at June 30, 2013. Cash flow hedges of natural gas production in place increased the ceiling value by $150.8 million, net of tax, at June 30, 2013.  Decreases in average quoted prices from June 30, 2013 levels as well as changes in production rates, levels of reserves, capitalized costs, the evaluation of costs excluded from amortization, future development costs, service costs and taxes could result in future ceiling test impairments.

Using the average quoted price from the first day of each month from the previous 12 months for Henry Hub natural gas of $3.15 per MMBtu and $92.17 per barrel for West Texas Intermediate oil, adjusted for market differentials, the Company’s net book value of its United States natural gas and oil properties exceeded the ceiling by approximately $496.4 million (net of tax) at June 30, 2012 and resulted in a non-cash ceiling test impairment.  Cash flow hedges of natural gas production in place increased the ceiling by $354.8 million at June 30, 2012.

All of the Company’s costs directly associated with the acquisition and evaluation of properties in Canada relating to its exploration program at June 30, 2013 were unproved and did not exceed the ceiling amount.  If the exploration program in Canada is unsuccessful on all or a portion of these properties, a ceiling test impairment may result in the future.

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Segment Information (Details) (USD $)	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013		Jun. 30, 2012		Dec. 31, 2012
Revenues from external customers	$ 862,041,000		$ 606,076,000		$ 1,595,690,000		$ 1,260,911,000
Intersegment revenues	643,379,000		318,759,000		1,142,314,000		676,572,000
Operating income (loss)	325,317,000		(646,046,000)	[1]	577,277,000		(461,720,000)	[1]
Other Gain (Loss), Net	354,000	[2]	2,577,000	[2]	(179,000)	[2]	2,377,000	[2]
Gain (Loss) on Derivatives	93,449,000		(6,348,000)		63,655,000		(4,714,000)
Depreciation, depletion and amortization expense	186,867,000		207,830,000		366,334,000		401,457,000
Impairment of natural gas and oil properties			800,652,000				800,652,000	[2]
Interest expense	9,278,000	[2]	8,361,000	[2]	18,299,000	[2]	15,699,000	[2]
Provision (benefit) for income taxes	164,211,000	[2]	(253,046,000)	[2]	249,308,000	[2]	(182,328,000)	[2]
Assets	7,635,191,000		7,639,210,000	[3]	7,635,191,000		7,639,210,000	[3]	6,737,527,000
Capital investments	694,893,000	[3]	588,633,000	[2]	1,212,949,000	[3]	1,161,745,000	[3]
Change in accrued expenditures	7,500,000		200,000		40,400,000		15,500,000
Intersegment revenues for marketing company's E&P sales	559,000,000		245,500,000		978,500,000		531,600,000
Capital investment related to companys E&P segment related to Canada for September 30, 2012 and 2011	5,600,000		2,300,000		7,900,000		4,700,000
Assets related to E&P program in Canada	51,300,000		33,200,000		51,300,000		33,200,000
Non-cash ceiling test impairment			800,700,000				800,700,000
Exploration and Production [Member]
Revenues from external customers	616,894,000		437,035,000		1,126,988,000		901,666,000
Intersegment revenues	1,664,000		(1,448,000)		3,173,000		(735,000)
Operating income (loss)	252,546,000		(718,277,000)	[1]	428,304,000		(603,668,000)	[1]
Other Gain (Loss), Net	296,000	[2]	(64,000)	[2]	(82,000)	[2]	(247,000)	[2]
Gain (Loss) on Derivatives	93,449,000		(6,348,000)		63,655,000		(4,714,000)
Depreciation, depletion and amortization expense	174,267,000		196,201,000		341,717,000		378,940,000
Impairment of natural gas and oil properties			800,652,000				800,652,000	[2]
Interest expense	6,345,000	[2]	4,430,000	[2]	12,521,000	[2]	7,752,000	[2]
Provision (benefit) for income taxes	138,636,000	[2]	(279,493,000)	[2]	194,452,000	[2]	(234,655,000)	[2]
Assets	6,006,318,000		6,120,697,000	[3]	6,006,318,000		6,120,697,000	[3]
Capital investments	631,221,000	[3]	531,845,000	[2]	1,106,554,000	[3]	1,064,984,000	[3]
Midstream Services [Member]
Revenues from external customers	245,120,000		169,004,000		468,654,000		359,177,000
Intersegment revenues	641,655,000		319,391,000		1,139,028,000		675,672,000
Operating income (loss)	72,889,000		71,821,000	[1]	149,196,000		141,110,000	[1]
Other Gain (Loss), Net	58,000	[2]	(5,000)	[2]	(97,000)	[2]	(23,000)	[2]
Depreciation, depletion and amortization expense	12,495,000		11,309,000		24,407,000		21,879,000
Interest expense	2,743,000	[2]	3,578,000	[2]	5,388,000	[2]	7,245,000	[2]
Provision (benefit) for income taxes	25,711,000	[2]	25,414,000	[2]	55,114,000	[2]	51,262,000	[2]
Assets	1,383,930,000		1,114,364,000	[3]	1,383,930,000		1,114,364,000	[3]
Capital investments	56,906,000	[3]	47,719,000	[2]	95,373,000	[3]	73,883,000	[3]
Other [Member]
Revenues from external customers	27,000		37,000		48,000		68,000
Intersegment revenues	60,000		816,000		113,000		1,635,000
Operating income (loss)	(118,000)		410,000	[1]	(223,000)		838,000	[1]
Other Gain (Loss), Net			2,646,000	[2]			2,647,000	[2]
Depreciation, depletion and amortization expense	105,000		320,000		210,000		638,000
Interest expense	190,000	[2]	353,000	[2]	390,000	[2]	702,000	[2],[4]
Provision (benefit) for income taxes	(136,000)	[2]	1,033,000	[2]	(258,000)	[2]	1,065,000	[2],[4]
Assets	244,943,000	[4]	404,149,000	[3]	244,943,000	[4]	404,149,000	[3]
Capital investments	6,766,000	[3]	9,069,000	[2]	11,022,000	[3]	22,878,000	[3]
Parent [Member]
Assets	$ 5,345,762,000				$ 5,345,762,000				$ 4,809,628,000

[1] The operating loss for the E&P segment for the three and six months ended June 30, 2012 includes a $800.7 million non-cash ceiling test impairment of our natural gas and oil properties.

[2] Interest expense and the provision for income taxes by segment are allocated as they are incurred at the corporate level.

[3] Capital investments includes increases of $7.5 million and $0.2 million for the three-month periods ended June 30, 2013 and 2012, respectively, and increases of $40.4 million and $15.5 million for the six-month periods ended June 30, 2013 and 2012, respectively, relating to the change in accrued expenditures between periods.

[4] Other assets represent corporate assets not allocated to segments and assets, including restricted cash and investments in cash equivalents, for non reportable segments.

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value Measurements [Abstract]

Carrying Amount and Estimated Fair Values of Financial Instruments

	June 30,				December 31,
	2013				2012
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
	(in thousands)
Cash and cash equivalents	$	25,685	$	25,685	$	53,583	$	53,583
Restricted cash	$	–	$	–	$	8,542	$	8,542
Unsecured revolving credit facility	$	230,000	$	230,000	$	–	$	–
Senior notes	$	1,668,934	$	1,791,429	$	1,669,473	$	1,917,005
Derivative instruments	$	264,201	$	264,201	$	287,878	$	287,878

Summary Assets and Liabilities Measured at Fair Value on Recurring Basis

	June 30, 2013
	Fair Value Measurements Using:
	Quoted Prices		Significant
	in Active		Other		Significant
	Markets		Observable Inputs		Unobservable Inputs		Assets (Liabilities)
	(Level 1)		(Level 2)		(Level 3)		at Fair Value
Derivative assets	$	–	$	295,761	$	10,967	$	306,728
Derivative liabilities		–		(3,602)		(38,925)		(42,527)
Total	$	–	$	292,159	$	(27,958)	$	264,201
	December 31, 2012
	Fair Value Measurements Using:
	Quoted Prices		Significant
	in Active		Other		Significant
	Markets		Observable Inputs		Unobservable Inputs		Assets (Liabilities)
	(Level 1)		(Level 2)		(Level 3)		at Fair Value
Derivative assets	$	–	$	287,993	$	4,151	$	292,144
Derivative liabilities		–		–		(4,266)		(4,266)
Total	$	–	$	287,993	$	(115)	$	287,878

Assets and Liabilities Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3), Reconciliation

	For the three months ended				For the six months ended
	June 30,				June 30,
	2013		2012		2013		2012
	(in thousands)
Balance at beginning of period	$	(60,147)	$	184,543	$	(115)	$	182,119
Total gains or losses (realized/unrealized):
Included in earnings		32,277		65,274		(26,748)		123,736
Included in other comprehensive income		–		(77,731)		–		(77,441)
Purchases, issuances, and settlements:
Purchases		–		–		–		–
Issuances		–		–		–		–
Settlements		(88)		(65,864)		(1,095)		(122,192)
Transfers into/out of Level 3		–		–		–		–
Balance at end of period	$	(27,958)	$	106,222	$	(27,958)	$	106,222
Change in unrealized gains included in earnings relating to derivatives still held as of June 30	$	32,189	$	(590)	$	(27,843)	$	1,544

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Derivatives and Risk Management (Narratives) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Derivative [Line Items]
Accumulated other comprehensive income, net gain related to hedging activities	$ 119.7
Deferred income tax liability, accumulated other comprehensive income	79.8
Cash flow hedge after-tax net gain to be transferred from accumulated other comprehensive income to earnings during the next twelve months	112.5
Period of time needed to transfers net gain from accumulated other comprehensive income to earnings, months	12 months
Year 2013 [Member]
Derivative [Line Items]
Volume of Natural Gas Production (in Bcf), Basis Swaps Not Qualifying for Hedge Accounting Treatment	14,100,000,000
Volume of Natural Gas Production (in Bcf), Cash Flow Hedges	168,800,000,000
Year 2014 [Member]
Derivative [Line Items]
Volume of Natural Gas Production (in Bcf), Basis Swaps Not Qualifying for Hedge Accounting Treatment	15,200,000,000
Volume of Natural Gas Production (in Bcf), Cash Flow Hedges	51,100,000,000
Year 2015 [Member]
Derivative [Line Items]
Volume of Natural Gas Production (in Bcf), Call Options Not Qualifying for Hedge Accounting Treatment	199,800,000,000
Fixed Price Swaps [Member] | Not Designated as Hedging Instrument [Member] | Year 2014 [Member]
Derivative [Line Items]
Volume of Natural Gas Production (in Bcf), Cash Flow Hedges	181,600,000,000
Interest Rate Swaps [Member] | Not Designated as Hedging Instrument [Member]
Derivative [Line Items]
Notional amount	$ 170

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Reclassifications From Accumulated Other Comprehensive Income

6 Months Ended

Jun. 30, 2013

Reclassifications From Accumulated Other Comprehensive Income [Abstract]

Reclassifications From Accumulated Other Comprehensive Income

(8) RECLASSIFICATIONS FROM ACCUMULATED OTHER COMPREHENSIVE INCOME

In February 2013, the FASB issued Accounting Standards Update No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“Update 2013-02”), which finalizes proposed ASU No. 2012-240, and seeks to improve the transparency of reporting reclassifications out of accumulated other comprehensive income. Update 2013-02 requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under U.S. GAAP to be reclassified in its entirety to net income.

The following tables detail the components of accumulated other comprehensive income and the related tax effects for the six-months ended June 30, 2013:

	For the six months ended
	June 30, 2013
	Gains and (Losses) on Cash Flow Hedges		Pension and Other Postretirement		Foreign Currency		Total
	(in thousands) (1)
Beginning balance, December 31, 2012	$	172,166	$	(22,311)	$	(51)	$	149,804
Other comprehensive income (loss) before reclassifications		22,091		–		(2,447)		19,644
Amounts reclassified from accumulated other comprehensive income (loss) (2)		(74,536)		534		–		(74,002)
Net current-period other comprehensive income (loss)		(52,445)		534		(2,447)		(54,358)
Ending balance, June 30, 2013	$	119,721	$	(21,777)	$	(2,498)	$	95,446

(1) All amounts are net-of-tax.

(2) See separate table below for details about these reclassifications.

The following table details the amounts reclassified from accumulated other comprehensive income into earnings for the six-months ended June 30, 2013:

Details about Accumulated Other Comprehensive Income		Amount Reclassified from Accumulated Other Comprehensive Income	Affected Line Item in the Consolidated Statement of Operations
Gains (losses) on cash flow hedges
Settlements	$	124,956	Gas sales
Ineffectiveness		(731)	Gas sales
		124,225	Income before income taxes
		49,689	Provision for income taxes
	$	74,536	Net income
Pension and other postretirement
Amortization of prior service cost included in net periodic pension cost (1)	$	(890)	General and administrative expenses
		(890)	Loss before income taxes
		(356)	Provision for income taxes
	$	(534)	Net loss
Total reclassifications for the period	$	74,002	Net income

(1) This accumulated other comprehensive income component is included in the computation of net periodic pension cost (see footnote 13 for additional details.)  

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Inventory

6 Months Ended

Jun. 30, 2013

Inventory [Abstract]

Inventory

(4) INVENTORY

Inventory recorded in current assets includes $3.7 million at June  30, 2013 and $5.6 million at December 31, 2012 for natural gas in underground storage owned by the Company’s E&P segment, and $34.4 million at June  30, 2013 and $22.5 million at December 31, 2012 for tubular and other equipment used in the E&P segment.

Other assets include $15.9 million at June  30, 2013 and $13.8 million at December 31, 2012, respectively, for inventory held by the Midstream Services segment consisting primarily of pipe that will be used to construct gathering systems for the Fayetteville Shale play.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Cash Flows From Operating Activities
Net income (loss)	$ 373,146	$ (297,428)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	368,305	403,250
Impairment of natural gas and oil properties		800,652	[1]
Deferred income taxes	232,838	(182,596)
Unrealized gain on derivatives	(62,560)	(2,031)
Stock-based compensation	5,962	5,549
Other	1,198	(2,049)
Change in assets and liabilities:
Accounts receivable	(68,309)	69,166
Inventories	(6,222)	8,088
Accounts payable	48,193	(1,349)
Taxes payable	17,590	20,762
Interest payable	(383)	4,762
Advances from partners	(68,919)	31,995
Other assets and liabilities	36,713	(21,381)
Net cash provided by operating activities	877,552	837,390
Cash Flows From Investing Activities
Capital investments	(1,175,634)	(1,140,661)
Proceeds from sale of property and equipment		174,337
Transfers to restricted cash		(167,750)
Transfers from restricted cash	8,542	23,366
Other	5,628	8,895
Net cash used in investing activities	(1,161,464)	(1,101,813)
Cash Flows From Financing Activities
Payments on current portion of long-term debt	(600)	(600)
Payments on revolving long-term debt	(1,233,150)	(1,273,700)
Borrowings under revolving long-term debt	1,463,150	602,200
Change in bank drafts outstanding	21,214	(30,730)
Proceeds from issuance of long-term debt		998,780
Debt issuance costs		(8,338)
Proceeds from exercise of common stock options	5,283	2,698
Net cash provided by financing activities	255,897	290,310
Effect of exchange rate changes on cash	117	(15)
Increase (decrease) in cash and cash equivalents	(27,898)	25,872
Cash and cash equivalents at beginning of year	53,583	15,627
Cash and cash equivalents at end of period	$ 25,685	$ 41,499

[1] Interest expense and the provision for income taxes by segment are allocated as they are incurred at the corporate level.

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Fair Value Measurements (Summary Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Quoted Prices in Active Markets for Identical Assets, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets
Derivative liabilities
Total
Significant Observable Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	295,761	287,993
Derivative liabilities	(3,602)
Total	292,159	287,993
Significant Unobservable Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	10,967	4,151
Derivative liabilities	(38,925)	(4,266)
Total	(27,958)	(115)
Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	306,728	292,144
Derivative liabilities	(42,527)	(4,266)
Total	$ 264,201	$ 287,878

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Derivatives and Risk Management (Fixed Price Swaps Not Designated For Hedge Accounting) (Details) (Year 2014 [Member])	Jun. 30, 2013 ft3
Derivative [Line Items]
Volume of Natural Gas Production (in Bcf), Cash Flow Hedges	51,100,000,000
Not Designated as Hedging Instrument [Member] | Fixed Price Swaps [Member]
Derivative [Line Items]
Volume of Natural Gas Production (in Bcf), Cash Flow Hedges	181,600,000,000

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Pension Plan and Other Postretirement Benefits (Tables)

6 Months Ended

Jun. 30, 2013

Pension Plan And Other Postretirement Benefits [Abstract]

Net Periodic Pension and Other Postretirement Benefit Costs

	Pension Benefits
	For the three months ended				For the six months ended
	June 30,				June 30,
	2013		2012		2013		2012
	(in thousands)
Service cost	$	3,448	$	2,735	$	6,895	$	5,471
Interest cost		1,026		1,012		2,052		2,025
Expected return on plan assets		(1,534)		(1,356)		(3,068)		(2,713)
Amortization of prior service cost		26		72		52		143
Amortization of net loss		385		305		770		610
Net periodic benefit cost	$	3,351	$	2,768	$	6,701	$	5,536
	Postretirement Benefits
	For the three months ended				For the six months ended
	June 30,				June 30,
	2013		2012		2013		2012
	(in thousands)
Service cost	$	574	$	458	$	1,148	$	916
Interest cost		110		99		220		199
Amortization of transition obligation		–		16		–		32
Amortization of prior service cost		3		4		7		7
Amortization of net loss		30		23		60		46
Net periodic benefit cost	$	717	$	600	$	1,435	$	1,200

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Stock-Based Compensation (Employee Stock-Based Compensation Costs) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Stock-Based Compensation [Abstract]
Stock-based compensation costs - expensed	$ 2,968,000	$ 2,705,000	$ 5,962,000	$ 5,549,000
Stock-based compensation costs - capitalized	2,872,000	2,442,000	5,734,000	5,306,000
Unrecognized compensation cost related to unvested stock option and restricted stock grants	$ 43,700,000		$ 43,700,000
Weighted average period over which cost is recognized, years			2 years 6 months

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2013

Commitments and Contingencies [Abstract]

Commitments and Contingencies

(11) COMMITMENTS AND CONTINGENCIES

Commitments

In the first quarter of 2010, the Company was awarded exclusive licenses by the Province of New Brunswick in Canada to conduct an exploration program covering approximately 2.5 million acres in the province. The licenses require the Company to make certain capital investments in New Brunswick of approximately $47.0 millionin the aggregate over a three year period. In order to obtain the licenses, the Company provided promissory notes payable on demand to the Minister of Finance of the Province of New Brunswick with an aggregate principal amount of$44.5 million Canadian dollars. The promissory notes secure the Company's capital expenditure obligations under the licenses and are returnable to the Company to the extent the Company performs such obligations. If the Company fails to fully perform, the Minister of Finance may retain a portion of the applicable promissory notes in an amount equal to any deficiency. The Company commenced its Canada exploration program in 2010 and no liability has been recognized in connection with the promissory notes due to the Company’s investments in New Brunswick as of June 30, 2013 and its future investment plans.  In December 2012, we received twoone-year extensions to our exploration license agreements which expire on March 16, 2014 and March 16, 2015, respectively.

In response to the Company’s well performance, SES and SEPCO entered into new and amended natural gas transportation and gathering arrangements with third party pipelines, during the second quarter of 2013, in support of the Company’s production in the Marcellus Shale Play.  As of June 30, 2013, SES’s and SEPCO’s obligations for demand and similar charges under the firm transportation agreements and gathering agreements totaled approximately $3.1 billion and the Company has guarantee obligations of up to $100.0million of that amount.

Environmental Risk

The Company is subject to laws and regulations relating to the protection of the environment. Environmental and cleanup related costs of a non-capital nature are accrued when it is both probable that a liability has been incurred and when the amount can be reasonably estimated. Management believes any future remediation or other compliance related costs will not have a material effect on the financial position or reported results of operations of the Company.

Litigation

Tovah Energy

In February 2009, SEPCO was added as a defendant in a Third Amended Petition in the matter of Tovah Energy, LLC and Toby Berry-Helfand v. David Michael Grimes, et, al.  In the Sixth Amended Petition, filed in July 2010, in the 273rd District Court in Shelby County, Texas (collectively, the “Sixth Petition”), plaintiff alleged that, in 2005, they provided SEPCO with proprietary data regarding two prospects in the James Lime formation pursuant to a confidentiality agreement and that SEPCO refused to return the proprietary data to the plaintiff, subsequently acquired leases based upon such proprietary data and profited therefrom.  Among other things, the plaintiff’s allegations in the Sixth Petition included various statutory and common law claims, including, but not limited to claims of misappropriation of trade secrets, violation of the Texas Theft Liability Act, breach of fiduciary duty and confidential relationships, various fraud based claims and breach of contract, including a claim of breach of a purported right of first refusal on all interests acquired by SEPCO between February 2005 and February 2006.  In the Sixth Petition, plaintiff sought actual damages of over $55.0 million as well as other remedies, including special damages and punitive damages of four times the amount of actual damages established at trial.

Immediately before the commencement of the trial in November 2010, plaintiff was permitted, over SEPCO’s objections, to file a Seventh Amended Petition claiming actual damages of $46.0 million and also seeking the equitable remedy of disgorgement of all profits for the misappropriation of trade secrets and the breach of fiduciary duty claims. In December 2010, the jury found in favor of the plaintiff with respect to all of the statutory and common law claims and awarded $11.4 million in compensatory damages. The jury did not, however, award the plaintiff any special, punitive or other damages. In addition, the jury separately determined that SEPCO’s profits for purposes of disgorgement were $381.5 million. This profit determination does not constitute a judgment or an award. The plaintiff’s entitlement to disgorgement of profits as an equitable remedy will be determined by the judge and it is within the judge’s discretion to award none, some or all the amount of profit to the plaintiff.  In December 2010, the plaintiff filed a motion to enter the judgment based on the jury’s verdict.  In February 2011, SEPCO filed a motion for a judgment notwithstanding the verdict and a motion to disregard certain findings.  In March 2011, the plaintiff filed an amended motion for judgment and intervenor filed its motion for judgment seeking not only the monetary damages and the profits determined by the jury but also seeking, as a new remedy, a constructive trust for profits from 143 wells as well as future drilling and sales of properties in the prospect areas.  At the suggestion of the judge, all parties voluntarily agreed to participate in non-binding mediation efforts.  The mediation occurred in April 2011 and was unsuccessful. In June 2011, SEPCO received by mail a letter dated June 2011 from the judge, in which he made certain rulings with respect to the post-verdict motions and responses filed by the parties. In his rulings, the judge denied SEPCO’s motion for judgment, judgment notwithstanding the verdict and to disregard certain findings. Plaintiff’s and intervenor’s claim for a constructive trust was denied but the judge ruled that plaintiff and intervenor shall recover from SEPCO $11.4 million and a reasonable attorney’s fee of 40% of the total damages awarded and are entitled to recover on their claim for disgorgement.  The judge instructed that SEPCO calculate the profit on the designated wells for each respective period.  SEPCO performed the calculation and provided it to the judge in June 2011.  In July 2011, plaintiff and intervenor filed a letter with the court raising objections to the accounting provided by SEPCO, to which SEPCO filed a response in July 2011.  In July 2011, the judge sent a letter to the parties in which he ruled that after reviewing the parties’ respective position letters, he was awarding $23.9 million in disgorgement damages in favor of the plaintiff and intervenor.  In the July 2011 letter, the judge instructed the plaintiff and intervenor to prepare a judgment for his approval prior to July 2011 consistent with his findings in his June 2011 letter and the disgorgement award.  In August 2011, a judgment was entered pursuant to which plaintiff and intervenor are entitled to recover approximately $11.4 million in actual damages and approximately $23.9 million in disgorgement as well as prejudgment interest and attorneys' fees which currently are estimated to be up to $8.9 million and all costs of court of the plaintiff and intervenor.  In September 2011, SEPCO filed a motion for a new trial and in November 2011 filed a notice of appeal.  In November 2011, the court approved SEPCO’s supersedeas bond in the amount of $14.1 million, which stays execution on the judgment pending appeal.  The bond covers the $11.4 million judgment for actual damages, plus $1.3 million in pre-judgment interest, $1.3 million in post-judgment interest (estimating two years for the duration of appeal), and court costs. 

In June 2012, SEPCO filed its appellate brief and, in June 2012, plaintiff and intervenor filed a cross-appellate brief seeking limited remand to reassess the disgorgement determination. The parties filed their responses to the appellate and cross appellate briefs in November 2012.  Oral argument was held before the Tyler Court of Appeals on March 8, 2013.  On July 10, 2013, the Tyler Court of Appeals ordered that (1) the judgment awarding plaintiff and intervenor $23.9 million as disgorgement of illicit gains be reversed and judgment rendered that they take nothing, (2) the award of $11.4 million for actual damages, insofar as it is based on the jury’s findings of breach of fiduciary duty, fraud, breach of contract, and theft of trade secret is reversed and judgment rendered that plaintiff and intervenor take nothing under those theories of recovery, (3) the award of $11.4 million to plaintiff and intervenor as damages for misappropriation of trade secret is affirmed, (4) the case be remanded to the trial court for a determination and award of attorney’s fees for SEPCO as the prevailing party under the Texas Theft Liability Act, and (5) in all other respects, the judgment is affirmed.  On July 25, 2013, SEPCO filed its motion for rehearing with the Tyler Court of Appeals, seeking reversal of every part of plaintiff and intervenor’s recovery.  Plaintiff and intervenor filed an unopposed motion for an extension of their deadline to file a motion for rehearing, which the Tyler Court of Appeals has granted; their deadline to file their motion is now August 26, 2013.

Based on the Company's understanding and judgment of the facts and merits of this case, including appellate defenses, and after considering the advice of counsel, the Company has determined that, although reasonably possible after exhaustion of all appeals, an adverse final outcome to this lawsuit is not probable.  As such, the Company has not accrued any amounts with respect to this lawsuit.  If the plaintiff and intervenor were to ultimately prevail in the appellate process, the Company currently estimates, based on the judgments to date, that SEPCO’s potential liability would be up to $45.5 million, including interest and attorney’s fees. The Company’s assessment may change in the future due to occurrence of certain events, such as denied appeals, and such re-assessment could lead to the determination that the potential liability is probable and could be material to the Company's results of operations, financial position or cash flows.

Bureau of Land Management

In March 2010, the Company’s subsidiary, SEECO, was served with a subpoena from a federal grand jury in Little Rock, Arkansas.  Based on the documents requested under the subpoena and subsequent discussions described below, the Company believes the grand jury is investigating matters involving approximately 27 horizontal wells operated by SEECO in Arkansas, including whether appropriate leases or permits were obtained therefore and whether royalties and other production attributable to federal lands have been properly accounted for and paid.  The Company believes it has fully complied with all requests related to the federal subpoena and delivered its affidavit to that effect. The Company and representatives of the Bureau of Land Management and the U.S. Attorney have had discussions since the production of the documents pursuant to the subpoena.  In January 2011, the Company voluntarily produced additional materials informally requested by the government arising from these discussions.  Although, to the Company’s knowledge, no proceeding in this matter has been initiated against SEECO, the Company cannot predict whether or when one might be initiated. The Company intends to fully comply with any further requests and to cooperate with any related investigation. No assurance can be made as to the time or resources that will need to be devoted to this inquiry or the impact of the final outcome of the discussions or any related proceeding.

Other

We are subject to various litigation, claims and proceedings that have arisen in the ordinary course of business. Management believes, individually or in aggregate, such litigation, claims and proceedings will not have a material adverse impact on our financial position, results of operations or cash flows but these matters are subject to inherent uncertainties and management’s view may change in the future. If an unfavorable final outcome were to occur, there exists the possibility of a material impact on our financial position, results of operations or cash flows for the period in which the effect becomes reasonably estimable. We accrue for such items when a liability is both probable and the amount can be reasonably estimated.

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Derivatives and Risk Management

6 Months Ended

Jun. 30, 2013

Derivatives And Risk Management [Abstract]

Derivatives and Risk Management

(7) DERIVATIVES AND RISK MANAGEMENT

The Company is exposed to volatility in market prices and basis differentials for natural gas and crude oil which impacts the predictability of its cash flows related to the sale of natural gas and oil, and is exposed to volatility in interest rate risks. These risks are managed by the Company’s use of certain derivative financial instruments.  At June  30, 2013 and December 31, 2012, the Company’s derivative financial instruments consisted of price swaps, basis swaps, fixed price call options, and interest rate swaps. A description of the Company’s derivative financial instruments is provided below:

Fixed price swaps	The Company receives a fixed price for the contract and pays a floating market price to the counterparty.
Floating price swaps	The Company receives a floating market price from the counterparty and pays a fixed price.
Costless-collars	Arrangements that contain a fixed floor price (put) and a fixed ceiling price (call). If the market price exceeds the call strike price or falls below the put strike price, the Company receives the fixed price and pays the market price. If the market price is between the call and the put strike price, no payments are due from either party.
Basis swaps	Arrangements that guarantee a price differential for natural gas from a specified delivery point. The Company receives a payment from the counterparty if the price differential is greater than the stated terms of the contract and pays the counterparty if the price differential is less than the stated terms of the contract.
Fixed price call options	The Company sells fixed price call options in exchange for a premium. At the time of settlement, if the market price exceeds the fixed price of the call option, the Company pays the counterparty such excess on sold fixed price call options. If the market price settles below the fixed price of the call option, no payment is due from either party.
Interest rate swaps	Interest-rate swaps are used to fix or float interest rates on existing or anticipated indebtedness. The purpose of these instruments is to manage the Company’s existing or anticipated exposure to unfavorable interest-rate changes.

GAAP requires that all derivatives be recognized in the balance sheet as either an asset or liability and be measured at fair value. Under GAAP, certain criteria must be satisfied in order for derivative financial instruments to be classified and accounted for as either a cash flow or a fair value hedge. Accounting for qualifying hedges requires a derivative’s gains and losses to be recorded either in earnings or as a component of other comprehensive income. Gains and losses on derivatives that are not elected for hedge accounting treatment or that do not meet hedge accounting requirements are recorded in earnings.

The Company utilizes counterparties for its derivative instruments that it believes are credit-worthy at the time the transactions are entered into and the Company closely monitors the credit ratings of these counterparties. Additionally, the Company performs both quantitative and qualitative assessments of these counterparties based on their credit ratings and credit default swap rates where applicable. However, the events in the financial markets in recent years demonstrate there can be no assurance that a counterparty will be able to meet its obligations to the Company.

The balance sheet classification of the assets related to derivative financial instruments are summarized below at June  30, 2013 and December 31, 2012:

	Derivative Assets
	June 30, 2013			December 31, 2012
	Balance Sheet Classification	Fair Value		Balance Sheet Classification	Fair Value
	(in thousands)
Derivatives designated as hedging instruments:
Fixed price swaps	Hedging asset	$	189,541	Hedging asset		$	279,443
Fixed price swaps	Other assets		12,214	Other assets			8,550
Total derivatives designated as hedging instruments		$	201,755			$	287,993
Derivatives not designated as hedging instruments:
Basis swaps	Hedging asset	$	8,402	Hedging asset		$	3,250
Fixed price swaps	Hedging asset		48,512	Hedging asset			–
Basis swaps	Other assets		2,565	Other assets			901
Fixed price swaps	Other assets		39,276	Other assets			–
Interest rate swaps	Other assets		6,218	Other assets			–
Total derivatives not designated as hedging instruments		$	104,973			$	4,151
Total derivative assets		$	306,728			$	292,144
	Derivative Liabilities
	June 30, 2013			December 31, 2012
	Balance Sheet Classification	Fair Value		Balance Sheet Classification	Fair Value
	(in thousands)
Derivatives not designated as hedging instruments:
Basis swaps	Other current liabilities	$	69	Other current liabilities		$	138
Fixed price call options	Other long-term liabilities		38,856	Other long-term liabilities			4,128
Interest rate swaps	Other current liabilities		308	Other current liabilities			–
Interest rate swaps	Other long-term liabilities		3,294	Other long-term liabilities			–
Total derivatives not designated as hedging instruments		$	42,527			$	4,266
Total derivative liabilities		$	42,527			$	4,266

Cash Flow Hedges

The reporting of gains and losses on cash flow derivative hedging instruments depends on whether the gains or losses are effective at offsetting changes in the cash flows of the hedged item. The effective portion of the gains and losses on the derivative hedging instruments are recorded in other comprehensive income until recognized in earnings during the period that the hedged transaction takes place. The ineffective portion of the gains and losses from the derivative hedging instrument is recognized in earnings immediately.

As of June  30, 2013, the Company had cash flow hedges on the following volumes of natural gas production (in Bcf):

Year	Fixed price swaps
2013	168.8
2014	51.1

As of June  30, 2013, the Company recorded a net gain in accumulated other comprehensive income related to its hedging activities of $119.7 million. This amount is net of a deferred income tax liability recorded as of June  30, 2013 of $79.8 million. The amount recorded in accumulated other comprehensive income will be relieved over time and recognized in the statement of operations as the physical transactions being hedged occur. Assuming the market prices of natural gas futures as of June  30, 2013 remain unchanged, the Company would expect to transfer an aggregate after-tax net gain of $112.5 million from accumulated other comprehensive income to earnings during the next 12 months. Gains or losses from derivative instruments designated as cash flow hedges are reflected as adjustments to gas sales in the unaudited condensed consolidated statements of operations. Volatility in earnings and other comprehensive income may occur in the future as a result of the Company’s derivative activities.

The following tables summarize the before tax effect of all cash flow hedges on the unaudited condensed consolidated financial statements for the three- and six-month periods ended June  30, 2013 and 2012:

		Gain (Loss) Recognized in Other Comprehensive Income
		(Effective Portion)
		For the three months ended				For the six months ended
		June 30,				June 30,
Derivative Instrument		2013		2012		2013		2012
		(in thousands)
Fixed price swaps		$	112,621	$	(47,829)	$	38,719	$	171,128
Costless-collars		$	–	$	(12,370)	$	–	$	44,141
	Classification of Gain	Gain Reclassified from Accumulated Other
	Reclassified from	Comprehensive Income into Earnings
	Accumulated Other	(Effective Portion)
	Comprehensive Income	For the three months ended				For the six months ended
	into Earnings	June 30,				June 30,
Derivative Instrument	(Effective Portion)	2013		2012		2013		2012
		(in thousands)
Fixed price swaps	Gas Sales	$	46,335	$	128,894	$	124,956	$	235,205
Costless-collars	Gas Sales	$	–	$	65,732	$	–	$	121,042
		Gain (Loss) Recognized in Earnings
		(Ineffective Portion)
	Classification of Gain (Loss)	For the three months ended				For the six months ended
	Recognized in Earnings	June 30,				June 30,
Derivative Instrument	(Ineffective Portion)	2013		2012		2013		2012
		(in thousands)
Fixed price swaps	Gas Sales	$	(2,032)	$	(2,303)	$	(731)	$	1,996
Costless-collars	Gas Sales	$	–	$	(371)	$	–	$	540

Fair Value Hedges

For fair value hedges, the gain or loss on the derivative instrument as well as the offsetting gain or loss on the hedged item are recognized in earnings immediately.For the three- and six-months ended June 30, 2012, the impact on earnings was not material and as of June 30, 2013 and December 31, 2012, the Company had no fair value hedges.

Other Derivative Contracts

Although the Company’s basis swaps meet the objective of managing commodity price exposure, these trades are typically not entered into concurrent with the Company’s derivative instruments that qualify as cash flow hedges and therefore do not generally qualify for hedge accounting. Basis swap derivative instruments that do not qualify as cash flow hedges are recorded on the balance sheet at their fair values under hedging assets, other assets and other current liabilities, as applicable, and all realized and unrealized gains and losses related to these contracts are recognized immediately in the unaudited condensed consolidated statements of operations as a component of gain (loss) on derivatives.  

As of June  30, 2013, the Company had basis swaps on natural gas production that did not qualify for hedge accounting treatment of 14.1 Bcf and 15.2 Bcf in 2013 and 2014, respectively.

As of June  30, 2013, the Company had fixed price call options on199.8 Bcf of 2015 natural gas production that did not qualify for hedge accounting treatment and 181.6 Bcf of 2014 natural gas production on fixed price swaps not designated for hedge accounting.

The Company is a party to an interest rate swap with counterparty banks. The interest rate swap was entered into in order to mitigate the Company’s exposure to volatility in interest rates related to its building lease. The interest rate swap has a notional amount of $170 million and expires on June 20, 2020. The Company did not designate the interest rate swap for hedge accounting.  Changes in the fair value of the interest rate swap are included in gain (loss) on derivatives in theunaudited condensed consolidated statements of operations.  The Company had no interest rate swaps in 2012. 

The following table summarizes the before tax effect of basis swaps, fixed price call options that did not qualify for hedge accounting,fixed price swaps not designated for hedge accounting, and interest rate swaps not designated for hedge accounting on the unaudited condensed consolidated statements of operations for the three- and six-month periods ended June  30, 2013 and 2012:

		Unrealized Gain (Loss)
		Recognized in Earnings
	Income Statement	For the three months ended				For the six months ended
	Classification	June 30,				June 30,
Derivative Instrument	of Unrealized Gain (Loss)	2013		2012		2013		2012
		(in thousands)
Basis swaps	Gain (Loss) on Derivatives	$	9,835	$	(218)	$	6,885	$	1,005
Fixed price call options	Gain (Loss) on Derivatives	$	22,354	$	–	$	(34,728)	$	–
Fixed price swaps	Gain (Loss) on Derivatives	$	58,556	$	–	$	87,787	$	–
Interest Rate Swaps	Gain (Loss) on Derivatives	$	2,616	$	–	$	2,616	$	–
		Realized Gain
		Recognized in Earnings
	Income Statement	For the three months ended				For the six months ended
	Classification	June 30,				June 30,
Derivative Instrument	of Realized Gain	2013		2012		2013		2012
		(in thousands)
Basis swaps	Gain (Loss) on Derivatives	$	88	$	131	$	1,095	$	1,149

As of June 30, 2013, the Company had fixed price swaps not designatedfor hedge accounting on the following volumes of natural gas production (in Bcf):

Year	Fixed price swaps not designated for hedge accounting
2014	181.6

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2013

Stock-Based Compensation [Abstract]

Stock-Based Compensation

(14) STOCK-BASED COMPENSATION

The Company recognized the following amounts in employee stock-based compensation costs for the three-and six-months ended June  30, 2013 and 2012:

	For the three months ended				For the six months ended
	June 30,				June 30,
	2013		2012		2013		2012
	(in thousands)
Stock-based compensation cost – expensed	$	2,968	$	2,705	$	5,962	$	5,549
Stock-based compensation cost – capitalized	$	2,872	$	2,442	$	5,734	$	5,306

As of June  30, 2013, there was $43.7 million of total unrecognized compensation cost related to the Company’s unvested stock option and restricted stock grants. This cost is expected to be recognized over a weighted-average period of 2.5 years.

The following table summarizes stock option activity for the first six months ended June  30, 2013 and provides information for options outstanding as of June  30, 2013:

		Weighted
		Average
	Number	Exercise
	of Options	Price
Outstanding at December 31, 2012	3,649,520	$	29.84
Granted	5,210		34.84
Exercised	(466,887)		11.32
Forfeited or expired	(39,369)		37.95
Outstanding at June 30, 2013	3,148,474		32.50
Exercisable at June 30, 2013	1,931,580	$	30.62

The following table summarizes restricted stock activity for the six months ended June 30, 2013 and provides information for unvested shares as of June 30, 2013:  

		Weighted
		Average
	Number	Grant Date
	of Shares	Fair Value
Unvested shares at December 31, 2012	1,117,515	$	35.64
Granted	13,540		36.60
Vested	(26,044)		36.17
Forfeited	(41,501)		35.88
Unvested shares at June 30, 2013	1,063,510	$	35.63

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Supplemental Disclosures of Cash Flow Information

6 Months Ended

Jun. 30, 2013

Supplemental Disclosures of Cash Flow Information [Abstract]

Supplemental Disclosures of Cash Flow Information

(12) SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Supplemental disclosures of cash flow information:

	For the three months ended				For the six months ended
	June 30,				June 30,
	2013		2012		2013		2012
	(in thousands)
Cash paid for interest	$	5,875	$	3,368	$	50,218	$	29,820
Cash paid for income taxes		965		–		17,306		68
Noncash property changes		10,325		3,220		46,182		20,789

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Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Jul. 30, 2013
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Entity Registrant Name	Southwestern Energy Co
Entity Central Index Key	0000007332
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		351,512,483
Trading Symbol	SWN
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes

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Pension Plan And Other Postretirement Benefits

6 Months Ended

Jun. 30, 2013

Pension Plan And Other Postretirement Benefits [Abstract]

Pension Plan and Other Postretirement Benefits

(13) PENSION PLAN AND OTHER POSTRETIREMENT BENEFITS

The Company has defined pension and postretirement benefit plans which cover substantially all of the Company’s employees. Net periodic pension and other postretirement benefit costs include the following components for the three-and six-month periods ended June  30, 2013 and 2012:  

	Pension Benefits
	For the three months ended				For the six months ended
	June 30,				June 30,
	2013		2012		2013		2012
	(in thousands)
Service cost	$	3,448	$	2,735	$	6,895	$	5,471
Interest cost		1,026		1,012		2,052		2,025
Expected return on plan assets		(1,534)		(1,356)		(3,068)		(2,713)
Amortization of prior service cost		26		72		52		143
Amortization of net loss		385		305		770		610
Net periodic benefit cost	$	3,351	$	2,768	$	6,701	$	5,536
	Postretirement Benefits
	For the three months ended				For the six months ended
	June 30,				June 30,
	2013		2012		2013		2012
	(in thousands)
Service cost	$	574	$	458	$	1,148	$	916
Interest cost		110		99		220		199
Amortization of transition obligation		–		16		–		32
Amortization of prior service cost		3		4		7		7
Amortization of net loss		30		23		60		46
Net periodic benefit cost	$	717	$	600	$	1,435	$	1,200

As of June  30, 2013, the Company has contributed $6.0 million to the pension plan and $0.1 million to the postretirement benefit plan, and expects to contribute $12.0 million to the pension plan and $0.1 million to the postretirement benefit plan.

The Company maintains a non-qualified deferred compensation supplemental retirement savings plan (“Non-Qualified Plan”) for certain key employees who may elect to defer and contribute a portion of their compensation, as permitted by the plan. Shares of the Company’s common stock purchased under the terms of the Non-Qualified Plan are presented as treasury stock and totaled 14,442 shares at June  30, 2013 compared to 64,715 shares at December 31, 2012.

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Stock-Based Compensation (Summary of Restricted Stock Activity and Unvested Shares) (Details) (USD $)	6 Months Ended
	Jun. 30, 2013
Stock-Based Compensation [Abstract]
Restricted Stock, Unvested shares at December 31, 2012 Number of Shares	1,117,515
Restricted Stock, Granted, Number of Shares	13,540
Restricted Stock, Vested, Number of Shares	(26,044)
Restricted Stock, Forfeited, Number of Shares	(41,501)
Restricted Stock, Unvested shares at June 30, 2013, Number of Shares	1,063,510
Restricted Stock, Unvested shares at December 31, 2012 Weighted Average Grant Date Fair Value	$ 35.64
Restricted Stock, Granted, Weighted Average Grant Date Fair Value	$ 36.60
Restricted Stock, Vested, Weighted Average Grant Date Fair Value	$ 36.17
Restricted Stock, Forfeited, Weighted Average Grant Date Fair Value	$ 35.88
Restricted Stock, Unvested shares at June 30, 2013, Weighted Average Grant Date Fair Value	$ 35.63

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Stock-Based Compensation (Summary of Stock Option Activity, Options Outstanding) (Details) (USD $)	6 Months Ended
	Jun. 30, 2013
Stock-Based Compensation [Abstract]
Stock options, Outstanding at December 31, 2012 Number of options	3,649,520
Stock options, Granted, Number of options	5,210
Stock options, Exercised, Number of options	(466,887)
Stock options, Forfeited or expired, Number of options	(39,369)
Stock options, Outstanding at June 30, 2013, Number of options	3,148,474
Stock options, Exercisable at June 30, 2013	1,931,580
Stock options, Outstanding at December 31, 2012 Weighted average exercise price	$ 29.84
Stock options, Granted, Weighted average exercise price	$ 34.84
Stock options, Exercised, Weighted average exercise price	$ 11.32
Stock options, Forfeited or expired, Weighted average exercise price	$ 37.95
Stock options, Outstanding at June 30, 2013, Weighted average exercise price	$ 32.50
Stock options Exercisable at June 30, 2013, Weighted average exercise price	$ 30.62