UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549 
 


 
FORM 8-K
 


 
CURRENT REPORT 
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 
 
Date of report (Date of earliest event
reported): December 29, 2006 
 


 
SOUTHWESTERN ENERGY COMPANY
(Exact name of registrant as specified in its
charter) 
 


 
Delaware 
(State or other jurisdiction of incorporation)

 


  
    
    
    
  
    1-08246
     
    71-0205415
  
    (Commission File Number)
     
    (IRS
      Employer Identification No.)
 


  
    
    
    
  
    
      
2350 N. Sam Houston Pkwy. E., Suite
      300,
      
Houston, Texas
     
    77032
  
    (Address of principal executive offices)
     
    (Zip
      Code)
 
(281) 618-4700 
(Registrant's telephone number, including area
code) 
 
Not Applicable 
(Former name or former address, if changed
since last report) 
 


 
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions: 
 
       o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

       o Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) 
       o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) 
       o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) 
 





 
SECTION 1.  REGISTRANT'S BUSINESS AND OPERATIONS.
 
Item 1.01 Entry into a Material
Definitive Agreement. 
 
The information set forth under Item 2.03 below is incorporated herein by reference.
 

SECTION 2.  FINANCIAL INFORMATION.
 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
 


Effective December 29,
2006, Southwestern Energy Company (the "Company" or "Lessee") entered into a
sale/lease-back transaction pursuant to which the Company sold 13 drilling rigs
and related equipment owned by it to various financial institutions and then leased such
drilling rigs and equipment back, along with two additional separate drilling
rigs and equipment, pursuant to a Master Lease Agreement (including any and all
riders, exhibits and supplements, the "Master Lease") of the same date with
SunTrust Leasing Corporation ("STLC") as lessor (STLC, RBS Asset Finance, Inc.
or such other party entering into any Schedule (as defined in the Master Lease)
and named as "Lessor" therein, together with their respective successors and
assigns, a "Lessor").  Each Schedule, together with the riders, exhibits and
attachments thereto and incorporating the terms of the Master Lease, is referred
to, collectively, as a "Lease" and the drilling rig and equipment leased under
each such Lease is referred to, collectively, as the "Equipment."  Each Lease
has a term of ninety-six (96) months and the aggregate rent payable by the
Company under the Master Lease is approximately $156.7 million.  Subject to
certain conditions, the Company has options to purchase the Equipment from the
Lessors at (i) the end of the eighty-fourth month of the Lease term at an agreed
upon price or (ii) the end of the Lease term for its then fair market value.  



The Leases impose obligations on the Company and its subsidiary, DeSoto
Drilling, Inc., as the operator of the Equipment ("DDI") with respect to, among
other things, the maintenance and use of the Equipment.  The Leases also contain
other customary representations, warranties, obligations, conditions,
indemnification provisions and termination provisions associated with Leases of
this nature.  
 

The Leases also grant
certain remedies to each Lessor in the event of a default with respect to the
Company or DDI under its Lease, including, but not limited to, the right to (i)
upon written notice to Lessee, to cancel any or all Leases held by such Lessor;
(ii) declare immediately due and payable all sums due and to become due under
any or all Leases held by such Lessor for the full term respecting the Equipment
subject to such Leases; (iii) demand and recover all liquidated damages; or (iv)
repossess the Equipment or re-lease, sell or otherwise dispose of any or all of
the Equipment leased by such Lessor.
 
 
 
 



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

 


  
    
    
    
    
    
  
     
     
    SOUTHWESTERN ENERGY COMPANY
  
    
    
    
  
    
      
Dated: January 5, 2007
     
    
      
By:
     
    
      
/s/ GREG D.
      KERLEY
      

    
  
     
     
    
      
Name:
     
    
      
Greg D. Kerley
  
     
     
    
      
Title:
     
    
      
Executive Vice President
and
  
     
     
     
     
    
      
Chief Financial
  Officer