Health, Safety and the Environment
Southwestern is committed to protecting our natural environment and resources in all areas where we conduct business and our mission is to:

• Promote a corporate attitude whereby ALL employees embrace Health, Safety and Environmental (HS&E) concepts as their personal responsibility.
• Foster a culture in which HS&E is equally important to all business activities.
• Provide technically sound, cost-effective HS&E policies, procedures and training to conduct our activities in a healthy, safe and evironmentally responsible manner.
• Continually improve our HS&E performance.

We have fostered a culture where our HS&E requirements apply to our employees and our third-party contractors and our HS&E programs are extensive and address matters that relate to personal protective equipment, office safety (including workplace ergonomics), drilling, workover and well service safety, industrial hygiene and the environment (including storm water contamination prevention, waste management and weed and pest control).

We also have an Environmental Policy which states our committment to protecting our natural environment and resources in all areas where we conduct business.

The following are some of the initiatives that Southwestern has taken to establish the policies, procedures and training that will help ensure that all of our business activities are conducted in a healthy, safe and environmentally-responsible manner:

HS&E Management System
We are currently developing a new HS&E Management System which will enhance our ability to achieve our HS&E goals. The HS&E Management System establishes a corporate governance framework for HS&E compliance. Standards, procedures and practices will be referenced in the management system and will be used to implement our HS&E policy.

Southwestern Incident Management System (SIMS)
Southwestern has an internal web-based incident reporting system that requires initial reporting of spills, injuries, fires or explosions, vehicle incidents, theft, and vandalism, as well as any third-party documentation or notifications to agencies or landowners. The SIMS database automatically e-mails a notice of the incident report to designated persons so they can respond appropriately.

Incident Command System Emergency Response Plans
We have implemented customized plans for handling emergencies for each of our operating areas utilizing a template based upon the Incident Command System adopted by the United States government. We perform periodic company-wide drills and internal training at times that are least disruptive to operational schedules.

Green Team
As the company has expanded its oil and gas exploration and production activities in recent years, it has found new ways to enhance operational practices while minimizing impact on the environment. During 2005, Southwestern formalized its focus on environmental initiatives by creating the "Green Team." Composed of employees from HS&E and E&P operations, the Green Team works to identify opportunities and create programs that support a proactive approach to environmental stewardship. Although the group’s first task was to develop goals to guide the company’s planning, activities and communications for the company’s Fayetteville Shale play in central Arkansas, its long-term focus is to implement key initiatives across all of the company’s projects. Some of the activities resulting from the group’s efforts for the Fayetteville Shale include:

• Timely environmental assessments and/or impact studies
• Proactive coordination and two-way communication with regulator agencies
• Development of a comprehensive environmental training program for both employees and contractors
• Oversight of key environmental resources

Energy STAR Program
Southwestern also participates in the Energy STAR Program administered by the Environmental Protection Agency (EPA) on behalf of the President’s Global Climate Change Initiative. This program is a voluntary program where the oil and gas industry jointly works with the EPA for the purpose of reducing greenhouse gas emissions. An example of our participation is the voluntarily incorporation of the use of a "vapor recover system" at one of our larger natural gas compression facilities that reduced emissions at that facility to a point that resulted in a lower level of air permit. We intend to continue to participate in voluntary programs that address greenhouse gas emissions.