Because Southwestern and its subsidiaries often interact with public employees and officials, including but not limited to regulatory bodies like the Arkansas Oil and Gas Commission (“AOGC”), the Texas Railroad Commission (“TRC”) and the Pennsylvania Bureau of Oil and Gas Management (“PBOGM”), all directors, officers and employees must be familiar with the requirements and restrictions imposed by the various lobbying activity and government interaction statutes of Arkansas, Texas, Pennsylvania and, in some circumstances, the other states in which Southwestern does business (collectively, the “Government Interaction Statutes”). This section will briefly set out some of the main provisions of the Government Interaction Statutes of Arkansas, Texas and Pennsylvania which could have an effect on our business. As with any other matter, any question concerning the application of the Government Interaction Statutes to your activities should be referred to the Corporate Compliance Officer.

Essentially, a lobbyist who must register with the Arkansas Secretary of State, the Texas Ethics Commission or the Pennsylvania Department of State is any person who receives compensation from another person, group or entity to influence or attempt to influence legislation or administrative action (“lobbying”). Lobbying includes: (1) attempting to or promoting the introduction of, or seeking the defeat or enactment of legislation, (2) attempting to or promoting, opposing or seeking to influence executive approval of a bill or action, and (3) attempting to or promoting, opposing or influencing the enactment of regulations by a regulatory body (like the AOGC, the TRC or the PBOGM). In essence, if your job duties require you to have regular contact with legislators, the executive branch, or regulatory authorities, you should consider carefully whether you may be a lobbyist. If so, you are subject to certain reporting requirements and certain restrictions upon your activities. The lobbying statutes may contain exceptions to the registration and reporting requirements for certain “excused lobbying activities” (e.g. appearing in judicial or administrative hearings). Questions concerning the applicability of these lobbying statutes to your activities should be referred to the Corporate Compliance Officer.

Certain Government Interaction Statutes apply to all persons. These Statutes take more or less a common sense approach, with their focus on prohibiting any improper influence on the official actions of a public official or public employee. All directors, officers and employees are forbidden from:

• Soliciting a public official or employee to use or cause to be used equipment, facilities, time, materials, labor or other public property for your private or business benefit.
• Offering or giving a public official or employee or one of their family members any thing of value for the purpose of influencing official action.
• Making any false statement or misrepresentation of facts to a member of the legislative or executive branch.
• Causing a document containing a false statement to be received by a member of the legislative or executive branch.