SOUTHWESTERN ENERGY CO. Houston, Texas; It's What You Make, Not What You Spend.(THE NEW AMERICA)

Byline: ALAN R. ELLIOTT

Cost control, Harold Korell will tell you, is one nasty word.

"I remember from my days at Tenneco when somebody would say, "You've got to cut costs 10% this year,' you know: cost control," Korell said. "Then it's like, "Oh, I'm getting whipped again."'

Whipped is what Southwestern Energy Co. was getting when Korell arrived as chief operating officer in 1997.

Now Southwestern's chairman, president and chief executive, Korell has spent seven years training a team able to innovate its way clear of the weak-kneed earnings and ponderous debt that has plagued the Houston-based natural gas exploration and production (E&P) operation.

As winter season gas prices hoist the entire industry toward what could be a record year, Southwestern appears to be finding its stride.

In February, a company equity offering brought in $103 million in capital. With its gas coffers full, underperforming assets sold off and a lean-times cost structure in place, Southwestern turned to its high return wells in the Overton field in East Texas.