HOUSTON, April 24, 1996 – Swift Energy Company (NYSE: SFY) and Valero Energy Corporation (NYSE: VLO) reported today that they have entered into an agreement for the transportation, marketing and processing of up to 75 million cubic feet per day of natural gas production from Swift's interest in the AWP Olmos Field in McMullen County, Texas. The production is from gas reserves currently producing and under development on Swift's 100 percent owned, 13,450-acre lease. The area is under active development, with four rigs currently contracted to Swift.

Valero will construct approximately 13 miles of 12-inch pipeline to facilitate delivery of the gas for processing at Valero's Armstrong gas processing plant in Dewitt County, Texas. Residual gas will be re-delivered for Swift's account into one or more of 15 interstate and intrastate pipelines, thereby providing Swift with significant market diversification. Valero has estimated the pipeline construction will be completed within 60 to 90 days.

Commenting on the agreement, Mr. A. Earl Swift, Chairman, President and Chief Executive Officer of Swift Energy, stated, "Swift expects the cooperation of Swift and Valero to be the beginning of a strategic alliance allowing us to effectively process and market our natural gas from this important developing area."

Marty Zolkoski, Vice President of Field Services for Valero, added, "We are very pleased to be expanding our relationship with Swift and believe that this agreement is a good example of the added services our recently formed field services group can provide to producers, as Valero is combining gathering, dehydration, processing, marketing and transportation to increase the value of Swift's natural gas production."

Based in Houston, Swift Energy Company is a 16-year old independent oil and gas company engaged primarily in the exploration, development, acquisition and operation of oil and gas properties, with an emphasis on domestic natural gas. Swift has a record of growth that is founded on an ambitious program of disciplined exploration and reserves development, conservative financing and innovative management.

Based in San Antonio, Valero Energy is a diversified energy company engaged in the production, transportation and marketing of environmentally clean fuels and products. Valero's core businesses are specialized refining and natural gas related services. Valero refines high-sulfur atmospheric residual oil into premium products, primarily reformulated gasoline, at its 170,000-barrel-per-day refinery in Corpus Christi, Texas, and markets those products. In addition, through its 8,000-mile natural gas pipeline system and eight natural gas processing plants, Valero is a major gatherer, processor, transporter and marketer of natural gas, natural gas liquids and electricity.