 Over 85% of the reserves included in the 1993
property acquisitions were located in various counties in the states of Texas, Louisiana,
and Mississippi (counties highlighted in yellow). |
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During 1993, Swift Energy negotiated the purchases
of producing properties equivalent to 16.8 million BOEs of proved oil and natural gas
reserves on behalf of itself and others. The total cost of these purchases was $83.5
million, bringing the cumulative property acquisitions by the Company and its co-investors
to over $440 million.
The 1993 acquisitions consisted of 10 separate transactions ranging from
$1.1 million to $28.3 million and covering net revenue interests in more than 2,100 wells.
Swift Energy became the operator of 168 of the wells, representing approximately one-half
of the total reserves. Consistent with Swift’s emphasis on natural gas, the reserves
were 65% natural gas and 35% crude oil.
The year’s largest single acquisition consisted of oil and natural
gas properties distributed among nine states; however, 62% of the reserves were in South
Texas fields near the Company’s largest operation, the AWP Olmos Field in McMullen
County, Texas. The bulk of these reserves were located in the Green Branch Area in
McMullen County and La Salle County, where Swift became the operator of 41 wells included
in the acquisition.
This purchase was negotiated under the Company’s direct solicitation
program, in which Swift locates attractive and strategically positioned properties and
initiates negotiations with the potential sellers. Before the negotiations are completed,
Swift’s evaluation teams, which include reservoir engineers, accountants, operations
engineers, geologists, and petrophysicists, perform detailed analyses of the properties.
Following the purchases in the Green Branch Area, Swift acquired
additional reserves in the same South Texas region, further allowing the Company to
benefit from economies of scale in that area. The bulk of these reserves are located in
the Estes Cove Field in Aransas County and the Nikoma Field and Chonan Field in Zavala
County, where Swift assumed operation of 13 wells.
Altogether, the South Texas acquisitions totaled 7.6 million BOEs, or 45%
of the total 1993 purchases. Other acquisitions in the state increased the total reserves
acquired in Texas to 8.5 million BOEs, or 51% of all the 1993 acquisitions. The state with
the second highest volume of acquired reserves was Louisiana, with 3.4 million BOEs, or
20% of the 1993 acquisitions. Approximately 95% of these reserves were located in the
Second Bayou Field and the East Mud Lake Field in Cameron Parish.
The 1993 acquisitions also secured reserves totaling 2.7 million BOEs (16%
of the total) in the state of Mississippi, primarily in the Chaparral Field and Clear
Creek Field in Wayne County. In addition, 2.2 million BOEs (13% of the total) was
distributed throughout the states of Alabama, Colorado, Oklahoma, New Mexico, Nevada,
North Dakota, and Wyoming.
Of the $83.5 million in properties acquired by Swift for itself and others
during 1993, approximately 70% of the reserves were placed in Swift’s acquisition
limited partnerships. The remaining properties were either held in producing property
inventory pending transfer to partnerships or joint ventures to be formed in 1994
(approximately 17%) or purchased directly for the Company’s own account
(approximately 13%).
About one-half of Swift’s 1993 capital expenditures for producing
property acquisitions, which totaled $21.8 million, consisted of direct purchases included
in the $83.5 million amount. The remainder of the Company’s capital expenditures for
acquisitions was related to partnership activities, which primarily consisted of: (1)
Swift’s general partner capital contribution to the partnerships in the form of
front-end formation and marketing costs paid by the Company, and (2) Swift’s earned
interests in the partnerships’ producing properties, which the Company derives from
serving as general partner. To a lesser extent, capital expenditures for acquisitions also
included Swift’s purchases of limited partner interests.
Swift’s general partner interests in partnership properties acquired
during 1993 totaled 2.3 million BOEs. Direct Company purchases accounted for another 2.1
million BOEs, bringing Swift’s total purchases of proved reserves in 1993 to 4.4
million BOEs.
Swift Energy anticipates that its acquisition activities will continue to
make a major contribution to reserves growth in the years ahead.
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