Founded in 1979, Swift Energy Company is an oil and natural gas company engaged in the exploration, development, acquisition, and operation of oil and gas properties, with a focus on U.S. onshore natural gas reserves. At the end of 1995, Swift had interests in 4,083 wells in 15 states and was the operator of 767 wells in 10 states. The operated wells represented 86% of the Company’s reserves, 93% of which are located in Texas, Oklahoma, and Louisiana. The Company’s proved reserves totaled 176.1 billion cubic feet of natural gas equivalent (Bcfe), with natural gas comprising 82% of the total. Discounted at 10% per annum, the reserves at the end of 1995 had a present value of $147.0 million (PV-10 Value).

Corporate Mission. As a natural resource company, Swift Energy’s mission has always been to increase the volume and net present value of its oil and gas reserves. This mission is based on the premise that increases in reserves lead to increases in production and sales, which, in turn, lead to higher cash flows and earnings and ultimately to increases in shareholder value. In 1995, Swift had a 70% increase in proved reserves, and over the last five years it has averaged a compounded annual reserves growth rate of 34%, exceeding the ambitious 1995 target of its strategic plan. During that same period, the Company has achieved an average annual compounded growth rate of 24% in cash flows from operating activities, despite low product prices.

Business Strategy. Currently, Swift Energy pursues its mission primarily by drilling exploratory and development wells. In both its drilling and production activities, the Company applies advanced technologies to maximize efficiencies and reduce costs.

In 1995, Swift’s drilling program included 76 wells--eight exploratory wells with four successes and 68 development wells with 65 successes. The resulting success rates of 50% for exploratory wells and 96% for development wells surpassed industry averages for the fifth year in a row. Of the 76 wells drilled (compared to 44 wells in 1994), Swift is the operator of 60, including six of the exploratory wells.

The Company has entered 1996 with the largest inventory of proved undeveloped reserves in its history and plans to drill 94 development wells before year end. An additional 16 exploratory prospects have been identified, providing an overall target of 110 wells for the year.

With its current focus on drilling, Swift Energy has significantly reduced its producing property acquisition activities. However, the Company still actively seeks strategic acquisition opportunities where its expertise and experience in applying advanced technologies, as well as economies of scale, will provide competitive advantages.

Common Stock Performance. Since the end of 1991, Swift Energy’s common stock has outperformed the Dow Jones U.S. Oil Secondary Index. At the end of 1995, the closing price of Swift Energy’s common stock was 220% of its close at the end of 1991, while the Dow Jones U.S. Oil Secondary Index was only 113% of its 1991 close.

Investor Information. Swift Energy’s common stock is traded on the New York Stock Exchange (NYSE) and the Pacific Stock Exchange (PSE) under the symbol “SFY.” Swift Energy Convertible Subordinated Debentures are listed on the NYSE under the symbol “SFY 03.” Additional information about the Company is available from the Stockholder Relations Department at the address listed on the inside front cover.