1996 ANNUAL REPORTCompany ProfileSwift Energy Company is an independent 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. Founded in 1979 with
headquarters in Houston, Texas, the Company has achieved an average compounded growth rate
in proved oil and gas reserves of approximately 40% per year during the last five years,
with reserves growth of 47% in 1996.
Company Mission. As a natural resource company, Swift Energy’s mission has always been to achieve growth in the volume and net present value of its proved reserves. This mission is based upon the premise that reserves growth leads to increases in oil and gas production and sales, which in turn lead to higher cash flows and earnings and ultimately to increases in shareholder value. Swift’s success in exceeding its reserves growth targets has enabled it to achieve five-year compounded annual growth rates of 45% in oil and gas sales, 44% in cash flows from operating activities, and 50% in net income. Swift’s primary strategic goal for the next several years is to continue increasing its oil and gas reserves at a rate of approximately 40% per year. Common Stock Performance. Swift’s policy is to reinvest earnings in order to promote growth in proved reserves, which over time promotes growth in the value of the Company's common stock. In 1996, the year-end price of Swift Energy’s common stock increased over its 1995 year-end price by 149%, compared to 21% for an index of peer companies (the U.S. Dow Jones Oil Secondary Index) and 23% for the Standard & Poor’s 500. Business Strategy. Swift’s mission of reserves growth is primarily accomplished through a focused exploration and development drilling program utilizing an array of advanced technologies--such as technologies for enhancing production from tight sands, horizontal drilling, and three-dimensional seismic analysis. Current focus areas include the AWP Olmos Field in South Texas and the Texas Austin Chalk trend. The Company greatly increased its inventory of leasehold acreage in each of these core areas during 1996. In addition, Swift is pursuing drilling opportunities in other parts of Texas, as well as in Arkansas, Louisiana, and Wyoming. During 1996, Swift Energy drilled 153 wells. Its resulting success rates, 64% for exploratory wells and 94% for development wells, exceeded industry averages for the sixth year in a row. Over the last three years, Swift’s exploration and development program has added approximately 215 Bcfe to the Company’s proved reserves, including 118 Bcfe in 1996. In addition to implementing its aggressive drilling program, the Company continuously reviews acquisition opportunities for strategic producing properties where performance can be enhanced through development drilling or improved operating efficiencies. Swift is also pursuing long-term international initiatives in New Zealand, Russia, and Venezuela.
The Natural Gas Industry. Because Swift Energy’s reserves are predominantly natural gas (approximately 87% at year end), trends in the natural gas industry can impact the Company’s revenues from oil and gas sales. During 1996, for example, a 45% increase in natural gas prices, combined with a 98% increase in gas production, had a significant impact on Swift’s total revenues. (Also contributing were a 27% increase in oil prices and a 14% increase in oil and condensate production.) Demand for clean-burning natural gas continues to rise in the United States, increasing in 1996 to record levels. Increases in U.S. production and Canadian imports have failed to keep pace with demand, leading to price appreciation. Although market fundamentals suggest a continuation of strong prices in the future, Swift Energy does not assume high price levels in establishing its strategy. The Company believes it must remain positioned to respond to price volatility. 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’s 6.25% Convertible Subordinated Notes due in the year 2006 are listed on the NYSE under the symbol "SFY 06." |
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This page was last updated on Saturday, February 08, 2003, at 07:28:43 PM. Copyright © 1994-2008 by Swift Energy Company. |
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