SWIFT ENERGY COMPANY 2000 ANNUAL REPORTImprovements in the Company's Financial Position
Swift significantly strengthened its balance sheet in 2000 with the elimination of nearly half of its debt. In December, approximately $100 million of the Company’s $115 million issue of 6.25% convertible subordinated notes was converted into shares of common stock at a price of $31.53 per share. The remaining notes were redeemed at an aggregate redemption price of $15.9 million, which included the required premium and accrued interest. Swift further improved its financial standing in 2000 by increasing its borrowing base to $200 million, of which $10.6 million was outstanding at year-end. As a result of both of these actions, Standard & Poor’s upgraded Swift’s corporate credit rating from B+ to BB– at year-end 2000. Swift’s long-term debt-to-equity ratio declined from 1.40 in 1999 to 0.41 in 2000. These accomplishments exemplify several cornerstones of Swift’s long-standing financial strategy, which is to preserve a strong balance sheet through the appropriate mix of debt and equity, continually improve the Company’s credit profile, maintain maximum flexibility, and effectively manage risk to deal with volatile industry cycles. This strategy is one of the reasons Swift has consistently grown despite the dramatic price swings characteristic of the oil and gas industry. Keeping debt down during periods of higher product prices allows Swift to continue to take advantage of economical growth opportunities during industry downturns. Similarly, the Company’s expansion during times of low product prices positions it for even greater success as product prices improve. The wisdom of this approach was demonstrated during the price collapse in 1998-99 and the improved pricing environment in 2000. Another of the Company’s achievements in 2000 was the financing of the majority of its $173 million capital budget with cash on hand at the beginning of the year and cash flows from operations during the year. This follows the Company’s policy of reinvesting cash flows in growth rather than paying cash dividends. In general, Swift strives to finance drilling activity through internally generated cash flows while financing producing property acquisitions through a mix of debt and equity. Together, the financial achievements of 2000 have positioned the Company to aggressively pursue growth opportunities. As Swift moves forward in 2001, it has in place a capital budget that is designed to foster substantial growth in the United States and New Zealand, to minimize finding costs in a competitive industry environment, and to preserve flexibility for pursuing new drilling and acquisition opportunities as they arise.
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This page was last updated on Saturday, February 08, 2003, at 07:28:58 PM. Copyright © 1994-2008 by Swift Energy Company. |
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