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SWIFT ENERGY COMPANY 2000 ANNUAL REPORT |
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Notes to Consolidated Financial Statements |
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8. Foreign Activities New Zealand Swift Operated Permit. Our activity in New Zealand began in 1995 with the issuance of the first of two petroleum exploration permits. After a 1998 surrendering of a portion of our permit acreage, a combining of the two permits, and a 1999 expansion of the permit, as of year-end 2000 our permit 38719 covers approximately 100,700 acres in the Taranaki Basin of New Zealand’s North Island, with all but 12,800 acres onshore. We have a 90% working interest in this permit and have fulfilled all current obligations under this permit. In late 1999, we completed our first exploratory well on this permit, the Rimu-A1, and a production test was performed. During the second half of 2000, we drilled and successfully tested two delineation wells, the Rimu-B1 and the Rimu-B2. We commenced drilling our third delineation well, the Rimu-A2, during December 2000. Our portion of the drilling, completion, and testing costs incurred on the wells within our permit area during 2000 was approximately $10.7 million. Our portion of prospect costs on our permit area during 2000 was approximately $4.4 million, which included obtaining 2-D seismic data in the first half of the year. We incurred $1.1 million on the initial phases of production facilities. In 2001, we plan to drill four wells, one exploratory well on our Kauri prospect to the southeast of the Rimu discovery and three wells to further delineate the Rimu area. Non-Operated Permits. In 1998, we entered into agreements for a 25% working interest in an exploration permit held by Marabella Enterprises Ltd., a subsidiary of Bligh Oil & Minerals, an Australian company, and a 7.5% working interest held by Antrim Oil and Gas Limited, a Canadian company in a permit operated by Marabella. In turn, Bligh and Antrim each became 5% working interest owners in our permit. Unsuccessful exploratory wells were drilled on these two permits, and we charged $400,000 against earnings in 1998 and $290,000 in 1999. All of the acreage on the permit we had a 25% working interest in was surrendered in 2000. The exploratory well on the 7.5% working interest permit has been temporarily abandoned pending a further evaluation. In 2000, we entered into agreements with Fletcher Challenge Energy Limited whereby we will earn a 20% participating interest in petroleum exploration permit 38718 containing approximately 57,400 acres and a 25% participating interest in permit 38730 with approximately 48,900 acres. In January 2001, the operator temporarily abandoned the Tuihu #1 exploratory well on permit 38718 pending further analysis. The permit now contains approximately 28,700 acres after a scheduled surrender during December 2000. Costs Incurred. During 2000 our portion of all costs incurred in New Zealand totaled $17.4 million, including $11.8 million for drilling, $4.5 million for prospect costs, and $1.1 million for production facilities. These costs included $1.2 million of costs incurred on permits operated by others: $1.1 million of drilling costs and $0.1 million of prospect costs. As of December 31, 2000, our investment in New Zealand totaled approximately $29.8 million. At year-end we recorded proved undeveloped reserves relating to our successful drilling activities. Accordingly, $21.1 million of our investment costs have been included in the proved properties portion of oil and gas properties and $8.7 million is included as unproved properties. The development strategy includes marketing oil and gas, with the intent of having production on line for oil and gas sales in New Zealand in 2001. Russia In 1993, we entered into a Participation Agreement with Senega, a Russian Federation joint stock company, to assist in the development and production of reserves from two fields in Western Siberia and received a 5% net profits interest. We also purchased a 1% net profits interest. Our investment in Russia, prior to its impairment in the third quarter of 1998, was approximately $10.8 million. See Note 1 to the Consolidated Financial Statements for a more detailed discussion of the impairment. We retain a minimum 6% net profits interest from the sale of hydrocarbon products from the fields, the value of which depends upon the successful development of production from the fields by others, which may or may not occur. Venezuela In 1993, we formed a wholly owned subsidiary, Swift Energy de Venezuela, C. A., for the purpose of submitting a bid under the Venezuelan Marginal Oil Field Reactivation Program and entered into an agreement with two Venezuelan companies to jointly formulate and submit a proposal to Petroleos de Venezuela, S. A., for the construction and operation of a methane pipeline. Our investment in Venezuela, prior to its impairment in the third quarter of 1998, was approximately $2.8 million. See Note 1 to the Consolidated Financial Statements for a more detailed discussion of the impairment.
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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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