Swift Energy’s founder and chairman of the board, A. Earl Swift, has long said that one of the most vital responsibilities of a company’s leadership is to balance the three main aspects of decision making—individual initiative, team consensus, and authoritative control and oversight.

This balance provides the creativity and flexibility needed to respond quickly to changes in the competitive environment, while also guaranteeing a measure of control and transparency within a system of checks and balances. A fundamental aspect of this philosophy is a dedication to the free flow of information between a company and its investors and also between internal departments.

The effectiveness of this approach was particularly evident at Swift Energy in 2002 when major strategic changes had to be quickly put into place in response to the economic and industry upheaval that occurred during 2001. Swift’s responses were overseen by a management team comprised of 14 officers, 13 of whom have been working together for a decade or longer. They joined with small, interdisciplinary teams of employees from a range of departments to rebalance all aspects of Swift’s competitive strategy.

The continuity of leadership that Swift enjoys has resulted at least in part from the Company’s policy of promoting employees from within who have been instrumental to past successes. One long-serving member of this management team was promoted in early 2003. James P. Mitchell was named senior vice president–commercial transactions and land. Mr. Mitchell, who has been with the Company since 1987 previously served as vice president–land and property transactions.

In addition to internal principles, outside measures of accountability are also highly valued at Swift. For many years, long before the recent emphasis on corporate accountability, a majority of Swift’s Board of Directors have been outside "independent" directors. Most of the board’s committees are comprised entirely of outside directors, including the Audit Committee, the Compensation Committee, the Corporate Governance Committee, and the Special Transactions Committee.

The Company’s newest outside director is R.E. "Ray" Galvin, who was appointed to the board on August 5, 2002. Mr. Galvin retired in February 1997 as president of Chevron U.S.A. Production Co. and as a director and vice president of Chevron Corporation.

The independent auditors and consultants on whom Swift relies include Ernst & Young, a big-four accounting firm; Jenkens & Gilchrist, a 50-year-old national law firm specializing in public company and energy representation; and H.J. Gruy & Associates, international oil and gas engineering and geological consultants with more than 50 years of experience.

The same principles of balance and openness that are trademarks of Swift Energy in the United States are being built into the Company’s growing organization in New Zealand, Swift Energy New Zealand Limited (SENZ). SENZ is a New Zealand company incorporated on June 6, 1997, that is a wholly owned subsidiary of Swift Energy International, Inc., a Texas corporation, which in turn is a wholly owned subsidiary of Swift Energy Company.

The seasoned management put into place at SENZ is a blend of employees who formerly worked for Swift at its Houston offices and other professionals from both New Zealand and the United States.

With these cohesive management teams in place in the United States and New Zealand, Swift is prepared to build upon its successes in 2002, focusing on achieving sustained growth in shareholder value.

With a lower decline rate, improved financial flexibility, and a considerable inventory of undeveloped and potential reserves, Swift is now in a better position to pursue long-term growth opportunities. The Company’s management is confident in its strategies and optimistic about the future.