Swift’s focused financial strategy is central to its plans for growth in 2004 and the years beyond. The key components of the Company’s strategy are to preserve a strong balance sheet through the appropriate mix of debt and equity, maintain maximum financial flexibility, continually improve the Company’s credit profile, and effectively manage risk to deal with volatile industry cycles.

2004 OPPORTUNITIES. Swift projects that its capital budget for 2004 will range between $130 million and $150 million. Swift’s internally generated cash flows are expected to fund the majority of these expenditures, depending on a number of factors that include oil and gas prices and production levels. Although current plans do not call for extensive use of the Company’s bank credit facility in 2004, Swift believes that its recently increased bank borrowing base will continue to stay at or near its current level as its proved reserves base continues to grow.

For further flexibility, Swift announced in January 2004 that it had filed a new universal shelf registration with the U.S. Securities and Exchange Commission. Under this registration, Swift may offer up to $350 million of securities in the form of common stock, debt securities, preferred stock, depositary shares or warrants, or any combination of these. The flexibility provided by this registration could potentially be used to fund strategic acquisition opportunities or, depending upon market conditions, to lower interest payments by redeeming $125 million of 10.25% Senior Notes due 2009. On or after August 1, 2004, these 10.25% Senior Notes are redeemable for cash at the option of Swift, with certain restrictions, at 105.125% of principal, declining to 100% in 2007.

MANAGING RISK. Swift minimizes its major market risk—the exposure to volatile oil and gas price cycles—through its active price-risk management program that is overseen by the Company’s Finance Committee. The goal of Swift’s hedging strategy is to protect its near-term cash flow and the capital budget while maintaining upside potential through the use of floors and participating collars. Typically, 20% to 50% of the Company’s volume of oil and U.S. natural gas production is covered, with hedging implemented when prices rise one standard deviation above average. In New Zealand, long-term contracts are used for price-risk management of natural gas.

Swift’s staff monitors price-risk management activities daily, seeking to conservatively balance risks and rewards with regard to economic and industry trends as they emerge.