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SWIFT ENERGY COMPANY NEWSSWIFT ENERGY MAKES LARGE PRODUCING PROPERTY PURCHASEHOUSTON, July 6, 1998 - Swift Energy Company (NYSE, PCX: SFY) announced today that it has signed an agreement with Sonat Exploration Company, a subsidiary of Sonat Inc. (NYSE: SNT), to purchase for $87.6 million producing oil and gas properties that will increase Swift’s existing reserves by approximately 25%. At the effective date of April 1, 1998, these properties were estimated to have proved reserves of 91.1 billion cubic feet of natural gas equivalent (Bcfe), of which 56% was natural gas. Estimated production for the interests being acquired is approximately 70 million cubic feet equivalent per day (MMcfe/d). Included in the purchase are extensive production facilities, interests in two gas processing plants and more than 200,000 undeveloped net acres. The properties are being purchased as proved producing assets and additional drilling activity beyond wells in progress will be scheduled only after economic drilling conditions improve. The properties to be purchased include all of Sonat’s interests in 156 producing natural gas and oil wells in the Brookeland Field in southeast Texas and the Masters Creek Field area in western Louisiana. Swift will assume operations of 113 of these wells. As part of the transaction, Swift is to acquire Sonat’s 20% interest in both the Brookeland and the Masters Creek natural gas liquids plants, which together will have a combined capacity of up to 250 million cubic feet of gas per day (MMcf/d). Commenting on the transaction, Mr. A. Earl Swift, Chairman of the Board and Chief Executive Officer said, "With these Sonat properties, the Company will exceed its reserves growth target for 1998 and coupled with its other planned activities, Swift believes its year-end proved reserves will increase to over 500 Bcfe, of which 75% will be natural gas. The Sonat acquisition and the anticipated partnership properties acquisition that was announced in April of this year will further diversify the Company’s reserve base. At year-end, approximately 29% of Swift’s reserve base will be located in the Austin chalk trend. The Company’s 1998 production was previously forecasted to grow in excess of 30% over 1997, and we expect to substantially exceed this goal. This forecasted growth should translate into increased cash flow and earnings per share for 1998, even with the increased financing costs associated with funding the acquisitions. Our strategy with respect to Chalk production has been and remains to use the cash flow from the rapid depletion to add reserves from lower decline rate properties. "We are extremely excited about the Sonat transaction. Because of our extensive operating capabilities, Swift Energy is in a unique position to make this purchase and extract benefits from assuming operations. Swift has been active in drilling and operating horizontal wells in the Austin Chalk trend since 1992 and has earned a strong reputation in the industry for its technical acumen in this geological area. The Masters Creek properties represent Swift’s first entry into the Louisiana portion of the Austin Chalk trend. The acquisition of primarily developed reserves will provide Swift with significant increase in cash flow from these assets. "The Sonat property purchase, along with our proposed acquisition of partnership producing properties, signifies a redirection of our plans for 1998 capital expenditures. The Company entered 1998 with a growth strategy focused primarily on drilling, but inherent in our strategy was the ability to shift our focus to take full advantage of changes in market conditions. With current lower crude oil prices, we have the opportunity to purchase high quality, lower risk producing properties from Sonat with substantial upside potential that simply was not available in the recent past. Consequently, we have deferred some portion of our drilling activity in favor of these acquisitions. These Sonat properties fit directly into our growth strategy, offering an excellent potential return on our investment." Swift Energy Company is an independent oil and 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 additions in 1997 replacing the Company’s production by more than 500%. This material includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The opinions, forecasts, projections or other statements, other than statements of historical fact, are forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable; it can give no assurance that such expectations will prove to have been correct. Certain risks and uncertainties inherent in the Company’s business are set forth in the filings of the Company with the Securities and Exchange Commission. 16825 Northchase Drive, Suite 400, Houston, Texas 77060
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This page was last updated on Monday, January 10, 2005, at 08:15:35 AM. Copyright © 1994-2008 by Swift Energy Company. |
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