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SWIFT ENERGY COMPANY NEWSSWIFT ENERGY ANNOUNCES 19% PRODUCTION INCREASE, EARNINGS OF $0.12 PER SHARE FOR FIRST QUARTER 2002HOUSTON, May 1, 2002 -Swift Energy Company (NYSE, PCX: SFY) announced a 19% increase in production for the first quarter of 2002 to 12.3 billion cubic feet equivalent (“Bcfe”), or 136.5 million cubic feet per day (“MMcfe/d”), compared to 10.3 Bcfe for the first quarter of 2001 which is also a 7% sequential increase over the 11.5 Bcfe of production in the fourth quarter of 2001. Production from New Zealand accounted for 2.6 Bcfe or 21% of the total. Net income for the quarter was $3.0 million or $0.12 per diluted share, a decline of 86% from $22.3 million or $0.88 per diluted share during the first quarter in 2001. Revenues for the first quarter totaled $34.4 million, a decline of approximately 45% from revenues of $62.4 million during the first quarter in 2001. Revenues included a cash payment of $7.3 million on the sale of the Company’s interests in the Samburg project in Western Siberia, Russia, as previously disclosed. Cash flow from operations, including a non-recurring gain on this property sale and before changes in working capital, declined 61% to $18.8 million ($0.76 per share) compared to $48.0 million ($1.95 per share) in the first quarter of 2001. The Company saw slight increases in most of its costs over the comparable quarter of 2001, most notably in interest expense, which increased 46% to $3.9 million. Costs were slightly down to flat compared to costs in the fourth quarter of 2002. Reflecting significantly lower market prices, average domestic natural gas prices received in the first quarter were $1.94 per thousand cubic feet (“Mcf”), a decrease of 72% from the $6.86 per Mcf received a year earlier, while oil and condensate prices averaged $16.08 per barrel, down 42% from oil and condensate prices in the previous year’s first quarter. This provided a composite average domestic price for the quarter of $2.32 per thousand cubic feet equivalent (“Mcfe”), which was 62% less than the $6.07 per Mcfe received in the first quarter of 2001 and 5% less than the $2.43 per Mcfe received in the fourth quarter of 2001. Natural gas accounted for 48% of domestic production during the first quarter and 54% of total production. In New Zealand, Swift received an average price of $1.21 per Mcf for its natural gas and $16.23 per barrel for crude oil, natural gas liquids and condensate. The composite average price for New Zealand was $1.59 per Mcfe. Overall, the Company averaged $1.72 per Mcf for its natural gas and $16.10 per barrel for its crude oil, natural gas liquids and condensate, or a composite average price of $2.17 per Mcfe. As previously reported, Swift Energy completed a $200 million senior subordinated notes offering along with a 1,725,000 share offering of common stock in April. The Company’s borrowing base was recently reaffirmed at $275 million, and this has now been reduced to $195 million, following the closing of the notes offering. The net proceeds of approximately $225 million from the offerings were used to pay down bank indebtedness, which now has an outstanding balance of approximately $6 million. Domestic Update As reported earlier, the Company drilled and completed two development wells and drilled three unsuccessful exploration wells, two operated and one non-operated, in the first quarter. The two development wells were the SL 212 #99 and BLD-CM #15 both with a 100% working interest in the Lake Washington Field. The exploration wells were the non-operated Campbell-Frazier #1 well in San Jacinto County, Texas, the Delacroix #1 well in the Grand Lake area and the CM #196 well in the Lake Washington Field, both located in Plaquemine Parish, Louisiana. The Delacroix #1 well and the CM#196 were temporarily abandoned with plans for the CM#196 to be converted to a saltwater disposal well at a future date. In April, the Company drilled three additional wells in the Lake Washington Field with plans for an additional six wells to be drilled in the second quarter. A completion rig will move to the area in June to begin completion operations on these wells. The Company has a 100% working interest in each of these wells. The CM #182 well was drilled to a depth of 3,224 feet and had 170 feet of net sand and the CM #186 well was drilled to a depth of 3,220 feet and encountered 227 feet of net sand. Log analysis of both wells indicated the presence of hydrocarbons in these sands. The State Lease 212 #103, targeting the Li-1 sand, encountered approximately 20 feet of net sand but was deemed non-commercial and is being plugged. Production in the field has more than doubled since the Company acquired it in March of 2001 with an average of 1,486 barrels of oil per day in March 2002. New Zealand Update The Company began the initial production from the Rimu Production Station (RPS) during April 2002 with the first shipment of crude oil being trucked to the Company’s Waihapa Production Station, part of TAWN, where it is transported in the Company-owned pipeline to export facilities located at the New Plymouth port facilities. Commissioning activities are continuing on the natural gas and liquid processing components of the plant, with initial gas sales expected to begin this month. The previously announced option to acquire a 25% interest in the Rimu/Kauri permit, which was granted to Shell as consideration with the closing of the TAWN acquisition, is expected to expire on May 15, 2002. Assuming that Shell does not exercise their rights under this option, the Company intends to seek a strategic partner to participate by year-end for up to a 25% interest in the Rimu/Kauri permit. Average production at TAWN is now at more normal levels of 32 to 35 Mmcfe/d, down from the higher levels (40 Mmcfe/d) experienced in the first quarter. Hedging Activity Update As part of its price risk management strategy, the Company has put in place certain “costless collar” financial transactions beginning with the May 2002 contract month and in effect through the December 2002 contract. The crude oil collars include 45 contracts per month, currently estimated 20% of global oil production with an average floor of $20.44 per barrel and an average ceiling price of $27.58, plus 60% participation by the Company above the ceiling. The natural gas collars include 28 contracts per month, covering about 15% of currently estimated domestic natural gas production with an average floor price of $2.57 per Million BTU (“MMBtu”) and an average ceiling price of $4.31 per MMBtu, also with 60% participation by the Company above the ceiling. Terry Swift, President and Chief Executive Officer of Swift Energy Company, noted that, “In this commodity price environment, we have limited our drilling activity in the first quarter, made significant strides in flattening our underlying decline curve and added additional financial flexibility to our balance sheet. The TAWN acquisition is a wonderful addition, which will add significant strategic value as a hub to our New Zealand operations. The drilling to date in Lake Washington continues to reaffirm our belief in the additional reserve potential of that field, where we have identified over 40 million barrels of probable reserves in the sands we have mapped to date. The successes this year provide a nice foundation to further build production and reserves in the coming quarters, while maintaining sound fiscal discipline. Additionally, the recent debt and equity financing will provide us with the financial flexibility to accomplish our goals and position us to take advantage of other opportunities as they present themselves.” Earnings Conference Call The Company will conduct a conference call and live webcast on Wednesday, May 1st, at 9:00 a.m. Central Daylight Time, in conjunction with this first quarter earnings release. To participate in this conference call dial 973-872-3462 five to ten minutes before the start of the call and indicate your intention to participate in the Swift Energy conference call. This call will be available for digital replay until May 14th by dialing (973) 341-3080 (PIN# 3197036). Additionally, the conference call will be available by accessing the Company’s website at www.swiftenergy.com and clicking on the hyperlink. Swift Energy Company engages in developing, exploring, acquiring, and operating oil and gas properties, with a focus on onshore oil and natural gas reserves in Texas and Louisiana and onshore oil and natural gas reserves in New Zealand. Founded in 1979 with headquarters in Houston, Texas, the Company has consistently grown its proved oil and gas reserves, production, and cash flow through a disciplined program of acquisitions and drilling, while maintaining a strong financial position.
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, guidance or other statements other than statements of historical fact, are forward-looking statements. These statements are based upon assumptions that are subject to change and to risks, especially volatility in oil or gas prices, and lately availability of services and supplies. 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. Estimates of future financial or operating performance provided by the Company are based on existing market conditions and engineering and geologic information available at this time. Actual financial and operating performance may be higher or lower. Future performance is dependent upon oil and gas prices, exploratory and development drilling results, engineering and geologic information and changes in market conditions.
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SWIFT ENERGY COMPANY
SUMMARY FINANCIAL INFORMATION
- In Thousands Except Per
Share and Price Amounts -
| Three Months, | |||
| Ended March 31, | |||
| Percent | |||
| 2002 | 2001 | Change | |
| ----------------- | ----------------- | ---------- | |
| Revenues | |||
| Oil & Gas Sales | $26,613 | $62,696 | (58%) |
| Other | 7,741 | (304) | na |
| ----------------- | ----------------- | ||
| $34,354 | $62,392 | (45%) | |
| Income Before Cumulative Effect of Change in Accounting Principle | $3,020 | $22,720 | (87%) |
| Net Income | $3,020 | $22,327 | (86%) |
| Per Share Amounts: | |||
| Basic: | |||
| Income Before Cumulative Effect of Change in Accounting Principle | $0.12 | $0.92 | (87%) |
| Cumulative Effect of Change in Accounting Principle | -- | (0.01) | 100% |
| ----------------- | ----------------- | ||
| Net Income | $0.12 | $0.91 | (87%) |
| Diluted: | |||
| Income Before Cumulative Effect of Change in Accounting Principle | $0.12 | $0.89 | (87%) |
| Cumulative Effect of Change in Accounting Principle | -- | (0.01) | 100% |
| ----------------- | ----------------- | ||
| Net Income | $0.12 | $0.88 | (86%) |
| Cash Flow including Non-Recurring Gain and Before Working Capital Changes | $18,795 | $48,036 | (61%) |
| Cash Flow including Non-Recurring Gain and Before Working Capital Changes, Per Share | $0.76 | $1.95 | (61%) |
| Net Cash Provided by Operating Activities including Non-Recurring Gain | $18,166 | $48,215 | (62%) |
| Net Cash Provided by Operating Activities including Non-Recurring Gain, Per Share | $0.73 | $1.95 | (63%) |
| Weighted Averages Shares Outstanding | 24,882 | 24,666 | 1% |
| EBITDA | $22,515 | $51,550 | (56%) |
| Total Company Production: | |||
| Oil & Natural Gas Equivalent (Bcfe) | 12.29 | 10.33 | 19% |
| Domestic: | |||
| Oil & Natural Gas Equivalent (Bcfe) | 9.68 | 10.33 | (6%) |
| New Zealand: | |||
| Oil & Natural Gas Equivalent (Bcfe) | 2.61 | -- | 100% |
| Total Company Average Prices: | |||
| Combined Oil & Natural Gas ($/Mcfe) | $2.17 | $6.07 | (64%) |
| Natural Gas ($/Mcf) | $1.72 | $6.86 | (75%) |
| Oil, NGLs & Condensate ($/Bbl) | $16.10 | $27.63 | (42%) |
| Domestic Average Prices: | |||
| Combined Oil & Natural Gas ($/Mcfe) | $2.32 | $6.07 | (62%) |
| Natural Gas ($/Mcf) | $1.94 | $6.86 | (72%) |
| Oil, NGLs & Condensate ($/Bbl) | $16.08 | $27.63 | (42%) |
| New Zealand Average Prices: | |||
| Combined Oil & Natural Gas ($/Mcfe) | $1.59 | -- | 100% |
| Natural Gas ($/Mcf) | $1.21 | -- | 100% |
| Oil, NGLs & Condensate ($/Bbl) | $16.23 | -- | 100% |
Three Months Ended Three Months Ended March 31, 2002
Per Mcfe
March 31, 2001 Per Mcfe
Revenues:
Oil & Gas Sales
$26,613 $ 2.17
$62,696 $ 6.07
Other Revenues
7,741 0.63 (304) (0.03)
----------------- ----------------- Total Revenues
$34,354
$ 62,392
----------------- ----------------- Costs & Expenses:
General and Administrative, Net
2,274 0.19
1,884
0.18
Depreciation, Depletion & Amortization
13,961 1.14
13,387
1.30
Oil & Gas Production Costs, LOE
7,525 0.61
5,564 0.54
Severance & Ad Valorem Taxes
2,040 0.17
3,394 0.33
Interest Expense, Net
3,880 0.32
2,650 0.26
----------------- ----------------- Total Costs & Expenses
29,680 26,879 ----------------- ----------------- Income Before Income Taxes and Cumulative Effect
4,674 35,513 Provision for Income Taxes
(1,654) (12,793) ----------------- ----------------- Income Before Cumulative Effect
3,020 22,720
Cumulative Effect of Change in Accounting Principle -- (393)
Net Income 3,020 $22,327 ----------------- ----------------- Additional Information:
Capital Expenditures
$ 83,041
$ 100,015
Capitalized General & Administrative
$ 1,831
$ 2,173
Capitalized Interest Expense
$ 1,396
$ 1,543
Deferred Income Taxes
$ 1,653
$ 12,213
Description Guidance For
Second Quarter 2002Guidance For
Full Year 2002Production Volumes (Mcfe)
12,000 - 13,000 49,000 - 54,000 Domestic Volumes (Mcfe)
8,500 - 9,000 34,000 - 37,000 New Zealand Volumes (Mcfe) 3,200 - 4,000 14,000 - 17,000 % Natural Gas
50% - 55% 50% - 55% Total Company Oil and Gas Production Costs/Mcfe
$0.75 - $0.80 $0.75 - $0.80 NZ Oil and Gas Production Costs/Mcfe
$0.60 - $0.65 $0.55 - $0.60 G&A/Mcfe
$0.18 - $0.20 $0.18 - $0.20 Interest Expense/Mcfe
$0.50 - $0.55 $0.45 - $0.50 DD&A/Mcfe
$1.15 - $1.20 $1.10 - $1.20 Domestic Pricing:
Henry Hub differential (per Mcf)
-$0.30 - -$0.35 -$0.30 - -$0.35 WTI differential (per Bbl)
-$4.50 - -$5.00 -$4.00 - -$5.00 New Zealand Pricing:
Natural Gas Wellhead (per Mcf)
$1.10 - $1.15 $1.10 - $1.15 WTI differential (per Bbl)
-$6.00 - -$7.00 -$5.00 - -$7.00 Capital Expenditures
Drilling Activities
$20,000 - $25,000 $75,000 - $85,000
Acquisition/Dispositions, net
$0 $0 - $58,000
Capitalized G&A
$1,700 - $1,900 $7,000 - $8,000
Capitalized Interest
1,400 - $1,600 $5,500 - $6,000 Basic Weighted Average Shares
26,700- 27,000
26,300- 26,600
Diluted Computation:
Weighted Average Shares
27,200- 28,000
27,000- 28,000
Effective Tax Rate
36%
36%
Deferred Tax Percentage
98%
98%
As of March 31, 2002
(Unaudited)As of December 31, 2001
Assets
Current Assets:
Cash and Cash Equivalents
$ 816 $ 2,149
Other Current Assets
27,552 34,604 ----------------- ----------------- Total Current Assets
28,368 36,753 Oil and Gas Properties
1,141,918 1,070,642 Other Fixed Assets
8,943 8,706 Less-Accumulated DD&A
(462,133) (448,139)
----------------- ----------------- 688,728 631,209 Other Assets
8,053 3,723 ----------------- ----------------- $ 725,149 $ 671,685
========= ========== Liabilities
Current Liabilities
$ 20,549 $ 73,245
Long-Term Debt
355,215 258,197 Deferred Income Taxes and Other
28,350 27,590 Stockholders’ Equity
321,035 312,653 ----------------- ----------------- $ 725,149 $ 671,685
========== ==========
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, guidance or other statements other than statements of historical fact, are forward-looking statements. These statements are based upon assumptions that are subject to change and to risks, especially volatility in oil or gas prices, and lately availability of services and supplies. 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. Estimates of future financial or operating performance provided by the Company are based on existing market conditions and engineering and geologic information available at this time. Actual financial and operating performance may be higher or lower. Future performance is dependent upon oil and gas prices, exploratory and development drilling results, engineering and geologic information and changes in market conditions.
16825 Northchase Drive, Suite 400, Houston, Texas 77060
http://www.swiftenergy.com
This page was last updated on Monday, January 10, 2005, at 08:22:44 AM.
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