1995 FIRST QUARTER REPORTLetter to StockholdersSwift Energy's total revenues during the first quarter of 1995 were slightly higher than those received for the same period in 1994--$6,258,588 this year versus $6,138,535 last year. Oil and natural gas sales were also somewhat higher, $4,876,041 in the first quarter of 1995 compared to $4,817,270 in 1994, which corresponds to 78% of total revenues in both periods. With natural gas prices nationwide at their lowest point in over two years, our success in maintaining our revenue levels was a significant accomplishment, especially since natural gas comprises more than 67% of our current production. By adhering to our overall strategy of consistently increasing our reserves volumes and thereby our production volumes, and also maintaining a mix of oil and gas, we were able to compensate for a 26% drop in gas prices. This was partially accomplished through a 4% increase in gas production. However, the most significant positive impact was a 32% increase in oil prices and a 35% increase in oil production compared to the first quarter of 1994. As a result, oil production accounted for 43% of our first-quarter sales in 1995 versus 24% in 1994. The increase in both oil and gas production is primarily attributable to recently drilled exploratory and development wells in which we have sizeable working interests and to the Company's acquisition of interests in additional producing properties over the last 18 months. Notable examples of recent drilling successes are the LCRA/COA 1-H horizontal well drilled in the fourth quarter of 1994 (see back cover) and the LCRA/COA 2-H completed the first quarter of 1995. These are the first two development wells drilled on the large farmout acreage in Fayette County, Texas, which we obtained in 1993 from the Lower Colorado River Authority and the city of Austin. Drilled to the Austin Chalk formation, both wells tested at over 500 barrels of oil per day. In addition, the 1-H tested at over 18,000,000 cubic feet of gas per day, and the 2-H at over 12,000,000 cubic feet of gas per day. Another first-quarter horizontal well drilled by Swift in a separate region of Fayette County, the Rightmer Ranch 1-H, tested at 210 barrels of oil and 310,000 cubic feet of gas per day. As of March 31, the Company had interests in 16 horizontal wells drilled to the Austin Chalk. Also contributing to the first-quarter sales was the Sinner-Federal 24-15 #1, an exploratory well in Campbell County, Wyoming, which came on line in mid-February with an initial production of 415 barrels of oil per day; and the Boudoin #1, a newly recompleted well in Cameron Parish, Louisiana, which began producing in mid-February at 163 barrels of oil and 422,000 cubic feet of gas per day. In addition to improving our 1995 first-quarter sales, this added production increased our cash flows from operating activities by 10.6%. However, increased production costs, including significant one-time costs to enhance future production, together with a rise in depreciation, depletion, and amortization, contributed to an overall increase of 27% in our expenses compared to the first quarter of 1994. The result was a net income of $524,600, or $0.08 per share. This is to be compared with a net loss of ($2.36) per share during the first quarter of 1994, which included a one-time change in accounting policy. Before the cumulative effect of the accounting change, net income for the 1994 period was $0.18 per share. Swift Energy considers the most recent drop in gas prices, together with oil prices that have not totally rebounded to expected levels, to be just another short-term downturn in an industry that is cyclical by nature. In the meantime, we are moving forward with our ambitious exploration and development program, some of which is conducted in conjunction with our public limited partnerships and our private placement offering, Swift Energy Drilling Ventures (SEDV). On March 15 we closed the third SEDV partnership with subscriptions totaling approximately $5 million. We believe that the drilling successes we are recording reflect the wisdom of our current emphasis on exploration and development, and we look forward to reporting additional successes throughout the year.
This page was last updated on Saturday, February 08, 2003, at 07:45:44 PM. Copyright © 1994-2008 by Swift Energy Company.
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