1996 THIRD QUARTER REPORTLetter to StockholdersDuring the third quarter of 1996, Swift Energy's oil and natural gas sales reached a record $13.2 million--a 142% increase over third-quarter sales in 1995. Total revenues for the three months rose 119% to $15.4 million; net income increased 267% to $4.6 million ($.33 per share); and net cash provided by operating activities increased 206% to $11.4 million. For the nine-month period ending September 30, 1996, oil and gas sales totaled $33.7 million, 122% above the sales during the first nine months of 1995. At the same time, total revenues increased 97% to $39.2 million; net income increased 352% to $11.4 million ($.87 per share); and net cash provided by operating activities rose 208% to $26.4 million. As a result of this strong performance, Swift's stock, which was at $12 per share at the beginning of the year, had doubled in value to $24 per share on September 30. The Company's increasingly higher revenues and earnings continue to be due to the sharp upturns in our production and our emphasis on efficient operations, together with higher prices. For the first nine months, our gas production nearly doubled, increasing from 5.5 billion cubic feet (Bcf) in 1995 to 10.8 Bcf in 1996, and our oil and condensate production rose 17% to 459,000 barrels. Over the same period, natural gas prices rose 40% to an average of $2.31 per thousand cubic feet, and oil and condensate prices increased 21% to an average of $18.96 per barrel. The increases in production are, of course, the result of our expanding exploration and development programs. Through the first nine months of the year, we drilled 102 wells, 96 of which were completed successfully. Drilling continues at a rapid rate, with a total of 162 wells projected to be drilled before year end. This is to be compared with 76 wells drilled (69 successes) in all of 1995. In our most concentrated drilling program at the AWP Olmos Field of McMullen County, Texas, we currently have seven rigs in operation. With 30 successful development wells completed in the field during the third quarter, the number of AWP wells that we placed in production during the first nine months of the year totaled 79. During the month of October, another 11 wells were added. Swift owns a 100% working interest in most of these wells. Also in the third quarter we had two significant successes in our second largest drilling program--in the Giddings Field in Fayette County, Texas. Both were dual-lateral horizontal wells drilled in the Austin Chalk trend as joint development projects. Swift owns a 33.4% working interest in the first well, which had an initial production rate of 9.8 million cubic feet of gas and 962 barrels of condensate per day, and a 33.2% working interest in the second well, which had an initial production rate of 13.8 million cubic feet of gas and 552 barrels of condensate per day. The Company has also had recent drilling successes in other geographic areas. An early third-quarter exploratory well in Lavaca County, Texas, which we announced in our second-quarter report, was placed in production, and an early fourth-quarter exploratory well was successfully completed in the Smackover formation in Lafayette County, Arkansas. The locations of both these wells were largely based on our analyses of seismic data, the latter from a two-dimensional seismic swath survey Swift conducted in Lafayette County last May. Additional seismic data from the area were collected in a two-dimensional seismic line survey in September. In Wyoming, we had a successful third-quarter development well drilled to the Minnelusa formation in Campbell County. Two 1996 seismic surveys that we conducted in the area, a two-dimensional line shot in January and a three-dimensional cross swath shot in July, will aid in the selection of exploratory drilling sites in the near future. With plans to expand our current programs and also to initiate new activities, the Company is seeking additional financing through a public offering of $100,000,000 of Convertible Subordinated Notes due in the year 2006. We filed a registration statement for this offering with the Securities and Exchange Commission on October 24. As we near the end of 1996, all of Swift Energy's stakeholders, whether employees or
shareholders, can look back with considerable satisfaction. It has been a good year--not
only because of what has been accomplished but also because of the promising future the
year's successes have made possible.
This page was last updated on Saturday, February 08, 2003, at 07:45:45 PM. Copyright © 1994-2008 by Swift Energy Company.
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