With oil and gas prices effectively doubling and our production increasing 5% during the first quarter of 2003 as compared to the first quarter of 2002, Swift Energy Company’s income before a change in accounting principle rose to $10.5 million for the first three months of 2003. This was a 247% increase compared to a net income of $3.0 million in the same period in 2002. Even after a $4.4 million one-time charge due to a mandated accounting change (Statement of Financial Accounting Standard No. 143), the Company’s net income of $6.1 million ($0.22 per diluted share) was 102% higher in the first quarter of 2003 than in the first quarter of 2002. For the same periods, net cash provided by operating activities increased 147% to $26.8 million in 2003 ($0.98 per diluted share).

The average prices we received during the first quarter of 2003 were $3.71 per thousand cubic feet (Mcf) for natural gas and $30.55 per barrel for oil and natural gas liquids, compared to $1.72 and $16.10, respectively, during the first quarter of 2002. Domestic prices for the first quarter of 2003 averaged $6.03 per Mcf for natural gas and $32.16 per barrel for oil and natural gas liquids. While substantially lower, New Zealand prices have steadily increased for five straight quarters and are expected to improve as our non-contracted natural gas sales increase in a tightening New Zealand market.

Our production during the first quarter of 2003 totaled 12.86 billion cubic feet of natural gas equivalent (Bcfe) compared to 12.29 Bcfe in the first quarter of 2002. Our New Zealand production increased 97% to 5.16 Bcfe, while our domestic production decreased 20% to 7.71 Bcfe. This decrease was expected since we curtailed our 2002 domestic drilling in several areas to adapt to the low product prices and high operational costs that existed in the industry, especially in the early part of 2002.

We continue to focus our domestic drilling in the Lake Washington Field in Plaquemines Parish, Louisiana, where in 2002 we successfully drilled 19 wells (17 development, two exploratory), all with 100% Swift working interests. As of May 9, 2003, we had already drilled another 19 wells in the field (all development), again with 100% Swift working interests. Of these, 13 were completed during the first quarter and six were second-quarter wells that had been completed or were awaiting completion.

Also as of May 9, we had drilled a total of 57 wells in the Lake Washington Field since we acquired the field in early 2001. Of these, 43 have been successful and have resulted in significant additions to our proved reserves. We are proceeding with our plans to drill a total of 50 to 60 wells in the field this year and expect to continue at a comparable pace next year.

Thus far we have encountered 48 different pay zones in the field and have completed wells in 19 different pay zones with an average net pay thickness of 134 feet. The most recent Lake Washington wells have primarily targeted the D sand and the F sand that we discovered to be productive last year. The first four wells completed this year had an average net pay of 140 feet in the F sand, and a later well (the Cockrell-Moran 222) had a true vertical net pay of 230 feet in the F sand. Other wells have encountered net pay thicknesses in the 8,400-foot sand, another productive sand that we discovered last year.

As previously reported, a third-party pipeline rupture resulted in a temporary partial shut-in in the Lake Washington Field that lowered our first-quarter production by approximately 0.7 to 1.0 Bcfe and is expected to lower our second-quarter production by approximately the same amount. However, by the end of April we were barging our crude oil to sales locations at approximately 6,000 gross barrels per day. Pipeline transportation should be restored in the third quarter, and the scheduled facility upgrades to increase our processing capacity to over 14,000 gross barrels per day should also be completed during the third quarter.

In other domestic activities, we successfully completed the first of three wells to be drilled during the second quarter in the AWP Olmos Field in McMullen County, Texas. These three wells, in which we have 100% working interests, are part of a 10-well development program in this field for 2003 under an Entity for Density approval from the Texas Railroad Commission.

We are also participating in a development well (the Burns #2) that is currently being drilled to the Frio formation about 200 feet from last year’s successful Burns #1 well on the Milan prospect in the Garcia Ranch region in Kenedy County, Texas. We have a 33% working interest in each well.