1996 Company Profile (January 1, 1996)

Swift Energy Company (SFY) is an independent oil and gas company engaged in the exploration, development, acquisition, and operation of oil and natural gas properties, with a focus on U.S. onshore natural gas reserves. At the end of 1995, the Company's proved reserves were 176.1 billion cubic feet of natural gas equivalent (Bcfe), with natural gas comprising 82% of the total. Swift had interests in 4,083 wells in 15 states and was the operator of 767 wells in 10 states. The operated wells represented 86% of the Company's total reserves, 93% of which are located in Texas, Oklahoma, and Louisiana.

Company Mission

As a natural resource company, Swift Energy’s mission is to increase the volume and net present value of its reserves. This mission is based on the premise that increases in reserves lead to increases in oil and natural gas production and sales, which, in turn, lead to higher cash flows and earnings and ultimately to increases in shareholder value.

The Company

A Transition. During 1995, Swift Energy Company successfully completed its strategic transition from an emphasis on the acquisition of producing properties to an emphasis on exploration and development drilling. Today, reserves growth comes primarily from drilling, and the Company has established itself in two important Texas regions: the AWP Olmos Field in McMullen County and the Austin Chalk formation in Fayette County.

Track Record. During the last five years, Swift has exceeded the ambitious oil and gas reserves growth goals of its strategic plan, averaging a compounded annual growth rate of 34%. In 1995, with its activities more focused on drilling, the Company had a 70% increase in year-end proved reserves to 176.1 Bcfe.

Business Strategy. Currently, Swift Energy pursues its mission of reserves growth by drilling exploratory and development wells and, to a lesser extent, by acquiring strategic producing properties. In both its drilling and production activities, the Company applies advanced technologies to maximize efficiencies and reduce costs.

Advanced Technology. Swift Energy has been at the forefront in taking advantage of the specific technologies applicable to the geographic regions in which it operates. The Company has a high degree of experience in acquiring and analyzing seismic data (2-D and 3-D), performing AVO studies, conducting hydraulic fracturing, and drilling horizontally.

International Activities. As a part of the Company’s risk management strategy, a limited portion of investment capital is used for international activities. In 1995, a wholly owned subsidiary, Swift Energy International, Inc., was formed to continue the pursuit of these types of opportunities. Currently, the Company is focusing on three major areas: New Zealand, Russia and Venezuela.

Year 1995. Swift’s focus on advanced technologies in its drilling program has resulted in both reduced costs and improved success rates. In 1995, Swift achieved drilling success rates of 50% for exploratory wells and 96% for development wells, surpassing industry averages for the fifth year in a row. Of the 76 wells drilled in 1995 (compared to 44 wells in 1994), eight were exploratory and 68 were development. Swift is the operator of 60 of the 76 wells drilled, including six of the exploratory wells.

Year 1996. The Company entered 1996 with the largest inventory of proved undeveloped locations in its history and plans to drill 94 development wells before year end. An additional 16 exploratory prospects have been identified for 1996, providing an overall target of 110 wells. With the most well-defined long-term drilling program in the Company’s history, plans are to maintain a drilling emphasis throughout the decade.

Increased Reserves Through Advanced Technology

Swift Energy Company’s recent drilling and production achievements are primarily due to the application of advanced technologies by its highly skilled in-house teams of geophysicists, geologists, petrophysicists, and engineers.

Horizontal Drilling. Swift has developed a high level of expertise in drilling horizontal wells in Texas Austin Chalk formation. In this type of drilling, the crews first drill vertically to the target depth and then, with the aid of a special measurement-while-drilling (MWD) tool, guide the drill bit along a curve until the well bore is horizontal to the earth’s surface. Swift often drills two horizontal legs in a single well, with both legs intersecting and simultaneously producing from several faults containing oil and natural gas. As a result, the well has initial high production and provides strong cash flows.

Hydraulic Fracturing. Swift Energy is a leader in the utilization of hydraulic fracturing, a process where cracks are made in a tight sand formation surrounding a well in order to open up the flow of oil and natural gas. The fractures are induced by a mixture of water-based gel and resin-coated sand pumped down the well and into the formation under high pressure, with the deposited sand holding the fractures open.

Seismic Analysis. Swift Energy specializes in seismic analysis, which helps pinpoint the location of the oil and natural gas deposits in the targeted formation. The Company is skilled in conducting in-house analysis of two-dimensional (2-D) lines, 2-D swaths, and three-dimensional (3-D) seismic data.

Investment Appeal

• Five-Year Compound Growth Rate in Reserves of 34%
• Accelerating Production and Cash Flow
• Large Inventory of Low-Risk Drilling Opportunities
• Demonstrated Acquisition and Exploitation Skills
• Strong Financial Position
• Forefront of Advanced Technologies

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