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SWIFT ENERGY COMPANY NEWS
SWIFT ENERGY ANNOUNCES 11% INCREASE IN PRODUCTION AND EARNINGS OF $0.29 PER
SHARE FOR THIRD QUARTER 2001
HOUSTON, October 31, 2001 - Swift Energy
Company (NYSE, PCX: SFY) reported today that production increased to 11.7
billion cubic feet equivalent (“Bcfe”) in the third quarter of 2001, which
was an 11% increase from the third quarter of 2000. The Company reported
earnings of $7.4 million, $0.29 per diluted share, down from $15.8 million,
$0.66 per diluted share, in the same quarter last year, primarily due to
significantly lower oil and natural gas prices.
Revenues in the third quarter 2001 were $41.2 million, down from $49.5
million, and cash flows from operations, before changes in working capital,
declined 29% to $25.7 million ($1.04 per share) compared to $36.2 million
($1.69 per share) in the same quarter last year. The third quarter results
include a gain of $1.6 million resulting from the Company’s
marking-to-market through earnings from its oil and gas price derivatives.
Third quarter production of 11.7 Bcfe, including 0.3 Bcfe from New Zealand,
was up 11% from the 10.5 Bcfe reported in the third quarter of 2000 and an
increase of 4% from the most recent quarter this year. Reflecting lower market
prices, average natural gas prices received in the third quarter were $2.94
per thousand cubic feet (Mcf), a decrease of 33% over the $4.39 per Mcf
received a year earlier, while oil prices averaged $23.76 per barrel, down
almost 23% from the previous year’s third quarter. This provided a composite
average price for the quarter of $3.36 per thousand cubic feet equivalent (“Mcfe”),
which was over 27% less than the $4.63 per Mcfe received in the third quarter
of 2000 and 26% less than the $4.54 per Mcfe received in the most recent
quarter this year. Natural gas accounted for 58% of total production during
the quarter.
Record financial results were achieved during the first nine months of
2001. Net income rose 13% to $44.7 million, $1.75 per diluted share, compared
to $39.6 million, $1.71 per diluted share, for the same period in 2000.
Revenues in the first nine months of 2001 rose 17% to $155.9 million from
$133.4 million a year ago, while cash flows from operations, before changes in
working capital, rose 16% during this period to $111.7 million, $4.52 per
share, compared to $96.0 million, $4.56 per share, in the year earlier period.
Swift’s record performance thus far in 2001 is primarily attributable to
significantly higher natural gas prices during the first six months and
increased production during the year.
Terry Swift, President and Chief Executive Officer of Swift Energy Company,
noted that, “Despite the current market prices, we are very optimistic about
the outlook for the Company’s future, and we believe that this environment
can offer additional opportunities for growth. The results of the 2001
exploration program both domestically and in New Zealand have been important
to the Company, resulting in additional prospects for growth in the coming
year. We believe that we can further enhance these productivity gains through
focused exploitation and acquisitions under the changing market environment.”
Exploration Activity
The Company participated in three operated and two non-operated exploratory
wells in the third quarter. One of these operated wells is producing and
another is drilling, while the third has been plugged and abandoned, as have
both of the non-operated wells.
The Swickheimer Estate #1 (60% working interest), in the Brandon Prospect
in Goliad County, Texas, was completed in two Wilcox horizons and tested at
1.8 million cubic feet per day (“MMcf/d”) and 20 barrels of oil per day.
It is currently constrained by gas processing facilities and is flowing 1.4
MMcf/d, with an expected increase in production in the near future.
In the Delacroix area in Plaquemines Parish, Louisiana, the Company
continues drilling the exploratory Delacroix #1 well (57.5% working interest)
in the Grand Lake Prospect, which is currently drilling at approximately
12,500 feet with a proposed target of 16,500 feet. Results from this well are
expected by year-end.
Following is the updated status on significant additional exploration
activity during the year.
The Vaughan #1 well (65% working interest) in the Rome Prospect in Willacy
County, Texas is now flowing 14.1 MMcf/d from the M-50 sand. This well was
originally brought on production at 10.5 MMcf/d. The Company is exploring
additional efforts that might further enhance the reservoir performance of
this well.
The Post #1 well (76% working interest), in the Nita #1 Prospect in Goliad
County, Texas, was stimulated with a fracture procedure and is currently
producing at a rate of 4.4 MMcf/d and 40 barrels of condensate per day and is
constrained by the gas processing facilities. This well was previously
reported producing at a rate of 1.9 MMcf/d.
The Mallet #1 well (65% working interest), in the Sienna Prospect in
Willacy County, Texas, has temporarily shut-in the M-50 sand in order to
evaluate several intervals in the M-30 sand, further up the hole.
Two additional exploration wells are planned for the fourth quarter. The
Rodriguez #1 well (65% working interest), in the Capri Prospect in the Garcia
Ranch area of Willacy County, Texas, is drilling ahead at 10,082 feet, with a
proposed depth of 14,300 feet. In the Lake Washington Area in Plaquemines
Parish, Louisiana, the Company expects to drill the CM #196 well (100% working
interest) in the Duckhead Prospect targeting Miocene sands down to
approximately 8,700 feet.
Development Drilling
The Company drilled and set production casing on eight Swift operated wells
and one non-operated well during the third quarter. Two wells were drilled and
completed in the Masters Creek Field, two wells in the Brookeland Field, one
well in the South Burr Ferry Field and one well in the AWP Olmos Field. The
Company has placed all but three of these wells on production as of this date.
The Company has one rig currently drilling in the Masters Creek Field in
Rapides Parish, Louisiana.
The drilling program at the Lake Washington Field began with one well and
one sidetrack drilled in the third quarter and two additional wells drilled so
far in the fourth quarter, with plans to drill one additional development well
by year-end. As reported earlier, the SL-212 #102 well encountered 115 feet of
net pay in the targeted Miocene sands. The BLD-CM #18 well was a sidetrack
well that drilled as planned and penetrated 85 feet of net pay in three zones.
The BLD-CM #16 well was drilled to a depth of 8,300 feet and found 46 feet of
pay in four zones. The CM #192 well was drilled to 2,000 feet and found the
primary objective with 84 feet of net pay plus a secondary sand with 22 feet
of net pay. The CM #181 well is currently drilling at 900 feet and will be
drilled to a total depth of 3,200 feet. A second barge rig is on location in
the field and will start completing the wells throughout the remainder of the
year.
New Zealand
As recently reported, the Kauri-A1 well, which tested hydrocarbons from the
Upper Tariki sand, will now begin the testing of the Kauri sands. The Company
expects to conduct detailed testing of several zones in this section prior to
final reporting of test results. Preparations are underway to install
artificial lift equipment in the Kauri-A2, which successfully tested oil from
the shallow Manutahi sand. The Rimu-B3 well is being sidetracked to target the
Upper Tariki sands.
The Rimu Production Station, including the oil and gas separation and
processing facilities, is under construction and is expected to be operational
during the first quarter of next year.
Earnings Conference Call
The Company will conduct a conference call and live webcast on Wednesday,
October 31, at 9:00 a.m. Central Standard Time, in conjunction with this third
quarter earnings release. To participate in this conference call dial (973)
872-3100 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 November 7, 2001 by dialing (973)
341-3080 using pin # 2858197. Additionally, the conference call will be
available by accessing the Company’s website at www.swiftenergy.com
and clicking on the event hyperlink.
Swift Energy Company is engaged in developing, exploring, acquiring, and
operating oil and gas properties, with a focus on onshore 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
achieved outstanding growth rates in proved oil and gas reserves, production,
and cash flow over the last five years 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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