The dictionary defines a “steward” as someone who manages the property or financial affairs of another person.  At Swift Energy, we are keenly aware that we are responsible for the resources that have been entrusted to us, and we also know that our responsibility to others goes well beyond the financial results we achieve. Our late founder, A. Earl Swift, once wrote:

“Business has never been about making money. It is about meeting human needs. Making money is a necessary component of survival, but it can never provide the real reason for existence. We all have to breathe to live, but we don't live just to breathe.”

• Protecting health and safety and preserving environmental quality
• Maintaining high standards for ethical conduct
• Enhancing economic vitality of the communities where we operate
• Respecting and trusting one another as we carry out our roles and responsibilities

As stewards, we want to utilize and develop the resources entrusted to us to their fullest potential, and as our mission statement suggests, that means fulfilling responsibilities in four major areas: 1) as environmental stewards, 2) as role models of ethical behavior, 3) as community leaders, and 4) as team players who work together for the common good.

In the paragraphs below, we describe how we are meeting our obligations in these four areas.

Environmental Stewards.  As an independent oil and gas company, we recognize that we have a responsibility to all of our stakeholders to integrate health, safety, and environmental management processes into all our work activities.  We continually emphasize to all of our employees, as well as all our contractors, that we must meet our operational and financial objectives without endangering the environment or the health and safety of those around us.  In order to meet this goal effectively, we emphasize prevention rather than merely responding to problems after they occur, and we seek to continuously improve our processes so that health, safety, and the environment remain among our highest priorities.

Placing a priority on environmental stewardship has been a key to our operational success in the past.  In 2005 and again in 2008, our commitment to health, safety, and the environment helped prepare us to deal successfully with hurricanes Katrina, Rita, Gustav and Ike. 

Role Models.  As stewards, we are also responsible for the cultural values handed down to us from others. Our founder saw Swift Energy as a company of role models, where moral leadership was expected of everyone.  In one of his last papers, he wrote:

“Accepting the mantle of moral leadership is not only the right thing to do, it is the prerequisite for sustained success. In even the smallest organization, no leader can personally monitor and motivate everyone. If an organization is to compete in a dynamic marketplace, its goals and controls must be internalized as vision and values. Only internalized direction can be flexible enough and decentralized enough to cope with today's complex competitive landscape…” 

At Swift, we have taken that message to heart.  Our company’s culture is built around seven core values of stewardship, improvement, performance, passion, integrity, trust, and teamwork.  We actively seek to live out those seven values in our day-to-day relationships with one another, and we try to serve as role models for those values in our relationships with our vendors, contractors, and the broader community. 

Community Leaders.  As good stewards, we also realize that we have a responsibility to the communities where we operate.  Part of that responsibility is to provide good jobs for people living in those areas, but we have to give back to those communities in other ways as well.

Over the last five years, we have contributed over $2 million in charitable contributions.  This includes over $400,000 related to Hurricane Katrina and Rita recovery efforts and over $500,000 related to Hurricane Ike recovery efforts in Texas and Louisiana.  Our disaster recovery efforts included building Habitat for Humanity houses in Louisiana, along with amounts contributed to employee, contractors, and community groups who were affected by the hurricanes.
           
As important as it is to pitch in during a time of crisis, we don’t believe that our giving should be limited to responding to disasters.  We were recently recognized by the March of Dimes as one of their top fundraisers in the Houston area, and we contribute annually to many other charities such as The Houston Food Bank, Big Brothers & Sisters, Interfaith Care Partners, Covenant House, Boy Scouts, and The Palmer Drug Abuse Center. 

We also support the arts with recent contributions to Houston’s Theatre Under the Stars, the Houston Symphony, the Alley Theater, and the Houston Ballet.  As individuals, many Swift employees have participated in charitable endeavors such as: the Komen Walk for the Cure, the MS 150 Houston to Austin Bike Race that raises funds for the fight against multiple sclerosis, the Avon Walk for Breast Cancer, and other charities focused on the Greenspoint area in Houston, such as providing toys to underprivileged children at Christmas time.

Team Players.  Finally, in our role as good stewards, we believe we have a responsibility to team with our employees to help them realize their individual goals just as they help us to achieve our corporate objectives.

We try to provide challenging and rewarding opportunities for our employees, and we want to support them in lifelong learning.  As a result, we continue to invest in employee education and training. Each year we align our training programs with the technical and business skills that enable our employees to become more productive and competitive within the ever-changing oil and gas industry. Through the years, we have supported our employees in obtaining undergraduate and graduate degrees, including certifications in technical, administrative, business and financial disciplines. We also invest in the future of our industry by promoting education of children within the community with scholarships and contributions to the Houston Museum of Natural Science.

We believe that investing in our people is a good way to make sure that we continue to meet our performance objectives, and serving the interests of our stockholders and other stakeholders is also part of good stewardship.  We think that history demonstrates that we have used the financial resources and oil and gas resources entrusted to us very effectively over the years.  From August 8, 1984, when our common stock was first listed on a public exchange, through December 31, 2009, our monthly average stock price rose 1,321%, compared with 571% for the S&P 500 over that same time frame.