|Swift Energy Files Restated 2013 Full-Year and 2014 Quarterly Financial Reports and Files Initial Third Quarter 2014 Report
HOUSTON, November 17, 2014 – Swift Energy Company (NYSE: SFY) today announced that it has filed with the Securities and Exchange Commission (the "SEC") restated financial results contained in an amended 2013 Form 10-K Annual Report and amended 2014 Form 10-Q quarterly reports for the first two quarters of 2014. In addition, the Company has filed its Quarterly Report on Form 10-Q for the quarter ended September 30, 2014.
The ceiling test error, which caused this restatement, relates to the incorrect inclusion in prior periods of the tax effect of Swift Energy’s asset retirement obligations when computing the ceiling test limitation of its oil and natural gas properties under the full-cost method of accounting.
The net impact of correcting this ceiling test calculation error as well as making adjustments for certain previously identified immaterial accounting errors is set out in detail in the Company’s filings made with the SEC earlier today. Subject to those detailed explanations, highlights of the impact of these restatements, and of the filing of the Company’s third quarter 2014 quarterly report, are as follows:
- For the fiscal year ended December 31, 2013, correction of the ceiling test error increased the Company’s overall net oil and gas property balances by approximately $49 million, increased its deferred tax liability by approximately $18 million, and increased its retained earnings by approximately $31 million. Approximately $15 million of the increase in retained earnings is related to periods prior to 2013.
- Correction of the ceiling test error resulted in an increase in net income for the year ended December 31, 2013 of approximately $16 million, reducing the Company’s previously reported net loss for 2013 of $19.0 million to a loss of approximately $2.4 million.
- The impact of the correction of the ceiling test error in pre-2014 periods resulted in higher rates of depletion in the 2014 quarterly periods, decreasing previously reported net income for the first and second quarters of 2014 by approximately $0.5 million in each quarterly period.
- As reported in its quarterly report for the third quarter of 2014 filed today, the prior period corrections of the ceiling test error together with other accounting adjustments had virtually no impact upon the approximate $2.5 million in net income ($0.06 per diluted share) preliminarily reported by the Company on November 6, 2014.
- Further, this correction of the ceiling test error in pre-2014 periods will result in slightly higher rates of depletion prospectively. The Company’s November 6, 2014 guidance remains unchanged, with the exception of its DD&A per barrel of oil equivalent ("Boe"), which is anticipated to increase to a range of $21.65 – $21.90 per Boe for the fourth quarter of 2014, up from a previously announced range of $21.50 – $21.75 per Boe.
Swift Energy Company, founded in 1979 and headquartered in Houston, engages in developing, exploring, acquiring and operating oil and gas properties, with a focus on oil and natural gas reserves onshore in Texas and in the inland waters of Louisiana.
About Forward Looking Statements
This release 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, or other statements other than statements of historical fact, are forward-looking statements. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, no assurances can be given 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 Swift Energy Company with the Securities and Exchange Commission.