October 30, 2009. The Cote Blanche Island Field is one of six fields in which we have interests in our South Louisiana core area of operation and one of four fields that we operate in St. Mary Parish. The other three fields in the parish, all close by, are the Jeanerette Field to the northeast and the Bayou Sale Field and Horseshoe Bayou Field to the southeast. We obtained 100% working interests in Cote Blanche Island in a late 2004 acquisition and at year-end 2008 owned drilling and production rights in 14,699 net acres in the field, which is largely undeveloped.

Like Lake Washington and Bay de Chene in the Southeast Louisiana area, Cote Blanche Island is an inland-water field that produces from multiple stacked Miocene sand layers that radiate outward and downward from the surface of a centrally located submerged salt dome. The field is highly faulted, with potentially productive formations trapped in numerous isolated fault blocks, some abutting the salt dome and others located away from the salt dome. Because the field is water-driven, hydrocarbon-bearing formations are typically located in the highest regions within the sand layers, and for those fault blocks abutting the salt dome, the formations actually lie against the salt dome itself. We conduct our drilling activities with barge-based rigs, and in order to target these close formations in successively deeper fault blocks, we employ directional drilling, angling the well bore down the side of the dome. A measurement-while-drilling tool indicates the precise location of the drill bit at all times.

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Our exploration and development approach in Cote Blanche Island is entirely seismic led (see Louisiana Geoscience Databases).When we first began our operations in Cote Blanche Island, no three-dimensional seismic data were available for the field; however, in 2006 we conducted a three-dimensional seismic survey over the field and surrounding areas for a total of 77 square miles. These data were merged with several sets of licensed three-dimensional seismic data that we had by that time acquired for nearby fields. The result was a large 1,700-square-mile seismic dataset that we then merged with digitized geological data from well logs over the entire 1,700 square miles. This comprises the company’s second geoscience database and covers the four fields in St. Mary Parish plus a fifth field, the nonoperated Bayou Penchant Field in Terrebonne Parish, as well as other regions.

2008 Operational Statistics

While Cote Blanche Island did not sustain serious damage to its infrastructure during the two 2008 September hurricanes, Gustav and Ike, it did experience prolonged shut-ins during periods of preparation for and recovery from the hurricanes. Thus its contribution to the company’s 2008 production was less than had been anticipated. The field produced 71.8 MBoe of oil and 28.0 MBoe of gas for a total of 99.8 MBoe, or 1% of the company’s total 2008 production.

At year-end 2008, we had 11 producing wells in Cote Blanche Island, including an exploratory well (SL 340 #189) drilled during the year. We entered the year 2009 with ten proved undeveloped locations (PUDs) for future drilling at depths of 11,000 to 15,000 feet.

At year-end 2008, Cote Blanche Island held 4.6% of the company’s year-end reserves. The reserves totaled 5.4 MMBoe, consisted of 78.1% oil and natural gas liquids and were 87% undeveloped.

Exploration and Development Activities

Drilling Program. The exploratory well SL 340 #189, in which we have a 100% working interest, was the only well drilled in Cote Blanche Island during 2008. It was drilled to a total measured depth of 15,343 feet and found three separate pay zones. It was placed on production in the lowest zone at 300 barrels of oil equivalent per day with a flowing tube pressure of 1,600 psi. Sequential production from the two higher zones will follow.

Field Study.  After recognizing some performance and drilling issues in Cote Blanche Island during 2008, we carried out a very detailed study of the field using updated geophysical information and revised mapping of multiple zones and the salt interface. From this analysis we were able to take a much closer look at the field and, as a result, determined that a downward technical revision of the field’s year-end reserves should be made in addition to a downward revision resulting from the SEC requirement that we use low year-end prices to compute economically recoverable reserves. With our better understanding of the reservoir structures in the field and the continued guidance we can elicit from our geoscience database, we can expect that future drilling programs planned for the field will have a high degree of success.

Geoscience Database Upgrade. We remain very much engaged in extracting information from our 1,700-square-mile geoscience database that guides our drilling program in Cote Blanche Island and elsewhere in the South Louisiana core area. We have recently (in 2009) completed a lengthy three-dimensional prestack depth migration analysis of the entire database with updated salt models. These depth migration analyses have significantly improved and refined our understanding of the complex traps associated with salt bodies and, combined with seismic pore pressure predictions, have increased our confidence in drilling to deeper targets.

This web page may contain "forward-looking statements" as defined in Section 21E of the Securities Exchange Act of 1934, as amended. Any opinions, forecasts, projections, or other statements other than statements of historical fact are forward-looking statements. Although Swift Energy 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. (See Terms of Use.)

Updates

November 3, 2011: PRESS RELEASE; 2011 THIRD QUARTER 10-Q. During the third quarter, we sold our interest in six fields in South Louisiana, two in Texas, and one in Alabama to EnergyQuest II, LLC effective August 1, 2011. The sales price was $48.8 million, net of $4.7 million in purchase price adjustments and the buyer’s assumption of approximately $27.7 million of asset retirement related to these properties. The sale closed in October, with the sales prices subject  to customary post-closing adjustments that are not expected to be material. The fields in Louisiana include Horseshoe Bayou/Bayou Sale, High Island, Bayou Penchant, Jeanerette and Cote Blanche Island. The Texas fields include Bego South and Briscoe Ranch. The Alabama field includes Chunchula.

We will use the net cash proceeds from this transaction (as adjusted for cash flows from effective date through the closing date) to fund a portion of our 2011 capital expenditures. 

February 25, 2010: 2009 FORM 10-K. At year-end 2009, 5.4 MMBoe, or 4.8%, of the company’s total reserves were in the Cote Blanche Island Field. For the year 2009, Cote Blanche Island provided 0.6% of the company’s production. Approximately 78.4% of the proved reserves of 5.4 MMBoe in Cote Blanche Island consisted of oil and NGLs, and 4.7 MMBoe, or 87%, were undeveloped.

During 2009, we did not drill any wells in the Cote Blanche Island Field and have no plans for drilling in the area in 2010. At year-end 2009 we had identified 18 PUDs in the field.

For additional information, please see the latest Form 10-K and Form 10-Q.