May 6, 2010. In challenging economic times, we like to recall a saying of Winston Churchill: “The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty.” Even after a record drop in oil and gas prices in late 2008 that coincided with a global financial crisis that still persists, we believe our company remains well positioned to take advantage of growing opportunities in the years ahead.

We also believe that this solid footing is at least partially grounded in our conservative financial discipline. Early in the current cyclical decline, we made a conscious decision to maintain our capital expenditures within our cash flows. While this strategy caused us to temporarily halt new drilling and curtail other costs throughout 2009, it allowed us to contain drawdowns on our line of credit with our 10-member banking group. After a regular semiannual review of our $500 million credit facility with a syndicate of ten banks, Swift Energy’s borrowing base was affirmed at $277.5 million effective May 1, 2010. The company had no borrowings outstanding on this facility as of April 30, 2010. The borrowing base and commitment amount had been reset earlier at $277.5 million, a reduction from the previous level of $300 million due to the issuance of our senior notes due 2020 (see below). The next scheduled borrowing base review is November 2010.

During 2009, we engaged in several transactions to improve our financial position following the collapse of prices in 2008. In August 2009 we entered into a joint venture agreement with a large independent oil and gas producer active in the area for development and exploitation in and around the Burr Ferry Field in Vernon Parish, Louisiana. Swift retains a 50% working interest in the joint venture acreage as well as its fee mineral royalty rights and received approximately $4.2 million related to this transaction. We used the proceeds from the joint venture to pay down a portion of the outstanding balance on our credit facility.

We raised $108.8 million through an underwritten public stock offering in August 2009. We issued 6.21 million shares of our common stock at a price of $18.50 per share. The gross proceeds from these sales were approximately $114.9 million, before deducting underwriting commissions and issuance costs totaling $6.1 million.

In November 2009, we issued $225.0 million of 8-7/8% senior notes due 2020 at 98.389% of par, which equates to an effective yield to maturity of 9-1/8%.

In November 2009, we entered into a joint venture agreement between Swift Energy Company and Petrohawk Energy Corporation to jointly develop and operate approximately 26,000 acres of our Eagle Ford Shale acreage in McMullen County, Texas. Swift Energy retains a 50% interest in the joint venture that calls for joint development of this area located in our AWP Field and covers leasehold interests beneath the Olmos formation (including the Eagle Ford Shale formation) extending to the base of the Pearsall formation. We received approximately $26 million in cash related to this transaction and approximately $13 million of carried interests which would be credited against future drilling costs.

In December 2009, we redeemed all $150.0 million of our 7-5/8% senior notes due 2011 and recorded a charge of $4.0 million related to the redemption of these notes, which is recorded in “Debt retirement costs” on the accompanying consolidated statement of operations. The costs were comprised of approximately $2.9 million of premium paid to redeem the notes and $1.1 million to write off unamortized debt issuance costs.

We used the proceeds from this stock sale and note offering, less costs to redeem our senior notes due 2011, to pay down the outstanding balance on our credit facility.

To help protect us against the declines in oil and natural gas prices, we also have a price-risk management policy to use derivative instruments, mainly through the purchase of price floors and participating collars when appropriate (see Hedging Activities). As a result of the low commodity prices during the latter part of 2008, we recognized net gains of $26.1 million from these activities during 2008. While the downward pricing prevented us from entering into any hedging transactions in early 2009, as oil prices began to recover we began purchasing crude oil floors in the third quarter of the year. We recognized a net loss of $1.4 million from these activities in 2009.

For the full year 2009, we reported a $39.1 million net loss, attributable to a $79.3 million non-cash ceiling test write-down recorded in the first quarter of 2009. This compares favorably to the more significant net loss incurred in 2008 due to a fourth quarter 2008 non-cash ceiling test write-down. A full year 2009 adjusted cash flow of $225.2 million, or $6.70 per diluted share, decreased from a full year 2008 adjusted cash flow of $559.9 million, or $18.26 per diluted share. As a result of lower commodity prices and production levels, total revenues for the full year 2009 decreased 55% to $370.4 million from the $820.8 million generated during 2008.

With the actions described above, our debt-to-capitalization ratio decreased to 41% at year-end 2009 compared to 49% at year-end 2008, as paid in capital increased and our total debt balance decreased due to our stock offering, offset somewhat by a retained earnings decrease due to our net loss for 2009.

Our capital expenditures on a cash flow basis during 2009 were $215.4 million, while our accrual based capital expenditures were $174.6 million, as during the first quarter of 2009 we paid significant accounts payable and accrued capital cost balances incurred prior to year-end 2008. This cash flow basis amount of capital expenditures decreased by $413.0 million as compared to the 2008 period, primarily due to a decrease in our spending on drilling and development in our Southeast Louisiana and South Texas core areas. These 2009 expenditures were mostly funded by $226.2 million of cash provided by operating activities from continuing operations, and $31.1 million from the sale of properties and proceeds from joint ventures.

We currently plan to balance our 2010 accrual based capital expenditures with our 2010 cash flow and cash on hand. Our 2010 capital expenditures are currently budgeted at $300 million to $375 million, net of minor non-core dispositions and excluding any property acquisitions. (See update on 2010 capital budget.) These expenditures are expected to include the continuation of several on-going programs: the horizontal well drilling programs in the Olmos sand in our AWP Field and in the Eagle Ford shale formation in the AWP and other fields in the South Texas core area; the drilling activity in the Lake Washington Field targeting shallow and intermediate depth oil prospects; the recompletion program in Lake Washington; and the fracture enhancement program in South Texas.

First Quarter 2010 Finances

Our first quarter 2010 capital expenditures on an accrual basis were $71.4 million, which was an increase from $47.7 million spent on an accrual basis in the first quarter 2009 period. The increase in the 2010 period was mainly due to additional drilling activity in our South Texas region. These 2010 expenditures were primarily funded by $59.3 million of cash provided by operating activities from continuing operations, the use of $5.2 million in carried interests from our Eagle Ford joint venture operations, and $5.0 million of cash provided from our discontinued operations.

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 (in reverse chronological order)

May 3, 2012: PRESS RELEASE. Total revenues for first-quarter 2012 decreased 6% to $135.9 million from $144.1 million in first-quarter 2011, primarily because of lower realized natural gas prices during the 2012 period. First-quarter 2012 earnings from continuing operations were $3.6 million ($0.08 per diluted share), a decrease of 82% compared to first-quarter 2011 earnings of $20.2 million ($0.47 per diluted share) and a decrease of 83% compared to fourth-quarter 2011 earnings of $20.7 million.

Adjusted cash flow (cash flow before working capital changes [a non-GAAP measure; see press release for reconciliation to the GAAP measure]) for first-quarter 2012 decreased 13% to $69.1 million ($1.61 per diluted share) compared to adjusted cash flow of $79.2 million ($1.86 per diluted share) for first-quarter 2011. Compared to fourth-quarter 2011, adjusted cash flow decreased 30% to $99.4 million ($2.33 per diluted share).

2012 FIRST QUARTER FORM 10-Q. The GAAP measure “cash provided by operating activities” increased in first-quarter 2012 by $2.1 million, or 3%, compared to first-quarter 2011 levels owing to negative working capital adjustments in the 2011 period. Compared to fourth-quarter 2011 levels, this measure decreased by $20.8 million, or 25%, owing to lower revenues and income in the 2012 period.

For the first quarter of 2012, our net cash provided by operating activities was $63.8 million, representing a 3% increase as compared to $61.7 million generated during the same period of 2011. The $2.1 million change was mainly due to working capital changes.

Our first-quarter 2012 capital expenditures on a cash flow basis were $187.9 million, compared to $131.9 million in first-quarter 2011 and $136.6 million in fourth-quarter 2011. These increases were mainly due to additional drilling and completion activity in our South Texas core area (where 15 wells were drilled) and in our Southeast Louisiana area (where two wells were drilled). These 2012 expenditures were primarily funded by the $63.8 million of cash provided by operating activities and the remaining cash proceeds from our notes offering in November 2011.

We have realized significant capital cost savings in South Texas related to pad drilling, well construction and completion re-design, and sourcing and transportation of proppants, as well as increased productivity of our dedicated frac spread and crew. Our supply chain program continues to be extremely important and the relationships that we have developed with our service providers are critical to our 2012 program execution.

Our expenses in first-quarter 2012 were $130.0 million, an increase of $18.4 million, or 16%, compared to first-quarter 2011 expenses. These included an increase in lease operating expenses from $9.59 per Boe to $10.44 per Boe; an increase in depreciation, depletion and amortization (DD&A) expenses from $20.00 per Boe to $21.92 Boe; an increase in general and administration expenses from $3.95 per Boe to $4.25 per Boe; and an increase in net interest expense from $3.17 per Boe to $4.81 per Boe. Severance and other taxes decreased from $5.03 per Boe to $4.63 per Boe; and accretion of asset retirement obligation decreased from $0.43 per Boe to $0.40 per Boe.   

Our working capital decreased from a surplus of $116.4 million at December 31, 2011, to a surplus of $7.3 million at March 31, 2012. The change primarily resulted from a decrease in cash and cash equivalents, as we used cash received from our debt offering in November 2011 to fund ongoing operations, including our 2012 capital program. Working capital, which is calculated as current assets less current liabilities, can be used to measure both a company's operational efficiency and its short-term financial health. We use this measure to track our short-term financial position. Our debt to capitalization ratio was 42% at March 31, 2012, and December 31, 2011.

Our long-term debt as of March 31, 2012, and December 31, 2011, was as follows (in thousands):

In May 2011, we renewed and extended our $500 million credit facility with a syndicate of ten banks through May 12, 2016. This credit facility may be increased by up to $200 million to a maximum aggregate facility amount of $700 million, subject to additional lender commitments and other terms of the credit agreement. In May 2012, in conjunction with our regularly scheduled borrowing base redetermination, which occurs every six months, our borrowing base was increased from $325 million to $375 million, while we elected to keep our commitment amount at $300 million. At March 31, 2012, we had no borrowings under our credit facility.

At March 31, 2012, we had approximately $127 million of cash on hand together with the commitment amount of $300.0 million under our credit agreement. These amounts give us the financial flexibility to execute our 2012 strategy.

February 23, 2012: PRESS RELEASE; 2011 Form 10-K. Our total revenues for the fourth quarter of 2011 increased 34% to $155.1 million from the $116.0 million generated in the fourth quarter of 2010, primarily because of the higher prices we realized for oil and natural gas liquids (NGL) and higher natural gas and NGL production volumes.

Our earnings from continuing operations for the fourth quarter of 2011 were $20.7 million, or $0.48 per diluted share, a 100% increase when compared to fourth quarter 2010 earnings from continuing operations of $10.3 million, or $0.25 per diluted share, and an increase of 22% when compared to earnings of $17.0 million in the third quarter of 2011.

Adjusted cash flow (cash flow before working capital changes, a non-GAAP measure - see page 9 of full press release for reconciliation to the GAAP measure) for the fourth quarter of 2011 increased 50% to $99.4 million, or $2.33 per diluted share, compared to $66.3 million, or $1.65 per diluted share, for fourth quarter 2010 and increased 10% when compared to adjusted cash flow of $90.0 million, or $2.11 per diluted share, for the third quarter of 2011.

For the full year 2011, our revenues were $600 million, an increase of 37% from  2010, and our net income was $99 million, an increase of 113%. Also in 2011, we had $373 million in cash flow from operating activities, up 44% from the previous year, with $252 million of cash on hand, an increase of 191%. Contributing to this strong financial position were our 2011 offering of $250 million in senior notes at 7-7/8% and $48.8 million in net proceeds from our divestiture of non-strategic properties late in the year. At year-end 2011, we had no borrowings outstanding on our revolving credit facility, which was re-affirmed by our 10-member bank group in November.

Our capital expenditures on a cash flow basis were $505.3 million in 2011 compared to $353.6 million spent in 2010. Current 2012 spending plans are budgeted at $575 million to $625 million in total capital expenditures.

As of December 31, 2011, our debt to capitalization was approximately 42%, while our debt to proved reserves ratio was $4.51 per Boe, and our debt to PV-10 ratio was 36%. We plan to maintain a capital structure that provides financial flexibility through the prudent use of capital, aligning our capital expenditures to our cash flows, and maintaining a strategic hedging program when appropriate.

November 15, 2011: PRESS RELEASE. Our preliminary plans for 2012 project capital expenditures of $575 to $625 million. These expenditures will be allocated primarily towards drilling and completion activities, with approximately 75%–80% of expected expenditures focused on the company’s liquids-rich acreage in the Eagle Ford shale and the Olmos sands in South Texas. The remainder of the 2012 expenditures are expected to be directed towards drilling oil wells in our Southeast Louisiana core area and Austin Chalk oil and natural gas development wells in our Central Louisiana/East Texas core area.

Based upon these preliminary spending plans for next year, the company is targeting production to grow 20%–25% and reserves to grow 15%–20% over 2011 levels.

November 15, 2011: PRESS RELEASE. We announced today that we have priced our sale of $250 million principal amount of senior notes due 2022 in a private offering to eligible purchasers. The new senior notes will carry a coupon interest rate of 7 7/8% and are being sold at 99.156 of face value, which equates to an effective yield to maturity of 8%. The company expects to close the notes offering on November 30, 2011, subject to satisfaction of customary closing conditions.

Swift Energy intends to use the approximate $243 million of net proceeds from the offering for general corporate purposes, including funding of 2012 capital expenditures.

The notes have not been registered under the Securities Act of 1933 or applicable state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws. The notes may be resold by the initial purchasers pursuant to Rule 144A and Regulation S under the Securities Act.

November 3, 2011: PRESS RELEASE; 2011 THIRD QUARTER 10-Q. Our earnings from continuing operations of $17.0 million for the third quarter of 2011 were $17.0 million, or $0.39 per diluted share, an 81% increase when compared to third-quarter 2010 earnings from continuing operations of $9.3 million, or $0.24 per diluted share.

Adjusted cash flow (cash flow before working capital changes, a non-GAAP measure - see press release for reconciliation to the GAAP measure) for the third quarter of 2011 increased 46% to $90.0 million, or $2.11 per diluted share, compared to $61.7 million, or $1.62 per diluted share, for the third quarter 2010.

Total revenues for the third quarter of 2011 increased 35% to $142.5 million from the $105.6 million generated in the third quarter of 2010, primarily attributable to both higher commodity prices and production volumes.

Our capital expenditures for the first nine months of 2011 were $368.8 million compared to $228.4 million spent in the same period of 2010.  The increase of $140.4 million was mainly due to additional drilling and completion activity in our South Texas core area.  These 2011 expenditures were primarily funded by $288.5 million of cash provided by operating activities and remaining cash proceeds from our stock offering in November 2010.

We currently plan to finance the remainder of our 2011 accrual-based capital expenditures with our 2011 cash flow, cash on hand, proceeds from our October 2011 asset divestiture and potential line of credit borrowings.  Our 2011 capital expenditures are currently budgeted at $480 million to $520 million, which is net of disposition activity.  Approximately 80% of our capital budget is targeted for our South Texas core region. The company may enter into joint venture arrangements, pooling agreements for particular prospects, and consider non-strategic property dispositions, in each case to accelerate drilling and development of its assets and diversify its risk profile.

After a regularly scheduled semi-annual review in November, our ten-member bank group affirmed the company's borrowing base under its revolving credit facility to be $400 million, which is equal to the previous borrowing base amount. Swift Energy elected to retain the existing $300 million commitment amount and there are currently no borrowings outstanding.

Also during the third quarter, we sold our interests in six fields in South Louisiana, two in Texas and one in Alabama to EnergyQuest II, LLC effective August 1, 2011. The final sales price of the property interests sold was $53.5 million. This sale closed in October. Swift Energy will use the net cash proceeds of approximately $48.8 million from this transaction (as adjusted for cash flows from effective date through the closing date) to fund a portion of its 2011 capital expenditures. The disposition sales price is further subject to any customary post-closing adjustments, which are not expected to be material. 

August 4, 2011: PRESS RELEASE. Our net income was $41.0 million for the second quarter of 2011 and $61.2 million for the first six months, including $14.3 million received from discontinued operations related to sales proceeds from the company’s final New Zealand permit. The gain was recognized in the current quarter after a settlement in which all legal claims were dismissed in relation to the permit sale.

Net cash provided by our first six months’ operating activities was $186.9 million, representing a 45% increase as compared to $129.0 million generated during the same period of 2010. The $57.9 million change was primarily due to higher oil prices along with a significant increase in natural gas production during the first six months of 2011.

Our capital expenditures for the first six months were $244.8 million compared to $129.1 million in the same period of 2010.  The increase of $115.7 million was mainly due to additional drilling and completion activity in our South Texas core region.  These 2011 expenditures were primarily funded by the $186.9 million of cash provided by operating activities plus remaining cash proceeds from our stock offering in November 2010.

Our capital expenditures for the full year of 2011 are currently budgeted at $430 million to $480 million, net of potential dispositions of non-strategic properties estimated at $30 million to $40 million.  Approximately 80% of our capital budget is targeted for our South Texas core region. We plan to finance our 2011 accrual-based capital expenditures with our 2011 cash flow, cash on hand and potential line of credit borrowings. 

The Company may also enter into joint venture arrangements, pooling agreements for particular prospects, and consider non-strategic property dispositions, in each case to accelerate drilling and development of its assets and diversify its risk profile. For 2011, we are targeting an increase in production volumes of 28% to 34% over 2010 levels and reserves growth of 15% to 20% over 2010 levels.

In May 2011 we renewed and extended our $500.0 million credit facility with a syndicate of ten banks through May 12, 2016, and have included a feature that allows the Company to increase the size of the aggregate facility to up to $700.0 million with additional commitments from the lenders and their consent, subject to the terms of the credit agreement. We also increased our borrowing base to $400.0 million from $300.0 million, while the commitment amount remains at $300.0 million, the limit on our borrowings without lender consent. Under the terms of the credit facility, we can increase the commitment amount to the total amount of the borrowing base with unanimous consent of the bank group as it might change from time to time.

We had no amounts drawn under our credit facility as of June 30, 2011. In conjunction with our regularly scheduled borrowing base redetermination, which occurs every six months and will next be in November 2011, we expect the borrowing base amount to remain at or above the current level. Our revolving credit facility includes requirements to maintain certain minimum financial ratios (principally pertaining to adjusted working capital ratios and EBITDAX), and limitations on incurring other debt. We are in compliance with the provisions of this agreement and expect to remain in compliance with these provisions in future periods. Our available borrowings under our line of credit facility provide us liquidity. In light of credit market volatility in recent years which caused many financial institutions to experience liquidity issues, we periodically review the creditworthiness of the banks that fund our credit facility.

May 16, 2011: PRESS RELEASE. In conjunction with a scheduled semi-annual review, our ten-member bank group re-determined the company’s borrowing base under its revolving credit facility to be $400 million, which is an increase from the previous borrowing base of $300 million. We have elected to retain the existing $300 million commitment amount.

Historically, amounts drawn under the Company’s credit facility have been at levels well below the established commitment amount, as the Company generally funds its capital expenditure program with cash flows from operations. As of May 12, 2011, the Company had no outstanding balance drawn against this facility, excluding letters of credit.

In line with current market conditions, pricing was amended and reduced to establish the Eurodollar Rate borrowing margins at escalating rates of between 150 and 250 basis points and the Alternative Base Rate borrowing margins at escalating rates of between 50 and 150 basis points. The Commitment Fee associated with the unfunded portion of the borrowing base remains set at 50 basis points.

The credit facility’s maturity was also extended approximately 8 months to May 12, 2016.

Swift Energy’s credit facility, arranged by J.P. Morgan Securities LLC, is syndicated to a group of banks that includes JPMorgan Chase Bank, N.A., Lloyds Bank Corporate Markets, BNP Paribas, Wells Fargo Bank, N.A., Compass Bank, Comerica Bank, Natixis, Royal Bank of Canada, U.S. Bank National Association and Amegy Bank National Association.

May 5, 2011: 2011 FIRST QUARTER 10-Q. For first quarter 2011, our net cash provided by operating activities was $61.7 million, representing a 4% increase as compared to $59.3 million generated for first quarter 2010. The $2.5 million increase was primarily due to a significant increase in natural gas production and higher oil prices offset by lower natural gas prices.

Our capital expenditures were $131.9 million in the first quarter of 2011 compared to $63.4 million spent in the first quarter of 2010. The increase of $68.5 million was mainly due to additional drilling and completion activity in our South Texas core region. These 2011 expenditures were primarily funded by $61.7 million of cash provided by operating activities and $66.6 million in cash proceeds remaining from our stock offering in November 2010.

We currently plan to finance our 2011 accrual-based capital expenditures with our 2011 cash flow, cash on hand and potential line of credit borrowings. Our 2011 capital expenditures are currently budgeted at $430 million to $480 million, net of potential dispositions of non-strategic properties estimated at $30 million to $40 million. Approximately 80% of our capital budget is targeted for our South Texas core region.

The company may also explore its joint venture arrangements for particular prospects and select property dispositions, in each case to accelerate drilling and development of its assets and diversify its risk profile. For 2011, we are targeting an increase in production volumes of 30% to 33% over 2010 levels and reserves growth of 15% to 20% over 2010 levels.

We had no amounts drawn under our $300.0 million borrowing base under our $500.0 million credit facility as of March 31, 2011.

February 24, 2011: PRESS RELEASE. Swift Energy announced that in accordance with its demonstrated long-term strategy, it plans to balance its 2011 capital expenditures with its 2011 cash flow and cash on hand and use its credit facility as necessary. Current 2011 spending plans are budgeted at $430 million to $480 million in total capital expenditures net of potential dispositions of non-strategic properties and excluding any property acquisitions.

February 10, 2011: PRESS RELEASE. Swift Energy announced that its total capital expenditures for 2010 were approximately $421 million, slightly above expected levels, as completion efficiencies realized in the fourth quarter of 2010 allowed for increased activity levels in South Texas.

November 10, 2010: PRESS RELEASE. Swift Energy announced a preliminary 2011 capital budget of $430 million to $450 million to cover an accelerated drilling program with a production growth goal of 25% to 30% and a reserves growth goal of 15% to 20%. Approximately 75% to 80% of the capital budget will be spent in our South Texas core area, much of it on drilling oil and condensate development wells on acreage proved up in 2010 in the Eagle Ford shale and Olmos sands. The remainder will be directed towards oil production in our Southeast Louisiana core area and high-rate Austin Chalk oil and natural gas development wells in our Central Louisiana/East Texas core area. This program will be partially funded by proceeds from a public offering of 3 million shares of the company’s common stock also announced on November 10.

November 30, 2010: PRESS RELEASE. Swift Energy announced it has completed its public offering of shares of its common stock with the sale today to the underwriters of an additional 288,270 shares of Swift Energy common stock upon the underwriters’ partial exercise of their over-allotment option. When combined with the November 17th closing of the sale of 3,750,000 shares of common stock previously announced, Swift Energy issued 4,038,270 shares of its common stock through this offering at a public offering price of $36.60 per share. After deducting underwriters’ discounts, final net proceeds from the offering are approximately $140.4 million.

November 11, 2010: PRESS RELEASE. Swift Energy announced that it has increased the size of its previously announced public offering of shares of its common stock from 3,000,000 shares to 3,750,000 shares, and priced the offering at $36.60 per share.  The Company has granted the underwriters an option exercisable for a period of 30 days to purchase up to 562,500 additional shares of common stock to cover any over-allotments. Closing of the offering is expected to occur on or about November 17, 2010, subject to customary closing conditions

November 10, 2010: PRESS RELEASE. Swift Energy announced that it was making a public offering of 3 million shares of its common stock with the proceeds to be used to fund a portion of the company’s 2011 capital budget for an accelerated drilling program. The company has granted the underwriters a 30-day option to purchase up to an additional 450,000 shares of common stock to cover over-allotments, if any.  J.P. Morgan Securities LLC is acting as the sole book-running manager of the offering.

November 4, 2010: PRESS RELEASE; 2010 THIRD QUARTER 10-Q. For the first nine months of 2010, our net cash provided by operating activities from continuing operations was $193.7 million, representing a 33% increase as compared to $146.2 million generated during the first nine months of 2009. This increase in 2010 was primarily due to an increase of $63.7 million in oil and gas sales.

Our capital expenditures on an accrual basis were $270.6 million in the first nine months of 2010, which was an increase from $95.1 million spent on an accrual basis in the 2009 period. The increase in the 2010 period was mainly due to additional drilling activity in our South Texas region. These 2010 expenditures were primarily funded by the $193.7 million of cash provided by operating activities from continuing operations, the use of cash on hand, the use of $12.5 million in carried interests from our Eagle Ford joint venture operations, and $5.0 million of cash provided from our discontinued operations.

We currently plan to fund our 2010 capital expenditures with our 2010 cash flow, cash on hand, and availability under our credit facility. Our 2010 capital expenditures are currently budgeted at $370 million to $390 million, net of minor non-core dispositions. These expenditures are expected to cover: South Texas activities that include a continuation of our horizontal well drilling programs in both the Olmos sands and the Eagle Ford shale formation, as well as the fracture enhancement and artificial lift programs; Southeast Louisiana activities that consist of a focus on recompletions and facility optimization; and Central Louisiana/EastTexas activities that include placing one non-operated well on line and completing another non-operated well in November and completing both an operated and a non-operated well in December.

We had no borrowings under our bank credit facility at September 30, 2010.

September 21, 2010: PRESS RELEASE. Swift Energy has renewed and extended its revolving credit facility with its nine-member bank group.  The $500 million facility’s maturity has been extended to October 15, 2015, has an initial borrowing base set at $300 million, and has a feature that allows the company to increase the aggregate facility amount available up to $700 million with additional commitments from the lenders. 

The credit facility includes a collateralized security agreement and carries a standard financial covenant package, which the Company believes reflects current market terms and conditions not significantly different from the previous agreement.  The other terms of the credit facility remain largely the same as those in the previous facility.  As of September 21, 2010, the Company had no outstanding balance drawn against this facility, excluding letters of credit.

Swift Energy’s Credit Facility, arranged by J.P. Morgan Securities LLC., was syndicated to a group of banks that includes JPMorgan Chase Bank, N.A., Bank of Scotland plc, BNP Paribas, Société Générale, Wells Fargo Bank, N.A., BBVA Compass, Comerica Bank, Natixis, and Amegy Bank National Association. 

August 5, 2010: PRESS RELEASE; 2010 SECOND QUARTER 10-Q. For the first six months of 2010, our net cash provided by operating activities from continuing operations was $129.0 million, representing a 54% increase as compared to $83.6 million generated during the 2009 period. The $45.4 million increase in 2010 was primarily due to an increase of $55.9 million in oil and gas sales, attributable to higher oil and natural gas prices, partially offset by lower production.

Our 2010 capital expenditures on an accrual basis have been $159.2 million in the first half of the year—$71,426 in the first quarter and $87,740 in the second quarter. This is an increase from $63.7 million spent on an accrual basis in the first half of 2009 and has been mainly due to additional drilling activity in our South Texas core area. These 2010 expenditures were primarily funded by the $129.0 million of cash provided by operating activities from continuing operations, the use of $10.0 million in carried interests from our Eagle Ford joint venture operations, and $5.0 million of cash provided from our discontinued operations.

We currently plan to fund our 2010 capital expenditures with our 2010 cash flow, cash on hand, and, if needed, availability under our credit facility. Our 2010 capital expenditures, previously projected at $300 million to $375 million, are currently budgeted at $360 million to $375 million, net of minor non-core dispositions. These expenditures are expected to include: a continuation of our South Texas core area horizontal well drilling program in both the Olmos sands and the Eagle Ford shale formation, continuing our drilling activity in our Southeast Louisiana core area by targeting shallow and intermediate depth oil prospects, continuing the recompletion program in our Southeast Louisiana core area, and drilling several wells in our Central Louisiana/East Texas core area.

We had no borrowings under our bank credit facility at June 30, 2010. This facility continues to consist of a $500.0 million credit facility with a syndicate of ten banks, which has a borrowing base and commitment amount of $277.5 million and an expiration date of October 2011.

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