October 30, 2009. The Horseshoe Bayou Field and the Bayou Sale Field are two of six fields in which we have interests in our South Louisiana core area of operation and two of four fields that we operate in St. Mary Parish (see map). Horseshoe Bayou and Bayou Sale are both shore-based fields that produce from several formations at depths ranging from 9,000 feet to 17,000 feet, and because of their close proximity, we treat them as one field in most of our reporting activities. We obtained interests in Horseshoe Bayou and Bayou Sale in a 2006 acquisition and at year-end 2008 owned drilling and production rights in 16,212 net acres in the two fields.

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2008 Operational Statistics

While Horseshoe Bayou Field and Bayou Sale Field did not sustain serious damage to their infrastructure during the two 2008 September hurricanes, Gustav and Ike, they did experience prolonged shut-ins during periods of preparation for and recovery from the hurricanes, which lowered their potential production for the year. The combined production of the two fields in 2008 was 501.9 MBoe, or 5% of the company’s total production. The production consisted of 296.3 MBoe (59%) natural gas, 169.7 MBoe (34%) oil, and 35.9 MBoe (7%) natural gas liquids.

At year-end 2008, we had interests in 33 producing wells in Horseshoe Bayou and Bayou Sale (20 operated and 13 nonoperated), including one development well drilled in each field during 2008. We entered the year 2009 with 12 proved undeveloped locations (PUDs) in the two fields for future drilling.

At year-end 2008, Horseshoe Bayou and Bayou Sale held 6.0% of the company’s year-end reserves. The reserves totaled 7.0 MMBoe and consisted of 75.8% natural gas. They were 50% undeveloped.

Exploration and Development Activities

Drilling Program. In early 2008, we participated in a development well drilled in Horseshoe Bayou (St. Mary 24-2) with a 21% working interest and an 18% net revenue interest. The well was drilled to 17,458 feet and encountered approximately 155 feet of true vertical net pay. It was placed on production at 30 million cubic feet of natural gas equivalent per day.

We also participated in a development well in Bayou Sale, the St. Mary Parish Land Co. #82, in which we have a 66% working interest. It was drilled to a depth of 14,380 feet and found 46 feet of true vertical pay. The well was successfully completed in one horizon.

Field Reassessment. While our geophysical analysis of the substructure leading to the drilling of the St. Mary Parish Land Co. #82 well was found to be correct, with the target zone found where it was predicted to be, the volume of reserves in the target zone, as well as in several other zones, was much lower than had been hoped for and the zones were deemed noncommercial. These results led to a downward technical adjustment of the reserves in the Bayou Sale Field that was in addition to the downward adjustment in both fields caused by the SEC requirement that we use the low year-end prices in our computations of economically recoverable reserves.

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 Horseshoe Bayou and Bayou Sale 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, 6.1 MMBoe, or 5.4%, of the company’s total reserves were in the Horseshoe Bayou and Bayou Sale fields combined. For the year 2009, these fields provided 4.0% of the company’s production. Approximately 25.9% of the proved reserves of 6.1 MMBoe in the fields consisted of oil and NGLs, and 3.3 MMBoe, or 54%, were undeveloped.

During 2009, we did not drill any wells in the Horseshoe Bayou and Bayou Sale fields and have no plans for drilling in them in 2010. At year-end 2009 we had identified a total of 47 PUDs in the Bayou Sale, Horseshoe Bayou and Jeanerette fields combined.

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