October 30, 2009. The Lake Washington Field is one of two fields operated by Swift Energy in its Southeast Louisiana core area of operation. Our highest producing field, it is located in the northwest corner of Plaquemines Parish, where we acquired our initial interests in producing properties in 2001. At year-end 2008 we had drilling and production rights in 37,825 net acres in the field.

The Lake Washington Field 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 salt dome. The salt dome itself has surface depths that vary from 1,200 feet at its peak down to about 14,000 feet, and the water covering the field varies in depth from about 2 feet to 12 feet.

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The field is highly faulted, with potentially productive formations trapped in hundreds of isolated fault blocks, some abutting the salt dome and others located several miles away from the 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.  [Note: Each formation is identified by a letter of the alphabet or, in some cases, by the depth at which it was first discovered (e.g., the F sand, 2,000-foot sand.)]

Our exploration and development approach in Lake Washington is entirely seismic led. We conducted a three-dimensional seismic survey over the entire 55-square-mile field in 2004, after which we merged the resulting seismic dataset with other seismic datasets for nearby areas and with digitized geological data from well logs to develop a geoscience database for a 700-square-mile area. This area includes not only Lake Washington but also our Bay de Chene Field (see map) and our recent Shasta discovery between the two fields. As a result, we now have the technical expertise to identify and drill to deep targets within the database area, whereas we initially drilled to relatively shallow depths of only about 6,000 feet in Lake Washington.

2008 Operational Statistics

At year-end 2008, we had interests in 173 wells in the Lake Washington Field, 171 of which we operated. These numbers include 21 development wells and two water source wells that we drilled during 2008 to depths down to approximately 17,000 feet with a 100% completion rate. Because we were hit with two major hurricanes during the third quarter of 2008—Gustav on September 1 and Ike on September 13—we were forced to suspend work on five wells for 26 days. We suffered a simultaneous sharp plunge in oil prices and persistently high service charges that led to our release of the five barge rigs as soon as they completed their work. As a result, we deferred some of our 2008 drilling, including the drilling of some high-impact wells we had planned. We entered the year 2009 with 119 proved undeveloped locations (PUDs) for future drilling at depths of 3,000 feet to 13,000 feet.

Lake Washington provided 46.8%, or 4.7 MMBoe, of the company’s total 2008 production of 10.0 MMBoe. The field’s production, which consisted of 85.0% oil, 3.8% natural gas liquids, and 11.2% natural gas, was 29% lower than its 2007 production of 6.6 MMBoe largely due to the hurricane interruptions and our deferred drilling program.

At year-end 2008, Lake Washington held 27.3%, or 31.8 MMBoe, of the company’s total reserves. These reserves, which consisted of 91.6% oil and natural gas liquids and were 52% undeveloped, were 12.6% lower than the field’s year-end 2007 reserves primarily because we were required under SEC regulations to use the low year-end oil and gas prices in our reserves computations, with the results indicating that some of our reserves were not economically recoverable and therefore could not be counted.

Exploration and Development Activities

New Westside Facility. As Swift Energy entered 2008, we were experiencing production processing constraints in our Lake Washington Field even after we had significantly repaired and upgraded the field’s three production processing facilities following damage caused by hurricanes Katrina and Rita in 2005, increasing its total processing capacity to approximately 28,000 barrels per day. These constraints were alleviated during the first quarter of 2008 when we commissioned a fourth production processing facility, the new Westside facility that immediately increased the field’s processing capacity by 10,000 barrels of oil per day. In the first quarter of 2009, the Westside facility’s capacity was doubled to 20,000 barrels of oil per day, with a natural gas capacity of 40 MMcf per day. At the same time, we redirected production from our SL 212 Facility to the Westside facility, which will reduce lease operating expenses associated with maintenance costs for the older facility. (Note: The Westside facility, which was built to withstand severe hurricane forces, served as a pattern for a new production processing facility in the Bay de Chene Field.)

Separation of High- and Low-Pressure Production. With the addition of the Westside facility in early 2008, we began a program to optimize the processing of Lake Washington’s overall production among all four facilities and to reintroduce production from some shut-in wells. As we initiated this program, we found that the newer, deeper wells with higher flowing pressures and higher gas-to-oil ratios were increasing the overall operating pressure in the field’s bulk gathering lines and negatively impacting production rates from the more mature wells with lower flowing pressures. Also, higher volumes of produced water from the older wells resulted in higher artificial lift demands. To provide more flexibility to the gathering system, we began installing new gathering lines to segregate the production from the new and more mature wells, thereby removing the back pressure on the older wells and allowing them to maintain higher production rates.

Since a number of the older wells were associated with Lake Washington’s Newport area —an area on the west side of the field that was developed following a significant 2005 discovery on the Newport prospect—the first two gathering lines, each 6 inches in diameter, were installed between the Newport header and the new facility. Upon installation of the second line, we experienced a production increase of 600 barrels of oil per day. This project is continuing.

Newport Pressure Maintenance Project. In reviewing the overall performance of the Lake Washington Field, we also realized that the production from wells in the Newport area, which is the highest contributing area in the field, was declining more rapidly than we had anticipated. We attributed this to the reservoirs in the area not being open to the basin and, as a result, having weak water drives. To improve the area’s recovery rates, we initiated a pressure maintenance project in which we would inject water either in depleted wells or in specifically drilled injector wells downdip from producing wells to increase the bottom-hole pressure of the updip wells. As a first step, we drilled two water source wells early in 2008 and began injecting water into two reservoirs through a single converted well (the SL 17990 #3). Disappointing results led us to the conclusion that the Newport area was much more complicated structurally than we had originally thought and that we needed to carry out some very extensive modeling of the various Newport reservoirs.

To gain the information for the modeling, we engaged Nutec to perform a reservoir log study to help us understand the depositional environment of the reservoirs. We also conducted bottom-hole pressure surveys in seven of the wells, which will help us determine their connectivity, and we carried out pulse neutron logging in 11 wells to discover which sands still contained oil and which had been swept through with water. The resulting model, which is still under development, will help us identify down-dip wells that will be candidates for receiving injected water. The effectiveness of the first injector well is apparently hampered by its lack of connectivity with other wells.

Before converting a field well to an injector well, we must first verify that the well’s production is indeed depleted or near depletion.  For example, one well (the SL 17990 #8 ST1) was considered as an injector well because it was producing only 50 barrels of oil per day (with 300 barrels of water) from a total of five intervals. However, when we closed off the lowest interval with a sliding sleeve inside the well bore in October 2008, the production increased to 1,400 barrels of oil per day with only 10 barrels of water, and it maintained that production rate into 2009. Apparently the high pressure of the lowest production zone was blocking production from the higher zones.

To date, we have selected one additional well,  the SL 18907 #2 ST1, as an injector well after we drain it of oil through the opening and closing of its sliding sleeves. We have identified several other wells for potential conversion to injector wells and will drill additional injector wells if needed.

Thus far, our focus in this pressure maintenance project has been on two sands, the CC-7 sand that we estimate still holds 15 million barrels of oil and the CC-6 sand that we estimate still holds 5 million to 8 million barrels of oil.

As part of the project, we will also be recompleting some of the up-dip wells in other zones. With studies of the data still under way and the activities expected to occur successively, this project will not be in full operation before 2010.

Newport Wells. In the meantime, we continue to develop the Newport area. During 2008 we completed nine additional development wells in the area, including the two water source wells drilled for the pressure maintenance project, at measured depths down to approximately 16,600 feet.  A particularly significant well, the SL 212 #167 ST2, was drilled to a depth of 12,596 feet, encountered a total of 378 feet of net pay in nine separate zones, initially tested at rates of over 1,000 Boe per day, and was placed on production at 800 Boe per day. A tenth well, the SL 19338 #1, was spudded in 2008 but not completed until the first quarter of 2009. It was drilled to a depth of 16,535 feet, encountered 35 feet of net pay, and was placed on production at 3.6 MMcf of natural gas per day. Since drilling the Newport discovery in 2005, we have completed 24 wells in the area through the first half of 2009.

Shasta Discovery. In addition to the 23 development wells drilled within Lake Washington in 2008, we completed an exploratory well—the Shasta prospect (SL 18669#1)—between Lake Washington and Bay de Chene with a 50% Swift working interest. This well reached a total measured depth of 18,855 feet and found pay in two zones in the Miocene sands.  It tested at a rate of 11.0 MMcf and 739 barrels of oil per day (at 11,279 psi on a 14/64-inch choke) and was placed on production April 26, 2009, after an 8-mile-long pipeline was constructed from the well to Lake Washington’s new Westside facility. During July 2009, the gross daily production of the well averaged 4.6 MMcf of natural gas and 331 barrels of oil with a flowing tube pressure of 9,600 psi.

Geoscience Database Upgrade. We remain very much engaged in extracting information from our 700-square-mile geoscience database that guides our drilling program in Lake Washington and elsewhere in the Southeast Louisiana area. We have recently (in 2009) completed a lengthy three-dimensional prestack depth migration analysis of the 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 such as the Shasta prospect. We are planning to drill a subsalt test at 18,000 to 20,000 feet in Lake Washington once the industry environment improves sufficiently.

Production Optimization Program. While no new wells were spudded in the Lake Washington Field during the first half of 2009 because of the company’s suspension of drilling activities until service costs moderate and/or oil and gas prices recover, we have continued a production optimization program begun when our production processing capacity was increased with the commissioning of the new Westside facility. The focus of the program is to stimulate more production from underperforming wells or wells that have been shut in for various reasons. The program is particularly challenging since Lake Washington wells have so many types of flow regimes: we have high water cut wells, high gas cut wells, high sulfur wells, and high- and low-pressure wells, all spread out in numerous fault blocks.

The production optimization program was initiated in the first quarter of 2008 with the construction of new gathering lines to separate the field’s high- and low-pressure production so that the production from mature wells could enter the flow lines (see discussion above). About the same time, we performed coiled tubing acid stimulation jobs on 10 wells that resulted in a 145% increase in their combined production test rates.

In a subsequent set of activities, we increased the field’s production approximately 1,000 Boe per day through sliding sleeve changes on 10 wells and gas lift enhancements on four wells. This was followed by sliding sleeve changes on another 13 wells and gas lift enhancements on four wells. These types of enhancements are very cost effective, costing only about $3,000 to $5,000 per well, and will be continued throughout 2009.

In addition, we expect to initiate a drilling program of five to ten wells that will target shallow and intermediate-depth oil targets and will continue into 2010.

As we implement this program to mitigate natural production declines and introduce more production from relatively shallow wells, we are also continuing to develop deep high-impact prospects for the Lake Washington Field. Once industry conditions allow us to return to this type of drilling, we will be able to sustain production from this field for many years to come.

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. During first-quarter 2012, we completed two wells in the Lake Washington field. The first one, the CM 419, was drilled to a measured depth of 8,489 feet and encountered 60 feet of true vertical pay; however, its initial production was impaired due to mechanical reasons and a workover will be performed on the well during the second quarter to re-establish its production. The second well, the CM 421, was drilled to a measured depth of 8,513 feet and encountered 255 feet of true vertical pay. The initial production rate of this well was 406 barrels of oil per day and 0.2 MMcf of gas per day with a flowing tubing pressure of 250 psi on a 18/64-in. choke setting. Both wells have opened up additional drilling opportunity on the west side of the Lake Washington salt dome.

We have also drilled and completed a third well, the CM 422, during the second quarter. This well, located in the Northeast portion of the field, reached a measured depth of 8,573 feet and encountered 226 feet of true vertical pay. Its initial production rate was 654 barrels of oil per day and 0.1 MMcf of gas per day with a flowing tubing pressure of 400 psi on a 26/64-in. choke setting. This well sets up additional drilling inventory in this portion of the field.

In addition, we are continuing the on-going recompletion and production optimization program in the Lake Washington field. During the first quarter, we performed 10 recompletions and 26 production optimization projects.

February 23, 2012: PRESS RELEASE. During the fourth quarter of 2011, we continued our ongoing recompletion and production optimization program in the Lake Washington field. The average initial production response of ten recompletions that were performed was approximately 171 gross Boe/d per well. The six production optimization projects that were carried out averaged an initial production response of approximately 99 gross Boe/d per well.

Late in the fourth quarter, a drilling rig was moved into the field. This rig will remain active for most of 2012, drilling 5 to 10 wells. The first well in this program, the CM 419, was drilled early in first quarter 2012 to a measured depth of 8,489 feet and encountered 87 feet of true vertical pay. This well will be tested following the completion of a flow line installation. A second well, the CM 421, is currently being drilled and has encountered approximately 227 feet of true vertical pay through its current depth. This well will continue drilling to its depth objective and be completed during the first quarter.

November 3, 2011: PRESS RELEASE; 2011 THIRD QUARTER 10-Q. In our Southeast Louisiana core area, recompletion and production optimization work continued during the third quarter in the Lake Washington field. The work included six recompletions, one gas lift modification, one well returned to production, and eight sliding sleeve changes. The combined average initial production response from these operations was approximately 5,000 Boe per day. As a result of these low-cost operations and the impact of two new wells placed on line during the second quarter, Lake Washington’s third-quarter production remained flat compared to its second-quarter production. We will continue to focus on relatively low-risk, low-cost oil activity in this area and also plan to re-commence drilling in the Lake Washington field in the fourth quarter of 2011 and during 2012.

September 6, 2011: PRESS RELEASE. Because of the risk of adverse weather conditions caused by Tropical Storm Lee, we implemented standard shut-down procedures in several of our coastal Louisiana properties, including the Lake Washington field in Plaquemines Parish, the Bay de Chene field in Jefferson and Lafourche Parishes, and the Horseshoe Bayou, Bayou Sale, and Cote Blanche Island fields in St. Mary’s Parish. All nonessential personnel and equipment were evacuated from these fields.

Field operations necessary to safely bring production levels back to normal levels have begun. Some minor damage has been observed in certain areas but is not expected to impact ongoing operations. Current 2011 production and operational forecasts will be updated if necessary once the impact of Tropical Storm Lee on Swift Energy’s operations is known.

August 4, 2011: PRESS RELEASE; 2011 SECOND QUARTER FORM 10Q; 2011 SECOND QUARTER WEBCAST. During the second quarter of 2011, our drilling and completion activities in the Lake Washington field consisted of the drilling and completion of the CM-420 development well, the completion of the first-quarter LL&E #5 extension well, and a continuation of well recompletion and production optimization activities.

We drilled and completed the CM-420 (“Hershey”) development well during the second quarter on the west side of the Lake Washington field. It reached a measured depth of 9,882 feet and encountered 150 feet of true vertical net pay in five productive horizons. The initial production rate of this well was 399 barrels of oil per day and 0.12 MMcf of natural gas per day with a flowing tubing pressure of 230 psi on a 40/64-inch choke setting.

We drilled the LL&E #5 extension well during the first quarter in the Jelly Bowl area in the southern portion of the Lake Washington field and completed it in the second quarter. Previously identified as the SL-1464 #8 well (see May 5, 2011, press release), the LL&E #5 had an initial production rate of 2,294 barrels of oil per day and 1.2 MMcf of natural gas per day with a flowing tubing pressure of 1,080 psi on a 26/64-inch choke setting. The most recent test rate of this well was 799 barrels of oil per day and 2.4 MMcf of natural gas per day with a flowing tubing pressure of 1,020 psi on a 32/64-inch choke setting.

Both of these wells have opened up areas where we expect to drill additional wells over the next several years.

Also during the second quarter we recompleted four wells in the Lake Washington field that yielded an average initial production response of 280 gross Boe per day.

In addition, we performed 24 production optimization projects that included sliding sleeve changes, gas lift enhancements and returning shut-in wells to production. These projects had an average initial production response of 126 gross Boe per day.

During the second quarter, the average daily production of the Lake Washington field was 7,845 net Boe per day.

July 25, 2011: PRESS RELEASE. In the Lake Washington field in Plaquemines Parish, Louisiana, we completed the LL&E #5 (Jelly Bowl) well. The initial production rate of this well was 2,294 barrels of oil per day and 1.2 MMcf of natural gas per day with flowing tubing pressure of 1,080 psi on a 26/64-inch choke setting. The most recent test rate of this well was 799 barrels of oil per day and 2.4 MMcf of gas per day with flowing tubing pressure of 1,020 psi on a 32/64-inch choke setting.

A second well located on the west side of the Lake Washington field, the CM #420, was recently drilled to a measured depth of 9,882 feet and encountered 93 feet of true vertical net pay in three productive horizons. The initial production rate of this well was 399 barrels of oil per day of oil and 0.12 MMcf of natural gas per day with flowing tubing pressure of 230 psi on a 40/64-inch choke setting.

May 5, 2011: PRESS RELEASE. During first quarter 2011 we drilled the SL 1464 #8 (Jelly Bowl prospect) in the Lake Washington field to a measured depth of 11,846 feet and encountered 93 feet of true vertical net pay in four productive horizons. This well has been completed and will be connected to production facilities shortly.

We also performed five recompletions in the field with an average initial production response of approximately 480 gross Boe per day. In addition, we carried out 14 optimization projects (sliding sleeve changes, gas lift enhancements, and returning shut-in wells to production) that averaged an initial production response of approximately 224 gross Boe per day.

With no new wells brought on line during the quarter, these low-cost operations led to a 4% sequential increase in the field's daily net production rate from the previous quarter.

February 24, 2011: PRESS RELEASE. Swift completed one of three wells drilled in the Lake Washington Field during the fourth quarter. In addition, three recompletions were performed during the quarter, resulting in an average production increase of 183 gross barrels of oil equivalent per day per recompletion.

Also during the quarter at the Lake Washington Field, 12 field optimization projects were carried out, resulting in an average production increase of 75 barrels of oil equivalent per day per project.

Gas lift and amine unit infrastructure upgrades were also completed. These types of projects are important to ensure that facilities at the field level will not be constrained as the company increases development activity and begins a deep exploitation and exploration program.

One drilling rig and one recompletion rig are currently active in Lake Washington.

November 4, 2010: PRESS RELEASE; 2010 THIRD QUARTER 10-Q. In third quarter 2010 activities in the Lake Washington Field, we completed three of four development wells drilled as part of our one-rig shallow drilling program to enhance the field’s production.

The CM 413 was drilled to a measured depth of 2,922 feet and encountered 48 feet of true vertical net pay. This well has averaged approximately 270 gross barrels of oil per day over a period of 30 days.

The SL 17266 #25 was drilled to a measured depth of 5,037 feet and encountered 246 feet of true vertical net pay. It has averaged approximately 100 gross barrels of oil per day over a period of 30 days.

The CM 414 was drilled to a measured depth of 1,622 feet and encountered 90 feet of true vertical pay. This well was recently completed and will be tested following a facility upgrade.

In our second on-going production enhancement program in the Lake Washington Field, we executed six sliding sleeve changes that resulted in an average production increase of 277 gross Boe per day per operation.

August 5, 2010: PRESS RELEASE. During second quarter 2010, we continued our production enhancement activities in the Lake Washington Field.

In our one-rig shallow well drilling program we drilled three development wells. The CM 411 was drilled to a measured depth of 5,481 feet, encountered 345 feet of true vertical net pay, and averaged approximately 590 gross barrels of oil per day over a period of 30 days. The SL 212 #178 was drilled to a measured depth of 7,200 feet, encountered 75 feet of true vertical net pay, and averaged approximately 200 gross barrels of oil per day over a period of 30 days. The CM 412 was drilled to a measured depth of 8,178 feet, encountered 267 feet of true vertical pay, and was completed early in the third quarter with an initial production rate of 574 gross barrels of oil per day.

In our second production enhancement program, we recompleted seven wells with average initial production rates of approximately 244 gross Boe per day. In addition, four sliding sleeve changes yielded an average production increase of 324 barrels of oil per day per well. And one gas lift redesign was performed that increased the well’s performance from 98 to 315 barrels of oil per day.

May 27, 2010: PRESS RELEASE. Swift Energy’s Lake Washington Field located in Plaquemines Parish, Louisiana, has not been impacted by the Deepwater Horizon oil spill in the Gulf of Mexico, although there have been isolated reports of oil sheens along the Louisiana coast in close proximity to the company’s operations. “Our organization’s focus is first and foremost on Health, Safety and the Environment,” commented Terry Swift, CEO and Chairman of Swift Energy, “We have taken precautionary measures to protect our assets, the environment we operate in and the safety of our employees and contractors who work in southeast Louisiana. Swift Energy, through its crisis management plan and in communication with other operators and authorities monitoring the spill, will take appropriate measures to protect our people, assets and the environment as conditions require.”

The Company currently has one drilling rig and one completion rig operating in Lake Washington and maintains an inventory of projects to continue its 2010 operational plan.

May 6, 2010: PRESS RELEASE; 2010 FIRST QUARTER 10-Q. A group of three development wells were drilled during first quarter 2010 in the Lake Washington Field as part of a shallow drilling program initiated in third quarter 2009. Of these, one well, the CM #410, was completed. Drilled to a measured depth of 5,388 feet, the well encountered 79 feet of true vertical net pay and has averaged approximately 350 gross Bbls/day of oil over the past 30 days.

A fourth shallow Lake Washington development well encountered commercial quantities of hydrocarbons but was plugged because of mechanical failure. It was re-drilled early in the second quarter (in April) as the CM #411 well. This well, which had a measured depth of 5,481 feet and logged 334 feet of true vertical net pay, will be placed on production early in the second quarter.

Also during first quarter 2010, seven Lake Washington wells were recompleted, one gas lift modification and six sliding sleeve changes. Average initial production from these operations was approximately 339 gross Boe/day per well. We plan to perform six additional recompletions during the current year.

The company’s preventative maintenance program identified a small leak at the bulk separator for Lake Washington’s 6700 production processing facility, which normally handles 2,500 Bbls of oil per day. Unplanned repairs required that this unit be out of service for 10 days but eliminated the risk of a larger problem. To increase capacity and service additional gas lift volumes, a new amine treating system is being installed at the CM3/Caseload facility. This new unit will double treating capacity to 36 MMcf/day of gas.

February 25, 2010: 2009 FORM 10-K. At year-end 2009, 27.2 MMBoe, or 24.1%, of the company’s total reserves were in the Lake Washington Field. Approximately 93% of the field’s proved reserves consisted of oil and NGLs and 54.8% of the reserves were undeveloped.

The Lake Washington Field provided 3,595 MBoe, or 39.7%, of the company’s total production of 9,055 MBoe and 3,430 MBoe, or 39.2%, of its sales production of 8,731 MBoe, the latter excluding produced gas that was consumed in operations. The field’s sales production consisted of 3,199 MBoe of oil (93.3%), 75 MBoe of NGLs (2.2%), and 156 MBoe of natural gas (4.5%). Average sales prices received during 2009 for the field’s production were $59.62 per barrel for oil, $43.55 per barrel for NGLs, and $4.37 per Mcf for natural gas.

During 2009, we drilled and completed four out of five shallow development wells and one out of two exploratory wells in Lake Washington. We also carried out a production optimization program in Lake Washington involving gas lift enhancements and sliding sleeve shifts to more productive zones to assist in mitigation of natural field declines. In 2009 we completed nine gas lift modifications, 29 sliding sleeve changes, and three acid jobs in this program. Lake Washington has approximately 107 currently producing wells.

Our planned 2010 capital expenditures for Lake Washington include drilling 10 to 15 wells and performing recompletions on up to 10 wells. At year-end, we had identified 96 PUDs in the field.

February 18, 2010: PRESS RELEASE; WEBCAST. Fourth quarter 2009 production from the Lake Washington Field averaged approximately 9,645 net Boe per day, or approximately 58 million cfe per day. This is a decrease of 4% compared to third quarter 2009 production rates, primarily due to a slower pace of production activity and delays from freezing temperatures and natural declines. The freezing problems and unplanned equipment repairs will have a slightly negative impact on our first quarter 2010 production rates from this field.

During fourth quarter 2009, we completed four of five wells drilled in the Lake Washington Field. The four completed wells were drilled to measured depths ranging from 6,023 feet to 7,240 feet and had initial average production rates of approximately 350 gross Boe/d each. In the fourth quarter 2009, we also continued our Lake Washington production optimization program on 11 wells involving gas lift enhancements, acid stimulations, and sliding sleeve shifts to change productive zones to assist in mitigating natural field declines. In addition, we performed recompletions on two wells. Average initial production from these operations was approximately 250 gross Boe/d per well.

We plan to keep at least one rig operating in the Southeast Louisiana area during 2010.

November 3, 2009: PRESS RELEASE. During the third quarter we began a shallow drilling program in the Lake Washington Field, located in Plaquemines Parish, Louisiana. The CM 400 well was drilled to a measured depth of 6,023 feet and encountered 31 feet of true vertical net pay. The CM 403 well was drilled to a measured depth of 5,365 feet and encountered an estimated 52 feet of true vertical net pay. Both wells concluded drilling operations during the fourth quarter and are now being connected to production facilities. This one-rig program will remain active during the fourth quarter.

Also in the third quarter, we continued our production optimization program in the Lake Washington Field with gas lift enhancements and/or sliding sleeve shifts on four wells and recompletions on five wells.

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