Swift said it enjoyed excellent royalty terms in New Zealand when compared to the U.S. equivalent. In the TAWN area, Swift pays a 10% royalty on net sales revenues while at Rimu/Kauri, Swift pays a 5% ad valorem royalty. In the US production is covered by both severance and ad valorem taxes of 9% to 12.5% and landowner royalties of 12.5% to 25%.
The annual report also said New Zealand's economic, political, and commercial risks were often ranked lower than those of the US and Canada.
Reporting on its Kauri operations Swift said its Kauri-E3 development well was spudded at year-end 2003 and was drilled in the first quarter of 2004. The company also has begun drilling the Kauri-E4 development well. It plans to fracture and test both wells in the second quarter of 2004. The company also plans 4-6 wells in the Manutahi sands at Kauri in 2004.
On Swift Energy's website section on New Zealand exploration activities, the company says it still anticipates collaborating with industry partners to drill the Tawa prospect, a stratigraphic trap on the flank of the Kapuni field in the PEP 38719 permit northwest of the company's Rimu field.
Swift Energy has also identified three Kapuni group sands prospects in its TAWN permits, Waihapa Deep, the Toko Deep, and the Ahuroa Flank prospects.
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