Domestic production increased to at least 10.3 Bcfe, 33% greater than 2003 first quarter production of 7.7 Bcfe and an increase of at least 17% sequentially compared to 2003 fourth quarter production of 8.8 Bcfe. The increase in domestic production has been driven primarily by increased levels of production from the Company's Lake Washington operations. New Zealand production totaled approximately 3.8 Bcfe for the first quarter of 2004 and decreased in line with the Company's guidance by 26% from the 5.2 Bcfe produced in the first quarter of 2003 and 17% from the fourth quarter of 2003 production. Production in New Zealand was expected to decline as increased use of hydroelectricity in New Zealand has contributed to a short-term reduction in market demand, which is expected to continue at least through the second quarter of this year.
The average oil price received by Swift Energy during the first quarter of 2004 is expected to exceed $33.00 per barrel, both domestically and in New Zealand. The Company's estimated average prices received for natural gas are expected to exceed $4.75 per thousand cubic feet ("Mcf") domestically and $2.20 per Mcf in New Zealand, and the prices for natural gas liquids are expected to exceed $19.00 per barrel domestically and $14.00 per barrel in New Zealand.
Swift Energy has four drilling rigs operating domestically, one drilling for oil in the Lake Washington area and three drilling for natural gas in Texas, including one non-operated rig.
Swift Energy successfully drilled 12 of 14 domestic wells during the first quarter of 2004. In the Lake Washington Field in Plaquemines Parish, Louisiana, the Company drilled six of seven development wells successfully. The majority of these wells have been connected and are now producing. One exploration well was drilled but was unsuccessful. One rig is currently drilling in Lake Washington. The Lake Washington processing facilities are located in three distinctly separate areas of the field. These facilities currently utilize field-wide gas compression, common water injection and centralized oil sales delivery systems. One of the field processing facilities, the CM3 platform, is designed to handle heavier gravity crude oil and natural gas with hydrogen sulfide. Swift Energy is developing plans to optimize the operating performance of all theses facilities, which will include additions to existing facilities and may include the addition of a fourth field processing facility.
Swift Energy also successfully drilled five wells in the AWP Olmos Field in McMullen County, Texas, four of which have been fracture stimulated and brought on production in the first quarter 2004. The other completed well will be fracture stimulated later in the second quarter 2004. One rig is currently drilling in the AWP Olmos area.
Additionally, Swift Energy has drilled a development well in the Masters Creek area in Vernon Parish, Louisiana, which is currently being placed on production. Swift Energy also has a 25% working interest in a successful non-operated exploration well in the Guadalupe Pasture acreage adjacent to the Garcia Ranch area in Kenedy and Willacy Counties, Texas, which is currently undergoing completion procedures. Swift Energy has two rigs working in South Texas, drilling a development well in the Garcia Ranch area and another non-operated exploration well in the Guadalupe Pasture area.
New Zealand Activity
In New Zealand, Swift Energy has successfully drilled the Kauri-E4 well, encountering both the Kauri Sand and the Tariki Sand. This well is currently undergoing a completion procedure in the Tariki Sand. The first well in the 2004 Manutahi Sand drilling program, which is targeting this shallow oil-bearing sand, will begin drilling later in the second quarter.
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