Swift Energy Increases 2004 Capital Budget

Swift Energy announced a 7% increase in its production during the second quarter of 2004 to approximately 14.2 Billion cubic feet equivalent ("Bcfe") compared to second quarter 2003 production of 13.3 Bcfe. This is a slight decrease from the 14.3 Bcfe of production in the first quarter in 2004. Swift Energy also announced that it increased its 2004 capital budget by approximately 20% to $160-$175 million.

Swift Energy's domestic production increased by 20% to approximately 10.2 Bcfe compared to the 2003 second quarter production of 8.5 Bcfe but was approximately 2% lower than first quarter 2004 production of 10.4 Bcfe. New Zealand production totaled approximately 4.0 Bcfe for the second quarter of 2004. This was a decrease of 17% from the 4.8 Bcfe produced in the second quarter of 2003 and an increase of 3% from New Zealand production of 3.9 Bcfe in the first quarter of 2004.

The increase in Swift Energy's capital budget is expected to approximate the Company's revised projected operating cash flow for 2004. This increase is due in large part to the strong price environment for oil and gas, and to a lesser extent, the Company's increased production.

Terry Swift, President and CEO stated, "The elevated commodity prices and our operational progress provide Swift Energy with increased levels of cash flow, which allows us to increase our capital spending accordingly. This increase in our capital budget will enable us to begin projects late this year that will add to our momentum going into 2005."

The average oil price received by Swift Energy during the second quarter of 2004 is expected to exceed $35.00 per barrel, both domestically and in New Zealand. The Company's estimated average prices received for natural gas are expected to exceed $5.65 per thousand cubic feet ("Mcf") domestically and approximately $2.10 per Mcf in New Zealand, and the prices for natural gas liquids are expected to exceed $18.00 per barrel domestically and $16.00 per barrel in New Zealand.

Swift Energy currently has five drilling rigs operating domestically, one drilling for oil in the Lake Washington area of Louisiana, three drilling for natural gas in South Texas, and one non-operated rig drilling in Alabama. The Company also has one drilling rig operating in New Zealand. The increase in its capital budget will provide for two additional exploratory wells domestically, two more development wells in New Zealand, additional three-dimensional ("3-D") seismic in the Lake Washington area to enhance future drilling programs, facility enhancement and expansion in Lake Washington, as well as other operational expenditures.

Domestic Activity

Swift Energy successfully drilled nine of thirteen domestic wells during the second quarter of 2004. In the Lake Washington Field in Plaquemines Parish, Louisiana, the Company drilled five of six development wells successfully. The Lake Washington 3-D seismic acquisition began in the second quarter, which should allow for the processing to be completed during the fourth quarter. Swift Energy expects to begin utilizing the information from the 3-D data interpretations in its 2005 drilling program.

Swift Energy also successfully drilled three of four wells in the AWP Olmos Field in McMullen County, Texas, two of which have been fracture-stimulated and brought on production in the second quarter 2004. The other completed well will be fracture-stimulated during the third quarter 2004. Drilling will resume in the AWP Olmos area, after recent flood waters subside.

Additionally in the second quarter of 2004, Swift Energy drilled two unsuccessful wells in the Garcia Ranch area in Kenedy and Willacy Counties, Texas. Swift Energy has two rigs working in South Texas, drilling a development well in the Garcia Ranch area and a development well targeting the Wilcox sands in Duval County, Texas. The drilling of an additional Wilcox development well, the Post #3 well, is now being evaluated in Goliad County, Texas. The Company is also participating in a non-operated development well in Alabama.

New Zealand Activity

In New Zealand, Swift Energy began its development program in the Manutahi Sand, a shallow oil-bearing sand, and successfully drilled five development wells in this area. All five wells are now on production. One exploration well targeting the Manutahi sand in a prospective fault block to the south was unsuccessful. The Kauri-E5 well, the first of two more wells in the area targeting both the Kauri Sand and the deeper Tariki Sand, is drilling and should reach the targeted depth later in the third quarter. The Kauri-E6 well is expected to be drilled following the Kauri-E5 well.

Price Risk Management

Swift Energy currently has between 50 to 55% of its domestic natural gas hedged for the third quarter 2004 and approximately 10 to 15% of its domestic natural gas hedged for the fourth quarter of 2004. All of the Company's natural gas production in New Zealand is under long-term contract, which when included would effectively protect 70 to 75% of Swift's total natural gas in the third quarter and 50 to 55% of total natural gas in the fourth quarter. Swift Energy has between 40 to 45% of our total crude oil hedged through a combination of forward sales, and participating collars in the third quarter at an average forward sale price of $40.97 per barrel and average floor strike of $31.30 per barrel. In the fourth quarter 2004, the Company recently had a forward sale of 1,500 barrels per day of crude oil for October at a NYMEX strike price of $40.51 per barrel. These NYMEX crude oil strike prices do not take into account transportation charges or crude oil quality differentials that could result in deductions ranging from $2.00 to $3.00 per barrel.
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