Swift Energy Says 2005 a Record Year

Swift Energy Company (NYSE: SFY) announced record net income of $34.7 million, or $1.16 per diluted share for the fourth quarter 2005, an increase of 29% compared to $26.8 million, or $0.93 per diluted share, earned in the same quarter of 2004. Fourth quarter adjusted cash flow from operations of $84.3 million, or $2.83 per diluted share (cash flow before working capital changes, a non-GAAP measure -- see page 8 for reconciliation to net cash provided by operating activities of $64.9 million) increased 30% compared to the adjusted number of $64.7 million, or $2.25 per diluted share, for the fourth quarter of 2004. Production for the fourth quarter 2005 totaled 14.7 Billion cubic feet equivalent ("Bcfe"), with 11.0 Bcfe and 3.7 Bcfe of production from domestic and New Zealand operations, respectively.

Swift Energy achieved record 2005 production, which increased approximately 2% to 59.6 Bcfe, with 43.0 Bcfe produced domestically and 16.6 Bcfe produced in New Zealand. This level of production compares to 2004 production of 58.3 Bcfe (42.1 Bcfe domestic, 16.3 Bcfe New Zealand). While production was impacted by the hurricane activity in the second half of 2005, all of Swift Energy's operations in southern Louisiana are back on production at or above pre-Katrina production levels, except for the Cote Blanche Island Field, and the major facility expansion projects at Lake Washington Field in Plaquemines Parish, Louisiana are in the final commissioning stages.

For the year-ended 2005, Swift Energy had record net income of $115.8 million, a 69% increase, or $3.95 per diluted share compared to $68.5 million of net income for 2004, or $2.41 per diluted share. Adjusted cash flow from operations for the year-ended 2005 increased 50% to $287.7 million, or $9.82 per diluted share, compared to $192.3 million, or $6.78 per diluted share, for the year-ended 2004. Swift Energy also reported record total revenues of $423.2 million for the year-end 2005, an increase of 36% over 2004 revenue levels. Increased revenues, net income and cash flow in 2005 are primarily the result of higher commodity prices and our increased levels of production.

Terry Swift, CEO of Swift Energy, commented, "During 2005, the folks at Swift Energy Company responded admirably, enabling Swift Energy to make a remarkable recovery from the disruption Hurricanes Katrina and Rita caused to our operations in South Louisiana. Through the efforts of our people, Swift Energy has just recorded its best financial results in the history of the Company. Our recent exploration successes in the Lake Washington area at Newport and Bondi, which tested at combined rates of over 11,000 barrels of oil equivalent per day, illustrate the significant growth potential that we have developed from within our South Louisiana 3D seismic data. A continued robust commodity price environment together with our projected production growth of 14% to 18% should provide Swift Energy the opportunity to again reach new records in 2006."

Revenues and Expenses for the Fourth Quarter

Total revenues for the fourth quarter of 2005 increased 24% to a record $122.5 million from the $98.9 million of revenues generated in the fourth quarter of 2004. This increase was attributable to higher commodity prices despite the shut-in and deferral of production necessitated by the hurricanes and resultant recovery efforts.

Lease operating expenses ("LOE"), before severance and ad valorem taxes, were $0.85 per thousand cubic feet equivalent ("Mcfe") in the fourth quarter of 2005, which increased appreciably from $0.71 per Mcfe for these expenses in the fourth quarter of 2004. While the Company maintained approximately the same level of gross expenses for LOE during the fourth quarter of 2005 compared with the same quarter in 2004, the per unit level of LOE expense was much higher than originally projected due to lower production than expected as a result of the hurricanes. Severance and ad valorem taxes were also up appreciably to $0.86 per Mcfe from $0.64 per Mcfe in the comparable periods due to higher commodity prices.

Depreciation, depletion and amortization expenses increased to $2.09 per Mcfe in the fourth quarter of 2005 from $1.51 per Mcfe in the comparable period in 2004, primarily as a result of increased estimates for future development costs, changes in reserves estimates and additional capital expenditures during the year. General and administrative expenses increased to $0.44 per Mcfe during the fourth quarter 2005 from $0.33 per Mcfe in the same period in 2004. This increase was primarily attributable to the hurricane-induced production shut-in plus additional salaries and benefits associated with our expanded workforce and the additional expensing of certain stock compensation. Interest expense per unit increased slightly to $0.41 per Mcfe in the fourth quarter 2005 compared to $0.40 per Mcfe for the same period in 2004.

Fourth Quarter 2005 Production & Pricing

Swift Energy's fourth quarter 2005 production was 14.7 Bcfe, an increase of 9% sequentially from the 13.5 Bcfe produced in the third quarter of 2005. However, fourth quarter production decreased 8% from the 15.9 Bcfe produced in the same period in 2004. As previously reported, Hurricanes Katrina and Rita caused a domestic production decrease and deferred approximately 3.0 to 3.5 Bcfe of domestic production from the fourth quarter (on top of another estimated 3.0 Bcfe of deferred production in the third quarter of 2005). Fourth quarter 2005 production included 11.0 Bcfe of domestic production, a 2% decrease, and 3.7 Bcfe produced in New Zealand, a 20% decrease, in both cases when compared to production in the same period in 2004. New Zealand production decreased as a result of natural declines in natural gas production, as well as an additional crude oil lifting in the fourth quarter 2004 compared to the number of liftings in the fourth quarter 2005.

In the fourth quarter of 2005, Swift Energy realized an aggregate global average price of $8.34 per Mcfe, an increase of 34% from fourth quarter 2004 price levels, which averaged $6.23 per Mcfe. Domestically, the Company realized an aggregate average price of $9.77 per Mcfe, an increase of 36% over the $7.17 received in the fourth quarter of 2004. In New Zealand, the Company received an aggregate average price of $4.04 per Mcfe for the fourth quarter in 2005, an increase of 3% over the $3.93 per Mcfe realized in the same period of 2004.

Swift Energy's average fourth quarter 2005 domestic crude oil prices increased 26% to $58.36 per barrel from $46.17 per barrel realized in the same period of 2004. Meanwhile, domestic natural gas prices averaged $10.89 per thousand cubic feet ("Mcf") in the fourth quarter of 2005, an increase of 67% from the $6.53 per Mcf received during the same period in 2004. Prices for natural gas liquids ("NGLs") domestically averaged $37.99 per barrel in the fourth quarter of 2005, a 25% increase over fourth quarter 2004 NGL prices of $30.43.

In New Zealand, the sales price of Swift Energy's crude oil averaged $57.61 per barrel in the fourth quarter of 2005, a 21% increase over prices for the same period in 2004. Also in New Zealand, the Company received an average natural gas price of $3.05 per Mcf for the fourth quarter of 2005 under its current contracts, a 7% increase over the $2.86 per Mcf received in the same 2004 period. The Company's NGL contracts yielded an average price of $18.65 per barrel for the fourth quarter of 2005. New Zealand natural gas and NGL price contracts are remitted in New Zealand dollars, which has remained strong during the fourth quarter 2005 against the U.S. dollar compared to the same period in 2004.

2005 Reserves and Capital Expenditures

As previously announced, Swift Energy ended 2005 with total proved reserves of 762 Bcfe, a decrease of 5% from 800 Bcfe at year-end 2004, which resulted primarily from the delays in drilling activity necessitated by hurricane damage and recovery efforts interrupting the Company's drilling program. Proved developed reserves were 50% of total reserves at year-end 2005 compared to 56% at the previous year-end and were 51% crude oil at year-end. Fourth quarter acquisitions with reserves that were approximately 70% proved undeveloped were one of the significant items that contributed to the increase. Of our two largest core areas, the Lake Washington area contains approximately 37% and the AWP Olmos area has 29% of the proved developed reserves. Approximately 42% of proved undeveloped reserves ("PUD") at year-end 2005 were located in the Lake Washington area (26%) and in the AWP Olmos area (16%), both of which are characterized as long life fields. Year-end reserves contain only a minor amount of the potential reserves from the Bondi and Newport discoveries and which Swift Energy believes it will be able to develop over the next several years. All of the Company's reserves are audited annually by H.J. Gruy and Associates, Inc, independent petroleum consultants.

Domestic reserves decreased slightly to 644 Bcfe compared with 653 Bcfe of domestic reserves at year-end 2004. This domestic reserves total includes 29 Bcfe of proved reserves attributable to the recent South Louisiana acquisitions, which were closed during the fourth quarter. Domestic proved reserves, making up 85% of total proved reserves at year-end 2005, are located in the Lake Washington area (31% of total reserves), AWP Olmos area (23% of total reserves), Toledo Bend area (12% of total reserves), Bay de Chene and Cote Blanche Island areas (10% of total reserves), and other domestic properties (9% of total reserves).

In New Zealand, year-ended 2005 proved reserves declined by 20% to 118 Bcfe from 147 Bcfe at year-end 2004. The principal reason for the decline was that Swift Energy New Zealand's 2005 drilling campaign was focused on development drilling for the conversion of PUDs and a resulting downward revision related to drilling results in the Kauri sands in the Rimu/Kauri area.

Capital expenditures in 2005 totaled $264.5 million, with $215.8 million spent domestically and $48.7 million spent in New Zealand. Swift Energy's pre-tax present value (PV-10) of its proved reserves totaled nearly $3.2 billion, with approximately $2.9 billion in value representing domestic interests and New Zealand contributing $311 million to the total. This is an increase of 57% over year-end 2004 PV-10 value. These values were calculated in accordance with SEC guidelines, using a December 31, 2005 crude oil realized price of $59.96 per barrel and a $9.67 per Mcfe realized price for natural gas for domestic production and $60.98 per barrel and $3.33 per Mcfe for New Zealand crude oil and natural gas prices, respectively. (See page 7 for a reconciliation of PV-10 value to the after-tax Standardized measure of Discounted Future Net Cash Flows)

2005 and Fourth Quarter Drilling Report

In 2005, Swift Energy drilled and completed 45 of 64 wells for a 70% success rate. Domestically, Swift Energy completed 37 of 45 development wells and 5 of 9 exploration wells. In New Zealand, the Company completed 2 of 5 development wells and 1 of 5 exploration wells in 2005. For the fourth quarter 2005, Swift Energy successfully completed 10 of 18 wells. Of these wells, 14 were drilled domestically, of which 1 was a development well successfully completed in the Lake Washington area, 5 were development wells successfully completed in the AWP Olmos area in South Texas and 2 were development wells in the Garcia Ranch area in South Texas. Swift Energy was also successful on 2 of 4 domestic exploration wells in the fourth quarter 2005. The successful exploration wells included the previously announced Bondi prospect and Newport offset well, both in the Lake Washington area and the two unsuccessful wells were in Lake Washington and Bay de Chene Fields. In New Zealand, the Company had a successful development well and was unsuccessful on 3 exploration wells in the fourth quarter 2005.

Operations Update

Swift Energy has returned all affected fields to pre-Katrina production levels or higher, except Cote Blanche Island Field in St. Mary's Parish, Louisiana, which had average production of approximately 375 barrels of oil equivalent ("Boe") per day in August 2005. Cote Blanche Island is expected to be restarted late in the first quarter of 2006. As previously reported, significant facility upgrades in the Lake Washington Field are being completed and commissioned during the first quarter 2006. Swift Energy's Lake Washington average production rate for the month of December 2005 was approximately 14,400 net Boe per day. This production is mainly from the shallow and intermediate sands in the Lake Washington Field. Two deeper tests that had been reported earlier include the Newport prospect downdip delineation well and the Bondi prospect initial exploration well. These two wells tested at combined rates up to 10,712 barrels of oil per day ("B/d") and 7.3 million cubic of gas per day ("MMcf/d") from four sand intervals totaling 283 feet of net pay, two in each well. The Newport delineation well is expected to be placed on production during the second quarter of 2006. The Bondi discovery well is located approximately five miles to the northwest of the field's facility infrastructure and is not expected to be on production until the second-half of 2006. Actual production sales rates for the Bondi and Newport discoveries will be determined based on additional reservoir testing, state allowables and facility capacities.

Swift Energy continues to have seven drilling rigs and a completion rig currently operating on its behalf. The Company expects to begin drilling the second delineation well in the Newport discovery area in the first quarter 2006.