Swift Energy Increases 2003 Capital Budget
|Tuesday, July 08, 2003
Swift Energy's Board of Directors has authorized management to increase the Company's 2003 capital budget to provide for additional capital projects proposed by management. The budget has been increased about 15% to approximately $150 million, an increase of $20 million from up to $130 million as previously reported. The additional capital projects are expected to include additional development drilling, facility upgrades and initial 3-D seismic work in the Lake Washington Field located in Plaquemines Parish, Louisiana, and additional drilling and exploitation activity in New Zealand. This increase in the capital budget is supported by the recent operational successes and higher than anticipated cash flow in 2003, both domestically and in New Zealand.
Swift Energy also reported that production from its interests in the Lake Washington Field averaged over 8,500 gross (7,000 net) barrels of oil per day for the month of June 2003. The increase in the capital budget will be used in part to increase the facility capacity at Lake Washington to approximately 20,000 gross barrels per day. Facility upgrades are continuing on schedule in the field and are expected to be completed during the fourth quarter. The increased capital budget also enables the Company to drill a total of 60 to 70 wells in Lake Washington during 2003, or approximately 10 more wells than previously reported. Additionally, the Company is considering shooting 3-D seismic over a portion of the field.
Since the last report on June 2, Swift Energy has drilled seven additional wells in Lake Washington, all of which are awaiting completion operations and/or installation of flow lines. The Company has successfully drilled 28 out of 34 wells in the Lake Washington Field this year for an 82% success rate, with a 100% success rate during the second quarter. An exploration well drilled in this area during the second quarter, which reached a total true vertical depth of 3,486 feet in a deviated hole, found approximately 72 feet of net pay (true vertical depth) and had pipe successfully set. Also of note, the CM# 263 well, which was drilled as a deviated hole in this area on the southeast side of the salt dome, encountered approximately 222 feet of net pay (true vertical depth) in seven sands, including the F sand (77 feet net pay true vertical depth).
In the AWP/Olmos area located in McMullen County, Texas, Swift Energy recently finished drilling four natural gas wells of a 10 well 2003 program within the Company's Entity for Density ("EFD") permit. The EFD permit effectively allows the Company to further down space well locations and test new infill wells on 20-acre spacing. All four wells have been successfully drilled, two have been successfully completed and fracture stimulated and the other two are awaiting fracture stimulations. A drilling rig is scheduled to return later this year to resume drilling for natural gas in AWP.
In New Zealand, the Kauri-A4 well is expected to begin producing into the Rimu Production Station ("RPS") this month. The Kauri-E1 well was drilled to a depth of approximately 8,777 feet true vertical depth in a deviated hole and encountered about 192 feet of net pay (true vertical depth). As expected, the Kauri Sand was encountered approximately 75 feet high to the penetration point in the Kauri-A4 well. Pipe has been successfully set in the Kauri-E1 well, and this well is being prepared for completion to produce into the RPS. The Kauri-E2 well will also target the Kauri Sand and begin drilling immediately after the Kauri-E1 well is finished with these completion operations. The Kauri-E2 well is expected to be completed by the end of the third quarter of 2003. Following the drilling of these wells, a fracture stimulation program is planned to improve production from the Rimu/Kauri area. The increased capital budget in New Zealand will enable the Company to continue with its successful development program in the Rimu/Kauri area as well as some further exploitation at TAWN.