Swift's NZ Gas Production Exceeds its US Gas Output

The New Zealand properties produced 14.3 bcf of gas, 51% of Swift's total natural gas production for the year. Oil production from New Zealand was 572,683 barrels (17% of total Swift Energy oil) with natural gas liquids output 283,227 barrels (34% of total). Overall, New Zealand provided approximately 36% of Swift's 2003 production and 22% of the company's revenue in 2003. Proved reserves in New Zealand increased 13% in 2003 to 176 Bcfe, replacing 206% of Swift's 2003 NZ production.

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.