Swift's Kauri E4 Test Flows 4mcf/d of Gas

Swift Energy's Kauri-E4 appraisal well has test flowed natural gas at a rate of approximately 4.0 million cubic feet per day and crude oil/condensate at 400 barrels per day from Tariki sands in its PEP 38719 onshore south Taranaki Kauri field.

The recent Kauri-E4 well encountered both the Kauri and Tariki sands and was perforated in a five meter section of the Tariki sandstone at approximately 3200m true vertical depth, the Houston-based Swift Energy Company says in its first quarter report for 2004.

The Kauri-E4 well was tested over two days at various rates and is currently shut-in gathering pressure data. The well is expected to begin sustained production testing in the next few weeks.

The Tariki sand was approximately 570 m up-dip and over 5 km from the initial Tariki sand discovery in Swift Energy's first oil discovery, the Rimu-A1 well.

Swift Energy also completed the Kauri-E3 well in the Kauri sandstone level in the first quarter. Swift plans to fracture stimulate the well while monitoring results of the Kauri-E4 production testing.

In late May the first well of a multi-well program to drill the Kauri fields shallow oil-bearing Manutahi sands will begin.

Swift Energy said average prices for its New Zealand natural gas in the latest quarter were $US 2.27 (approx $NZ 3.60) per thousand cubic feet (Mcf) for the first quarter of 2004 under its long-term contracts. This is a 40% increase over the $US1.62 (approx $NZ 2.60) per Mcf received in the first quarter of 2003.

McKee blend crude oil averaged $US36.03 per barrel, an 11% increase over prices for the same period in 2003, and the company's natural gas liquids contracts yielded an average $US16.00 per barrel for the first quarter of 2004.

The company received an aggregate average price from New Zealand of $US2.93 per Mcfe for the first quarter in 2004, an increase of 36% over the $US2.15 per Mcfe realized in the same period of 2003.

As expected Swifts production declined for the first quarter to 3.9 Bcfe, a 25% decrease from the 5.2 Bcfe produced in the first quarter of 2003 and 16% down on the fourth quarter 2003. The fall was largely because of a decline in demand for natural gas because the electricity sector used more hydroelectricity during the quarter. This short-term reduction in demand was expected to continue at least through the second quarter of this year.

Parent company Swift Energy Company said its total net income increased 39% for the first quarter of 2004 to $US14.6 million, compared to $US10.5 million in net income before accounting change.