Swift to Drill Additional Taranaki Wells

Swift Energy Company is to drill two additional development wells in its onshore Taranaki Kauri permit (PEP 38719) in New Zealand this year following a boost to its capital expenditure mid-year mainly because of strong oil and gas prices.

The company is also later this year to drill its first well in its TAWN fields since it bought the licences from Shell in 2001.

Swift Energy says in its second quarter report that the increase in capital budget for the whole company is expected to approximate its 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," the report says.

The Kauri-E5 well, the first of the two additional wells in the area this year is currently being drilled. It is targeting both the Kauri sand and the deeper Tariki sand, and should reach the targeted depth later in the third quarter. The Kauri-E6 well, seeking similar targets is expected to be drilled following the Kauri-E5 well.

Swift Energy New Zealand's president and chief operating officer Alan Cunningham said the company also plans this year to drill a well Tariki-D1 in the company's Tariki mining license (PML 38138). The well will target Tariki sands.

The report says Swift Energy began its development program in the shallow oil-bearing Manutahi sands in the Kauri field and has now successfully drilled five development wells in this area since late last year. A sixth well targeting Manutahi sands was unsuccessful.

The report says average oil price received by Swift Energy during the second quarter of 2004 is expected to exceed $US35.00 per barrel, both in the US and in New Zealand.

The company's estimated average prices received for natural gas are expected to exceed $US5.65 per thousand cubic feet (Mcf) in the US and approximately $US2.10 (about $NZ3.30) per Mcf in New Zealand. The prices for natural gas liquids are expected to exceed $US18.00 per barrel domestically and $US16.00 (about $NZ25.00) per barrel in New Zealand.

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.