Two Swift Kauri Wells Each Flow Test at 10 mmcfe/d of Gas

Swift Energy has achieved its best results so far from the Kauri gas, condensate and oil field in onshore south Taranaki with two development wells each flow testing at up to 10 million cubic feet equivalent of gas per day.

The Houston-based Swift Energy Company said in its September quarter report that following fracture stimulation of the Kauri-E5 well it was tested on various choke sizes with rates up to 10.8 million cubic feet equivalent of gas per day (MMcfe/d) on a 32/64 inch choke at a flowing tubing pressure of 2400 psi.

The Kauri-E4 well was flow-tested at rates up to 10.3 MMcfe/d. This rate was on a 28/68-inch choke at a flowing tubing pressure of 1870 psi.

Both tests were from the Kauri sands levels of the wells drilled in PEP 38719 from the E pad, the northernmost of Swift Energy's A to E pads. The E pad is the closest to the Rimu field.

Previously Swift has said it has achieved three to five-fold increases in deliverability from pre to post-'fraccing'.

The September report also said the Kauri-E6 well, which was initially completed in the Tariki sand but found a limited reservoir, is now awaiting a recompletion in the Kauri sand. Results from Kauri-E3 were inconclusive.

An additional Kauri sand well will begin drilling before the end of year. Swift has made an application for a mining permit for the Kauri field.

Swift Energy has also recently drilled the Tariki-D1 well in the company's Tariki mining license (PML 38138), targeting the Tariki sands. The well was the first well drilled by Swift in the TAWN fields since it bought the licenses from Shell in 2001. The well reached a total depth of 2612 m and will be production tested shortly.

Swift's New Zealand output in the third quarter of 2004 was 3.8 billion cubic feet equivalent (Bcfe), which accounted for 27% of the company's total production in the period. This was a 23% decrease from the 4.9 Bcfe produced in the third quarter of 2003 and a 7% decrease from second quarter 2004 production levels. But a delayed tanker lifting in New Zealand moved approximately 0.3 Bcfe of crude oil sales into the fourth quarter 2004. US production in the September quarter was 10.2 Bcfe, a 16% increase.

In New Zealand, Swift received an aggregate average price of US$2.97 (approx. NZ$4.25) per Mcfe for the third quarter in 2004, an increase of 20% over the US$2.48 (approx NZ$3.55) per Mcfe for the same period of 2003.

Swift Energy's average natural gas price for its New Zealand long-term contracts was US$2.21 (approx NZ$3.15) per Mcf for the latest quarter, was an 18% increase over the US$1.87 (approx NZ$2.67) per Mcf in the 2003 third quarter. Sales price of McKee blend crude oil averaged US$47.75 (approx NZ$68) per barrel, a 66% increase over the 2003 third quarter, and the natural gas liquids contracts yielded an average price of US$18.63 (about NZ$26.50) per barrel for the 2004 third quarter.

Bruce H. Vincent has been appointed president of Swift Energy, CEO Terry Swift announced. Mr. Vincent has served Swift in a variety of strategic positions and will continue to serve as company secretary and president of Swift Energy International.