Swift To Acquire Shell New Zealand Assets

Swift Energy New Zealand Limited has reached agreement with an affiliate of Shell New Zealand to acquire Southern Petroleum (New Zealand) Exploration Limited, for approximately US $55 million in cash, as of November 16, 2001. Southern NZ owns interests in four onshore producing oil and gas fields, hydrocarbon-processing facilities with excess capacity and pipelines connecting the fields and facilities with each other and with export terminals and markets. The fields and facilities are located in the Taranaki Basin, New Zealand.

The assets acquired include the onshore TAWN properties, which are located in the Taranaki Basin of the North Island of New Zealand, approximately 17 miles north of Swift's Rimu discovery. Swift will be acquiring a 96.76% working interest in four Petroleum Mining Licenses ("PML"), collectively known as the TAWN properties, which include the Tariki Field (PML 38138), the Ahuroa Field (PML 38139), the Waihapa Field (PML 38140) and the Ngaere Field (PML 38141). The four fields include 17 wells with current net production for December expected to be approximately 930 barrels of oil per day ("Bopd"), 23.2 million cubic feet of natural gas per day ("MMcfpd", 1,000 BTU/Mcf) and 450 barrels per day of natural gas liquids, or total net production of 31.5 million cubic feet equivalent per day. The net proved reserves as of November 1, 2001 are estimated to be approximately 65.0 billion cubic feet equivalent ("Bcfe") with 74% of the reserves being natural gas. The natural gas is sold under a long-term contract to Contact Energy. Fiscal terms for the oil and gas reserves call for a royalty payable to the Crown at an effective royalty rate of approximately 10%.