Swift Adds to Interests in Plaquemines Parish
Swift Energy Company said that it has signed an agreement to purchase $20.4 million of a seller's operated wells and acreage in Lake Washington Field in Plaquemines Parish, Louisiana, to the northeast and southeast of Swift Energy's existing acreage in the field. The acquisition is to have an effective date of October 1, 2006 and is expected to close before year-end. The transaction is subject to typical closing conditions and post-closing adjustments. The purchase price will be funded through bank borrowings.
Swift Energy estimates total reserves of the purchased properties to be approximately 1.0 million barrels of oil equivalent ("BOE") of proved reserves and 1.7 million BOE of probable and possible reserves. Approximately 36% of the proved reserves are estimated to be proved developed. Future development costs for the proved, probable and possible reserves are estimated to be approximately $25.3 million for an all-in acquisition cost of $17.23 per BOE (or $2.87 per thousand cubic feet equivalent). Current production is approximately 275 BOE per day net to the purchased interests and consists of approximately 86% crude oil.
Pursuant to the terms of the purchase agreement, Swift Energy will acquire working interests, varying from 40% to 100%, in the seller's operated wells in the field. The purchased interests consist of approximately 4,400 gross acres, or approximately 2,800 net acres, with an average net revenue interest of approximately 68%.
Terry Swift, Chairman and Chief Executive Officer of Swift Energy Company, noted, "This acquisition allows us to consolidate interests in our largest field, Lake Washington, where Swift Energy has demonstrated growth through the drill bit. We see additional upside potential on this acreage as we do on our existing acreage and look forward to having this consolidated position in the field."
Swift Energy Company, founded in 1979 and headquartered in Houston, engages in developing, exploring, acquiring and operating oil and gas properties, with a focus on onshore and inland waters oil and natural gas reserves in Louisiana, Texas and most recently Alaska, as well as oil and natural gas reserves in New Zealand. Over the Company's 27-year history, Swift Energy has shown long-term growth in its proved oil and gas reserves, production and cash flow through a disciplined program of acquisitions and drilling, while maintaining a strong financial position.