Swift Energy Plans to Spend US$35-40m in 2007 NZ Program

New Zealand Crown Minerals

Houston-based Swift Energy Company has budgeted to spend approximately US$35-40 million on capital expenditure in New Zealand in 2007, the company says in its report for the December quarter of 2006.

Swift Energy plans to spend US$350 million to US$400 million in total capital expenditures in 2007, for its whole operations in North America and New Zealand, excluding any property acquisitions.

Approximately 90% of the budget is targeted for US activities, primarily in its South Louisiana region, with about 10% planned for activities in its New Zealand region.

Capital expenditures in 2006 totaled US$582 million, with US$212 million spent on acquisitions, $227 million spent on domestic drilling activities and US$86 million spent on prospect, leasehold and facilities and an additional US$57 million spent in New Zealand.

Swift Energy completed three of four development wells in Taranaki but was unsuccessful with five exploration wells in 2006.

Swift Energy's production in New Zealand in 2006 was 13.5 billion cubic feet equivalent (Bcfe), down from 16.5 Bcfe in 2005.

Production for the December quarter was 3.0 Bcfe, a decline of 19% from the same quarter in 2005.

New Zealand production decreased as a result of natural declines in natural gas production.

However Swift reported an increase in New Zealand aggregate average prices to US$4.74 per Mcfe in 2006 from US$4.10 per Mcfe in 2005. Fourth quarter 2006 New Zealand aggregate average prices rose to US$4.65 per Mcfe, an increase of 15% over the US$4.04 per Mcfe realized in the same period of 2005.

Crude oil sales prices in New Zealand increased to US$67.06 per barrel for the full year 2006 from US$55.57 per barrel in 2005. Fourth quarter 2006 average crude oil prices in New Zealand were US$59.02 per barrel, a 2% increase over prices for the same period in 2005.

Average natural gas prices in New Zealand were down slightly for 2006 at US$2.99 per Mcf, compared with US$3.09 per Mcf in 2005.

However gas prices in the fourth quarter 2006 under its current contracts increased 6% to US$3.24 per Mcf over the US$3.05 per Mcf received in the same 2005 period.

Natural gas liquids contracts in New Zealand yielded an average price of US$20.22 per barrel for 2006, up from US$18.84 per barrel in 2005.

Fourth quarter 2006 NGL contracts yielded an average price of US$26.17 per barrel, substantially up on the 2005 average of US$18.65. Swift Energy said New Zealand natural gas and NGL price contracts are remitted in New Zealand dollars, which had strengthened during the fourth quarter 2006 against the U.S. dollar, compared to the same period in 2005.

Proved reserves in New Zealand at year-end 2006 declined by 10% to 106 Bcfe from 118 Bcfe at year-end 2005 due to natural production declines and lack of reserve additions from the drilling program.

New Zealand proved reserves accounted for 13% of Swift Energy Company total reserves. South Louisiana holds the company's largest share of proved reserves at 55%, with South Texas holding 18% and Toledo Bend in East Texas and Central Louisiana 14%.

Swift Energy's pre-tax net present value (PV-10) of its proved reserves in New Zealand at year-end 2006 totaled $264 million. These values were calculated in accordance with US Securities Exchange Commission guidelines, using a December 31, 2006 crude oil average realized price of US$63.51 per barrel for New Zealand crude oil and US$3.59 per Mcfe for natural gas.

Swift Energy reported a record net income for 2006 of US$161.6 million, a 40% increase compared to $115.8 million of net income for 2005. For the fourth quarter of 2006, Swift Energy had net income of US$35.3 million, an increase of 2% compared to US$34.7 million earned in the same quarter in 2005.


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