Swift Energy Increases Production
Swift Energy Company reports that production for the third quarter of 2002 totaled approximately 12.2 billion cubic feet equivalent (Bcfe). This is a 4% increase in production from the third quarter production in 2001 and a 4% sequential decrease from production in the second quarter of 2002. Domestic production was approximately 8.1 Bcfe while production from New Zealand contributed 4.1 Bcfe of the third quarter 2002 total. Domestic operations in the Lake Washington Field, which were recently shut-in due to severe weather, have been successfully resumed, and the field is currently producing over 3,000 net barrels of oil per day.
Domestic operations continued to focus on the development of the shallow sands in the Lake Washington Field, where a total of 10 wells were drilled during the third quarter. Since the Company's last update August 1, nine wells have been drilled with production casing set on all of them. Most wells were drilled to an average true vertical depth of approximately 3,000 feet and have an estimated average of 154 feet of cumulative net oil pay in each well. The wells have multiple productive horizons with porosities between 17% to 33% and permeabilities from 100 to 3,000 millidarcies. Of particular note, the SL212 #104, which was drilled to a depth of 8,600 feet, has approximately 134 feet of net pay in deeper sands with average porosity of just over 30%, and the CM #206, which was drilled as a deviated hole to a measured depth of 4,506 feet, has over 420 feet of net pay in three different sands.
The Company experienced production and drilling delays in its operations as a result of Tropical Storm Isidore and Hurricane Lili that passed through this area. The Company successfully restored its production following these events, and current net production exceeds 3,000 net barrels of oil per day. Third party facility constraints combined with short-term water and oil flow-line restrictions limited Lake Washington production capacity during the third quarter. Significant facility upgrades and new equipment installations were completed, which increased the gross capacity of the facilities to over 9,000 barrels of oil per day. These facilities are expected to be fully operational later in the fourth quarter. The Company anticipates increasing field production through year-end, which will increase facility utilization up to 50% of this new capacity or approximately 4,500 barrels per day. A completion rig is now in the field to begin completion work on recently drilled wells. This activity brings the total wells drilled through the third quarter in Lake Washington to 21 wells with two additional wells drilled so far in the fourth quarter. It is anticipated that eight to nine more wells will be drilled by year-end, with drilling activity in the field currently planned to continue throughout next year.
Terry E. Swift, President and CEO of Swift Energy, noted, "Our work in Lake Washington continues to deliver outstanding results, and we believe that we can continue to increase reserves and production in this area. Although somewhat disappointed at the delays we experienced due to the two storms, we believe that hurricane season is behind us, and we are on track to meet our production and reserves goals for the year. We set out this year with the goal of improving our finding costs and reducing our overall production decline curve, and we are confident that this will be demonstrated in our year-end results. As a result of the success we are having in Lake Washington, we are now preparing a multi-year development plan in this area that will support our future growth for years to come."