Swift Energy Enjoys 96% Success Rate
Swift Energy completed 35 of 36 wells in the first quarter of 2008. This included 34 of 35 successful development wells for a success rate of 97% for the first quarter of 2008 and 1 exploration well that is under evaluation.
In the Company's Lake Washington Core Area in South Louisiana, 3 development wells were drilled in the Lake Washington Field in Plaquemines Parish and 1 development well was drilled in the Bay de Chene Field in Jefferson and Lafourche Parishes. We currently have 5 barge rigs contracted in this area, 4 are operating in Lake Washington with 1 operating in Bay de Chene. One of the rigs currently in Lake Washington will be released for repairs in the second quarter while 2 barge rigs are expected to be added at Lake Washington during the third quarter.
Swift Energy has recently commissioned its Westside Facility in Lake Washington and placed it on production. Oil production is now flowing through these facilities, and production from the field will be optimized through the four production facilities over the next 30 to 60 days. Since the beginning of 2008, Swift Energy has finished drilling 9 wells in Lake Washington that have encountered true vertical net pay ranging from 54 feet up to 423 feet. The wells have ranged in depth from 5,672 feet to 17,005 feet. One of these wells has been completed, and the remaining 8 wells will be completed and brought on production over the next several weeks. In Bay de Chene, the previously announced increase in export capacity has been recently completed, positioning the Company to increase production in this area during the remainder of 2008. The BDC UB #150 well, which was drilled to 9,600 feet, encountered 60 feet of true vertical net pay and is scheduled to be completed and placed on production this quarter.
In the Lafayette South Core Area, also in South Louisiana, 1 development well was drilled in the Jeanerette Field, and 1 non-operated development well was drilled in the Horseshoe Bayou Field, each located in St. Mary Parish. This latter well was drilled to 17,458 feet and encountered approximately 155 feet of true vertical net pay. It was recently completed and is currently producing at 30 million cubic feet equivalent per day with flowing tubing pressure above 10,000 psi. Swift has a 21% working interest and 18% net revenue interest in this well. In the Cote Blanche Island area in St. Mary Parish, Swift Energy drilled 1 exploration well, which is currently being evaluated.
In the Lafayette North Core Area (formerly referred to as Toledo Bend) Swift Energy completed 4 development wells in South Bearhead Creek in Beauregard Parish, Louisiana and drilled 1 well in the Masters Creek area in Vernon and Rapides Parishes. The Masters Creek well was plugged & abandoned after encountering mechanical difficulties prior to reaching the objective horizon.
In the South Texas Core Area, the Company completed 13 development wells in its Cotulla area in La Salle, Dimmit and Webb Counties, Texas and 11 development wells targeting the Olmos sand in its AWP area in McMullen County, Texas. Additionally, the Company recently acquired deep drilling rights in the AWP Field over approximately 11,000 acres below the Olmos sand and plans to drill an Edwards test in 2008.
Update on Discontinued Operations
During the first quarter, Swift Energy Company incurred a $1.5 million or $0.05 per diluted share loss from discontinued operations, which includes a $2.1 million non-cash asset write down. The sale of the majority of Swift Energy New Zealand's assets is awaiting certain regulatory approvals and is expected to close in the next several weeks with proceeds of approximately $80 million to $85 million due the Company, which will be used to pay down existing bank debt. As recently announced Swift Energy New Zealand has reached an agreement to sell its remaining assets for $15 million, which will result in a $12.8 million non-cash gain upon closing. Closing of both of these transactions is expected to occur within the next few months.