Swift Energy Updates Production Guidance
Swift Energy says that due to current transportation capacity constraints at the Lake Washington Field, domestic production is now expected to range from 34.0 - 37.0 Bcfe, down from the previous guidance of 36.5 - 39.0 Bcfe, while New Zealand production, bolstered by higher output from the TAWN area, is expected to be at higher levels ranging from 19.0 - 20.0 Bcfe, up from the previous guidance of 16.5 - 18.0 Bcfe.
The Company has continued its planned development activity in the Lake Washington Field in Louisiana, although due to the current transportation constraint, production is currently averaging approximately 3,500 barrels of oil per day at the field. The Company is installing facilities that will allow for additional transportation of hydrocarbons from the field by barge, and it is anticipated that this will be completed by the end of this month, at which time production will be able to return to anticipated levels of 6,000 to 7,500 gross barrels of oil per day. Although transportation costs by barge will be slightly higher, they will largely be offset by higher sales point realizations on the barged crude oil sales, which are expected to reduce the net price received by no more than $0.50 per barrel. The Company is moving ahead with its 2003 plans to replace the oil pipeline connecting its facilities in the field, as well plans to install additional storage and a new custody transfer facility that will enter the sales pipeline at a new location. This work should be completed early in the third quarter.
The Company has drilled and set pipe on all nine wells that have been drilled in the field since March 12, 2003. This brings the 2003 total of wells drilled and completed or awaiting completion to 15 of 21 wells in the Lake Washington Field, a 71% success ratio. The Company continues to have two drilling rigs and a completion rig operating in the field. The estimated productive capacity at the time of the incident, which caused the pipeline constraint, was approximately 6,000 gross barrels of oil per day. Based on recent well tests, the Company estimates that the addition of the newly completed wells will increase the productive capacity to approximately 7,500 gross barrels of oil per day. The wells to date in 2003 have primarily been targeting the shallow sands, mainly between 1,500 feet and 5,000 feet, including the 2000', A, D, and E sands. Recent wells have been successful targeting the F Sand and 8400' Sand. In addition, the Company will also begin drilling the first of three second-quarter wells in AWP Olmos area later this month.
Production from the TAWN fields in New Zealand averaged above 50.0 MMcf/d equivalent for the first quarter of 2003 and is expected to produce near these levels for the remainder of 2003 except for an approximate one-week period of downtime in the second quarter for routine maintenance. Production from the Rimu/Kauri area averaged approximately 6.0 MMcf/d equivalent during the first quarter of 2003, as expected. The Rimu Production Station will also be down for one week in the second quarter for required preventive maintenance.
During the first quarter of 2003, the Company performed several operations in the Rimu/Kauri area in New Zealand. The Kauri-A4 well was fracture stimulated in March 2003 and is currently being tested. The well continues to clean up, but to date the well has tested at rates up to 4.8 million cubic feet per day ("MMcf/d") of natural gas and 202 barrels of condensate with a negligible amount of water on a 25/64-inch choke with 1,258 pounds per square inch of flowing tubing pressure. The well is currently shut-in undergoing bottom hole pressure build up tests. Plans are underway to drill one or more additional tests targeting the Kauri Sand in 2003. Work is progressing on a pipeline to connect the Kauri-A4 well to the Rimu Production Station to begin long-term production, which should begin in the third quarter 2003.
The Kauri-F1 well, testing the shallow Manutahi sands, was successfully drilled and completed in the first quarter 2003. The well is currently undergoing production testing and has continued to flow naturally over the last three weeks. Plans call for the installation of a pumping unit later this quarter. The Company also injected CO2 into the Rimu-A2A well in the Tariki Sand and is preparing to begin production testing on this well.
Terry Swift, President and CEO noted, "We continue to be pleased with our ongoing activity in Lake Washington, as development of the field is continuing, and we are well on our way to our goal of 10,000 gross barrels of daily production in the field by year-end. The operations in New Zealand have also gone quite well, and although further testing is needed, we believe that both the Kauri Sand and the Manutahi Sand present good opportunities for future development. We are looking forward to 2003 and believe that we will accomplish those things that we set out to do this year."