Swift Energy Updates Drilling Activity

Swift Energy Company reported today that it continues to drill the Kauri-A1 well at 8,679 feet in a 12-1/4-inch hole. Plans for the well call for 9-5/8-inch casing to be set at a depth of 9,840 feet, and then call for drilling of an 8-1/2-inch hole to a target depth of 14,760 feet to evaluate potential Tariki sandstone, Rimu limestone and Cretaceous sandstone reservoirs on this large Kauri structure. The well is expected to take another 20 to 25 days to reach total depth. The Kauri structure lies immediately south of the Rimu structure where wells have encountered Upper and Lower sections of both the Tariki sandstone and Rimu limestone. Two prior wells at Rimu encountered downdip Cretaceous intervals with indications of hydrocarbons on logs or in core samples. It is anticipated that the Tariki sandstone and Rimu limestone intervals will be encountered in the Kauri-A1 well at depths up to approximately 1,000 feet high to the producing intervals at Rimu, while the Cretaceous sandstones are expected to be encountered up to approximately 3,000 feet high to those found in the Rimu wells.

The Company also reported that production testing has begun at the Rimu A pad. The Rimu-A1 well began production testing on May 31 and is currently producing at a rate of 607 barrels of oil per day and 2.1 million cubic feet of gas per day with no water on a 16/64-inch choke. It is anticipated that this test will be interrupted for approximately two days while the test facilities are moved to facilitate flow line construction activities at the A Pad. Following this interruption, the choke size will be increased to begin flowing the well at a rate of approximately 1,000 barrels of oil per day. Additional production testing will also be conducted on the A2 and A3 wells.

The Rimu-A3 well has been perforated over an interval of approximately 125 feet in the Upper Tariki sandstone that is located approximately 148 feet updip from the same zone in A1 well. Based on pressure tests conducted on the various Tariki sandstone completions and the information obtained from the full cores taken while drilling the Rimu-A3 well, the Company has determined that a "mud-clean-up" acid treatment is necessary before final completion. Prior to final completion, the well flow tested at an average rate over five days of 67 barrels of oil per day and 294 thousand cubic feet of gas per day, with 19 barrels of water per day. Laboratory analysis of the 161 feet of full diameter vertical core recovered through the Upper Tariki sandstone while drilling indicates that with the average permeability and porosity observed, the formation should provide significantly better flow rates following a proper cleanup treatment. Preliminary studies on these core samples indicate formation damage around the well bore that may have been caused by either the drilling or completion fluids. While preliminary analysis indicates that treatment with acid will improve this skin damage, further studies are underway to determine the optimal method of stimulation. The Company will commence the final completion of this zone as soon as this analysis is completed.

The Rimu-A2 well, which is approximately 322 feet downdip in the Upper Tariki sandstone from the same interval in the A1 well, was initially perforated in the lower 82 feet of this section to determine if a possible water zone might be present at this lower interval, which has been confirmed. These perforations have been isolated, and operations are currently underway to perforate the top 18 feet of the Upper Tariki sandstone in this well bore. The confirmation of this water zone establishes the downdip limit of this structure and further indicates that the Upper Tariki oil discovery may be supported by an aquifer system, which should improve the ultimate oil recovery.

Limited production testing from the Upper Rimu limestone has also been conducted from the wells at Rimu B pad. The Rimu-B1 well was tested over a 23 day period and produced at an average rate of 271 barrels of oil and 3.4 million cubic feet of gas, with 146 barrels of water per day from the Upper Rimu limestone. Analysis of production logging measurements demonstrates that the water production is coming from a zone below the current perforations. Subsequent operations on the Rimu B-1 completion will attempt to eliminate the water production. The Rimu-B2 well was tested over a 13 day period and produced at an average rate of 256 barrels of oil and 6.0 million cubic feet of gas, with 8 barrels of water per day. Further testing of the B pad wells will commence when facilities are available at the production station.