Swift Energy Co fka SFYWQ

[OilStockReport]

2009 Production & Sales

Our 2009 production totaled 9.1 MMBoe, a decrease of 10% from our production of 10.0 MMBoe in 2008 due primarily to reduced drilling activity in 2009 following the plunge in commodity prices in 2008. The contributions to the 2009 production from the core areas of operation were 52.8% from Southeast Louisiana, 30.1% from South Texas, 9.5% from Central Louisiana/East Texas, and 7.2% from South Louisiana. The production volumes were 48% crude oil, 39% natural gas, and 13% natural gas liquids (NGL).

Oil and gas sales decreased 53% in 2009 to $371.7 million from $793.9 in 2008 due to both decreased production and lower unit prices. The average prices we received in 2009 were $60.07 per barrel for oil compared to $101.38 per barrel in 2008; $3.48 per Mcf for natural gas compared to $8.54 per Mcf in 2008; and $31.36 per barrel for natural gas liquids (NGL) compared to $57.15 per barrel in 2008.

2009 Producing Wells

Excluding 59 service wells, as of December 31, 2009, we had interests in 1,294 producing wells (1,165.5 net wells), of which we were operating 1,146. The wells included 569 producing from the Olmos formation in the AWP Field and 107 producing from the Miocene sands in the Lake Washington Field, the two fields providing 18.4% and 39.7% of our 2009 production, respectively. In addition, we had 402 proved undeveloped locations (PUDs) for future drilling, 99 in our Southeast Louisiana core area, 201 in South Texas, 65 in South Louisiana, and 37 in Central Louisiana/East Texas.

2009 Operational Activities

During 2009, we drilled 20 wells with a 90% success rate compared to 126 wells drilled in 2008 with an 87% success rate. The reduced drilling program in 2009 was in keeping with the company’s intentional reduction of operational expenses during 2009. Of the 20 wells drilled, seven wells with five successes were drilled in the Southeast Louisiana core area (Lake Washington Field) and 13 wells with 13 successes were drilled in the South Texas core area (11 in the AWP Field, one in the Briscoe Ranch Field, and one in the Sun TSH Field).

Thirteen of the 2009 wells were drilled in the fourth quarter with a 92% completion rate. In the Lake Washington Field, we completed four of five development wells drilled to measured depths of 6,023 feet to 7,240 feet in a new shallow well drilling program. In the southern portion of our AWP Field we completed the last two wells in a five-well horizontal drilling program in the Olmos sand, and in the northern portion of the field we completed six wells in a shallow vertical well drilling program in the Olmos sand.

Also during fourth quarter 2009, we continued programs to assist in mitigating natural field declines in both Lake Washington and AWP. In a production optimization program in Lake Washington, we did work on 11 wells involving gas lift enhancements, acid stimulations, and sliding sleeve changes to more productive zones, and we also performed recompletions on two wells. In a fracture stimulation program in AWP, we applied additional fracture stimulations to existing vertical well bores in the Olmos sand.

At year-end 2009 we had one operated rig and one nonoperated rig drilling in the South Texas core area and one rig drilling in the Southeast Louisiana core area. We expect to maintain this minimum level of activity throughout 2010. (See statement on increase in drilling rigs.)

2010 Drilling Plans

For the year 2010, our plans include drilling up to 50 wells and continuing to perform well recompletions and fracture enhancements as follows: (1) In the South Texas AWP Field, up to 4 horizontal wells in the Olmos sand, up to 6 horizontal wells in the Eagle Ford shale, up to 9 horizontal wells in the Eagle Ford shale joint venture, and up to 30 fracture enhancements; (2) in other South Texas fields, 6 to 10 horizontal wells in the Eagle Ford shale; (3) in the Southeast Louisiana Lake Washington Field, 10 to 15 wells and up to 10 recompletions; (4) in the Southeast Louisiana Bay de Chene Field, 2 to 5 wells; and (4) in the Central Louisiana/East Texas Masters Creek Field, 1 horizontal well.

Capital expenditures for 2010 are currently budgeted at $300 million to $375 million, net of minor non-core dispositions. (See update on 2010 capital budget.)