Swift Energy Announces Record Year: 2006 Income Increases 40% to $161.6 Million, or $5.38/Share; 2006 Production Increases 18% to 70.2 Bcfe; and 2006 Fourth Quarter Earnings of $35.3 Million, or 1.16/Share.HOUSTON -- Swift Energy Company (NYSE NYSE See: New York Stock Exchange :SFY SFY State Fiscal Year SFY Sucks For You SFY Springfield, MA Metropolitan (airport code) ) announced today record net income for 2006 of $161.6 million, or $5.38 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, a 40% increase compared to $115.8 million of net income for 2005, or $3.95 per diluted share. For the fourth quarter of 2006, Swift Energy had net income of $35.3 million, or $1.16 per diluted share, an increase of 2% compared to $34.7 million (also $1.16 per diluted share) earned in the same quarter in 2005. Swift Energy achieved record production in 2006, which increased approximately 18% to 70.2 billion cubic feet equivalent ("Bcfe"), with 56.7 Bcfe produced domestically and 13.5 Bcfe produced in New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. . This level of production compares to 2005 production of 59.6 Bcfe (43.0 Bcfe domestic and 16.5 Bcfe New Zealand). Production for the fourth quarter 2006 totaled 18.6 Bcfe, an increase of 27% compared to production in the fourth quarter 2005. Domestic production increased 42% to 15.6 Bcfe compared to the hurricane affected fourth quarter 2005, while New Zealand production of 3.0 Bcfe declined 19% from the same quarter in 2005. Adjusted cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses (cash flow before working capital changes, a non-GAAP measure - see page 7 for reconciliation to the GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). measure) for 2006 increased 50% to $432.1 million, or $14.39 per diluted share, compared to $287.7 million, or $9.82 per diluted share, for the full year 2005. Fourth quarter 2006 adjusted cash flow from operations of $116.4 million, or $3.83 per diluted share, increased 38% compared to $84.4 million, or $2.83 per diluted share, for the fourth quarter of 2005. Swift Energy also reported record total revenues of $615.4 million for the full year 2006, an increase of 45% over 2005 revenue levels. Increased revenues, net income and cash flow in 2006 are primarily the result of our increased levels of production and higher commodity prices. Terry Swift, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Swift Energy, commented, "We are proud of our employees and their achievements in 2006. Production and reserves growth, along with an exceptional oil and gas pricing environment, enabled the Company to set new financial and operational records in 2006. We expect to increase production 7% to 10% during 2007 and anticipate proved reserves proved reserves The quantity of minerals expected to be recoverable under current economic and operating conditions. The amount of proved reserves is important in valuing the stock of a company with significant holdings in natural resources. growth of 4% to 6% during the year. A significant portion of our 2007 investment capital will be focused on expanding our South Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. potential in several areas, including
increasing the capacity of our Lake Washington Lake Washington is the second largest natural lake in state of Washington (after Lake Chelan) and the largest lake in King County. It is bordered by the cities of Seattle on the west, Bellevue and Kirkland on the east, Renton on the south and Kenmore on the north, and surrounds facilities in preparation
for additional growth from this field in 2008."Revenues and Expenses Swift Energy reported record total revenues of $615.4 million for 2006, an increase of 45% over 2005 revenue levels. These annual increases were primarily attributable to increased production and higher commodity prices. Total revenues for the fourth quarter of 2006 increased 30% to $158.6 million from the $122.5 million of revenues generated in the fourth quarter of 2005. Included in other revenues for the fourth quarter of 2006 is $7.7 million, representing the business interruption INTERRUPTION. The effect of some act or circumstance which stops the course of a prescription or act of limitation's. 2. Interruption of the use of a thing is natural or civil. portion of the hurricane insurance settlement receipt, as previously disclosed. Lease operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. ("LOE LOE Ley Orgánica de Educación (Spanish) LOE Level Of Effort LOE Limited Objective Experiment LOE Letter of Explanation LOE Language Other than English. "), before severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and ad valorem taxes Ad Valorem Tax A tax based on the assessed value of real estate or personal property. In other words ad valorem taxes can be property tax or even duty on imported items. Property ad valorem taxes are the major source of revenues for state and municipal governments. , for the full year 2006 averaged $0.89 per Mcfe, compared to $0.79 per Mcfe in 2005, and severance and ad valorem taxes increased to $0.93 per Mcfe compared to $0.71 in 2005. LOE also averaged $0.89 per thousand cubic feet equivalent ("Mcfe") in the fourth quarter of 2006, which increased from $0.85 per Mcfe for these expenses in the fourth quarter of 2005. Severance and ad valorem taxes increased to $0.87 per Mcfe from $0.86 per Mcfe in the same comparable fourth quarter periods due to our increased weighting of crude oil production leading to higher severance tax severance tax n. A tax imposed by a state on the extraction of natural resources, such as oil, coal, or gas, that will be used in other states. rates in Louisiana. Depreciation, depletion depletion n. when a natural resource (particularly oil) is being used up. The annual amount of depletion may, ironically, provide a tax deduction for the company exploiting the resource because if the resource they are exploiting runs out, they will no longer be able and amortization ("DD&A") expenses increased for the full year 2006 to $2.41 per Mcfe from $1.80 per Mcfe in 2005. DD&A expenses increased to $2.64 per Mcfe in the fourth quarter of 2006 from $2.09 per Mcfe in the comparable period in 2005, primarily as a result of increased estimates for future development costs, changes in reserve estimates and additional capital expenditures during the year. For the full year 2006, net general and administrative increased to $0.45 per Mcfe from $0.37 per Mcfe in 2005. Net general and administrative decreased to $0.43 per Mcfe during the fourth quarter 2006 from $0.44 per Mcfe in the same period in 2005. This decrease in expenses on a per-unit basis was primarily attributable to production increases, despite additional salaries and benefits associated with our expanded workforce and the additional expensing of certain stock compensation. For the full year 2006, interest expense averaged $0.34 per Mcfe for 2006 compared to $0.42 per Mcfe in 2005. Interest expense decreased to $0.33 per Mcfe in the fourth quarter 2006 compared to $0.41 per Mcfe for the same period in 2005. Swift Energy's fourth quarter provision for income taxes includes a non-recurring increase of $3.2 million, the result of a valuation allowance recorded on a deferred tax asset, related to a capital loss carry forward. Production & Pricing Swift Energy's fourth quarter 2006 production was 18.6 Bcfe, an increase of 27% from the hurricane affected 2005 fourth quarter production of 14.7 Bcfe. Sequentially, production decreased 1% from the 18.8 Bcfe produced in the third quarter of 2006 (a 3% sequential increase in domestic production, offset by a 16% decrease in New Zealand production). Fourth quarter 2006 production included 15.6 Bcfe of domestic production, a 42% increase, and 3.0 Bcfe produced in New Zealand, a 19% decrease, in both cases when compared to production in the same period in 2005. Comparative fourth quarter domestic production benefited slightly from the recent acquisitions of 5 fields in South Louisiana and increased despite reductions as a result of production downtime The time during which a computer is not functioning due to hardware, operating system or application program failure. due to an amine amine (əmēn`, ăm`ēn): see under amino group. amine Any of a class of nitrogen-containing organic compounds derived, either in principle or in practice, from ammonia (NH3). unit disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. and previously reported third-party pipeline maintenance in the Lake Washington Field. New Zealand production decreased as a result of natural declines in natural gas production. Aggregate realized global average prices increased for the full year 2006 to $8.57 from $7.11 in 2005. In the fourth quarter of 2006, Swift Energy realized an aggregate global average price of $7.98 per Mcfe, a decrease of 4% from fourth quarter 2005 price levels, which averaged $8.34 per Mcfe. Domestically, the Company realized an increased aggregate average price for the full year 2006 of $9.48 per Mcfe from $8.27 per Mcfe in 2005. Fourth Quarter 2006 domestic aggregate average prices fell to $8.61 per Mcfe, a decrease of 12% compared to the $9.77 per Mcfe received in the fourth quarter of 2005. In New Zealand, the Company realized an increased aggregate average price for the full year 2006 of $4.74 from $4.10 per Mcfe in 2005, while fourth quarter 2006 New Zealand aggregate average prices rose to $4.65 per Mcfe, an increase of 15% over the $4.04 per Mcfe realized in the same period of 2005. Swift Energy's average full year 2006 domestic crude oil prices increased to $64.28 per barrel from $53.45 per barrel in 2005. During fourth quarter 2006, domestic crude oil prices decreased slightly to $57.82 per barrel from $58.36 per barrel realized in the same period of 2005. Swift Energy's average full year 2006 domestic natural gas prices decreased to $6.44 per thousand cubic feet ("Mcf") from $7.40 per Mcf in 2005. Meanwhile, domestic natural gas prices averaged $6.20 per Mcf in the fourth quarter of 2006, a decrease of 43% from the $10.89 per Mcf received during the same period in 2005. Prices for natural gas liquids ("NGL NGL - A dialect of IGL. ") domestically rose to $38.70 per barrel for the full year 2006 from $34.00 per barrel in 2005, while fourth quarter 2006 NGL prices averaged $32.82 per barrel, a 14% decrease over fourth quarter 2005 NGL prices of $37.99. In New Zealand, the sales price of Swift Energy's crude oil increased to $67.06 per barrel for the full year 2006 from $55.57 per barrel in 2005. Fourth quarter 2006 average crude oil prices in New Zealand were $59.02 per barrel, a 2% increase over prices for the same period in 2005. Also in New Zealand for the full year 2006, the Company received a lower natural gas price of $2.99 per Mcf from $3.09 per Mcf in 2005. Fourth quarter 2006 average natural gas prices received in New Zealand were $3.24 per Mcf under its current contracts, a 6% increase over the $3.05 per Mcf received in the same 2005 period. Our New Zealand NGL contracts yielded an average price of $20.22 per barrel for the full year 2006, up from $18.84 per barrel in 2005. Fourth quarter 2006 New Zealand NGL contracts yielded an average price of $26.17 per barrel compared to $18.65 in 2005. New Zealand natural New Zealand Natural is a chain of franchise ice cream and juice shops in shopping centres in Australia, New Zealand and other countries. The products were developed in Christchurch, New Zealand, and use New Zealand milk but the company is based in Sydney, Australia. gas and NGL price contracts are remitted in New Zealand dollars Noun 1. New Zealand dollar - the basic unit of money in New Zealand dollar - the basic monetary unit in many countries; equal to 100 cents , which had strengthened during the fourth quarter 2006 against the U.S. dollar, compared to the same period in 2005. Drilling Activity In 2006, Swift Energy drilled and completed 45 of 63 wells for a 71% success rate. Domestically, Swift Energy completed 42 of 49 development wells (86% success rate) and was unsuccessful on 5 shallow exploration wells in the AWP AWP Awaiting Parts (military equipment status) AWP Average Wholesale Price AWP Annual Work Plan AWP Associated Writing Programs AWP Amusement with Prizes AWP Any Willing Provider AWP Aerial Work Platform Olmos area. In New Zealand, the Company completed 3 of 4 development wells and was unsuccessful on 5 exploration wells in 2006. For the fourth quarter 2006, Swift Energy completed 10 of 15 wells. Of these wells, 13 were drilled domestically, of which 3 of the 4 development wells drilled in the Lake Washington area were completed and 2 of the 4 development wells drilled in the Bay de Chene area were completed. Both properties are located in Swift Energy's South Louisiana region. Additionally, 3 development wells were completed in the AWP Olmos area in the South Texas region, and in the South Bearhead Creek area located in our Toledo Bend region, 2 development wells were also completed. In New Zealand, the Company was unsuccessful on 2 exploration wells in the fourth quarter 2006. Operations Update Swift Energy's Lake Washington average production rate for the fourth quarter of 2006 was 18,400 net barrels of oil equivalent per day ("Boe/d"), a 30% increase over production in the same period in 2005. This production increase was primarily attributable to the addition of production from the ongoing development at the Newport discovery. In 2006, the Company drilled 4 operated wells in the Newport area, all of which were completed. There were also three non-operated wells drilled at the Newport area, two of which were completed. The Bondi discovery well, located approximately five miles to the northwest of the field's facility infrastructure, is expected to be on production in the first quarter of 2007. Swift Energy has initiated plans to expand the productive capacity of its Lake Washington facilities by approximately 10,000 Boe/d. This expansion project is expected to be fully commissioned in the first half of 2008 and cost approximately $50 million. Additionally, Swift Energy has recently been experiencing production downtime with its CM3 platform amine unit in the Lake Washington Field throughout the first month of 2007 and also experienced a minor temporary interruption in barged crude oil sales due to navigational delays. The amine unit has now been repaired and production is back to normal levels at the CM3 platform. Production guidance has been adjusted to reflect these issues. Swift Energy has 5 barge barge, large boat, generally flat-bottomed, used for transporting goods. Most barges on inland waterways are towed, but some river barges are self-propelled. There are also sailing barges. drilling rigs and 1 land rig currently operating in its fields. Three barge rigs are operating in the Lake Washington area and 2 barge rigs are operating at Bay de Chene. One land rig is currently working in the South Bearhead Creek area. Price Risk Management Swift Energy has continued to enter into price risk management transactions and reports the following current positions. The Company has purchased floors that cover approximately 20% to 25% of its currently expected first quarter domestic natural gas production at an average NYMEX See New York Mercantile Exchange. NYMEX See New York Mercantile Exchange (NYM). strike price of $6.88 per MMBtu. Additionally, natural gas floors have been purchased covering approximately 22% to 27% of the estimated second quarter domestic natural gas production. These second quarter floors have an average NYMEX strike price of $6.43 per MMBtu. On an ongoing basis, details of Swift Energy's complete price risk management activities can be found on the Company's website (www.swiftenergy.com). 2007 Company Guidance Swift Energy currently plans to spend $350 million to $400 million in total capital expenditures in 2007, net of minor non-core dispositions and excluding any property acquisitions. Approximately 90% of the budget is targeted for domestic activities, primarily in its South Louisiana region, with about 10% planned for activities in its New Zealand region. For 2007, Swift Energy is targeting total production to increase 7% to 10% and proved reserves to increase 4% to 6% over respective 2006 levels. Earnings Conference Call Swift Energy will conduct a live conference call today, February 8, at 9:00 a.m. CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. to discuss full year 2006 and fourth quarter 2006 financial results. To participate in this conference call, dial 973-339-3086 five to ten minutes before the scheduled start time and indicate your intention to participate in the Swift Energy conference call. A digital replay of the call will be available later on February 8 until February 15, by dialing 973-341-3080 and using pin #8248595. Additionally, the conference call will be available over the Internet by accessing the Company's website at www.swiftenergy.com and by clicking on the event hyperlink A predefined linkage between one object and another. See hypertext. hyperlink - anchor . This webcast will be available online and archived at the Company's website. 2007 Analyst/Investor Meeting Swift Energy will host a meeting with financial analysts, portfolio managers and investors on March 14, 2007 in the Houston, Texas “Houston” redirects here. For other uses, see Houston (disambiguation). Houston (pronounced /'hjuːstən/) is the largest city in the state of Texas and the area. At this meeting, Swift Energy's management will provide an annual briefing that will include an update on certain 2006 results as well as covering operational and financial plans and guidance for full year 2007. An audio webcast accompanied with the slides of the presentation will be available on the Company's website www.swiftenergy.com by clicking on the event hyperlink commencing on March 14, 2007. The meeting begins at 8:00 a.m. CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT on Thursday, March 14, 2007 and is being held at the Marriott Woodlands Waterway waterway, natural or artificial navigable inland body of water, or system of interconnected bodies of water, used for transportation, may include a lake, river, canal, or any combination of these. Hotel and Convention Center on Lake Robbins Drive in The Woodlands, Texas. Anyone interested in attending this meeting should contact the Company's Investor Relation Department at 1-800-777-2412. Swift Energy Company, founded in 1979 and headquartered in Houston, engages in developing, exploring, acquiring and operating oil and gas properties, with a focus on onshore on·shore adj. 1. Moving or directed toward the shore: an onshore wind. 2. Located on the shore: an onshore beacon; an onshore patrol. adv. and inland waters Canals, lakes, rivers, water courses, inlets, and bays that are nearest to the shores of a nation and subject to its complete sovereignty. Inland waters, also known as internal waters, are subject to the total sovereignty of the country as much as if they were an actual part oil and natural gas reserves in Louisiana and Texas and oil and natural gas reserves in New Zealand. Over the Company's 27-year history, Swift Energy has delivered long-term growth of its proved oil and gas reserves and production, with per share compounded growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. of 18% and 30%, respectively. This has been accomplished with a disciplined program of acquisitions and drilling, while maintaining a strong financial position. This press release includes "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , and Section 21E of the Securities Exchange Act of 1934, as amended. The opinions, forecasts, projections, guidance or other statements other than statements of historical fact, are forward-looking statements. These statements are based upon assumptions that are subject to change and to risks, especially the availability of labor, services, supplies and facility capacity, results of exploratory and development drilling, volatility in oil or gas prices, uncertainty and costs of finding, replacing, developing or acquiring reserves, and disruption of operations. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Certain risks and uncertainties inherent in the Company's business are set forth in the filings of the Company with the Securities and Exchange Commission. Estimates of future financial or operating performance provided by the Company are based on existing market conditions and engineering and geologic ge·ol·o·gy n. pl. ge·ol·o·gies 1. The scientific study of the origin, history, and structure of the earth. 2. The structure of a specific region of the earth's crust. 3. A book on geology. information available at this time. Actual financial and operating performance may be higher or lower. Future performance is dependent upon oil and gas prices, exploratory and development drilling results, engineering and geologic information and changes in market conditions. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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