|
Swift Energy Announces First Quarter 2008 Results:
HOUSTON - MAY 8 2008 - Swift Energy Company (NYSE: SFY) announced today that its income from continuing operations for the first quarter of 2008 increased mAY 88% to $49.8 million, or $1.61 per diluted share, compared to $26.4 million of income from continuing operations earned in the first quarter of 2007, or $0.87 per diluted share. Adjusted cash flow from continuing operations (*cash flow before working capital changes, a non-GAAP measure - see page 6 for reconciliation to the GAAP measure) for the first quarter of 2008 increased 62% to $136.3 million, or $4.41 per diluted share, compared to $84.2 million of adjusted cash flow, or $2.76 per diluted share, for the same period of 2007.
Swift Energy produced 2.57 million
barrels of oil equivalent (“MMBoe”) from continuing operations
(domestically) during the first quarter of 2008, which is a 1%
increase compared to first quarter 2007 production of 2.53 MMBoe
from continuing operations.
Terry Swift, CEO of Swift Energy,
commented, “Against a backdrop of historically high crude oil and
natural gas prices, Swift Energy has continued to drill significant
wells across all of our operating areas, completed construction of
the Lake Washington Westside Facility and tied in additional natural
gas takeaway capacity in Bay de Chene. Given the exceptional
external environment and current and anticipated operating results,
we are increasing Swift Energy’s 2008 estimated capital outlays from
$425-$475 million to $475-$525 million. This increase in spending
will fund increased activity in both South Louisiana and South
Texas. Swift Energy currently has the most extensive opportunity set
in its 28-year history, and we are very fortunate to have such an
exceptional group of people developing these opportunities.”
Revenues and Expenses
Total revenues from continuing
operations for the first quarter of 2008 increased 53% to $199.0
million from the $130.1 million from continuing operations generated
in the first quarter of 2007, primarily attributable to higher
commodity prices.
Depreciation, depletion and amortization
expense (“DD&A”) of $20.43 per barrel of oil equivalent (“Boe”) in
the first quarter 2008 increased from $16.46 per Boe of DD&A in the
comparable period in 2007 primarily as a result of an increased
depletable base, partially offset by higher reserves. Lease
operating expenses, before severance and ad valorem taxes, were
$10.28 per Boe in the first quarter 2008, an increase of 66%
compared to $6.20 per Boe in the first quarter of 2007. The increase
in lease operating expenses was predominately due to higher than
projected workover expenses in Lake Washington and higher gas
processing costs associated with additional volumes from the Cotulla
acquisition. Also, severance and ad valorem taxes were up
appreciably to $8.61 per Boe from $6.33 per Boe in the comparable
period due to higher realized commodity prices.
General and administrative expenses
associated with increased staffing levels rose to $3.86 per Boe
during the first quarter 2008 from $2.99 per Boe in the same period
in 2007. Interest expense per Boe increased 27% to $3.38 per Boe in
the first quarter 2008 compared to $2.66 per Boe for the same period
in 2007 due to increased bank debt and lower capitalized interest.
Production & Pricing
Swift Energy’s first quarter 2008
production from continuing operations of 2.57 MMBoe represents a 1%
increase over comparable production from continuing operations in
the same period in 2007 and an 8% decrease compared to the fourth
quarter of 2007 continuing operations. Year over year first quarter
production benefited from the recent acquisition of three fields in
South Texas, which resulted in approximately twice as much
production from this region compared to first quarter 2007 levels.
The decrease in production from fourth quarter 2007 to first quarter
2008 was anticipated and caused by a combination of natural declines
in production as our wells in Lake Washington mature and a reduction
of the production of several wells in the Newport area in our Lake
Washington field to preserve reservoir pressure in advance of a
pressure maintenance program. This pressure maintenance program has
commenced with the recent start-up of the Westside facility and is
expected to take several months to bring about a production
response.
The Company realized an aggregate
average price of $77.80 per Boe for its continuing operations, an
increase of 51% from the $51.38 average price received in the first
quarter of 2007. In the first quarter of 2008, average crude oil
prices increased 72% to $99.43 per barrel from $57.87 per barrel
realized in the same period in 2007. For the same periods, average
natural gas prices were $7.97 per thousand cubic feet (“Mcf”), an
increase of 35% from the $5.92 per Mcf domestic average realized a
year earlier. Prices for natural gas liquids (“NGL”) averaged $59.80
per barrel in the first quarter for a 50% increase over first
quarter 2007 NGL prices of $39.90 per barrel.
Operations Update
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.
Borrowing Base
After a regular semi-annual review of
its $500 million facility by its bank group, Swift Energy’s
borrowing base was affirmed at $400 million effective May 1, 2008.
The Company is continuing to maintain its commitment amount at $350
million. Under the terms of its credit facility, the Company can
increase the commitment amount up to the total amount of the
borrowing base at its discretion.
Price Risk Management
Swift Energy has purchased natural gas floors that cover approximately 45% to 50% of its currently expected second quarter 2008 domestic natural gas production at an average NYMEX strike price of $7.68 per MMBtu. Additionally, natural gas floors have been purchased for the third quarter 2008 covering approximately 30% to 35% of that quarter’s estimated domestic natural gas production. These third quarter floors have an average NYMEX strike price of $8.71 per MMBtu. The Company has also purchased floors at a $93.55 average NYMEX strike price covering 40% to 45% of its third quarter crude oil production. 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) .
Earnings Conference Call
Swift Energy will conduct a live conference call today, May 8, at 9:00 a.m. CDT to discuss first quarter 2008 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 May 8 until May 15, by dialing 706-645-9291 and using Conference ID # 39919102. Additionally, the conference call will be available over the Internet by accessing the Company’s website at http://www.swiftenergy.com/ and by clicking on the event hyperlink. This webcast will be available online and archived at the Company’s website.
Annual Shareholder Meeting
Swift Energy’s Annual Meeting of Shareholders will be held at 4:00 p.m. CDT on Tuesday, May 13, 2008, at the Wyndham Greenspoint Hotel in the Wedgewood Ballroom on the second floor, 12400 Greenspoint Drive, Houston Texas 77060. The public is invited to attend to hear management’s discussion of 2008 opportunities and operating environment.
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 oil and natural gas reserves in the onshore and inland waters of Louisiana and Texas. Over the Company’s 28-year history, Swift Energy has shown long-term growth in its proved oil and gas reserves, production and cash flow through a disciplined program of acquisitions and drilling, while maintaining a strong financial position.
SWIFT ENERGY COMPANY
SUMMARY FINANCIAL INFORMATION
FROM CONTINUING OPERATIONS
(Unaudited)
(In Thousands Except Per Share and Price Amounts)
Three Months Ended
March 31,
2008 2007 Percent Change
Revenues:
Oil & Gas Sales $ 199,973 $ 130,222 54 %
Other (1,013) (143) NM %
Total Revenue $ 198,960 $ 130,079 53 %
Income From Continuing Operations $ 49,835 $ 26,445 88 %
Basic EPS – Continuing Operations $ 1.64 $ 0.89 85 %
Diluted EPS – Continuing Operations $ 1.61 $ 0.87 86 %
Net Cash Provided By Operating Activities – Continuing Operations
$ 139,690 $ 78,575 78 %
Net Cash Provided By Operating Activities, Per Diluted Share –
Continuing Operations $ 4.52 $ 2.58 75 %
Cash Flow Before Working Capital Changes(1) (non-GAAP measure) –
Continuing Operations $ 136,252 $ 84,206 62 %
Cash Flow Before Working Capital Changes, Per Diluted Share –
Continuing Operations $ 4.41 $ 2.76 60 %
Weighted Average Shares Outstanding (Diluted) 30,925
30,497 (1) %
EBITDA(1) (non-GAAP measure) $ 140,480 $ 90,726 55 %
Production (MBoe) – Continuing Operations: 2,570 2,534 1
%
Realized Price ($/Boe) – Continuing Operations: $ 77.80 $
51.38 51 %
(1) See reconciliation on page 6. Management believes that the
non-GAAP measures EBITDA and cash flow before working capital
changes are useful information to investors because they are widely
used by professional research analysts in the valuation, comparison,
rating and investment recommendations of companies within the oil
and gas exploration and production industry. Many investors use the
published research of these analysts in making their investment
decisions.
Reconciliation of GAAP (a) to non-GAAP Measures
(Unaudited)
(In Thousands)
Three Months Ended
Mar. 31, 2008 Mar. 31, 2007
INCOME TO EBITDA RECONCILIATIONS:
Income from Continuing Operations $ 49,835 $ 26,445 88 %
Provision for Income Taxes 29,007 15,472
Interest Expense, Net 8,690 6,746
Depreciation, Depletion & Amortization & ARO (b) 52,948
42,063
EBITDA $ 140,480 $ 90,726 55 %
Three Months Ended
Mar. 31, 2008 Mar. 31, 2007
CASH FLOW RECONCILIATIONS:
Net Cash Provided by Operating Activities – Continuing Operations
$ 139,690 $ 78,575 78 %
Increases and Decreases In:
Accounts Receivable (2,272) (586)
Accounts Payable and Accrued Liabilities 950 7,261
Income Taxes Payable (579) 884
Accrued Interest (1,537) (1,928)
Cash Flow Before Working Capital Changes – Continuing Operations
$ 136,252 $ 84,206 62 %
(a) GAAP--Generally Accepted Accounting Principles
(b) Includes accretion of asset retirement obligation
Note: Items may not total due to rounding
SWIFT ENERGY COMPANY
SUMMARY BALANCE SHEET INFORMATION
(Unaudited)
(In Thousands)
As of
March 31, 2008
As of
December 31, 2007
Assets:
Current Assets:
Cash and Cash Equivalents $ 10,156 $ 5,623
Other Current Assets 99,325 97,778
Current Assets Held for Sale 93,446 96,549
Total Current Assets 202,927 199,950
Oil and Gas Properties 2,860,504 2,717,112
Other Fixed Assets 33,349 33,064
Less-Accumulated DD&A (1,042,913) (989,981)
1,850,940 1,760,195
Other Assets 8,559 8,906
$ 2,062,426 $ 1,969,051
Liabilities:
Current Liabilities $ 165,699 $ 202,095
Current Liabilities Associated with Assets Held for Sale
8,164 8,066
Long-Term Debt 623,400 587,000
Deferred Income Taxes 337,620 302,303
Asset Retirement Obligation 32,372 31,066
Other Long-term Liabilities 2,407 2,467
Stockholders’ Equity 892,764 836,054
$ 2,062,426 $ 1,969,051
Note: Items may not total due to rounding
SWIFT ENERGY COMPANY
SUMMARY INCOME STATEMENT INFORMATION
(Unaudited)
In Thousands Except Per Boe Amounts
Three Months Ended Three Months Ended
Mar. 31, 2008 Per Boe Mar. 31, 2007 Per Boe
Revenues:
Oil & Gas Sales $ 199,973 $ 77.81 $ 130,222 $ 51.39
Other Revenue (1,013) (0.39) (143) (0.06)
198,960 77.42 130,079 51.33
Costs and Expenses:
General and Administrative, net 9,919 3.86 7,589 2.99
Depreciation, Depletion & Amortization 52,494 20.43
41,722 16.46
Accretion of Asset Retirement Obligation (ARO) 454 0.18
341 0.13
Lease Operating Costs 26,425 10.28 15,714 6.20
Severance & Other Taxes 22,136 8.61 16,050 6.33
Interest Expense, Net 8,690 3.38 6,746 2.66
Total Costs & Expenses $ 120,118 $ 46.74 $ 88,162 $
34.79
Income from Continuing Operations Before Income Taxes 78,842
30.68 41,917 16.54
Provision for Income Taxes 29,007 11.29 15,472 6.11
Income from Continuing Operations $ 49,835 $ 19.39 $
26,445 $ 10.44
Income (Loss) from Discontinued Operations, Net of Taxes
(1,474) NM 1,143 NM
Net Income $ 48,361 NM $ 27,588 NM
Additional Information:
Capital Expenditures $ 176,402 $ 110,340
Capitalized Geological & Geophysical $ 6,411 $ 6,371
Capitalized Interest Expense $ 1,961 $ 2,505
Deferred Income Tax $ 28,428 $ 15,446
Note: Items may not total due to rounding
SWIFT ENERGY COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
(In Thousands)
Three Months Ended
Mar. 31, 2008 Mar. 31, 2007
Cash Flows From Operating Activities:
Net Income $ 48,361 $ 27,588
Plus (Income) Loss From Discontinued Operations, Net of Taxes
1,474 (1,143)
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities -
Depreciation, Depletion, and Amortization 52,494 41,722
Accretion of Asset Retirement Obligation (ARO) 454 341
Deferred Income Taxes 28,428 15,446
Stock Based Compensation Expense 2,632 2,431
Other 2,409 (2,179)
Change in Assets and Liabilities -
Decrease in Accounts Receivable 2,272 586
Decrease in Accounts Payable and Accrued Liabilities (950)
(7,261)
Increase/(Decrease) in Income Taxes Payable 579 (884)
Increase in Accrued Interest 1,537 1,928
Cash Provided by Operating Activities – Continuing Operations
139,690 78,575
Cash Provided by Operating Activities – Discontinued Operations
2,822 7,392
Net Cash Provided by Operating Activities 142,512 85,967
Cash Flows From Investing Activities:
Additions to Property and Equipment (176,402) (110,340)
Proceeds from the Sale of Property and Equipment 79 89
Net Cash Received as Operator of Partnerships and Joint Ventures
--- 467
Cash Used in Investing Activities – Continuing Operations
(176,323) (109,784)
Cash Used in Investing Activities – Discontinued Operations
(1,023) (6,979)
Net Cash Used in Investing Activities (177,346) (116,763)
Cash Flows From Financing Activities:
Net Proceeds From of Bank Borrowings 36,400 32,600
Net Proceeds From Issuance of Common Stock 3,887 1,029
Excess Tax Benefits From Stock-Based Awards 467 ---
Purchase of Treasury Shares (1,387) (928)
Cash Provided by Financing Activities – Continuing Operations
39,367 32,701
Cash Provided by Financing Activities – Discontinued Operations
--- ---
Net Cash Provided by Financing Activities 39,367 32,701
Net Increase in Cash and Cash Equivalents 4,533 1,905
Cash and Cash Equivalents at the Beginning of the Period 5,623
1,058
Cash and Cash Equivalents at the End of the Period $ 10,156 $
2,963
SWIFT ENERGY COMPANY
OPERATIONAL INFORMATION(1)
QUARTERLY COMPARISON -- SEQUENTIAL & YEAR-OVER-YEAR
(Unaudited)
Three Months Ended Three Months Ended
Mar. 31,
2008
Dec. 31, 2007 Percent
Change
Mar. 31,
2007
Percent
Change
Domestic Production :
Oil & Natural Gas Equivalent (MBoe) 2,570 2,791 (8) %
2,534 1 %
Natural Gas (Bcf) 5.01 5.14 (3) % 3.77 33 %
Crude Oil (MBbl) 1,420 1,617 (12) % 1,773 (20) %
NGL (MBbl) 316 318 (1) % 133 138 %
Domestic Average Prices:
Combined Oil & Natural Gas ($/Boe) $ 77.80 $ 70.33 11 %
$ 51.38 51 %
Natural Gas ($/Mcf) $ 7.97 $ 6.62 20 % $ 5.92 35
%
Crude Oil ($/Bbl) $ 99.43 $ 89.23 11 % $ 57.87 72
%
NGL ($/Bbl) $ 59.80 $ 56.65 6 % $ 39.90 50 %
(1) Does not include production and pricing information for our New
Zealand activities, which have been included in discontinued
operations in our financial statements.
SWIFT ENERGY COMPANY
FIRST QUARTER AND FULL YEAR 2008
GUIDANCE ESTIMATES
Actual
For First
Quarter 2008
Guidance
For Second
Quarter 2008
Guidance
For Full
Year 2008
Production Volumes (MMBoe) 2.57 2.58 - 2.73
11.66 - 12.25
Production Mix:
Natural Gas (Bcf) 5.01 5.4 - 5.7
22.9 - 24.1
Crude Oil (MMBbl) 1.42 1.39 - 1.47
6.49 - 6.82
Natural Gas Liquids (MMBbl) 0.316 0.286 - 0.304
1.30 - 1.40
Product Pricing (Note 1):
Natural Gas (per Mcf)
NYMEX Differential (Note 2) $ (0.06) ($0.60) - ($1.00)
($0.50) - ($1.25)
Crude Oil (per Bbl)
NYMEX differential (Note 3) $ 1.61 ($1.25) - ($2.25) ($1.00)
- ($3.00)
NGL (per Bbl)
Percent of NYMEX Crude 61 % 50% - 65% 50% - 65%
Oil & Gas Production Costs:
Lease Operating Costs (per Boe) $ 10.28 $9.00 - $9.50 $8.00
- $9.00
Severance & Ad Valorem Taxes (as % of Revenue dollars) 11.1 %
11.0% - 12.0% 10.5% - 12.0%
Other Costs:
G&A per Boe $ 3.86 $3.55 - $4.15 $3.75 - $4.25
Interest Expense per Boe $ 3.38 $2.80 - $3.00 $2.50 - $2.75
DD&A per Boe $ 20.43 $20.00 - $20.75 $21.00 - $22.50
Supplemental Information:
Capital Expenditures
Operations $ 168,030 $135,000 - $150,000 $443,500 -
$494,500
Acquisition/ Dispositions, net
$ --- $0 - ($1,000) ($5,000) - ($10,000)
Capitalized G&G (Note 4) $ 6,411 $7,100 - $7,500 $28,000 -
$30,500
Capitalized Interest $ 1,961 $2,000 - $2,300 $8,500 -
$10,000
Total Capital Expenditures $ 176,402 $144,100 - $158,800
$475,000 - $525,000
Basic Weighted Average Shares 30,347 30,400 - 30,700 30,400
- 30,900
Diluted Computation:
Weighted Average Shares 30,925 30,900 - 32,000 31,000 -
32,000
Effective Tax Rate (Note 5) 36.8 % 36.0% - 37.0% 36.0% -
37.0%
Deferred Tax Percentage
97.0 % 90% - 95% 70% - 80%
Note 1: Swift Energy now maintains all its current price risk
management instruments (hedge positions) on its Hedge Activity page
on the Swift Energy website (www.swiftenergy.com).
Note 2: Average of monthly closing Henry Hub NYMEX futures price
for the respective contract months, included in the period, which
best benchmarks the 30-day price received for domestic natural gas
sales.
Note 3: Average of daily WTI NYMEX futures price during the
calendar period reflected which best benchmarks the daily price
received for the majority of crude oil sales.
Note 4: Does not include capitalized acquisition costs,
incorporated in acquisitions when occurred.
Note 5: Effective Tax rate guidance is based off of NYMEX strip
pricing
For more information contact :
Swift Energy Company
Paul Vincent, 281-874-2700 or 800-777-2412
Manager of Investor Relations
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, 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 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.
InvestorIdeas.com Disclaimer: Issuers of press releases are solely responsible for the accuracy of the content.
Would you like to see your news and articles here? GO>>
|
