Swift Energy Completes Two Successful Wells in Taranaki

Houston-based Swift Energy Company completed three of four wells drilled in Taranaki in the first quarter of 2006, the company says in its first quarter report to March 31.

Swift Energy said it was successful with the Kauri-E11 well, which was undergoing production testing in the Tariki sands in the Kauri field.

Two wells targeted the shallow Manutahi sands, with Swift Energy recording one successful development well and one unsuccessful exploration well.

In addition the Trapper exploration well in the TAWN fields, is undergoing testing in deeper zones to determine prospectivity. The Trapper well is being drilled in a 50% joint venture with Mighty River Power in the Tarata thrust exploration.

Swift Energy has two rigs operating in New Zealand and is drilling a development well targeting the Kauri sand and the Goss exploration well targeting several deep horizons of interest.

Swift Energy Company’s net income increased by 45% to a record of US$37.3 million for the March 31 quarter of 2006, compared to US$25.7 million in the first quarter of 2005.

Production in from the company’s New Zealand operations decreased 16% to 3.8 billion cubic feet equivalent (Bcfe) when compared to production in the same period of 2005. US production increased 16% to 12.8 Bcfe for the first quarter of 2006 compared with the same period of 2005.

Average realised natural gas prices in New Zealand for the quarter were US$2.91 per Mcf for the first quarter of 2006, an 8% decrease from the $3.17 per Mcf received in the comparable 2005 period. Natural gas liquids contracts yielded an average price of US$16.68 per barrel, a decrease of 6% compared to $17.80 per barrel in the 2005 first quarter.

Swift Energy said the lower New Zealand natural gas and NGL prices were a function of being denominated in New Zealand dollars, which declined in the first quarter against the U.S. dollar.

But the company’s New Zealand McKee blend crude oil (which is sold at a world market-linked price) sold for an average US$64.13 per barrel compared to US$51.68 per barrel in the same period in 2005.

Swift Energy Company’s management discussion and analysis for the first quarter said that it planned to spend about 15% of its current 2006 capital expenditure budget of between US$325 - 375 million for its New Zealand activities. [15% of US$325 million = about US$48 million or about NZ$78 million at current exchange rates]. In 2005 Swift Energy’s total capital expenditures were US$236 million.

Sources: Swift Energy Co 1st quarter report, and Management and Analysis.