Swift Energy said Tuesday its domestic production in the second quarter increased 20% to 10.2 Bcfe compared to the 2003 second quarter production of 8.5 Bcfe, but was 2% lower than first quarter 2004 volumes of 10.4 Bcfe. The company also announced that it will boost its capital spending budget for the year by 20% to $160-175 million in response to higher expected cash flow due to high commodity prices and, to a lesser extent, rising production volumes.
Its total production, including New Zealand volumes, grew about 7% during the second quarter to 14.2 Bcfe compared to the second quarter of last year. New Zealand production totaled 4 Bcfe, down 17% from 2Q2003 but up 3% from the first quarter.
“The elevated commodity prices and our operational progress provide Swift Energy with increased levels of cash flow, which allows us to increase our capital spending accordingly,” said CEO Terry Swift. “This increase in our capital budget will enable us to begin projects late this year that will add to our momentum going into 2005.”
The company’s estimated average prices received for natural gas are expected to exceed $5.65/Mcf domestically and $2.10/Mcf in New Zealand, and the prices for gas liquids are expected to exceed $18/bbl domestically and $16/bbl in New Zealand. The average oil price received by Swift Energy during the second quarter of 2004 is expected to exceed $35/bbl, both domestically and in New Zealand.
Swift Energy currently has five drilling rigs operating domestically, one drilling for oil in Lake Washington in Plaquemines Parish, LA, three drilling for natural gas in South Texas and one non-operated rig drilling in Alabama. The company also has one drilling rig operating in New Zealand. The increase in its capital budget will provide for two additional exploratory wells domestically, two more development wells in New Zealand, additional 3-D seismic in the Lake Washington area to enhance future drilling programs, facility enhancement and expansion in Lake Washington, as well as other operational expenditures, the company said.
It has 50-55% of its domestic natural gas production hedged for the third quarter 2004 and 10 to 15% of its domestic natural gas production hedged for the fourth quarter. Swift also has 40-45% of its total crude oil hedged in the third quarter at an average forward sale price of $40.97/bbl and average floor strike of $31.30/bbl.
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