Swift Energy to Acquire South Texas Properties for $47 Million
Swift Energy Company (NYSE:SFY) announced today that it has signed an agreement to purchase from Crimson Energy Partners, L.P., a privately held company, oil and natural gas interests in Dimmit County in South Texas for $47 million. The interests in Crimson’s Briscoe “A” lease and wells are located on 5,140 acres adjacent to existing Swift Energy production in its Cotulla area. The acquisition is expected to close within 30 days, with an effective date of May 1, 2008. The total acquisition purchase price is subject to typical post-closing adjustments.
Swift Energy currently estimates that total reserves of the purchased properties are approximately 13 billion cubic feet equivalent (“Bcfe”) of proved reserves and 3 Bcfe of probable reserves. Approximately 70% of the proved reserves are classified proved developed. Future development costs of both the proved undeveloped and probable reserves are estimated to be approximately $12.5 million for an all-in acquisition cost of $3.72 per Mcfe of proved and probable reserves. Production is approximately 90% natural gas and natural gas liquids and averaged approximately 3.7 million cubic feet equivalent (“MMcfe”) per day net to the purchased working interests for the first seven months of 2008. Pursuant to the terms of the agreement, Swift Energy will acquire a 100% working interest in all of Crimson’s operated wells in the lease and will serve as operator of the property. The purchase price will be funded with bank borrowings under the Company’s bank credit facility.
The Briscoe “A” lease has 34 producing well bores with an additional 23 locations identified. This area is adjacent to Swift Energy’s existing Briscoe acreage, which is part of its Cotulla area. Production is from the Olmos and San Miguel formations at depths ranging from 4,500 to 5,000 feet.
Terry Swift, Chairman of the Board and Chief Executive Officer of Swift Energy Company, noted, “This strategic acquisition of property adjacent to our current operations further expands the Company’s presence and production base in our Cotulla operating area, which now covers 89,000 gross acres. The main productive interval of this property is from the Olmos formation, similar to our AWP Olmos area and other properties in the Cotulla area. Swift Energy has considerable expertise in exploiting this type of tight gas sand reservoir.
“The Company plans to continue the current development drilling program of the acquired property in the third and fourth quarters of 2008. This strategic acquisition will increase the production, reserves and value of our South Texas asset base.”
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 and inland waters oil and natural gas reserves in 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.
This material 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, or other statements other than statements of historical fact, are forward-looking statements. 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.