NZ production lifts Swift earnings

Swift Energy's New Zealand operations continue to have a noticeably positive influence on overall company results, with increased Kiwi gas sales and prices more than compensating for falling Kiwi crude oil production.
NZ production lifts Swift earnings NZ production lifts Swift earnings NZ production lifts Swift earnings NZ production lifts Swift earnings NZ production lifts Swift earnings

Houston-headquartered Swift Energy today announced total group income (EBITDA) for the first quarter of 2003 of $US38.036 million, a 69% increase on last year's $US22.515 million.

Total group production increased 5% to 12.9 billion cubic feet equivalent (bcfe) - 5.2 bcfe from New Zealand and 7.7 bcfe from Texas and Louisiana - from the first quarter of 2003.

The New Zealand production represented a virtual doubling over the same quarter last year and an increase of nearly 4% from last quarter 2002 production levels.

Higher natural gas demand in New Zealand has allowed SENZ to both increase production from the TAWN fields (now running at over 50 MMCF/d), as well as increase the realised price received.

SENZ has also seen its average realised price increase for five straight quarters, due to a beneficial currency exchange rate and non-contracted natural gas sales into the tightening New Zealand gas market.

The composite average price for New Zealand was $US2.15 per Mcfe, a 35% increase over prices received in the first quarter of the previous year. Similar increases over prices received in the same quarter last year were seen on an individual product basis, with the company receiving an average price of $US1.62 per Mcf for its natural gas in 2003, a 34% increase from the $US1.21 received in 2002.

Crude oil prices, of $US32.36 per barrel in 2003, were up 65% from the $US19.67 per barrel average of 2002; while natural gas liquids were $US12.89 per barrel in 2003, a 31% increase from the $US9.81 per barrel average of 2002.

However, Kiwi oil production, which almost doubled from 72,000 barrels in the first 2002 quarter to 142,000 barrels by year end, dropped to 112,000 barrels during the first 2003 quarter.

Earlier this year SENZ successfully drilled the Kauri-F1 well, targeting the shallow Manutahi sands, and expects to install a pumping unit on that well shortly to begin a prolonged production test.

The Kauri-A4 well was fracture stimulated, more than doubling the initial flow rates to 4.8 MMcf/d of gas and 202 barrels of condensate, and will be connected later to the Rimu production station. The Rimu-A2A well has been treated with a CO2 injection in an attempt to improve the Tariki sand performance and is being further evaluated.

SENZ currently plans to drill two delineation wells in the Kauri sands, several additional shallow Manutahi wells and one or two exploration wells in the second half of this year.

"Second-half drilling plans will allow us to better evaluate both the Kauri and Manutahi," said company president Terry Swift from Houston.