And here's the second:
March 18, 1998
Swift Energy is Confident of Profitability of Drilling in Its
Core Areas
HOUSTON, March 18 /PRNewswire/ -- The Wall Street Journal published
an article today in its Texas Journal questioning the profitability of the wells in
Swift Energy's (NYSE: SFY; PCX) core production areas. A. Earl Swift,
Chairman of the Board for Swift Energy, stated, "Reserves and financial
audits for year 1997 completed within the last 45 days dispel any notion of
the validity of a report prepared by petroleum engineer Gary Swindell upon
which the article is based. Both the Company and its independent engineer,
H.J. Gruy & Associates, Inc., are confident of the accuracy of Swift's
recently disclosed reserves. The Swindell report, parts of which were
furnished to Swift, is based upon limited data, and is full of errors, omissions
and contradictions. The average reserves reported by Swindell are low by up
to 200 to 300 percent. Data available to the public show that many wells in
the area have already produced more than his estimate of the expected
production during such wells' lifetimes. We are dismayed that The Wall
Street Journal declined our offer, made in writing, to meet with them and
provide them with accurate audited facts.
"In the Austin Chalk program, the 25 post 1994 Swift-operated wells were
drilled at a net cost to Swift of approximately $38 million. Already about $30
million net have been returned to the Company from the program in spite of
the fact that 13 of the wells were drilled in 1997. The program continues to
produce exceptional income and returns on investment. The original
investment of the 25 well program will payout in early 1998 with production
and income continuing for several years.
"Drilling and production in the South Texas AWP Field program continues to
yield excellent results. We have had, and expect to continue to have, good
drilling results with good economic returns in the AWP field program. Swift
operates many wells that have produced for up to 15 years, which give a
good analogy for the reserves of new wells. These facts were not covered by
the article or the report and apparently were rejected on the basis of some
assumption of well interference. There clearly is no significant well
interference in this area or in rocks of this type drilled on this field spacing.
Any responsible evaluation would not base its conclusion on interference. It
is correct that during 1997 the Company drilled wells to test the field limits,
as any responsible operator would do when defining the field. Drilling during
1998 and beyond will be within the now defined field limits where 50-60
wells will be drilled this year. As field development has matured the
Company has decreased the number of wells to be drilled in the field as
compared to early drilling.
"We recently announced that during 1997 the Company increased
production by 31 percent, replaced production by 500 percent, adding 40
percent to its reserves base. Cash flow has significantly increased. Cash flow
per share for 1997 quoted in the article was substantially less than the
Company's computation and that of all of the analysts who follow the
Company. The Company's 1997 results issued after review by our
independent auditors and based upon the reports of our independent
engineer could not have been achieved with poor results in our core drilling
and production area, representing 79% of the Company's 1997 production.
"Mr. Swindell's report is inferior to the report issued by professional
independent engineers like H.J. Gruy & Associates, Inc., which have all the
information and have studied these areas over a period of years. The
Swindell report was commissioned by people who were not willing to be
identified, and was produced in a short time relying on extremely limited
information, which is flawed throughout. Mr. Swindell has repeatedly refused
to identify his unnamed client or clients. The Company is instituting legal
proceedings to identify these parties and any instructions given him in the
preparation of the report."
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.
/CONTACT: John R. Alden, Sr. Vice President of Swift Energy Company,
281-874-2700 or 800-777-2412/ |
