Purchase and Sale Agreement

On December 31, 2015, the Company, through its subsidiaries Swift Energy Operating, LLC, GASRS, LLC and SWENCO-Western, LLC (collectively “Swift Energy”) entered into a purchase and sale agreement (the “PSA”) with Texegy LLC (“Texegy”) to sell to Texegy a portion of Swift Energy’s approximately 65,132 net acre position in the South Bearhead Creek Field and Burr Ferry Field located in Allen, Avoyelles, Vernon, Sabine and Beauregard Parishes in Louisiana (the “Properties”). Closing is anticipated to occur on or before March 15, 2016, subject to customary closing conditions, including approval by the Court.

The PSA provides for Texegy to pay Swift Energy $48,750,000 in cash consideration to acquire a full 75% interest in the Properties, which is subject to closing adjustments for interim operations between January 1, 2016 and the closing date.

In addition to paying for its share of costs, Texegy has agreed to carry a portion of the Company’s field development costs, which are limited to all costs for the drilling of two wells to casing point in the South Bearhead Creek Field.

Immediately upon the execution of the PSA, Texegy deposited 5% of the purchase price in escrow to be used as a credit against the remaining payment due at closing. Upon the entry of a sale order by the Court, Texegy will deposit an additional 5% of the purchase price in escrow to used as a credit against the remaining payment due at closing.

On the closing date, Swift Energy and Texegy plan to enter into a joint development agreement and a joint operating agreement (together, the “JV Agreements”) to continue operation and development of the Properties as of the closing date. The JV Agreements will result in SV Energy Company, LLC, an affiliate of Texegy, serving as the operator of the Properties, conducting all drilling, completion and production operations. Under the JV Agreements, future development plans for the field will be mutually agreed upon by the Company and Texegy.