ENP Newswire - 06 May 2014
Release date- 02052014 - HOUSTON - Swift Energy Company (NYSE: SFY) announced today net income of $5.4 million for the first quarter of 2014 or $0.12 per diluted share, a decrease compared to first quarter 2013 net income of $7.2 million or $0.17 per diluted share, and an increase compared to a net loss of $41.8 million in the fourth quarter of 2013.
Included in first quarter 2014 net income is a pre-tax loss of $3.4 million, or $0.04 per diluted share, for a non-cash fair value adjustment associated with the Company's ongoing price risk management program.
Adjusted cash flow for the first quarter of 2014 increased 1% to $73.6 million, compared to $72.6 million for that measure in the first quarter of 2013, and decreased 5% when compared to adjusted cash flow of $77.8 million for the fourth quarter of 2013.
Swift Energy produced 2.94 million barrels of oil equivalent ('MMBoe') during the first quarter of 2014, a 4% increase over first quarter 2013 production of 2.82 MMBoe, and down 5% compared to fourth quarter 2013 production of 3.09 MMBoe.
'Our focused South Texas development program continues to yield excellent results,' commented Terry Swift, CEO of Swift Energy. 'Our oil and gas professionals are able to hydraulically stimulate greater hydrocarbon reservoir volumes using longer laterals and more proppant. We are applying these techniques across our South Texas asset base and, at the same time, are lowering our costs.
'The three new wells brought online in our Fasken area this quarter have all individually maintained gross production rates in excess of 15 million cubic feet per day ('MMcf/d') over their first 60 days of production. At the end of this 60 day period, each of these wells had produced greater than 900 MMcf of gas while maintaining flowing pressures materially higher than older wells completed with shorter laterals and less proppant.
Based on these performance results, we intend to pursue additional firm natural gas transportation capacity in excess of the current 75 million cubic feet per day available to us in the Fasken area. We expect to utilize any new transportation that becomes available to us, which we would hope to have in place by early next year, and view this area as an important strategic step toward developing high margin, predictable production volumes.'
First Quarter Revenues and Expenses
Oil and gas sales revenues for the first quarter of 2014 increased 1% to $148.6 million from the $146.5 million in the first quarter of 2013. Total revenues for the first quarter of 2014 (including a pre-tax loss of $3.4 million for a non-cash fair value adjustment associated with the Company's ongoing price risk management program) decreased 2% to $143.7 million from the $146.2 million generated in the first quarter of 2013.
Depreciation, depletion and amortization expense ('DD&A') of $20.95 per barrel of oil equivalent ('Boe') in the first quarter of 2014 decreased 2% from $21.33 of DD&A per Boe in the comparable period in 2013 due to increased reserve levels, partially offset by a higher depletable base.
Lease operating costs before severance and ad valorem taxes, were $8.58 per Boe in the first quarter 2014, an approximate 12% decrease when compared to $9.73 per Boe incurred in the same period of 2013. The decrease was due to costs associated with a well control incident in Lake Washington during the first quarter of 2013 as well as cost decreases in South Texas, primarily for lower salt water disposal costs.
Transportation and processing expense in the first quarter of 2014 of $1.80 per Boe decreased from $2.14 per Boe in the first quarter of 2013 due primarily to lower levels of NGL production.
Severance and ad valorem taxes decreased to $3.13 per Boe in the first quarter of 2014 from $3.47 per Boe in the first quarter of 2013 primarily due to a higher percentage of revenues associated with production in Texas, which carries a lower overall severance tax rate than Louisiana, coupled with some prior period retroactive tax credits approved and received during the first quarter of 2014.
General and administrative expenses decreased to $3.65 per Boe during the first quarter of 2014, down from $4.51 per Boe in the same period in 2013. Interest expense increased to $6.27 per Boe in the first quarter of 2014 compared to $5.96 per Boe for the same period in 2013 due to increased borrowings against our line of credit.
First Quarter Pricing
The Company realized an aggregate average price of $50.45 per Boe during the quarter, a decrease from the $51.97 per Boe average price received in the first quarter of 2013.
In the first quarter of 2014, Swift Energy's average crude oil prices decreased 8% to $99.38 per barrel from $108.45 per barrel realized in the same period in 2013. For the same period, average natural gas prices were $4.20 per thousand cubic feet ('Mcf'), up 42% from the $2.96 per Mcf average price realized a year earlier. Prices for NGLs averaged $36.27 per barrel in the 2014 first quarter, a 21% increase from first quarter 2013 NGL prices of $29.90 per barrel.
First Quarter Drilling Activity
In the first quarter of 2014, Swift Energy drilled 11 operated development wells, all in the Company's South Texas core Eagle Ford area. In McMullen County, 6 wells were drilled and 5 were drilled in Webb County.
There are currently three operated rigs drilling in the Company's South Texas core area.
South Texas Operations
In the Company's South Texas core area, 8 operated wells were completed during the first quarter. In McMullen County, 5 Eagle Ford wells were completed and in Webb County, 3 Eagle Ford wells were completed.
The Company is currently conducting completion operations on 2 Eagle Ford wells in its PCQ area in northern McMullen County and 3 Eagle Ford wells in its Fasken area in Webb County.
In the Lake Washington field in Plaquemines Parish, LA, the Company continued its ongoing production optimization program, performing 35 production optimization projects during the quarter and adding 62,000 Boe of production. Additionally, the planned 20 well recompletion program for 2014 began during the second quarter at Lake Washington.
The Company is currently engaged in negotiations regarding a joint venture arrangement for a portion of our natural gas properties in the Eagle Ford area, principally our natural gas properties in the Fasken area.
Swift Energy is also negotiating with prospective buyers to sell some or all of our Austin Chalk and Wilcox assets in Central Louisiana and expects to either complete a sale of some or all of these properties or pursue an ongoing development plan of its own.
Borrowing Base Reaffirmed
After a regularly scheduled semi-annual review by its 11 member bank group, Swift Energy's borrowing base and commitment amount of $450 million was reaffirmed under its revolving credit facility effective April 30, 2014. The credit facility matures on November 1, 2017.
Price Risk Management
Swift Energy has entered into hedging transactions for the remainder of 2014 covering 12.2 Bcf of natural gas production and approximately 0.3 MMbbls of crude oil production. On an ongoing basis, details of Swift Energy's complete price risk management activities can be found on the Company's website (www.swiftenergy.com).
Earnings Conference Call
Swift Energy will conduct a live conference call today, May 1, at 10:00 a.m. EDT to discuss first quarter 2014 financial results and second quarter 2014 financial and operational guidance. To participate in this conference call, dial 973-339-3086 five to ten minutes before the scheduled start time and indicate your intention to participate in the Swift Energy conference call.
A digital replay of the call will be available later on May 1 until May 8, by dialing 855-859-2056 and using Conference ID # 23346137. Additionally, the conference call will be available over the Internet by accessing the Company's website at www.swiftenergy.com and by clicking on the event hyperlink. This webcast will be available online and archived at the Company's website.
About Forward Looking Statements
This press release 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, guidance or other statements contained herein, other than statements of historical fact, are forward-looking statements, including guidance estimates for the second quarter of 2014.
These statements are based upon assumptions that are subject to change and to risks, especially the uncertainty and costs of finding, replacing, developing and acquiring reserves, availability and cost of capital, labor, services, supplies and facility capacity, hurricanes or tropical storms disrupting operations, and, volatility in oil or gas prices, uncertainty and costs of finding, replacing, developing or acquiring reserves, and disruption of operations.
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.
Estimates of future financial or operating performance provided by the Company are based on existing market conditions and engineering and geologic information available at this time. Actual financial and operating performance may be higher or lower. Future performance is dependent upon oil and gas prices, exploratory and development drilling results, engineering and geologic information and changes in market conditions.
Tel: (281) 874-2700