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TheStreet Open House

Swift Energy Announces: 122% Increase In Second Quarter 2013 Earnings To $6.7 Million, Or $0.15 Per Diluted Share

Southeast Louisiana

In the Lake Washington field in Plaquemines Parish, LA, the Company continued its ongoing recompletion and production optimization program, performing 2 recompletions and 24 production optimization projects during the quarter.

Also in Lake Washington, the LL&E #6 (Jelly Bowl prospect) well encountered more complex geologic conditions than expected during drilling operations. As a result, this well was temporarily abandoned and additional data will be collected to assess the potential to re-enter or re-drill the well at a later date. The expected 2013 production contribution of this well was approximately 110,000 barrels of oil equivalent.

Central Louisiana

In South Bearhead Creek, the Company drilled its first upper Wilcox test well during the second quarter. The James O Dolby H1 was drilled to a total depth of 15,147 feet with a horizontal length of 3,387 feet. This well has successfully proven that horizontal drilling in this field can be utilized to access the Wilcox formation. As a result of lower than expected production levels due to a mechanical failure experienced while running the completion assembly, this well is currently only capable of producing 100 – 200 barrels of oil per day. This result has reduced the Company’s expected production from this well by approximately 110,000 barrels of oil equivalent in 2013.

In the Burr Ferry field in Vernon Parish, Louisiana, the Indigo 17-1 was recently drilled by the Company’s partner. This well will be brought into production during the third quarter and will be the last well drilled in the Austin Chalk by the Company’s Joint Venture Partner this year.

Price Risk Management

In the third quarter, Swift Energy has entered into hedging transactions covering approximately 40% of expected third quarter natural gas production and approximately 20% of expected third quarter crude oil production. The company has also entered into hedging transactions for the fourth quarter of 2013 covering 1,190,000 MMBtu per month of natural gas production and 130,000 barrels per month 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, August 1, at 10:00 a.m. EDT to discuss second quarter 2013 financial results. 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 August 1 until August 7, by dialing 855-859-2056 and using Conference ID # 99322755. 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 targets for 2013 production and reserves growth, estimates of 2013 capital expenditures And guidance estimates for the third quarter of 2013 and full-year 2013. 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.

 
SWIFT ENERGY COMPANY
SUMMARY FINANCIAL INFORMATION

(Unaudited)

(In Thousands Except Per Share and Price Amounts)

       
Three Months Ended Six Months Ended
June 30, June 30,
        Percent         Percent
2013 2012 Change 2013 2012 Change
Revenues:
Oil & Gas Sales $ 140,892 $ 131,980 7 % $ 287,369 $ 268,122 7 %
Other   1,574       2,777   1,334       2,513
Total Revenue $ 142,466 $ 134,757 6 % $ 288,703 $ 270,635 7 %
Net Income $ 6,722 $ 3,028 122 % $ 13,931 $ 6,598 111 %
Basic EPS $ 0.15 $ 0.07 119 % $ 0.32 $ 0.15 113 %
Diluted EPS $ 0.15 $ 0.07 119 % $ 0.32 $ 0.15 113 %
Net Cash Provided By Operating Activities $ 87,308 $ 91,896 (5) % $ 149,531 $ 155,679 (4) %
Net Cash Provided By Operating Activities, Per Diluted Share $ 2.00 $ 2.13 (6) % $ 3.43 $ 3.61 (5) %
Cash Flow Before Working Capital Changes (1) (non-GAAP measure) $ 72,795 $ 72,729 0 % $ 145,427 $ 141,826 3 %
Cash Flow Before Working Capital Changes, Per Diluted Share $ 1.67 $ 1.69 (1) % $ 3.34 $ 3.29 1 %
Weighted Average Shares Outstanding (Basic) 43,369 42,862 (1) % 43,268 42,768 (1) %
Weighted Average Shares Outstanding (Diluted) 43,612 43,111 (1) % 43,599 43,133 (1) %
EBITDA (non-GAAP measure) $ 88,952 $ 80,884 10 % $ 179,235 $ 162,706 10 %
Production (MMBoe) 2.78 2.92 (5) % 5.60 5.72 (2) %
Realized Price ($/Boe) $ 50.71 $ 45.22 12 % $ 51.34 $ 46.90 9 %
   

(1)

See reconciliation on page 7. Management believes that the non-GAAP measures EBITDA and cash flow before working capital changes are useful information to investors because they are widely used by professional research analysts in the valuation, comparison, rating and investment recommendations of companies within the oil and gas exploration and production industry. Many investors use the published research of these analysts in making their investment decisions.
 
   
SWIFT ENERGY COMPANY
RECONCILIATION OF GAAP((a)) TO NON-GAAP MEASURES
(Unaudited)

(In Thousands)

   
Three Months Ended
    Percent
June 30, 2013 June 30, 2012 Change
CASH FLOW RECONCILIATIONS:
Net Cash Provided by Operating Activities $ 87,308 $ 91,896

(5)

%

Increases and Decreases In:
Accounts Receivable (5,792 ) (9,308 )
Accounts Payable and Accrued Liabilities (520 ) (4,600 )
Income Taxes Payable 178 198
Accrued Interest   (8,379 )   (5,457 )
Cash Flow Before Working Capital Changes $ 72,795   $ 72,729   0 %
 
INCOME TO EBITDA RECONCILIATIONS:
 

Net Income

$

6,722

$

3,028 122 %
Provision for Income Taxes 4,293 2,087
Interest Expense, Net 17,000 13,319
Depreciation, Depletion & Amortization & ARO (b)   60,937     62,450  
EBITDA $ 88,952   $ 80,884   10 %
 
Six Months Ended
Percent
June 30, 2013 June 30, 2012 Change
CASH FLOW RECONCILIATIONS:
Net Cash Provided by Operating Activities $ 149,531 $ 155,679

(4)

%

Increases and Decreases In:
Accounts Receivable (601 ) (12,501 )
Accounts Payable and Accrued Liabilities (3,605 ) 3,313
Income Taxes Payable 178 198
Accrued Interest   (76 )   (4,863 )
Cash Flow Before Working Capital Changes $ 145,427   $ 141,826   3 %
 
INCOME TO EBITDA RECONCILIATIONS:
 
Net Income

$

13,931

$ 6,598 111 %
Provision for Income Taxes 8,670 4,399
Interest Expense, Net 33,802 26,784
Depreciation, Depletion & Amortization & ARO (b)   122,832     124,925  
EBITDA $ 179,235   $ 162,706   10 %
 

(a)  GAAP—Generally Accepted Accounting Principles

(b)  Includes accretion of asset retirement obligation

 

Note: Items may not total due to rounding

 
 
SWIFT ENERGY COMPANY
SUMMARY BALANCE SHEET INFORMATION
(Unaudited)

(In Thousands)

       
As of As of

   June 30, 2013   

December 31, 2012
Assets:
Current Assets:
Cash and Cash Equivalents $ 11,338 $ 170
Other Current Assets   77,501     80,367  
Total Current Assets 88,839 80,537
 
Oil and Gas Properties 5,448,877 5,151,103
Other Fixed Assets 42,375 41,690
Less-Accumulated DD&A   (2,968,161 )   (2,847,773 )
Total Properties 2,523,091 2,345,020
 
Other Assets   17,988     18,504  
$ 2,629,918   $ 2,444,061  
Liabilities:
Current Liabilities $ 223,282 $ 177,480
Long-Term Debt 1,037,435 916,934
Deferred Income Taxes 230,617 223,243
Asset Retirement Obligation 68,832 79,643
Other Long-term Liabilities 10,162 9,901
Stockholders’ Equity   1,059,590     1,036,860  
$ 2,629,918   $ 2,444,061  
 

Note: Items may not total due to rounding

 
       
SWIFT ENERGY COMPANY
SUMMARY INCOME STATEMENT INFORMATION
(Unaudited)

In Thousands Except Per Boe Amounts

 
Three Months Ended    

 Six Months Ended 

June 30, 2013   Per Boe June 30, 2013   Per Boe
Revenues:
Oil & Gas Sales $ 140,892 $ 50.71 $ 287,369 $ 51.34
Other Revenue   1,574     1,334  
  142,466   51.27   288,703   51.58
Costs and Expenses:
General and Administrative, net 11,191 4.03 23,916 4.27
Depreciation, Depletion & Amortization 59,458 21.40 119,578 21.36
Accretion of Asset Retirement Obligation (ARO) 1,479 0.53 3,254 0.58
Lease Operating Costs 26,957 9.70 54,381 9.72
Transportation and Processing Expense 4,865 1.75 10,895 1.95
Severance & Other Taxes 10,501 3.78 20,276 3.62
Interest Expense, Net   17,000   6.12   33,802   6.04
Total Costs & Expenses   131,451   47.31   266,102   47.54
Income Before Income Taxes 11,015 3,96 22,601 4.04
Provision for Income Taxes   4,293   1.55   8,670   1.55
Net Income $ 6,722 $ 2.42 $ 13,931 $ 2.49
 
 
Additional Information:
Total Capital Expenditures $ 153,980 $ 298,459
Capitalized General & Administrative $ 7,494 $ 15,965
Capitalized Interest Expense $ 1,890 $ 3,833
Deferred Income Tax $ 4,293 $ 8,670
 

Note: Items may not total due to rounding

 
   
SWIFT ENERGY COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)

(In Thousands)

 
Six Months Ended
June 30, 2013     June 30, 2012
Cash Flows From Operating Activities:
Net Income $ 13,931 $ 6,598
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities -
Depreciation, Depletion, and Amortization 119,578 122,651
Accretion of Asset Retirement Obligation (ARO) 3,254 2,274
Deferred Income Taxes 8,670 4,399
Stock Based Compensation Expense 6,018 7,181
Other (6,024 ) (1,277 )
Change in Assets and Liabilities -
Decrease in Accounts Receivable 601 12,501
Increase/(Decrease) in Accounts Payable and Accrued Liabilities 3,605 (3,313 )
Decrease in Income Taxes Payable (178 ) (198 )
Increase in Accrued Interest   76     4,863  
Net Cash Provided by Operating Activities   149,531     155,679  
 
Cash Flows From Investing Activities:
Additions to Property and Equipment (265,317 ) (374,753 )
Proceeds from the Sale of Property and Equipment   6,841     284  
Net Cash Used in Investing Activities   (258,476 )   (374,469 )
 
Cash Flows From Financing Activities:
Net Proceeds From Bank Borrowings 120,600 ---
Net Proceeds From Issuance of Common Stock 946 1,451
Purchase of Treasury Shares   (1,433 )   (2,686 )
Net Cash Provided by (Used in) Financing Activities   120,113     (1,235 )
Net Increase/(Decrease) in Cash and Cash Equivalents 11,168 (220,025 )
 
Cash and Cash Equivalents at the Beginning of the Period   170     251,696  
Cash and Cash Equivalents at the End of the Period $ 11,338   $ 31,671  
 
 
SWIFT ENERGY COMPANY
OPERATIONAL INFORMATION
QUARTERLY COMPARISON -- SEQUENTIAL & YEAR-OVER-YEAR
(Unaudited)
           
Three Months Ended       Three Months Ended
June 30,     March 31, Percent June 30,     Percent
2013 2013 Change 2012 Change
Production :
Oil & Natural Gas Equivalent (MBoe) 2,778 2,819

(1)

%

2,918

(5)

%

Natural Gas (Bcf) 7.91 7.64 3 % 9.50

(17)

%

Crude Oil (MBbl) 911 988

(8)

%

905 1 %
NGL (MBbl) 549 557

(1)

%

430 28 %
 
Average Prices:
Combined Oil & Natural Gas ($/Boe) $ 50.71 $ 51.97

(2)

%

$ 45.22 12 %
Natural Gas ($/Mcf) $ 3.86 $ 2.96 30 % $ 2.01 93 %
Crude Oil ($/Bbl) $ 103.15 $ 108.45

(5)

%

$ 108.02

(5)

%

NGL ($/Bbl) $ 29.74 $ 29.90

(1)

%

$ 35.25

(16)

%

 
 
SWIFT ENERGY COMPANY
THIRD QUARTER AND FULL YEAR 2013
GUIDANCE ESTIMATES
           
Actual Guidance Guidance
For For For
Second Third Full
Quarter Quarter Year
2013 2013 2013
Production Volumes (MMBoe) 2.78 3.02     -     3.15 11.7     -     11.9
 
Production Mix:
Natural Gas (Bcf) 7.91 8.83 - 9.20 32.6 - 33.2
Crude Oil (MMBbl) 0.91 0.99 - 1.03 4.02 - 4.08
Natural Gas Liquids (MMBbl) 0.55 0.56 - 0.59 2.25 - 2.29
Product Pricing (Note 1):
Natural Gas (per Mcf)
NYMEX Differential (Note 2) ($0.24) ($0.25) - ($0.50) ($0.25) - ($0.50)
Crude Oil (per Bbl)
NYMEX differential (Note 3) $8.98 --- - $5.00 $5.00 - $8.00
NGL (per Bbl)
Percent of NYMEX Crude 32% 25% - 30% 30% - 35%
Oil & Gas Production Costs:
Lease Operating Costs (per Boe) $9.70 $7.85 - $8.15 $8.70 - $8.85
Transportation and Processing (per Boe) $1.75 $1.95 $2.05 $1.90 $2.00
Severance & Ad Valorem Taxes (as % of Revenue dollars) 7.5% 7.0% - 8.0% 7.0% - 8.0%
Other Costs:
G&A per Boe $4.03 $4.05 - $4.20 $4.15 - $4.30
Interest Expense per Boe $6.12 $5.50 - $5.70 $5.75 - $5.90
DD&A per Boe $21.40 $20.70 - $20.90 $21.00 - $21.20
Supplemental Information:
Capital Expenditures (in Thousands)
Operations $161,680 $105,500 - $120,000 $480,000 - $501,000
Acquisitions/(Dispositions), net ($5,821) --- - --- ($6,800) - ($6,800)

Acquisitions/(Dispositions, Change in ARO

($11,263)

---

-

---

($11,300)

-

($11,300)

Capitalized G&A (Note 4) $7,494 $8,000 - $8,400 $30,000 - $33,000
Capitalized Interest $1,890 $2,000 - $2,300 $8,000 - $9,000
Total Capital Expenditures $153,980 $115,500 - $130,500 $500,000 - $525,000
 
Basic Weighted Average Shares 43,369 43,300 - 43,500 43,300 - 43,500
 
Diluted Weighted Average Shares 43,612 43,700 - 43,900 43,600 - 43,800
 
Effective Tax Rate 39.0% 39.0% - 43.0% 39.0% - 42.0%
Deferred Tax Percentage 100% 100% 100%
 
Note 1:    

Swift Energy maintains all its current price risk management instruments (hedge positions) on its Hedge Activity page on the Swift Energy website ( www.swiftenergy.com).

Note 2: Average of monthly closing Henry Hub NYMEX futures price for the respective contract months, included in the period, which best benchmarks the 30-day price received for natural gas sales.
Note 3: Average of daily WTI NYMEX futures price during the calendar period reflected, which best benchmarks the daily price received for the majority of crude oil sales.
Note 4: Does not include capitalized acquisition costs, incorporated in acquisitions when occurred.




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