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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 (cash flow before working capital changes, a non-GAAP measure - see page 6 for reconciliation to the GAAP measure) 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.”