Net sales of 1,160 barrels of oil equivalent per day (97%)
HOUSTON – Swift Energy Company announced today that it had entered into a purchase and sale agreement providing for the company to sell its Lake Washington field in South East Louisiana, according to a press release.
“Swift Energy has made several strategic moves this year to actively manage our portfolio and transform the company into a premier Eagle Ford producer, and today’s announcement is consistent with that strategy. We’ve had a tremendous amount of success with the development of our assets in South Texas, and this transaction allows us to focus exclusively on our very best rate of return projects,” said Interim CEO Bob Banks.
This strategic divestiture is a significant step in achieving Swift Energy’s goal of becoming a more focused Eagle Ford player, where it has identified over 400 high-quality drilling locations.
Transaction Highlights:
- Cash consideration of $40.0 million upon closing, which is expected in early December 2016, subject to customary closing conditions and adjustments;
- Approximately 14,000 net acres in Plaquemines Parish, including 23 producing wells;
- Net sales of approximately 1,160 barrels of oil equivalent per day (97 per cent oil) as of the end of the third quarter 2016; and
- Upon closing of the transaction, Swift will also eliminate the ARO liability associated with this asset from its books and records.
“The net proceeds from this transaction, which will go toward paying down the revolver, will improve our liquidity profile, strengthen our balance sheet, and provide the financial flexibility we need to execute on our 2017 development plans. Additionally, we have identified other smaller monetization opportunities within the portfolio which we will continue to actively pursue,” said Banks.
Swift Energy also announced it has recently increased its gas hedge position for 2017.
Specifically, the company added favorable collars with corresponding floor and ceiling prices, as outlined below.
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2017 |
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Q1 |
Q2 |
Q3 |
Q4 |
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Gas Collars |
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| Volume (MMBtu) | 750,000 | 2,400,000 | 2,865,000 | 3,102,000 | ||||||||||||
| Floor Price (put) | $ | 3.3000 | $ | 3.0500 | $ | 3.0500 | $ | 3.1000 | ||||||||
| Ceiling Price (call) | $ | 3.9000 | $ | 3.5450 | $ | 3.5850 | $ | 3.7150 | ||||||||
