Swift Energy has abandoned plans to find a joint venture partner in the Eagle Ford in favor of selling assets in Central Louisiana. Executives note the lack of premium placed on their Eagle Ford assets in the market. They view the Eagle ford as the best assets in the company and prices simply aren't what they were the past few years.
Instead, the company will sell assets in Louisiana. As a result, the capital budget in the Eagle Ford was increased by $50 million and Swift plans to maintain a two rig program through the rest of 2013.
Company-wide production was down slightly in the quarter and Eagle Ford production was down to flat. There were gas gathering constraints in Webb County during the quarter, but Eagle Ford production had rebounded to grow 10% in July.
“Our performance in the prolific Eagle Ford shale trend in South Texas continues to improve according to our plans. When compared to 2012, our 2013 South Texas well results have delivered higher initial production rates, larger estimated ultimate recoveries (“EURs”) and lower costs. Additionally, during July our average daily production rate in our South Texas core area was approximately 10% higher than our second quarter 2013 average production rate.”
During the second quarter, Swift drilled 14 operated wells targeting the Eagle Ford. A total of six wells were drilled in La Salle County, four in McMullen County, and two in Webb County. As for completions, the company brought 15 Eagle Ford wells and one Olmos well online during the quarter.
Production fell slightly in the second quarter, but had rebounded to increase 10% to almost 18,000 boe/d in July.
Watch for additional improvements in costs and initial production rates. Swift has lowered costs by 13-16% in the Artesia and N. AWP areas while improving initial production by 15-18%. That's a win-win.
Now that the company has turned its focus to developing the Eagle Ford and not simply seeking a JV partner, don't be surprised to see significant growth in the coming quarters. The company already expects 15-20% production growth in the area in 2014.