Swift Energy - PT Saka Energi Close Eagle Ford JV Deal

July 18, 2014 Kirk Eggleston

Houston-based Swift Energy and PT Saka Energi Indonesia (Saka) have closed on their Eagle Ford joint venture to develop ~8,300 acres of the Fasken field in Webb County, TX.

The $175-million agreement was previously announced in May of 2014. At closing, Swift received approximately $147-million, which included an agreed upon $125-million in cash consideration. Approximately $38-million of Saka’s original $50 million drilling carry obligation remains; however, Swift officials indicate that commitment should be fulfilled during the 2016 calendar year.

Under the agreement, Saka gains a 36% interest in Swift's Fasken acreage. Swift will remain the operator for the area.

“Both parties have worked diligently towards the conclusion of this transaction, and we look forward to working alongside Saka to optimize this asset’s value through an advanced technology development program,”

— Swift Energy CEO ,Terry Swift

In related news, Swift Energy also announced in May of 2014, that it expanded a long term agreement for natural gas gathering services in Webb County with Howard Energy Partners and its affiliates. Under the terms of the agreement, Swift Energy will have up to 160-million cubic feet of gas per day of firm capacity for its Fasken field natural gas production.

Swift Energy - PT Saka Energi Eagle Ford Joint Venture

May 8, 2014 Kirk Eggleston

Houston-based Swift Energy announced in early May of 2014 that it has entered a joint venture agreement with Indonesian-based PT Saka Energi to develop 8,300 Eagle Ford acres in the Fasken area of Webb County.

In March of 2014, Swift revealed it was in negotiations for a joint venture to accelerate development in the Fasken area, after completing three Eagle Ford test wells with average initial production (IP) rates of 22.1 mmcf/d.

Under the companies' agreements, effective January 1, 2014, Saka will pay Swift $175 million to acquire a 36% full participating interest in Swift Energy's Fasken properties. $50 million will be used to carry a portion of Swift's future field development costs. Swift will remain the operator of the properties, and be responsible for conducting all drilling, completion and production operations.

“Saka recognizes the opportunity in the Fasken area to create value through highly productive natural gas drilling, and is aligned with Swift Energy in its assessment of the valuation of our Fasken acreage. Both parties are committed to rapidly realize the full value of this asset through an aggressive, disciplined development program.”

— Terry Swift, CEO of Swift Energy

The closing date is anticipated at the end of June of 2014. Per the agreements, the companies will jointly determine development plans for the field.

Swift Energy Reveals Initial Production Rates for Six Eagle Ford Test Wells

March 25, 2014 Kirk Eggleston

Swift Energy tested three Eagle Ford wells in the Fasken area of Webb County, with average initial production (IP) rates of 22.1 mmcf/d. The Company has identified an additional 50-60 undeveloped lower Eagle Ford locations in the Fasken area and expects future well costs to be approximately $7.5 million. The company is currently in the negotiations process for a joint venture in this area to accelerate development.

Swift Energy also tested three wells in McMullen County, with average IP rates of 1,212 boe/d. In the fourth-quarter of 2013, Swift tightened frac stage intervals and used higher volumes of fluid and proppant in Eagle Ford well completions. The IP rate for a McMullen County well completed using this technique in the fourth-quarter of 2013 was 1,608 boe/d. Similar IP rates from the most recent test wells indicate the company is continuing to utilize this strategy as it refines its process for well completions.

“We are very pleased with our continuing operational improvements in these two key areas of our Eagle Ford acreage. The repeatable results in these areas provide a more predictable production growth profile, which is essential to our near term objectives of reducing financial leverage and increasing our liquidity profile.”

— Terry Swift, CEO of Swift Energy

Swift Energy Eagle Ford IP Rates Per Well in Webb County

Fasken BD 14H - 20.6 mmcf/d
Fasken BCD 10H - 22.5 mmcf/d
Fasken AB 9H - 23.3 mmcf/d

Swift Energy Eagle Ford IP Rates Per Well in McMullen County

PCQ EF 14H - 1,302 boe/d
PCQ EF 15H - 1,292 boe/d
PCQ EF 16H - 1,042 boe/d

Swift Energy Is Pumping More Fluid & Proppant in Eagle Ford Completions

October 31, 2013 R.T. Dukes

Swift Energy is testing higher volumes of fluid and proppant in Eagle Ford well completions. The company's number of Eagle Ford completions actually slowed to nine in the third quarter, but production grew due to better well performance.

The company's best well on a boe basis in the third quarter produced over 2,300 boe/d. The completion method utilized on the well included 25% more fluid and proppant. Completion testing didn't stop there.

In a well completed in the fourth quarter, the company tested tighter frac stage intervals and perforation clusters along with fluid and proppant volumes that were double Swift's standard completion. The well performed better than previous wells in the area (~1,600 boe/d at 2,250 PSI), so watch for Swift to begin using a completion design that looks more like what we've seen from EOG.

Swift is now targeting a lower interval of the Eagle Ford and is logging the horizontal section of every well to place completions in the most optimal portions of the wellbore.

“Further, we are optimizing our completion designs with longer lateral lengths, increases in frac stages and the volume of frac sand to increase initial production rates and cumulative production of Eagle Ford shale horizontal wells. We expect continued performance and efficiency improvements as we exploit these relationships in our drilling program.”

— Terry Swift, CEO

Swift grew company-wide production by ~10% in the quarter and continues to deploy approximately 80% of its development capital in the Eagle Ford. The company is also marketing assets in Central Louisiana to fund aggressive development plans in South Texas.

Swift Energy's Eagle Ford Well Costs Are Down & IP Rates Are Up

October 9, 2013 R.T. Dukes

Swift Energy Eagle Ford Drilling Savings

Swift Energy has seen its well costs fall and its initial production (IP) rates rise in 2013. Across two areas in South Texas, the company's IP rates are up 15% or more and drilling and completion costs are down 13% or more.

That's exactly what operators want to see and its why several companies are selling assets to fund accelerated development programs in the Eagle Ford.

Swift is selling assets in Louisiana and just last week Forest Oil sold assets in the Panhandle to fund its Eagle Ford operations.

Eagle Ford Drilling & Completion Costs Down

Swift Energy Eagle Ford Completion Costs

In the past year, Swift has driven drilling costs down from more than $4 million to a little more than $3 million. Simultaneously, completion costs have been falling. Since early 2011, completion costs have fallen from $5.3 million to $3.6 million.

Together, those two metrics equate to a savings of 13% or more from last year at this time for the average Eagle Ford well Swift drills and completes.

Watch For More Activity In 2014 From Eagle Ford Operators

Most companies have not released their plans for 2014, but we're starting to hear several major operators will be increasing activity next year. Stories like this one from Swift and $100 oil make the Eagle Ford more attractive than ever.