HOUSTON - (Business Wire) Swift Energy Company (NYSE: SFY) (“Swift Energy”) and Petrohawk Energy Corporation (NYSE: HK) (“Petrohawk”) have executed a definitive agreement to jointly develop and operate an approximate 26,000 acre portion of Swift Energy’s Eagle Ford Shale acreage in McMullen County, Texas. Swift Energy received approximately $26 million in cash consideration upon closing of the agreement. Petrohawk will also fund approximately $13 million of capital expenditures on Swift Energy’s behalf within the first twelve months of the joint venture. If any portion of this amount is not expended during the first twelve months, it will be paid to Swift Energy as cash consideration.
Swift Energy retains a 50% interest in the joint venture that calls for joint development of this approximate 26,000 acre prospect area located in Swift Energy’s AWP field and covers leasehold interests beneath the Olmos formation (including the Eagle Ford Shale formation) extending to the base of the Pearsall formation. Petrohawk will serve as operator during the drilling and completion phase of the joint development, and Swift Energy will operate the wells drilled once they have entered the production phase, subject to terms of the agreement. The appraisal drilling program covered by the agreement will begin before the end of 2009 with an acceleration of activity anticipated in 2010.
Terry Swift, CEO of Swift Energy, remarked, “We have found an excellent partner to jointly develop with us a portion of our highly prospective Eagle Ford shale acreage. Petrohawk is one of the leaders in developing natural gas from shale formations responsibly, efficiently and cost effectively. Their technical and commercial expertise has already produced strong operational results in the Eagle Ford Shale, making Petrohawk an excellent choice as a partner for this project. Both organizations are committed to aggressively pursuing a strategy that will maximize production and reserves growth. This transaction is another step forward in Swift Energy’s plan to build operational momentum and strengthen its balance sheet entering 2010. We look forward to a long and fruitful relationship with Petrohawk.”
“We are very pleased to have the opportunity to develop this very prospective area of the Eagle Ford Shale," said Floyd C. Wilson, Chairman, President and Chief Executive Officer of Petrohawk. “Swift Energy’s position, geologically speaking, is in what we believe to be an ideal depositional location and contiguous to our rapidly growing program in Hawkville field. We will waste no time in bringing the experience derived from our established Eagle Ford drilling program, as well as our access to processing and transportation in the area, to this new acreage for the mutual benefit of our two companies.”
Swift Energy Company, founded in 1979 and headquartered in Houston, engages in developing, exploring, acquiring and operating oil and gas properties, with a focus on oil and natural gas reserves onshore in Louisiana and Texas and in the inland waters of Louisiana.
Petrohawk Energy Corporation is an independent energy company engaged in the acquisition, production, exploration and development of natural gas and oil with properties concentrated in North Louisiana, Arkansas, East Texas, South Texas, and Oklahoma.
This 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, or other statements other than statements of historical fact, are forward-looking statements. Although the companies believe that the expectations reflected in such forward-looking statements are reasonable, no assurances can be given that such expectations will prove to have been correct. Certain risks and uncertainties inherent in each company’s business are set forth in the respective filings of Swift Energy Company and Petrohawk Energy Corporation with the Securities and Exchange Commission.
Swift Energy Company
Manager of Investor Relations
Paul Vincent, (281) 874-2700, (800) 777-2412
www.swiftenergy.com
or
Petrohawk Energy Corporation
Vice President, Investor Relations
Joan Dunlap, (832) 204-2737
jdunlap@petrohawk.com
www.petrohawk.com
