Jefferies 2012 Global Energy Conference

Transcription

1 Jefferies 2012 Global Energy Conference November 29, 2012

2 Forward Looking Statement The material included herein which is not historical fact constitutes 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. These opinions, forecasts, scenarios and projections relate to, among other things, estimates of future capital expenditures, levels and costs of drilling activity, estimated production rates or forecasts of growth thereof, hydrocarbon reserve quantities and values, potential oil and gas reserves, assumptions as to future hydrocarbon prices, liquidity, cash flows, operating results, availability of capital, internal rates of return, net asset values and potential growth rates of reserves and production, all of which are forwardlooking statements. These forward-looking statements are generally accompanied by words such as estimated, projected, potential, anticipated, forecasted or other words that convey the uncertainty of future events or outcomes. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, the matters addressed reflect management s current plans and assumptions, are subject to numerous risks and uncertainties, many of which are beyond the Company s control, and certain of which are set out in our most recent Form 10-K and Form 10-Q filed with the SEC. The Company can give no assurance that such expectations will prove to have been correct. For reconciliations of non-gaap financial measures, see our website at Cautionary Note Regarding Potential Reserves Disclosures Current SEC rules regarding oil and gas reserve information allow oil and gas companies to disclose not only proved reserves, but also probable and possible reserves that meet the SEC s definitions of such terms. In this presentation, we refer to estimates of resource potential or EUR (estimated ultimate recovery quantities) or IP (initial production rates) other descriptions of volumes potentially recoverable, which in addition to reserves generally classifiable as probable and possible include estimates of reserves that do not rise to the standards for possible reserves, and which SEC guidelines strictly prohibit us from including in filings with the SEC. These estimates are by their nature more speculative than estimates of proved reserves and are subject to greater uncertainties, and accordingly the likelihood of recovering those reserves is subject to substantially greater risk. Swift Energy and are registered service marks of Swift Energy Company. 2

3 Today s Agenda Strategic Overview Operational Overview South Texas Central Louisiana/East Texas Southeast Louisiana Financial Overview 3

4 Corporate Overview Balanced and focused asset base 3 core areas along U.S. Gulf Coast Balanced, long-lived property base with 15.2 R/P Diversified production across commodities Low risk development and high reward exploration Significant resource within legacy asset base 100% of Q corporate crude oil pricing based on HLS or LLS pricing South Texas resource potential of more than one billion barrels of oil equivalent ~ 115,000 net prospective acres in Eagle Ford shale & Olmos tight sands Strong balance sheet and liquidity position 4

5 Corporate Strategy Tandem approach: drilling & acquisitions Technology led focus Repeatable method of operations Focus on multiple horizons and large acreage positions Exploitation with exploration upside Reduce operating risk Maintain R/P, improve production profile Maximize operational control Balance and diversify reserves base Limit financial risk Maintain conservative balance sheet Ensure adequate liquidity Disciplined price-risk management 5

6 Operational Overview

7 Swift Energy Core Areas 2011 Production and Reserves Total Company* 2011 Production: 28.8 MBoe/d 2011 Proved Reserves: MMBoe Central Louisiana/East Texas Area 2011 Production: 2.6 MBoe/d 2011 Proved Reserves: 18.4 MMBoe Burr Ferry TEXAS Brookeland South Bearhead Creek Masters Creek LOUISIANA Lake Washington South Texas Area 2011 Production: 16.3 MBoe/d 2011 Proved Reserves: MMBoe Artesia Wells & Sun TSH AWP Bay de Chene Southeast Louisiana Area 2011 Production: 8.4 MBoe/d 2011 Proved Reserves: 17.3 MMBoe Fasken *Includes 2011 production of 1.2 MBoe/d from non-strategic assets divested October

8 Today s Focus South Texas Eagle Ford Shale Multiple year horizontal development potential Oil, Condensate and Gas focus on liquids rich drilling AWP Olmos Tight Sand Multiple year horizontal development potential Oil, Condensate and Rich Gas Southeast Louisiana Lake Washington & Bay de Chene Miocene Sands Oil and High GOR Oil opportunity set across various risk/reward categories Central Louisiana/East Texas Potential for multiple year horizontal development in Austin Chalk and potentially the Wilcox Oil and High GOR Oil 8

9 South Texas LaSalle County Artesia Wells Sun TSH McMullen County SMR North AWP South AWP MEXICO Webb County Fasken Eagle Ford Play Hydrocarbon Types OIL CONDENSATE GAS 9

10 South Texas Swift owns ~78,000 net acres prospective for Eagle Ford ~ 975 locations assuming 80 acre well spacing & 6,000 ft. laterals 7-10 Bcfe resource potential per dry gas well 380 1,125 MBoe resource potential per liquid rich well > 950 MMBoe of resource potential Swift owns ~37,000 net acres prospective for horizontal Olmos development ~ 230 locations assuming 160 acre well spacing 500 1,260 MBoe EUR per well > 200 MMBoe of resource potential Boe/d 30,000 22,500 15,000 7,500 Production Profile* Olmos EF 0 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Q312 Q412 * 2012 Q4 Production data is estimated based on company guidance announced on 11/1/12 10

11 2012 Swift Energy South Texas Projected Net Daily Production Rate Growth 12,000 10,000 South Texas Liquids Rate Eagle Ford Olmos +48% 25,000 20,000 South Texas Natural Gas Rate Eagle Ford Olmos -13% Avg Net Boe/d 8,000 6,000 4,000 2,000 Avg Net Boe/d 15,000 10,000 5, * Q production data represents the high end of company guidance announced on November 1,

12 South Texas Summary Stronger liquids focus Eagle Ford dry gas acreage earned or held Manufacturing and Development Phase are driving efficiencies 3-D Seismic facilitates proper placement of laterals Drilling times and costs are being reduced Frac execution times and costs are being reduced Marketing Infrastructure Firm transportation secured for LaSalle, McMullen and Webb Counties Secondary interruptible connections in place for McMullen and Webb Counties 12

13 Central Louisiana / East Texas Austin Chalk Over 45% Oil, 20% Natural Gas Liquids >70,000 net acres in Burr Ferry area 4-6 wells planned in MMBoe Net Resource Potential Recent well test: 1,056 Barrels of oil per day 3.0 MMcf per day > 35,000 net acres in Masters Creek MMBoe Net Resource Potential South Bearhead Creek Wilcox oil production (2 zones) Evaluating successful offset activity Planning vertical or horizontal test well in the near future Production optimization opportunities 1,800 1,600 1,400 1,200 1,000 * Q production data represents the high end of company guidance announced on November 1, 2012 Net Boe/d Chalk Liquids Rate +100% 13

14 Southeast Louisiana Lake Washington Low cost per barrel development opportunities 10 Development wells in 2012 Multi-year recompletion inventory High return production optimization program Crude oil production benefits from Gulf Coast pricing Bay de Chene - BDC 6K 18K in depth Target rich environment Net Boe/d 7,000 6,000 5,000 4,000 3,000 2,000 1,000 SELA Liquids Rate +12% 0 * Q production data represents the high end of company guidance announced on November 1, 2012 and is adjusted for effect of Hurricane Isaac announced September 19,

15 Financial Overview

16 Capitalization Cash $252 17% $54 3% Bank Borrowings /8 % Sr Notes due % % 8 7/8 % Sr Notes due % % 7 7/8 % Sr Notes due % % Net Debt % % Stockholders Equity % 1,021 55% Capitalization $1, % $1, % Liquidity $552 $384 Credit Statistics Net Debt/LTM EBITDA 1.2x 2.4x Debt/Capitalization 41.9% 46.2% Debt/YE 2011 Proved Reserves ($/Boe) $4.51 $5.50 All Sr Notes rated B+/B3 Corporate Rating B+/B2 $ in Millions As of Dec. 31, 2011 $ in Millions* As of Sept. 30, 2012 *Pro forma for $150 million senior notes due 2022 add-on priced Oct,

17 Significant Financial Flexibility $ Millions $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 Debt Maturity Schedule $400 $150 $250 $225 $ $150 million senior notes due 2022 add-on strengthens balance sheet and liquidity, mitigating financial markets uncertainty and commodity price volatility $450 Million Bank Borrowing Base Bank commitments of $450 Million Bank Covenants Current Ratio (including undrawn bank line) must be maintained at or above 1.0 to 1.0 EBITDA (on a rolling 4 Qtr average basis) to Interest Expense must be maintained at or above 2.75 to 1.0 ratio 17

18 2012 Capital Expenditure Budget $ MM Historical Spending Acquisition Prospect Exploration Development 2012 Spending by Activity Prospect Costs/Seismic Discretionary $695 MM-$710 MM** Facilities Development *For presentation purposes, development includes facilities expenditures **Based on Company guidance provided on November 1, 2012 press release and prepared assuming NYMEX strip pricing of $95.00 crude oil and $3.25 natural gas pricing for

19 Summary

20 Portfolio Potential 3 Key Areas South Texas: Eagle Ford Shale Development ~78,000 net acres of resource potential 7-10 Bcfe EUR per dry gas well * 380 1,125 MBoe EUR per liquids rich well * > 950 MMBoe of resource potential Horizontal Olmos Development ~37,000 net acres of resource potential 500 1,260 MBoe EUR per well * > 200 MMBoe of resource potential * Assumes 6,000 ft. laterals; resource potential is un-risked 20

21 Portfolio Potential 3 Key Areas (Cont.) Central Louisiana/East Texas Masters Creek Austin Chalk Re-development ~38,000 net acres of resource potential MMBoe of total resource potential Burr Ferry Austin Chalk Appraisal and Development ~74,000 net acres of resource potential MMBoe of total resource potential South Bearhead Creek Wilcox Appraisal & Development Southeast Louisiana Lake Washington/Bay de Chene Development, Extension & Exploration of Miocene Sands 17.3 MMBoe booked reserves, 52% Developed Rich inventory of development and exploration prospect inventory: Multiple Extension prospects 1-3 MMBoe each Exploration prospects 1-50 MMBoe each LW Sub-salt prospect MMBoe *Resource potential is un-risked 21

22 2012 Total Corporate Projected Net Daily Rate Growth Avg Net Boe/d 20,000 18,000 16,000 14,000 12,000 10,000 Total Corp Liquids Rate +37% Avg Net Boe/d 20,000 18,000 16,000 14,000 12,000 Total Corp Natural Gas Rate -11% 8,000 6,000 10,000 4,000 8,000 2,000 6,000 *Q production data represents the high end of company guidance announced on November 1,

23 Key Investment Highlights Significant operational experience supported by world-class technology Balanced and focused asset base Significant resource within legacy asset base South Texas resource potential of more than one billion barrels of oil equivalent Strong balance sheet and liquidity position 23

24 Jefferies 2012 Global Energy Conference November 29, 2012

25 Appendix

26 South Texas Future Opportunities Included in Drilling Scenario Approx. IP Boepd % Liquids 2012 Projects 2013 Projects 2014 Projects Eagle Ford Oil (McMullen) 1,600 86% Eagle Ford Oil (LaSalle) 1,000 73% Olmos Oil (McMullen) 1,300 84% Eagle Ford Condensate (McMullen) 1,400 51% Eagle Ford Condensate (LaSalle) 1,200 44% Olmos Condensate (McMullen) 1,500 34% Excluded from 3-Year Program Approx. IP Boepd % Liquids 2012 Projects 2013 Projects 2014 Projects Olmos Rich Gas (McMullen) 1,500 28% Eagle Ford Dry Gas (McMullen) 1,300 0% Eagle Ford Dry Gas (Webb) 2,100 0% Initial production rates are rounded for presentation purposes 26

27 Economic Summary Slide Included in Drilling Scenario Capital (MM$) Oil EUR (MBbl) Gas EUR (MMcf) NGL EUR (MBbl) EUR (MBoe) % Liquids NPV 10% (M$) IRR (%) ROI Eagle Ford Oil (McMullen) % 8, Eagle Ford Oil (LaSalle) , % 7, Olmos Oil (McMullen) % 12, Eagle Ford Condensate (LaSalle) , ,125 44% 9, Eagle Ford Condensate (McMullen) , % 9, Olmos Condensate (McMullen) , % 6, Excluded from Drilling Scenario Capital (MM$) Oil EUR (MBbl) Gas EUR (MMcf) NGL EUR (MBbl) EUR (MBoe) % Liquids NPV 10% (M$) IRR (%) ROI Olmos Rich Gas (McMullen) , ,260 28% 6, Eagle Ford Dry Gas (McMullen) , ,167 0% Eagle Ford Dry Gas (Webb) , ,667 0% 5, Assumed 2012 pricing of $95 per Barrel for crude oil and $3.25 per Mcffor natural gas -EUR estimates are not equivalent to SEC reserve bookings 27

28 Drilling Performance - STX Development Performance Indicators Lateral Length Days on Well Length 6,000 5,000 4,000 3,000 Lateral Length 2, Days on Well 1,000 0 Artesia AWP EF AWP OL Fasken Days Legend Artesia AWP EF AWP OL Fasken 28

29 Drilling Performance - STX Development Performance Indicators: Cost Quality Speed Cost Per Foot $400 $350 $300 $250 $200 $150 Cost Per Foot Legend $100 $50 $0 Artesia AWP EF AWP OL Fasken 70 Feet Per Hour 20% % of NPT 60 Feet Per Hour NPT % 15% 10% 5% 10 0 Artesia AWP EF AWP OL Fasken 0% Artesia AWP EF AWP OL Fasken 29

30 CLAETX Development Economics Capital Oil EUR Gas EUR NGL EUR NPV 10% IRR ROI Activity (MM$) MBbl (MMcf) (MBbl) (MM$) % Burr Ferry , > Masters Creek , > South Bearhead Creek > Assumed 2012 pricing of $95 per Barrel for crude oil and $3.25 per Mcffor natural gas -EUR estimates are not equivalent to SEC reserve bookings 30

31 SELA Development Economics Activity Capital (MM$) Oil (MBbl) NPV 10% (MM$) IRR ROI Recompletions > Development Wells , Extension Wells ,