OilVoice - Swift Energy and Petrohawk Announce Joint Venture to Develop Eagle Ford Shale

Swift Energy and Petrohawk Announce Joint Venture to Develop Eagle Ford Shale

03 November 2009

Swift Energy Company and Petrohawk Energy Corporation 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.”