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Swift Energy Signs Agreement

Swift Energy Company


Swift Energy Signs Agreement To Acquire New Zealand Reserves And Production Facilities From Shell

HOUSTON, December 3, 2001 - Swift Energy Company (NYSE, PCX: SFY) announced today that Swift Energy New Zealand Limited ("SENZ") has reached agreement with an affiliate of Shell New Zealand ("Shell NZ") to acquire Southern Petroleum (New Zealand) Exploration Limited ("Southern NZ"), for approximately US $55 million in cash, as of November 16, 2001. Southern NZ owns interests in four onshore producing oil and gas fields, hydrocarbon-processing facilities with excess capacity and pipelines connecting the fields and facilities with each other and with export terminals and markets. The fields and facilities are located in the Taranaki Basin, New Zealand.

Terry Swift, President and CEO of Swift Energy Company, noted, "We are extremely pleased to be adding these strategic assets to our New Zealand operations. Swift will not only be adding proved producing properties and immediate increases in cash flow, but more importantly adding significant facilities and infrastructure that can enhance the value of our Rimu and Kauri areas and potentially accelerate their development. We will own and operate substantial additional oil and natural gas processing capacity, and by building pipelines from the Rimu/Kauri area to the Waihapa Production Station, we would be able to export crude oil at New Plymouth and transport natural gas to electrical generation facilities through our own pipelines. We will also be adding skilled oil and gas professionals to our staff in Taranaki. Swift will rely strongly on these experienced professionals to meet our corporate goals."

In addition, SENZ has entered into agreements with Shell NZ with regard to oil storage facilities, hydrocarbon transportation and crude oil marketing. SENZ and Shell NZ have also entered into several strategic agreements with options to participate in future exploratory and development activity.

Southern NZ will become a wholly owned subsidiary of SENZ. The shares transaction is subject to Shell NZ notifying and obtaining the waiver or rejection by a preferential rights owner and is expected to close in 30 to 60 days. The transaction will require various approvals and consents from New Zealand regulatory authorities. Swift will fund this acquisition by utilizing its available bank line of credit.

The assets acquired include the onshore TAWN properties, which are located in the Taranaki Basin of the North Island of New Zealand, approximately 17 miles north of Swift's Rimu discovery. Swift will be acquiring a 96.76% working interest in four Petroleum Mining Licenses ("PML"), collectively known as the TAWN properties, which include the Tariki Field (PML 38138), the Ahuroa Field (PML 38139), the Waihapa Field (PML 38140) and the Ngaere Field (PML 38141). The four fields include 17 wells with current net production for December expected to be approximately 930 barrels of oil per
day ("Bopd"), 23.2 million cubic feet of natural gas per day ("MMcfpd", 1,000 BTU/Mcf) and 450 barrels per day of natural gas liquids, or total net production of 31.5 million cubic feet equivalent per day. The net proved reserves as of November 1, 2001 are estimated to be approximately 65.0 billion cubic feet equivalent ("Bcfe") with 74% of the reserves being natural gas. The natural gas is sold under a long-term contract to Contact Energy. Fiscal terms for the oil and gas reserves call for a royalty payable to the Crown at an effective royalty rate of approximately 10%.

The TAWN asset package includes natural gas processing facilities plus oil and gas pipelines and other infrastructure assets. The oil facility, the Waihapa Production Station ("WPS"), was built in 1993. Solution gas is gathered from the WPS and flows through a nine-mile (8-inch diameter) multi-phase pipeline to the Tariki Ahuroa Gas ("TAG") plant. The current capacity of the WPS facility is over 15,000 Bopd for oil and condensate and 40 MMcfpd for natural gas processing. Natural gas processing can be increased significantly with additional compression. The 32-mile (8-inch diameter) oil export line runs from the WPS to the Omata Tank Farm at New Plymouth, where oil export facilities allow for sales into international markets. The 32-mile (8-inch diameter) natural gas pipeline runs from the WPS to the Taranaki Combined Cycle electric generation facility near Stratford and on to the New Plymouth Power Station.

SENZ has entered into service agreements with a Shell NZ affiliate, the owner of the Omata Tank Farm, to utilize the blending, storage and export capabilities of the facility. SENZ and other users will participate in operational planning issues with the operator of the Omata Tank Farm to maintain or improve the quality of the McKee blend crude oil. All users of the facility will transport crude oil to the farm and receive McKee blended crude oil. The operator of the facility will provide services for a fixed
fee per barrel received and other variable costs as required by the
agreement. Under the terms of the agreements, crude oil produced from the Rimu or Kauri discoveries will also have access to the Omata Tank Farm. SENZ has also entered into a one-year agreement for Shell NZ to market crude oil using a reference price of APPI (Asian Petroleum Price Index) TAPIS, an internationally recognized crude oil index, which is quoted at least weekly. The price will be adjusted for various fees and premiums.

SENZ will continue to sell the natural gas produced from the TAWN properties under the terms of an agreement with Contact Energy Limited, subject to contractual approvals. The natural gas is transported to the Taranaki Combined Cycle electric generation facility on the natural gas pipeline. Natural gas can also be transported on the natural gas pipeline to the New Plymouth Power Station. SENZ will continue to produce and market natural gas
liquids under existing contracts.

SENZ and Shell NZ have also entered into several exploration and development option agreements. SENZ expects to offer Shell NZ an option to participate in future exploration and development of certain deep oil and gas horizons located within the TAWN license areas ("TAWN Deep Rights"). Shell NZ, under the terms of the offer, would have up to a year to elect whether to acquire up to 50% of the TAWN Deep Rights owned by SENZ for an undisclosed amount. SENZ will remain operator of any future exploratory or development drilling within the TAWN license areas.

Additionally, SENZ has agreed to provide Shell NZ with certain options to review information on and to participate in future exploration and development of Petroleum Exploration Permit 38719 ("Rimu Options"), where SENZ is currently developing its Rimu and Kauri discoveries. Effective with the signing of this initial agreement, SENZ grants Shell NZ the right to evaluate technical information on this permit in order to conduct due diligence regarding the Rimu Options. The Rimu Options, which become effective only with the final closing of the TAWN acquisition, grant Shell NZ, for a brief period, a right to acquire an undivided 25% interest in PEP 38719, including the Rimu Production Station. Shell has only just begun their due diligence of PEP 38719. The Rimu Options are subject to numerous notifications, governmental approvals and consents. Swift does not know if Shell NZ will exercise either of these options.

SENZ currently holds interests in four exploration permits in New Zealand including a 90% interest in the permit where the Rimu and Kauri discoveries are located, which covers approximately 50,000 net acres extending both onshore and offshore on the Western coast of the northern island of New Zealand.

Conference Call
The Company will conduct a conference call and live webcast this morning, at 10:00 a.m. Central Standard Time, to review this transaction in further detail. To participate in this conference call dial (973) 872-3100 five to ten minutes before the start of the call and indicate your intention to participate in the Swift Energy conference call. This call will be available for digital replay for seven days by dialing (973) 341-3080 using pin no. 2993912. Additionally, the conference call will be available by accessing
the Company's website at www.swiftenergy.com and clicking on the event hyperlink.

Swift Energy Company engages in developing, exploring, acquiring, and operating oil and gas properties, with a focus on onshore natural gas reserves in Texas and Louisiana and onshore oil and natural gas reserves in New Zealand. Founded in 1979 with headquarters in Houston, Texas, the Company has achieved outstanding growth rates in proved oil and gas reserves, production, and cash flow over the last five years through a disciplined program of acquisitions and drilling, while maintaining a strong financial position.

This material 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 Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Certain risks and uncertainties inherent in the Company's business are set forth in the filings of the Company with the Securities and Exchange Commission.

Ends

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