UPDATE 2-Swift Energy Q4 tops view, sees higher 2010 production

Thu Feb 18, 2010 12:32pm EST

* Q4 shr $0.38 vs est of $0.28

* Q4 revenue fell 21 pct

* Sees 2010 production up 5-7 pct

* Shares up 5 pct (Recasts, adds details, analyst comments, updates share movement)

By Arup Roychoudhury

BANGALORE, Feb 18 (Reuters) - Independent oil and natural gas company Swift Energy Co (SFY.N) reported a fourth-quarter profit that beat analysts estimates, helped by a fall in operating expenses and higher prices, and forecast higher production for 2010, sending its shares to a 15-month high.

The company said it expects its full-year 2010 production to grow 3 to 7 percent and proved reserves to grow 5 to 10 percent year-over-year.

"We expect our daily production exit rate to be approximately 10 percent higher than the 25,100 net barrels of oil equivalent per day rate that we entered 2010 with," company Chief Executive Terry Swift said in a conference call with analysts.

The company also set its capital expenditure plans at $300 million to $375 million.

Terry Swift said the majority of Swift's spending will be focused in its South Texas properties, dedicated to its Eagle Ford shale, and tight sand drilling programs, and also in southeast Louisiana, where the company expects to maintain oil production levels.

"They have a lot of activity in South Texas this year, which has the potential to give them a nice boost in production and reserves, so I think the outlook is pretty good," RBC Capital markets analyst Leo Mariani said by phone.

Natixis Bleichroeder analyst Curtis Trimble said positive well results from two of the company's wells in Olmos formation, Texas, was also a catalyst.

Swift Energy said its R Braken and AFP 1H wells averaged initial 30 days production rate of 9.9 million cubic feet per day (mmcfd) and 6.4 mmcfd, respectively.

"With the AWP Olmos and Eagle Ford set to see at least two rigs working the entirety of 2010, reserve growth of about 10 percent should be well within Swift's reach," Trimble said.

For the latest fourth quarter, the company's net income was $14.6 million, or 38 cents a share, compared with a loss of $452.5 million, or $14.66 per share a year earlier.

Total revenues decreased 21 percent to $114.9 million.

Analysts on average were expecting Swift to earn 28 cents a share, on revenue of $107.2 million, according to Thomson Reuters I/B/E/S.

Lease operating expenses in the fourth quarter decreased 12 percent, while aggregate average price increased 9 percent.

Shares of Swift rose 5 percent to $29.35, their highest since November 2008, before paring gains to trade up 3.3 percent at $28.80 Thursday afternoon on the New York Stock Exchange.

For the alerts, please double click [ID:nWNAB8746] (Reporting by Arup Roychoudhury in Bangalore; Editing by Jarshad Kakkrakandy)