This article
was first published by Seeking Alpha on February 12, 2015.
By Sarfaraz
A. Khan
Following the
50% drop in oil prices since mid-2014, several oil and gas producers in the
U.S. have slashed their capital budgets. Overall, analysts at Goldman Sachs
have predicted 30% decline in North American land spending in 2015. A handful
of companies, such as Pengrowth Energy (NYSE:PGH), MEG Energy (OTCPK:MEGEF),
Legacy Reserves (NASDAQ:LGCY) and Warren Resources (NASDAQ:WRES), have cut
their budgets by more than 70%. Among this group is the small Houston-based
energy company Swift Energy (NYSE:SFY).
Swift Energy,
with a market cap of $132.4 million, focuses on producing oil and gas from
onshore fields in Texas and Louisiana and from inland waters of Louisiana. At
the end of 2013, Swift Energy had estimated proved reserves of 219.2 million
barrels of oil equivalents, which were 62% natural gas, 24% crude oil and 14%
natural gas liquids. Nearly 80% of the company's proved reserves are located in
Texas, where the company is focusing on developing its Eagle Ford properties,
while 20% are in Louisiana. Around 40% of the company's total proved reserves
are located in Eagle Ford's Fasken region.
The Good
Earlier in
January, Swift Energy said that it will reduce its 2015 capital budget to
between $100 million and $125 million, which shows a drop of between 70% and
75% from 2014. The reduction, which was attributed to the plunge in oil prices,
was greater than market's consensus 2015 capital expenditure forecast of $225
million, as per a recent report from Raymond James's analyst Andrew Coleman
emailed to me .… read full article at Seeking Alpha.
