By Tess Stynes
Swift Energy Co. (SFY) said a unit of Perusahaan Gas Negara
(PPAAY, PGAS.JK) will pay $175 million for a 36% interest in a
joint venture to develop Swift's Fasken properties in the Eagle
Ford shale in South Texas.
Swift Energy shares rose 11% to $12.16 in recent trading.
American depositary shares of Perusahaan Gas rose 5.9% to
$22.60.
The joint-venture agreement includes $125 million to be paid at
closing and $50 million to carry a portion of Swift Energy's future
field development costs. Swift Energy will continue to operate the
Fasken properties, conducting all drilling, completion and
production operations.
As a result of the joint-venture pact with the Perusahaan
unit--PT Saka Energi Indonesia--Swift Energy raised its 2014
capital-spending and production targets.
The company also expanded a long-term agreement with Howard
Energy Partners for natural-gas gathering services in the area.
Swift Energy said the accord will more than double the current
capacity for production in the Fasken area. The added capacity is
expected to be available early next year.
Swift Energy Chief Executive Terry Swift said "As the
productivity of our asset base improves in conjunction with a
strengthening natural gas pricing environment, it is critical to
our plans to expand transportation for increased production
resulting from our development program."
Swift raised its 2014 capital-spending guidance by $50 million
and now projects $350 million to $400 million. The additional
spending will be directed to natural gas and liquids rich
development programs in South Texas.
The company also boosted the low end of its production estimate
and now expects between 11.5 million and 11.8 million barrels of
oil equivalent, compared with its previous outlook for 11.3MMboe to
11.8MMboe.
Write to Tess Stynes at tess.stynes@wsj.com
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