Swift Energy (SFY) and Petrohawk Energy (HK) Announce Joint Venture to Develop Eagle Ford Shale

November 2, 2009 3:21 PM EST

Swift Energy Company (NYSE: SFY) and Petrohawk Energy (NYSE: HK) 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.

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