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Swift Energy Co. Message Board

  • taylord97 taylord97 Jun 15, 2000 2:48 PM Flag

    Industry Respect

    Is Virgil respected in the industry? And what about Terry, we don't have a short hitter on our hands, do we???
    Any good insights?? Regards,

    Taylor

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Just to add a note on LNG. The stuff is dangerous
      to transport, too. This explains some of the lack of
      development over the years into LNG resources. You have to
      offload way off shore. If a big tanker would go up in New
      York harbor for instance, there goes Manhattan...
      Perhaps some of you historians can aid my memory. Was it
      LNG that blew up in Boston harbor 80-90 years ago and
      did so much damage?

    • Logically I figured that was the only way to
      liquify gas, but why would anyone ever do it? Anyways,
      thanks for that.

      While we're at it, SFY does
      produce/sell some rich liquid
      condensates. Is this
      something between NG and oil? What is the market for
      it?

      Thanks again,
      Breezy

    • of Fletcher Challenge's well.

      Pitter

    • Taylor,

      great reply to Dan-completely on
      target.

      Dan, one thing I suspect you may
      be
      missing in your evaluation of
      Swift. What kind of
      depletion
      units of production life are you

      assuming? A longer life probably
      doesn't give you the
      right depreciation tax sheild and could
      be why your
      cfps numbers are too low.

      I concur with your
      earnings estimate
      but I believe the cfps that
      corresponds to that is more like $5.75/share.

      Second,
      why does swift deserve a
      premium to multiples of
      cash flow?

      There are lots of reasons I could
      cite---but just focusing on discounted cash flow analysis
      methodology---What has more value,
      on an NPV basis, 75 mmboe of
      reserves that can be produced in 8 years or
      75 mmboe of
      reserves that take 15 years to produce?

      Ideally at
      these gas prices, I would
      want to produce those
      reserves from a
      stock tank instantaneously perhaps in
      order to create the most NPV.
      ( I do realize that
      would not be consistent with a 20 PE multiple--
      but
      lets not mix PE's, earnings,
      and discounted cash
      flow or NPV--
      they are two completely
      different
      valuation methods.)

      So why wouldn't someone pay a
      premium at these gas prices for Swift?

      I think its
      just the result of the
      numbers that drop out of
      the economics when you look at the value
      creation
      possible with something like
      8 years as opposed to a
      longer depletion or units of production basis.

      It
      may be that simple.

      New Zealand is just
      upside
      to that.


      Truth

    • Breezy,

      Don't look for an LNG situation

      in new Zealand. It takes first
      a liquefaction
      plant to basically
      use cryogenic -273 degrees
      F
      kind of temperature to liquefy the
      gas, then they
      put it on refrigerated
      ships in very costly
      storage tanks
      kept at -273 and ship it
      somewhere
      where they pump it into regasification plants which
      expand it
      and warm it back to vapor state or natural
      gas again.

      Let me assure you....it is nothing

      like crude oil when liquified.

      This is a very
      costly and expensive
      process and the spot market for
      LNG
      sales in Southeast Asia is probably
      not ready to
      support another LNG
      export project right now.


      Look for Swift to produce all the oil
      first, strip
      very valuable liquids from the gas and re-inject the
      gas for some time when it will be sold a a good price
      in New Zealand or to
      use it in power generation,
      etc.

      A lot of value is in the rich liquid

      condensates 1475 mmbtu in the gas.

      Truth

    • Yes this is offshore and to the
      Northwest
      from Swift's Kuari prospect which is half onshore,
      half offshore.
      (They can drill the wells from
      onshore).

      This is indeed a prolific well!

      I wouldn't want
      to speculate that
      any of Kuari wells or Rimu
      would
      be this big at 30 MMcfd. I expect
      more
      like 3-10 mmcfd/well- and this is probably a function
      of the basinward pay thicknesses you could see
      offshore as opposed to onshore--
      though the pinnacle
      reefs if big
      ones might give some rates like
      this.

      You could see higher rates from the
      more
      basinward wells in Kuari as opposed to others
      onshore--again
      just due to potential pay thickness
      or getting a
      reefal structure with extremely large permeabilities in
      the
      high energy zone of an ancient coast
      line.


      Time will tell...

      Truth

    • Hope you find this responsive to your request(and
      thanks for your help on other boards):
      1) FY 1999
      reserve estimates DON'T include any NZ reserves (see pg.
      8 annual report)

      2) The range of estimates
      of potential NZ reserves are from 20 mmboe to 900
      mmboe (sampling of many relevant posts on this board
      include
      #1480,#1478,##1441,#1388,#1389,#1223,#1793,#1700,and many others as you will see)

      3) SFY is
      planning to drill exploratory/delineation wells in 8
      different prospects in U.S. in 2000 having aggregate
      reserve potential of 1.3 tcfe. Not all of these are 100%
      interests -- See pg. 14 of annual report.

      4)Your
      $2.20 eps estimate seems pretty sound at this time --
      see my previous earnings post @ #1578. Your cfps is
      definitely low -- some of the analysts are already at
      $4.75.

      The web site has the annual report and other good
      info. This is a quality board with a good knowledge
      base and a valuable give and take. For other SFY
      qualitative factors, see my post# 1984 on POG. I'm sure
      others will be happy to respond to other questions. Good
      luck and regards,

      Taylor

    • i got interested in SFY the beginning of March,
      company showed growing reserves, NG focus, veteran
      management, not too leveraged, and a kicker in the NZ
      discovery. check out the many posts on this board from
      True_Truth, who is very knowledgeable about the industry and
      this company in particular. my commitment to the NG
      producers is based on fundamentals of the domestic NG
      market, which appear to support position that NG price
      will (absent a sever recession) not fall below $3.50
      in the next two years, maybe more. if gas stays this
      high, SFY could make $3.00 a share in 2001 even without
      any contribution from NZ. NZ hit has potential to
      more than double the company's reserves. so - if NZ
      hit is big, the stock sells up to between $50 and
      $100. if not, it sells for between 15 and 20 times peak
      earnings of $3, which means between $45 and $60 a share.
      but do also check out True_Truth's postings for good
      technical stuff about size and value of the U.S. drilling
      prospects, not just NZ. a good one.

    • So much talk about Swift over on the VPI board I
      just had to check it out and make sure my database
      numbers are correct.

      Based on 12/31/99 proven
      reserves only, SFY is trading at $10.90/boe which is a
      significant premium to the peer group average of
      $7.60/boe.

      At 12/31/99 SFY reported proven reserves of:
      Oil
      = 21 MMBBLS
      Gas = 330 BCF
      Equiv at 6:1 = 76
      MMBOE

      So, in order to justify the premium SFY must have
      significant reserve adds from drilling this year. So, here
      are a few questions:

      1. The discovery in New
      Zealand does look significant. Were any of those reserves
      included in the 12/31/99 proven reserves reported to the
      SEC?

      2. What is your best guess as to the NZ reserves net
      to SFY?

      3. It looks like SFY has been very
      active, drilling 16 wells (14 successful) in the first
      quarter. In addition to NZ, is any of this adding to
      proven reserves are is this primarily development
      drilling?

      4. I'm estimating SFY's EPS to be about $2.20 for
      2000 with $3.50 CFPS. Do these numbers look reasonable
      to you?

      Thanks for the help. Looks like you
      have a good one here.

    • liquifying NG depends on high pressure and cold.
      can only be shipped in special ships like giant
      vacuum bottles. Algeria ships some to France, and
      Commonwealth Oil used to import some into U.S. but
      infrastructure costs are absolutely enormous, $billions to get
      any real volume. forget about it. the risk here for
      SFY, if any, is that a sudden rush of NG discoveries
      in NZ may depress local NG sale price. but if the
      SFY plan is to initially stress oil productioon at
      the NZ find, perhaps any temporary surplus of NG will
      have little effect on SFY. longer term, it may be that
      the whole NZ economy will become NG driven, electric
      power and perhaps even vehicles. but that's too far off
      to affect the stock price.

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SFY
3.13+0.06(+1.95%)Feb 27 4:01 PMEST

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