Dallas, Texas 05/16/2014 (FINANCIALSTRENDS) –Swift Energy Company (NYSE:SFY) & PT Saka Energi Indonesia have announced that the United States’ subsidiaries of Swift Energy & Saka have now executed their definitive agreements to fully-develop around 8,300 acres of the Fasken area situated at Eagle Ford shale-properties that are owned by Swift Energy in the Webb County, Texas. The closing is expected on/about 2014 June 30 and is subject to all the normal closing conditions.
These executed agreements, are effective 1 January 2014, and provide for Saka to now pay SFY $175M in total cash-consideration to buy a 36% full-participating interest in the latter’s Fasken properties. This consideration is made up of $125M in cash that is to be paid at the closing and $50M in cash that is to be paid by Saka for carrying a portion of SFY’s future field-development costs. The company will continue serving as the operator of these Fasken properties, and will conduct all the drilling, completion as well as the production operations.
The development plans
The development plans for this field to be mutually-agreed upon by SFY & Saka as has been provided for in their definitive agreements. J.P. Morgan Securities LLC has acted as the financial advisor to Swift Energy Company (NYSE:SFY) in this transaction. Saka Energi is the ideal partner to jointly-develop the acreage alongside SFY said the latter’s chief executive officer, Terry Swift. Saka also recognizes an opportunity in this Fasken area to create high value via highly productive natural-gas drilling & is aligned with SFY in assessment of valuation of its Fasken acreage.
Both the parties are totally committed to now rapidly realize the full-value of the asset via an aggressive and disciplined development program. The impact of any additional drilling activity in the year that is made possible by the transaction is reflected in the revised guidance that has issued by the company in its separate release.