Swift Energy To Restate 2013 Full-Year & 2014 Quarterly Results - Quick Facts

(RTTNews) - As a result of an error in the model used to determine historical ceiling test write-downs by including the tax effect of asset retirement obligations, Swift Energy Co. (SFY) said it would restate financial results contained in its 2013 Form 10-K Annual Report and 2014 Form 10-Q quarterly reports, as applicable, filed for periods ended December 31, 2013, March 31, 2014, and June 30, 2014.

The firm concluded that its earlier announced preliminary unaudited financial data for the period ended September 30, 2014 contained in its November 6, 2014 press release should not be relied upon. Further, its previously issued annual audited financial statements for the years ended December 31, 2013, 2012 and 2011, and its unaudited financial statements for the periods ended March 31, 2014 and 2013, and ended June 30, 2014 and 2013 should no longer be relied upon and these financial statements will be restated on a timely basis.

The ceiling test error causing this restatement pertains to the incorrect inclusion in prior periods of the tax effect of Swift Energy's asset retirement obligations when computing the ceiling test limitation of its oil and natural gas properties under full-cost pool accounting. The company has determined that the error caused understatement in periods prior to 2014 of retained earnings and overstatement of its full cost ceiling-test write-down.

For the year to December 31, 2013, correction of this error is likely to increase the company's overall net oil and gas property balances by around $50 million, increase its deferred tax liability by some $20 million, and increase its retained earnings to increase by about $30 million.

As the ceiling-test-error led to an understatement of the undepleted full cost pool subject to depletion in all periods after a ceiling write-down, at December 31, 2013, the most recent ceiling write-down of about $74 million, which occurred in the fourth quarter of 2013, is overstated by some $27 million on a pre-tax basis. Reversal of this overstatement is now expected to substantially lower the firm's previously reported net loss for 2013.