Swift Energy to Repay Revolver Debt After Saka JV Deal

Swift Energy Co. (SFY) plans to use about $150 million from a joint venture to pay down its revolving credit line and is seeking to stem its negative free cash flow, said President Bruce Vincent.

The independent oil and gas company is selling a 36 percent stake to PT Saka Energi Indonesia, a unit of the government-controlled Perusahaan Gas Negara Persero Tbk (PGAS), in its 8,300 acres of Fasken area Eagle Ford shale natural gas properties in Texas, according to a May 6 statement. Houston-based Swift will receive an estimated $150 million of proceeds, which it will use to pay down $297.7 million outstanding on the revolver, Vincent said.

While Swift is giving up a portion of the revenue in the joint venture, Saka’s contribution may help the U.S. company “align our capital spending with our cash flow” in the second half of 2014 and in 2015, Vincent said in a May 7 telephone interview. The company’s free cash flow was negative for the fourth straight year in 2013, according to data compiled by Bloomberg.

Saka will pay a total $175 million, comprising $125 million for its stake in the venture and $50 million for field development costs, according to the statement.

To contact the reporter on this story: David Holley in New York at dholley8@bloomberg.net

To contact the editors responsible for this story: Shannon D. Harrington at sharrington6@bloomberg.net Mitchell Martin, John Parry

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