Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Swift Energy Company (NYSE:SFY) jumped as much as 16.5% early in trading this morning after it updated operational and financial guidance.
So what: Management said it expects to receive about $150 million in cash when it closes its joint venture with Saka Energi Indonesia on June 30, something investors were looking for when the stock dropped last week. The money will be used to reduce debt and increase capital expenditures by $50 million to $350 million-$400 million.
As a result of the additional drilling, production is now expected to be between 11.5 million barrels of oil equivalent (MMboe) and 11.8 MMboe, raising the lower end of the range by 0.2 MMboe.
Now what: There was some relief to hear details about the joint venture, and I think investors were looking for some lost revenue and profits once the deal closed, but an increase in drilling activity should make up the difference. So, estimates may be much lower than results will show in the second half of the year. I think Swift Energy has strong momentum after a first-quarter earnings beat, and with the joint venture, it's managed to increase production and reduce leverage, which is good for investors long-term.
3 stock picks to ride America's energy bonanza
Record oil and natural gas production is revolutionizing the United States' energy position. Finding the right plays while historic amounts of capital expenditures are flooding the industry will pad your investment nest egg. For this reason, the Motley Fool is offering a look at three energy companies using a small IRS "loophole" to help line investor pockets. Learn this strategy, and the energy companies taking advantage, in our special report "The IRS Is Daring You to Make This Energy Investment." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free.
Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.