Zero rigs, that is.

Amid last week's flurry of earnings releases from exploration and production outfits -- and I apologize for missing key reports by Apache (NYSE:APA) and Ultra Petroleum (NYSE:UPL) -- was this zinger:

"Swift Energy (NYSE:SFY) maintains a substantial inventory of drilling projects but currently has no rigs operating. The Company intends to commence its 2009 drilling program once oil field drilling and service costs accurately reflect the current operating and lower pricing environment."

No rigs operating! Swift, a seasoned Gulf Coast oil patch player, definitely isn't alone in expecting service costs to fall further. Chesapeake Energy (NYSE:CHK) and XTO Energy (NYSE:XTO) both cited expectations of a roughly 25% year-over-year drop for 2009. But so far, Swift is the only E&P that I've seen go on a complete buyer's strike.

Think about what Swift is giving up here. The company is likely sacrificing both reserve growth and production growth in 2009. If you're trying to appease short-term oriented investors, this is suicide.

You can draw one of two conclusions here. Either Swift is distressed, and this is another sign of panic in the oil patch, or it's maximizing long-term value by deferring drilling, which would hardly be accretive in this environment.

The reality may actually lie somewhere in between. While the company does appear to have decent liquidity through its 10-member bank borrowing facility, the company managed to run up a 49% debt-to-capital ratio at year's end, which is far above my comfort level. Its headcount reductions also suggest that Swift overstretched during good times, and is now paying the price with uncomfortable adjustments.

Chesapeake Energy is an Inside Value selection. You know the drill: Go ahead and check out any of our premium newsletters free for 30 days.

Fool contributor Toby Shute doesn't have a position in any company mentioned. The Motley Fool has a disclosure policy.