DEBTWIRE BROADCAST:
SWIFT ENERGY EQUITY & BANK DEBT TREATMENT MERIT SCRUTINY
AS DEBTOR POSES HIGH-SPEED PATH TO EMERGENCE
Debtwire’s team of reporters and analysts host a roundtable discussion to explore Swift Energy’s
prearranged plan to get out of bankruptcy in just 110 days. We’ll also scrutinize the generous recovery
earmarked for common shareholders, and dive into the plan’s assumption that secured debt can be paid
back in full and the company will have enough liquidity at emergence. | 06 January 2016
AGENDA

Case Overview: Madalina Iacob, Associate Editor
Madalina.Iacob@Debtwire.com

First Day Action: Maria Chutchian, Court Reporter
Maria.Chutchian@Debtwire.com

Valuation Insights: Thomas Rorick, Distressed Analyst
Thomas.Rorick@Debtwire.com

Legal Issues: Joshua Friedman, Legal Analyst
Joshua.Friedman@Debtwire.com

Q&A
2
CASE OVERVIEW

Swift’s pulled loan deal in June sounds the death knell
for the company

Company cuts costs to the bone, slashes capex by 70%

Downfall hastened by lack of hedges

New Year Eve’s bondholder backed RSA
3
ADJUSTED CAPITAL STRUCTURE
PRO FORMA CAPITAL STRUCTURE (USD m)
Coupon
Face
Amount
Market
Amount
Adj.
Pro Forma
Face Amount
Price
Yield
USD 330m RBL facility (USD 5m in L/Cs) 1
L+ 2% - 3%
330
278
-
330
84.3
-
USD 75m multidraw junior lien DIP loan 2
L+ 12%
75
75
-
75
-
-
330
278
-
405
Instrument as of 31 Dec. 2015
Total secured debt
Maturity
Springing
Est. PF Annual 2016 PF Face
Maturity Date Cash Interest Leverage
1 Nov 2017 2 Mar 2017
19 Apr
2016
12
9
21
4.8x
-
-
-
Senior unsecured notes
7.125%
250
27
(250)
-
10.8
280.1% 1 Jun 2017
Senior unsecured notes
8.875%
225
25
(225)
-
11.0
108.1%
15 Jan
2020
-
-
-
Senior unsecured notes
7.875%
400
43
(400)
-
10.8
82.2%
1 Mar 2022
-
-
-
1,205
373
(875)
405
21
4.8x
28
28
-
1,177
345
405
7
7
95
1,184
351
500
Total debt
Cash and cash equivalents 3
Net debt
Market value of equity 4
Enterprise value
2016P EBITDA
85
2017P EBITDA
107
Asset Retirement Obligations:
4.8x
5.9x
USD 73m
1) The RBL is subject to a springing maturity of 2 March 2017 if a) the maturity on SFY's existing senior notes is not extended to or beyond 1 May 2018 or b) the notes are repurchased,
redeemed, refinanced or exchanged into stock. As of the petition date, the revolver was fully drawn.
2) The DIP maturity date is based on the plan effective date in the DIP milestones. The DIP loan will mature on the earliest of a) six months from the closing date, b) the effective date of
a plan of reorganization or liquidiation, c) the sale of all or substantially all of SFY's assets under Section 363 or d) an event of default.
3) Based on the cash budget, we assume the company has USD 28m in cash as of 4 January.
4) Estimated market value of equity for the reorganized company is based on market value of the unsecured bonds.
Sources; SEC Filings, Markit, MarketAxess.
4
FIRST DAY ACTION

Interim DIP, other administrative matters approved

Conditions still need to be met to secure additional USD 45m DIP

Most important condition to noteholders is RBL treatment

Debtors are hoping for exit facility, talks are ongoing
5
ADJUSTED CAPITAL STRUCTURE
PRO FORMA CAPITAL STRUCTURE (USD m)
Coupon
Face
Amount
Market
Amount
Adj.
Pro Forma
Face Amount
Price
Yield
USD 330m RBL facility (USD 5m in L/Cs) 1
L+ 2% - 3%
330
278
-
330
84.3
-
USD 75m multidraw junior lien DIP loan 2
L+ 12%
75
75
-
75
-
-
330
278
-
405
Instrument as of 31 Dec. 2015
Total secured debt
Maturity
Springing
Est. PF Annual 2016 PF Face
Maturity Date Cash Interest Leverage
1 Nov 2017 2 Mar 2017
19 Apr
2016
12
9
21
4.8x
-
-
-
Senior unsecured notes
7.125%
250
27
(250)
-
10.8
280.1% 1 Jun 2017
Senior unsecured notes
8.875%
225
25
(225)
-
11.0
108.1%
15 Jan
2020
-
-
-
Senior unsecured notes
7.875%
400
43
(400)
-
10.8
82.2%
1 Mar 2022
-
-
-
1,205
373
(875)
405
21
4.8x
28
28
-
1,177
345
405
7
7
95
1,184
351
500
Total debt
Cash and cash equivalents 3
Net debt
Market value of equity 4
Enterprise value
2016P EBITDA
85
2017P EBITDA
107
Asset Retirement Obligations:
4.8x
5.9x
USD 73m
1) The RBL is subject to a springing maturity of 2 March 2017 if a) the maturity on SFY's existing senior notes is not extended to or beyond 1 May 2018 or b) the notes are repurchased,
redeemed, refinanced or exchanged into stock. As of the petition date, the revolver was fully drawn.
2) The DIP maturity date is based on the plan effective date in the DIP milestones. The DIP loan will mature on the earliest of a) six months from the closing date, b) the effective date of
a plan of reorganization or liquidiation, c) the sale of all or substantially all of SFY's assets under Section 363 or d) an event of default.
3) Based on the cash budget, we assume the company has USD 28m in cash as of 4 January.
4) Estimated market value of equity for the reorganized company is based on market value of the unsecured bonds.
Sources; SEC Filings, Markit, MarketAxess.
6
VALUATION INSIGHTS: CASH BUDGET
CASH BUDGET (USD m)
Week ending
Beginning cash balance
Receipts
Oil & gas sales
JIB receivables
Other
Total receipts
Disbursements
Payroll & benefits
Taxes
Rent
Insurance
Royalty payments
Working interest payments
Transportation & processing fees
Pre-petition vendor payments
Post-petition vendor LOE
Post-petition vendor G&A
Post-petition vendor capex
Operating disbursements
Net cash flow from operations
One-time/non-recurring items
Professional fees
Other
Net cash flow after non-recurring items
Interest & fees
Cash flow after debt service
Beginning cash balance:
Net cash flow
Paydowns to revolver
Draw from revolver/DIP Loan
Ending cash balance (book)
1/8/16
1/15/16
1/22/16
1/29/16
2/5/16
2/12/16
2/19/16
2/26/16
3/4/16
3/11/16
3/18/16
3/25/16
4/1/16
13-Weeks
28
18
11
16
6
1
1
1
14
1
1
1
19
28
-
-
8
4
11
15
1
16
-
-
-
19
7
26
0
0
0
0
-
25
3
27
1
1
66
15
82
(0)
(3)
(5)
(0)
(0)
(1)
(8)
(8)
(1)
(0)
(5)
(0)
(0)
(1)
(7)
(7)
(0)
(5)
(0)
(0)
(1)
(6)
5
(1)
(8)
(7)
(1)
(2)
(5)
(0)
(0)
(1)
(25)
(10)
(0)
(0)
(5)
(5)
(0)
(0)
(1)
(12)
(12)
(1)
(5)
(0)
(0)
(1)
(8)
(8)
(2)
(0)
(5)
(0)
(0)
(1)
(8)
(8)
(1)
(1)
(1)
(0)
(2)
(5)
(0)
(0)
(1)
(12)
14
(0)
(0)
(4)
(0)
(5)
(1)
(0)
(2)
(13)
(12)
(1)
(2)
(2)
(1)
(0)
(2)
(8)
(8)
(0)
(0)
(1)
(0)
(2)
(3)
(3)
(0)
(1)
(1)
(0)
(2)
(1)
(0)
(2)
(8)
19
(1)
(0)
(3)
(0)
(1)
(0)
(3)
(9)
(8)
(10)
(11)
(1)
(0)
(16)
(11)
(6)
(47)
(5)
(1)
(19)
(127)
(46)
(1)
(9)
(1)
(10)
28
(10)
18
(0)
(7)
(0)
(7)
18
(7)
11
5
(0)
5
11
5
16
(10)
(0)
(10)
16
(10)
6
(2)
(13)
(1)
(15)
6
(15)
9
1
(8)
(1)
(9)
1
(9)
9
1
(8)
(1)
(9)
1
(9)
9
1
14
(0)
13
1
13
14
(12)
(2)
(14)
14
(14)
1
1
(4)
(12)
(1)
(13)
1
(13)
13
1
(3)
(0)
(4)
1
(4)
4
1
19
(0)
19
1
19
19
(8)
(1)
(9)
19
(9)
11
(7)
(0)
(53)
(8)
(60)
28
(60)
43
11
Source: Court filings.
7
VALUATION INSIGHTS: RESERVES
PV-10 ESTIMATES (USDm)
Proven
Strip
Proved developed producing
389
Proved developed nonproducing
65
Proved undeveloped
499
Total proven reserves
953
Source: Lender presentation.
8
VALUATION INSIGHTS: MGT. PROJECTIONS
PROJECTIONS
USD m where applicable
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
1Q19
2Q19
3Q19
4Q19
1Q20
2Q20
3Q20
4Q20
4.9
3.8
138.3
190.1
4.4
3.5
120.5
167.6
3.5
2.9
123.8
161.9
3.3
2.7
123.5
159.6
4.2
3.3
134.9
179.8
4.0
3.3
145.9
189.6
3.6
3.1
130.4
170.7
3.3
3.1
145.6
183.8
3.6
3.7
158.3
201.7
3.7
3.4
153.0
195.4
3.7
3.1
133.4
174.0
4.4
3.8
156.6
206.1
6.2
4.3
153.9
217.1
6.1
4.1
139.7
200.7
5.6
3.6
126.7
182.0
6.1
4.6
153.6
218.0
6.6
4.9
159.3
227.8
6.0
4.7
151.2
215.8
Net production
Oil (Mbbl/d)
NGL (Mbbl/d)
Gas (Mmcf/d)
Total production (Mmcfe/d)
Average realized pricing
Oil ($/bbl)
NGL ($/bbl)
Gas ($/mcf)
$45.22 $46.35 $47.00 $47.79 $49.44 $49.45 $51.43 $51.38 $51.57 $51.66 $54.03 $54.38 $54.61 $54.89 $55.22 $55.49 $55.72 $56.07
$14.50 $14.88 $15.16 $15.42 $15.78 $15.78 $16.42 $16.42 $16.42 $16.42 $17.15 $17.23 $17.32 $17.40 $17.49 $17.58 $17.67 $17.75
$2.48 $2.68 $2.81 $2.70 $2.86 $2.86 $2.98 $2.98 $2.98 $2.98 $3.11 $3.13 $3.14 $3.16 $3.17 $3.19 $3.21 $3.22
Cash flows
Oil & gas revenue
(-) Lease opex
(-) Production taxes
(-) Corporate SG&A
EBITDA
(-) Capital expenditures
Unlevered operating cash flow
(-) Cash interest
Levered cash flow
(+) Beginning cash
(+) Drawdown/(repayment) of revolver
Ending cash
Liquidity available
56
(22)
(3)
(8)
22
(30)
(8)
(3)
(11)
11
22
52
(21)
(3)
(8)
20
(7)
13
(8)
5
(5)
28
50
(16)
(3)
(8)
23
(21)
2
(3)
(1)
1
27
48
(16)
(2)
(8)
21
(26)
(5)
(8)
(12)
12
15
58
(16)
(3)
(8)
31
(27)
3
(3)
(0)
0
15
60
(17)
(3)
(8)
32
(4)
28
(8)
20
(20)
34
56
(15)
(3)
(8)
30
(34)
(4)
(3)
(7)
7
27
59
(16)
(3)
(8)
32
(22)
10
(8)
2
(2)
29
65
(17)
(3)
(8)
36
(32)
4
(3)
0
(0)
29
63
(17)
(3)
(8)
35
(2)
33
(8)
25
(25)
54
60
(16)
(3)
(8)
33
(43)
(10)
(3)
(13)
13
41
72
(18)
(4)
(8)
42
(36)
6
(8)
(2)
2
39
81
(18)
(5)
(8)
49
(35)
14
(3)
11
(11)
50
76
(18)
(5)
(8)
46
(2)
44
(8)
36
(36)
87
70
(16)
(5)
(8)
41
(53)
(12)
(3)
(15)
0
15
0
71
82
(19)
(5)
(8)
50
(44)
6
(8)
(2)
(0)
2
0
69
87
(20)
(6)
(8)
53
(24)
29
(3)
27
(0)
(27)
(0)
96
82
(19)
(5)
(8)
49
(2)
48
(7)
41
(0)
(41)
(0)
136
350
328
350
322
350
323
350
335
350
336
350
316
350
323
350
321
350
321
350
296
350
309
350
311
350
300
350
264
350
279
350
281
350
254
350
214
82
3.3x
4.9x
85
4.1x
4.7x
91
4.3x
4.4x
87
4.1x
4.7x
95
4.4x
4.3x
107
4.9x
3.7x
114
5.1x
3.5x
124
5.5x
3.2x
130
5.7x
3.1x
133
5.9x
2.8x
136
6.0x
2.8x
146
6.5x
2.6x
159
7.2x
2.4x
170
7.8x
2.0x
177
8.2x
2.0x
185
8.7x
1.9x
189
9.1x
1.7x
193
9.5x
1.5x
Memo
Borrowing base
Outstanding borrowings
Credit statistics
LTM EBITDA
Interest coverage ratio
Net leverage ratio
Source: Court filings.
9
VALUATION INSIGHTS: ESTIMATED RECOVERIES
ESTIMATED RECOVERIES
USD m where applicable
2017
Estimated enterprise value 1
535
RBL 2
316
100%
Second lien financing 3
75
100%
Estimated equity value
144
Discounted equity value 4
109
Unsecured notes 5
905
12%
1) Estimated enterprise value applies a 5x multiple to projected 2017 EBITDA of USD 107m.
2) Projections have USD 316m outstanding under the revolver at 2017 year-end.
3) Assumes rollover of DIP financing into second lien term loan.
4) Discounts estimated equity value of USD 144m at 20% for two periods to estimate the present value of SFY's equity.
5) We assume 96% of the equity is allocated to unsecured noteholders, which includes the 7.5% backstop commitment fee payable in common stock.
Sources; Lender presentation, court filings.
10
LEGAL ISSUES

Junior DIP Financing from Unsecured Noteholders

RSA Gives Almost All Restructured Equity to Noteholders

Equity and Management Still Win

NOLs and Other Takeaways
11
ADJUSTED CAPITAL STRUCTURE
PRO FORMA CAPITAL STRUCTURE (USD m)
Coupon
Face
Amount
Market
Amount
Adj.
Pro Forma
Face Amount
Price
Yield
USD 330m RBL facility (USD 5m in L/Cs) 1
L+ 2% - 3%
330
278
-
330
84.3
-
USD 75m multidraw junior lien DIP loan 2
L+ 12%
75
75
-
75
-
-
330
278
-
405
Instrument as of 31 Dec. 2015
Total secured debt
Maturity
Springing
Est. PF Annual 2016 PF Face
Maturity Date Cash Interest Leverage
1 Nov 2017 2 Mar 2017
19 Apr
2016
12
9
21
4.8x
-
-
-
Senior unsecured notes
7.125%
250
27
(250)
-
10.8
280.1% 1 Jun 2017
Senior unsecured notes
8.875%
225
25
(225)
-
11.0
108.1%
15 Jan
2020
-
-
-
Senior unsecured notes
7.875%
400
43
(400)
-
10.8
82.2%
1 Mar 2022
-
-
-
1,205
373
(875)
405
21
4.8x
28
28
-
1,177
345
405
7
7
95
1,184
351
500
Total debt
Cash and cash equivalents 3
Net debt
Market value of equity 4
Enterprise value
2016P EBITDA
85
2017P EBITDA
107
Asset Retirement Obligations:
4.8x
5.9x
USD 73m
1) The RBL is subject to a springing maturity of 2 March 2017 if a) the maturity on SFY's existing senior notes is not extended to or beyond 1 May 2018 or b) the notes are repurchased,
redeemed, refinanced or exchanged into stock. As of the petition date, the revolver was fully drawn.
2) The DIP maturity date is based on the plan effective date in the DIP milestones. The DIP loan will mature on the earliest of a) six months from the closing date, b) the effective date of
a plan of reorganization or liquidiation, c) the sale of all or substantially all of SFY's assets under Section 363 or d) an event of default.
3) Based on the cash budget, we assume the company has USD 28m in cash as of 4 January.
4) Estimated market value of equity for the reorganized company is based on market value of the unsecured bonds.
Sources; SEC Filings, Markit, MarketAxess.
12
Q&A
13
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14