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

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AGENDA

Case Overview: Madalina Iacob, Associate EditorMadalina.Iacob@Debtwire.com

First Day Action: Maria Chutchian, Court ReporterMaria.Chutchian@Debtwire.com

Valuation Insights: Thomas Rorick, Distressed AnalystThomas.Rorick@Debtwire.com

Legal Issues: Joshua Friedman, Legal AnalystJoshua.Friedman@Debtwire.com

Q & A

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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

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ADJUSTED CAPITAL STRUCTURE

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.

PRO FORMA CAPITAL STRUCTURE (USD m)

Instrument as of 31 Dec. 2015 Coupon Face Amount

Market Amount Adj. Pro Forma

Face Amount Price Yield Maturity Springing Maturity Date

Est. PF Annual Cash Interest

2016 PF Face Leverage

USD 330m RBL facility (USD 5m in L/Cs) 1 L+ 2% - 3% 330 278 - 330 84.3 - 1 Nov 2017 2 Mar 2017 12

USD 75m multidraw junior lien DIP loan 2 L+ 12% 75 75 - 75 - - 19 Apr 2016 9

Total secured debt 330 278 - 405 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 - - -

Total debt 1,205 373 (875) 405 21 4.8x

Cash and cash equivalents 3 28 28 -

Net debt 1,177 345 405 4.8x

Market value of equity 4 7 7 95

Enterprise value 1,184 351 500 5.9x

2016P EBITDA 85

2017P EBITDA 107 Asset Retirement Obligations: USD 73m

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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

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ADJUSTED CAPITAL STRUCTURE

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.

PRO FORMA CAPITAL STRUCTURE (USD m)

Instrument as of 31 Dec. 2015 Coupon Face Amount

Market Amount Adj. Pro Forma

Face Amount Price Yield Maturity Springing Maturity Date

Est. PF Annual Cash Interest

2016 PF Face Leverage

USD 330m RBL facility (USD 5m in L/Cs) 1 L+ 2% - 3% 330 278 - 330 84.3 - 1 Nov 2017 2 Mar 2017 12

USD 75m multidraw junior lien DIP loan 2 L+ 12% 75 75 - 75 - - 19 Apr 2016 9

Total secured debt 330 278 - 405 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 - - -

Total debt 1,205 373 (875) 405 21 4.8x

Cash and cash equivalents 3 28 28 -

Net debt 1,177 345 405 4.8x

Market value of equity 4 7 7 95

Enterprise value 1,184 351 500 5.9x

2016P EBITDA 85

2017P EBITDA 107 Asset Retirement Obligations: USD 73m

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VALUATION INSIGHTS: CASH BUDGET

CASH BUDGET (USD m)Week ending 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

Beginning cash balance 28 18 11 16 6 1 1 1 14 1 1 1 19 28 Receipts Oil & gas sales - - 8 15 - - - 19 - - - 25 - 66 JIB receivables - - 4 1 - - - 7 0 0 - 3 1 15 Other - - - - - - - - - - - - - -Total receipts - - 11 16 - - - 26 0 0 - 27 1 82 Disbursements Payroll & benefits (0) (1) (0) (1) (0) (1) (2) (1) (0) (1) (0) (0) (1) (10)Taxes - - - (8) - - - (1) - - - (1) - (11)Rent - - - - (0) - - - (0) - - - (0) (1)Insurance - (0) - - - - (0) - - - (0) - - (0)Royalty payments - - - (7) - - - (1) (4) - - (1) (3) (16)Working interest payments (3) - - (1) (5) - - (0) (0) (2) - (0) (0) (11)Transportation & processing fees - - (2) - - - (2) - - - (2) - (6)Pre-petition vendor payments (5) (5) (5) (5) (5) (5) (5) (5) (5) (2) - - - (47)Post-petition vendor LOE (0) (0) (0) (0) (0) (0) (0) (0) (1) (1) (1) (1) (1) (5)Post-petition vendor G&A (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (1)Post-petition vendor capex (1) (1) (1) (1) (1) (1) (1) (1) (2) (2) (2) (2) (3) (19)Operating disbursements (8) (7) (6) (25) (12) (8) (8) (12) (13) (8) (3) (8) (9) (127)Net cash flow from operations (8) (7) 5 (10) (12) (8) (8) 14 (12) (8) (3) 19 (8) (46)One-time/non-recurring items Professional fees (1) - - - (2) - - - - (4) - - - (7)Other - (0) - - - - - - - - - - - (0)Net cash flow after non-recurring items (9) (7) 5 (10) (13) (8) (8) 14 (12) (12) (3) 19 (8) (53)Interest & fees (1) (0) (0) (0) (1) (1) (1) (0) (2) (1) (0) (0) (1) (8)Cash flow after debt service (10) (7) 5 (10) (15) (9) (9) 13 (14) (13) (4) 19 (9) (60)Beginning cash balance: 28 18 11 16 6 1 1 1 14 1 1 1 19 28 Net cash flow (10) (7) 5 (10) (15) (9) (9) 13 (14) (13) (4) 19 (9) (60)Paydowns to revolver - - - - - - - - - - - - - -Draw from revolver/DIP Loan - - - - 9 9 9 - 1 13 4 - - 43 Ending cash balance (book) 18 11 16 6 1 1 1 14 1 1 1 19 11 11

Source: Court filings.

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VALUATION INSIGHTS: RESERVES

Source: Lender presentation.

PV-10 ESTIMATES (USDm)

Proven Strip

Proved developed producing 389

Proved developed nonproducing 65

Proved undeveloped 499

Total proven reserves 953

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VALUATION INSIGHTS: MGT. PROJECTIONS

PROJECTIONSUSD m where applicable 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20Net production

Oil (Mbbl/d) 4.9 4.4 3.5 3.3 4.2 4.0 3.6 3.3 3.6 3.7 3.7 4.4 6.2 6.1 5.6 6.1 6.6 6.0 NGL (Mbbl/d) 3.8 3.5 2.9 2.7 3.3 3.3 3.1 3.1 3.7 3.4 3.1 3.8 4.3 4.1 3.6 4.6 4.9 4.7 Gas (Mmcf/d) 138.3 120.5 123.8 123.5 134.9 145.9 130.4 145.6 158.3 153.0 133.4 156.6 153.9 139.7 126.7 153.6 159.3 151.2 Total production (Mmcfe/d) 190.1 167.6 161.9 159.6 179.8 189.6 170.7 183.8 201.7 195.4 174.0 206.1 217.1 200.7 182.0 218.0 227.8 215.8 Average realized pricing Oil ($/bbl) $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 $56.07NGL ($/bbl) $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 $17.75Gas ($/mcf) $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 $3.22Cash flows Oil & gas revenue 56 52 50 48 58 60 56 59 65 63 60 72 81 76 70 82 87 82 (-) Lease opex (22) (21) (16) (16) (16) (17) (15) (16) (17) (17) (16) (18) (18) (18) (16) (19) (20) (19)(-) Production taxes (3) (3) (3) (2) (3) (3) (3) (3) (3) (3) (3) (4) (5) (5) (5) (5) (6) (5)(-) Corporate SG&A (8) (8) (8) (8) (8) (8) (8) (8) (8) (8) (8) (8) (8) (8) (8) (8) (8) (8)EBITDA 22 20 23 21 31 32 30 32 36 35 33 42 49 46 41 50 53 49 (-) Capital expenditures (30) (7) (21) (26) (27) (4) (34) (22) (32) (2) (43) (36) (35) (2) (53) (44) (24) (2)Unlevered operating cash flow (8) 13 2 (5) 3 28 (4) 10 4 33 (10) 6 14 44 (12) 6 29 48 (-) Cash interest (3) (8) (3) (8) (3) (8) (3) (8) (3) (8) (3) (8) (3) (8) (3) (8) (3) (7)Levered cash flow (11) 5 (1) (12) (0) 20 (7) 2 0 25 (13) (2) 11 36 (15) (2) 27 41 (+) Beginning cash - - - - - - - - - - - - - - 0 (0) (0) (0)(+) Drawdown/(repayment) of revolver 11 (5) 1 12 0 (20) 7 (2) (0) (25) 13 2 (11) (36) 15 2 (27) (41)Ending cash - - - - - - - - - - - - - - 0 0 (0) (0)Liquidity available 22 28 27 15 15 34 27 29 29 54 41 39 50 87 71 69 96 136 Memo Borrowing base 350 350 350 350 350 350 350 350 350 350 350 350 350 350 350 350 350 350 Outstanding borrowings 328 322 323 335 336 316 323 321 321 296 309 311 300 264 279 281 254 214 Credit statistics LTM EBITDA 82 85 91 87 95 107 114 124 130 133 136 146 159 170 177 185 189 193 Interest coverage ratio 3.3x 4.1x 4.3x 4.1x 4.4x 4.9x 5.1x 5.5x 5.7x 5.9x 6.0x 6.5x 7.2x 7.8x 8.2x 8.7x 9.1x 9.5xNet leverage ratio 4.9x 4.7x 4.4x 4.7x 4.3x 3.7x 3.5x 3.2x 3.1x 2.8x 2.8x 2.6x 2.4x 2.0x 2.0x 1.9x 1.7x 1.5x

Source: Court filings.

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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.

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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

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ADJUSTED CAPITAL STRUCTURE

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.

PRO FORMA CAPITAL STRUCTURE (USD m)

Instrument as of 31 Dec. 2015 Coupon Face Amount

Market Amount Adj. Pro Forma

Face Amount Price Yield Maturity Springing Maturity Date

Est. PF Annual Cash Interest

2016 PF Face Leverage

USD 330m RBL facility (USD 5m in L/Cs) 1 L+ 2% - 3% 330 278 - 330 84.3 - 1 Nov 2017 2 Mar 2017 12

USD 75m multidraw junior lien DIP loan 2 L+ 12% 75 75 - 75 - - 19 Apr 2016 9

Total secured debt 330 278 - 405 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 - - -

Total debt 1,205 373 (875) 405 21 4.8x

Cash and cash equivalents 3 28 28 -

Net debt 1,177 345 405 4.8x

Market value of equity 4 7 7 95

Enterprise value 1,184 351 500 5.9x

2016P EBITDA 85

2017P EBITDA 107 Asset Retirement Obligations: USD 73m

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Q & A

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