Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to ___________________
Commission File number 33-15998-06
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
(Exact name of registrant as specified in
its Certificate of Limited Partnership)
TEXAS 76-0281859
(State of Organization) (I.R.S. Employer Identification No.)
16825 Northchase Dr., Suite 400
Houston, Texas 77060
(713) 874-2700
(Address and telephone number of principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
27,353 Limited Partnership Units
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter periods that the registrant was
required), and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
---- ----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
Registrant does not have an aggregate market value for its Limited Partnership
Interests.
Documents Incorporated by Reference
Document Incorporated as to
Registration Statement No. 33-15998 Items 1 and 13
on Form S-1
TABLE OF CONTENTS
Form 10-K Annual Report
For the Period Ended December 31, 1996
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
ITEM NO. PART I PAGE
1 Business I-1
2 Properties I-5
3 Legal Proceedings I-8
4 Submission of Matters to a Vote of
Security Holders I-8
PART II
5 Market Price of and Distributions on the
Registrant's Units and Related Limited
Partner Matters II-1
6 Selected Financial Data II-2
7 Management's Discussion and Analysis of
Financial Condition and Results of Operations II-2
8 Financial Statements and Supplementary Data II-3
9 Disagreements on Accounting and Financial
Disclosure II-3
PART III
10 Directors and Executive Officers of the
Registrant III-1
11 Executive Compensation III-2
12 Security Ownership of Certain Beneficial
Owners and Management III-2
13 Certain Relationships and Related Transactions III-2
PART IV
14 Exhibits, Financial Statement Schedules
and Reports on Form 8-K IV-1
OTHER
Signatures
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
PART I
Item 1. Business
General Description of Partnership
Swift Energy Managed Pension Assets Partnership 1989-C, Ltd., a Texas
limited partnership (the "Partnership" or the "Registrant"), is a partnership
formed under a public serial limited partnership offering denominated Swift
Energy Managed Pension Assets Fund I (Registration Statement No. 33-15998 on
Form S-1, originally declared effective November 13, 1987, and amended effective
November 3, 1988, August 4, 1989 and May 1, 1990 [the "Registration
Statement"]). The Partnership was formed effective September 30, 1989 under a
Limited Partnership Agreement dated September 30, 1989. The initial 322 limited
partners made capital contributions of $2,735,300.
The Partnership is principally engaged in the business of acquiring
nonoperating interests (i.e., net profits interests, royalty interests and
overriding royalty interests) in proven oil and gas properties within the
continental United States. The Partnership does not acquire working interests in
or operate oil and gas properties, and does not engage in drilling activities.
At December 31, 1996, the Partnership had expended or committed to expend 100%
of the limited partners' net commitments (i.e., limited partners' commitments
available to the Partnership for property acquisitions after payment of
organizational fees and expenses) in the acquisition and development of
nonoperating interests in producing properties, which properties are described
under Item 2, "Properties," below. The Partnership's income is derived almost
entirely from its nonoperating interests and the disposition thereof.
The Partnership's business and affairs are conducted by its Managing
General Partner, Swift Energy Company, a Texas corporation ("Swift"). The
Partnership's Special General Partner, VJM Corporation, a California corporation
("VJM"), consults with and advises Swift as to certain financial matters.
The general manner in which the Partnership acquires nonoperating
interests and otherwise conducts its business is described in detail in the
Registration Statement under "Proposed Activities," which is incorporated herein
by reference. The following is intended only as a summary of the Partnership's
manner of doing business and specific activities to date.
Manner of Acquiring Nonoperating Interests in Properties; Net Profits and
Overriding Royalty Interest Agreement
The nonoperating interests owned by the Registrant have typically been
acquired pursuant to a Net Profits and Overriding Royalty Interest Agreement
dated September 30, 1989 (the "NP/OR Agreement") between the Registrant and
Swift Energy Income Partners 1989-C, Ltd. (the "Operating Partnership"). The
Operating Partnership is a Texas limited partnership that is also managed by
Swift and VJM. The Operating Partnership was formed to acquire and develop
producing oil and gas properties.
Under the NP/OR Agreement, the Registrant and the Operating Partnership
have, in effect, combined their funds to acquire producing properties. Using
funds committed to the NP/OR Agreement by both partnerships, the Operating
Partnership acquires producing properties, then promptly conveys nonoperating
interests therein to the Registrant. The Operating Partnership retains a working
interest in each such property, and is responsible for the production of oil and
gas therefrom. For the sake of legal and administrative convenience, producing
properties are usually acquired from the third party sellers by Swift, which
then conveys a working interest in each such property to the Operating
Partnership. The Registrant initially committed $2,351,165 and the Operating
Partnership initially committed $3,530,592 for acquisitions under the NP/OR
Agreement. The Operating Partnership is obligated under the NP/OR Agreement to
convey to the Registrant a 40% fixed net profits interest and a variable
overriding royalty interest in specified depths of all producing properties
acquired under the NP/OR Agreement.
Under the NP/OR Agreement, the Operating Partnership is required to
convey to the Registrant, and the Registrant is required to purchase,
nonoperating interests in all producing properties acquired by the Operating
Partnership, except that:
I-1
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
1. Properties anticipated to require significant development
operations and nonoperating interests offered to the Operating Partnership by
third parties may be purchased by the Operating Partnership outside the NP/OR
Agreement, without participation by the Registrant;
2. During a specified one-year period, the Registrant is
entitled to reduce the amount originally committed by it to purchases under the
NP/OR Agreement and to redirect such funds to the purchase of nonoperating
interests from sources other than the Operating Partnership; and
3. The Registrant's funds will be released from the NP/OR
Agreement if they are not completely spent by the Operating Partnership within a
specified period, or if there is a prior withdrawal of funds by the Operating
Partnership to purchase properties anticipated to require significant
development.
Purchases of nonoperating interests by the Registrant using withdrawn
or released funds may be made from the Managing General Partner and its
affiliates, other partnerships affiliated with the Operating Partnership
(possibly through the Registrant's entry into a new NP/OR Agreement), or from
unaffiliated third parties.
In accordance with its obligations under the NP/OR Agreement, as of
December 31, 1996 the Operating Partnership had conveyed to the Registrant a 40%
net profits interest burdening certain depths of all producing properties
acquired by the Operating Partnership thereunder. Typically, a net profits
interest in an oil and gas property entitles the owner to a specified percentage
share of the gross proceeds generated by the burdened property, net of operating
costs. The net profits interest conveyed to the Registrant under the NP/OR
Agreement differs from the typical net profits interest in that it is calculated
over the entire group of producing properties conveyed under the NP/OR
Agreement; i.e., all operating costs attributable to the burdened depths of such
properties are aggregated, and the total is then subtracted from the total of
all gross proceeds attributable to such depths in order to calculate the net
profits to which the Registrant is entitled. The net profits interest conveyed
to the Registrant burdens only those depths of each subject property which were
evaluated to contain proved reserves at the date of acquisition, to the extent
such depths underlie specified surface acreage.
The Operating Partnership has also conveyed to the Registrant under the
NP/OR Agreement an overriding royalty interests in each property acquired
thereunder. An overriding royalty interest is a fractional interest in the gross
production (or the gross proceeds therefrom) of oil and gas from a property,
free of any exploration, development, operation or maintenance expenses. Under
the NP/OR Agreement, the overriding royalty interest burdens the portions of
each producing property that were evaluated at the date of acquisition not to
contain proved reserves.
Competition, Markets and Regulations
Competition
The oil and gas industry is highly competitive in all its phases. The
Partnership encounters strong competition from many other oil and gas producers,
many of which possess substantial financial resources, in acquiring economically
desirable Producing Properties.
Markets
The amounts of and price obtainable for oil and gas production from
Partnership Properties will be affected by market factors beyond the control of
the Partnership. Such factors include the extent of domestic production, the
level of imports of foreign oil and gas, the general level of market demand on a
regional, national and worldwide basis, domestic and foreign economic conditions
that determine levels of industrial production, political events in foreign
oil-producing regions, and variations in governmental regulations and tax laws
and the imposition of new governmental requirements upon the oil and gas
industry. There can be no assurance that oil and gas prices will not decrease in
the future, thereby decreasing net Revenues from Partnership Properties.
From time to time, there may exist a surplus of natural gas or oil
supplies, the effect of which may be to reduce the amount of hydrocarbons that
the Partnerships may produce and sell while such oversupply exists. In recent
years, initial steps have been taken to provide additional gas transportation
lines from Canada to the United States. If additional Canadian gas is brought to
the United States market, it could create downward pressure on United States gas
prices.
I-2
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
Regulations
Environmental Regulation
The federal government and various state and local governments have
adopted laws and regulations regarding the control of contamination of the
environment. These laws and regulations may require the acquisition of a permit
by Operators before drilling commences, prohibit drilling activities on certain
lands lying within wilderness areas or where pollution arises and impose
substantial liabilities for pollution resulting from operations, particularly
operations near or in onshore and offshore waters or on submerged lands. These
laws and regulations may also increase the costs of routine drilling and
operation of wells. Because these laws and regulations change frequently, the
costs to the Partnership of compliance with existing and future environmental
regulations cannot be predicted. However, the Managing Partner does not believe
that the Partnership is affected in a significantly different manner by these
regulations than are its competitors in the oil and gas industry.
Federal Regulation of Natural Gas
The transportation and sale of natural gas in interstate commerce is
heavily regulated by agencies of the federal government. The following
discussion is intended only as a summary of the principal statutes, regulations
and orders that may affect the production and sale of natural gas from
Partnership Properties. This summary should not be relied upon as a complete
review of applicable natural gas regulatory provisions.
FERC Orders
Several major regulatory changes have been implemented by the Federal
Energy Regulatory Commission ("FERC") from 1985 to the present that affect the
economics of natural gas production, transportation and sales. In addition, the
FERC continues to promulgate revisions to various aspects of the rules and
regulations affecting those segments of the natural gas industry that remain
subject to the FERC's jurisdiction. In April 1992, the FERC issued Order No. 636
pertaining to pipeline restructuring. This rule requires interstate pipelines to
unbundle transportation and sales services by separately stating the price of
each service and by providing customers only the particular service desired,
without regard to the source for purchase of the gas. The rule also requires
pipelines to (i) provide nondiscriminatory "no-notice" service allowing firm
commitment shippers to receive delivery of gas on demand up to certain limits
without penalties, (ii) establish a basis for release and reallocation of firm
upstream pipeline capacity and (iii) provide non-discriminatory access to
capacity by firm transportation shippers on a downstream pipeline. The rule
requires interstate pipelines to use a straight fixed variable rate design. The
rule imposes these same requirements upon storage facilities.
FERC Order No. 500 affects the transportation and marketability of
natural gas. Traditionally, natural gas has been sold by producers to pipeline
companies, which then resold the gas to end-users. FERC Order No. 500 alters
this market structure by requiring interstate pipelines that transport gas for
others to provide transportation service to producers, distributors and all
other shippers of natural gas on a nondiscriminatory, "first-come, first-served"
basis ("open access transportation"), so that producers and other shippers can
sell natural gas directly to end-users. FERC Order No. 500 contains additional
provisions intended to promote greater competition in natural gas markets.
It is not anticipated that the marketability of and price obtainable
for natural gas production from Partnership Properties will be significantly
affected by FERC Order No. 500. Gas produced from Partnership Properties
normally will be sold to intermediaries who have entered into transportation
arrangements with pipeline companies. These intermediaries will accumulate gas
purchased from a number of producers and sell the gas to end-users through open
access pipeline transportation.
I-3
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
State Regulations
Production of any oil and gas from Partnership Properties will be
affected to some degree by state regulations. Many states in which the
Partnership will operate have statutory provisions regulating the production and
sale of oil and gas, including provisions regarding deliverability. Such
statutes, and the regulations promulgated in connection therewith, are generally
intended to prevent waste of oil and gas and to protect correlative rights to
produce oil and gas between owners of a common reservoir. Certain state
regulatory authorities also regulate the amount of oil and gas produced by
assigning allowable rates of production to each well or proration unit.
Federal Leases
Some of the Partnership's properties are located on federal oil and gas
leases administered by various federal agencies, including the Bureau of Land
Management. Various regulations and orders affect the terms of leases,
exploration and development plans, methods of operation and related matters.
Employees
The Partnership has no employees. Swift, however, has a staff of
geologists, geophysicists, petroleum engineers, landmen, and accounting
personnel who administer the operations of Swift and the Partnership. As of
December 31, 1996, Swift had 191 employees. Swift's administrative and overhead
expenses attributable to the Partnership's operations are borne by the
Partnership.
I-4
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
Item 2. Nonoperating Interests in Properties
As of December 31, 1996, the Partnership has acquired nonoperating
interests in producing oil and gas properties which are generally described
below.
Principal Oil and Gas Producing Properties
The most valuable fields in the Partnership, based upon year-end
engineering estimates of discounted future net revenues using constant pricing
and costs, are described below.
1. The Wimberly Field is located in Choctaw County, Alabama, (Cairn
Acquisition) and accounts for 18% of the value in this Partnership.
2. The Cheniere Cadeville Unit is located in Ouachita Parish,
Louisiana, (Cairn Acquisition) and accounts for 20% of the value in this
Partnership.
3. The Gladewater Unit is located in Upshur County, Texas, (Cairn
Acquisition) and accounts for 22% of the value in this Partnership.
The remaining value in the Partnership is attributable to numerous
properties none of which equals or exceeds 15 percent of the total Partnership
value.
Title to Properties
Title to substantially all significant producing properties in which
the Partnership owns nonoperating interests has been examined. In addition to
the nonoperating interests owned by the Partnership, the properties are subject
to royalty, overriding royalty and other interests customary in the industry.
The Managing General Partner does not believe any of these burdens materially
detract from the value of the properties or will materially detract from the
value of the properties or materially interfere with their use in the operation
of the business of the Partnership.
Production and Sales Price
The following table summarizes the sales volumes of the Partnership's
net oil and gas production expressed in MCFs. Equivalent MCFs are obtained by
converting oil to gas on the basis of their relative energy content; one barrel
equals 6,000 cubic feet of gas.
Net Production
-----------------------------------------
For the Years Ended
December 31,
-----------------------------------------
1996 1995 1994
------ ------- -------
Net Volumes (Equivalent MCFs) 212,703 222,794 198,810
Average Net Nonoperating
Interest Price per
Equivalent MCF $1.92 $1.22 $1.16
I-5
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
Net Proved Oil and Gas Reserves
Presented below are the estimates of the Partnership's nonoperating
interests in proved reserves as of December 31, 1996, 1995 and 1994. All of the
Partnership's nonoperating interests in proved reserves are located in the
United States.
December 31,
-------------------------------------------------------------------------
1996 1995 1994
------------------- ------------------- ----------------------
Natural Natural Natural
Oil Gas Oil Gas Oil Gas
------- -------- ------- -------- ------- --------
(BBLS) (MMCF) (BBLS) (MMCF) (BBLS) (MMCF)
Proved developed
reserves at end of year 36,488 475 52,619 593 77,547 530
------- ----- ------- ----- ------- -----
Proved reserves
Balance at beginning
of year 58,951 662 86,984 624 100,553 968
Purchase of minerals
in place -- -- -- -- -- --
Extensions, discoveries
and other additions 8 1 77 2 605 26
Revisions of previous
estimates 7,018 63 (15,214) 181 1,972 (254)
Sales of minerals in
place (12,044) (33) -- -- (1,081) (8)
Production (10,793) (148) (12,896) (145) (15,065) (108)
------- ----- ------- ----- ------- -----
Balance at end of year 43,140 545 58,951 662 86,984 624
------- ----- ------- ----- ------- -----
Revisions of previous quantity estimates are related to upward or
downward variations based on current engineering information for production
rates, volumetrics and reservoir pressure. Additionally, changes in quantity
estimates are the result of the increase or decrease in crude oil and natural
gas prices at each year end which have the effect of adding or reducing proved
reserves on marginal properties due to economic limitations.
I-6
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
The following table summarizes by acquisition the Registrant's reserves
and its nonoperating interests in gross and net producing oil and gas wells as
of December 31, 1996:
Reserves
December 31, 1996
---------------------
Natural Wells
Oil Gas -----------------------
Acquisition State(s) (BBLS) (MMCF) Gross Net
- ----------- --------- ------ ------- ------ -------
Cairn AL, AR, CA, KS,
LA, MI, MS, NM,
OK, TX, WY 34,822 371 178 3.247
Mission Oil
Company TX 888 27 47 0.128
Hardy Oil Company TX 156 4 4 0.005
Amoco OK 1,225 90 108 0.131
Eva Ashby OK 343 6 1 0.010
AWP TX 5,706 47 1 0.014
------- ----- ---- ------
43,140 545 339 3.535
------- ----- ---- ------
There are numerous uncertainties inherent in estimating quantities of
proved reserves and in projecting the future rates of production, timing and
plan of development. Oil and gas reserve engineering must be recognized as a
subjective process of estimating underground accumulations of oil and gas that
cannot be measured in an exact way, and estimates of other engineers might
differ from those above, audited by H. J. Gruy and Associates, Inc., an
independent petroleum consulting firm. The accuracy of any reserve estimate is a
function of the quality of available data and of engineering and geological
interpretation and judgment. Results of drilling, testing and production
subsequent to the date of the estimate may justify revision of such estimate,
and, as a general rule, reserve estimates based upon volumetric analysis are
inherently less reliable than those based on lengthy production history.
Accordingly, reserve estimates are often different from the quantities of oil
and gas that are ultimately recovered.
In estimating the oil and natural gas reserves, the Registrant, in
accordance with criteria prescribed by the Securities and Exchange Commission,
has used prices received as of December 31, 1996 without escalation, except in
those instances where fixed and determinable gas price escalations are covered
by contracts, limited to the price the Partnership reasonably expects to
receive. The Registrant does not believe that any favorable or adverse event
causing a significant change in the estimated quantity of proved reserves has
occurred between December 31, 1996 and the date of this report.
Future prices received for the sale of the Partnership's products may
be higher or lower than the prices used in the evaluation described above; the
operating costs relating to such production may also increase or decrease from
existing levels. The estimates presented above are in accordance with rules
adopted by the Securities and Exchange Commission.
I-7
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
Item 3. Legal Proceedings
The Partnership is not aware of any material pending legal proceedings
to which it is a party or of which any of its property is the subject.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of limited partners during the
fourth quarter of the fiscal year covered by this report.
I-8
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
PART II
Item 5. Market Price of and Distributions on the Registrant's Units and Related
Limited Partner Matters
Market Information
Units in the Partnership were initially sold at a price of $100 per
Unit. Units are not traded on any exchange and there is no established public
trading market for the Units. Swift is aware of negotiated transfers of Units
between unrelated parties; however, these transfers have been limited and
sporadic. Due to the nature of these transactions, Swift has no verifiable
information regarding prices at which Units have been transferred.
Holders
As of December 31, 1996, there were 322 Limited Partners holding Units
in the Partnership.
Distributions
The Partnership generally makes distributions to Limited Partners on a
quarterly basis, subject to the restrictions set forth in the Limited
Partnership Agreement. In the fiscal years ended December 31, 1995 and 1996, the
Partnership distributed a total of $104,000 and $175,800, respectively, to the
holders if its Units. Cash distributions constitute net proceeds from sale of
oil and gas production after payment of lease operating expenses and other
partnership expenses. Some or all of such amounts or any proceeds from the sale
of partnership properties could be deemed to constitute a return of investors'
capital.
Oil and gas investments involve a high risk of loss, and no assurance
can be given that any particular level of distributions to holders of Units can
be achieved or maintained. Although it is anticipated that quarterly
distributions will continue to be made through 1997, the Partnership's ability
to make distributions could be diminished by any event adversely affecting the
oil and gas properties in which the Partnership owns interests or the amount of
revenues received by the Partnership therefrom.
The Partnership's Limited Partnership Agreement contains various
provisions which might serve to delay, defer or prevent a change in control of
the Partnership, such as the requirement of a vote of Limited Partners in order
to sell all or substantially all of the Partnership's properties or the
requirement of consent by the Managing General Partner to transfers of limited
partnership interests.
II-1
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
Item 6. Selected Financial Data
The following selected financial data, prepared in accordance with
generally accepted accounting principles as of December 31, 1996, 1995, 1994
1993 and 1992, should be read in conjunction with the financial statements
included in Item 8:
1996 1995 1994 1993 1992
------------ ------------ ------------ ------------ ------------
Revenues $ 441,723 $ 298,575 $ 248,107 $ 423,459 $ 432,485
Income (Loss) $ 235,917 $ 38,575 $ 35,645 $ 145,932 $ (1,629)
Total Assets $ 876,048 $ 907,269 $ 1,099,335 $ 1,296,649 $ 1,441,393
Cash Distributions $ 199,203 $ 127,845 $ 193,766 $ 366,687 $ 538,033
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
The Partnership has expended all of the partners' net commitments
available for property acquisitions and development by acquiring nonoperating
interests in producing oil and gas properties. The partnership invests primarily
in proved producing properties with nominal levels of future costs of
development for proven but undeveloped reserves. Significant purchases of
additional reserves or extensive drilling activity are not anticipated. Oil and
gas reserves are depleting assets and therefore often experience significant
production declines each year from the date of acquisition through the end of
the life of the property. The primary source of liquidity to the Partnership
comes almost entirely from the income generated from nonoperating interests in
oil and gas produced from oil and gas properties. This source of liquidity and
the related results of operations will decline in future periods as the oil and
gas produced from these properties also declines.
Results of Operations
Income from nonoperating interests increased 48 percent in 1996 over
1995. Oil and gas sales increased 25 percent in 1996 vs. 1995. Increases in both
1996 gas and oil prices were major contributors to the increased revenues. The
Partnership experienced an increase in gas prices of 41 percent or $.64/MCF and
an increase in oil prices of 26 percent or $4.05/BBL. Production volumes
decreased 4 percent due to a 16 percent oil production decrease. The production
declines partially offset the effect of increased oil and gas prices impacting
partnership performance.
Associated amortization expense decreased 25 percent in 1996 when
compared to 1995.
Income from nonoperating interests increased 20 percent in 1995 over
1994. Oil and gas sales increased 6 percent in 1995 vs. 1994. Production volumes
increased 12 percent due to a 34 percent gas production increase. Since the
Partnership's reserves are 65 percent gas, the increase in gas production, had a
major impact on partnership performance. A decline in the 1995 gas prices of 15
percent or $.28/MCF partially offset the Partnership's increased revenues due to
production increases.
Associated amortization expense increased 26 percent in 1995 when
compared to 1994.
During 1997, Partnership revenues and costs will be shared between the
limited partners and general partners in an 90:10 ratio, based on the annualized
rate of cash distributions by the Partnership during a certain period prior to
December 31, 1996. Based on current oil and gas prices, current levels of oil
and gas production and expected cash distributions during 1997, the Managing
General Partner anticipates that the Partnership sharing ratio will continue to
be 90:10.
II-2
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
Item 8. Financial Statements and Supplementary Data
See Part IV, Item 14(a) for index to financial statements.
Item 9. Disagreements on Accounting and Financial Disclosure
None.
II-3
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
PART III
Item 10. Directors and Executive Officers of the Registrant
As a limited partnership, the Registrant has no directors or executive
officers. The business and affairs of the Registrant are managed by Swift as
Managing General Partner. Set forth below is certain information as of March 17,
1997 regarding the directors and executive officers of Swift.
Position(s) with
Name Age Swift and Other Companies
---- --- -------------------------
DIRECTORS
A. Earl Swift 63 President, Chief Executive Officer and
Chairman of the Board
Virgil N. Swift 68 Executive Vice President - Business
Development, Vice Chairman of the Board
G. Robert Evans 65 Director of Swift; Chairman of the Board,
Material Sciences Corporation;
Director, Consolidated Freightways, Inc.,
Fibreboard Corporation, Elco Industries,
and Old Second Bancorp
Raymond O. Loen 72 Director of Swift; President, R. O. Loen
Company
Henry C. Montgomery 61 Director of Swift; Chairman of the Board,
Montgomery Financial Services Corporation;
Director, Southwall Technology Corporation
Clyde W. Smith, Jr. 48 Director of Swift; President, Somerset
Properties, Inc.
Harold J. Withrow 69 Director of Swift
EXECUTIVE OFFICERS
Terry E. Swift 41 Executive Vice President, Chief
Operating Officer
John R. Alden 51 Senior Vice President - Finance,
Chief Financial Officer and Secretary
Bruce H. Vincent 49 Senior Vice President - Funds Management
James M. Kitterman 52 Senior Vice President - Operations
Alton D. Heckaman, Jr. 39 Vice President - Finance and Controller
III-1
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
From time to time, Swift as Managing General Partner of the Partnership
purchases Units in the Partnership from investors who offer the Units pursuant
to their right of presentment, which purchases are made pursuant to terms set
out in the Partnership's original Limited Partnership Agreement. Due to the
frequency and large number of these transactions, Swift reports these
transactions under Section 16 of the Securities Exchange Act of 1934 on an
annual rather than a monthly basis. In some cases such annual reporting may
constitute a late filing of the required Section 16 reports under the applicable
Section 16 rules.
Item 11. Executive Compensation
As noted in Item 10, "Directors and Executive Officers of the
Registrant," above, the Partnership has no executive officers. The executive
officers of Swift and VJM are not compensated by the Partnership.
Certain fees and allowances contemplated by the Limited Partnership
Agreement have been paid by the Partnership to Swift and VJM. See Note (4) in
Notes To Financial Statements (Related-Party Transactions) for further
discussion.
Item 12. Security Ownership of Certain Beneficial Owners and Management
No single limited partner is known to the Partnership to be the
beneficial owner of more than five percent of the Partnership's Units.
Swift and VJM are not aware of any arrangement, the operation of which
may at a subsequent date result in a change in control of the Partnership.
Item 13. Certain Relationships and Related Transactions
As noted in Item 10, "Directors and Executive Officers of the
Registrant," above, the Partnership has no executive officers or directors, and
thus has not engaged in any transactions in which any such person had an
interest. The Partnership is permitted to engage in certain transactions with
Swift as Managing General Partner and VJM as Special General Partner, subject to
extensive guidelines and restrictions are described in the "Conflicts of
Interest" section of the Amended Prospectus contained in the Registration
Statement, which is incorporated herein by reference.
Summarized below are the principal transactions that have occurred
between the Partnership, on one hand, and Swift, VJM and their affiliates, on
the other.
Certain Transactions with General Partners
1. As described in Item 1, "Business," above, during 1989 the
Partnership entered into an NP/OR Agreement with the Operating Partnership,
which is also managed by Swift and VJM. Pursuant to such NP/OR Agreement, the
Operating Partnership acquired the oil and gas properties described under Item 2
above and conveyed nonoperating interests therein to the Partnership.
2. Swift acts as operator for many of the wells in which the
Partnership has nonoperating interests and has received compensation for such
activities in accordance with standard industry operating agreements.
3. The Partnership paid to Swift and VJM certain fees as contemplated
by the Limited Partnership Agreement. See Note (4) in Notes To Financial
Statements (Related-Party Transactions) for further discussion.
III-2
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
a(1) FINANCIAL STATEMENTS PAGE NO.
Report of Independent Public Accountants IV-2
Balance Sheets as of December 31, 1996 and 1995 IV-3
Statements of Operations for the years ended
December 31, 1996, 1995 and 1994 IV-4
Statements of Partners' Capital for the years
ended December 31, 1996, 1995 and 1994 IV-5
Statements of Cash Flows for the years ended
December 31, 1996, 1995 and 1994 IV-6
Notes to Financial Statements IV-7
a(2) FINANCIAL STATEMENT SCHEDULES
All schedules required by the SEC are either inapplicable or the
required information is included in the Financial Statements, the
Notes thereto, or in other information included elsewhere in this
report.
a(3) EXHIBITS
3.1 Limited Partnership Agreement of Swift Energy Managed
Pension Assets Partnership 1989-C, Ltd., dated September
30, 1989. (Form 10-K for year ended December 31, 1989,
Exhibit 3.1).
3.2 Certificate of Limited Partnership of Swift Energy Managed
Pension Assets Partnership 1989-C, Ltd., as filed
September 29, 1989, with the Texas Secretary of State.
(Form 10-K for year ended December 31, 1989, Exhibit 3.2).
10.1 Net Profits and Overriding Royalty Interest Agreement
between Swift Energy Managed Pension Assets Partnership
1989-C Ltd. and Swift Energy Income Partners 1989-C Ltd.
dated September 30, 1989. (Form 10-K for year ended
December 31, 1989, Exhibit 10.1).
99.1 A copy of the following section of the Amended Prospectus
dated November 13, 1987, contained in Post-Effective
Amendment No. 1 to Registration Statement No. 33-15998 on
Form S-1 for Swift Energy Managed Pension Assets Fund I,
as filed on November 3, 1988, which have been incorporated
herein by reference: "Proposed Activities" (pp 38 - 48)
and "Conflicts of Interest" (pp. 70 - 79). (Form 10-K for
year ended December 31, 1989, Exhibit 28.1).
b(1) REPORTS ON FORM 8-K
No reports on Form 8-K have been filed during the quarter ended
December 31, 1996.
Supplemental Information to be Furnished with Reports Filed Pursuant to Section
15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant to
Section 12 of the Act.
No annual report to security holders covering the Partnership's 1996
fiscal year, or proxy statement, form of proxy or other proxy soliciting
material has been sent to Limited Partners of the Partnership.
IV-1
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Swift Energy Managed Pension Assets Partnership 1989-C, Ltd.:
We have audited the accompanying balance sheets of Swift Energy Managed
Pension Assets Partnership 1989-C, Ltd., (a Texas limited partnership) as of
December 31, 1996 and 1995, and the related statements of operations, partners'
capital and cash flows for the years ended December 31, 1996, 1995 and 1994.
These financial statements are the responsibility of the general partner's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Swift Energy Managed
Pension Assets Partnership 1989-C, Ltd., as of December 31, 1996 and 1995, and
the results of its operations and its cash flows for the years ended December
31, 1996, 1995 and 1994, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Houston, Texas
February 10, 1997
IV-2
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
1996 1995
--------------- ----------------
ASSETS:
Current Assets:
Cash and cash equivalents $ 166,985 $ 1,284
Nonoperating interests income receivable 320,324 72,950
--------------- ----------------
Total Current Assets 487,309 74,234
--------------- ----------------
Nonoperating interests in oil and gas
properties, using full cost accounting 2,295,768 2,587,083
Less-Accumulated amortization (1,907,029) (1,754,048)
--------------- ----------------
388,739 833,035
--------------- ----------------
$ 876,048 $ 907,269
=============== ================
LIABILITIES AND PARTNERS' CAPITAL:
Current Liabilities:
Payable related to property capital costs $ 3,325 $ 71,260
--------------- ----------------
Partners' Capital 872,723 836,009
--------------- ----------------
$ 876,048 $ 907,269
=============== ================
See accompanying notes to financial statements.
IV-3
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1996 1995 1994
--------------- --------------- ---------------
REVENUES:
Income from nonoperating interests $ 440,185 $ 298,363 $ 248,062
Interest income 1,538 212 45
--------------- --------------- ---------------
441,723 298,575 248,107
--------------- --------------- ---------------
COSTS AND EXPENSES:
Amortization 152,982 206,690 161,823
General and administrative 52,824 53,310 50,639
--------------- --------------- ---------------
205,806 260,000 212,462
--------------- --------------- ---------------
INCOME (LOSS) $ 235,917 $ 38,575 $ 35,645
=============== =============== ===============
See accompanying notes to financial statements.
IV-4
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
STATEMENTS OF PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
Limited General Combining
Partners Partners Adjustment Total
--------------- --------------- --------------- ---------------
Balance,
December 31, 1993 $ 1,013,302 $ 17,837 $ 52,261 $ 1,083,400
Income (Loss) 32,018 15,281 (11,654) 35,645
Cash Distributions (170,900) (22,866) -- (193,766)
--------------- --------------- --------------- ---------------
Balance,
December 31, 1994 874,420 10,252 40,607 925,279
--------------- --------------- --------------- ---------------
Income (Loss) 38,604 18,349 (18,378) 38,575
Cash Distributions (104,000) (23,845) -- (127,845)
--------------- --------------- --------------- ---------------
Balance,
December 31, 1995 809,024 4,756 22,229 836,009
--------------- --------------- --------------- ---------------
Income (Loss) 218,223 32,663 (14,969) 235,917
Cash Distributions (175,800) (23,403) -- (199,203)
--------------- --------------- --------------- ---------------
Balance,
December 31, 1996 $ 851,447 $ 14,016 $ 7,260 $ 872,723
=============== =============== =============== ===============
Limited Partners' net income (loss)
per unit
1994 $ 1.17
===============
1995 $ 1.41
===============
1996 $ 7.98
===============
See accompanying notes to financial statements.
IV-5
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1996 1995 1994
--------------- --------------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Income (Loss) $ 235,917 $ 38,575 $ 35,645
Adjustments to reconcile income (loss) to
net cash provided by operations:
Amortization 152,982 206,690 161,823
Change in assets and liabilities:
(Increase) decrease in nonoperating interests income receivable (247,375) 21,186 33,910
Increase (decrease) in accounts payable
and accrued liabilities -- (4,220) (283)
--------------- --------------- ---------------
Net cash provided by (used in) operating activities 141,524 262,231 231,095
--------------- --------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to nonoperating interests in oil
and gas properties (14,686) (35,819) (81,062)
Proceeds from sales of nonoperating interests
in oil and gas properties 306,001 79 82,688
Increase (decrease) in payable related to property capital costs (67,935) (98,576) (38,910)
--------------- --------------- ---------------
Net cash provided by (used in) investing activities 223,380 (134,316) (37,284)
--------------- --------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to partners (199,203) (127,845) (193,766)
--------------- --------------- ---------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 165,701 70 45
--------------- --------------- ---------------
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 1,284 1,214 1,169
--------------- --------------- ---------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 166,985 $ 1,284 $ 1,214
=============== =============== ===============
See accompanying notes to financial statements.
IV-6
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
NOTES TO FINANCIAL STATEMENTS
(1) Organization and Terms of Partnership Agreement -
Swift Energy Managed Pension Assets Partnership 1989-C, Ltd., a Texas
limited partnership (the Partnership), was formed on September 30, 1989, for the
purpose of purchasing net profits interests, overriding royalty interests and
royalty interests (collectively, "nonoperating interests") in producing oil and
gas properties within the continental United States. Swift Energy Company
("Swift"), a Texas corporation, and VJM Corporation ("VJM"), a California
corporation, serve as Managing General Partner and Special General Partner of
the Partnership, respectively. The general partners are required to contribute
up to 1/99th of limited partner net contributions. The 322 limited partners made
total capital contributions of $2,735,300.
Nonoperating interests acquisition costs and the management fee are
borne 99 percent by the limited partners and one percent by the general
partners. Organization and syndication costs were borne solely by the limited
partners.
Initially, all continuing costs (including general and administrative
reimbursements and direct expenses) and revenues are allocated 90 percent to the
limited partners and ten percent to the general partners. If prior to
partnership payout, as defined, however, the cash distribution rate (as defined
in the Partnership Agreement) for a certain period equals or exceeds 17.5
percent, then for the following calendar year, these continuing costs and
revenues will be allocated 85 percent to the limited partners and 15 percent to
the general partners. After partnership payout, continuing costs and revenues
will be shared 85 percent by the limited partners, and 15 percent by the general
partners, even if the cash distribution rate is less than 17.5 percent. During
1992 and 1991, the cash distribution rate exceeded 17.5 percent and thus, in
1993 and 1992, the continuing costs and revenues were shared 85 percent by the
limited partners and 15 percent by the general partners. During 1996, 1995, 1994
and 1993, the cash distribution rate fell below 17.5 percent and thus, in 1997,
1996, 1995 and 1994 the continuing costs and revenues will be (were) shared 90
percent by the limited partners and 10 percent by the general partners. Payout
had not occurred as of December 31, 1996.
(2) Significant Accounting Policies -
Use of Estimates --
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
estimates. Certain reclassifications have been made to prior year amounts to
conform to the current year presentation.
Nonoperating Interests in Oil and Gas Properties --
For financial reporting purposes, the Partnership follows the
"full-cost" method of accounting for nonoperating interests in oil and gas
properties. Under this method of accounting, all costs incurred in the
acquisition of nonoperating interests in oil and gas properties are capitalized.
The unamortized cost of nonoperating interests in oil and gas properties is
limited to the "ceiling limitation", (calculated separately for the Partnership,
limited partners, and general partners). The "ceiling limitation" is calculated
on a quarterly basis and represents the estimated future net revenues from
nonoperating interests in proved properties using current prices, discounted at
ten percent. Proceeds from the sale or disposition of nonoperating interests in
oil and gas properties are treated as a reduction of the cost of the
nonoperating interests with no gains or losses recognized except in significant
transactions.
The Partnership computes the provision for amortization of nonoperating
interests in oil and gas properties on the units-of-production method. Under
this method, the provision is calculated by multiplying the total unamortized
cost of nonoperating interests in oil and gas properties by an overall rate
determined by dividing the physical units of oil and gas produced during the
period by the total estimated units of proved oil and gas reserves attributable
to the Partnership's nonoperating interests at the beginning of the period.
IV-7
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The calculation of the "ceiling limitation" and the provision for
amortization is based on estimates of proved reserves. There are numerous
uncertainties inherent in estimating quantities of proved reserves and in
projecting the future rates of production, timing and plan of development. The
accuracy of any reserve estimate is a function of the quality of available data
and of engineering and geological interpretation and judgment. Results of
drilling, testing and production subsequent to the date of the estimate may
justify revision of such estimate. Accordingly, reserve estimates are often
different from the quantities of oil and gas that are ultimately recovered.
Statements of Cash Flows --
Highly liquid debt instruments with an initial maturity of three months
or less are considered to be cash equivalents.
(3) Acquisition of Nonoperating Interests in Oil and Gas Property Costs -
Effective September 30, 1989, the Partnership entered into a Net
Profits and Overriding Royalty Interests Agreement (NP/OR Agreement) with Swift
Energy Income Partners 1989-C, Ltd. (Operating Partnership), managed by Swift,
for the purpose of acquiring interests in producing oil and gas properties.
Under the terms of the NP/OR Agreement, the Partnership has been conveyed a
nonoperating interest in the aggregate net profits (i.e., oil and gas sales net
of related operating costs) of the properties acquired equal to its
proportionate share of the property acquisition costs, as defined. Property
acquisition costs are amounts actually paid by the Operating Partnership for the
properties plus costs incurred by the Operating Partnership in acquiring the
properties and costs related to screening and evaluation of properties not
acquired. In 1996, 1995 and 1994, the Partnership acquired nonoperating
interests in producing oil and gas properties for $14,686, $35,819 and $81,062,
respectively.
During 1995, the Partnership's unamortized oil and gas property costs
exceeded the quarterly calculations of the "ceiling limitation" resulting in an
additional provision for amortization of $2,245. No such write down was required
in 1996.
(4) Related-Party Transactions -
An affiliate of the Special General Partner, as Dealer Manager,
received $68,383 for managing and overseeing the offering of limited partnership
units.
A one-time management fee of $68,383 was paid to Swift in 1989 for
services performed for the Partnership. During 1996, 1995 and 1994, the
Partnership paid Swift $41,030, $41,030 and $37,265, respectively, as general
and administrative overhead allowances.
(5) Federal Income Taxes -
The Partnership is not a tax-paying entity. No provision is made in the
accounts of the Partnership for federal or state income taxes, since such taxes
are liabilities of the individual partners, and the amounts thereof depend upon
their respective tax situations.
The tax returns and the amount of distributable Partnership income are
subject to examination by the federal and state taxing authorities. If the
Partnership's royalty income for federal income tax purposes is ultimately
changed by the taxing authorities, the tax liability of the limited partners
could be changed accordingly. Royalty income reported on the Partnership's
federal return of income for the years ended December 31, 1996, 1995 and 1994
was $579,181, $200,383 and $128,574, respectively. The difference between
royalty income for federal income tax purposes reported by the Partnership and
income or loss from nonoperating interests reported herein primarily results
from the exclusion of amortization (as described below) from ordinary income
reported in the Partnership's federal return of income.
For federal income tax purposes, amortization with respect to
nonoperating interests in oil and gas properties is computed separately by the
partners and not by the Partnership. Since the amount of amortization on
nonoperating interests in oil and gas is not computed at the Partnership level,
amortization is not included in the Partnership's income for federal income tax
purposes but is charged directly to the partners' capital accounts to the extent
of the cost of the nonoperating interests in oil and gas properties, and thus is
treated as a separate item on the partners' Schedule K-1. Amortization for
federal income tax purposes may vary from that computed for financial reporting
purposes in cases where a ceiling adjustment is recorded, as such amount is not
recognized for tax purposes.
IV-8
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(6) Vulnerability Due to Certain Concentrations -
The Partnership's revenues are primarily the result of sales of its oil
and natural gas production. Market prices of oil and natural gas may fluctuate
and adversely affect operating results.
The Partnership extends credit to various companies in the oil and gas
industry which results in a concentration of credit risk. This concentration of
credit risk may be affected by changes in economic or other conditions and may
accordingly impact the Partnership's overall credit risk. However, the Managing
General Partner believes that the risk is mitigated by the size, reputation, and
nature of the companies to which the Partnership extends credit. In addition,
the Partnership generally does not require collateral or other security to
support customer receivables.
(7) Fair Value of Financial Instruments -
The Partnership's financial instruments consist of cash and cash
equivalents and short-term receivables and payables. The carrying amounts
approximate fair value due to the highly liquid nature of the short-term
instruments.
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
SWIFT ENERGY MANAGED PENSION
ASSETS PARTNERSHIP 1989-C, LTD.
(Registrant)
By: SWIFT ENERGY COMPANY
General Partner
Date: March 17, 1997 By: s/b A. Earl Swift
-------------- ----------------------------------
A. Earl Swift
President
Date: March 17, 1997 By: s/b John R. Alden
-------------- ----------------------------------
John R. Alden
Principal Financial Officer
Date: March 17, 1997 By: s/b Alton D. Heckaman, Jr.
-------------- ----------------------------------
Alton D. Heckaman, Jr.
Principal Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
SWIFT ENERGY MANAGED PENSION
ASSETS PARTNERSHIP 1989-C, LTD.
(Registrant)
By: SWIFT ENERGY COMPANY
General Partner
Date: March 17, 1997 By: s/b A. Earl Swift
-------------- ----------------------------------
A. Earl Swift
Director and Principal
Executive Officer
Date: March 17, 1997 By: s/b Virgil N. Swift
-------------- ----------------------------------
Virgil N. Swift
Director and Executive
Vice President - Business
Development
Iv-10
SWIFT ENERGY MANAGED PENSION ASSETS PARTNERSHIP 1989-C, LTD.
Date: March 17, 1997 By: s/b G. Robert Evans
-------------- ---------------------------------
G. Robert Evans
Director
Date: March 17, 1997 By: s/b Raymond O. Loen
-------------- ---------------------------------
Raymond O. Loen
Director
Date: March 17, 1997 By: s/b Henry C. Montgomery
-------------- ---------------------------------
Henry C. Montgomery
Director
Date: March 17, 1997 By: s/b Clyde W. Smith, Jr.
-------------- ---------------------------------
Clyde W. Smith, Jr.
Director
Date: March 17, 1997 By: s/b Harold J. Withrow
-------------- ---------------------------------
Harold J. Withrow
Director
IV-11