FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [ X ]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995 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 33-11773-01 SWIFT ENERGY INCOME PARTNERS 1987-B, LTD. (Exact name of registrant as specified in its charter) Texas 76-0226425 (State or other jurisdiction (I.R.S. Employer of organization) Identification No.) 16825 Northchase Drive, Suite 400 Houston, Texas 77060 (Address of principal executive offices) (Zip Code) (713) 874-2700 (Registrant's telephone number, including area code) None (Former name, former address and former fiscal year, if changed since last report) 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 period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No_____ SWIFT ENERGY INCOME PARTNERS 1987-B, LTD. INDEX PART I. FINANCIAL INFORMATION PAGE ITEM 1. Financial Statements Balance Sheets - March 31, 1995 and December 31, 1994 3 Statements of Operations - Three month periods ended March 31, 1995 and 1994 4 Statements of Cash Flows - Three month periods ended March 31, 1995 and 1994 5 Notes to Financial Statements 6 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II. OTHER INFORMATION 8 SIGNATURES 9 SWIFT ENERGY INCOME PARTNERS 1987-B, LTD. BALANCE SHEETS March 31, December 31, 1995 1994 __________ __________ (Unaudited) ASSETS: Current Assets: Cash and cash equivalents $ 1,549 $ 1,452 Oil and gas sales receivable 439,945 536,357 ___________ ___________ Total Current Assets 441,494 537,809 ___________ ___________ Oil and Gas Properties, using full cost accounting 24,931,762 24,879,507 Less-Accumulated depreciation, depletion and amortization (18,754,280) (18,352,629) ___________ ___________ 6,177,482 6,526,878 ___________ ___________ $ 6,618,976 $ 7,064,687 =========== =========== LIABILITIES AND PARTNERS' CAPITAL: Current Liabilities: Accounts payable and accrued liabilities $ 633,728 $ 660,538 Current portion of note payable 170,674 170,674 ___________ __________ Total Current Liabilities 804,402 831,212 ___________ __________ Note payable to a Bank, net of current portion -- 42,669 Deferred Revenues 241,746 244,148 Partners' Capital 5,572,828 5,946,658 ___________ __________ $ 6,618,976 $7,064,687 =========== ========== See accompanying notes to financial statements. SWIFT ENERGY INCOME PARTNERS 1987-B, LTD. STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended March 31, ____________________________ 1995 1994 ____________ ____________ REVENUES: Oil and gas sales $ 461,650 $ 571,180 Interest income 129 3 Other 8,321 5,254 __________ __________ 470,100 576,437 __________ __________ COSTS AND EXPENSES: Lease operating 187,184 195,514 Production taxes 22,276 36,933 Depreciation, depletion and amortization - Normal provision 196,225 205,895 Additional provision 205,426 -- General and administrative 51,281 67,577 Interest expense 11,254 13,116 __________ __________ 673,646 519,035 __________ __________ NET INCOME (LOSS) $ (203,546) $ 57,402 ========== ========== Limited Partners' net income (loss) per unit March 31, 1995 $ (.78) ======= March 31, 1994 $ .22 ======= See accompanying note to financial statements. SWIFT ENERGY INCOME PARTNERS 1987-B, LTD. STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, ___________________________ 1995 1994 ___________ ____________ CASH FLOWS FROM OPERATING ACTIVITIES: Income (loss) $ (203,546) $ 57,402 Adjustments to reconcile income (loss) to net cash provided by operations: Depreciation, depletion and amortization 401,651 205,895 Deferred revenues (2,402) 60,782 Change in assets and liabilities: (Increase) decrease in oil and gas sales receivable 96,412 58,638 Increase (decrease) in accounts payable and accrued liabilities (26,810) (77,275) __________ ________ Net cash provided by (used in) operating activities 265,305 305,442 __________ ________ CASH FLOWS FROM INVESTING ACTIVITIES: Additions to oil and gas properties (52,255) (65,020) Proceeds from sales of oil and gas properties -- 47,735 __________ ________ Net cash provided by (used in) investing activities (52,255) (17,285) __________ ________ CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions to partners (170,284) (245,471) Payment on notes payable (42,669) (42,669) __________ ________ Net cash provided by (used in) financing activities (212,953) (288,140) __________ ________ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 97 17 __________ ________ CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,452 1,230 __________ ________ CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,549 $ 1,247 ========== ======== Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 5,041 $ 7,018 ========== ======== See accompanying notes to financial statements. SWIFT ENERGY INCOME PARTNERS 1987-B, LTD. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (1) General Information - The financial statements included herein have been prepared by the Partnership and are unaudited except for the balance sheet at December 31, 1994 which has been taken from the audited financial statements at that date. The financial statements reflect adjustments, all of which were of a normal recurring nature, which are, in the opinion of the Managing General Partner necessary for a fair presentation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). The Partnership believes adequate disclosure is provided by the information presented. The financial statements should be read in conjunction with the audited financial statements and the notes included in the latest Form 10-K. (2) Deferred Revenues - Deferred Revenues represent a gas imbalance liability assumed as part of property acquisitions. The imbalance is accounted for on the entitlements method, whereby the Partnership records its share of revenue, based on its entitled amount. Any amounts over or under the entitled amount are recorded as an increase or decrease to deferred revenues. (3) Concentrations of Credit Risk - 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. SWIFT ENERGY INCOME PARTNERS 1987-B, LTD. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General The Partnership was formed for the purpose of investing in producing oil and gas properties located within the continental United States. In order to accomplish this, the Partnership goes through two distinct yet overlapping phases with respect to its liquidity and result of operations. When the Partnership is formed, it commences its "acquisition" phase, with all funds placed in short-term investments until required for such property acquisitions. The interest earned on these pre-acquisition investments becomes the primary cash flow source for initial partner distributions. As the Partnership acquires producing properties, net cash from operations becomes available for distribution, along with the investment income. After Partnership funds have been expended on producing oil and gas properties, the Partnership enters its "operations" phase. During this phase, oil and gas sales generate substantially all revenues, and distributions to partners reflect those revenues less all associated Partnership expenses. The Partnership may also derive proceeds from the sale of acquired oil and gas properties, when the sale of such properties is economically appropriate or preferable to continued operation. Liquidity and Capital Resources The Partnership has completed acquisition of producing oil and gas properties, expending all of limited partners' commitments available for property acquisitions. The Partnership does not allow for additional assessments from the partners to fund capital requirements. However, funds are available from partnership revenues, borrowings or proceeds from the sale of partnership property. The Managing General Partner believes that the funds currently available to the Partnership will be adequate to meet any anticipated capital requirements. Results of Operations Oil and gas sales declined $109,530 or 19 percent in the first quarter of 1995 when compared to the corresponding quarter in 1994, primarily due to decreased gas prices. A decline in gas prices of 34 percent or $.71/MCF had a significant impact on Partnership performance. Also, current quarter gas and oil production declined 10 percent and 11 percent, respectively, when compared to first quarter 1994 production volumes, further contributing to decreased revenues. Increased oil prices of 62 percent or $6.37/BBL partially offset the revenue declines. Associated depreciation expense decreased 5 percent or $9,670. The Partnership recorded an additional provision in depreciation, depletion and amortization in the first quarter of 1995 for $205,426 when the present value, discounted at ten percent, of estimated future net revenues from oil and gas properties, using the guidelines of the Securities and Exchange Commission, was below the fair market value originally paid for oil and gas properties. The additional provision results from the Managing General Partner's determination that the fair market value paid for properties may or may not coincide with reserve valuations determined according to guidelines of the Securities and Exchange Commission. During 1995, Partnership revenues and costs will be shared between the limited partners and general partners in a 90:10 ratio. SWIFT ENERGY INCOME PARTNERS 1987-B, LTD. PART II - OTHER INFORMATION ITEM 5. OTHER INFORMATION -NONE- 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 INCOME PARTNERS 1987-B, LTD. (Registrant) By: SWIFT ENERGY COMPANY Managing General Partner Date: May 12, 1995 By: /s/ John R. Alden ___________________ ______________________________ John R. Alden Senior Vice President, Secretary and Principal Financial Officer Date: May 12, 1995 By: /s/ Alton D. Heckaman, Jr. ___________________ _____________________________ Alton D. Heckaman, Jr. Vice President, Controller and Principal Accounting Officer