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 June 30, 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 0-17023
SWIFT ENERGY INCOME PARTNERS 1986-D, LTD.
(Exact name of registrant as specified in its charter)
Texas 76-0208087
(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 1986-D, LTD.
INDEX
PART I. FINANCIAL INFORMATION PAGE
ITEM 1. Financial Statements
Balance Sheets
- June 30, 1995 and December 31, 1994 3
Statements of Operations
- Three month and six month periods ended
June 30, 1995 and 1994 4
Statements of Cash Flows
- Six month periods ended June 30, 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 9
SIGNATURES 10
SWIFT ENERGY INCOME PARTNERS 1986-D, LTD.
BALANCE SHEETS
June 30, December 31,
1995 1994
____________ ______________
(Unaudited)
ASSETS:
Current Assets:
Cash and cash equivalents $ 1,617 $ 1,468
Oil and gas sales receivable 207,377 223,434
___________ ____________
Total Current Assets 208,994 224,902
___________ ____________
Oil and Gas Properties, using
full cost accounting 13,075,832 13,030,737
Less-Accumulated depreciation,
depletion and amortization (10,129,071) (9,511,869)
___________ ____________
2,946,761 3,518,868
___________ ____________
$3,155,755 $ 3,743,770
=========== ============
LIABILITIES AND PARTNERS' CAPITAL:
Current Liabilities:
Accounts payable and accrued
liabilities $ 429,680 $ 414,932
Current portion of note payable 75,000 100,000
_____________ _____________
Total Current Liabilities 504,680 514,932
__________ __________
Note payable to a Bank, net
of current portion -- 25,000
Deferred Revenues 145,576 142,996
Partners' Capital 2,505,499 3,060,842
__________ __________
$3,155,755 $3,743,770
========== ==========
See accompanying notes to financial statements.
SWIFT ENERGY INCOME PARTNERS 1986-D, LTD.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
__________________________ ___________________
1995 1994 1995 1994
___________ ___________ __________ __________
REVENUES:
Oil and gas sales $ 219,896 $ 291,519 $ 418,423 $ 521,127
Interest income 80 9 87 12
Other 2,725 2,355 5,398 4,383
___________ __________ __________ _________
222,701 293,883 423,908 525,522
____________ __________ __________ _________
COSTS AND EXPENSES:
Lease operating 86,109 66,424 172,669 163,568
Production taxes 12,519 16,077 23,474 31,755
Depreciation, depletion
and amortization -
Normal provision 77,503 90,951 156,061 173,215
Additional provision 283,915 -- 461,141 --
General and administrative 23,272 41,383 43,514 64,431
Interest expense 13,612 7,112 19,652 14,242
__________ __________ _________ _________
496,930 221,947 876,511 447,211
NET INCOME (LOSS) $ (274,229) $ 71,936 $(452,603) $ 78,311
========== ========== ========= =========
Limited Partners' net income
(loss) per unit $ (19.42) $ 5.09 $ (32.05) $ 5.55
=========== ========== =========== =========
See accompanying note to financial statements.
4
SWIFT ENERGY INCOME PARTNERS 1986-D, LTD.
STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30,
___________________________
1995 1994
_____________ ___________
CASH FLOWS FROM OPERATING ACTIVITIES:
Income (loss) $ (452,603) $ 78,311
Adjustments to reconcile income
(loss) to net cash provided by
operations:
Depreciation, depletion and
amortization 617,202 173,215
Deferred revenues 2,580 13,001
Change in assets and liabilities:
(Increase) decrease in oil and
gas sales receivable 16,057 (34,640)
Increase (decrease) in accounts
payable and accrued liabilities (14,748) (20,622)
_________ _______
Net cash provided by (used in)
operating activities 197,984 209,265
________ _______
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties (67,422) (76,156)
Proceeds from sales of oil and gas
properties 22,237 47,604
_________ _______
Net cash provided by (used in)
investing activities (45,095) (28,552)
_________ _______
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to partners (102,740) (130,588)
Payments on note payable (50,000) (50,000)
__________ _______
Net cash provided by (used in)
financing activities (152,740) (180,588)
_________ ________
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 149 125
_________ ________
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 1,468 1,180
_________ ________
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,617 $ 1,305
======== ========
Supplemental disclosure of cash flow
information:
Cash paid during the period for interest $ 5,439 $ 7,687
======== ========
See accompanying notes to financial statements.
5
SWIFT ENERGY INCOME PARTNERS 1986-D, 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 1986-D, 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 results 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 Partners believes that the
funds currently available to the partnership will be adequate to meet
any anticipated capital requirements.
RESULTS OF OPERATIONS
The following analysis explains changes in the revenue and expense
categories for the quarter ended June 30, 1995 (current quarter) when
compared to the quarter ended June 30, 1994 (corresponding quarter), and
for the six months ended June 30, 1995 (current period), when compared
to the six months ended June 30, 1994 (corresponding period).
7
SWIFT ENERGY INCOME PARTNERS 1986-D, LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Three Months Ended June 30, 1995 and 1994
Oil and gas sales declined $71,623 or 25 percent in the second
quarter of 1995 when compared to the corresponding quarter in 1994,
primarily due to decreased gas prices. A decline in gas prices of 27
percent or $.58/MCF had a significant impact on partnership performance.
Also, current quarter oil and gas production declined 19 percent and 6
percent, respectively, when compared to second quarter 1994 production
volumes, further contributing to decreased revenues. Increased oil
prices of 12 percent or $1.81/BBL partially offset the revenue declines.
Associated depreciation expense decreased 15 percent or $13,448.
The Partnership recorded an additional provision in depreciation,
depletion and amortization in the second quarter of 1995 for $283,915
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.
Six Months Ended June 30, 1995 and 1994
Oil and gas sales decreased $102,704 or 20 percent in the first six
months of 1995 over the corresponding period in 1994. A decline in the
current period gas prices of 31 percent or $.66/MCF had a significant
impact on partnership performance. Also, current period oil production
declined 17 percent when compared to the corresponding period in 1994,
further contributing to decreased income. Increased oil prices of 32
percent or $4.00/BBL partially offset the revenue declines.
Associated depreciation expense decreased 10 percent or $17,154.
The Partnership recorded an additional provision in depreciation,
depletion and amortization in the first six months of 1995 for $461,141
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.
8
SWIFT ENERGY INCOME PARTNERS 1986-D, LTD.
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION
-NONE-
9
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 1986-D, LTD.
(Registrant)
By: SWIFT ENERGY COMPANY
Managing General Partner
Date: August 11, 1995 By: /s/ John R. Alden
_____________________ __________________________________
John R. Alden
Senior Vice President, Secretary
and Principal Financial Officer
Date: August 11, 1995 By: /s/ Alton D. Heckaman, Jr.
_____________________ __________________________________
Alton D. Heckaman, Jr.
Vice President, Controller
and Principal Accounting Officer
10
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 1986-D, LTD.
(Registrant)
By: SWIFT ENERGY COMPANY
Managing General Partner
Date: August 11, 1995 By:
_________________________________
John R. Alden
Senior Vice President, Secretary
and Principal Financial Officer
Date: August 11, 1995 By:
_________________________________
Alton D. Heckaman, Jr.
Vice President, Controller
and Principal Accounting Officer