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 September 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 0-17024
SWIFT ENERGY INCOME PARTNERS 1987-A, LTD.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 76-0215132
(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-A, LTD.
INDEX
PART I. FINANCIAL INFORMATION Page
----
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets
- September 30, 1995 and December 31, 1994 3
Statements of Operations
- Three month and nine month periods ended
September 30, 1995 and 1994 4
Statements of Cash Flows
- Nine month periods ended September 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 1987-A, LTD.
BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- ------------
(Unaudited)
ASSETS:
Current Assets:
Cash and cash equivalents $ 1,770 $ 1,385
Oil and gas sales receivable 124,675 238,703
------------ -----------
Total Current Assets 126,445 240,088
------------ -----------
Oil and Gas Properties, using full cost
accounting 14,007,344 13,926,844
Less-Accumulated depreciation, depletion
and amortization (10,669,883) (9,815,595)
------------ -----------
3,337,461 4,111,249
------------ -----------
$ 3,463,906 $ 4,351,337
============ ===========
LIABILITIES AND PARTNERS' CAPITAL:
Current Liabilities:
Accounts payable and accrued liabilities $ 513,080 $ 533,021
Current portion of note payable 68,449 127,778
------------ -----------
Total Current Liabilities 581,529 660,799
------------ -----------
Note payable to a Bank, net
of current portion -- 36,504
Deferred Revenues 153,258 150,808
Partners' Capital 2,729,119 3,503,226
------------ -----------
$ 3,463,906 $ 4,351,337
============ ===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
3
SWIFT ENERGY INCOME PARTNERS 1987-A, LTD.
STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------- -----------------------
1995 1994 1995 1994
-------- -------- ---------- --------
REVENUES:
Oil and gas sales $132,221 $288,197 $ 587,732 $887,044
Interest income 52 11 155 23
Other 2,544 2,660 9,426 7,493
-------- -------- ---------- --------
134,817 290,868 597,313 894,560
-------- -------- ---------- --------
COSTS AND EXPENSES:
Lease operating 65,046 71,965 224,711 249,307
Production taxes 7,546 15,838 34,759 54,387
Depreciation, depletion
and amortization -
Normal provision 44,469 96,297 213,385 295,572
Additional provision 76,437 -- 640,903 --
General and administrative 25,666 39,753 78,051 115,296
Interest expense 12,797 8,107 37,167 24,881
-------- -------- ---------- --------
231,961 231,960 1,228,976 739,443
-------- -------- ---------- --------
NET INCOME (LOSS) $(97,144) $ 58,908 $ (631,663) $155,117
======== ======== ========== ========
LIMITED PARTNERS' NET INCOME
(LOSS) PER UNIT $ (6.45) $ 3.91 $ (41.91) $ 10.29
======== ======== ========== ========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
4
SWIFT ENERGY INCOME PARTNERS 1987-A, LTD.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------
1995 1994
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Income (Loss) $(631,663) $ 155,117
Adjustments to reconcile income (loss) to
net cash provided by operations:
Depreciation, depletion and amortization 854,288 295,572
Deferred revenues 2,450 7,881
Change in assets and liabilities:
(Increase) decrease in oil and gas sales receivable 114,028 (6,909)
Increase (decrease) in accounts payable
and accrued liabilities (19,941) 8,601
--------- ---------
Net cash provided by (used in) operating
activities 319,162 460,262
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties (106,400) (90,095)
Proceeds from sales of oil and gas properties 25,900 62,213
--------- ---------
Net cash provided by (used in) investing
activities (80,500) (27,882)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to partners (142,444) (340,940)
Payments on note payable (95,833) (91,273)
--------- ---------
Net cash provided by (used in) financing
activities (238,277) (432,213)
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 385 167
--------- ---------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,385 1,162
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,770 $ 1,329
========= =========
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 9,736 $ 14,382
========= =========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
5
SWIFT ENERGY INCOME PARTNERS 1987-A, 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) CONCENTRATION 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.
6
SWIFT ENERGY INCOME PARTNERS 1987-A, 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 the limited partners' commitments available for
property acquisitions.
The Partnership does not allow for additional assessments from the
partners to fund capital requirements. However, funds in addition to the
remaining unexpended net capital commitments of the partners 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
The following analysis explains changes in the revenue and expense
categories for the quarter ended September 30, 1995 (current quarter) when
compared to the quarter ended September 30, 1994 (corresponding quarter), and
for the nine months ended September 30, 1995 (current period), when compared
to the nine months ended September 30, 1994 (corresponding period).
THREE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
Oil and gas sales declined $155,976 or 54 percent in the current quarter
of 1995 when compared to the corresponding quarter in 1994, primarily due to
decreased gas and oil production. Current quarter gas and oil production
declined 51 percent and 38 percent, respectively, when compared to third
quarter 1994 production volumes. A decline in gas and oil prices of 14
percent or $.25/MCF and 18 percent or $3.05/BBL, respectively, further
contributed to decreased revenues.
Associated depreciation expense decreased 54 percent or $51,828.
The Partnership recorded an additional provision in depreciation,
depletion and amortization in the third quarter of 1995 for $76,437 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. Using
prices in effect at September 30, 1994, the Partnership would have recorded
an additional provision at September 30, 1994 in the amount of $448,517.
However, these temporarily low quarter-end prices rebounded and by using
prices in effect at the filing date, the Partnership's unamortized cost of
oil and gas properties were not limited by this calculation.
7
SWIFT ENERGY INCOME PARTNERS 1987-A, LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
Oil and gas sales decreased $299,312 or 34 percent in the first nine
months of 1995 over the corresponding period in 1994. A decline of 24 percent
in gas production and 24 percent in oil production were significant factors
in the decreased revenues for the period. Also, current period gas prices
decreased 25 percent or $.48/MCF compared to the corresponding period in
1994, further contributing to decreased income.
Associated depreciation expense decreased 28 percent or $82,187.
The Partnership recorded an additional provision in depreciation,
depletion and amortization in the first nine months of 1995 for $640,903 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 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 1987-A, 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 1987-A, LTD.
(Registrant)
By: SWIFT ENERGY COMPANY
Managing General Partner
Date: November 13, 1995 By: /s/ John R. Alden
--------------------------------
John R. Alden
Senior Vice President, Secretary
and Principal Financial Officer
Date: November 13, 1995 By: /s/ Alton D. Heckaman, Jr.
--------------------------------
Alton D. Heckaman, Jr.
Vice President, Controller
and Principal Accounting Officer
10