RE: Liquidation Strategy for Swift Energy Limited Partnerships
Dear Investor:
On March 26, 1998, you were advised that Swift Energy Company, the Managing
General Partner, determined that the best course of action for your partnership
was to proceed with asset disposition and partnership dissolution. During the
last seven months, Swift has been working with the Securities and Exchange
Commission to finalize proxy materials that would enable a meeting of investors
to be called to vote on a proposal to sell your partnership's properties to the
Managing General Partner and liquidate the Partnership.
During 1998, and especially over the last few months, there has been
extreme volatility in the oil and gas markets, with material decreases in both
oil and gas prices. As a result of this volatility, combined with the downturn
in the equity and debt markets, the Managing General Partner has decided to
delay proposing the sale of your partnership's properties (and the properties of
the other 62 partnerships to whom a similar proposal was to be submitted).
The Managing General Partner believes that the best approach at this time
is to continue normal operations of the partnership until market conditions
improve. Swift will closely monitor the impact of impending winter weather on
current gas supplies and assess how the current industry downturn is affecting
long-term pricing perceptions.
If lower oil and/or gas prices are expected for a significant period, then
this may not be the best time to sell your partnership's properties. Instead, it
may be preferable to defer any significant property sales for a longer period of
time and simply continue to hold most properties, produce their remaining
reserves and continue to make distributions of available cash generated by sale
of that production. However, if the long-term view of prices improves, it may be
appropriate to again move forward with an updated or new plan for asset
disposition and partnership liquidation.
At this time, it is difficult to predict the ultimate recommendation that
will be made to you. The principal factor affecting any decision is a volatile
and unpredictable market. Nonetheless, Swift will continue to manage the
partnership's oil and gas properties in a manner that will maximize the
partnership's ability to respond to future market conditions. Of course, if you
have any questions, please contact the Investor Relations Department at
800-777-2750.
Sincerely yours,
Swift Energy Company, Managing General Partner
/s/ Bruce H. Vincent
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Bruce H. Vincent,
Senior Vice President, Funds Management
