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 0-17021
SWIFT ENERGY INCOME PARTNERS 1986-B, LTD.
(Exact name of registrant as specified in its charter)
Texas 76-0198754
(State or other (I.R.S. Employer
jurisdiction 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
----- -----
<PAGE>
SWIFT ENERGY INCOME PARTNERS 1986-B, 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
<PAGE>
SWIFT ENERGY INCOME PARTNERS 1986-B, LTD.
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
__________ __________
(Unaudited)
<S> <C> <C>
ASSETS:
Current Assets:
Cash and cash equivalents $ 1,425 $ 1,399
Oil and gas sales receivable 41,362 49,586
------------ ------------
Total Current Assets 42,787 50,985
------------ ------------
Oil and Gas Properties, using full cost
accounting 5,619,362 5,615,841
Less-Accumulated depreciation, depletion
and amortization (5,388,147) (5,289,767)
------------ ------------
231,215 326,074
------------ ------------
$ 274,002 $ 377,059
============ ============
LIABILITIES AND PARTNERS' CAPITAL:
Current Liabilities:
Accounts payable and accrued liabilities $ 82,598 $ 107,165
------------ -------------
Deferred Revenues 8,846 8,853
Partners' Capital 182,558 261,041
------------ -------------
$ 274,002 $ 377,059
============ =============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
SWIFT ENERGY INCOME PARTNERS 1986-B, LTD.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------- -------------------------------
1995 1994 1995 1994
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Oil and gas sales $ 44,508 $ 62,004 $ 95,672 $ 237,137
Interest income 22 10 29 13
Other -- 57 -- 60
--------------- --------------- --------------- ---------------
44,530 62,071 95,701 237,210
--------------- --------------- --------------- ---------------
COSTS AND EXPENSES:
Lease operating 14,977 22,444 39,023 38,585
Production taxes 3,146 2,111 6,912 11,743
Depreciation, depletion
and amortization -
Normal provision 17,712 33,338 46,514 124,743
Additional provision -- 128,104 51,866 157,764
General and administrative 8,129 11,785 12,647 17,096
Interest expense 1,491 -- 1,491 --
------------ ------------ ------------ ------------
45,455 197,782 158,453 349,931
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ (925) $ (135,711) $ (62,752) $ (112,721)
============ ============ ============ ============
Limited Partners' net income (loss)
per unit $ (.15) $ (22.21) $ (10.27) $ (18.45)
============ ============= ============= =============
</TABLE>
See accompanying note to financial statements.
<PAGE>
SWIFT ENERGY INCOME PARTNERS 1986-B, LTD.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
------------------------
1995 1996
------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Income (loss) $ (62,752) $(112,721)
Adjustments to reconcile income (loss) to
net cash provided by operations:
Depreciation, depletion and amortization 98,380 282,507
Deferred revenues (7) (1,361)
Change in assests and liabilities:
(Increase) decrease in oil and gas sales
receivable 8,224 90,260
Increase (decrease) in accounts payable
and accrued liabilities (24,567) (194,551)
------- -------
Net cash provided by (used in) operating
activities 19,278 64,134
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties (3,521) --
Proceeds from sales of oil and gas properties -- 8,725
------- -------
Net cash provided by (used in) investing
activities (3,521) 8,725
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to partners (15,731) (72,846)
------- -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 26 13
------- --------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,399 1,348
-------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,425 $ 1,361
======== =======
</TABLE>
See accompanying notes to financial statements.
<PAGE>
SWIFT ENERGY INCOME PARTNERS 1986-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 neces-
sary 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 conjunc-
tion 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 methods, 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.
<PAGE>
SWIFT ENERGY INCOME PARTNERS 1986-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 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 dis-
tribution, 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 dis-
tributions 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 the acquisition of producing
oil and gas properties, expending all of limited partners' net
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 (cor-
responding quarter), and for the six months ended June 30, 1995
(current period), when compared to the six months ended June 30,
1994 (corresponding period).
<PAGE>
Three Months Ended June 30, 1995 and 1994
-----------------------------------------
Oil and gas sales declined $17,496 or 28 percent in the current
quarter of 1995 when compared to the corresponding quarter in
1994, primarily due to decreased gas prices. A decline in gas
prices of 37 percent or $.83/MCF had a significant impact on
partnership performance. Also, current quarter gas production
declined 5 percent when compared to second quarter 1994 production
volumes, further contributing to decreased revenues.
Associated depreciation expense decreased 47 percent or $15,626.
The Partnership recorded an additional provision in depre-
ciation, depletion and amortization in the second quarter of 1994
for $128,104 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 deter-
mined according to guidelines of the Securities and Exchange
Commission.
<PAGE>
SWIFT ENERGY INCOME PARTNERS 1986-B, LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Six Months Ended June 30, 1995 and 1994
---------------------------------------
Oil and gas sales decreased $141,465 or 60 percent in the first
six months of 1995 over the corresponding period in 1994. A
decline in the current period gas prices of 43 percent or
$.97/MCF had a significant impact on partnership performance.
Also, current period gas production declined 41 percent when
compared to the corresponding period in 1994, further contri-
buting to decreased income. Increased oil prices of 48 percent
or $5.40/BBL partially offset the revenue declines.
The decrease in gas production due to an accelerated production
decline on the Gautreaux #1 well, which was recompleted in 1993,
and production curtailments due to declining prices contributed to
the decreased revenues.
Associated depreciation expense decreased 63 percent or $78,229.
The Partnership recorded an additional provision in depre-
ciation, depletion and amortization in the first six months of
1995 and 1994 for $51,866 and $157,764, respectively, 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 guide-
lines 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.
<PAGE>
SWIFT ENERGY INCOME PARTNERS 1986-B, LTD.
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION
-NONE-
<PAGE>
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-B, 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
<PAGE>
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-B, 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
Office
TEXT>
<PAGE>
[ARTICLE] 5
[LEGEND]
The schedule contains summary financial information extracted from the
filer's balance sheet and statement of operations as of June 30, 1995,
and is qualified in its entirety by reference to such financial statements.
<TABLE>
<S> <C>
[PERIOD-TYPE] 6-MOS
[FISCAL-YEAR-END] DEC-31-1995
[PERIOD-END] JUN-30-1995
[CASH] 1,425
[SECURITIES] 0
[RECEIVABLES] 41,362
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 42,787
[PP&E] 5,619,362
[DEPRECIATION] 5,388,147
[TOTAL-ASSETS] 274,002
[CURRENT-LIABILITIES] 82,598
[BONDS] 0
[COMMON] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[OTHER-SE] 182,558
[TOTAL-LIABILITY-AND-EQUITY] 274,002
[SALES] 95,672
[TOTAL-REVENUES] 95,701
[CGS] 0
[TOTAL-COSTS] 92,449<F1>
[OTHER-EXPENSES] 0
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 1,491
[INCOME-PRETAX] (62,752)
[INCOME-TAX] 0
[INCOME-CONTINUING] (62,752)
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] (62,752)
[EPS-PRIMARY] 0
[EPS-DILUTED] 0
<FN>
<F1>Includes lease operating expense, production taxes, and depreciation, depletion
and amortization expense.
</FN>
</TABLE>
