<PAGE>
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 0-17022
SWIFT ENERGY INCOME PARTNERS 1986-C, LTD.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 76-0200458
(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
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SWIFT ENERGY INCOME PARTNERS 1986-C, 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
<PAGE>
SWIFT ENERGY INCOME PARTNERS 1986-C, LTD.
BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- ------------
(Unaudited)
<S> <C> <C>
ASSETS:
Current Assets:
Cash and cash equivalents $ 124,658 $ 58,817
Oil and gas sales receivable 86,500 100,716
------------- ------------
Total Current Assets 211,158 159,533
------------- ------------
Oil and Gas Properties, using full cost
accounting 9,496,864 9,488,456
Less-Accumulated depreciation, depletion
and amortization (8,969,002) (8,822,570)
------------- ------------
527,862 665,886
------------- ------------
$ 739,020 $ 825,419
------------- ------------
------------- ------------
LIABILITIES AND PARTNERS' CAPITAL:
Current Liabilities:
Accounts payable and accrued liabilities $ 19,901 $ 42,230
------------- ------------
Deferred Revenues 33,398 33,991
Partners' Capital 685,721 749,198
------------- ------------
$ 739,020 $ 825,419
------------- ------------
------------- ------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
3
<PAGE>
SWIFT ENERGY INCOME PARTNERS 1986-C, LTD.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ ------------------------
1995 1994 1995 1994
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
REVENUES:
Oil and gas sales $ 90,535 $ 138,463 $ 306,089 $ 346,404
Interest income 1,474 585 3,347 1,441
Other 33 -- 35 60
--------- --------- --------- ---------
92,042 139,048 309,471 347,905
--------- --------- --------- ---------
COSTS AND EXPENSES:
Lease operating 34,534 65,425 133,092 154,052
Production taxes 5,519 8,573 18,902 21,476
Depreciation, depletion
and amortization -
Normal provision 27,143 41,158 100,385 100,276
Additional provision -- 14,098 46,047 14,098
General and administrative 9,169 10,592 30,793 40,417
--------- --------- --------- ---------
76,365 139,846 329,219 330,319
--------- --------- --------- ---------
NET INCOME (LOSS) $ 15,677 $ (798) $ (19,748) $ 17,586
--------- --------- --------- ---------
--------- --------- --------- ---------
Limited Partners' Net Income (Loss)
Per Unit $ 1.44 $ (.07) $ (1.81) $ 1.61
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
SEE ACCOMPANYING NOTE TO FINANCIAL STATEMENTS.
4
<PAGE>
SWIFT ENERGY INCOME PARTNERS 1986-C, LTD.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------------
1995 1994
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Income (Loss) $ (19,748) $ 17,586
Adjustments to reconcile income (loss) to
net cash provided by operations:
Depreciation, depletion and amortization 146,432 114,374
Deferred revenues (593) (8,610)
Change in assets and liabilities:
(Increase) decrease in oil and gas sales receivable 14,216 98,826
Increase (decrease) in accounts payable
and accrued liabilities (22,329) (14,903)
--------- ---------
Net cash provided by (used in) operating activities 117,978 207,273
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties (8,408) (27,426)
Proceeds from sales of oil and gas properties -- 16,034
--------- ---------
Net cash provided by (used in) investing activities (8,408) (11,392)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to partners (43,729) (137,290)
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 65,841 58,591
--------- ---------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 58,817 1,132
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 124,658 $ 59,723
--------- ---------
--------- ---------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
SWIFT ENERGY INCOME PARTNERS 1986-C, 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.
8
<PAGE>
SWIFT ENERGY INCOME PARTNERS 1986-C, 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 the 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 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 $47,928 or 35 percent in the third quarter of
1995 when compared to the corresponding quarter in 1994, primarily due to
decreased oil production. A decline of 35 percent in oil production and 7
percent in gas production had a significant impact on partnership performance.
Also, current quarter gas prices declined 19 percent or $1.62/MCF when compared
to third quarter 1994 gas prices, further contributing to decreased revenues.
Associated depreciation expense decreased 34 percent or $14,015.
The Partnership recorded an additional provision in depreciation, depletion
and amortization in the third quarter of 1994 for $14,098 when the present
value, discounted at ten percent, of estimated future net revenues from oil and
gas properties based on the prices in effect at the filing date, 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 $44,926.
7
<PAGE>
SWIFT ENERGY INCOME PARTNERS 1986-C, 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 $40,315 or 12 percent in the first nine months
of 1995 over the corresponding period in 1994. A decline in the current period
gas prices of 35 percent or $.68/MCF had a significant impact on partnership
performance. Increased gas production of 13 percent compared to the
corresponding period in 1994, partially offset the gas price declines.
The Partnership recorded an additional provision in depreciation, depletion
and amortization in the first nine months of 1995 and 1994 for $46,047 and
$14,098, 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 guidelines of the Securities and Exchange Commission.
During 1995, partnership revenues and costs will be shared between the
limited partner and general partners in 90:10 ratio.
8
<PAGE>
SWIFT ENERGY INCOME PARTNERS 1986-C, LTD.
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION
-NONE-
9
<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-C, 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
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FINANCIAL STATEMENTS CONTAINED IN ITS QUARTERLY REPORT ON FORM 10-Q
FOR THE PERIOD ENDED SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 124,658
<SECURITIES> 0
<RECEIVABLES> 86,500
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 211,158
<PP&E> 9,496,864
<DEPRECIATION> 8,969,002
<TOTAL-ASSETS> 739,020
<CURRENT-LIABILITIES> 19,901
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 685,721
<TOTAL-LIABILITY-AND-EQUITY> 739,020
<SALES> 306,889
<TOTAL-REVENUES> 309,471
<CGS> 0
<TOTAL-COSTS> 298,428<F1>
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (19,748)
<INCOME-TAX> 0
<INCOME-CONTINUING> (19,748)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (19,748)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1> Includes lease operating expense, production taxes, and depreciation,
depletion and amortization expense.
</FN>
</TABLE>
