<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 0-17023
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_____
<PAGE>
SWIFT ENERGY INCOME PARTNERS 1986-D, 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-D, LTD.
BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------ ------------
(UNAUDITED)
<S> <C> <C>
ASSETS:
Current Assets:
Cash and cash equivalents $ 1,746 $ 1,468
Oil and gas sales receivable 112,094 223,434
------------ ------------
Total Current Assets 113,840 224,902
------------ ------------
Oil and Gas Properties, using full cost
accounting 13,107,922 13,030,737
Less-Accumulated depreciation, depletion
and amortization (10,232,380) (9,511,869)
------------ ------------
2,875,542 3,518,868
------------ ------------
$ 2,989,382 $ 3,743,770
============ ============
LIABILITIES AND PARTNERS' CAPITAL:
Current Liabilities:
Accounts payable and accrued liabilities $ 432,788 $ 414,932
Current portion of note payable 50,000 100,000
------------ ------------
Total Current Liabilities 482,788 514,932
------------ ------------
Note payable to a Bank, net
of current portion -- 25,000
Deferred Revenues 145,114 142,996
Partners' Capital 2,361,480 3,060,842
------------ ------------
$ 2,989,382 $ 3,743,770
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
3
<PAGE>
SWIFT ENERGY INCOME PARTNERS 1986-D, 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 $ 118,103 $ 259,608 $ 536,527 $ 780,734
Interest income 46 12 133 24
Other 2,019 2,190 7,416 6,572
------------ ------------ ------------ ------------
120,168 261,810 544,076 787,330
------------ ------------ ------------ ------------
COSTS AND EXPENSES:
Lease operating 61,713 69,148 234,382 232,715
Production taxes 6,009 13,872 29,483 45,627
Depreciation, depletion
and amortization -
Normal provision 39,003 85,938 195,064 259,153
Additional provision 64,306 -- 525,447 --
General and administrative 21,581 35,114 65,096 99,544
Interest expense 10,841 6,872 30,492 21,114
------------ ------------ ------------ ------------
203,453 210,944 1,079,964 658,153
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ (83,285) $ 50,866 $ (535,888) $ 129,177
============ ============ ============ ============
LIMITED PARTNERS' NET INCOME (LOSS)
PER UNIT $ (5.90) $ 3.60 $ (37.95) $ 9.15
============ ============ ============ ============
</TABLE>
SEE ACCOMPANYING NOTE TO FINANCIAL STATEMENTS.
4
<PAGE>
SWIFT ENERGY INCOME PARTNERS 1986-D, 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) $ (535,888) $ 129,177
Adjustments to reconcile income (loss) to
net cash provided by operations:
Depreciation, depletion and amortization 720,511 259,153
Deferred revenues 2,118 7,493
Change in assets and liabilities:
(Increase) decrease in oil and gas sales receivable 111,340 (4,934)
Increase (decrease) in accounts payable
and accrued liabilities 17,856 (52,606)
------------ ------------
Net cash provided by (used in) operating activities 315,937 338,283
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties (100,441) (98,708)
Proceeds from sales of oil and gas properties 23,256 47,626
------------ ------------
Net cash provided by (used in) investing activities (77,185) (51,082)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to partners (163,474) (212,033)
Payments on note payable (75,000) (75,000)
------------ ------------
Net cash provided by (used in) financing activities (238,474) (287,033)
------------ ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 278 168
------------ ------------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,468 1,180
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,746 $ 1,348
============ ============
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 7,355 $ 11,255
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
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) 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
<PAGE>
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 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 $141,505 or 55 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 39 percent, respectively, when compared to third quarter
1994 production volumes. A decline in gas and oil prices of 16 percent or
$.28/MCF and 16 percent or $2.83/BBL, respectively, further contributed to
decreased revenues.
Associated depreciation expense decreased 55 percent or $46,935.
The Partnership recorded an additional provision in depreciation, depletion
and amortization in the third quarter of 1995 for $64,306 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 $471,819. 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
<PAGE>
SWIFT ENERGY INCOME PARTNERS 1986-D, 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 $244,207 or 31 percent in the first nine months
of 1995 over the corresponding period in 1994. A decline in the current period
gas prices of 27 percent or $.55/MCF had a significant impact on partnership
performance. Also, current period gas and oil production declined 17 percent and
24 percent, respectively, when compared to the corresponding period in 1994,
further contributing to decreased income. Increased oil prices of 13 percent or
$1.80/BBL partially offset the revenue declines.
Associated depreciation expense decreased 25 percent or $64,089.
The Partnership recorded an additional provision in depreciation, depletion
and amortization in the first nine months of 1995 for $525,447 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
<PAGE>
SWIFT ENERGY INCOME PARTNERS 1986-D, 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-D, 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> 1,746
<SECURITIES> 0
<RECEIVABLES> 112,094
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 113,840
<PP&E> 13,107,922
<DEPRECIATION> 10,232,380
<TOTAL-ASSETS> 2,989,382
<CURRENT-LIABILITIES> 482,788
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2,361,480
<TOTAL-LIABILITY-AND-EQUITY> 2,989,382
<SALES> 536,527
<TOTAL-REVENUES> 544,076
<CGS> 0
<TOTAL-COSTS> 984,376<F1>
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30,492
<INCOME-PRETAX> (535,888)
<INCOME-TAX> 0
<INCOME-CONTINUING> (535,888)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (535,888)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Includes lease operating expense, production taxes, and depreciation, depletion
and amortization expense.
</FN>
</TABLE>
