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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, 1996
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)
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<S> <C>
TEXAS 76-0215132
(State or other jurisdiction of organization) (I.R.S. Employer Identification No.)
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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 1987-A, LTD.
INDEX
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PART I. FINANCIAL INFORMATION PAGE
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets
- June 30, 1996 and December 31, 1995 3
Statements of Operations
- Three month and six month periods ended June 30, 1996 and 1995 4
Statements of Cash Flows
- Six month periods ended June 30, 1996 and 1995 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
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SWIFT ENERGY INCOME PARTNERS 1987-A, LTD.
BALANCE SHEETS
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<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
--------------- --------------
(Unaudited)
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ASSETS:
Current Assets:
Cash and cash equivalents $ 1,000 $ 1,877
Oil and gas sales receivable 198,428 229,526
--------------- --------------
Total Current Assets 199,428 231,403
--------------- --------------
Gas Imbalance Receivable 2,556 3,600
--------------- --------------
Oil and Gas Properties, using full cost
accounting 13,916,512 14,069,607
Less-Accumulated depreciation, depletion
and amortization (10,889,949) (10,752,735)
--------------- --------------
3,026,563 3,316,872
--------------- --------------
$ 3,228,547 $ 3,551,875
=============== ==============
LIABILITIES AND PARTNERS' CAPITAL:
Current Liabilities:
Accounts payable and accrued liabilities $ 286,971 $ 674,950
Current portion of note payable -- 36,504
--------------- --------------
Total Current Liabilities 286,971 711,454
--------------- --------------
Deferred Revenues 140,720 153,194
Partners' Capital 2,800,856 2,687,227
--------------- --------------
$ 3,228,547 $ 3,551,875
=============== ==============
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See accompanying notes to financial statements.
3
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SWIFT ENERGY INCOME PARTNERS 1987-A, LTD.
STATEMENTS OF OPERATIONS
(Unaudited)
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<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------------- -------------------------------
1996 1995 1996 1995
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REVENUES:
Oil and gas sales $ 205,984 $ 232,794 $ 530,017 $ 455,511
Interest income 533 96 999 103
Other 7,448 3,448 10,152 6,882
-------------- -------------- -------------- --------------
213,965 236,338 541,168 462,496
-------------- -------------- -------------- --------------
COSTS AND EXPENSES:
Lease operating 57,195 82,523 131,705 159,665
Production taxes 11,362 14,432 22,382 27,212
Depreciation, depletion
and amortization -
Normal provison 56,050 82,470 137,214 168,916
Additional provision -- 343,094 -- 564,466
General and administrative 34,418 25,794 69,172 52,386
Interest expense 4,397 17,245 13,654 24,371
-------------- -------------- -------------- --------------
163,422 565,558 374,127 997,016
-------------- -------------- -------------- --------------
NET INCOME (LOSS) $ 50,543 $ (329,220) $ 167,041 $ (534,520)
============== ============== ============== ==============
LIMITED PARTNERS' NET INCOME (LOSS)
PER UNIT $ 3.35 $ (21.84) $ 11.08 $ (35.46)
============== ============== ============== ==============
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See accompanying note to financial statements.
4
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SWIFT ENERGY INCOME PARTNERS 1987-A, LTD.
STATEMENTS OF CASH FLOWS
(Unaudited)
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<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------------------------------------
1996 1995
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CASH FLOWS FROM OPERATING ACTIVITIES:
Income (loss) $ 167,041 $ (534,520)
Adjustments to reconcile income (loss) to
net cash provided by operations:
Depreciation, depletion and amortization 137,214 733,382
Change in gas imbalance receivable
and deferred revenues (11,430) 2,477
Change in assets and liabilities:
(Increase) decrease in oil and gas sales receivable 31,098 20,341
Increase (decrease) in accounts payable
and accrued liabilities (387,979) (10,532)
-------------- ---------------
Net cash provided by (used in) operating activities (64,056) 211,148
-------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties (23,723) (76,018)
Proceeds from sales of oil and gas properties 176,818 25,281
-------------- ---------------
Net cash provided by (used in) investing activities 153,095 (50,737)
-------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to partners (53,412) (96,279)
Payments on note payable (36,504) (63,889)
-------------- ---------------
Net cash provided by (used in) financing activities (89,916) (160,168)
-------------- ---------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (877) 243
-------------- ---------------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,877 1,385
-------------- ---------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,000 $ 1,628
============== ===============
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 14,571 $ 18,009
============== ===============
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See accompanying notes to financial statements.
5
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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, 1995 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) GAS IMBALANCES -
The gas imbalance receivable and deferred revenues are
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 the gas imbalance receivable or deferred revenues as
applicable.
(3) VULNERABILITY DUE TO CERTAIN CONCENTRATIONS -
The Company's revenues are primarily the result of sales of
its oil and natural gas production. Market prices of oil and natural
gas may fluctuate and adversely affect operating results.
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.
(4) FAIR VALUE OF FINANCIAL INSTRUMENTS -
The Partnership's financial instruments consist of cash and
cash equivalents and short-term receivables and payables. The
carrying amounts approximate fair value due to the highly liquid
nature of the short-term instruments.
6
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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 limited partners' 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, 1996 (current quarter) when compared
to the quarter ended June 30, 1995 (corresponding quarter), and for the six
months ended June 30, 1996 (current period), when compared to the six months
ended June 30, 1995 (corresponding period).
THREE MONTHS ENDED JUNE 30, 1996 AND 1995
Oil and gas sales declined $26,810 or 12 percent in the second quarter of
1996 when compared to the corresponding quarter in 1995, primarily due to
decreased gas and oil production. A decline of 30 percent in gas production
and 30 percent in oil production had a significant impact on partnership
performance. Current quarter gas and oil prices increased 31 percent or
$.48/MCF and 18 percent or $2.73/BBL respectively, partially offsetting the
revenue declines.
Associated depreciation expense decreased 32 percent or $26,420.
The Partnership recorded an additional provision in depreciation,
depletion and amortization in the second quarter of 1995 for $343,094 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.
7
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SWIFT ENERGY INCOME PARTNERS 1987-A, LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
Oil and gas sales increased $74,506 or 16 percent in the first six months
of 1996 over the corresponding period in 1995. An increase in gas prices of 33
percent or $.49/MCF and in oil prices of 16 percent or $2.40/BBL were major
contributing factors to the increased revenues for the period. Also, current
period oil and gas production decreased 31 percent and 27 percent,
respectively, when compared to the corresponding period in 1995, offsetting the
effect of increased gas and oil prices.
Associated depreciation expense decreased 19 percent or $31,702.
The Partnership recorded an additional provision in depreciation,
depletion and amortization in the first six months of 1995 for $564,466 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 1996, partnership revenues and costs will be shared between the
limited partners and general partners in a 90:10 ratio.
8
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SWIFT ENERGY INCOME PARTNERS 1987-A, LTD.
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION
-NONE-
9
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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: August 9, 1996 By: /s/ John R. Alden
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John R. Alden
Senior Vice President, Secretary
and Principal Financial Officer
Date: August 9, 1996 By: /s/ Alton D. Heckaman, Jr.
-------------- ---------------------------------
Alton D. Heckaman, Jr.
Vice President, Controller
and Principal Accounting Officer
10
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Index to Exhibits
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Exhibit
Number Description
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27 Financial Data Schedule
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<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Swift Energy
Income Partners 1987-A LTD's balance sheet and statements of operations
contained in its Form 10-Q for the quarter ended June 30, 1996.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,000
<SECURITIES> 0
<RECEIVABLES> 198,428
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 199,428
<PP&E> 13,916,512
<DEPRECIATION> (10,889,949)
<TOTAL-ASSETS> 3,228,547
<CURRENT-LIABILITIES> 286,971
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2,800,856
<TOTAL-LIABILITY-AND-EQUITY> 3,228,547
<SALES> 530,017
<TOTAL-REVENUES> 541,168
<CGS> 0
<TOTAL-COSTS> 291,301<F1>
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 167,041
<INCOME-TAX> 0
<INCOME-CONTINUING> 167,041
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 167,041
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Includes lease operating expenses, production taxes and depreciation
depletion and amortization expense. Excludes general and administrative and
interest expense.
</FN>
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