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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 September 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 33-11773-12
SWIFT ENERGY INCOME PARTNERS 1990-A, LTD.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Texas 76-0307428
(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 1990-A, LTD.
INDEX
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PART I. FINANCIAL INFORMATION PAGE
ITEM 1. Financial Statements
Balance Sheets
- September 30, 1996 and December 31, 1995 3
Statements of Operations
- Three month and nine month periods ended September 30, 1996 and 1995 4
Statements of Cash Flows
- Nine month periods ended September 30, 1996 and 1995 5
Notes to Financial Statements 6
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION 11
SIGNATURES 12
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SWIFT ENERGY INCOME PARTNERS 1990-A, LTD.
BALANCE SHEETS
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<CAPTION>
September 30, December 31,
1996 1995
--------------- ----------------
(Unaudited)
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ASSETS:
Current Assets:
Cash and cash equivalents $ 57,303 $ 1,594
Oil and gas sales receivable 321,291 293,493
--------------- ----------------
Total Current Assets 378,594 295,087
--------------- ----------------
Gas Imbalance Receivable 298,734 303,193
--------------- ---------------
Oil and Gas Properties, using full cost
accounting 6,821,913 6,988,218
Less-Accumulated depreciation, depletio
and amortization (5,014,424) (4,711,774)
--------------- ----------------
1,807,489 2,276,444
--------------- ----------------
$ 2,484,817 $ 2,874,724
=============== ================
LIABILITIES AND PARTNERS' CAPITAL:
Current Liabilities:
Accounts payable and accrued liabilities $ 68,978 $ 477,681
Current portion of note payable -- 45,825
--------------- ----------------
Total Current Liabilities 68,978 523,506
--------------- ----------------
Deferred Revenues 330,779 362,907
Partners' Capital 2,085,060 1,988,311
--------------- ----------------
$ 2,484,817 $ 2,874,724
=============== ================
</TABLE>
See accompanying notes to financial statements.
3
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SWIFT ENERGY INCOME PARTNERS 1990-A, LTD.
STATEMENTS OF OPERATIONS
(Unaudited)
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<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------------- ---------------------------------
1996 1995 1996 1995
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
REVENUES:
Oil and gas sales $ 289,057 $ 173,264 $ 892,741 $ 696,806
Interest income 625 20 1,530 102
Other 984 1,260 4,343 4,276
--------------- --------------- --------------- ---------------
290,666 174,544 898,614 701,184
--------------- --------------- --------------- ---------------
COSTS AND EXPENSES:
Lease operating 47,036 59,239 187,106 214,331
Production taxes 14,415 12,110 48,976 44,494
Depreciation, depletion
and amortization -
Normal provision 84,246 88,444 302,650 312,336
Additional provision -- 102,589 -- 475,577
General and administrative 29,026 27,398 87,618 76,175
Interest expense -- 4,463 3,706 13,691
--------------- --------------- --------------- ---------------
174,723 294,243 630,056 1,136,604
--------------- --------------- --------------- ---------------
NET INCOME (LOSS) $ 115,943 $ (119,699) $ 268,558 $ (435,420)
=============== =============== =============== ===============
Limited Partners' net income (loss)
per unit $ 2.02 $ (2.09) $ 4.68 $ (7.59)
=============== =============== =============== ===============
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See accompanying note to financial statements.
4
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SWIFT ENERGY INCOME PARTNERS 1990-A, LTD.
STATEMENTS OF CASH FLOWS
(Unaudited)
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<CAPTION>
Nine Months Ended
September 30,
----------------------------------------
1996 1995
---------------- ---------------
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CASH FLOWS FROM OPERATING ACTIVITIES:
Income (Loss) $ 268,558 $ (435,420)
Adjustments to reconcile income (loss) to
net cash provided by operations:
Depreciation, depletion and amortization 302,650 787,913
Change in gas imbalance receivable
and deferred revenues (27,669) 21,059
Change in assets and liabilities:
(Increase) decrease in oil and gas sales receivable (27,798) 93,949
Increase (decrease) in accounts payable
and accrued liabilities (408,703) 62,681
--------------- ---------------
Net cash provided by (used in) operating activities 107,038 530,182
--------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties (24,238) (110,968)
Proceeds from sales of oil and gas properties 190,543 213
--------------- ---------------
Net cash provided by (used in) investing activities 166,305 (110,755)
--------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to partners (171,809) (281,995)
Payments on note payable (45,825) (137,475)
--------------- ---------------
Net cash provided by (used in) financing activities (217,634) (419,470)
--------------- ---------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 55,709 (43)
--------------- ---------------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,594 1,479
--------------- ---------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 57,303 $ 1,436
=============== ===============
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 4,468 $ 13,670
=============== ===============
</TABLE>
See accompanying notes to financial statements.
5
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SWIFT ENERGY INCOME PARTNERS 1990-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) Organization and Terms of Partnership Agreement -
Swift Energy Income Partners 1990-A, Ltd., a Texas limited
partnership (the Partnership), was formed on April 17, 1990, for the
purpose of purchasing and operating producing oil and gas properties
within the continental United States. Swift Energy Company ("Swift"), a
Texas corporation, and VJM Corporation ("VJM"), a California
corporation, serve as Managing General Partner and Special General
Partner of the Partnership, respectively. The general partners are
required to contribute up to 1/99th of limited partner net
contributions. The 568 limited partners made total capital contributions
of $5,738,400.
Property acquisition costs and the management fee are borne 99
percent by the limited partners and one percent by the general partners.
Organization and syndication costs were borne solely by the limited
partners.
Generally, all continuing costs (including development costs,
operating costs, general and administrative reimbursements and direct
expenses) and revenues are allocated 90 percent to the limited partners
and ten percent to the general partners. If prior to partnership payout,
however, the cash distribution rate for a certain period equals or
exceeds 17.5 percent, then for the following calendar year, these
continuing costs and revenues will be allocated 85 percent to the
limited partners and 15 percent to the general partners. After
partnership payout, continuing costs and revenues will be shared 85
percent by the limited partners, and 15 percent by the general partners,
even if the cash distribution rate is less than 17.5 percent. During
1993 and 1992, the cash distribution rate (as defined in the Partnership
Agreement) exceeded 17.5 percent and thus, in 1994 and 1993, the
continuing costs and revenues were shared 85 percent by the limited
partners and 15 percent by the general partners. During 1995 and 1994,
the cash distribution rate fell below 17.5 percent and thus, in 1996 and
1995, the continuing costs and revenues will be (were) shared 90 percent
by the limited partners and 10 percent by the general partners.
(3) Significant Accounting Policies -
Use of Estimates --
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from estimates.
Oil and Gas Properties --
For financial reporting purposes the Partnership follows the
"full-cost" method of accounting for oil and gas property costs. Under
this method of accounting, all productive and nonproductive costs
incurred in the acquisition and development of oil and gas reserves are
capitalized. Such costs include lease acquisitions, geological and
geophysical services, drilling, completion, equipment and certain
general and administrative costs directly associated with acquisition
and development activities. General and administrative costs related to
production and general overhead are expensed as incurred. No general and
administrative costs were capitalized during the nine months ended
September 30, 1996 and 1995.
6
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SWIFT ENERGY INCOME PARTNERS 1990-A, LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
Future development, site restoration, dismantlement and
abandonment costs, net of salvage values, are estimated on a
property-by-property basis based on current economic conditions and are
amortized to expense as the Partnership's capitalized oil and gas
property costs are amortized.
The unamortized cost of oil and gas properties is limited to
the "ceiling limitation" (calculated separately for the Partnership,
limited partners and general partners). The "ceiling limitation" is
calculated on a quarterly basis and represents the estimated future net
revenues from proved properties using current prices, discounted at ten
percent, and the lower of cost or fair value of unproved properties.
Proceeds from the sale or disposition of oil and gas properties are
treated as a reduction of oil and gas property costs with no gains or
losses being recognized except in significant transactions.
The Partnership computes the provision for depreciation,
depletion and amortization of oil and gas properties on the
units-of-production method. Under this method, the provision is
calculated by multiplying the total unamortized cost of oil and gas
properties, including future development, site restoration,
dismantlement and abandonment costs, by an overall amortization rate
that is determined by dividing the physical units of oil and gas
produced during the period by the total estimated units of proved oil
and gas reserves at the beginning of the period.
The calculation of the "ceiling limitation" and the provision
for depreciation, depletion and amortization is based on estimates of
proved reserves. There are numerous uncertainties inherent in estimating
quantities of proved reserves and in projecting the future rates of
production, timing and plan of development. The accuracy of any reserve
estimate is a function of the quality of available data and of
engineering and geological interpretation and judgment. Results of
drilling, testing and production subsequent to the date of the estimate
may justify revision of such estimate. Accordingly, reserve estimates
are often different from the quantities of oil and gas that are
ultimately recovered.
(4) Related-Party Transactions -
An affiliate of the Special General Partner, as Dealer
Manager, received $143,460 for managing and overseeing the offering of
the limited partnership units. A one-time management fee of $143,460 was
paid to Swift for services performed for the Partnership.
Effective April 17, 1990, the Partnership entered into a Net
Profits and Overriding Royalty Interest Agreement ("NP/OR Agreement")
with Swift Energy Managed Pension Assets Partnership 1990-A, Ltd.
(Pension Partnership), managed by Swift for the purpose of acquiring
working interests in producing oil and gas properties. Under terms of
the NP/OR Agreement, the Partnership will convey to the Pension
Partnership a nonoperating interest in the aggregate net profits (i.e.,
oil and gas sales net of related operating costs) of the properties
acquired equal to its proportionate share of the property acquisition
costs.
(5) Gas Imbalances -
The gas imbalance receivable and deferred revenues represent
imbalances assumed as part of property acquisitions. The imbalances 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 gas imbalance receivable or deferred revenues as applicable.
(6) 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.
7
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SWIFT ENERGY INCOME PARTNERS 1990-A, LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
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.
(7) 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.
8
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SWIFT ENERGY INCOME PARTNERS 1990-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 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, 1996 (current quarter) when
compared to the quarter ended September 30, 1995 (corresponding quarter), and
for the nine months ended September 30, 1996 (current period), when compared to
the nine months ended September 30, 1995 (corresponding period).
Three Months Ended September 30, 1996 and 1995
Oil and gas sales increased $115,793 or 67 percent in the current quarter
of 1996 when compared to the corresponding quarter in 1995, primarily due to
increased gas and oil prices. An increase in gas prices of 90 percent or
$1.13/MCF and in oil prices of 46 percent or $6.68/BBL had a significant impact
on partnership performance. Also, current quarter oil production decreased 53
percent when compared to third quarter 1995 production volumes, partially
offsetting the increased revenues from gas and oil price increases.
Associated depreciation expense decreased 5 percent or $4,198.
The Partnership recorded an additional provision in depreciation,
depletion and amortization in the third quarter of 1995 for $102,589 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.
9
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SWIFT ENERGY INCOME PARTNERS 1990-A, LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Nine Months Ended September 30, 1996 and 1995
Oil and gas sales increased $195,935 or 28 percent in the first nine
months of 1996 over the corresponding period in 1995. An increase in gas prices
of 54 percent or $.75/MCF and in oil prices of 22 percent or $3.36/BBL were
major contributing factors to the increased revenues for the period. Also,
current period oil production decreased 49 percent when compared to the
corresponding period in 1995, partially offsetting the effect of increased gas
and oil prices.
Associated depreciation expense decreased 3 percent or $9,686.
The Partnership recorded an additional provision in depreciation,
depletion and amortization in the first nine months of 1995 for $475,577 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 1996, partnership revenues and costs will be shared between the
limited partners and general partners in a 90:10 ratio.
10
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SWIFT ENERGY INCOME PARTNERS 1990-A, LTD.
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION
-NONE-
11
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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 1990-A, LTD.
(Registrant)
By: SWIFT ENERGY COMPANY
Managing General Partner
Date: November 6, 1996 By: /s/ John R. Alden
---------------- --------------------------------
John R. Alden
Senior Vice President, Secretary
and Principal Financial Officer
Date: November 6, 1996 By: /s/ Alton D. Heckaman, Jr.
---------------- --------------------------------
Alton D. Heckaman, Jr.
Vice President, Controller
and Principal Accounting Officer
12
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<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Swift Energy
Income Partners 1990-A, Ltd.'s Balance Sheet and Statement of Operations
contained in its Form 10-Q for the quarter ended September 30, 1996.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 57,303
<SECURITIES> 0
<RECEIVABLES> 321,291
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 378,594
<PP&E> 6,821,913
<DEPRECIATION> (5,014,424)
<TOTAL-ASSETS> 2,484,817
<CURRENT-LIABILITIES> 68,978
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 330,779
<TOTAL-LIABILITY-AND-EQUITY> 2,484,817
<SALES> 892,741
<TOTAL-REVENUES> 898,614
<CGS> 0
<TOTAL-COSTS> 538,732<F1>
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 268,558
<INCOME-TAX> 0
<INCOME-CONTINUING> 268,558
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 268,558
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Includes lease operating expenses, production taxes and depreciation and
amortization expense. Excludes general and administrative and interest expense.
</FN>
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