<PAGE> 1
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 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.)
</TABLE>
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
- 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 9
PART II. OTHER INFORMATION 11
SIGNATURES 12
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SWIFT ENERGY INCOME PARTNERS 1990-A, LTD.
BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
--------------- --------------
(Unaudited)
<S> <C> <C>
ASSETS:
Current Assets:
Cash and cash equivalents $ 1,697 $ 1,594
Oil and gas sales receivable 310,079 293,493
--------------- --------------
Total Current Assets 311,776 295,087
--------------- --------------
Gas Imbalance Receivable 302,043 303,193
--------------- --------------
Oil and Gas Properties, using full cost
accounting 6,809,152 6,988,218
Less-Accumulated depreciation, depletion
and amortization (4,930,178) (4,711,774)
--------------- --------------
1,878,974 2,276,444
--------------- --------------
$ 2,492,793 $ 2,874,724
=============== ==============
LIABILITIES AND PARTNERS' CAPITAL:
Current Liabilities:
Accounts payable and accrued liabilities $ 105,019 $ 477,681
Current portion of note payable -- 45,825
--------------- --------------
Total Current Liabilities 105,019 523,506
--------------- --------------
Deferred Revenues 333,199 362,907
Partners' Capital 2,054,575 1,988,311
--------------- --------------
$ 2,492,793 $ 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 SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------------- --------------------------------
1996 1995 1996 1995
-------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
REVENUES:
Oil and gas sales $ 325,880 $ 274,457 $ 603,684 $ 523,543
Interest income 487 75 905 82
Other 2,413 1,667 3,359 3,016
-------------- -------------- -------------- --------------
328,780 276,199 607,948 526,641
-------------- -------------- -------------- --------------
COSTS AND EXPENSES:
Lease operating 67,925 70,930 140,071 155,093
Production taxes 19,336 16,573 34,561 32,384
Depreciation, depletion
and amortization -
Normal provision 111,172 108,469 218,404 223,892
Additional provision -- -- -- 372,988
General and administrative 30,086 26,233 58,591 48,777
Interest expense -- 4,294 3,706 9,228
-------------- -------------- -------------- --------------
228,519 226,499 455,333 842,362
-------------- -------------- -------------- --------------
NET INCOME (LOSS) $ 100,261 $ 49,700 $ 152,615 $ (315,721)
============== ============== ============== ==============
LIMITED PARTNERS' NET INCOME (LOSS)
PER UNIT $ 1.75 $ .87 $ 2.66 $ (5.50)
============== ============== ============== ==============
</TABLE>
See accompanying note to financial statements.
4
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SWIFT ENERGY INCOME PARTNERS 1990-A, LTD.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------------------------------------
1996 1995
-------------- ---------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Income (loss) $ 152,615 $ (315,721)
Adjustments to reconcile income (loss) to
net cash provided by operations:
Depreciation, depletion and amortization 218,404 596,880
Change in gas imbalance receivable
and deferred revenues (28,558) 32,574
Change in assets and liabilities:
(Increase) decrease in oil and gas sales receivable (16,586) (2,781)
Increase (decrease) in accounts payable
and accrued liabilities (372,662) 694
-------------- ---------------
Net cash provided by (used in) operating activities (46,787) 311,646
-------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties (11,602) (33,297)
Proceeds from sales of oil and gas properties 190,668 213
-------------- ---------------
Net cash provided by (used in) investing activities 179,066 (33,084)
-------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to partners (86,351) (187,022)
Payments on note payable (45,825) (91,650)
-------------- ---------------
Net cash provided by (used in) financing activities (132,176) (278,672)
-------------- ---------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 103 (110)
-------------- ---------------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,594 1,479
-------------- ---------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,697 $ 1,369
============== ===============
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 4,468 $ 10,535
============== ===============
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 6
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 six months ended June 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 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.
(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 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 increased $51,423 or 19 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 40 percent or
$.60/MCF and in oil prices of 21 percent or $3.28/BBL had a significant impact
on partnership performance. Current quarter oil production decreased 62
percent when compared to second quarter 1995 production volumes, partially
offsetting the effect of increased gas and oil prices.
Associated depreciation expense increased 2 percent or $2,703.
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)
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
Oil and gas sales increased $80,141 or 15 percent in the first six months
of 1996 over the corresponding period in 1995. An increase in gas prices of 41
percent or $.59/MCF and in oil prices of 15 percent or $2.37/BBL were major
contributing factors to the increased revenues for the period. Also, current
period oil production decreased 48 percent when compared to the corresponding
period in 1995, partially offsetting the effect of increased gas and oil
prices.
Associated depreciation expense decreased 2 percent or $5,488.
The Partnership recorded an additional provision in depreciation,
depletion and amortization in the first six months of 1995 for $372,988 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.
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: August 9, 1996 By: /s/ John R. Alden
-------------- ---------------------------------
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
12
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Index to Exhibits
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<CAPTION>
Exhibit
Number Description
- - ------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<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 June 30, 1996.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,697
<SECURITIES> 0
<RECEIVABLES> 310,079
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 311,776
<PP&E> 6,809,152
<DEPRECIATION> (4,930,178)
<TOTAL-ASSETS> 2,492,793
<CURRENT-LIABILITIES> 105,019
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2,054,575
<TOTAL-LIABILITY-AND-EQUITY> 2,492,793
<SALES> 603,684
<TOTAL-REVENUES> 607,948
<CGS> 0
<TOTAL-COSTS> 393,036<F1>
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,706
<INCOME-PRETAX> 152,615
<INCOME-TAX> 0
<INCOME-CONTINUING> 152,615
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 152,615
<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>
</TABLE>
