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FORM 10-Q FOR QUARTER ENDED JUNE 30, 2005PDF VersionUNITED STATES
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| TEXAS | 74-2073055 |
| (State of Incorporation) | (I.R.S. Employer Identification No.) |
| 16825 Northchase Drive, Suite 400 | |
Houston, Texas 77060
(281) 874-2700
(Registrant's telephone number, including area code)
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 and 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
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes X No
Indicate the number of shares outstanding of each of the
Issuer's
classes of common stock,
as of the latest practicable date.
| Common Stock | 28,595,381 Shares |
| ($.01 Par Value) | (Outstanding at July 31, 2005) |
| (Class of Stock) |
June 30, 2005 December 31, 2004
ASSETS Current Assets: Cash and cash equivalents $ 27,728,290 $ 4,920,118 Accounts receivable -- Oil and gas sales 46,260,907 38,029,409 Joint interest owners 606,591 1,013,938 Other current assets 15,064,295 10,422,531 ---------------------- ---------------------- Total Current Assets 89,660,083 54,385,996 ---------------------- ---------------------- Property and Equipment: Oil and gas, using full-cost accounting Proved properties being amortized 1,581,386,007 1,479,681,903 Unproved properties not being amortized 80,994,868 80,121,509 ---------------------- ---------------------- 1,662,380,875 1,559,803,412 Furniture, Fixtures and Other Equipment 14,099,878 12,820,622 ---------------------- ---------------------- 1,676,480,753 1,572,624,034 Less--Accumulated Depreciation, Depletion, and Amortization (702,299,352) (649,185,874) ---------------------- ---------------------- 974,181,401 923,438,160 ---------------------- ---------------------- Other Assets: Deferred income taxes --- 1,666,058 Debt issuance costs 8,598,414 9,148,977 Restricted assets 1,914,856 1,933,956 ---------------------- ---------------------- 10,513,270 12,748,991 ---------------------- ---------------------- $1,074,354,754 $990,573,147 =========== ===========
Liabilities and Stockholders' EquitySee accompanying notes to condensed consolidated financial statements.
| June 30, 2005 | December 31, 2004 | |
|---|---|---|
| Liabilities and Stockholders' Equity | ||
| Current Liabilities: | ||
| Accounts payable and accrued liabilities | $ 29,411,912 | $ 29,406,877 |
| Accrued capital costs | 30,243,537 | 22,489,467 |
| Accrued interest | 8,506,743 | 9,209,192 |
| Undistributed oil and gas revenues | 7,840,625 | 7,512,755 |
| ---------------------- | ---------------------- | |
| Total Current Liabilities | 76,002,817 | 68,618,291 |
| ---------------------- | ---------------------- | |
| Long-Term Debt | 350,000,000 |
357,500,000 |
| Deferred Income Taxes | 97,876,922 |
73,106,580 |
| Asset Retirement Obligation | 16,584,569 |
17,176,136 |
| Lease Incentive Obligation | 158,724 |
--- |
| Commitments and Contingencies | ||
| Stockholders' Equity: | ||
| Preferred stock $.01 par value, 5,000,000 shares authorized, | ||
| none outstanding | --- | --- |
| Common stock, $.01 par value, 85,000,000 shares authorized, | ||
| 29,005,618 and 28,570,632 shares issued, and 28,556,174 | ||
| and 28,089,764 shares outstanding, respectively | 290,056 |
285,706 |
| Additional paid-in capital | 350,179,003 |
343,536,298 |
| Treasury stock held, at cost, 449,444 and 480,868 shares, respectively | (6,445,586) |
(6,896,245) |
| Unearned Compensation | (2,059,168) | (1,728,585) |
| Retained Earnings | 192,095,111 | 138,524,301 |
| Accumulated Other Comprehensive Income (Loss), Net of Taxes | (327,694) | 450,665 |
| -------------- | ---------------------- | |
| 533,731,722 | 474,172,140 | |
| -------------- | ---------------------- | |
| $1,074,354,754 | $990,573,147 | |
| ========== | ========== |
See accompanying notes to condensed consolidated financial statements.
Three Months Ended Six Months Ended 06/30/05
06/30/04
06/30/05
06/30/04
Revenues:
Oil and gas sales
$104,922,400
$71,824,789
$200,443,733
$137,778,559
Price-risk management and other, net (622,475) (781,054) (523,124) (1,379,094) --------------------- --------------------- --------------------- --------------------- 104,299,925
71,043,735
199,920,609
136,399,465
--------------------- --------------------- --------------------- ---------------------
Costs and Expenses:
General and administrative, net
4,995,887
4,175,559
9,870,195
8,205,233
Depreciation, depletion and amortization
28,777,631
19,509,056
52,983,009
37,804,740
Accretion of asset retirement obligation
187,495
160,259
374,002
330,735
Lease operating costs
11,565,223
10,435,813
22,614,005
20,061,793
Severance and other taxes
10,708,754
6,927,269
19,911,835
13,173,828
Interest expense, net
6,286,894
7,143,389
12,630,903
14,044,564
Debt retirement cost
--
2,691,243
--
2,691,243
--------------------- --------------------- --------------------- --------------------- 62,521,884
51,042,588
118,383,949
96,312,136
--------------------- --------------------- --------------------- --------------------- Income Before Income Taxes
41,778,041
20,001,147
81,536,660
40,087,329
Provision for Income Taxes
13,896,383
7,103,220
27,965,850
12,601,548
--------------------- --------------------- --------------------- --------------------- Net Income
$27,881,658
$12,897,927
$53,570,810
$27,485,781
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===========
===========
Per share amounts
Basic: Net Income
$0.98
$0.46
$1.90
$0.99
===========
===========
===========
===========
Diluted: Net Income
$0.96
$0.46
$1.86
$0.98
===========
===========
===========
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Weighted Average Shares Outstanding
28,376,518
27,742,444
28,268,733
27,647,636
See accompanying notes to condensed consolidated financial statements.
Other Com- Additional Unearned prehensive Common Paid-In Treasury Compen- Retained Income Stock (1) Capital Stock sation Earnings (Loss) Total ------------- --------------- ------------ --------------- ----------------- ----------------- --------------- Balance, December 31, 2003 $280,111 $334,865,204 $(7,558,093) $ -- $70,073,384 $(269,342) $397,391,264 ========= ========= ========= ========== ========== ========== ========= Stock issued for benefit plans (46,150 shares) -- 166,298 661,848 -- -- -- 828,146 Stock options exercised (509,105 shares) 5,091 4,260,882 -- -- -- -- 4,265,973 Tax benefits from exercise of stock options -- 1,956,555 -- -- -- -- 1,956,555 Employee stock purchase plan (50,418 shares) 504 502,097 -- -- -- -- 502,601 Issuance of restricted stock -- 1,785,262 -- (1,785,262) -- -- -- Amortization of restricted stock -- -- -- 56,677 -- -- 56,677 Net income -- -- -- -- 68,450,917 -- 68,450,917 Other comprehensive income -- -- -- -- -- 720,007 720,007 --------------- Total comprehensive income -- -- -- -- -- -- 69,170,924 ------------- --------------- ------------ --------------- ----------------- ----------------- --------------- Balance, December 31, 2004 $ 285,706 $ 343,536,298 $(6,896,245) $(1,728,585) $138,524,301 $450,665 $ 474,172,140 ========= ========= ========= ========== ========== ========== ========= Stock issued for benefit plans (31,424 shares) -- 435,134 450,659 -- -- -- 885,793 Stock options exercised (403,550 shares) 4,036 3,489,967 -- -- -- -- 3,494,003 Tax benefits from exercise of stock options -- 1,213,728 -- -- -- -- 1,213,728 Issuance of restricted stock -- 861,522 -- (600,719) -- -- 260,803 Employee stock purchase plan (31,436 shares) 314 642,354 -- -- -- -- 642,668 Amortization of restricted stock -- -- -- 270,136 -- -- 270,136 Net income -- -- -- -- 53,570,810 -- 53,570,810 Other comprehensive loss -- -- -- -- -- (778,359) (778,359) --------------- Total comprehensive income -- -- -- -- -- -- 52,792,451 ------------- --------------- ------------ --------------- ----------------- ----------------- --------------- Balance, June 30, 2005 $ 290,056 $ 350,179,003 $(6,445,586) $(2,059,168) $192,095,111 $(327,694) $ 533,731,722 ========= ========= ========= ========== ========== ========== =========
(1) $.01 Par Value
See accompanying notes to condensed consolidated financial statements.
| Period Ended June 30, | ||
|---|---|---|
| 2005 | 2004 | |
| ----------------- | ----------------- | |
| Cash Flows From Operating Activities: | ||
| Net income | $ 53,570,810 | $ 27,485,781 |
| Adjustments to reconcile net income to net cash provided | ||
| by operating activities - | ||
| Depreciation, depletion, and amortization | 52,983,009 | 37,804,740 |
| Accretion of asset retirement obligation | 374,002 | 330,735 |
| Deferred income taxes | 27,565,850 | 12,195,548 |
| Debt retirement cost | --- | 2,691,243 |
| Other | 117,924 | 363,958 |
| Change in assets and liabilities - | ||
| Increase in accounts receivable | (4,738,848) | (3,445,623) |
| Increase in accounts payable and accrued liabilities | 113,433 | 962,744 |
| Decrease in accrued interest | (702,449) | (1,300,178) |
| ----------------- | ----------------- | |
| Net Cash Provided by Operating Activities | 129,283,731 | 77,088,948 |
| ----------------- | ----------------- | |
| Cash Flows From Investing Activities: | ||
| Additions to property and equipment | (101,766,582) | (85,926,359) |
| Proceeds from the sale of property and equipment | 2,339,634 | 1,274,935 |
| Net cash distributed as operator of oil and gas | ||
| properties | (3,840,937) | (5,781,399) |
| Net cash received as operator of partnerships | ||
| and joint ventures | 243,286 | 224,482 |
| Other | 50,105 | (17,607) |
| ----------------- | ----------------- | |
| Net Cash Used in Investing Activities | (102,974,494) | (90,225,948) |
| ----------------- | ----------------- | |
| Cash Flows From Financing Activities: | ||
| Proceeds from long-term debt | --- | 150,000,000 |
| Payments of long-term dept | --- | (32,076,000) |
| Net payments of bank borrowings | (7,500,000) | (15,900,000) |
| Net proceeds from issuances of common stock | 3,998,935 | 2,923,516 |
| Payments of debt retirement costs | --- | (1,792,017) |
| Payments of debt issuance costs | --- | (4,205,542) |
| ----------------- | ----------------- | |
| Net Cash Provided by (Used in) Financing Activities | (3,501,065) | 98,949,957 |
| ----------------- | ----------------- | |
| Net Increase in Cash and Cash Equivalents | 22,808,172 | 85,812,957 |
| Cash and Cash Equivalents at Beginning of Period | 4,920,118 | 1,066,280 |
| ----------------- | ----------------- | |
| Cash and Cash Equivalents at End of Period | $27,728,290 | $86,879,237 |
| ========== | ========== | |
| Supplemental disclosures of cash flows information: | ||
| Cash paid during period for interest, net of amounts capitalized | $ 12,798,576 | $ 14,774,142 |
| Cash paid during period for income taxes | $ 400,000 | $ 406,000 |
See accompanying notes to condensed consolidated financial statements.
(1) GENERAL INFORMATION
The condensed consolidated financial statements included herein have been prepared by Swift Energy Company and reflect necessary adjustments, all of which were of a recurring nature, and are in the opinion of our management necessary for a fair presentation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission. We believe that the disclosures presented are adequate to allow the information presented not to be misleading. The condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the latest Form 10-K and Annual Report.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Property and Equipment
We follow the “full-cost” method of accounting for oil and gas property and equipment costs. Under this method of accounting, all productive and nonproductive costs incurred in the exploration, development, and acquisition of oil and gas reserves are capitalized. Such costs may be incurred both prior to and after the acquisition of a property and include lease acquisitions, geological and geophysical services, drilling, completion, and equipment. Internal costs incurred that are directly identified with exploration, development, and acquisition activities undertaken by us for our own account,