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EXHIBIT 99.10
April 20, 1998
Swift Energy Company
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Special Transactions Committee
Swift Energy Company Board of Directors
Gentlemen:
Pursuant to that certain letter agreement dated February 27, 1998 (the
"Agreement") between the Special Transactions Committee (the "Committee") of the
Board of Directors of Swift Energy Company ("Swift" or the "Company") and CIBC
▇▇▇▇▇▇▇▇▇▇▇ Corp. ("CIBC ▇▇▇▇▇▇▇▇▇▇▇"), you have retained CIBC ▇▇▇▇▇▇▇▇▇▇▇ to
prepare an independent financial analysis as to the estimated fair market value
(the "CIBC ▇▇▇▇▇▇▇▇▇▇▇ Valuation") of various interests (the "Assets") in oil
and gas properties (the "Properties'), which Assets are owned by Swift Energy
Managed Pension Assets 1988-A Ltd. (the "Partnership") of which the Company is
the managing general partner ("General Partner"). CIBC ▇▇▇▇▇▇▇▇▇▇▇ performed a
similar analysis for 62 other partnerships (the "Partnerships") of which the
Company is the General Partner. It is CIBC ▇▇▇▇▇▇▇▇▇▇▇'▇ understanding that the
General Partner has proposed to purchase substantially all of the Partnership's
Assets and, in turn, dissolve and wind up the Partnership. It is also CIBC
▇▇▇▇▇▇▇▇▇▇▇'▇ understanding that the Committee has also retained the reserve
engineering firms of ▇.▇. ▇▇▇▇ & Associates, Inc. and J.R. ▇▇▇▇▇▇ & Company
(collectively, the "Engineering Consultants") to prepare a separate analysis as
to the estimated fair market value of the Assets (the "Engineering Consultants'
Valuation").
In arriving at the CIBC ▇▇▇▇▇▇▇▇▇▇▇ Valuation, we, among other things:
(i) Reviewed the historical financial returns to the limited
partners of the Partnership;
(ii) Held discussions with senior management of the Company as to
the Partnership's operational and financial prospects;
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April 20,1998
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(iii) Held discussions with senior management of the Company
regarding the general characteristics of the Properties
underlying the Assets, including location, productive
geological formations, future development potential and oil
and gas marketing arrangements;
(iv) Held discussions with the Engineering Consultants regarding
the general characteristics of the Properties underlying the
Assets, including location, productive geological formations
and future development potential;
(v) Reviewed the reserve engineering reports supplied to us by the
Engineering Consultants and, particularly, reviewed the
estimated future net cash flow to be generated from the
production of proved reserves of the Properties underlying the
Assets discounted to present value using an annual discount
rate of 10% (the "PV-10 Value") dated as of December 31, 1997;
these amounts were calculated net of estimated production
costs and future development costs, using prices and costs in
effect as of a certain date, without escalation and without
giving effect to non-property related expenses such as future
income tax expense or depreciation, depletion and
amortization;
(vi) Reviewed the Engineering Consultants' Valuation of the
Properties underlying the Assets;
(vii) Reviewed historical operating and financial results of the
Properties underlying the Assets which included PV-10 Value,
proved reserves on a barrel of oil equivalent ("BOE") basis
and projected earnings before interest, taxes and
depreciation, depletion and amortization ("EBITDA") as
prepared by the Engineering Consultants and discussed with
senior management of the Company;
(viii) Reviewed and analyzed financial terms of similar transactions
in which public oil and gas companies liquidated partnerships
of which they were the general partner;
(ix) Reviewed and analyzed transactions involving the sale of oil
and gas companies we deemed comparable to the Partnership(s)
individually and collectively and to the Company;
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April 20, 1998
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(x) Reviewed and analyzed transactions involving the sale of oil
and gas properties we deemed comparable to the Properties
underlying the Assets;
(xi) Reviewed financial and market data for certain public
companies we deemed comparable to the Partnership(s)
individually and collectively and to the Company; and
(xii) Performed such other analyses and reviewed such other
information as we deemed appropriate.
In determining the CIBC ▇▇▇▇▇▇▇▇▇▇▇ Valuation, we have relied upon and assumed,
without independent verification or investigation and at the direction of the
Committee, (i) the accuracy and completeness of all of the financial and other
information available to us from public sources or provided to us by the Company
and their representatives (including the Engineering Consultants), (ii) that the
reserve engineering reports supplied to us by the Engineering Consultants as
described in clause (v) above have been reasonably prepared and are based on
their best business judgment, (iii) that the information with respect to the
Partnership's ownership of the Assets, as provided to the Engineering
Consultants and to us was accurate in all respects, (iv) with respect to the
historical operating and financial results and projections provided to us as
described in clause and (vii) above, that such information and projections were
reasonably prepared and were based on the best currently available information,
estimates and good faith judgment of the Company's management and their
representatives (including the Engineering Consultants).
Not being experts in the geological evaluation of oil and gas reserves, we have,
with your consent, relied without independent verification upon the audit of the
reserve estimates prepared by the Engineering Consultants for the purpose of
estimating fair market value of the Assets. In addition, we have not made a
physical inspection of the Properties underlying the Assets, nor have we made
any independent evaluations, appraisals or inspections of the Company's or the
Partnership's other assets or the Company's or the Partnership's liabilities
(contingent or otherwise). We have not reviewed any relevant agreements which
may exist between the General Partner and the limited partners governing the
Partnership, nor have we considered the effect which the ownership structure of
the Partnership and the terms of the agreements of the Partnership may have upon
the fairness of the consideration offered by any general partner of the
Partnership. We have not reviewed the books and records of the Partnership and
have assumed, with your consent, that the Partnership's ownership interests in
the Properties underlying the Assets, as provided to us by you, is true and
correct.
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April 20, 1998
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The CIBC ▇▇▇▇▇▇▇▇▇▇▇ Valuation is based upon analyses of the foregoing factors
in light of our assessment of general economic, financial, market and other
conditions and circumstances as of the date of this letter and any changes in
such conditions and circumstances may affect the validity or fairness of the
CIBC ▇▇▇▇▇▇▇▇▇▇▇ Valuation. CIBC ▇▇▇▇▇▇▇▇▇▇▇ disclaims any obligations to
update, revise or reaffirm the CIBC ▇▇▇▇▇▇▇▇▇▇▇ Valuation. The CIBC ▇▇▇▇▇▇▇▇▇▇▇
Valuation reflects our estimate of the consideration that could have been
received by the Partnership in a sale of the Assets in an orderly manner in a
private market transaction in which neither buyer nor seller is under any
compunction to complete such transaction. The CIBC ▇▇▇▇▇▇▇▇▇▇▇ Valuation falls
within a range of values which we believe, subject to the foregoing conditions,
represent possible fair market value estimates of the Partnership's interest in
the Assets. The CIBC ▇▇▇▇▇▇▇▇▇▇▇ Valuation should not be viewed as a guarantee
of the price that a willing buyer might have paid for the Assets.
CIBC ▇▇▇▇▇▇▇▇▇▇▇, as part of its investment banking services, is regularly
engaged in the valuation of businesses and securities in connection with
mergers, acquisitions, underwritings, sales and distributions of listed and
unlisted securities and private placements. CIBC ▇▇▇▇▇▇▇▇▇▇▇ has provided
certain investment banking and financial advisory services to the Company from
time to time, including acting as co-manager of the Company's Convertible
Subordinated Notes financing in November 1996 and lead manager of the public
offering of the Company's Common Stock in July 1995, and may be involved in
future investment banking activities on behalf of the Company. CIBC ▇▇▇▇▇▇▇▇▇▇▇
will also receive a fee upon delivery of this CIBC ▇▇▇▇▇▇▇▇▇▇▇ Valuation. In the
ordinary course of business, CIBC ▇▇▇▇▇▇▇▇▇▇▇ actively trades in the equity
securities of the Company for CIBC ▇▇▇▇▇▇▇▇▇▇▇'▇ own account and for the
accounts of CIBC ▇▇▇▇▇▇▇▇▇▇▇'▇ customers and, accordingly, may at any time hold
a long or short position in such securities.
Based upon and subject to the foregoing, and based upon such other matters as we
consider relevant, it is CIBC ▇▇▇▇▇▇▇▇▇▇▇'▇ estimate that the value of Swift
Energy Managed Pension Assets 1988-A Ltd. interest in the Assets as of the date
hereof is $347,204.
This letter is being provided for the use of the Committee in its evaluation of
a possible proposal that the Partnership sell the Assets to the Managing General
Partner and dissolve and wind up its affairs. This letter is not intended to
confer rights or remedies upon any stockholder of the Company or any partner of
the Partnership and may not be relied upon by any person or entity other than
the Committee. Neither this letter nor the CIBC
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April 20, 1998
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▇▇▇▇▇▇▇▇▇▇▇ Valuation may be published or otherwise used or referred to, in
whole or part, nor shall any public reference to CIBC ▇▇▇▇▇▇▇▇▇▇▇, this letter
or the CIBC ▇▇▇▇▇▇▇▇▇▇▇ Valuation be made without the prior written consent of
CIBC ▇▇▇▇▇▇▇▇▇▇▇; provided, however, that the Company and the Partnership may
include a copy of this letter and a reference to CIBC ▇▇▇▇▇▇▇▇▇▇▇ in the proxy
statement to be distributed to limited partners of the Partnership in connection
with the solicitation of the approval of the proposal that the Partnership sell
the Assets to the General Partner and dissolve and wind up its affairs. Neither
this letter nor the CIBC ▇▇▇▇▇▇▇▇▇▇▇ Valuation constitutes a recommendation to
any partner of the Partnership as to how such partner should vote on or respond
to the proposal that the Partnership sell the Assets to the General Partner and
dissolve and wind up its affairs.
Sincerely yours,
/s/ ▇▇▇▇▇ ▇▇▇▇▇
CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp.