<PAGE>

                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                    FORM 10-K

             [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 1998
                                       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 0-17025

                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.
                    (Exact name of registrant as specified in
                     its Certificate of Limited Partnership)

         TEXAS                                       76-0226425
(State of Organization)                 (I.R.S. Employer Identification No.)


                         16825 Northchase Dr., Suite 400
                              Houston, Texas 77060
                                 (281) 874-2700
          (Address and telephone number of principal executive offices)


                 Securities registered pursuant to Section 12(b)
                                   of the Act:
                                      None

                 Securities registered pursuant to Section 12(g)
                                   of the Act:
                      260,255.25 Limited Partnership Units


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  periods that the  registrant  was
required),  and (2) has been subject to such filing requirements for the past 90
days.
                               Yes   X   No
                                    ---

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]

Registrant does not have an aggregate  market value for its Limited  Partnership
Interests.

                       Documents Incorporated by Reference

Document                                               Incorporated as to

    Registration Statement No. 33-11773                  Items 1 and 13
     on Form S-1


<PAGE>


                                TABLE OF CONTENTS

                             Form 10-K Annual Report
                     For the Period Ended December 31, 1998

                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.

<TABLE>
<CAPTION>
ITEM NO.                   PART I                                PAGE
  <S>      <C>                                                  <C>
   1       Business                                               I-1
   2       Properties                                             I-4
   3       Legal Proceedings                                      I-7
   4       Submission of Matters to a Vote of
           Security Holders                                       I-7


                           PART II

   5       Market Price of and Distributions on the
             Registrant's Units and Related Limited
             Partner Matters                                     II-1
   6       Selected Financial Data                               II-2
   7       Management's Discussion and Analysis of
           Financial Condition and Results of Operations         II-2
   8       Financial Statements and Supplementary Data           II-4
   9       Disagreements on Accounting and Financial
             Disclosure                                          II-4


                           PART III

  10       Directors and Executive Officers of the
             Registrant                                         III-1
  11       Executive Compensation                               III-2
  12       Security Ownership of Certain Beneficial
             Owners and Management                              III-2
  13       Certain Relationships and Related Transactions       III-2


                           PART IV

  14       Exhibits, Financial Statement Schedules
             and Reports on Form 8-K                             IV-1
</TABLE>


                           OTHER

           Signatures


<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.

                                     PART I


Item 1.  Business

General Description of Partnership

         Swift Energy Income Partners 1987-B,  Ltd., a Texas limited partnership
(the "Partnership" or the "Registrant"),  is a partnership formed under a public
serial limited partnership offering denominated Swift Energy Income Partners III
(Registration  Statement No. 33-11773 on Form S-1, originally declared effective
March 19, 1987,  and amended  effective  March 28, 1988,  May 4, 1989 and May 1,
1990 [the "Registration Statement"]).  The Partnership was formed effective July
23, 1987 under a Limited Partnership  Agreement dated July 21, 1987. The initial
3,177 limited partners made capital contributions of $26,025,525.

         The  Partnership is  principally  engaged in the business of acquiring,
developing and, when  appropriate,  disposing of working interests in proven oil
and gas properties  within the continental  United States.  The Partnership does
not  engage  in  exploratory  drilling.   Each  working  interest  held  by  the
Partnership entitles the Partnership to receive, in kind or in value, a share of
the  production  of oil and gas from the producing  property,  and obligates the
Partnership  to  participate  in the  operation  of the property and to bear its
proportionate share of all operating costs associated therewith. The Partnership
typically  holds  less  than  the  entire  working  interest  in  its  producing
properties.

         At December  31,  1998,  the  Partnership  had expended or committed to
expend 100% of the limited  partners' net commitments  (i.e.,  limited partners'
commitments available to the Partnership for property acquisitions after payment
of  organization  fees and  expenses)  in the  acquisition  and  development  of
producing properties, which properties are described under Item 2, "Properties,"
below. The  Partnership's  revenues and profits are derived almost entirely from
the  sale of oil and gas  produced  from  its  properties  and  from the sale of
acquired  oil  and  gas  properties,   when  the  sale  of  such  properties  is
economically preferable to continued operation.

         The  Partnership's  business and affairs are  conducted by its Managing
General  Partner,  Swift Energy  Company,  a Texas  corporation  ("Swift").  The
Partnership's Special General Partner, VJM Corporation, a California corporation
("VJM"),  consults with and advises Swift as to certain financial matters. Swift
is the designated  operator of many of the  properties in which the  Partnership
owns  interests.  The remaining  properties  are operated by industry  operators
designated by the owners of a majority of the working interest in each property.

         The  general  manner  in  which  the  Partnership   acquires  producing
properties  and  otherwise  conducts  its business is described in detail in the
Registration Statement under "Proposed Activities," which is incorporated herein
by reference.

Competition, Markets and Regulations

         Competition

         The oil and gas industry is highly  competitive in all its phases.  The
Partnership encounters strong competition from many other oil and gas producers,
many of which possess substantial financial resources, in acquiring economically
desirable Producing Properties.

         Markets

         The amounts of and price  obtainable  for oil and gas  production  from
Partnership  Properties will be affected by market factors beyond the control of
the  Partnership.  Such factors include the extent of domestic  production,  the
level of imports of foreign oil and gas, the general level of market demand on a
regional, national and worldwide basis, domestic and foreign economic conditions
that  determine  levels of industrial  production,  political  events in foreign
oil-producing  regions, and variations in governmental  regulations and tax laws
and  the  imposition  of new  governmental  requirements  upon  the  oil and gas
industry. There can be no assurance that oil and gas prices will not decrease in
the future, thereby decreasing net Revenues from Partnership Properties.


                                   I-1


<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.


         From time to time,  there may exist a  surplus  of  natural  gas or oil
supplies,  the effect of which may be to reduce the amount of hydrocarbons  that
the  Partnerships may produce and sell while such oversupply  exists.  In recent
years,  initial steps have been taken to provide  additional gas  transportation
lines from Canada to the United States. If additional Canadian gas is brought to
the United States market, it could create downward pressure on United States gas
prices.

         Regulations

         Environmental Regulation

         The federal  government  and various state and local  governments  have
adopted  laws and  regulations  regarding  the control of  contamination  of the
environment.  These laws and regulations may require the acquisition of a permit
by Operators before drilling commences,  prohibit drilling activities on certain
lands  lying  within  wilderness  areas or where  pollution  arises  and  impose
substantial  liabilities for pollution  resulting from operations,  particularly
operations near or in onshore and offshore waters or on submerged  lands.  These
laws and  regulations  may also  increase  the  costs of  routine  drilling  and
operation of wells.  Because these laws and regulations change  frequently,  the
costs to the  Partnership of compliance  with existing and future  environmental
regulations cannot be predicted.  However, the Managing Partner does not believe
that the  Partnership is affected in a significantly  different  manner by these
regulations than are its competitors in the oil and gas industry.

         Federal Regulation of Natural Gas

         The  transportation  and sale of natural gas in interstate  commerce is
heavily  regulated  by  agencies  of  the  federal  government.   The  following
discussion is intended only as a summary of the principal statutes,  regulations
and  orders  that  may  affect  the  production  and  sale of  natural  gas from
Partnership  Properties.  This  summary  should not be relied upon as a complete
review of applicable natural gas regulatory provisions.

         FERC Orders

         Several major  regulatory  changes have been implemented by the Federal
Energy Regulatory  Commission  ("FERC") from 1985 to the present that affect the
economics of natural gas production,  transportation and sales. In addition, the
FERC  continues  to  promulgate  revisions  to various  aspects of the rules and
regulations  affecting  those  segments of the natural gas industry  that remain
subject to the FERC's jurisdiction. In April 1992, the FERC issued Order No. 636
pertaining to pipeline restructuring. This rule requires interstate pipelines to
unbundle  transportation  and sales services by separately  stating the price of
each service and by providing  customers  only the particular  service  desired,
without  regard to the source for  purchase of the gas.  The rule also  requires
pipelines to (i) provide  nondiscriminatory  "no-notice"  service  allowing firm
commitment  shippers to receive  delivery of gas on demand up to certain  limits
without  penalties,  (ii) establish a basis for release and reallocation of firm
upstream  pipeline  capacity  and  (iii)  provide  non-discriminatory  access to
capacity by firm  transportation  shippers on a  downstream  pipeline.  The rule
requires interstate  pipelines to use a straight fixed variable rate design. The
rule imposes these same requirements upon storage facilities.

         FERC Order No. 500  affects the  transportation  and  marketability  of
natural gas.  Traditionally,  natural gas has been sold by producers to pipeline
companies,  which then  resold the gas to  end-users.  FERC Order No. 500 alters
this market structure by requiring  interstate  pipelines that transport gas for
others to provide  transportation  service to  producers,  distributors  and all
other shippers of natural gas on a nondiscriminatory, "first-come, first-served"
basis ("open access  transportation"),  so that producers and other shippers can
sell natural gas directly to end-users.  FERC Order No. 500 contains  additional
provisions intended to promote greater competition in natural gas markets.

         It is not anticipated  that the  marketability  of and price obtainable
for natural gas production from  Partnership  Properties  will be  significantly
affected  by FERC  Order No.  500.  Gas  produced  from  Partnership  Properties
normally  will be sold to  intermediaries  who have entered into  transportation
arrangements with pipeline companies.  These  intermediaries will accumulate gas
purchased from a number of producers and sell the gas to end-users  through open
access pipeline transportation.


                                      I-2


<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.


         State Regulations

         Production  of any oil  and gas  from  Partnership  Properties  will be
affected  to some  degree  by  state  regulations.  Many  states  in  which  the
Partnership will operate have statutory provisions regulating the production and
sale  of oil  and  gas,  including  provisions  regarding  deliverability.  Such
statutes, and the regulations promulgated in connection therewith, are generally
intended to prevent  waste of oil and gas and to protect  correlative  rights to
produce  oil and  gas  between  owners  of a  common  reservoir.  Certain  state
regulatory  authorities  also  regulate  the amount of oil and gas  produced  by
assigning allowable rates of production to each well or proration unit.

         Federal Leases

         Some of the Partnership's properties are located on federal oil and gas
leases  administered by various federal  agencies,  including the Bureau of Land
Management.   Various  regulations  and  orders  affect  the  terms  of  leases,
exploration and development plans, methods of operation and related matters.

         Employees

         The  Partnership  has no  employees.  Swift,  however,  has a staff  of
geologists,   geophysicists,   petroleum  engineers,   landmen,  and  accounting
personnel who  administer  the  operations of Swift and the  Partnership.  As of
December 31, 1998, Swift had 203 employees.  Swift's administrative and overhead
expenses  attributable  to  the  Partnership's   operations  are  borne  by  the
Partnership.


                                      I-3


<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.


Item 2.  Properties

         As of December  31, 1998,  the  Partnership  has acquired  interests in
producing oil and gas properties which are generally described below.

Principal Oil and Gas Producing Properties

         The most  valuable  fields  in the  Partnership,  based  upon  year-end
engineering  estimates of discounted  future net revenues using constant pricing
and costs, are described below.

         1.  Approximately 48% of the  Partnership's  value is from the Giddings
Field in Fayette  and  Burleson  Counties,  Texas (NRG  acquisition).  The wells
produce from the Austin Chalk and Edwards zones.

         2.  Approximately 25% of the Partnership's  value is from the AWP Field
in McMullen  County,  Texas  (Bracken  acquisition).  The wells produce from the
Olmos formation.

         The remaining  value in the  Partnership  is  attributable  to numerous
properties  none of which equals or exceeds 15 percent of the total  Partnership
value.

Title to Properties

         Title to  substantially  all  significant  producing  properties of the
Partnership has been examined. The properties are subject to royalty, overriding
royalty and other  interests  customary in the  industry.  The Managing  General
Partner does not believe any of these burdens  materially detract from the value
of the properties or will materially detract from the value of the properties or
materially  interfere  with their use in the  operation  of the  business of the
Partnership.

Production and Sales Price

         The following table  summarizes the sales volumes of the  Partnership's
net oil and gas  production  expressed  in  MCFs  of oil.  Equivalent  MCFs  are
obtained by converting oil to gas on the basis of their relative energy content;
one barrel equals 6,000 cubic feet of gas.


<TABLE>
<CAPTION>
                                                  Net Production
                                      --------------------------------------
                                                For the Years Ended
                                                   December 31,
                                      --------------------------------------
                                        1998            1997           1996
                                      --------        --------       -------
<S>                                    <C>             <C>           <C>
Net Volumes (Equivalent MCFs)          309,214         463,658       676,534

Average Sales Price
   per Equivalent MCF                  $1.79           $2.62         $2.51

Average Production Cost
   per Equivalent MCF
   (includes production taxes)         $0.86           $1.26         $0.85
</TABLE>


                                      I-4


<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.


Net Proved Oil and Gas Reserves

         Presented below are the estimates of the Partnership's  proved reserves
as of December 31, 1998, 1997 and 1996. All of the Partnership's proved reserves
are located in the United States.
<TABLE>
<CAPTION>
                                                                      December 31,
                                   ---------------------------------------------------------------------------
                                            1998                      1997                       1996
                                   ---------------------      ---------------------      ---------------------
                                                 Natural                   Natural                     Natural
                                     Oil           Gas         Oil           Gas          Oil            Gas
                                   -------      --------      -------      --------      -------      --------
                                   (BBLS)        (MMCF)       (BBLS)        (MMCF)       (BBLS)        (MMCF)
<S>                                <C>             <C>        <C>            <C>        <C>              <C>
Proved developed
   reserves at end of year          53,901         1,609       98,661         2,941      185,252         4,148
                                   -------        ------      -------        ------      -------        ------
Proved reserves
   Balance at beginning
     of year                       120,913         3,669      219,361         4,979      327,219         5,850

   Extensions, discoveries
      and other additions               --            --           --            --           --            --

   Revisions of previous
     estimates                     (38,303)         (713)     (28,831)         (586)       8,677           888

   Sales of minerals in
     place                             (44)         (450)     (54,508)         (351)     (88,018)       (1,254)

   Production                       (9,019)         (255)     (15,109)         (373)     (28,517)         (505)
                                   --------        -----      -------        ------      -------        ------

   Balance at end of year           73,547         2,251      120,913         3,669      219,361         4,979
                                   --------       ------      -------        ------      -------        ------
</TABLE>


         Revisions  of  previous  quantity  estimates  are  related to upward or
downward  variations  based on current  engineering  information  for production
rates,  volumetrics and reservoir  pressure.  Additionally,  changes in quantity
estimates  are the result of the  increase  or decrease in crude oil and natural
gas prices at each year end which have the effect of adding or  reducing  proved
reserves on marginal properties due to economic limitations.


                                      I-5


<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.


         The following table summarizes by acquisition the Registrant's reserves
and gross and net  interests in  producing  oil and gas wells as of December 31,
1998:

<TABLE>
<CAPTION>
                                                       Reserves
                                                    December 31, 1998
                                                 -----------------------

                                                             Natural            Wells
                                                  Oil          Gas       ------------------
Acquisition                State(s)              (BBLS)       (MMCF)      Gross        Net
-----------                ---------             -------     -------     ------      ------
<S>                        <C>                    <C>         <C>          <C>       <C>
Kaiser-Francis II          KS, LA, OK, TX          5,061        958          9        1.158
Wainoco                    LA, MI, OK, TX             --         48          6        1.032
NRG                        TX                     30,355        676         74        4.777
Kimbrel & Cook             TX                      4,112         --          9        4.050
Bracken                    TX                     32,472        563         45        1.674
Norcen Explorer            WY                      1,547          6         29        0.067
                                                 -------     ------       ----       ------
                                                  73,547      2,251        172       12.758
                                                 -------     ------       ----       ------
</TABLE>


         There are numerous  uncertainties  inherent in estimating quantities of
proved  reserves and in projecting  the future rates of  production,  timing and
plan of  development.  Oil and gas reserve  engineering  must be recognized as a
subjective process of estimating  underground  accumulations of oil and gas that
cannot be measured  in an exact way,  and  estimates  of other  engineers  might
differ  from  those  above,  audited  by H. J.  Gruy and  Associates,  Inc.,  an
independent petroleum consulting firm. 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,
and, as a general rule,  reserve  estimates based upon  volumetric  analysis are
inherently  less  reliable  than  those  based on  lengthy  production  history.
Accordingly,  reserve  estimates are often  different from the quantities of oil
and gas that are ultimately recovered.

         In estimating  the oil and natural gas  reserves,  the  Registrant,  in
accordance with criteria  prescribed by the Securities and Exchange  Commission,
has used prices received as of December 31, 1998 without  escalation,  except in
those instances where fixed and determinable  gas price  escalations are covered
by  contracts,  limited  to the  price the  Partnership  reasonably  expects  to
receive.  The  Registrant  does not believe that any  favorable or adverse event
causing a significant  change in the estimated  quantity of proved  reserves has
occurred between December 31, 1998 and the date of this report.

         Future prices received for the sale of the  Partnership's  products may
be higher or lower than the prices used in the evaluation  described  above; the
operating  costs relating to such  production may also increase or decrease from
existing  levels.  The estimates  presented  above are in accordance  with rules
adopted by the Securities and Exchange Commission.

                                      I-6


<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.


Item 3. Legal Proceedings

         The Partnership is not aware of any material pending legal  proceedings
to which it is a party or of which any of its property is the subject.

Item 4. Submission of Matters to a Vote of Security Holders

         No matters  were  submitted  to a vote of limited  partners  during the
fourth quarter of the fiscal year covered by this report.


                                      I-7


<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.

                                     PART II


Item 5. Market Price of and Distributions on the Registrant's  Units and Related
Limited Partner Matters

Market Information

         Units in the  Partnership  were  initially  sold at a price of $100 per
Unit.  Units are not traded on any exchange and there is no  established  public
trading  market for the Units.  Swift is aware of negotiated  transfers of Units
between  unrelated  parties;  however,  these  transfers  have been  limited and
sporadic.  Due to the  nature of these  transactions,  Swift  has no  verifiable
information regarding prices at which Units have been transferred.

Holders

         As of December  31, 1998,  there were 3,177  Limited  Partners  holding
Units in the Partnership.

Distributions

         The Partnership  generally makes distributions to Limited Partners on a
quarterly  basis,   subject  to  the  restrictions  set  forth  in  the  Limited
Partnership  Agreement.  In the fiscal years ending  December 31, 1997 and 1998,
the Partnership distributed a total of $618,100 and $461,900,  respectively,  to
holders of its Units.  Cash  distributions  constitute net proceeds from sale of
oil and gas  production  after  payment of lease  operating  expenses  and other
partnership expenses.  Some or all of such amounts or any proceeds from the sale
of partnership  properties  could be deemed to constitute a return of investors'
capital.

         Oil and gas  investments  involve a high risk of loss, and no assurance
can be given that any particular  level of distributions to holders of Units can
be  achieved  or  maintained.   Although  it  is   anticipated   that  quarterly
distributions  will continue to be made through 1999, the Partnership's  ability
to make distributions  could be diminished by any event adversely  affecting the
oil and gas properties in which the Partnership  owns interests or the amount of
revenues received by the Partnership therefrom.

         The  Partnership's   Limited  Partnership  Agreement  contains  various
provisions  which might serve to delay,  defer or prevent a change in control of
the Partnership,  such as the requirement of a vote of Limited Partners in order
to  sell  all  or  substantially  all  of the  Partnership's  properties  or the
requirement of consent by the Managing  General  Partner to transfers of limited
partnership interests.


                                      II-1


<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.


Item 6. Selected Financial Data

         The following  selected  financial  data,  prepared in accordance  with
generally  accepted  accounting  principles as of December 31, 1998, 1997, 1996,
1995 and  1994,  should be read in  conjunction  with the  financial  statements
included in Item 8:

<TABLE>
<CAPTION>
                                  1998               1997               1996              1995             1994
                              ------------       ------------       ------------      ------------     ------------
<S>                        <C>                <C>                <C>               <C>                <C>
Revenues                   $     586,995      $   1,488,783      $   1,895,900      $    1,751,110    $   2,403,877 
Income (Loss)              $    (967,838)     $     111,373      $     424,660      $     (788,796)   $     380,984 
Total Assets               $   2,724,811      $   4,390,459      $   4,964,271      $    5,727,598    $   7,064,687 
Cash Distributions         $     525,321      $     674,546      $     485,357      $      553,384    $     959,619 
Long Term Obligations      $          --      $          --      $          --      $           --    $      42,669 
Limited Partners' Net
 Income (Loss) Per Unit    $       (3.07)     $         .54      $        1.47      $        (2.58)   $        1.26)
Limited Partners' Cash
 Distributions Per Unit    $        1.78      $        2.37      $        1.53      $         1.87    $        3.25 

</TABLE>


Item 7. Management's Discussion and Analysis of Financial Condition and
         Results of Operations

Liquidity and Capital Resources

         Oil  and  gas  reserves  are  depleting   assets  and  therefore  often
experience   significant   production  declines  each  year  from  the  date  of
acquisition  through the end of the life of the property.  The primary source of
liquidity to the  Partnership  comes almost  entirely from the income  generated
from the sale of oil and gas produced  from  ownership  interests in oil and gas
properties. Net cash provided by operating activities totaled $575,543, $302,463
and $343,930 in 1998, 1997 and 1996, respectively.  This source of liquidity and
the related results of operations, and in turn cash distributions,  will decline
in future periods as the oil and gas produced from the properties  also declines
while production and general and  administrative  costs remain relatively stable
making it unlikely that the Partnership  will hold the properties until they are
fully  depleted,  but will likely  liquidate when a substantial  majority of the
reserves have been  produced.  Cash  provided by property sale proceeds  totaled
$282,111,  $439,291  and  $413,865  in  1998,  1997 and  1996,  respectively.The
Partnership  has expended all of the  partner's  net  commitments  available for
property  acquisitions  and  development  by  acquiring  producing  oil  and gas
properties.  The partnership  invests  primarily in proved producing  properties
with nominal  levels of future costs of development  for proven but  undeveloped
reserves.  Significant  purchases of additional  reserves or extensive  drilling
activity are not anticipated. Capital expenditures totaled $81,736, $172,971 and
$123,283  in 1998,  1997 and  1996,  respectively.  Cash  distributions  totaled
$525,321, $674,546 and $485,357 in 1998, 1997 and 1996, respectively.

         Subject to 1999 market conditions  remaining  comparable with 1998, the
Managing General Partner ("MGP")  anticipates an increase in liquidity  provided
that certain development work scheduled in 1999 is completed  successfully.  The
Partnership  plans to spend in the next four  years an  estimated  $526,000  for
capital  expenditures  needed for this  development  work and the enhancement of
proved oil and gas reserves.  The MGP anticipates that the Partnership will have
adequate liquidity from income from continuing  operations to satisfy any future
capital  expenditure  requirements.  Funds  generated  from bank  borrowings and
proceeds from the sale of oil and gas properties will be used to supplement this
effort if deemed necessary.

Results of Operations

         Oil and gas sales  decreased  59 percent in 1998 vs. 1997. A decline in
the 1998 gas prices received of 29 percent or $.73/MCF had a significant  impact
on partnership performance. The average sales price per equivalent MCF decreased
32 percent in 1998 as gas prices decreased 29 percent and oil prices declined 44
percent.  Also,  production volumes decreased 33 percent due to a 32 percent gas
production  decrease and a 40 percent oil  production  decline.  The decrease in
production,  due in part to the  partnership's  sale in early 1998 of the Cotton
Plant properties  (Broyles  acquisition),  further  contributed to the decreased
revenues.

         Production  cost  per  equivalent  MCF  decreased  32  percent  in 1998
compared to 1997 as total production costs decreased 54 percent in 1998.


                                      II-2


<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.


         Associated  depreciation  expense  decreased  23  percent  in 1998 when
compared to 1997, also related to the decline in production volumes.

         Oil and gas sales  decreased  27 percent in 1997 vs.  1996.  Production
volumes  decreased 31 percent due to a 26 percent gas production  decrease and a
47 percent oil production  decline.  The decrease in production,  due in part to
accelerated  production  declines on mature wells,  had a significant  impact on
partnership  performance.  The partnership's sale in late 1996 of the Gladewater
gas unit in Gregg County,  Texas (Cairn acquisition) and in 1997 of the Anderson
oil unit in  Colorado  County,  Texas (Sue Ann  acquisition)  had a  significant
impact on  partnership  performance.  An  increase  in the 1997 gas prices of 11
percent or $.25/MCF partially offset the production declines.  The average sales
price per equivalent MCF increased 4 percent in 1997 as gas prices  increased 11
percent but oil prices decreased 7 percent.

         Production  cost  per  equivalent  MCF  increased  48  percent  in 1997
compared to 1996,  primarily  due to the decline in  production  volumes.  Total
production costs increased a sligt 1 percent in 1997.

         Associated  depreciation  expense  decreased  25  percent  in 1997 when
compared to 1996, also related to the decrease in production volumes.

         The  Partnership  recorded an  additional  provision  in  depreciation,
depletion  and  amortization  in 1998,  1997 and 1996 of $813,102,  $156,097 and
$4,650,  respectively,  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 paid
for oil and gas properties resulting in a full cost ceiling impairment.

         During 1999,  Partnership revenues and costs will be shared between the
limited and general  partners in a 90:10 ratio,  based on the annualized rate of
cash  distributions by the Partnership during a certain period prior to December
31,  1998.  Based on current oil and gas prices,  current  levels of oil and gas
production and expected cash distributions during 1999, the MGP anticipates that
the Partnership sharing ratio will continue to be 90:10.

Year 2000

         The Year  2000  issue  results  from  computer  programs  and  embedded
computer chips with date fields that cannot  distinguish  between the years 1900
and 2000.  The  Managing  General  Partner is currently  implementing  the steps
necessary to make its operations and the related  operations of the  Partnership
capable of addressing the Year 2000. These steps include upgrading,  testing and
certifying its computer systems and field operation  services and obtaining Year
2000  compliance  certification  from  all  important  business  suppliers.  The
Managing  General  Partner  formed a task force  during 1998 to address the Year
2000 issue and prepare its business systems for the Year 2000. By mid-1999,  the
Managing  General  Partner  expects  the mission  critical  systems to be either
replaced or updated and testing to be virtually completed.

         The Managing  General  Partner's  business  systems are almost entirely
comprised of off-the-shelf  software.  Most of the necessary changes in computer
instructional code can be made by upgrading this software.  The Managing General
Partner is  currently  in the  process  of either  upgrading  the  off-the-shelf
software or receiving  certification  as to Year 2000 compliance from vendors or
third party  consultants.  A testing phase is being conducted as the software is
updated or certified and is expected to be completed by mid-1999.

         The Managing  General  Partner does not believe that costs  incurred to
address the Year 2000 issue with  respect to its  business  systems  will have a
material effect on the Partnership's results of operations, or its liquidity and
financial condition. The estimated total cost to the Managing General Partner to
address Year 2000 issues is projected  to be less than  $150,000,  most of which
will be spent during the testing phase. The Partnership's  share of this cost is
expected to be insignificant.


                                      II-3

<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.


         The failure to correct a material  Year 2000 problem could result in an
interruption,  or failure of certain normal  business  activities or operations.
Based on activities to date, the Managing  General Partner believes that it will
be able  to  resolve  any  Year  2000  problems  concerning  its  financial  and
administrative  systems.  It is  undeterminable  how all the aspects of the Year
2000 will impact the Partnership. The most reasonably likely worst case scenario
would involve a prolonged  disruption of external  power sources upon which core
equipment relies,  resulting in a substantial  decrease in the Partnership's oil
and gas production  activities.  In addition, the pipeline operators to whom the
Managing General Partner sells the  Partnership's  natural gas, as well as other
customers and suppliers,  could be prone to Year 2000 problems that could not be
assessed or detected by the  Managing  General  Partner.  The  Managing  General
Partner is contacting  its major  purchasers,  customers,  suppliers,  financial
institutions and others with whom it conducts business to determine whether they
will be able to  resolve  in a timely  manner  any Year 2000  problems  directly
affecting the Managing  General Partner or Partnership and to inform them of the
Managing General Partner's  internal  assessment of its Year 2000 review.  There
can be no  assurance  that such  third  parties  will not fail to  appropriately
address  their  Year  2000  issues  or will not  themselves  suffer a Year  2000
disruption  that  could  have a  material  adverse  effect on the  Partnership's
activities, financial condition or operating results. Based upon these responses
and any  problems  that arise  during the testing  phase,  contingency  plans or
back-up systems would be determined and addressed.

Item 8. Financial Statements and Supplementary Data

         See Part IV, Item 14(a) for index to financial statements.

Item 9. Disagreements on Accounting and Financial Disclosure

         None.


                                      II-4


<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.

                                    PART III


Item 10.  Directors and Executive Officers of the Registrant

         As a limited partnership,  the Registrant has no directors or executive
officers.  The  business and affairs of the  Registrant  are managed by Swift as
Managing General Partner. Set forth below is certain information as of March 12,
1999 regarding the directors and executive officers of Swift.
<TABLE>
<CAPTION>
                                          Position(s) with
         Name             Age        Swift and Other Companies
         ----             ---      ---------------------------
<S>                       <C>      <C>
                                   DIRECTORS

A. Earl Swift             65       Chief Executive Officer and
                                   Chairman of the Board

Virgil N. Swift           70       Executive Vice President - Business
                                   Development, Vice Chairman of the Board

G. Robert Evans           67       Director of Swift; Chairman of the Board,
                                   Material Sciences Corporation;
                                   Director, Consolidated Freightways, Inc.,
                                   Fibreboard Corporation, Elco Industries, and
                                   Old Second Bancorp

Raymond O. Loen           74       Director of Swift; President, R. O. Loen
                                   Company

Henry C. Montgomery       63       Director of Swift; Chairman of the Board,
                                   Montgomery Financial Services Corporation;
                                   Director, Southwall Technology Corporation

Clyde W. Smith, Jr.       50       Director of Swift; President, Somerset
                                   Properties, Inc.

Harold J. Withrow         71       Director of Swift

                                   EXECUTIVE OFFICERS

Terry E. Swift            43       President, Chief Operating Officer

John R. Alden             53       Senior Vice President - Finance,
                                   Chief Financial Officer and Secretary

Bruce H. Vincent          51       Senior Vice President - Funds Management

James M. Kitterman        54       Senior Vice President - Operations

Joe A. D'Amico            50       Senior Vice President- Exploration and
                                   Development

Alton D. Heckaman, Jr.    41       Vice President - Finance and Controller
</TABLE>


                                     III-1


<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.


         From time to time, Swift as Managing General Partner of the Partnership
purchases Units in the  Partnership  from investors who offer the Units pursuant
to their right of  presentment,  which  purchases are made pursuant to terms set
out in the  Partnership's  original Limited  Partnership  Agreement.  Due to the
frequency  and  large  number  of  these   transactions,   Swift  reports  these
transactions  under  Section  16 of the  Securities  Exchange  Act of 1934 on an
annual  rather than a monthly  basis.  In some cases such annual  reporting  may
constitute a late filing of the required Section 16 reports under the applicable
Section 16 rules.

Item 11.  Executive Compensation

         As  noted  in  Item  10,  "Directors  and  Executive  Officers  of  the
Registrant,"  above,  the Partnership has no executive  officers.  The executive
officers of Swift and VJM are not compensated by the Partnership.

         Certain fees and  allowances  contemplated  by the Limited  Partnership
Agreement  have been paid by the  Partnership  to Swift and VJM. See Note (4) in
Notes  To  Financial   Statements   (Related-Party   Transactions)  for  further
discussion.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

         Swift Energy Company,  the Managing General  Partner,  located at 16825
Northchase  Drive,  Suite  400,  Houston,   Texas  77060,  owns  27,145  Limited
Partnership Units, which is 10.43 percent of all outstanding Limited Partnership
Units. All Limited Partnership Units owned by Swift were acquired from investors
who  offered  the  Limited   Partnership   Units  pursuant  to  their  right  of
presentment.  As the Managing General Partner, Swift is not permitted generally,
under the Limited Partnership Agreement,  to vote its Limited Partnership Units.
Swift also owns a general  partnership  interest of 9 percent of all partnership
interests in the Partnership.

         Swift and VJM are not aware of any arrangement,  the operation of which
may at a subsequent date result in a change in control of the Partnership.

Item 13.  Certain Relationships and Related Transactions

         As  noted  in  Item  10,  "Directors  and  Executive  Officers  of  the
Registrant," above, the Partnership has no executive officers or directors,  and
thus has not  engaged  in any  transactions  in which  any  such  person  had an
interest.  The Partnership is permitted to engage in certain  transactions  with
Swift as Managing General Partner and VJM as Special General Partner, subject to
extensive  guidelines  and  restrictions  as  described  in  the  "Conflicts  of
Interest"  section  of the  Amended  Prospectus  contained  in the  Registration
Statement, which is incorporated herein by reference.

         Summarized  below are the  principal  transactions  that have  occurred
between the Partnership and Swift, VJM and their affiliates.

         1. The oil and gas properties acquired by the Partnership, as described
in Item 2, "Properties"  above, were typically  acquired initially by Swift from
the  seller  thereof  and  subsequently  transferred  to the  Partnership.  Such
transfers  were made by Swift at its Property  Acquisition  Costs (as defined in
the  Limited  Partnership  Agreement),  less any amounts  received  from sale of
production  between the time of acquisition by Swift and the time of sale to the
Partnership.

         2.  Swift  acts  as  operator  for  many  of the  wells  in  which  the
Partnership  has  acquired  interests  and has  received  compensation  for such
activities in accordance with standard industry operating agreements.

         3. The  Partnership  paid to Swift and VJM certain fees as contemplated
by the  Limited  Partnership  Agreement.  See Note  (4) in  Notes  To  Financial
Statements (Related-Party Transactions) for further discussion.


                                     III-2


<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.

                                     PART IV


<TABLE>
<CAPTION>
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

      a(1)     FINANCIAL STATEMENTS                                   PAGE NO.
                                                                      --------
               <S>                                                      <C>
               Report of independent Public Accountants                 IV-2

               Balance Sheets as of December 31, 1998 and 1997          IV-3

               Statements of Operations for the years ended
                  December 31, 1998, 1997 and 1996                      IV-4

               Statements of Partners' Capital for the years ended
                  December 31, 1998, 1997 and 1996                      IV-5

               Statements of Cash Flows for the years ended
                  December 31, 1998, 1997 and 1996                      IV-6

               Notes to Financial Statements                            IV-7
</TABLE>

       a(2)    FINANCIAL STATEMENT SCHEDULES

               All schedules required by the SEC are either  inapplicable or the
               required information is included in the Financial Statements, the
               Notes thereto, or in other information included elsewhere in this
               report.

       a(3)    EXHIBITS

               3.1    Certificate of Limited  Partnership of Swift Energy Income
                      Partners  1987-B,   Ltd.  (including  Limited  Partnership
                      Agreement of Swift Energy Income  Partners  1987-B,  Ltd.,
                      dated July 21,  1987),  as filed July 23,  1987,  with the
                      Texas  Secretary  of  State  (excluding  list  of  limited
                      partners  filed as part of  Certificate.)  (Form  10-K for
                      year ended December 31, 1988, Exhibit 3.1).

               99.1   A copy of the following  section of the  Prospectus  dated
                      March 19, 1987, contained in Pre-Effective Amendment No. 1
                      to  Registration  Statement  No.  33-11773 on Form S-1 for
                      Swift Energy  Income  Partners  III, as filed on March 19,
                      1987,  which have been  incorporated  herein by reference:
                      "Proposed  Activities"  (pp  30 - 36)  and  "Conflicts  of
                      Interest"  (pp.  70 -  78).  (Form  10-K  for  year  ended
                      December 31, 1989, Exhibit 28.1).

       b(1)    REPORTS ON FORM 8-K

               No reports on Form 8-K have been filed  during the quarter  ended
December 31, 1998.


                                      IV-1


<PAGE>


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To Swift Energy Income Partners 1987-B, Ltd.:

         We have audited the accompanying  balance sheets of Swift Energy Income
Partners 1987-B, Ltd., (a Texas limited partnership) as of December 31, 1998 and
1997, and the related statements of operations, partners' capital and cash flows
for the years ended December 31, 1998, 1997 and 1996. These financial statements
are  the  responsibility  of the  Managing  General  Partner's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

         We conducted our audits in accordance with generally  accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

         In our opinion,  the  financial  statements  referred to above  present
fairly, in all material respects,  the financial position of Swift Energy Income
Partners 1987-B,  Ltd., as of December 31, 1998 and 1997, and the results of its
operations  and its cash flows for the years ended  December 31, 1998,  1997 and
1996, in conformity with generally accepted accounting principles.






                              ARTHUR ANDERSEN LLP




Houston, Texas
February 10, 1999


                                      IV-2


<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.
                                 BALANCE SHEETS
                           DECEMBER 31, 1998 AND 1997



<TABLE>
<CAPTION>
                                                                                             1998                 1997
                                                                                       --------------       --------------
         <S>                                                                           <C>                  <C>
         ASSETS:

         Current Assets:
              Cash and cash equivalents                                                $      252,359       $        1,762 
              Oil and gas sales receivable                                                    199,398              796,119 
              Other                                                                            20,508               11,847 
                                                                                       ---------------      ---------------
                  Total Current Assets                                                        472,265              809,728 
                                                                                       ---------------      ---------------

         Gas Imbalance Receivable                                                                 683                   -- 
                                                                                       ---------------      ---------------

         Oil and Gas Properties, using full cost
              accounting                                                                   24,311,374           24,511,749 
         Less-Accumulated depreciation, depletion
              and amortization                                                            (22,059,511)         (20,931,018)
                                                                                       ---------------      ---------------
                                                                                            2,251,863            3,580,731 
                                                                                       ---------------      ---------------
                                                                                       $    2,724,811       $    4,390,459 
                                                                                       ===============      ===============

         LIABILITIES AND PARTNERS' CAPITAL:

         Current Liabilities:
              Accounts Payable                                                         $       59,977       $      190,865 
                                                                                       ---------------      ---------------

         Deferred Revenues                                                                    177,385              218,986 

         Limited Partners' Capital (260,255.25 Limited Partnership Units;
                                   $100 per unit)                                           2,409,401            3,840,409 
         General Partners' Capital                                                             78,048              140,199 
                                                                                       ---------------      ---------------
                  Total Partners' Capital                                                   2,487,449            3,980,608 
                                                                                       ---------------      ---------------
                                                                                       $    2,724,811       $    4,390,459 
                                                                                       ===============      ===============
</TABLE>


                 See accompanying notes to financial statements.

                                      IV-3


<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.
                            STATEMENTS OF OPERATIONS
              FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996


<TABLE>
<CAPTION>
                                                                      1998             1997              1996
                                                                ---------------  ---------------   ---------------
<S>                                                             <C>              <C>               <C>            
REVENUES:
   Oil and gas sales                                            $       562,521   $    1,366,336   $     1,865,841 
   Interest income                                                       20,679          111,540             2,039 
   Other                                                                  3,795           10,907            28,020 
                                                                ---------------  ---------------   --------------- 
                                                                        586,995        1,488,783         1,895,900 
                                                                ---------------  ---------------   --------------- 

COSTS AND EXPENSES:
   Lease operating                                                      238,588          509,552           489,649 
   Production taxes                                                      27,099           73,728            88,698 
   Depreciation, depletion
     and amortization -
        Normal provision                                                315,391          411,108           551,679 
        Additional provision                                            813,102          156,097             4,650 
   General and administrative                                           160,653          226,193           326,998 
   Interest expense                                                          --              732             9,566 
                                                                ---------------  ---------------   --------------- 
                                                                      1,554,833        1,377,410         1,471,240 
                                                                ---------------  ---------------   --------------- 
INCOME (LOSS)                                                   $      (967,838) $       111,373   $       424,660 
                                                                ===============  ===============   =============== 
</TABLE>


                 See accompanying notes to financial statements.

                                      IV-4


<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.
                         STATEMENTS OF PARTNERS' CAPITAL
              FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996


<TABLE>
<CAPTION>
                                                  Limited           General         Combining
                                                  Partners          Partners        Adjustment            Total
                                              ---------------   ---------------  ---------------    ---------------
<S>                                           <C>               <C>              <C>                <C>           
Balance,
    December 31, 1995                         $     4,037,285   $       147,800  $       419,393     $    4,604,478 

Income (Loss)                                         383,492            82,803          (41,635)           424,660 

Cash Distributions                                   (396,900)          (88,457)              --           (485,357)
                                              ---------------   ---------------  ---------------    --------------- 
Balance,
    December 31, 1996                               4,023,877           142,146          377,758          4,543,781 
                                              ---------------   ---------------  ---------------    --------------- 

Income (Loss)                                         140,202            54,499          (83,328)           111,373 

Cash Distributions                                   (618,100)          (56,446)              --           (674,546)
                                              ---------------   ---------------  ---------------    --------------- 
Balance,
    December 31, 1997                               3,545,979           140,199          294,430          3,980,608 
                                              ---------------   ---------------  ---------------    --------------- 

Income (Loss)                                        (799,209)            1,270         (169,899)          (967,838)

Cash Distributions                                   (461,900)          (63,421)              --           (525,321)
                                              ---------------   ---------------  ---------------    --------------- 
Balance,
    December 31, 1998                         $     2,284,870   $        78,048  $       124,531     $    2,487,449 
                                              ===============   ===============  ===============    =============== 



Limited Partners' net income (loss)
    per unit

      1996                                    $          1.47 
                                                    ========= 
      1997                                    $           .54 
                                                    ========= 
      1998                                    $         (3.07)
                                                    ========= 
</TABLE>


                 See accompanying notes to financial statements.

                                      IV-5


<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.
                            STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996


<TABLE>
<CAPTION>
                                                                                       1998              1997            1996
                                                                                 ---------------   ---------------  ---------------
<S>                                                                              <C>               <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Income (Loss)                                                                $      (967,838)  $       111,373  $       424,660 
    Adjustments to reconcile income (loss) to
      net cash provided by operations:
      Depreciation, depletion and amortization                                         1,128,493           567,205          556,329 
      Change in gas imbalance receivable
          and deferred revenues                                                          (42,284)           (1,408)         (22,813)
      Change in assets and liabilities:
        (Increase) decrease in oil and gas sales receivable                              596,721          (353,629)          17,817 
        (Increase) decrease in other current assets                                       (8,661)          (11,847)              -- 
        Increase (decrease) in accounts payable                                         (130,888)           (9,231)        (632,063)
                                                                                 ---------------   ---------------  --------------- 
                  Net cash provided by (used in) operating activities                    575,543           302,463          343,930 
                                                                                 ---------------   ---------------  --------------- 
CASH FLOWS FROM INVESTING ACTIVITIES:
    Additions to oil and gas properties                                                  (81,736)         (172,971)        (123,283)
    Proceeds from sales of oil and gas properties                                        282,111           439,291          413,865 
                                                                                 ---------------   ---------------  --------------- 
                  Net cash provided by (used in) investing activities                    200,375           266,320          290,582 
                                                                                 ---------------   ---------------  --------------- 
CASH FLOWS FROM FINANCING ACTIVITIES:
    Cash distributions to partners                                                      (525,321)         (674,546)        (485,357)
    Payments on note payable                                                                  --                --          (42,669)
                                                                                 ---------------   ---------------  --------------- 
                  Net cash provided by (used in) financing activities                   (525,321)         (674,546)        (528,026)
                                                                                 ---------------   ---------------  --------------- 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                     250,597          (105,763)         106,486 
                                                                                 ---------------   ---------------  --------------- 
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                             1,762           107,525            1,039 
                                                                                 ---------------   ---------------  --------------- 
CASH AND CASH EQUIVALENTS AT END OF YEAR                                         $       252,359   $         1,762  $       107,525 
                                                                                 ===============   ===============  =============== 
Supplemental disclosure of cash flow information:
    Cash paid during the year for interest                                       $            --   $           732  $        10,637 
                                                                                 ===============   ===============  =============== 
Supplemental disclosure of non-cash investing activities:
  Oil and gas properties disposition for which cash will be
  received in a subsequent period                                                $            --   $            --  $       108,997 
                                                                                 ===============   ===============  ===============
</TABLE>


                 See accompanying notes to financial statements.

                                      IV-6


<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.
                          NOTES TO FINANCIAL STATEMENTS


(1) Organization and Terms of Partnership Agreement -

         Swift Energy Income Partners 1987-B,  Ltd., a Texas limited partnership
("the Partnership"),  was formed on July 23, 1987, 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
3,177 limited partners made total capital contributions of $26,025,525.

         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.

         Initially, 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, as defined,  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. Payout had not occurred
as of December 31, 1998.

(2) 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 --

     The  Partnership  accounts  for  its  ownership  interest  in oil  and  gas
properties   using  the   proportionate   consolidation   method,   whereby  the
Partnership's share of assets, liabilities, revenues and expenses is included in
the appropriate classification in the financial statements.

         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 years
ended December 31, 1998, 1997 and 1996.

         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.  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.


                                      IV-7


<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


         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.

Cash and Cash Equivalents --

         Highly liquid debt instruments with an initial maturity of three months
or less are considered to be cash equivalents.

Reclassifications --

         Certain  reclassifications have been made to the prior year balances to
conform with the current year presentation.

(3) Oil and Gas Capitalized Costs -

         The  following  table sets forth  capital  expenditures  related to the
Partnership's oil and gas operations:

<TABLE>
<CAPTION>
                                             Year Ended December 31,
                                   --------------------------------------------
                                      1998              1997              1996
                                   ---------           -------           ------
         <S>                       <C>               <C>              <C>
         Acquisition of
           proved properties       $      --        $       --        $      --

         Development                  81,736           172,971          123,283
                                   ---------           -------          -------
                                   $  81,736        $  172,971        $ 123,283
                                   ---------           -------          -------
</TABLE>


         All oil and gas  property  acquisitions  are made by Swift on behalf of
the Partnership. The costs of the properties include the purchase price plus any
costs incurred by Swift in the evaluation and acquisition of properties.


                                      IV-8


<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


         During 1998, 1997 and 1996, the  Partnership's  unamortized oil and gas
property costs exceeded the quarterly  calculations of the "ceiling  limitation"
resulting in additional provisions for depreciation,  depletion and amortization
of  $813,102,  $156,097  and  $4,650,  respectively.  In  addition,  the limited
partners'  share  of  unamortized  oil and gas  property  costs  exceeded  their
"ceiling  limitation"  in 1998 and 1997,  resulting in a valuation  allowance of
$665,344 and  $97,026,  respectively.  These  amounts are included in the income
(loss) attributable to the limited partners shown in the statements of partners'
capital together with a "combining  adjustment," for the differences between the
limited partners'  valuation  allowances and the Partnership's full cost ceiling
write down. The "combining  adjustment"  changes  quarterly as the Partnership's
total  depreciation,  depletion and amortization  provision is more or less than
the combined depreciation,  depletion and amortization provision attributable to
the general and limited partners.

(4) Related-Party Transactions -

         An  affiliate  of the  Special  General  Partner,  as  Dealer  Manager,
received   $650,638  for  managing  and   overseeing  the  offering  of  limited
partnership units.

         A  one-time  management  fee of  $650,638  was  paid  Swift in 1987 for
services  performed  for the  Partnership.  During  1998,  1997  and  1996,  the
Partnership paid Swift $80,152, $123,424, and $223,455, respectively, as general
and administrative overhead allowances.

(5) Federal Income Taxes -

         The Partnership is not a tax-paying entity. No provision is made in the
accounts of the Partnership for federal or state income taxes,  since such taxes
are liabilities of the individual partners,  and the amounts thereof depend upon
their respective tax situations.

         The tax returns and the amount of distributable  Partnership income are
subject to  examination  by the federal  and state  taxing  authorities.  If the
Partnership's  ordinary  income for federal  income tax  purposes is  ultimately
changed by the taxing  authorities,  the tax  liability of the limited  partners
could be changed  accordingly.  Ordinary  income  reported on the  Partnership's
federal  return of income for the years ended  December 31, 1998,  1997 and 1996
was  $225,560,  $650,772 and  $962,546,  respectively.  The  difference  between
ordinary income for federal income tax purposes  reported by the Partnership and
net income or loss  reported  herein  primarily  results  from the  exclusion of
depletion  (as  described   below)  from   ordinary   income   reported  in  the
Partnership's federal return of income.

         For federal  income tax purposes,  depletion with respect to production
of  oil  and  gas  is  computed  separately  by  the  partners  and  not  by the
Partnership.  Since the amount of depletion on the  production of oil and gas is
not  computed  at  the  Partnership  level,  depletion  is not  included  in the
Partnership's  income for federal income tax purposes but is charged directly to
the  partners'  capital  accounts  to the  extent  of the cost of the  leasehold
interests, and thus is treated as a separate item on the partners' Schedule K-1.
Depletion  for  federal  income tax  purposes  may vary from that  computed  for
financial reporting purposes in cases where a ceiling adjustment is recorded, as
such amount is not recognized for tax purposes.


                                      IV-9


<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


(6) Gas Imbalances -

         The  Partnership  recognizes  its  ownership  interest  in natural  gas
production as revenue.  Actual production  quantities sold may be different than
the Partnership's  ownership share in a given period. If the Partnership's sales
exceed its  ownership  share of  production,  the  differences  are  recorded as
deferred revenue. Gas balancing  receivables are recorded when the Partnership's
ownership share of production exceeds sales.

(7) Vulnerability Due to Certain Concentrations -

         The Partnership'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.

         In the normal  course of  business,  the  Partnership  extends  credit,
primarily  in the form of  monthly  oil and gas sales  receivables,  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.

(8) 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.


                                     IV-10


<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD

                                 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-B, LTD.
                                             (Registrant)

                                    By:      SWIFT ENERGY COMPANY
                                              General Partner

Date:      March 12, 1999                 By:      s/b A. Earl Swift
           --------------                    -----------------------------------
                                             A. Earl Swift
                                             Chief Executive Officer

Date:      March 12, 1999                 By:      s/b John R. Alden
           --------------                    -----------------------------------
                                             John R. Alden
                                             Principal Financial Officer

Date:      March 12, 1999                 By:      s/b Alton D. Heckaman, Jr.
           --------------                    -----------------------------------
                                             Alton D. Heckaman, Jr.
                                             Principal Accounting Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.

                                             SWIFT ENERGY INCOME
                                             PARTNERS 1987-B, LTD.
                                             (Registrant)

                                    By:      SWIFT ENERGY COMPANY
                                              General Partner

Date:     March 12, 1999                  By:      s/b A. Earl Swift
          --------------                     -----------------------------------
                                             A. Earl Swift
                                             Director and Principal
                                             Executive Officer

Date:     March 12, 1999                  By:      s/b Virgil N. Swift
          --------------                     -----------------------------------
                                             Virgil N. Swift
                                             Director and Executive
                                             Vice President - Business
                                             Development


                                     IV-11


<PAGE>


                    SWIFT ENERGY INCOME PARTNERS 1987-B, LTD


Date:      March 12, 1999                 By:      s/b G. Robert Evans
           --------------                    -----------------------------------
                                             G. Robert Evans
                                             Director

Date:      March 12, 1999                 By:      s/b Raymond O. Loen
           --------------                    -----------------------------------
                                             Raymond O. Loen
                                             Director

Date:      March 12, 1999                 By:      s/b Henry C. Montgomery
           --------------                    -----------------------------------
                                             Henry C. Montgomery
                                             Director

Date:      March 12, 1999                 By:      s/b Clyde W. Smith, Jr.
           --------------                    -----------------------------------
                                             Clyde W. Smith, Jr.
                                             Director

Date:      March 12, 1999                 By:      s/b Harold J. Withrow
           --------------                    -----------------------------------
                                             Harold J. Withrow
                                             Director


                                     IV-12