United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from...............to...............
Commission file number 0-16549
ENEX INCOME AND RETIREMENT FUND - SERIES 1, L.P.
(Exact name of small business issuer as specified in its charter)
New Jersey 76-0222813
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 200, Three Kingwood Place
Kingwood, Texas 77339
(Address of principal executive offices)
Issuer's telephone number:
(713) 358-8401
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes x No
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ENEX INCOME AND RETIREMENT FUND - SERIES 1, L.P.
BALANCE SHEET
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September 30,
ASSETS 1995
-------------
(Unaudited)
CURRENT ASSETS:
Cash .......................................... $ 789
Accounts receivable - oil & gas sales ......... 16,059
Receivable from affiliated limited partnership 340
Other current assets .......................... 42,338
----------
Total current assets ............................ 59,526
----------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests ............................ 1,148,114
Less depletion ................................ 742,829
----------
Property, net ................................... 405,285
----------
TOTAL ........................................... $ 464,811
==========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable ............................. $ 13
Payable to general partner ................... 21,280
----------
Total current liabilities ....................... 21,293
----------
NONCURRENT PAYABLE TO GENERAL PARTNER ........... 170,243
----------
PARTNERS' CAPITAL:
Limited partners ............................. 264,401
General partner .............................. 8,874
----------
Total partners' capital ......................... 273,275
----------
TOTAL ........................................... $ 464,811
==========
<FN>
See accompanying notes to financial statements.
- ----------------------------------------------------------------------
</FN>
I-1
ENEX INCOME AND RETIREMENT FUND - SERIES 1, L.P.
STATEMENTS OF OPERATIONS
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(UNAUDITED) QUARTER ENDED NINE MONTHS ENDED
--------------------------- ---------------------------
September 30, September 30, September 30, September 30,
1995 1994 1995 1994
------------- ------------- ------------- -------------
REVENUES:
Oil and gas sales ......... $15,422 $21,172 $58,276 $77,217
-------- -------- -------- --------
EXPENSES:
Depletion ................. 9,932 10,717 27,525 36,493
Production taxes .......... 894 880 1,799 2,787
General and administrative 6,284 7,217 20,908 28,055
-------- -------- -------- --------
Total expenses .............. 17,110 18,814 50,232 67,335
-------- -------- -------- --------
INCOME (LOSS) FROM OPERATIONS (1,688) 2,358 8,044 9,882
-------- -------- -------- --------
OTHER INCOME:
Interest income ............. 15 -- 15 --
Gain on sale of property .... 37,624 -- 37,624 --
-------- -------- -------- --------
Total other income .......... 37,639 -- 37,639 --
-------- -------- -------- --------
NET INCOME .................. $35,951 $ 2,358 $45,683 $ 9,882
======== ======== ======== ========
<FN>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------------
</FN>
I-2
ENEX INCOME AND RETIREMENT FUND - SERIES 1, L.P.
STATEMENTS OF CASH FLOWS
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(UNAUDITED)
NINE MONTHS ENDED
-----------------------------
September 30, September 30,
1995 1994
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ..................................... $ 45,683 $ 9,882
--------- ---------
Adjustments to reconcile net income to net
cash provided by operating activities:
(Gain) on sale of property ................... (37,624) --
Depletion .................................... 27,525 36,493
(Increase) in:
Accounts receivable - oil & gas sales ........ (3,579) (1,193)
Other current assets ......................... (42,338) --
Increase (decrease) in:
Accounts payable ............................ (3,012) (938)
Payable to general partner .................. (30,042) 11,853
-------- --------
Total adjustments .............................. (89,070) 46,215
-------- --------
Net cash provided (used) by operating activities (43,387) 56,097
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of property ............... 42,338 --
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions .......................... (10,133) (55,436)
-------- --------
NET INCREASE (DECREASE) IN CASH ................ (11,182) 661
CASH AT BEGINNING OF YEAR ...................... 11,971 10,857
-------- --------
CASH AT END OF PERIOD .......................... $ 789 $ 11,518
========= ========
<FN>
See accompanying notes to financial statements.
- -------------------------------------------------------------------------------
</FN>
I-3
ENEX INCOME AND RETIREMENT FUND - SERIES 1, L.P.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
1. The interim financial information included herein is unaudited;
however, such information reflects all adjustments (consisting solely
of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair presentation of results for the
interim periods.
2. In the third quarter of 1995, the Company sold a portion of its
interest in the Larto Lake acquisition for $20,000. A gain of $15,286
was recognized on the sale. Also, in the third quarter, the Company
sold a portion of its interest in the Corinne acquisition for $22,338.
A gain of $22,338 was recognized on the sale.
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Item 2. Management's Discussion and Analysis or Plan of Operation.
Third Quarter 1995 Compared to Third Quarter 1994
Oil and gas sales for the third quarter decreased from $21,172 in 1994 to
$15,422 in 1995. This represents a decrease of $5,750 (27%). Oil sales decreased
by $2,745 (33%). A 57% decrease in oil production reduced sales by $4,807. This
decrease was partially offset by a 58% increase in the average net oil sales
price. Gas sales decreased by $3,005 (23%). A 26% decrease in the average net
gas sales price reduced sales by $3,408. This decrease was partially offset by a
3% increase in gas production. The decrease in oil production was primarily the
result of natural production declines, which were especially pronounced on the
Larto Lake acquisition. The increase in gas production was primarily the result
of the shut-in of production from the Corinne acquisition in 1994 due for
overproduction and higher production from the East Cameron acquisition due to a
recompletion in the fourth quarter of 1994. The increase in the average net oil
sales price was primarily the result of lower operating costs, due to a workover
performed in 1994 on the Larto Lake acquisition, in which the Company has a net
profits interest. The decrease in the average net gas sales price was primarily
due to higher operating costs incurred due to a pump replacement on the Shana
acquisition, in which the Company has a net profits interest.
Depletion expense decreased from $10,717 in the third quarter of 1994 to $9,932
in the third quarter of 1994. This represents a decrease of $785 (7%). The
changes in production, noted above, reduced depletion expense by $2,989. This
decrease was partially offset by a 29% increase in the depletion rate. The rate
increase is primarily the result of a downward revision of the oil reserves at
December 31, 1994, partially offset by an upward revision of the gas reserves at
December 31, 1994.
In the third quarter of 1995, the Company sold a portion of its interest in the
Larto Lake acquisition for $20,000. A gain of $15,286 was recognized on the
sale. Also, in the third quarter, the Company sold a portion of its interest in
the Corinne acquisition for $22,338. A gain of $22,338 was recognized on the
sale.
General and administrative expenses decreased from $7,217 in 1994 to $6,284 in
1995. This decrease of $933 (13%) is primarily due to less staff time being
required to manage the Company's operations.
First Nine Months in 1995 Compared to First Nine Months in 1994
Oil and gas sales for the first nine months decreased from $77,217 in 1994 to
$58,276 in 1995. This represents a decrease of $18,941 (25%). Oil sales
decreased by $438 (1%). A 38% decrease in oil production reduced sales by
$11,596. This decrease was partially offset by a 58% increase in the average net
oil sales price. Gas sales decreased by $18,503 (40%). A 34% decrease in gas
production reduced sales by $15,781. A 9% decrease in the average net gas sales
price reduced sales by an additional $2,722. The decrease in oil production was
primarily a result
I-5
of the partial shut-in of production from the Larto Lake acquisition to
perform a workover which was successfully completed in the first quarter of
1995, coupled with natural production declines. The decrease in gas production
was primarily the result of the shut-in of production for two weeks in February
1995 from the Deal acquisition and due to natural production declines which were
especially pronounced on the Pecan Island acquisition. The increase in average
net oil sales prices was a result of lower operating costs incurred on the
Company's net profits royalty properties, especially the Larto Lake acquisition
which incurred workover costs in 1994, coupled with higher prices in the overall
market for the sale of oil. The decrease in average gas net sales price was a
result of lower prices in the overall market for the sale of gas coupled with
higher costs incurred on the Shana acquisition due to a pump replacement.
Depletion expense decreased from $36,493 in the first nine months of 1994 to
$27,525 in the first nine months of 1995. This represents a decrease of $8,968
(25%). The changes in production, noted above, reduced depletion expense by
$13,051. This decrease was partially offset by a 17% increase in the depletion
rate. This rate increase is primarily the result of a downward revision of the
oil reserves at December 31, 1994, partially offset by an upward revision of the
gas reserves at December 31, 1994.
In the third quarter of 1995, the Company sold a portion of its interest in the
Larto Lake acquisition for $20,000. A gain of $15,286 was recognized on the
sale. Also, in the third quarter, the Company sold a portion of its interest in
the Corinne acquisition for $22,338. A gain of $22,338 was recognized on the
sale.
General and administrative expenses decreased from $28,055 in 1994 to $20,908 in
1995. This decrease of $7,147 (25%) is primarily due to less staff time being
required to manage the Company's operations.
CAPITAL RESOURCES AND LIQUIDITY
The Company's cash flow from operations is a direct result of the amount of net
proceeds realized from the sale of oil and gas production. Accordingly, the
changes in cash flow from 1994 to 1995 are primarily due to the changes in oil
and gas sales described above. It is the general partner's intention to
distribute substantially all of the Company's available cash flow to the
Company's partners.
The Company discontinued the payment of distributions in January 1995.
Future distributions are dependent upon, among other things, an increase in
prices received for oil and gas. The Company will continue to recover its
reserves and distribute to the limited partners the net proceeds realized form
the sale of oil and gas production. Distribution amounts are subject to change
if net revenues are greater or less than expected. Future periodic distributions
will be made once sufficient net revenues are accumulated.
I-6
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders.
Not Applicable
Item 5. Other Information.
Not Applicable
Item 6. Exhibits and Reports on Form 8-K.
(a) There are no exhibits to this report.
(b) The Company filed no reports on Form 8-K during the
quarter ended September 30, 1995.
II-1
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
ENEX INCOME AND RETIREMENT
FUND - SERIES 1, L.P.
---------------------
(Registrant)
By:ENEX RESOURCES CORPORATION
--------------------------
General Partner
By: /s/ R. E. Densford
-------------------
R. E. Densford
Vice President, Secretary
Treasurer and Chief Financial
Officer
November 11, 1995 By: /s/ James A. Klein
-------------------
James A. Klein
Controller and Chief
Accounting Officer