United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
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 0-14233
ENEX PROGRAM I PARTNERS, L.P.
(Exact name of small business issuer as specified in its Charter)
New Jersey 76-0175128
(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) has 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
Transitional Small Business Disclosure Format (Check one):
Yes No x
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ENEX PROGRAM I PARTNERS, L.P.
BALANCE SHEET
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JUNE 30,
ASSETS 1996
-----------------
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 36,660
Accounts receivable - oil & gas sales 475,367
Receivable from litigation settlement 267,319
Other current assets 141,253
-------------
Total current assets 920,599
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OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 83,407,217
Less accumulated depreciation and depletion 80,034,949
-------------
Property, net 3,372,268
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TOTAL $ 4,292,867
=============
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 162,782
Payable to general partner 13,158
-------------
Total current liabilities 175,940
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PARTNERS' CAPITAL:
Limited partners 3,119,385
General partner 997,542
-------------
Total partners' capital 4,116,927
-------------
TOTAL $ 4,292,867
=============
Number of $500 Limited Partner units outstanding 193,629
See accompanying notes to financial statements.
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I-1
ENEX PROGRAM I PARTNERS, 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. On August 9, 1996, the Company's General Partner submitted preliminary
proxy material to the Securities Exchange Commission with respect to a
proposed consolidation of the Company with 33 other managed limited
partnerships. The terms and conditions of the proposed consolidation
are set forth in such preliminary proxy material.
3. The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standard ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of," which
requires certain assets to be reviewed for impairment whenever events or
circumstances indicate the carrying amount may not be recoverable. Prior to
this pronouncement, the Company assessed properties on an aggregate basis.
Upon adoption of SFAS 121, the Company began assessing properties on an
individual basis, wherein total capitalized costs may not exceed the
property's fair market value. The fair market value of each property was
determined by H. J. Gruy and Associates, ("Gruy"). To determine the fair
market value, Gruy estimated each property's oil and gas reserves, applied
certain assumptions regarding price and cost escalations, applied a 10%
discount factor for time and certain discount factors for risk, location,
type of ownership interest, category of reserves, operational
characteristics, and other factors. In the first quarter of 1996, the
Company recognized a non-cash impairment provision of $125,097 for certain
oil and gas properties due to market indications that the carrying amounts
were not fully recoverable.
I-4
partially offset by a 14% decrease in gas production. Gas plant sales increased
to $437,738 in 1996 from $333,006 in 1995. This represents an increase of
$104,732 (31%). A 33% increase in the average sales price of gas plant products
increased sales by $107,686. This increase was partially offset by a 1% decrease
in the production of gas plant products. The decreases in oil, gas and gas plant
production were primarily due to natural production declines. The changes in
average sales prices correspond with changes in the overall market for the sale
of oil, gas and gas plant products.
Lease operating expenses increased to $383,029 in 1996 from $368,215 in 1995.
The increase of $14,814 (4%) is primarily due to workover expenses incurred on
the A&W acquisition in 1996. Gas plant purchases increased to $346,052 in the
first half of 1996 from $245,419 in the first half of 1995. The increase of
$100,633 or 41% corresponds with the increase in gas plant product sales, as
noted above.
Depreciation and depletion expense increased to $332,104 in the first half of
1996 from $330,195 in the first half of 1995. This represents an increase of
$1,909 (1%). An 11% increase in the depletion rate increased depreciation and
depletion expense by $31,632. This increase was partially offset by the changes
in production, noted above. The increase in the depletion rate was primarily due
to relatively higher depreciation on the gas plant due to a downward revision of
the gas plant reserves during December 1995, partially offset by the lower
property basis resulting from the recognition of an property impairment of
$125,097 in the first quarter of 1996.
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standard ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long- Lived Assets to be Disposed Of," which requires
certain assets to be reviewed for impairment whenever events or circumstances
indicate the carrying amount may not be recoverable. Prior to this
pronouncement, the Company assessed properties on an aggregate basis. Upon
adoption of SFAS 121, the Company began assessing properties on an individual
basis, wherein total capitalized costs may not exceed the property's fair market
value. The fair market value of each property was determined by H. J. Gruy and
Associates, ("Gruy"). To determine the fair market value, Gruy estimated each
property's oil and gas reserves, applied certain assumptions regarding price and
cost escalations, applied a 10% discount factor for time and certain discount
factors for risk, location, type of ownership interest, category of reserves,
operational characteristics, and other factors. In the first quarter of 1996,
the Company recognized a non-cash impairment provision of $125,097 for certain
oil and gas properties due to market indications that the carrying amounts were
not fully recoverable.
General and administrative expenses decreased to $459,882 in 1996 from $468,890
in 1995. This decrease of $9,008 (2%) is primarily due to lower direct expenses
incurred by the Company in the first half of 1996.
I-6
CAPITAL RESOURCES AND LIQUIDITY
The Company's cash flow is a direct result of the amount of net proceeds
realized from the sale of oil and gas production and the repayment of its debt
obligations. Accordingly, the changes in cash flow from 1995 to 1996 are
primarily due to the changes in oil and gas sales described above and the
repayment of the Company's debt obligations. It is the general partner's
intention to distribute substantially all of the Company's available cash flow,
after debt repayment, to the Company's partners. The Company's "available cash
flow" is the net amount of cash flow provided by operations net of financing and
investing activities.
The Company discontinued the payment of distributions during 1990. In the fourth
quarter of 1995, the Company paid a distribution of $730,913 to its limited
partners. The distribution in 1995 was primarily the result of the receipt of
$744,127 as proceeds from the sale of properties. Future distributions are
dependent upon, among other things, future prices received for oil and gas. The
Company will continue to recover its reserves and reduce its debt obligations.
It is anticipated that the periodic distributions will be made in the future as
cash becomes available.
On August 9, 1996, the Company's General Partner submitted preliminary proxy
material to the Securities Exchange Commission with respect to a proposed
consolidation of the Company with 33 other managed limited partnerships. The
terms and conditions of the proposed consolidation are set forth in such
preliminary proxy material.
As of June 30, 1996, the Company had no material commitments for capital
expenditures. The Company does not intend to engage in any significant
developmental drilling activity.
I-7
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant has this report to be signed on its behalf by the undersigned
thereunto duly authorized.
ENEX PROGRAM I PARTNERS, 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 7, 1996 By: /s/ James A. Klein
-------------------
James A. Klein
Controller and Chief
Accounting Officer