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 0-16552
ENEX OIL & GAS INCOME PROGRAM III - SERIES 4, L.P.
(Exact name of small business issuer as specified in its charter)
New Jersey 76-0179822
(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 OIL & GAS INCOME PROGRAM III - SERIES 4, L.P.
BALANCE SHEET
- --------------------------------------------------------------------------------
September 30,
ASSETS 1995
-------------
(Unaudited)
CURRENT ASSETS:
Cash ......................................................... $ 2,935
Accounts receivable - oil & gas sales ........................ 17,951
Other current assets ......................................... 14,696
----------
Total current assets ........................................... 35,582
----------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities ........ 1,692,294
Less accumulated depreciation and depletion ................. 1,234,857
----------
Property, net .................................................. 457,437
----------
TOTAL .......................................................... $ 493,019
==========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable ............................................ $ 19,791
Payable to affiliated limited partnership ................... 665
Payable to general partner .................................. 18,780
----------
Total current liabilities ...................................... 39,236
----------
NONCURRENT PAYABLE TO GENERAL PARTNER .......................... 150,238
----------
PARTNERS' CAPITAL:
Limited partners ............................................ 290,987
General partner ............................................. 12,558
----------
Total partners' capital ........................................ 303,545
----------
TOTAL .......................................................... $ 493,019
==========
<FN>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
</FN>
I-1
ENEX OIL & GAS INCOME PROGRAM III - SERIES 4, L.P.
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------------------
(UNAUDITED) QUARTER ENDED NINE MONTHS ENDED
--------------------------- -----------------------------
September 30, September 30, September 30, September 30,
1995 1994 1995 1994
------------- ------------- ------------- -------------
REVENUES:
Oil and gas sales ........ $ 33,895 $ 39,348 $ 114,131 $ 117,889
--------- ---------- ---------- -----------
EXPENSES:
Depreciation and depletion 13,025 16,760 38,548 52,196
Lease operating expenses . 27,360 22,944 73,220 56,354
Production taxes ......... 2,178 2,139 8,006 6,564
General and administrative 6,126 6,850 20,865 26,502
--------- ---------- ---------- -----------
Total expenses ............. 48,689 48,693 140,639 141,616
--------- ---------- ---------- -----------
OTHER INCOME:
Gain on sale of property 3,969 -- 3,969 --
--------- ---------- ---------- -----------
NET (LOSS) ................. $(10,825) $ (9,345) $ (22,539) $ (23,727)
========= ========== ========== ==========
<FN>
See accompanying notes to financial statements.
- ---------------------------------------------------------------------------------------------
</FN>
I-2
ENEX OIL AND GAS INCOME PROGRAM III - SERIES 4, 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 (loss) .................................... $(22,539) $(23,727)
--------- ---------
Adjustments to reconcile net (loss) to net
cash provided by operating activities:
Depreciation and depletion .................. 38,548 52,196
Gain on sale of property .................... (3,969) --
(Increase) decrease in:
Accounts receivable - oil & gas sales ....... 965 3,603
Other current assets ........................ (11,830) (55)
Increase (decrease) in:
Accounts payable ........................... 5,856 82
Payable to affiliated partnership .......... (15) --
Payable to general partner ................. (5,316) 5,053
-------- --------
Total adjustments ............................. 24,239 60,879
-------- --------
Net cash provided by operating activities ..... 1,700 37,152
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property ............ 10,000 --
Property additions - development costs .... (2,059) (2,702)
-------- --------
Net cash provided by investing activities ..... 7,941 (2,702)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ......................... (7,507) (35,948)
-------- --------
NET INCREASE (DECREASE) IN CASH ............... 2,134 (1,498)
CASH AT BEGINNING OF YEAR ..................... 801 3,180
-------- --------
CASH AT END OF PERIOD ......................... $ 2,935 $ 1,682
========= ========
<FN>
See accompanying notes to financial statements.
- ------------------------------------------------------------------------------
</FN>
I-3
ENEX OIL & GAS INCOME PROGRAM III - SERIES 4, 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 in-
terest in the Shana acqusition for $10,000. A gain of $3,969 was re-
cognized from 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 $39,348 in 1994 to
$33,895 in 1995. This represents a decrease of $5,453 (14%). Oil sales decreased
by $1,338 (4%). A 12% decrease in the average oil sales price caused sales to
decrease by $4,192. This decrease was partially offset by a 9% increase in oil
production. Gas sales decreased by $4,115 (58%). A 14% decrease in the average
gas sales price reduced sales by $466. A 52% decrease in gas production reduced
sales by an additional $3,649. The changes in average sales prices correspond
with changes in the overall market for the sale of oil and gas. The higher oil
production was primarily the result of the shut-in of production, in the third
quarter of 1994, from the Corkscrew acquisition, partially offset by natural
production declines. The lower gas production was primarily due to the shut-in
of productin from the Hightower acquisition to perform a workover in the third
quarter of 1995 and due to natural production declines, which were especially
pronounced on the Pecan Island acquisition.
Lease operating expenses increased from $22,944 in 1994 to $27,360 in 1995. The
increase of $4,416 (19%) is primarily due to costs incurred to perform a
workover on the Hightower acquisition in the third quarter of 1995.
Depreciation and depletion expense decreased from $16,760 in the third quarter
of 1994 to $13,025 in the third quarter of 1995. This represents a decrease of
$3,735 (22%). The decline in production, noted above, reduced depreciation and
depletion expense by $650. A 19% decrease in the depletion rate reduced
depreciation and depletion expense by an additional $3,085. This rate decrease
is primarily the result of an upward revision of the oil and gas reserves at
December 31, 1994.
In the third quarter of 1995, the Company sold a portion of its interest in the
Shana acqusition for $10,000. A gain of $3,969 was recognized from the sale.
General and administrative expenses decreased from $6,850 in 1994 to $6,126 in
1995. This decrease of $724 (11%) is primarily due to less staff time being
required to manage the Company's operations in 1995.
First Nine Months in 1995 Compared to First Nine Months in 1994
Oil and gas sales for the first nine months decreased from $117,889 in 1994 to
$114,131 in 1995. This represents a decrease of $3,758 (3%). Oil sales increased
by $29,832 (35%). A 35% increase in the average oil sales price caused sales to
increase by $29,749. A 1% increase in oil production increased sales by an
additional $109. Gas sales decreased by $33,590 (105%). A 110% decrease in the
average gas sales price reduced sales by $15,585. A 56% decrease in gas
production reduced sales by an additional $18,005. The increase in average oil
sales price was primarily the result of lower net profits payments on the Shana
acquisition which had a pump replaced on the Dorothy Stevens #4 well, coupled
I-5
with higher prices in the overall market for the sale of oil. The decrease in
the average gas sales price was primarily the result of lower prices in the
overall market for the sale of gas coupled with relatively higher production
from properties with a relatively lower gas price. The higher oil production was
primarily the result of the shut-in of production, in 1994, from the Corkscrew
acquisition, partially offset by natural production declines. The lower gas
production was primarily due to the shut-in of production from the Shana and
Hightower acquisitions,to perform workovers in 1995, coupled with natural
production declines.
Lease operating expenses increased from $56,354 in 1994 to $73,220 in 1995. The
increase of $16,866 (30%) is primarily due to costs incurred to perform a
workover on the Shana and Hightower acquisitions in 1995.
Depreciation and depletion expense decreased from $52,196 in the first nine
months of 1994 to $38,547 in the first nine months of 1995. This represents a
decrease of $13,649 (26%). The decline in production, noted above, reduced
depreciation and depletion expense by $6,573. A 16% decrease in the depletion
rate reduced depreciation and depletion expense by an additional $7,076. This
rate decrease is primarily the result of an upward revision of the oil and gas
reserves at December 31, 1994.
In the third quarter of 1995, the Company sold a portion of its interest in the
Shana acqusition for $10,000. A gain of $3,969 was recognized from the sale.
General and administrative expenses decreased from $26,502 in 1994 to $20,865 in
1995. This decrease of $5,637 (21%) is primarily due to less staff time being
required to manage the Company's operations in 1995.
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 April 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 from 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.
As of September 30, 1995, the Company had no material commitments for capital
expenditures. The Company does not intend to engage in any significant
developmental drilling activity.
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 OIL & GAS INCOME
PROGRAM III - SERIES 4, 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