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 March 31, 1997
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 0-15433
ENEX OIL & GAS INCOME PROGRAM III - SERIES 1, L.P.
(Exact name of small business issuer specified in its charter)
New Jersey 76-0179821
(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 1, L.P.
BALANCE SHEET
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MARCH 31,
ASSETS 1997
---------------------
(Unaudited)
CURRENT ASSETS:
Cash $ 7,476
Accounts receivable - oil & gas sales 15,241
Other current assets 724
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Total current assets 23,441
---------------------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 1,153,642
Less accumulated depreciation and depletion 933,537
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Property, net 220,105
---------------------
TOTAL $ 243,546
=====================
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 8,470
Payable to general partner 160,492
---------------------
Total current liabilities 168,962
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PARTNERS' CAPITAL:
Limited partners 19,364
General partner 55,220
---------------------
Total partners' capital 74,584
---------------------
TOTAL $ 243,546
=====================
Number of $500 Limited Partner units outstanding 2,978
See accompanying notes to financial statements.
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ENEX OIL & GAS INCOME PROGRAM III - SERIES 1, L.P.
STATEMENTS OF OPERATIONS
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(UNAUDITED) THREE MONTHS ENDED
----------------------------------------
MARCH 31, MARCH 31,
1997 1996
------------------- -------------------
REVENUES:
Oil and gas sales $ 38,261 $ 37,506
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EXPENSES:
Depreciation and depletion 8,159 11,688
Lease operating expenses 10,075 12,052
Production taxes 1,817 1,737
General and administrative 5,030 7,857
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Total expenses 25,081 33,334
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NET INCOME $ 13,180 $ 4,172
=================== ===================
See accompanying notes to financial statements.
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ENEX OIL & GAS INCOME PROGRAM III - 1, L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 1996 AND
FOR THE THREE MONTHS ENDED MARCH 31, 1997
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PER $500
LIMITED
PARTNER
GENERAL LIMITED UNIT OUT-
TOTAL PARTNER PARTNERS STANDING
------------------ ------------------ ------------------ ------------------
BALANCE, JANUARY 1, 1996 $ 5,740 $ 44,022 $ (38,282) $ (13)
NET INCOME 55,664 9,062 46,602 16
------------------ ------------------ ------------------ ------------------
BALANCE, DECEMBER 31, 1996 61,404 53,084 8,320 3
NET INCOME 13,180 2,136 11,044 4
------------------ ------------------ ------------------ ------------------
BALANCE, MARCH 31, 1997 $ 74,584 $ 55,220 $ 19,364 (1)$ 7
================== ================== ================== ==================
(1) Includes 586 units purchased by the general partner as a limited partner.
See accompanying notes to financial statements.
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ENEX OIL AND GAS INCOME PROGRAM III - SERIES 1, L.P.
STATEMENTS OF CASH FLOWS
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(UNAUDITED)
THREE MONTHS ENDED
------------------------------------------
MARCH 31, MARCH 31,
1997 1996
------------------- -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 13,180 $ 4,172
------------------- -------------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and depletion 8,159 11,688
(Increase) decrease in:
Accounts receivable - oil & gas sales 2,417 (6,600)
Other current assets (16) 1,552
Increase (decrease) in:
Accounts payable (229) (6,258)
Payable to general partner (16,990) 534
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Total adjustments (6,659) 916
------------------- -------------------
Net cash provided by operating activities 6,521 5,088
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CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions - development costs (1,307) (3,389)
------------------- -------------------
NET INCREASE IN CASH 5,214 1,699
CASH AT BEGINNING OF YEAR 2,262 2,078
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CASH AT END OF PERIOD $ 7,476 $ 3,777
=================== ===================
See accompanying notes to financial statements.
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ENEX OIL & GAS INCOME PROGRAM III - 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. On April 7, 1997, the Company's General Partner mailed proxy material
to the limited partners 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 proxy
material.
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Item 2. Management's Discussion and Analysis or Plan of Operation.
First Quarter 1997 Compared to First Quarter 1996
Oil and gas sales for the first quarter increased from $37,506 in 1996 to
$38,261 in 1997. This represents an increase of $755 or 2%. Oil sales increased
$1,683 or 5%. A 4% increase in average oil prices increased sales by $1,311. A
1% increase in oil production increased sales by an additional $372. Gas sales
decreased by $928 or 15%. A 38% decrease in gas production reduced sales by
$2,337. This decrease was partially offset by a 37% increase in average gas
prices. The decrease in oil production was primarily the result of natural
production declines. The decrease in gas production was primarily the result of
the shut-in of production from the Concord acquisition to perform workovers in
the first quarter of 1997. The changes in average prices correspond with changes
in the overall market for the sale of oil and gas.
Lease operating expenses decreased from $12,052 in the first quarter of 1996 to
$10,075 in the first quarter of 1997. The decrease of $1,977 (16%) is primarily
due to the lower production, noted above.
Depreciation and depletion expense decreased from $11,688 in the first quarter
of 1996 to $8,159 in the first quarter of 1997. This represents a decrease of
$3,529 (30%). A 24% decrease in the depletion rate reduced depreciation and
depletion expense by $2,551. The changes in production, noted above, decreased
depreciation and depletion expense by an additional $978. The decrease in the
depletion rate was primarily the result of upward revisions of the oil and gas
reserves during December 1996.
General and administrative expenses decreased from $7,857 in 1996 to $5,030 in
1997. This decrease of $2,827 is primarily due to $1,297 lower direct expenses
incurred by the Company in 1997 coupled with less staff time being required to
manage the Company's operations.
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. Accordingly, the changes in
cash flow from 1996 to 1997 are primarily due to the changes in oil and gas
sales described above.
The Company discontinued the payment of distributions in January, 1994. 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
reduce its obligations on 1997. Based upon current projected cash flows from its
property, it does not appear that the Company will have sufficient cash
remaining after the payment of its operating expenses and debt obligations to
pay distributions.
On April 7, 1997, the Company's General Partner mailed proxy material to the
limited partners 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 proxy material.
As of March 31, 1997, the Company had no material commitments for capital
expenditures. The Company does not intend to engage in any significant
developmental drilling activity.
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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 March 31, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
ENEX OIL & GAS INCOME
PROGRAM III - 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
May 11, 1997 By: /s/ James A. Klein
-------------------
James A. Klein
Controller and Chief
Accounting Officer