1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2006
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 0-16493
Southwest Oil & Gas Income Fund VII-A, L.P.
(Exact name of registrant as specified
in its limited partnership agreement)
Delaware 75-2145576
(State or other jurisdiction of (I.R.S.
Employer
incorporation or organization)
Identification No.)
6 Desta Drive, Suite 6500
Midland, Texas 79705
(Address of principal executive offices)
432-682-6324
(Registrant's telephone number,
including area code)
Indicate by check mark whether 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 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 ___
Indicate by check mark whether the registrant is large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the
Exchange Act. (Check one):
Large accelerated filer ___ Accelerated filer ___ Non-
accelerated filer X
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).
Yes__ No X
The registrant's outstanding securities consist of Units of limited
partnership interests for which there exists no established public market
from which to base a calculation of aggregate market value.
The total number of pages contained in this report is 20.
Glossary of Oil and Gas Terms
The following are abbreviations and definitions of terms commonly used in
the oil and gas industry that are used in this filing.
Bbl. One stock tank barrel, or 42 United States gallons liquid volume.
BOE. Equivalent barrels of oil, with natural gas converted to oil
equivalents based on a ratio of six Mcf of natural gas to one Bbl of oil.
Developmental well. A well drilled within the proved area of an oil or
natural gas reservoir to the depth of a stratigraphic horizon known to be
productive.
Exploratory well. A well drilled to find and produce oil or natural
gas reserves in an unproved area, to find a new reservoir in a field
previously found to be productive of oil or natural gas in another
reservoir, or to extend a known reservoir.
Farm-out arrangement. An agreement whereby the owner of a leasehold or
working interest agrees to assign his interest in certain specific acreage
to an assignee, retaining some interest, such as an overriding royalty
interest, subject to the drilling of one (1) or more wells or other
specified performance by the assignee.
Field. An area consisting of a single reservoir or multiple reservoirs
all grouped on or related to the same individual geological structural
feature and/or stratigraphic condition.
Mcf. One thousand cubic feet.
Oil. Crude oil, condensate and natural gas liquids.
Overriding royalty interest. Interests that are carved out of a
working interest, and their duration is limited by the term of the lease
under which they are created.
Standardized measure of discounted future net cash flows. Present
value of proved reserves, as adjusted to give effect to estimated future
abandonment costs, net of the estimated salvage value of related equipment.
Production costs. Costs incurred to operate and maintain wells and
related equipment and facilities, including depreciation and applicable
operating costs of support equipment and facilities and other costs of
operating and maintaining those wells and related equipment and facilities.
Proved Area. The part of a property to which proved reserves have been
specifically attributed.
Proved developed oil and gas reserves. Proved oil and gas reserves
that can be expected to be recovered from existing wells with existing
equipment and operating methods.
Proved properties. Properties with proved reserves.
Proved oil and gas reserves. The estimated quantities of crude oil,
natural gas, and natural gas liquids with geological and engineering data
that demonstrate with reasonable certainty to be recoverable in future
years from known reservoirs under existing economic and operating
conditions, i.e., prices and costs as of the date the estimate is made.
Proved undeveloped reserves. Proved Oil and gas reserves that are
expected to be recovered from new wells on undrilled acreage, or from
existing wells where a relatively major expenditure is required for
recompletion.
Reservoir. A porous and permeable underground formation containing a
natural accumulation of producible oil or gas that is confined by
impermeable rock or water barriers and is individual and separate from
other reservoirs.
Royalty interest. An interest in an oil and natural gas property
entitling the owner to a share of oil or natural gas production free of
costs of production.
Working interest. The operating interest that gives the owner the
right to drill, produce and conduct operating activities on the property
and a share of production.
Workover. Operations on a producing well to restore or increase
production.
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
The unaudited condensed financial statements included herein have been
prepared by the Registrant (herein also referred to as the "Partnership")
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01
of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments necessary for a fair presentation have been included and are of
a normal recurring nature. The financial statements should be read in
conjunction with the audited financial statements and the notes thereto for
the year ended December 31, 2005, which are found in the Registrant's Form
10-K Report for 2005 filed with the Securities and Exchange Commission.
The December 31, 2005 balance sheet included herein has been taken from the
Registrant's 2005 Form 10-K Report. Operating results for the three and
nine-month periods ended September 30, 2006 are not necessarily indicative
of the results that may be expected for the full year.
Southwest Oil & Gas Income Fund VII-A, L.P.
Balance Sheets
Septembe December
r 30, 31,
2006 2005
------ ------
(unaudit
ed)
Assets
- ----------
Current assets:
Cash and cash equivalents $ 86,919 146,379
Receivable from Managing 148,986 141,931
General Partner
Distributions receivable - 305
Other 5,998 3,850
-------- --------
---- ----
Total current assets 241,903 292,465
-------- --------
---- ----
Oil and gas properties -
using the full-
cost method of accounting 4,675,77 4,669,07
3 9
Less accumulated
depreciation,
depletion and 4,219,03 4,194,02
amortization 9 9
-------- --------
---- ----
Net oil and gas 456,734 475,050
properties
-------- --------
---- ----
$ 698,637 767,515
======= =======
Liabilities and Partners'
Equity
- ----------------------------
- ------------
Asset retirement obligation $ 277,018 260,759
-------- --------
---- ----
Partners' equity (deficit):
General partner (592,313 (583,800
) )
Limited partners 1,013,93 1,090,55
2 6
-------- --------
---- ----
Total partners' equity 421,619 506,756
-------- --------
---- ----
$ 698,637 767,515
======= =======
The accompanying notes are an integral
part of these financial statements.
Southwest Oil & Gas Income Fund VII-A, L.P.
Statements of Operations
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
----- ----- ----- -----
Revenues
- ------------
Oil and gas $ 374,953 381,983 1,053,74 922,763
1
Interest 965 522 3,283 1,114
--------- --------- -------- --------
- - ---- --
375,918 382,505 1,057,02 923,877
4
--------- --------- -------- --------
- - ---- --
Expenses
- -------------
Production 134,389 114,263 322,507 296,216
Depreciation, depletion 8,848 8,021 25,010 21,491
and amortization
Accretion of asset 5,792 2,516 16,534 7,563
retirement obligation
General and administrative 31,799 30,245 101,983 92,879
--------- --------- -------- --------
- - ---- --
180,828 155,045 466,034 418,149
--------- --------- -------- --------
- - ---- --
Net income $ 195,090 227,460 590,990 505,728
====== ====== ======= ======
Net income allocated to:
Managing General Partner $ 19,509 22,746 59,099 50,573
====== ====== ======= ======
Limited Partners $ 175,581 204,714 531,891 455,155
====== ====== ======= ======
Per limited partner unit $ 11.71 13.65 35.46 30.34
====== ====== ======= ======
The accompanying notes are an
integral
part of these financial
statements.
Southwest Oil & Gas Income
Fund VII-A, L.P.
Statements of Cash Flows
(unaudited)
Nine Months Ended
September 30,
2006 2005
----- -----
Cash flows from operating
activities
Cash received from oil and gas $ 1,044,538 926,247
sales
Cash paid to suppliers (424,765) (389,095)
Interest received 3,283 1,114
--------- ---------
- -
Net cash provided by operating 623,056 538,266
activities
--------- ---------
- -
Cash flows used in investing
activities
Additions to oil and gas (6,694) (24,631)
properties
--------- ---------
- -
Cash flows from financing
activities
Distributions to partners (676,127) (470,000)
Increase in distributions payable 305 1,394
--------- ---------
- -
Net cash used in financing (675,822) (468,606)
activities
--------- ---------
- -
Net (decrease) increase in cash (59,460) 45,029
and cash equivalents
Beginning of period 146,379 69,020
--------- ---------
- -
End of period $ 86,919 114,049
====== ======
Reconciliation of net income to
net cash
provided by operating activities
Net income $ 590,990 505,728
Adjustments to reconcile net
income to net
cash provided by operating
activities
Depreciation, depletion and 25,010 21,491
amortization
Accretion of asset retirement 16,534 7,563
obligation
Settlement of asset retirement
obligations
for plugged and abandoned wells (275) -
(Increase) decrease in (9,203) 3,484
receivables
--------- ---------
- -
Net cash provided by operating $ 623,056 538,266
activities
====== ======
The accompanying notes are an
integral
part of these financial
statements.
Southwest Oil & Gas Income Fund VII-A, L.P.
(a Delaware limited partnership)
Notes to Financial Statements
1. Organization
Southwest Oil & Gas Income Fund VII-A, L.P.
was organized under the laws of the state of
Delaware on January 30, 1987, for the purpose of
acquiring producing oil and gas properties and
to produce and market crude oil and natural
gas produced from such properties for a term of
50 years, unless terminated at an earlier
date as provided for in the Partnership
Agreement. The Partnership sells its
oil and gas production to a variety of
purchasers with the prices it receives being
dependent upon the oil and gas economy.
Southwest Royalties, Inc., a wholly owned
subsidiary of Clayton Williams Energy, Inc.,
serves as the Managing General Partner.
Revenues, costs and expenses are allocated
as follows:
Limited General
Partners Partners
-------- --------
Interest income on capital 100% -
contributions
Oil and gas sales 90% 10%
All other revenues 90% 10%
Organization and offering 100% -
costs (1)
Amortization of organization 100% -
costs
Property acquisition costs 100% -
Gain/loss on property 90% 10%
dispositions
Operating and administrative 90% 10%
costs (2)
Depreciation, depletion and
amortization
of oil and gas properties 90% 10%
All other costs 90% 10%
(1)All organization costs in excess of 3% of initial capital
contributions will be paid by the Managing General Partner and will
be treated as a capital contribution. The Partnership paid the
Managing General Partner an amount equal to 3% of initial capital
contributions for such organization costs.
(2)Administrative costs in any year, which exceed 2% of capital
contributions, shall be paid by the Managing General Partner and
will be treated as a capital contribution.
2. Summary of Significant
Accounting Policies
The interim financial information as of
September 30, 2006, and for the three and nine
months ended September 30, 2006, is unaudited.
Certain information and footnote disclosures
normally included in financial statements
prepared in accordance with generally accepted
accounting principles have been condensed or
omitted in this Form 10- Q pursuant to the rules
and regulations of the Securities and Exchange
Commission. However, in the opinion of
management, these interim financial
statements include all the necessary
adjustments to fairly present the results of
the interim periods and all such adjustments are
of a normal recurring nature. The interim
consolidated financial statements should be
read in conjunction with the Partnership's Annual
Report on Form 10-K for the year ended December
31, 2005.
In September 2004, the Securities and Exchange
Commission issued Staff Accounting Bulletin No.
106 ("SAB 106"). SAB 106 expresses the SEC
staff's views regarding SFAS No. 143 and its
impact on both the full- cost ceiling test and
the calculation of depletion expense. In
accordance with SAB 106, beginning in the first
quarter of 2005, undiscounted abandonment
costs for wells to be drilled in the future to
develop proved reserves are included in the
unamortized cost of oil and gas properties, net
of related salvage value, for purposes of
computing depreciation, depletion and
amortization ("DD&A"). The implementation of
SAB 106 did not have a material impact on our
financial statements.
Southwest Oil & Gas Income
Fund VII-A, L.P.
(a Delaware limited
partnership)
Notes to Financial Statements
3. Asset Retirement
Obligations
Changes in abandonment obligations for the nine months
ended September 30, 2006 and 2005 are as follows:
2006 2005
------- -------
Beginning of period $ 260,759 187,858
Additional abandonment obligations - 136
from new wells
Settlement of obligations for (275) -
plugged and abandoned wells
Non-cash reduction of obligations - (498)
Accretion expense 16,534 7,563
------- -------
------- -----
End of period $ 277,018 195,059
======= =======
=
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
General
Southwest Oil & Gas Income Fund VII-A, L.P. was
organized as a Delaware limited partnership on
January 30, 1987. The offering of limited
partnership interests began on March 4, 1987; minimum
capital requirements were met on April 28, 1987, and the
offering concluded on September 21, 1987 with total
limited partner contributions of $7,500,000.
The Partnership was formed to acquire interests in
producing oil and gas properties, to produce and
market crude oil and natural gas produced from such
properties, and to distribute the net proceeds from
operations to the limited and general partners. Net
revenues from producing oil and gas properties are not
reinvested in other revenue producing assets except to
the extent that production facilities and wells are
improved or reworked, or where methods are employed to
improve or enable more efficient recovery of oil and
gas reserves. The economic life of the Partnership thus
depends on the period over which the Partnership's oil
and gas reserves are economically recoverable.
Increases or decreases in Partnership revenues and,
therefore, distributions to partners, will depend
primarily on changes in the prices received for
production, changes in volumes of production sold,
increases and decreases in lease operating expenses,
enhanced recovery projects, offset drilling activities
pursuant to farm-out arrangements, sale of
properties, and the depletion of wells. Since wells
deplete over time, production can generally be expected to
decline from year to year.
Well operating costs and general and administrative
costs usually decrease with production declines; however,
these costs may not decrease proportionately. Net income
available for distribution to the partners is therefore
expected to fluctuate in later years based on these
factors.
Oil and Gas Properties
Oil and gas properties are accounted for at cost under
the full-cost method. Under this method, all productive
and nonproductive costs incurred in connection with
the acquisition, exploration and development of oil and
gas reserves are capitalized. Gain or loss on the sale of
oil and gas properties is not recognized unless significant
oil and gas reserves are sold.
Should the net capitalized costs exceed the estimated
present value of oil and gas reserves, discounted at 10%,
such excess costs would be charged to current expense.
As of September 30, 2006, the net capitalized costs did not
exceed the estimated present value of oil and gas
reserves.
Critical Accounting Policies
The Partnership follows the full cost method of
accounting for its oil and gas properties. The full
cost method subjects companies to quarterly
calculations of a "ceiling", or limitation on the amount
of properties that can be capitalized on the balance
sheet. If the Partnership's capitalized costs are in
excess of the calculated ceiling, the excess must be
written off as an expense.
The Partnership's discounted present value of its proved
oil and natural gas reserves is a major component of the
ceiling calculation, and represents the component that
requires the most subjective judgments. Estimates of
reserves are forecasts based on engineering data,
projected future rates of production and the timing of
future expenditures. The process of estimating oil and
natural gas reserves requires substantial judgment,
resulting in imprecise determinations, particularly
for new discoveries. Different reserve engineers
may make different estimates of reserve quantities based
on the same data. The Partnership's reserve
estimates are prepared by outside consultants.
The passage of time provides more qualitative information
regarding estimates of reserves, and revisions are
made to prior estimates to reflect updated information.
However, there can be no assurance that more
significant revisions will not be necessary in the
future. If future significant revisions are
necessary that reduce previously estimated reserve
quantities, it could result in a full cost property
writedown. In addition to the impact of these estimates
of proved reserves on calculation of the ceiling,
estimates of proved reserves are also a significant
component of the calculation of depletion, depreciation,
and amortization ("DD&A").
While the quantities of proved reserves require
substantial judgment, the associated prices of oil and
natural gas reserves that are included in the discounted
present value of the reserves do not require judgment. The
ceiling calculation dictates that prices and costs in
effect as of the last day of the period are generally held
constant indefinitely. Because the ceiling
calculation dictates that prices in effect as of the
last day of the applicable quarter are held constant
indefinitely, the resulting value is not indicative of
the true fair value of the reserves. Oil and natural
gas prices have historically been cyclical and, on any
particular day at the end of a quarter, can be either
substantially higher or lower than the Partnership's long-
term price forecast that is a barometer for true fair
value.
Supplemental Information
The following unaudited information is intended to
supplement the financial statements included in this
Form 10-Q with data that is not readily available from
those statements.
Three Months Ended
September 30,
2006 2005
------ ------
Oil production in 3,996 3,795
barrels
Gas production in mcf 12,660 20,795
Total (BOE) 6,106 7,261
Average price per barrel $ 66.39
of oil 60.11
Average price per mcf of $ 8.66
gas 7.40
Partnership $ 225,000 170,000
distributions
Limited partner $ 202,500 153,000
distributions
Per unit distribution to $ 13.50
limited partners 10.20
Number of limited 15,000 15,000
partner units
Operating Results
The following discussion compares our results for the
quarters ended September 30, 2006 and 2005. Unless
otherwise indicated, references to 2006 and 2005
within this section refer to the respective quarterly
period.
Income from net profits
Oil and gas prices continued to climb to record levels
compared to the previous two years. Comparing 2006 to
2005, oil and gas sales decreased $7,000, of which
price variances accounted for a $41,100 increase and
production variances accounted for a $48,100
decrease.
Production in 2006 (on a BOE basis) was 16% lower than
2005. Our oil production increased 5% in 2006 due
primarily to a workover performed on an oil well.
Our gas production in 2006 was 39% lower than 2005 due
primarily to a sharp production decline in a gas
field.
In 2006, our realized oil price was 10% higher than
2005, while our realized gas price was 17% higher.
Historically, the markets for oil and gas have been
volatile, and they are likely to continue to be volatile.
We have very little control over the prices we receive
for our production at the wellhead since most of our
physical marketing arrangements are market-
sensitive.
Oil and gas production costs on a BOE basis increased from
$15.74 per BOE in 2005 to $22.01 per BOE in 2006. The
increase in oil and gas production costs was due
primarily to a workover performed on an injection
well.
Expenses
Depletion on a BOE basis increased 31% in 2006.
Comparing 2006 to 2005, depletion expense increased
$800, of which rate variances accounted for a $2,100
increase and production variances accounted for a
$1,300 decrease.
Accretion expense increased 130% in 2006 due primarily to
fourth quarter 2005 revisions in previous estimates related
to increased costs to plug wells.
General and administrative ("G&A") expenses were 5%
higher in 2006 as compared to 2005.
Supplemental Information
The following unaudited information is intended to
supplement the financial statements included in this
Form 10-Q with data that is not readily available from
those statements.
Nine Months Ended
September 30,
2006 2005
------ ------
Oil production in 11,790 12,134
barrels
Gas production in mcf 38,910 47,018
Total (BOE) 18,275 19,970
Average price per barrel $ 63.31
of oil 49.47
Average price per mcf of $ 7.90
gas 6.86
Partnership $ 676,127 470,000
distributions
Limited partner $ 608,515 423,000
distributions
Per unit distribution to $ 40.57
limited partners 28.20
Number of limited 15,000 15,000
partner units
Operating Results
The following discussion compares our results for the
nine months ended September 30, 2006 and 2005. Unless
otherwise indicated, references to 2006 and 2005
within this section refer to the respective nine-month
period.
Income from net profits
Oil and gas prices continued to climb to record levels
compared to the previous two years. Comparing 2006 to
2005, oil and gas sales increased $131,000, of which
price variances accounted for a $203,600 increase and
production variances accounted for a $72,600
decrease.
Production in 2006 (on a BOE basis) was 8% lower than
2005. Our oil production in 2006 was 3% lower than 2005
due primarily to normal production decline. Our gas
production was 17% lower primarily due to a sharp
production decline in a gas field.
In 2006, our realized oil price was 28% higher than
2005, while our realized gas price was 15% higher.
Historically, the markets for oil and gas have been
volatile, and they are likely to continue to be volatile.
We have very little control over the prices we receive
for our production at the wellhead since most of our
physical marketing arrangements are market-
sensitive.
Oil and gas production costs on a BOE basis increased from
$14.83 per BOE in 2005 to $17.65 per BOE in 2006. The
increase in oil and gas production costs was due
primarily to a workover performed on an injection
well.
Expenses
Depletion on a BOE basis increased 27% in 2006.
Comparing 2006 to 2005, depletion expense increased
$3,500, of which rate variances accounted for a
$5,300 increase and production variances
accounted for a $1,800 decrease.
Accretion expense increased 119% in 2006 due primarily to
fourth quarter 2005 revisions in previous estimates related
to increased costs to plug wells.
General and administrative ("G&A") expenses were 10%
higher in 2006 as compared to 2005. The increase in
general and administrative expenses is primarily due to
higher professional fees for audit, tax and engineering
services.
Liquidity and Capital Resources
Partnership distributions during the nine months ending
September 30, 2006 were $676,127, of which $608,515
was distributed to the limited partners and $67,612
to the general partners. Cumulative cash distributions
of $13,429,146 have been made to the general and limited
partners as of September 30, 2006. As of September 30,
2006, $12,104,425 or $806.96 per limited partner unit has
been distributed to the limited partners,
representing 161% of contributed capital.
Texas Margin Taxes
In May 2006, the State of Texas adopted House Bill 3,
which modified the state's franchise tax structure,
replacing the previous tax based on capital or earned
surplus with a margin tax (the "Texas Margin Tax")
effective with franchise tax reports filed on or after
January 1, 2008. The Texas margin Tax is computed by
applying the applicable tax rate (1% for the
Partnership's business) to the profit margin, which is
generally determined by total revenue less either cost of
goods sold or compensation as applicable. Although House
Bill 3 states that the Texas Margin Tax is not an income
tax, the Partnership believes that Statement of Financial
Accounting Standards No. 109 "Accounting for Income Taxes"
("SFAS 109") applies to the Texas Margin Tax. However the
Partnership has determined that the impact of the Texas
Margin Tax on the deferred income tax liabilities of the
partnership is insignificant at September 30, 2006. The
Partnership may be required to record an income tax
provision for the Texas Margin Tax in future periods.
Recent Accounting Pronouncements
There were no recent accounting pronouncements
that had a significant effect on the partnership.
Item 3. Quantitative and Qualitative Disclosures About
Market Risk
The Partnership is not a party to any derivative or
embedded derivative instruments.
Item 4. Controls and Procedures
The Managing General Partner has established disclosure
controls and procedures that are adequate to provide
reasonable assurance that management will be able to
collect, process and disclose both financial and non-
financial information, on a timely basis, in the
Partnership's reports to the SEC. Disclosure controls and
procedures include all processes necessary to ensure
that material information is recorded, processed,
summarized and reported within the time periods
specified in the SEC's rules and forms, and is accumulated
and communicated to management, including our
chief executive and chief financial officers, to allow
timely decisions regarding required disclosures.
With respect to these disclosure controls and
procedures:
management has evaluated the effectiveness of the disclosure
controls and procedures as of the end of the period covered by
this report;
this evaluation was conducted under the supervision and with the
participation of management, including the chief executive and chief
financial officers of the Managing General Partner; and
it is the conclusion of chief executive and chief financial officers
of the Managing General Partner that these disclosure controls
and procedures are effective in ensuring that information that is
required to be disclosed by the Partnership in reports filed or
submitted with the SEC is recorded, processed, summarized and
reported within the time periods specified in the rules and forms
established by the SEC.
Internal Control Over Financial Reporting
There has not been any change in the Partnership's internal
control over financial reporting that occurred
during the nine months ended September 30, 2006 that has
materially affected, or is reasonably likely to
materially affect, its internal control over
financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in
Securities
None
Item 3. Defaults Upon Senior
Securities
None
Item 4. Submission of Matter
to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports
on Form 8-K
(a) Exhibits:
31.1Rule 13a-
14(a)/15d-14(a) Certification
31.2Rule 13a-
14(a)/15d-14(a) Certification
32.1 Certification of Chief
Executive Officer and Chief
Financial Officer
Pursuant
to 18 U.S.C.
Section 1350,
as adopted
Pursuant
to Section 906 of the
Sarbanes-Oxley Act of 2002
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 thereunto
duly authorized.
Southwest Oil & Gas Income
Fund VII-A, L.P., a
Delaware limited partnership
By: Southwest Royalties, Inc.,
Managing General Partner
By: /s/ L. Paul Latham
L. Paul Latham
President and Chief
Executive Officer
Date: November 13, 2006
SECTION 302 CERTIFICATION Exhibit 31.1
I, L. Paul Latham, certify that:
1.I have reviewed this quarterly report on Form 10-Q
of Southwest Oil & Gas Income Fund VII-A, L.P.
2.Based on my knowledge, this report does not
contain any untrue statement of a material
fact or omit to state a material fact necessary to
make the statements made, in light of the
circumstances under which such statements were made,
not misleading with respect to the period
covered by this report;
3.Based on my knowledge, the financial statements, and
other financial information included in
this report, fairly present in all material
respects the financial condition, results of
operations and cash flows of the registrant as of,
and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and
I are responsible for establishing and
maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the registrant and have:
a)Designed such disclosure controls and procedures,
or caused such disclosure controls and
procedures to be designed under our
supervision, to ensure that material
information relating to the registrant,
including its consolidated
subsidiaries, is made known to us by others
within those entities, particularly during the
period in which this
report is being prepared;
b)Evaluated the effectiveness of the
registrant's disclosure controls and procedures
and presented in this report our conclusions
about the effectiveness of the disclosure
controls and procedures, as of the end of the
period covered by this report based on such
evaluation; and
c)Disclosed in this report any change in the
registrant's internal control over financial
reporting that occurred during the registrant's
most recent fiscal quarter (the
registrant's fourth fiscal quarter in the
case of an annual report) that has
materially affected, or is reasonably likely to
materially affect, the registrant's internal
control over financial reporting; and
5.The registrant's other certifying officer(s) and
I have disclosed, based on our most recent evaluation
of internal control over financial reporting, to
the registrant's auditors and the audit committee of
registrant's board of directors (or persons
performing the equivalent functions):
a)All significant deficiencies and
material weaknesses in the design or operation
of internal control over financial reporting
which reasonably likely to adversely affect the
registrant's ability to record, process,
summarize and report financial information;
and
b)Any fraud, whether or not material, that
involves management or other employees who have
a significant role in the registrant's
internal control over financial reporting.
Date: November 13, 2006 /s/ L. Paul Latham
L. Paul Latham
President and Chief
Executive Officer
of Southwest
Royalties, Inc., the
Managing General
Partner of
Southwest Oil & Gas
Income Fund VII-A, L.P.
SECTION 302 CERTIFICATION Exhibit 31.2
I, Mel G. Riggs, certify that:
1.I have reviewed this quarterly report on Form 10-Q
of Southwest Oil & Gas Income Fund VII-A, L.P.,
2.Based on my knowledge, this report does not
contain any untrue statement of a material
fact or omit to state a material fact necessary to
make the statements made, in light of the
circumstances under which such statements were made,
not misleading with respect to the period
covered by this report;
3.Based on my knowledge, the financial statements, and
other financial information included in
this report, fairly present in all material
respects the financial condition, results of
operations and cash flows of the registrant as of,
and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and
I are responsible for establishing and
maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the registrant and have:
a)Designed such disclosure controls and procedures,
or caused such disclosure controls and
procedures to be designed under our
supervision, to ensure that material
information relating to the registrant,
including its consolidated
subsidiaries, is made known to us by others
within those entities, particularly during the
period in which this report is being
prepared;
b)Evaluated the effectiveness of the
registrant's disclosure controls and procedures
and presented in this report our conclusions
about the effectiveness of the disclosure
controls and procedures, as of the end of the
period covered by this report based on such
evaluation; and
c)Disclosed in this report any change in the
registrant's internal control over financial
reporting that occurred during the registrant's
most recent fiscal quarter (the
registrant's fourth fiscal quarter in the
case of an annual report) that has
materially affected, or is reasonably likely to
materially affect, the registrant's internal
control over financial reporting; and
5.The registrant's other certifying officer(s) and
I have disclosed, based on our most recent evaluation
of internal control over financial reporting, to
the registrant's auditors and the audit committee of
registrant's board of directors (or persons
performing the equivalent functions):
a)All significant deficiencies and
material weaknesses in the design or operation
of internal control over financial reporting
which reasonably likely to adversely affect the
registrant's ability to record, process,
summarize and report financial information;
and
b)Any fraud, whether or not material, that
involves management or other employees who have
a significant role in the registrant's
internal control over financial reporting.
Date: November 13, 2006 /s/ Mel G. Riggs
Mel G. Riggs
Vice President and
Chief Financial Officer of
Southwest Royalties, Inc., the
Managing General Partner of
Southwest Oil & Gas
Income Fund VII-A, L.P.
Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND
CHIEF FINANCIAL OFFICER
Pursuant to 18 U.S.C. 1350 and in connection with the
accompanying report on Form 10-Q for the period ended
September 30, 2006 that is being filed concurrently with
the Securities and Exchange Commission on the date hereof
(the "Report"), each of the undersigned officers of
Southwest Oil & Gas Income Fund VII-A, L.P. (the
"Company"), hereby certifies that:
1. The Report fully complies with the
requirements of section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and
2. The information contained in the
Report fairly presents, in all
material respects, the financial
condition and results of
operation of the Company.
/s/ L. Paul Latham
L.Paul Latham
President and Chief Executive Officer
of Southwest Royalties, Inc.,
the Managing General Partner
of
Southwest Oil & Gas Income Fund VII-A, L.P.
.
November 13, 2006
/s/ Mel G. Riggs
Mel G. Riggs
Vice President and Chief
Financial Officer of
Southwest Oil & Gas Income Fund VII-A, L.P.
the Managing General Partner
Southwest Oil & Gas Income Fund V II-A, L.P.
November 13, 2006