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 June 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 0-16551
ENEX OIL & GAS INCOME PROGRAM III - SERIES 3, L.P.
(Exact name of small business issuer as specified in its charter)
New Jersey 76-0179823
(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
ENEX OIL & GAS INCOME PROGRAM III - SERIES 3, L.P.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ENEX OIL & GAS INCOME PROGRAM III - SERIES 3, L.P.
BALANCE SHEET
JUNE 30,
ASSETS 1995
(Unaudited)
CURRENT ASSETS:
Cash $ 12,482
Accounts receivable - oil & gas sales 24,517
Other current assets 7,712
Total current assets 44,711
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 2,611,551
Less accumulated depreciation and depletion 2,037,681
Property, net 573,870
TOTAL $ 618,581
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 20,332
Payable to general partner 29,947
Total current liabilities 50,279
NONCURRENT PAYABLE TO GENERAL PARTNER 149,135
PARTNERS' CAPITAL:
Limited partners 389,877
General partner 29,290
Total partners' capital 419,167
TOTAL $ 618,581
See accompanying notes to financial statements.
I-1
ENEX OIL & GAS INCOME PROGRAM III - SERIES 3, L.P.
STATEMENTS OF OPERATIONS
(UNAUDITED) QUARTER ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1995 1994 1995 1994
REVENUES:
Oil and gas sales $ 70,985 $ 64,860 $ 145,917 $ 126,014
EXPENSES:
Depreciation and depletion 30,244 38,326 63,686 76,088
Lease operating expenses 10,430 6,584 35,965 32,578
Production taxes 4,248 4,611 9,110 8,870
General and administrative 8,501 10,811 19,999 23,082
Total expenses 53,423 60,332 128,760 140,618
NET INCOME (LOSS) $ 17,562 $ 4,528 $ 17,157 $ (14,604)
See accompanying notes to financial statements.
I-2
ENEX OIL AND GAS INCOME PROGRAM III - SERIES 3, L.P.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED
JUNE 30, JUNE 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 17,157 $ (14,604)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and depletion 63,686 76,088
(Increase) decrease in:
Accounts receivable - oil & gas sales (2,156) (5,617)
Other current assets 245 (335)
Increase (decrease) in:
Accounts payable 4,022 (7,454)
Payable to general partner (26,683) (9,557)
Total adjustments 39,114 53,125
Net cash provided by operating activities 56,271 38,521
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions - development costs (21,369) (9,607)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (25,232) (22,931)
NET INCREASE IN CASH 9,670 5,983
CASH AT BEGINNING OF YEAR 2,812 6,681
CASH AT END OF PERIOD $ 12,482 $ 12,664
See accompanying notes to financial statements.
I-3
ENEX OIL & GAS INCOME PROGRAM III - SERIES 3, 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. A cash distribution was made to the limited partners of the Company in
the amount of $13,391, representing net revenues from the sale of oil
and gas produced from properties owned by the Company. This
distribution was made on April 30, 1995.
Item 2. Management's Discussion and Analysis or Plan of Operation.
Second Quarter 1995 Compared to Second Quarter 1994
Oil and gas sales for the second quarter increased from $64,860 in 1994 to
$70,985 in 1995. This represents an increase of $6,125 (9%). Oil sales
increased by $6,609 (11%). A 14% increase in oil production caused sales
to increase by $8,040. This increase was partially offset by a 2% decrease
in average oil sales price. Gas sales decreased by $484 (7%). A 22%
decrease in the average gas sales price reduced sales by $1,717. This
decrease was partially offset by a 19% increase in gas production. The
change in average oil sales price was primarily the result of lower
production costs on the Larto Lake acquisition, on which the Company pays
a net profits interest, partially offset by higher prices in the overall
market for the sale of oil. The change in the average gas sales price
corresponds with changes in the overall market for the sale of gas. The
increase in gas production was primarily the result of the completion of a
waterflood project on the Schafter Lake field and the acquisition of
additional interest in the Concord acquisition in the fourth quarter of
1994. The increase in oil production was due to the shut-in of production,
in 1994, due to a workover on the Larto Lake acquisition coupled with the
purchase of additional interest in the Concord acquisition in the fourth
quarter of 1994.
Lease operating expenses increased from $6,584 in 1994 to $10,430 in 1995.
The increase of $3,846 (58%) is primarily due to the increases in
production, noted above, and enhanced recovery costs incurred on the
Concord acquisition in the second quarter of 1995, partially offset by
workover costs incurred on the Larto Lake acquisition in 1994.
Depreciation and depletion expense decreased from $38,326 in the second
quarter of 1994 to $30,244 in the second quarter of 1995. This represents
a decrease of $8,082 (21%). A 31% decrease in the depletion rate reduced
depreciation and depletion expense by $13,680. This decrease was partially
offset by the changes in production, noted above. The decrease in the
depletion rate is primarily the result of an upward revision of the oil
reserves at December 31, 1994, partially offset by a downward revision of
the gas reserves.
General and administrative expenses decreased from $10,811 in 1994 to
$8,501 in 1995. This decrease of $2,310 (21%) is primarily due to less
staff time being required to manage the Company's operations.
First Six Months in 1995 Compared to First Six Months in 1994
Oil and gas sales for the first six months increased from $126,014 in 1994
to $145,917 in 1995. This represents an increase of $19,903 (16%). Oil
sales increased by $21,237 (19%). A 24% increase in oil production caused
sales to increase by $26,724. This increase was partially offset by a 4%
decrease in average oil sales price. Gas sales decreased by $1,334 (8%).
A 24% decrease in the average gas sales price reduced sales by $4,574.
This decrease was partially offset by a 20% increase in gas production.
The change in average oil sales price was primarily the result of lower
production costs on the Larto Lake acquisition, on which the Company pays
a net profits interest, partially offset by higher prices in the overall
market for the sale of oil. The change in the average gas sales price
corresponds with changes in the overall market for the sale of gas. The
increase in gas production was primarily the result of the completion of a
waterflood project on the Schafter Lake field and the acquisition of
additional interest in the Concord acquisition in the fourth quarter of
1994. The increase in oil production was due to the shut-in of production,
in 1994, due to a workover on the Larto Lake acquisition coupled with the
purchase of additional interest in the Concord acquisition in the fourth
quarter of 1994.
Lease operating expenses increased from $32,578 in 1994 to $35,965 in 1995.
The increase of $3,387 (10%) is primarily due to the changes in production,
noted above, and enhanced recovery costs incurred on the Concord
acquisition in 1995, partially offset by workover costs incurred on the
Larto Lake acquisition in 1994.
Depreciation and depletion expense decreased from $76,088 in the first six
months of 1994 to $63,686 in the first six months of 1995. This represents
a decrease of $12,402 (16%). A 32% decrease in the depletion rate reduced
depreciation and depletion expense by $30,408. This decrease was partially
offset by the changes in production, noted above. The decrease in the
depletion rate is primarily the result of an upward revision of the oil
reserves at December 31, 1994, partially offset by a downward revision of
the gas reserves.
General and administrative expenses decreased from $23,082 in 1994 to
$19,999 in 1995. This decrease of $3,083 (13%) 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 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. Nonetheless, the general partner believes
the Company will continue to have sufficient cash flow to fund operations
and to maintain a regular pattern of distributions.
As of June 30, 1995, the Company had no material commitments for capital
expenditures. The Company does not intend to engage in any significant
developmental drilling activity.
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 June 30, 1995.
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 3, 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
August 11, 1995 By: /s/ James A. Klein
James A. Klein
Controller and Chief
Accounting Officer
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 3, L.P.
(Registrant)
By:ENEX RESOURCES CORPORATION
General Partner
By:
R. E. Densford
Vice President, Secretary
Treasurer and Chief Financial
Officer
August 11, 1995 By:
James A. Klein
Controller and Chief
Accounting Officer