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, 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 0-16551
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
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ENEX OIL & GAS INCOME PROGRAM III - SERIES 3, L.P.
BALANCE SHEET
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MARCH 31,
ASSETS 1996
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(Unaudited)
CURRENT ASSETS:
Cash $ 17,283
Accounts receivable - oil & gas sales 36,949
Other current assets 2,597
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Total current assets 56,829
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OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 2,629,106
Less accumulated depreciation and depletion 2,087,971
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Property, net 541,135
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TOTAL $ 597,964
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LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 14,121
Payable to general partner 36,588
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Total current liabilities 50,709
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NONCURRENT PAYABLE TO GENERAL PARTNER 109,764
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PARTNERS' CAPITAL:
Limited partners 401,338
General partner 36,153
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Total partners' capital 437,491
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TOTAL $ 597,964
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See accompanying notes to financial statements.
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ENEX OIL & GAS INCOME PROGRAM III - SERIES 3, L.P.
STATEMENTS OF OPERATIONS
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(UNAUDITED) THREE MONTHS ENDED
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MARCH 31, MARCH 31,
1996 1995
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REVENUES:
Oil and gas sales $ 89,912 74,932
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EXPENSES:
Depreciation and depletion 25,500 33,442
Lease operating expenses 18,420 25,535
Production taxes 4,820 4,862
General and administrative 10,506 11,498
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Total expenses 59,246 75,337
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NET INCOME (LOSS) $ 30,666 (405)
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See accompanying notes to financial statements.
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ENEX OIL AND GAS INCOME PROGRAM III - SERIES 3, L.P.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31, MARCH 31,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 30,666 $ (405)
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation and depletion 25,500 33,442
(Increase) decrease in:
Accounts receivable - oil & gas sales (13,798) (5,730)
Other current assets 3,352 3,658
Increase (decrease) in:
Accounts payable (10,588) 9,580
Payable to general partner (7,744) (5,206)
Total adjustments (3,278) 35,744
Net cash provided by operating activities 27,388 35,339
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions - development costs (7,398) (13,051)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (16,213) (10,355)
NET INCREASE IN CASH 3,777 11,933
CASH AT BEGINNING OF YEAR 13,506 2,812
CASH AT END OF PERIOD $ 17,283 $ 14,745
See accompanying notes to financial statements.
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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 $14,593, representing net revenues from the sale of oil and gas
produced from properties owned by the Company. This distribution was made
on January 31, 1996.
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Item 2Management's Discussion and Analysis or Plan of Operation.
First Quarter 1996 Compared to First Quarter 1995
Oil and gas sales for the first quarter increased from $74,932 in 1995 to
$89,912 in 1996. This represents an increase of $14,980 (20%). Oil sales
increased $10,434 or 16%. A 33% increase in average oil prices increased sales
by $19,098. This increase was partially offset by a 13% decrease in oil
production. Gas sales increased by $4,546 or 53%. A 14% increase in average gas
prices increased sales by $1,617. A 34% increase in gas production increased
sales by an additional $2,929. The decrease in oil production was primarily the
result of natural production declines. The increase in gas production was
primarily the result of enhanced production improvements on the Concord
acquisition. The changes in average prices correspond with changes in the
overall market for the sale of oil and gas.
Lease operating expenses decreased from $25,535 in the first quarter of 1995 to
$18,420 in the first quarter of 1996. The decrease of $7,115 (28%) is primarily
due to workover costs incurred on the Concord acquisition in 1995.
Depreciation and depletion expense decreased from $33,442 in the first quarter
of 1995 to $25,500 in the first quarter of 1996. This represents a decrease of
$7,942 (24%). A 19% decrease in the depletion rate reduced depreciation and
depletion expense by $5,904. The changes in production, noted above, reduced
depreciation and depletion expense by an additional $2,038. The decrease in the
depletion rate was primarily the result of upward revisions of the oil and gas
reserves at December 31, 1995.
General and administrative expenses decreased from $11,498 in 1995 to $10,506 in
1996. This decrease of $992 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 1995 to 1996 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 after
the payment of its debt obligations. 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 March 31, 1996, 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, 1996.
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 - 3, L.P.
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(Registrant)
By:ENEX RESOURCES CORPORATION
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General Partner
By: /s/ R. E. Densford
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R. E. Densford
Vice President, Secretary
Treasurer and Chief Financial
Officer
May 11, 1996 By: /s/ James A. Klein
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James A. Klein
Controller and Chief
Accounting Officer