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 0-16552
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
JUNE 30,
ASSETS 1995
(Unaudited)
CURRENT ASSETS:
Cash $ 2,084
Accounts receivable - oil & gas sales 30,122
Other current assets 5,645
Total current assets 37,851
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 1,749,751
Less accumulated depreciation and depletion 1,274,897
Property, net 474,854
TOTAL $ 512,705
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 27,836
Payable to affiliated limited partnership 665
Payable to general partner 17,010
Total current liabilities 45,511
NONCURRENT PAYABLE TO GENERAL PARTNER 152,825
PARTNERS' CAPITAL:
Limited partners 302,030
General partner 12,339
Total partners' capital 314,369
TOTAL $ 512,705
See accompanying notes to financial statements.
I-1
ENEX OIL & GAS INCOME PROGRAM III - SERIES 4, 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 $ 40,848 $ 39,376 $ 80,236 $ 78,541
EXPENSES:
Depreciation and depletion 11,807 18,697 25,523 35,436
Lease operating expenses 22,084 11,093 45,860 33,410
Production taxes 3,183 2,644 5,828 4,425
General and administrative 5,794 8,142 14,739 19,652
Total expenses 42,868 40,576 91,950 92,923
NET (LOSS) $ (2,020) $ (1,200) $ (11,714) $ (14,382)
See accompanying notes to financial statements.
I-2
ENEX OIL AND GAS INCOME PROGRAM III - SERIES 4, L.P.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED
JUNE 30, JUNE 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $ (11,714) $ (14,382)
Adjustments to reconcile net (loss) to net cash
provided by operating activities:
Depreciation and depletion 25,523 35,436
(Increase) decrease in:
Accounts receivable - oil & gas sales (11,206) 673
Other current assets (2,779) (131)
Increase (decrease) in:
Accounts payable 13,901 3,414
Payable to affiliated partnership (15) -
Payable to general partner (4,499) (2,913)
Total adjustments 20,925 36,479
Net cash provided by operating activities 9,211 22,097
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions - development costs (421) (2,431)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (7,507) (20,634)
NET INCREASE (DECREASE) IN CASH 1,283 (968)
CASH AT BEGINNING OF YEAR 801 3,180
CASH AT END OF PERIOD $ 2,084 $ 2,212
See accompanying notes to financial statements.
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.
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 $39,376 in 1994 to
$40,848 in 1995. This represents an increase of $1,472 (4%). Oil sales
increased by $17,327 (61%). A 97% increase in the average oil sales price
caused sales to increase by $22,601. This increase was partially offset by
an 18% decrease in oil production. Gas sales decreased by $15,855 (146%).
A 245% decrease in the average gas sales price reduced sales by $8,433. A
68% decrease in gas production reduced sales by an additional $7,422. 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 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 lower oil production was primarily the
result of natural production declines. The lower gas production was
primarily due to the shut-in of production from the Shana acquisition, for
a pump replacement, coupled with natural production declines.
Lease operating expenses increased from $11,093 in 1994 to $22,084 in 1995.
The increase of $10,991 (99%) is primarily due to costs incurred to perform
a workover on the Shana acquisition in the second quarter of 1995.
Depreciation and depletion expense decreased from $18,697 in the second
quarter of 1994 to $11,807 in the second quarter of 1995. This represents
a decrease of $6,890 (37%). The decline in production, noted above,
reduced depreciation and depletion expense by $5,605. A 10% decrease in
the depletion rate reduced depreciation and depletion expense by an
additional $1,285. This rate decrease is primarily the result of an upward
revision of the oil and gas reserves at December 31, 1994.
General and administrative expenses decreased from $8,142 in 1994 to $5,794
in 1995. This decrease of $2,348 (29%) is primarily due to less staff time
being required to manage the Company's operations in 1995.
First Six Months in 1995 Compared to First Six Months in 1994
Oil and gas sales for the first six months increased from $78,541 in 1994
to $80,236 in 1995. This represents an increase of $1,695 (2%). Oil sales
increased by $31,170 (58%). A 65% increase in the average oil sales price
caused sales to increase by $33,317. This increase was partially offset by
a 4% decrease in oil production. Gas sales decreased by $29,475 (117%).
A 141% decrease in the average gas sales price reduced sales by $14,981.
A 58% decrease in gas production reduced sales by an additional $14,494.
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 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 lower oil production was primarily the
result of natural production declines. The lower gas production was
primarily due to the shut-in of production from the Shana acquisition, for
a pump replacement, coupled with natural production declines.
Lease operating expenses increased from $33,410 in 1994 to $45,860 in 1995.
The increase of $12,450 (37%) is primarily due to costs incurred to
perform a workover on the Shana acquisition in the second quarter of 1995.
Depreciation and depletion expense decreased from $35,436 in the first six
months of 1994 to $25,523 in the first six months of 1995. This represents
a decrease of $9,913 (28%). The decline in production, noted above,
reduced depreciation and depletion expense by $5,882. A 14% decrease in
the depletion rate reduced depreciation and depletion expense by an
additional $4,031. This rate decrease is primarily the result of an upward
revision of the oil and gas reserves at December 31, 1994.
General and administrative expenses decreased from $19,652 in 1994 to
$14,739 in 1995. This decrease of $4,913 (25%) 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 during 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
form 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 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 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
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 4, 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