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 0-18321
ENEX OIL & GAS INCOME PROGRAM IV - SERIES 4, L.P.
(Exact name of small business issuer as specified in its charter)
New Jersey 76-0251422
(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) has 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 IV - SERIES 4, L.P.
BALANCE SHEET
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MARCH 31,
ASSETS 1996
--------------
(Unaudited)
CURRENT ASSETS:
Cash $ 7,992
Accounts receivable - oil & gas sales 11,533
Other current assets 1,048
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Total current assets 20,573
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OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 1,158,836
Less accumulated depreciation and depletion 1,036,426
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Property, net 122,410
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TOTAL $ 142,983
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LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 2,951
Payable to general partner 28,242
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Total current liabilities 31,193
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NONCURRENT PAYABLE TO GENERAL PARTNER 56,484
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PARTNERS' CAPITAL:
Limited partners 48,028
General partner 7,278
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Total partners' capital 55,306
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TOTAL $ 142,983
=============
See accompanying notes to financial statements.
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ENEX OIL & GAS INCOME PROGRAM IV - SERIES 4, 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 $ 28,405 24,495
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EXPENSES:
Depreciation, depletion and amortization 7,428 13,771
Impairment of property 243,005 -
Lease operating expenses 5,293 8,277
Production taxes 1,488 1,307
General and administrative 5,980 5,221
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Total expenses 263,194 28,576
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NET LOSS $ (234,789) (4,081)
See accompanying notes to financial statements.
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ENEX OIL AND GAS INCOME PROGRAM IV - SERIES 4, L.P.
STATEMENTS OF CASH FLOWS
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(UNAUDITED)
THREE MONTHS ENDED
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MARCH 31, MARCH 31,
1996 1995
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (234,789) (4,081)
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Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation, depletion and amortization 7,428 13,771
Impairment of property 243,005 -
(Increase) decrease in:
Accounts receivable - oil & gas sales (3,820) 287
Other current assets 759 828
(Decrease) in:
Accounts payable (5,712) (3,127)
Payable to general partner (462) (1,284)
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Total adjustments 241,198 10,475
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Net cash provided by operating activities 6,409 6,394
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CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions - development costs (1,655) (1,053)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions - (4,520)
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NET INCREASE IN CASH 4,754 821
CASH AT BEGINNING OF YEAR 3,238 4,633
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CASH AT END OF PERIOD $ 7,992 5,454
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See accompanying notes to financial statements.
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ENEX OIL & GAS INCOME PROGRAM IV - 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.
2. The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standard ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of," which
requires certain assets to be reviewed for impairment whenever events or
circumstances indicate the carrying amount may not be recoverable. In the
first quarter of 1996, the Company recognized a non-cash impairment
provision of $243,005 for certain oil and gas properties due to market
conditions and reserve revisions which indicated that the carrying amounts
were not fully recoverable.
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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 $24,495 in 1995 to
$28,405 in 1996. This represents an increase of $3,910 (16%). Oil sales
increased by $2,360 or 12%. A 26% increase in average oil sales prices increased
sales by $4,366. This increase was partially offset by an 11% decrease in oil
production. Gas sales increased by $1,550 or 28%. A 7% increase in gas
production increased sales by $382. A 20% increase in average gas sales prices
increased sales by an additional $1,168. The lower oil production is a primarily
a 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 $8,277 in the first quarter of 1995 to
$5,293 in the first quarter of 1996. The decrease of $2,984 (36%) is primarily
due to the changes in production, noted above.
Depreciation and depletion expense decreased from $13,771 in the first quarter
of 1995 to $7,428 in the first quarter of 1996. This represents a decrease of
$6,343 (46%). The changes in production, noted above, caused depreciation and
depletion to decrease by $838, while a 43% decrease in the depletion rate caused
an additional reduction of $5,505. The rate decrease was primarily due to the
lower property basis resulting from the recognition of a $243,005 impairment of
property in the first quarter of 1996.
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standard ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long- Lived Assets to be Disposed Of," which requires
certain assets to be reviewed for impairment whenever events or circumstances
indicate the carrying amount may not be recoverable. In the first quarter of
1996, the Company recognized a non-cash impairment provision of $243,005 for
certain oil and gas properties due to market conditions and reserve revisions on
the Lake Decade acquisition, which indicated that the carrying amounts were not
fully recoverable.
eneral and administrative expenses increased from $5,221 in the first quarter of
1995 to $5,980 in the first quarter of 1996. This increase of $759 (15%) is
primarily due to $2,350 higher direct expenses incurred by the Company in 1996,
partially offfset by 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 partners
the net proceeds realized from the sale of oil and gas production after payment
of debt obligations. Distributions were suspended in the first quarter of 1996.
Distribution amounts are subject to change if net
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revenues are greater or less than expected. It is anticipated that periodic
distributions will be made by the Company as cash becomes available.
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 IV - 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
May 11, 1996 By: /s/ James A. Klein
-------------------
James A. Klein
Controller and Chief
Accounting Officer