United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
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 0-18330
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 5, L.P.
(Exact name of registrant as specified in its Charter)
New Jersey 76-0259722
(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) (Zip Code)
Registrant's telephone number, including area code:
(713) 358-8401
Indicate by check mark whether the 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
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 5, L.P.
BALANCE SHEET
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MARCH 31,
ASSETS 1996
---------------------
(Unaudited)
CURRENT ASSETS:
Cash $ 2,155
Accounts receivable - oil & gas sales 12,036
---------------------
Total current assets 14,191
---------------------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests 1,011,033
Less accumulated depletion 950,316
---------------------
Property, net 60,717
---------------------
TOTAL $ 74,908
=====================
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 171
Payable to general partner 12,758
---------------------
Total current liabilities 12,929
NONCURRENT PAYABLE TO GENERAL PARTNER 38,275
---------------------
PARTNERS' CAPITAL:
Limited partners 17,921
General partner 5,783
---------------------
Total partners' capital 23,704
---------------------
TOTAL $ 74,908
=====================
See accompanying notes to financial statements.
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I-1
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 5, L.P.
STATEMENTS OF OPERATIONS
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(UNAUDITED)
THREE MONTHS ENDED
-----------------------------
MARCH 31, MARCH 31,
1996 1995
------------ --------------
REVENUES:
Oil and gas sales $ 11,016 $ 9,763
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EXPENSES:
Depletion 3,003 7,645
Production taxes 335 534
General and administrative 3,432 2,270
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Total expenses 6,770 10,449
------------ --------------
NET INCOME (LOSS) $ 4,246 $ (686)
============ ==============
See accompanying notes to financial statements.
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I-2
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 5, L.P.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31, MARCH 31,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 4,246 $ (686)
Adjustments to reconcile net income (loss) to
net cash provided by operating
activities:
Depletion 3,003 7,645
Decrease in:
Accounts receivable - oil & gas sales 140 4,142
(Decrease) in:
Accounts payable (1,844) (2,871)
Payable to general partner (4,980) (11)
Total adjustments (3,681) 8,905
Net cash provided by operating activities 565 8,219
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions - (7,575)
NET INCREASE IN CASH 565 644
CASH AT BEGINNING OF YEAR 1,590 1,725
CASH AT END OF PERIOD $ 2,155 $ 2,369
See accompanying notes to financial statements.
I-3
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 5, 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.
I-4
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 $9,763 in 1995 to $11,016
in 1996. This represents an increase of $1,253 (13%). Oil sales increased by
$416 or 4%. A 35% increase in average oil net sales price increased sales by
$1,541. This increase was partially offset by a 20% decrease in oil production.
Gas sales increased $837 or 20%. A 43% increase in average gas net sales price
increased sales by $1,499. This increase was partially offset by a 16% decrease
in gas production. The increases in average net sales prices were primarily a
result of lower operating costs incurred on the Company's net profit royalty
properties coupled with higher prices in the overall market for the sale of oil
and gas. Operating costs were higher in 1995 due to workovers on the Speary
acquisition which adversely affected the prices received on the Company's net
profit royalty interests.
Depletion expense decreased from $7,645 in the first quarter of 1995 to $3,003
in the first quarter of 1996. This represents a decrease of $4,642 (61%). The
changes in production, noted above, reduced depletion expense by $4,342. A 52%
decrease in the depletion rate reduced depletion expense by an additional
$3,300. The decrease in the depletion rate was primarily due upward revisions of
the oil and gas reserves during December 1995.
General and administrative expenses increased from $2,270 in the first quarter
of 1995 to $3,432 in the first quarter of 1996. This increase of $1,162 (51%) is
primarily due to a $1,714 increase in direct expenses incurred by the Company in
1996, partially offset 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. The Company discontinued the payment of distributions in
the second quarter of 1995. Future distributions are dependent upon among other
things, an increase in the prices received for oil and gas. The Company will
continue to recover its reserves and reduce its obligations in 1996. The general
partner does not intend to accelerate the repayment of the debt beyond the cash
flow provided by operating activities. Based upon current projected cash flows
from its property, it does not appear that the Company will have sufficient cash
to pay its operating expenses, repay its debt obligations and pay distributions
in the near future.
I-5
PART II. OTHER INFORMATION
Item 1Legal 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.
II-1
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 88-89 INCOME AND RETIREMENT
FUND - SERIES 5, 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