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, 1997
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 1997
---------------------
(Unaudited)
CURRENT ASSETS:
Cash $ 8,643
Accounts receivable - oil & gas sales 22,577
---------------------
Total current assets 31,220
---------------------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests 1,011,033
Less accumulated depletion 958,602
---------------------
Property, net 52,431
---------------------
TOTAL $ 83,651
=====================
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 1,101
Payable to general partner 27,746
---------------------
Total current liabilities 28,847
PARTNERS' CAPITAL:
Limited partners 45,084
General partner 9,720
---------------------
Total partners' capital 54,804
---------------------
TOTAL $ 83,651
=====================
Number of $500 Limited Partner units outstanding 2,300
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,
1997 1996
------------------- -------------------
REVENUES:
Oil and gas sales $ 16,711 $ 11,016
------------------- -------------------
EXPENSES:
Depletion 2,037 3,003
Production taxes 365 335
General and administrative 2,600 3,432
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Total expenses 5,002 6,770
------------------- -------------------
NET INCOME $ 11,709 $ 4,246
=================== ===================
See accompanying notes to financial statements.
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I-2
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 5, L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 1996 AND
FOR THE THREE MONTHS ENDED MARCH 31, 1997
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PER $500
LIMITED
PARTNER
GENERAL LIMITED UNIT OUT-
TOTAL PARTNER PARTNERS STANDING
------------------ ------------------ ----------------- -----------------
BALANCE, JANUARY 1, 1996 $ 19,458 $ 5,058 $ 14,400 $ 6
CASH DISTRIBUTIONS (11,407) (1,142) (10,265) (4)
NET INCOME 38,366 4,761 33,605 15
------------------ ------------------ ----------------- -----------------
BALANCE, DECEMBER 31, 1996 46,417 8,677 37,740 17
CASH DISTRIBUTIONS (3,322) (332) (2,990) (1)
NET INCOME 11,709 1,375 10,334 4
------------------ ------------------ ----------------- -----------------
BALANCE, MARCH 31, 1997 $ 54,804 $ 9,720 $ 45,084 (1) $ 20
================== ================== ================= =================
(1) Includes 132 units purchased by the general partner as a limited partner.
See accompanying notes to financial statements.
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I-3
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 5, L.P.
STATEMENTS OF CASH FLOWS
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(UNAUDITED)
THREE MONTHS ENDED
------------------------------------------
MARCH 31, MARCH 31,
1997 1996
------------------- -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 11,709 $ 4,246
------------------- -------------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depletion 2,037 3,003
(Increase) decrease in:
Accounts receivable - oil & gas sales (3,289) 140
(Decrease) in:
Accounts payable (1,105) (1,844)
Payable to general partner (6,466) (4,980)
------------------- -------------------
Total adjustments (8,823) (3,681)
------------------- -------------------
Net cash provided by operating activities 2,886 565
------------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (3,322) -
------------------- -------------------
NET INCREASE (DECREASE) IN CASH (436) 565
CASH AT BEGINNING OF YEAR 9,079 1,590
------------------- -------------------
CASH AT END OF PERIOD $ 8,643 $ 2,155
=================== ===================
See accompanying notes to financial statements.
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I-4
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.
2. A cash distribution was made to the limited partners of the Company in
the amount of $2,990, representing net revenues from the sale of oil
and gas produced from properties owned by the Company. This
distribution was made on January 31, 1997.
3. On April 7, 1997, the Company's General Partner mailed proxy material
to the limited partners with respect to a proposed consolidation of the
Company with 33 other managed limited partnerships. The terms and
conditions of the proposed consolidation are set forth in such proxy
material.
I-5
Item 2. Management's Discussion and Analysis or Plan of Operation.
First Quarter 1997 Compared to First Quarter 1996
Oil and gas sales for the first quarter increased from $11,016 in 1996 to
$16,711 in 1997. This represents an increase of $5,695 (52%). Oil sales
increased by $3,275 or 55%. A 45% increase in average oil net sales price
increased sales by $2,893. A 6% increase in oil production increased sales by an
additional $382. Gas sales increased $2,420 or 48%. A 24% increase in average
gas net sales price increased sales by $1,419. A 20% increase in gas production
increased sales by an additional $1,001. The increases in average net sales
prices were primarily a result of higher prices in the overall market for the
sale of oil and gas. The increases in oil and gas production were primarily the
result of higher production from the El Mac acquisition which had an acidization
treatment.
Depletion expense decreased from $3,003 in the first quarter of 1996 to $2,037
in the first quarter of 1997. This represents a decrease of $966 (32%). A 41%
decrease in the depletion rate reduced depletion expense by $1,410. This
decrease was partially offset by the changes in production, noted above. The
decrease in the depletion rate was primarily due to upward revisions of the oil
and gas reserves during December 1996.
General and administrative expenses decreased from $3,432 in the first quarter
of 1996 to $2,600 in the first quarter of 1997. This decrease of $832 (24%) 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's "available cash flow" is essentially equal to
the net amount of cash provided by operating, financing and investing
activities.
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 1997. There
appears to be sufficient net revenues to pay all operating obligations and
expenses. The Company does not intend to purchase additional properties or fund
extensive development of existing oil and gas properties, and as such; has no
long-term liquidity needs. The Company's projected cash flows from operations
will provide sufficient funding to pay its operating expenses and debt
obligations.
On April 7, 1997, the Company's General Partner mailed proxy material to the
limited partners with respect to a proposed consolidation of the Company with 33
other managed limited partnerships. The terms and conditions of the proposed
consolidation are set forth in such proxy material.
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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, 1997.
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, 1997 By: /s/ James A. Klein
-------------------
James A. Klein
Controller and Chief
Accounting Officer