Page 14 of 14
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 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 0-18996
SOUTHWEST OIL & GAS 1990-91 INCOME PROGRAM
Southwest Oil and Gas Income Fund X-A, L.P.
(Exact name of registrant as specified
in its limited partnership agreement)
Delaware 75-2310854
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
407 N. Big Spring, Suite 300
_________Midland, Texas 79701_________
(Address of principal executive offices)
________(915) 686-9927________
(Registrant's telephone number,
including area code)
Indicate by check mark whether 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 _____
The total number of pages contained in this report is 14.
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
The unaudited condensed financial statements included herein have been
prepared by the Registrant (herein also referred to as the "Partnership")
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01
of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments necessary for a fair presentation have been included and are of
a normal recurring nature. The financial statements should be read in
conjunction with the audited financial statements and the note thereto for
the year ended December 31, 1996 which are found in the Registrant's Form
10-K Report for 1996 filed with the Securities and Exchange Commission.
The December 31, 1996 balance sheet included herein has been taken from the
Registrant's 1996 Form 10-K Report. Operating results for the three and
nine month periods ended September 30, 1997 are not necessarily indicative
of the results that may be expected for the full year.
Southwest Oil and Gas Income Fund X-A, L.P.
Balance Sheets
September 30, December 31,
1997 1996
------------- ------------
(unaudited)
Assets
Current assets
Cash and cash equivalents $ 5,455 8,919
Receivable from Managing General Partner 46,695 85,367
Other receivable - 14,850
--------- ---------
Total current assets 52,150 109,136
--------- ---------
Oil and gas properties - using the
full cost method of accounting 3,934,509 3,940,445
Less accumulated depreciation,
depletion and amortization 3,499,000 3,470,000
--------- ---------
Net oil and gas properties 435,509 470,445
--------- ---------
$ 487,659 579,581
========= =========
Liabilities and Partners' Equity
Current liability - Distribution payable $ 953 950
--------- ---------
Partners' equity
General partners (11,141) (4,848)
Limited partners 497,847 583,479
--------- ---------
Total partners' equity 486,706 578,631
--------- ---------
$ 487,659 579,581
========= =========
Southwest Oil and Gas Income Fund X-A, L.P.
Statements of Operations
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
Revenues
Oil and gas $ 133,671 182,348 420,055 611,603
Interest 75 252 368 767
Miscellaneous 6,003 - 7,653 -
------- ------- ------- -------
139,749 182,600 428,076 612,370
------- ------- ------- -------
Expenses
Production 83,112 117,699 280,348 391,978
General and administrative 19,569 20,511 67,653 68,045
Depreciation, depletion and
amortization 9,000 25,000 29,000 84,000
------- ------- ------- -------
111,681 163,210 377,001 544,023
------- ------- ------- -------
Net income $ 28,068 19,390 51,075 68,347
======= ======= ======= =======
Net income allocated to:
Managing General Partner $ 3,336 3,995 7,207 13,711
======= ======= ======= =======
General Partner $ 371 444 800 1,523
======= ======= ======= =======
Limited Partners $ 24,361 14,951 43,068 53,113
======= ======= ======= =======
Per limited partner unit $ 2.32 1.43 4.11 5.07
======= ======= ======= =======
Southwest Oil and Gas Income Fund X-A, L.P.
Statements of Cash Flows
(unaudited)
Nine Months Ended
September 30,
1997 1996
Cash flows from operating activities
Cash received from oil and gas sales $ 490,973 573,935
Cash paid to suppliers (357,744) (485,152)
Interest received 368 767
------- -------
Net cash provided by operating activities 133,597 89,550
------- -------
Cash flows from investing activities
Additions to oil and gas properties (7,916) (10,567)
Cash received from sale of oil and gas
property interest 13,852 1,040
------- -------
Net cash provided by (used in) investing
activities: 5,936 (9,527)
------- -------
Cash flows used in financing activities
Distributions to partners (142,997) (105,158)
------- -------
Net decrease in cash and cash equivalents (3,464) (25,135)
Beginning of period 8,919 41,056
------- -------
End of period $ 5,455 15,921
======= =======
(continued)
Southwest Oil and Gas Income Fund X-A, L.P.
Statements of Cash Flows, continued
(unaudited)
Nine Months Ended
September 30,
1997 1996
Reconciliation of net income to net cash
provided by operating activities
Net income $ 51,075 68,347
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation, depletion and amortization 29,000 84,000
(Increase) decrease in receivables 63,265 (37,668)
Decrease in payables (9,743) (25,129)
--------- ------
Net cash provided by operating activities $ 133,597 89,550
========= ======
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
Southwest Oil & Gas Income Fund X-A, L.P. was organized as a Delaware
limited partnership on January 29, 1990. The offering of such limited
partnership interests began on May 11, 1990 as part of a shelf offering
registered under the name Southwest Oil & Gas 1990-91 Income Program.
Minimum capital requirements for the Partnership were met on August 15,
1990, with the offering of limited partnership interests concluding on
November 30, 1990, with total limited partner contributions of $5,242,000.
The Partnership was formed to acquire interests in producing oil and gas
properties, to produce and market crude oil and natural gas produced from
such properties, and to distribute the net proceeds from operations to the
limited and general partners. Net revenues from producing oil and gas
properties will not be reinvested in other revenue producing assets except
to the extent that production facilities and wells are improved or reworked
or where methods are employed to improve or enable more efficient recovery
of oil and gas reserves.
Increases or decreases in Partnership revenues and, therefore,
distributions to partners will depend primarily on changes in the prices
received for production, changes in volumes of production sold, lease
operating expenses, enhanced recovery projects, offset drilling activities
pursuant to farm-out arrangements, sales of properties, and the depletion
of wells. Since wells deplete over time, production can generally be
expected to decline from year to year.
Well operating costs and general and administrative costs usually decrease
with production declines; however, these costs may not decrease
proportionately. Net income available for distribution to the partners is
therefore expected to fluctuate in later years based on these factors.
Based on current conditions, management anticipates participating in a
farmout agreement and performing workovers during the next two years to
enhance production. The Partnership may undergo an increase later in 1997
and possibly in 1998. Thereafter, the Partnership could possibly
experience a normal decline of 8% to 10% per year.
Results of Operations
A. General Comparison of the Quarters Ended September 30, 1997 and 1996
The following table provides certain information regarding performance
factors for the quarters ended September 30, 1997 and 1996:
Three Months
Ended Percentage
September 30, Increase
1997 1996 (Decrease)
Average price per barrel of oil $ 17.31 20.95 (17%)
Average price per mcf of gas $ 2.79 2.14 30%
Oil production in barrels 6,500 7,900 (18%)
Gas production in mcf 7,600 7,800 (3%)
Gross oil and gas revenue $ 133,671 182,348 (27%)
Net oil and gas revenue $ 50,559 64,649 (22%)
Partnership distributions $ 31,000 54,000 (43%)
Limited partner distributions $ 27,900 48,600 (43%)
Per unit distribution to limited partners $ 2.66 4.64 (43%)
Number of limited partner units 10,484 10,484
Revenues
The Partnership's oil and gas revenues decreased to $133,671 from $182,348
for the quarters ended September 30, 1997 and 1996, respectively, a
decrease of 27%. The principal factors affecting the comparison of the
quarters ended September 30, 1997 and 1996 are as follows:
1. The average price for a barrel of oil received by the Partnership
decreased during the quarter ended September 30, 1997 as compared to
the quarter ended September 30, 1996 by 17%, or $3.64 per barrel,
resulting in a decrease of approximately $28,800 in revenues. Oil
sales represented 84% of total oil and gas sales during the quarter
ended September 30, 1997 as compared to 91% during the quarter ended
September 30, 1996.
The average price for an mcf of gas received by the Partnership
increased during the same period by 30%, or $.65 per mcf, resulting in
an increase of approximately $5,100 in revenues.
The net total decrease in revenues due to the change in prices received
from oil and gas production is approximately $23,700. The market price
for oil and gas has been extremely volatile over the past decade and
management expects a certain amount of volatility to continue in the
foreseeable future.
2. Oil production decreased approximately 1,400 barrels or 18% during the
quarter ended September 30, 1997 as compared to the quarter ended
September 30, 1996, resulting in a decrease of approximately $24,200 in
revenues.
Gas production decreased approximately 200 mcf or 3% during the same
period, resulting in a decrease of approximately $600 in revenues.
The total decrease in revenues due to the change in production is
approximately $24,800. The decrease in oil production is primarily
attributable to a farm-out agreement which lowered the Partnership's
interest in the Ballard Grayburg San Andres Unit.
Costs and Expenses
Total costs and expenses decreased to $111,681 from $163,210 for the
quarters ended September 30, 1997 and 1996, respectively, a decrease of
32%. The decrease is the result of lower lease operating costs, general
and administrative expense and depletion expense.
1. Lease operating costs and production taxes were 29% lower, or
approximately $34,600 less during the quarter ended September 30, 1997 as
compared to the quarter ended September 30, 1996. The decrease in
primarily attributable to a farm-out agreement which lowered the
Partnership's interest in the Ballard Grayburg San Andres Unit.
2. General and administrative costs consist of independent accounting and
engineering fees, computer services, postage, and Managing General
Partner personnel costs. General and administrative costs decreased
5% or approximately $900 during the quarter ended September 30, 1997 as
compared to the quarter ended September 30, 1996.
3. Depletion expense decreased to $9,000 for the quarter ended September
30, 1997 from $25,000 for the same period in 1996. This represents a
decrease of 64%. Depletion is calculated using the units of revenue
method of amortization based on a percentage of current period gross
revenues to total future gross oil and gas revenues, as estimated by
the Partnership's independent petroleum consultants. Two contributing
factors to the decline in depletion expense between the comparative
periods were the increase in the price of oil used to determine the
Partnership's reserves for January 1, 1997 as compared to 1996 and the
decline in gross oil and gas revenues.
B. General Comparison of the Nine Month Periods Ended September 30, 1997
and 1996
The following table provides certain information regarding performance
factors for the nine month periods ended September 30, 1997 and 1996:
Nine Months
Ended Percentage
September 30, Increase
1997 1996 (Decrease)
Average price per barrel of oil $ 18.06 18.97 (5%)
Average price per mcf of gas $ 2.66 2.43 9%
Oil production in barrels 19,900 29,400 (32%)
Gas production in mcf 22,880 22,300 3%
Gross oil and gas revenue $ 420,055 611,603 (31%)
Net oil and gas revenue $ 139,707 219,625 (36%)
Partnership distributions $ 143,000 105,000 36%
Limited partner distributions $ 128,700 94,500 36%
Per unit distribution to limited partners $ 12.28 9.01 36%
Number of limited partner units 10,484 10,484
Revenues
The Partnership's oil and gas revenues decreased to $420,055 from $611,603
for the nine months ended September 30, 1997 and 1996, respectively, a
decrease of 31%. The principal factors affecting the comparison of the
nine months ended September 30, 1997 and 1996 are as follows:
1. The average price for a barrel of oil received by the Partnership
decreased during the nine months ended September 30, 1997 as compared
to the nine months ended September 30, 1996 by 5%, or $.91 per barrel,
resulting in a decrease of approximately $26,800 in revenues. Oil
sales represented 86% of total oil and gas sales during the nine months
ended September 30, 1997 as compared to 91% during the nine months
ended September 30, 1996.
The average price for an mcf of gas received by the Partnership
increased during the same period by 9%, or $.23 per mcf, resulting in
an increase of approximately $5,100 in revenues.
The net total decrease in revenues due to the change in prices received
from oil and gas production is approximately $21,700. The market price
for oil and gas has been extremely volatile over the past decade and
management expects a certain amount of volatility to continue in the
foreseeable future.
2. Oil production decreased approximately 9,500 barrels or 32% during the
nine months ended September 30, 1997 as compared to the nine months
ended September 30, 1996, resulting in a decrease of approximately
$171,600 in revenues.
Gas production increased approximately 600 mcf or 3% during the same
period, resulting in an increase of approximately $1,500 in revenues.
The net total decrease in revenues due to the change in production is
approximately $170,100. The decrease is primarily attributable to
eleven months of revenue, on one lease, being held in suspense during
litigation between the lease's third party operator, the pumper and the
Managing General Partner. Upon conclusion of the litigation, all
revenues, approximately 5,900 barrels of oil, were released during the
first quarter of 1996. Also contributing to the decline is a farm-out
agreement, which lowered the Partnership's interest in the Ballard
Grayburg San Andres Unit.
Costs and Expenses
Total costs and expenses decreased to $377,001 from $544,023 for the nine
months ended September 30, 1997 and 1996, respectively, a decrease of 31%.
The decrease is the result of lower lease operating costs, general and
administrative expense and depletion expense.
1. Lease operating costs and production taxes were 28% lower, or
approximately $111,600 less during the nine months ended September 30,
1997 as compared to the nine months ended September 30, 1996. The
decrease is primarily attributable to litigation costs of
approximately $56,000 incurred during the first quarter of 1996 and a
farm-out agreement which lowered the Partnership's interest in the
Ballard Grayburg San Andres Unit.
2. General and administrative costs consist of independent accounting and
engineering fees, computer services, postage, and Managing General
Partner personnel costs. General and administrative costs decreased 1%
or approximately $400 during the nine months ended September 30, 1997
as compared to the nine months ended September 30, 1996.
3. Depletion expense decreased to $29,000 for the nine months ended
September 30, 1997 from $84,000 for the same period in 1996. This
represents a decrease of 65%. Depletion is calculated using the units
of revenue method of amortization based on a percentage of current
period gross revenues to total future gross oil and gas revenues, as
estimated by the Partnership's independent petroleum consultants. Two
contributing factors to the decline in depletion expense between the
comparative periods were the increase in the price of oil used to
determine the Partnership's reserves for January 1, 1997 as compared to
1996 and the decline in gross oil and gas revenues.
Liquidity and Capital Resources
The primary source of cash is from operations, the receipt of income from
interests in oil and gas properties. The Partnership knows of no material
change, nor does it anticipate any such change.
Cash flows provided by operating activities were approximately $133,600 in
the nine months ended September 30, 1997 as compared to approximately
$89,600 in the nine months ended September 30, 1996. The primary source of
the 1997 cash flow from operating activities was profitable operations.
Cash flows provided by or (used in) investing activities were approximately
$5,900 in the nine months ended September 30, 1997 as compared to
approximately ($9,500) in the nine months ended September 30, 1996. The
principle source of the 1997 cash flow from investing activities was the
change in oil and gas properties.
Cash flows used in financing activities were approximately $143,000 in the
nine months ended September 30, 1997 as compared to approximately $105,200
in the nine months ended September 30, 1996. The only use in financing
activities was the distributions to partners.
Total distributions during the nine months ended September 30, 1997 were
$143,000 of which $128,700 was distributed to the limited partners and
$14,300 to the general partners. The per unit distribution to limited
partners during the nine months ended September 30, 1997 was $12.28. Total
distributions during the nine months ended September 30, 1996 were $105,000
of which $94,500 was distributed to the limited partners and $10,500 to the
general partners. The per unit distribution to limited partners during the
nine months ended September 30, 1996 was $9.01.
The sources for the 1997 distributions of $143,000 were oil and gas
operations of approximately $133,600 and the change in oil and gas
properties of approximately $5,900, with the balance of available cash on
hand at the beginning of the period. The source for the 1996 distributions
of $105,000 was oil and gas operations of approximately $89,600, partially
offset by the change in oil and gas properties of approximately $9,500,
with the balance from available cash on hand at the beginning of the
period.
Since inception of the Partnership, cumulative monthly cash distributions
of $2,631,906 have been made to the partners. As of September 30, 1997,
$2,419,184 or $230.75 per limited partner unit has been distributed to the
limited partners, representing a 46% return of the capital contributed.
As of September 30, 1997, the Partnership had approximately $51,200 in
working capital. The Managing General Partner knows of no unusual
contractual commitments and believes the revenues generated from operations
are adequate to meet the needs of the Partnership.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matter to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a)Exhibits:
27 Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter for
which this report is filed.
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 thereunto duly authorized.
Southwest Oil and Gas Income Fund X-A,
L.P.
a Delaware limited partnership
By: Southwest Royalties, Inc.
Managing General Partner
By: /s/ Bill E. Coggin
------------------------------
Bill E. Coggin, Vice President
and Chief Financial Officer
Date: November 15, 1997