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 June 30, 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 0-20299
SOUTHWEST OIL & GAS 1990-91 INCOME PROGRAM
Southwest Oil & Gas Income Fund X-C, L.P.
(Exact name of registrant as specified
in its limited partnership agreement)
Delaware 75-2374445
(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 notes thereto for the year
ended December 31, 1995 which are found in the Registrant's Form 10-K Report
for 1995 filed with the Securities and Exchange Commission. The December 31,
1995 balance sheet included herein has been taken from the Registrant's 1995
Form 10-K Report. Operating results for the three and six month periods
ended June 30, 1996 are not necessarily indicative of the results that may be
expected for the full year.
Southwest Oil & Gas Income Fund X-C, L.P.
Balance Sheets
June 30, December 31,
1996 1995
--------- ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 259,838 34,680
Receivable from Managing
General Partner 171,370 145,549
--------- ---------
Total current assets 431,208 180,229
--------- ---------
Oil and gas properties - using the
full cost method of accounting 2,407,563 2,631,187
Less accumulated depreciation,
depletion and amortization 1,603,496 1,526,496
--------- ---------
Net oil and gas properties 804,067 1,104,691
--------- ---------
Organization costs, net 3,158 6,398
--------- ---------
$ 1,238,433 1,291,318
========= =========
Liabilities and Partners' Equity
Current liability - Distributions payable $ 63 147
--------- ---------
Partners' equity:
General partners 20,740 11,701
Limited partners 1,217,630 1,279,470
--------- ---------
Total partners' equity 1,238,370 1,291,171
--------- ---------
$ 1,238,433 1,291,318
========= =========
Southwest Oil & Gas Income Fund X-C, L.P.
Statements of Operations
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
Revenues
Oil and gas $ 399,414 348,643 656,677 682,299
Interest 2,279 645 3,084 1,283
------- ------- ------- -------
401,693 349,288 659,761 683,582
------- ------- ------- -------
Expenses
Production 160,852 237,419 333,150 454,080
General and administrative 10,410 10,353 26,220 25,996
Depreciation, depletion and
amortization 48,620 68,620 80,240 134,240
------- ------- ------- -------
219,882 316,392 439,610 614,316
------- ------- ------- -------
Net income $ 181,811 32,896 220,151 69,266
======= ======= ======= =======
Net income allocated to:
Managing General Partner $ 20,739 9,137 27,035 18,316
======= ======= ======= =======
General Partner $ 2,304 1,015 3,004 2,035
======= ======= ======= =======
Limited Partners $ 158,768 22,744 190,112 48,915
======= ======= ======= =======
Per limited partner
unit $ 25.42 3.64 30.44 7.83
======= ======= ======= =======
Southwest Oil & Gas Income Fund X-C, L.P.
Statements of Cash Flows
(unaudited)
Six Months Ended
June 30,
1996 1995
Cash flows from operating activities:
Cash received from sale of oil
and gas $ 636,314 669,127
Cash paid to suppliers (364,828) (458,079)
Interest received 3,084 1,283
------- -------
Net cash provided by operating
activities 274,570 212,331
------- -------
Cash flows from investing activities:
Additions to oil and gas properties (2,070) (9,067)
Cash received from sale of oil
and gas properties 225,694 20,167
------- -------
Net cash provided by investing
activities: 223,624 11,100
------- -------
Cash flows used in financing activities:
Distributions to partners (273,036) (245,088)
------- -------
Net increase (decrease) in cash and
cash equivalents 225,158 (21,657)
Beginning of period 34,680 67,225
------- -------
End of period $ 259,838 45,568
======= =======
(continued)
Southwest Oil & Gas Income Fund X-C, L.P.
Statements of Cash Flows, continued
(unaudited)
Six Months Ended
June 30,
1996 1995
Reconciliation of net income to
net cash provided by operating
activities:
Net income $ 220,151 69,266
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion and
amortization 80,240 134,240
Increase in receivables (20,363) (13,172)
Increase (decrease) in payables (5,458) 21,997
------- -------
Net cash provided by operating
activities $ 274,570 212,331
======= =======
Supplemental schedule of noncash investing
and financing activities:
Sale of oil and gas properties included
in accounts receivable $ - 500
======= =======
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
Southwest Oil & Gas Income Fund X-C, L.P. was organized as a Delaware limited
partnership on September 20, 1991. The offering of such limited partnership
interests began October 1, 1991 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 January 13, 1992 and the
offering concluded on April 30, 1992 with total limited partner contributions
of $3,123,000.
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 farmout
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.
Results of Operations
A. General Comparison of the Quarters Ended June 30, 1996 and 1995
The following table provides certain information regarding performance
factors for the quarters ended June 30, 1996 and 1995:
Three Months
Ended Percentage
June 30, Increase
1996 1995 (Decrease)
---- ---- ----------
Average price per barrel of oil $ 19.04 17.13 11%
Average price per mcf of gas $ 2.39 1.39 72%
Oil production in barrels 15,600 16,500 (5%)
Gas production in mcf 42,700 47,700 (10%)
Gross oil and gas revenue $ 399,414 348,643 15%
Net oil and gas revenue $ 238,562 111,224 114%
Partnership distributions $ 142,952 145,000 (1%)
Limited partner distributions $ 131,452 130,500 1%
Per unit distribution to limited
partners $ 21.05 20.89 1%
Number of limited partner units 6,246 6,246
Revenues
The Partnership's oil and gas revenues increased to $399,414 from $348,643
for the quarters ended June 30, 1996 and 1995, respectively, an increase of
15%. The principal factors affecting the comparison of the quarters ended
June 30, 1996 and 1995 are as follows:
1. The average price for a barrel of oil received by the Partnership
increased during the quarter ended June 30, 1996 as compared to the
quarter ended June 30, 1995 by 11%, or $1.91 per barrel, resulting in an
increase of approximately $31,500 in revenues. Oil sales represented 74%
of total oil and gas sales during the quarter ended June 30, 1996 as
compared to 81% during the quarter ended June 30, 1995.
The average price for an mcf of gas received by the Partnership increased
during the same period by 72%, or $1.00 per mcf, resulting in an increase
of approximately $47,700 in revenues.
The total increase in revenues due to the change in prices received from
oil and gas production is approximately $79,200. 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 900 barrels or 5% during the
quarter ended June 30, 1996 as compared to the quarter ended June 30,
1995, resulting in a decrease of approximately $17,100 in revenues.
Gas production decreased approximately 5,000 mcf or 10% during the same
period, resulting in a decrease of approximately $12,000 in revenues.
The total decrease in revenues due to the change in production is
approximately $29,100. The decrease is a result of property sales and
downhole problems.
Costs and Expenses
Total costs and expenses decreased to $219,882 from $316,392 for the quarters
ended June 30, 1996 and 1995, respectively, a decrease of 31%. The decrease
is the result of lower lease operating costs and depletion expense, offset by
an increase in general and administrative expense.
1. Lease operating costs and production taxes were 32% lower, or
approximately $76,600 less during the quarter ended June 30, 1996 as
compared to the quarter ended June 30, 1995. The decrease is a result of
property sales and workover costs incurred in 1995.
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 increased 1%
or approximately $100 during the quarter ended June 30, 1996 as compared
to the quarter ended June 30, 1995.
3. Depletion expense decreased to $47,000 for the quarter ended June 30,
1996 from $67,000 for the same period in 1995. This represents a
decrease of 30%. Depletion is calculated using the gross 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 factors that attributed to the decline in depletion expense between
the comparative periods were the increase in the price of oil and gas
used to determine the Partnership's reserves for January 1, 1996 as
compared to 1995 and the increase in property sales.
B. General Comparison of the Six Month Periods Ended June 30, 1996 and 1995
The following table provides certain information regarding performance
factors for the six month periods ended June 30, 1996 and 1995:
Six Months
Ended Percentage
June 30, Increase
1996 1995 (Decrease)
---- ---- ----------
Average price per barrel of oil $ 18.61 16.66 12%
Average price per mcf of gas $ 2.27 1.41 61%
Oil production in barrels 26,800 33,400 (20%)
Gas production in mcf 70,000 88,700 (21%)
Gross oil and gas revenue $ 656,677 682,299 (4%)
Net oil and gas revenue $ 323,527 228,219 42%
Partnership distributions $ 272,952 244,890 11%
Limited partner distributions $ 251,952 220,690 14%
Per unit distribution to limited
partners $ 40.34 35.33 14%
Number of limited partner units 6,246 6,246
Revenues
The Partnership's oil and gas revenues decreased to $656,677 from $682,299
for the six months ended June 30, 1996 and 1995, respectively, a decrease of
4%. The principal factors affecting the comparison of the six months ended
June 30, 1996 and 1995 are as follows:
1. The average price for a barrel of oil received by the Partnership
increased during the six months ended June 30, 1996 as compared to the
six months ended June 30, 1995 by 12%, or $1.95 per barrel, resulting in
an increase of approximately $65,100 in revenues. Oil sales represented
76% of total oil and gas sales during the six months ended June 30, 1996
as compared to 82% during the six months ended June 30, 1995.
The average price for an mcf of gas received by the Partnership increased
during the same period by 61%, or $.86 per mcf, resulting in an increase
of approximately $76,300 in revenues.
The total increase in revenues due to the change in prices received from
oil and gas production is approximately $141,400. 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 6,600 barrels or 20% during the
six months ended June 30, 1996 as compared to the six months ended June
30, 1995, resulting in a decrease of approximately $122,800 in revenues.
Gas production decreased approximately 18,700 mcf or 21% during the same
period, resulting in a decrease of approximately $42,400 in revenues.
The total decrease in revenues due to the change in production is
approximately $165,200. The decrease is a result of property sales and
downhole problems.
Costs and Expenses
Total costs and expenses decreased to $439,610 from $614,316 for the six
months ended June 30, 1996 and 1995, respectively, a decrease of 28%. The
decrease is the result of a decline in lease operating costs and depletion
expense, offset by an increase in general and administrative expense.
1. Lease operating costs and production taxes were 27% lower, or
approximately $120,900 less during the six months ended June 30, 1996 as
compared to the six months ended June 30, 1995. The decrease is a result
of property sales and workover costs incurred in 1995.
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 increased 1%
or approximately $200 during the six months ended June 30, 1996 as
compared to the six months ended June 30, 1995.
3. Depletion expense decreased to $77,000 for the six months ended June 30,
1996 from $131,000 for the same period in 1995. This represents a
decrease of 41%. Depletion is calculated using the gross 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.
Three factors that attributed to the decline in depletion expense between
the comparative periods were the increase in the price of oil and gas
used to determine the Partnership's reserves for January 1, 1996 as
compared to 1995, the increase in property sales and the decrease in 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 $274,600 in
the six months ended June 30, 1996 as compared to approximately $212,300 in
the six months ended June 30, 1995. The primary source of the 1996 cash flow
from operating activities was profitable operations.
Cash flows provided by investing activities were approximately $223,600 in
the six months ended June 30, 1996 as compared to approximately $11,100 in
the six months ended June 30, 1995. The principle source of the 1996 cash
flow from investing activities was the sale of oil and gas properties, offset
by the additions to oil and gas properties.
Cash flows used in financing activities were approximately $273,000 in the
six months ended June 30, 1996 as compared to approximately $245,100 in the
six months ended June 30, 1995. The only use in financing activities was the
distributions to partners.
Total distributions during the six months ended June 30, 1996 were $272,952
of which $251,952 was distributed to the limited partners and $21,000 to the
general partners. The per unit distribution to limited partners during the
six months ended June 30, 1996 was $40.34. Total distributions during the
six months ended June 30, 1995 were $244,890 of which $220,690 was
distributed to the limited partners and $24,200 to the general partners. The
per unit distribution to limited partners during the six months ended June
30, 1995 was $35.33.
The sources for the 1996 distributions of $272,952 were oil and gas
operations of approximately $274,600 and the sale of oil and gas properties
of approximately $225,700, offset by the addition to oil and gas properties
of approximately $2,100, resulting in excess cash for contingencies or
subsequent distributions. The sources for the 1995 distributions of $244,890
were oil and gas operations of approximately $212,300 and the sale of oil and
gas properties of approximately $20,200, offset by the addition to oil and
gas properties of approximately $9,100, with the balance from available cash
on hand at the beginning of the period.
Since inception of the Partnership, cumulative monthly cash distributions of
$1,638,318 have been made to the partners. As of June 30, 1996, $1,491,494
or $238.79 per limited partner unit has been distributed to the limited
partners, representing a 48% return of the capital contributed.
As of June 30, 1996, the Partnership had approximately $431,100 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) None
(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 & GAS
INCOME FUND X-C, 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: August 12, 1996