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, 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 nine month periods
ended September 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
September 30, December 31,
1996 1995
------------- ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 233,462 34,680
Receivable from Managing
General Partner 164,508 145,549
--------- ---------
Total current assets 397,970 180,229
--------- ---------
Oil and gas properties - using the
full cost method of accounting 2,409,506 2,631,187
Less accumulated depreciation,
depletion and amortization 1,642,496 1,526,496
--------- ---------
Net oil and gas properties 767,010 1,104,691
--------- ---------
Organization costs, net 1,538 6,398
--------- ---------
$ 1,166,518 1,291,318
========= =========
Liabilities and Partners' Equity
Current liability - Distributions payable $ 69 147
--------- ---------
Partners' equity:
General partners 17,610 11,701
Limited partners 1,148,839 1,279,470
--------- ---------
Total partners' equity 1,166,449 1,291,171
--------- ---------
$ 1,166,518 1,291,318
========= =========
Southwest Oil & Gas Income Fund X-C, L.P.
Statements of Operations
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
Revenues
Oil and gas $ 330,868 324,276 987,545 1,006,575
Interest 2,346 515 5,430 1,798
------- ------- ------- ---------
333,214 324,791 992,975 1,008,373
------- ------- ------- ---------
Expenses
Production 175,303 205,298 508,453 659,378
General and administrative 9,212 9,200 35,432 35,196
Depreciation, depletion and
amortization 40,620 64,620 120,860 198,860
------- ------- ------- ---------
225,135 279,118 664,745 893,434
------- ------- ------- ---------
Net income $ 108,079 45,673 328,230 114,939
======= ======= ======= =========
Net income allocated to:
Managing General Partner $ 13,383 9,926 40,418 28,242
======= ======= ======= =========
General Partner $ 1,487 1,103 4,491 3,138
======= ======= ======= =========
Limited Partners $ 93,209 34,644 283,321 83,559
======= ======= ======= =========
Per limited partner
unit $ 14.92 5.55 45.36 13.38
======= ======= ======= =========
Southwest Oil & Gas Income Fund X-C, L.P.
Statements of Cash Flows
(unaudited)
Nine Months Ended
September 30,
1996 1995
Cash flows from operating activities:
Cash received from sale of oil
and gas $ 961,380 1,005,722
Cash paid to suppliers (536,679) (660,888)
Interest received 5,430 1,798
------- ---------
Net cash provided by operating
activities 430,131 346,632
------- ---------
Cash flows from investing activities:
Additions to oil and gas properties (6,164) (11,925)
Cash received from sale of oil
and gas properties 227,845 21,681
------- ---------
Net cash provided by investing
activities: 221,681 9,756
------- ---------
Cash flows used in financing activities:
Distributions to partners (453,030) (379,855)
------- ---------
Net increase (decrease) in cash and
cash equivalents 198,782 (23,467)
Beginning of period 34,680 67,225
------- ---------
End of period $ 233,462 43,758
======= =========
(continued)
Southwest Oil & Gas Income Fund X-C, L.P.
Statements of Cash Flows, continued
(unaudited)
Nine Months Ended
September 30,
1996 1995
Reconciliation of net income to
net cash provided by operating
activities:
Net income $ 328,230 114,939
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion and
amortization 120,860 198,860
Increase in receivables (26,165) (853)
Increase in payables 7,206 33,686
------- -------
Net cash provided by operating
activities $ 430,131 346,632
======= =======
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 September 30, 1996 and 1995
The following table provides certain information regarding performance
factors for the quarters ended September 30, 1996 and 1995:
Three Months
Ended Percentage
September 30, Increase
1996 1995 (Decrease)
---- ---- ----------
Average price per barrel of oil $ 20.72 15.50 34%
Average price per mcf of gas $ 2.18 1.61 35%
Oil production in barrels 12,400 16,900 (27%)
Gas production in mcf 33,500 38,400 (13%)
Gross oil and gas revenue $ 330,868 324,276 2%
Net oil and gas revenue $ 155,565 118,978 31%
Partnership distributions $ 180,000 135,000 33%
Limited partner distributions $ 162,000 121,500 33%
Per unit distribution to limited
partners $ 25.94 19.45 33%
Number of limited partner units 6,246 6,246
Revenues
The Partnership's oil and gas revenues increased to $330,868 from $324,276
for the quarters ended September 30, 1996 and 1995, respectively, an increase
of 2%. The principal factors affecting the comparison of the quarters ended
September 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 September 30, 1996 as compared to the
quarter ended September 30, 1995 by 34%, or $5.22 per barrel, resulting
in an increase of approximately $88,200 in revenues. Oil sales
represented 78% of total oil and gas sales during the quarter ended
September 30, 1996 as compared to 81% during the quarter ended September
30, 1995.
The average price for an mcf of gas received by the Partnership increased
during the same period by 35%, or $.57 per mcf, resulting in an increase
of approximately $21,900 in revenues.
The total increase in revenues due to the change in prices received from
oil and gas production is approximately $110,100. 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 4,500 barrels or 27% during the
quarter ended September 30, 1996 as compared to the quarter ended
September 30, 1995, resulting in a decrease of approximately $93,200 in
revenues.
Gas production decreased approximately 4,900 mcf or 13% during the same
period, resulting in a decrease of approximately $10,700 in revenues.
The total decrease in revenues due to the change in production is
approximately $103,900. The decrease is a result of property sales and
downhole problems.
Costs and Expenses
Total costs and expenses decreased to $225,135 from $279,118 for the quarters
ended September 30, 1996 and 1995, respectively, a decrease of 19%. 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 15% lower, or
approximately $30,000 less during the quarter ended September 30, 1996 as
compared to the quarter ended September 30, 1995. The decrease is a
result of property sales and workover cost 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 less
than 1% or approximately $10 during the quarter ended September 30, 1996
as compared to the quarter ended September 30, 1995.
3. Depletion expense decreased to $39,000 for the quarter ended September
30, 1996 from $63,000 for the same period in 1995. This represents a
decrease of 38%. 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 Nine Month Periods Ended September 30, 1996 and
1995
The following table provides certain information regarding performance
factors for the nine month periods ended September 30, 1996 and 1995:
Nine Months
Ended Percentage
September 30, Increase
1996 1995 (Decrease)
---- ---- ----------
Average price per barrel of oil $ 19.28 16.27 19%
Average price per mcf of gas $ 2.28 1.47 55%
Oil production in barrels 39,200 50,300 (22%)
Gas production in mcf 101,500 127,100 (20%)
Gross oil and gas revenue $ 987,545 1,006,575 2%
Net oil and gas revenue $ 479,092 347,197 38%
Partnership distributions $ 452,952 379,890 19%
Limited partner distributions $ 413,952 342,190 21%
Per unit distribution to limited
partners $ 66.27 54.79 21%
Number of limited partner units 6,246 6,246
Revenues
The Partnership's oil and gas revenues decreased to $987,545 from $1,006,575
for the nine months ended September 30, 1996 and 1995, respectively, a
decrease of 2%. The principal factors affecting the comparison of the nine
months ended September 30, 1996 and 1995 are as follows:
1. The average price for a barrel of oil received by the Partnership
increased during the nine months ended September 30, 1996 as compared to
the nine months ended September 30, 1995 by 19%, or $3.01 per barrel,
resulting in an increase of approximately $151,400 in revenues. Oil
sales represented 77% of total oil and gas sales during the nine months
ended September 30, 1996 as compared to 81% during the nine months ended
September 30, 1995.
The average price for an mcf of gas received by the Partnership increased
during the same period by 55%, or $.81 per mcf, resulting in an increase
of approximately $103,000 in revenues.
The total increase in revenues due to the change in prices received from
oil and gas production is approximately $254,400 . 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 11,100 barrels or 22% during the
nine months ended September 30, 1996 as compared to the nine months ended
September 30, 1995, resulting in a decrease of approximately $214,000 in
revenues.
Gas production decreased approximately 25,600 mcf or 20% during the same
period, resulting in a decrease of approximately $58,400 in revenues.
The total decrease in revenues due to the change in production is
approximately $272,400. The decrease is a result of property sales and
downhole problems.
Costs and Expenses
Total costs and expenses decreased to $664,745 from $893,434 for the nine
months ended September 30, 1996 and 1995, respectively, a decrease of 26%.
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 23% lower, or
approximately $151,000 less during the nine months ended September 30,
1996 as compared to the nine months ended September 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 nine months ended September 30, 1996 as
compared to the nine months ended September 30, 1995.
3. Depletion expense decreased to $116,000 for the nine months ended
September 30, 1996 from $194,000 for the same period in 1995. This
represents a decrease of 40%. 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 $430,100 in
the nine months ended September 30, 1996 as compared to approximately
$346,600 in the nine months ended September 30, 1995. The primary source of
the 1996 cash flow from operating activities was profitable operations.
Cash flows provided by investing activities were approximately $221,700 in
the nine months ended September 30, 1996 as compared to approximately $9,800
in the nine months ended September 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 $453,000 in the
nine months ended September 30, 1996 as compared to approximately $379,900 in
the nine months ended September 30, 1995. The only use in financing
activities was the distributions to partners.
Total distributions during the nine months ended September 30, 1996 were
$452,952 of which $413,952 was distributed to the limited partners and
$39,000 to the general partners. The per unit distribution to limited
partners during the nine months ended September 30, 1996 was $66.27. Total
distributions during the nine months ended September 30, 1995 were $379,890
of which $342,190 was distributed to the limited partners and $37,700 to the
general partners. The per unit distribution to limited partners during the
nine months ended September 30, 1995 was $54.79.
The sources for the 1996 distributions of $452,952 were oil and gas
operations of approximately $430,100 and the sale of oil and gas properties
of approximately $227,800, offset by the additions to oil and gas properties
of approximately $6,200, resulting in excess cash for contingencies or
subsequent distributions. The sources for the 1995 distributions of $379,890
were oil and gas operations of approximately $346,600 and the sale of oil and
gas properties of approximately $21,700, offset by the additions to oil and
gas properties of approximately $11,900, with the balance from available cash
on hand at the beginning of the period.
Since inception of the Partnership, cumulative monthly cash distributions of
$1,818,318 have been made to the partners. As of September 30, 1996,
$1,653,494 or $264.73 per limited partner unit has been distributed to the
limited partners, representing a 53% return of the capital contributed.
As of September 30, 1996, the Partnership had approximately $397,900 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) 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 & 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: November 15, 1996