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 0-18327
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 6, L.P.
(Exact name of registrant as specified in its Charter)
New Jersey 76-0259723
(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 6, L.P.
BALANCE SHEET
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MARCH 31,
ASSETS 1996
---------------------
(Unaudited)
CURRENT ASSETS:
Cash $ 2,369
Accounts receivable - oil & gas sales 8,089
---------------------
Total current assets 10,458
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OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests 906,914
Less accumulated depletion 828,631
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Property, net 78,283
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TOTAL $ 88,741
=====================
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 144
Payable to general partner 13,661
---------------------
Total current liabilities 13,805
NONCURRENT PAYABLE TO GENERAL PARTNER 68,307
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PARTNERS' CAPITAL:
Limited partners 1,112
General partner 5,517
---------------------
Total partners' capital 6,629
---------------------
TOTAL $ 88,741
=====================
See accompanying notes to financial statements.
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I-1
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 6, L.P.
STATEMENTS OF OPERATIONS
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(UNAUDITED) QUARTER ENDED
----------------------------------------
MARCH 31, MARCH 31,
1996 1995
------------------- -------------------
REVENUES:
Oil, gas & gas plant sales $ 12,204 $ 10,640
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EXPENSES:
Depletion 3,245 5,905
Production taxes 773 1,293
General and administrative 3,474 2,392
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Total expenses 7,492 9,590
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NET INCOME $ 4,712 $ 1,050
=================== ===================
See accompanying notes to financial statements.
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I-2
STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31, MARCH 31,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 4,712 $ 1,050
Adjustments to reconcile net income to net cash
provided by operating activities
Depletion 3,245 5,905
Decrease in:
Accounts receivable - oil & gas sales 428 2,367
(Decrease) in:
Accounts payable (1,689) (2,857)
Payable to general partner (7,060) (4,882)
Total adjustments (5,076) 533
Net cash provided (used) by operating activities (364) 1,583
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions - (5,182)
NET (DECREASE) IN CASH (364) (3,599)
CASH AT BEGINNING OF YEAR 2,733 5,754
CASH AT END OF PERIOD $ 2,369 $ 2,155
See accompanying notes to financial statements.
I-3
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 6, 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 $10,640 in 1995 to
$12,204 in 1996. This represents an increase of $1,564 (15%). Oil sales
decreased by $384 or 9%. A 25% decrease in oil production, due to natural
production declines which were especially pronounced on the Wardner Ranch
acquisition, caused sales to decrease by $1,074. This decrease was partially
offset by $225 increase in the average oil net sales price. Gas sales increased
$1,948 or 30%. A 50% increase in average gas sales price increased sales by
$2,784. This increase was partially offset by a 13% decrease in gas production.
The increases in average net prices were primarily a result of higher 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 $5,905 in the first quarter of 1995 to $3,245
in the first quarter of 1995. This represents a decrease of $2,660 (45%). The
changes in production, noted above, reduced depletion expense by $996. A 34%
decrease in the depletion rate reduced depletion expense by an additional
$1,664. 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 $2,392 in 1995 to $3,474 in
1996. This increase of $1,082 (45%) was primarily a result of a $1,712 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 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, 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 6, 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