United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from...............to...............
Commission file number 0-18853
ENEX 90-91 INCOME AND RETIREMENT FUND - SERIES 1, L.P.
(Exact name of small business issuer as specified in its charter)
New Jersey 76-0299892
(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)
Issuer's telephone number:
(713) 358-8401
Check whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 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
Transitional Small Business Disclosure Format (Check one):
Yes No x
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ENEX 90-91 INCOME AND RETIREMENT FUND - SERIES 1, L.P.
BALANCE SHEET
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JUNE 30,
ASSETS 1996
-------------------
CURRENT ASSETS:
Cash .......................................... $ 16,826
Accounts receivable - oil & gas sales ......... 13,851
----------
Total current assets ............................ 30,677
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OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests ............................ 1,324,866
Less accumulated depletion ................... 812,382
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Property, net ................................... 512,484
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TOTAL ........................................... $ 543,161
==========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable ............................. $ 284
Payable to general partner ................... 24,461
----------
Total current liabilities ....................... 24,745
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PARTNERS' CAPITAL:
Limited partners ............................. 508,883
General partner .............................. 9,533
----------
Total partners' capital ......................... 518,416
----------
TOTAL ........................................... $ 543,161
==========
See accompanying notes to financial statements.
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ENEX 90-91 INCOME AND RETIREMENT FUND - SERIES 1, L.P.
STATEMENTS OF OPERATIONS
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(UNAUDITED) QUARTER ENDED SIX MONTHS ENDED
------------------- --------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1996 1995
-------- --------- --------- ---------
REVENUES:
Oil and gas sales ........ $ 47,757 $ 33,834 $ 86,442 $ 64,862
-------- -------- -------- --------
EXPENSES:
Depletion and amortization 25,738 27,929 48,368 57,098
Impairment of property .. -- -- 29,056 --
Production taxes ......... 3,231 2,192 5,840 6,604
General and administrative 3,058 3,040 6,521 7,462
-------- -------- -------- --------
Total expenses ............. 32,027 33,161 89,785 71,164
-------- -------- -------- --------
NET INCOME (LOSS) .......... $ 15,730 $ 673 $ (3,343) $ (6,302)
======== ======== ======== ========
See accompanying notes to financial statements.
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ENEX 90-91 INCOME AND RETIREMENT FUND - SERIES 1, L.P.
STATEMENTS OF CASH FLOWS
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(UNAUDITED)
SIX MONTHS ENDED
------------------------
JUNE 30, JUNE 30,
1996 1995
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) .................................... $ (3,343) $ (6,302)
-------- --------
Adjustments to reconcile net (loss) to net cash
provided by operating activities
Depletion and amortization .................. 48,368 57,098
Impairment of property ..................... 29,056 --
(Increase) in:
Accounts receivable - oil & gas sales ....... (1,732) (683)
(Decrease) in:
Accounts payable ........................... (3,921) (3,313)
Payable to general partner ................. (30,322) (13,637)
-------- --------
Total adjustments ............................. 41,449 39,465
-------- --------
Net cash provided by operating activities ..... 38,106 33,163
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ......................... (30,766) (30,513)
-------- --------
NET INCREASE IN CASH .......................... 7,340 2,650
CASH AT BEGINNING OF YEAR ..................... 9,486 9,607
-------- --------
CASH AT END OF PERIOD ......................... $ 16,826 $ 12,257
======== ========
See accompanying notes to financial statements.
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ENEX 90-91 INCOME AND RETIREMENT FUND - SERIES 1,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 $10,385, representing net revenues from the sale of oil
and gas produced from properties owned by the Company. This
distribution was made on April 30, 1996.
3. On August 9, 1996, the Company's General Partner submitted preliminary
proxy material to the Securities Exchange Commission 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 preliminary proxy material.
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Item 2. Management's Discussion and Analysis or Plan of Operation.
Second Quarter 1995 Compared to Second Quarter 1996
Oil and gas sales for the second quarter increased from $47,757 in 1996 from
$33,834 in 1995. This represents an increase of $13,923 (41%). Oil sales
increased by $828 or 7%. A 13% increase in the average net oil sales price
increased sales by $1,459. This increase was partially offset by a 5% decrease
in oil production. Gas sales increased by $13,095 or 60%. A 15% increase in gas
production increased sales by $3,239. A 39% increase in average net gas sales
prices increased sales by an additional $9,856. The decrease in oil production
was primarily due to natural production declines. The increase in gas production
was primarily due to higher production from the Wardner Ranch acquisition which
was shut-in for a workover in the second quarter of 1995. The changes in average
net sales prices correspond with changes in the overall market for the sale of
oil and gas.
Depletion expense increased to $25,738 in the second quarter of 1996 from
$25,326 in the second quarter of 1995. This represents an increase of $412 (2%).
The changes in production, noted above, increased depletion expense by $2,352.
This increase was partially offset by a 7% decrease in the depletion rate. The
decrease in the depletion rate was primarily due to the lower property basis
resulting from the recognition of a $29,056 property impairment recognized in
the first quarter of 1996.
General and administrative expenses remained relatively constant at $3,058 in
1996 as compared to $3,040 in 1995.
First Six Months in 1995 Compared to First Six Months in 1996
Oil and gas sales for the first six months increased to $86,442 in 1996 from
$64,862 in 1995. This represents an increase of $21,580 (33%). Oil sales
increased by $496 or 2%. A 15% increase in the average net oil sales price
increased sales by $3,046. This increase was partially offset by an 11% decrease
in oil production. Gas sales increased by $21,085 or 51%. A 5% increase in gas
production increased sales by $2,012. A 44% increase in average net gas sales
prices increased sales by an additional $19,073. The decrease in oil production
was primarily due to natural production declines. The increase in gas production
was primarily due to higher production from the Wardner Ranch acquisition which
was shut-in for a workover in the second quarter of 1995. The changes in average
net sales prices correspond with changes in the overall market for the sale of
oil and gas.
Depletion expense decreased to $48,368 in the first six months of 1996 from
$51,892 in the first six months of 1995. This represents a decrease of $3,524
(7%). A 7% decrease in the depletion rate reduced depletion expense by $3,762.
This decrease was partially offset by the changes in production, noted above.
The decrease in the depletion rate was primarily due to the lower
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property basis resulting from the recognition of a $29,056 property impairment
recognized in the first quarter of 1996.
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standard ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long- Lived Assets to be Disposed Of," which requires
certain assets to be reviewed for impairment whenever events or circumstances
indicate the carrying amount may not be recoverable. In the first quarter of
1996, the Company recognized a non-cash impairment provision of $29,056 for
certain oil and gas properties due to market indications that the carrying
amounts were not fully recoverable.
General and administrative expenses decreased to $6,521 in 1996 from $7,462 in
1995. This decrease of $941 (13%) 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 will continue to recover its reserves and distribute to the limited
partners the net proceeds realized from the sale of oil and gas production.
Distribution amounts are subject to change if net revenues are greater or less
than expected. Nonetheless, the general partner believes the Company will
continue to have sufficient cash flow to fund operations and to maintain a
regular pattern of distributions.
On August 9, 1996, the Company's General Partner submitted preliminary proxy
material to the Securities Exchange Commission 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
preliminary 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 June 30, 1996.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
ENEX 90-91 INCOME AND RETIREMENT
FUND - SERIES 1, 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
August 13, 1996 By: /s/ James A. Klein
-------------------
James A. Klein
Controller and Chief
Accounting Officer