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 March 31, 1997
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) 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
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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MARCH 31,
ASSETS 1997
-------------------
(Unaudited)
CURRENT ASSETS:
Cash $ 36,784
Accounts receivable - oil & gas sales 13,193
-------------------
Total current assets 49,977
-------------------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests 1,324,866
Less accumulated depletion 855,182
-------------------
Property, net 469,684
-------------------
TOTAL $ 519,661
===================
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 1,554
Payable to general partner 11,235
---------------------
Total current liabilities 12,789
---------------------
PARTNERS' CAPITAL:
Limited partners 499,488
General partner 7,384
-------------------
Total partners' capital 506,872
-------------------
TOTAL $ 519,661
===================
Number of $500 Limited Partner units outstanding 2,975
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) THREE MONTHS ENDED
------------------------------------------
MARCH 31, MARCH 31,
1997 1996
-------------------- -------------------
REVENUES:
Oil and gas sales $ 57,278 $ 38,685
-------------------- -------------------
EXPENSES:
Depletion 17,615 22,630
Impairment of property - 29,056
Production taxes 3,915 2,609
General and administrative 7,674 3,463
-------------------- -------------------
Total expenses 29,204 57,758
-------------------- -------------------
NET INCOME (LOSS) $ 28,074 $ (19,073)
==================== ===================
See accompanying notes to financial statements.
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ENEX 90-91 INCOME AND RETIREMENT FUND - SERIES 1, L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 1996 AND
FOR THE THREE MONTHS ENDED MARCH 31, 1997
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PER $500
LIMITED
PARTNER
GENERAL LIMITED UNIT OUT-
TOTAL PARTNER PARTNERS STANDING
----------------- ----------------- ----------------- -----------------
BALANCE, JANUARY 1, 1996 $ 552,525 $ 6,447 $ 546,078 $ 184
CASH DISTRIBUTIONS (79,412) (11,615) (67,797) (23)
NET INCOME 40,438 14,303 26,135 9
----------------- ----------------- ----------------- -----------------
BALANCE, DECEMBER 31, 1996 513,551 9,135 504,416 170
CASH DISTRIBUTIONS (34,753) (6,320) (28,433) (10)
NET INCOME 28,074 4,569 23,505 8
----------------- ----------------- ----------------- -----------------
BALANCE, MARCH 31, 1997 $ 506,872 $ 7,384 $ 499,488 (1) $ 168
================= ================= ================= =================
(1) Includes 605 units purchased by the general partner as a limited partner.
See accompanying notes to financial statements.
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I-3
ENEX INCOME AND RETIREMENT FUND - SERIES 1, L.P.
STATEMENTS OF CASH FLOWS
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(UNAUDITED)
THREE MONTHS ENDED
------------------------------------------
MARCH 31, MARCH 31,
1997 1996
------------------- -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 28,074 $ (19,073)
------------------- -------------------
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Depletion 17,615 22,630
Impairment of property - 29,056
Decrease in:
Accounts receivable - oil & gas sales 9,724 652
(Decrease) in:
Accounts payable (4,801) (3,862)
Payable to general partner (2,967) (11,351)
------------------- -------------------
Total adjustments 19,571 37,125
------------------- -------------------
Net cash provided by operating activities 47,645 18,052
------------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (34,753) (15,574)
------------------- -------------------
NET INCREASE IN CASH 12,892 2,478
CASH AT BEGINNING OF YEAR 23,892 9,486
------------------- -------------------
CASH AT END OF PERIOD $ 36,784 $ 11,964
=================== ===================
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 $28,433, representing net revenues from the sale of oil
and gas produced from properties owned by the Company. This
distribution was made on January 31, 1997.
3. On April 7, 1997, the Company's General Partner mailed proxy material
to the limited partners 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 proxy
material.
4. 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. Prior to
this pronouncement, the Company assessed properties on an aggregate basis.
Upon adoption of SFAS 121, the Company began assessing properties on an
individual basis, wherein total capitalized costs may not exceed the
property's fair market value. The fair market value of each property was
determined by H. J. Gruy and Associates, ("Gruy"). To determine the fair
market value, Gruy estimated each property's oil and gas reserves, applied
certain assumptions regarding price and cost escalations, applied a 10%
discount factor for time and certain discount factors for risk, location,
type of ownership interest, category of reserves, operational
characteristics, and other factors. 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 changes in the overall market for the sale of
oil and gas and significant decreases in the projected production from
certain of the Company's oil and gas properties.
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Item 2. Management's Discussion and Analysis or Plan of Operation.
First Quarter 1997 Compared to First Quarter 1996
Oil and gas sales for the first quarter increased from $38,685 in 1996 to
$57,278 in 1997. This represents an increase of $18,593 (48%). Oil sales
increased by $3,059 or 27%. A 40% increase in average net oil sales prices
increased sales by $4,041. This increase was partially offset by a 9% decline in
oil production. Gas sales increased by $15,534 or 56%. A 46% increase in average
net gas sales prices increased sales by $13,496. A 7% increase in gas production
increased sales by an additional $2,038. The decrease in oil production was
primarily due to natural production declines. The increase in gas production was
primarily due to higher production from Wardner Ranch acquisition which was
shut-in for a workover in the first quarter of 1996. The increases in average
net prices correspond with higher prices in the overall market for the sale of
oil and gas.
Depletion expense decreased from $22,630 in the first quarter of 1996 to $17,615
in the first quarter of 1997. This represents a decrease of $5,015 (22%). A 25%
decrease in the depletion rate reduced depletion expense by $5,740. This
decrease was partially offset by the changes in production, noted above. The
decrease in the depletion rate was primarily due to an upward revision of the
oil and gas reserves during December 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. Prior to this
pronouncement, the Company assessed properties on an aggregate basis. Upon
adoption of SFAS 121, the Company began assessing properties on an individual
basis, wherein total capitalized costs may not exceed the property's fair market
value. The fair market value of each property was determined by H. J. Gruy and
Associates, ("Gruy"). To determine the fair market value, Gruy estimated each
property's oil and gas reserves, applied certain assumptions regarding price and
cost escalations, applied a 10% discount factor for time and certain discount
factors for risk, location, type of ownership interest, category of reserves,
operational characteristics, and other factors. 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 changes in the overall market for the sale of oil
and gas and significant decreases in the projected production from certain of
the Company's oil and gas properties.
General and administrative expenses increased from $3,463 in the first quarter
of 1996 to $7,674 in the first quarter of 1997. This increase of $4,211 is
primarily due to a $3,667 increase in direct expenses incurred by the Company in
1997.
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 1996 to 1997 are primarily due to the changes in oil
and gas sales described above. It is the general partner's
I-6
intention to distribute substantially all of the Company's available cash flow
to the Company's partners. The Company's "available cash flow" is essentially
equal to the net amount of cash provided by operating, financing and investing
activities.
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 April 7, 1997, the Company's General Partner mailed proxy material to the
limited partners 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 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 March 31, 1997.
II-1
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: R. E. Densford
----------------
R. E. Densford
Vice President, Secretary
Treasurer and Chief Financial
Officer
May 11, 1997 By: James A. Klein
--------------
James A. Klein
Controller and Chief
Accounting Officer