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, 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 0-18854
ENEX OIL & GAS INCOME PROGRAM V - SERIES 1, L.P.
(Exact name of small business issuer as specified in its charter)
New Jersey 76-0303870
(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 OIL & GAS INCOME PROGRAM V - SERIES 1, L.P.
BALANCE SHEET
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MARCH 31,
ASSETS 1996
---------------------
(Unaudited)
CURRENT ASSETS:
Cash $ 26,844
Accounts receivable - oil & gas sales 55,955
Other current assets 4,224
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Total current assets 87,023
---------------------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 1,603,452
Less accumulated depreciation and depletion 1,212,243
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Property, net 391,209
---------------------
TOTAL $ 478,232
=====================
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 79,215
PARTNERS' CAPITAL:
Limited partners 376,394
General partner 22,623
---------------------
Total partners' capital 399,017
---------------------
TOTAL $ 478,232
=====================
See accompanying notes to financial statements.
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I-1
ENEX OIL & GAS INCOME PROGRAM V - SERIES 1, L.P.
STATEMENTS OF OPERATIONS
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(UNAUDITED) THREE MONTHS ENDED
---------------------------
MARCH 31, MARCH 31,
1996 1995
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REVENUES:
Oil and gas sales $ 96,031 113,416
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EXPENSES:
Depreciation, depletion and amortization 19,352 38,490
Impairment of property 84,631 -
Lease operating expenses 52,544 57,476
Production taxes 6,990 7,800
General and administrative 10,536 13,159
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Total expenses 174,053 116,925
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LOSS FROM OPERATIONS (78,022) (3,509)
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OTHER INCOME:
Gain from sale of property 936 -
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NET LOSS $ (77,086) (3,509)
============= ============
See accompanying notes to financial statements.
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I-2
ENEX OIL AND GAS INCOME PROGRAM V - SERIES 1, L.P.
STATEMENTS OF CASH FLOWS
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(UNAUDITED)
THREE MONTHS ENDED
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MARCH 31, MARCH 31,
1996 1995
------------ -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (77,086) $ (3,509)
------------ -----------
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation, depletion and amortization 103,983 38,490
Gain on sale of property (936) -
(Increase) decrease in:
Accounts receivable - oil & gas sales (3,873) (1,922)
Other current assets - 263
Increase (decrease) in:
Accounts payable 30,162 1,046
Payable to general partner - (39,068)
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Total adjustments 129,336 (1,191)
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Net cash provided (used) by operating activities 52,250 (4,700)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property 936 -
Property additions - development costs (43,158) (7,615)
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Net cash used by investing activities (42,222) (7,615)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (9,453) (9,125)
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NET INCREASE (DECREASE) IN CASH 575 (21,440)
CASH AT BEGINNING OF YEAR 26,269 29,576
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CASH AT END OF PERIOD $ 26,844 $ 8,136
============ ===========
See accompanying notes to financial statements.
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ENEX OIL & GAS INCOME PROGRAM V - 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 $8,508 representing net revenues from the sale of oil and gas
produced from properties owned by the Company. This distribution was made
on January 31, 1996.
3. 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 $84,631 for certain oil and gas properties due to market
indications that the carrying amounts were not fully recoverable.
4. Effective January 1, 1996, the Company sold its interest in the Nunley
Ranch acquisition for $936. The Company recognized a gain of $936 on the
sale.
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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 decreased from $113,416 in 1995 to
$96,031 in 1996. This represents a decrease of $17,385 (15%). Oil sales
decreased by $4,824 or 8%. An 8% decrease in average oil sales prices reduced
sales by $5,230. This increase was partially offset by a 1% increase in oil
production. Gas sales decreased by $12,561 or 26%. A 40% decrease in gas
production reduced sales by $19,464. This decrease was partially offset by a 23%
increase in average gas sales prices. The increase in oil production was
primarily the result of increased production from the FEC acquisition in which
the Company obtained additional interests from farmouts in the first quarter of
1995. The lower average oil sales price was primarily the result of lower
expenses incurred on the FEC acquisition, on which the Company pays a net
profits royalty, partially offset by higher prices in the overall market for the
sale of oil. The decrease in gas production was primarily a result of the sale
of the Nunley Ranch acquisition effective January 1, 1996, coupled with natural
production declines which were especially pronounced on the Binger acquisition.
The changes in average gas prices correspond with changes in the overall market
for the sale of gas.
Lease operating expenses decreased from $57,476 in the first quarter of 1995 to
$52,544 in the first quarter of 1996. The decrease of $4,932 (9%) is primarily
due to lower operating costs incurred on the FEC acquisition in 1996.
Depreciation and depletion expense decreased from $33,960 in the first quarter
of 1995 to $19,352 in the first quarter of 1996. This represents a decrease of
$14,608 (43%). The changes in production, noted above, reduced depreciation and
depletion expense by $7,953. A 26% decrease in the depletion rate reduced
depreciation and depletion expense by an additional $6,655. The rate decrease
was primarily due to the lower property basis resulting from the recognition of
an impairment of property of $84,631 in the first quarter of 1996.
Effective January 1, 1996, the Company sold its interest in the Nunley Ranch
acquisition for $936. The Company recognized a gain of $936 on the sale.
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 $84,631 for
certain oil and gas properties due to market indications that the carrying
amounts were not fully recoverable.
General and administrative expenses decreased from $13,159 in the first quarter
of 1995 to $10,536 in the first quarter of 1996. This decrease of $2,623 (20%)
is primarily due to less staff time being required to manage the Company's
operations, partially offset by $2,097 higher direct expenses incurred by the
Company in 1996.
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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.
TThe 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 after
payment of its debt obligations. 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.
As of March 31, 1996, the Company had no material commitments for capital
expenditures. The Company does not intend to engage in any significant
developmental drilling activity.
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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, 1996.
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 OIL & GAS INCOME
PROGRAM V - 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
May 11, 1996 By: /s/ James A. Klein
------------------------
James A. Klein
Controller and Chief
Accounting Officer