United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 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 0-18854
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) 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 OIL & GAS INCOME PROGRAM V - SERIES 1, L.P.
BALANCE SHEET
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September 30,
ASSETS 1996
----------------
(Unaudited)
CURRENT ASSETS:
Cash $ 11,061
Accounts receivable - oil & gas sales 56,202
Other current assets 4,186
-------------
Total current assets 71,449
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OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 1,597,105
Less accumulated depreciation and depletion 1,237,574
-------------
Property, net 359,531
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TOTAL $ 430,980
=============
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 37,914
-------------
PARTNERS' CAPITAL:
Limited partners 368,439
General partner 24,627
-------------
Total partners' capital 393,066
-------------
TOTAL $ 430,980
=============
Number of $500 Limited Partner units outstanding 2,736
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
- -----------------------------------------------------------------------------------------------------------------------------
(UNAUDITED) QUARTER ENDED NINE MONTHS ENDED
------------------------------------ ----------------------------------------
September 30, September 30, September 30, September 30,
1996 1995 1996 1995
--------------- ----------------- ----------------- -----------------
REVENUES:
Oil and gas sales $ 101,518 $ 81,240 $ 294,357 $ 283,782
--------------- ----------------- ----------------- -------------------
EXPENSES:
Depreciation, depletion and amortization 19,749 29,502 58,070 105,801
Impairment of property - - 84,631 -
Lease operating expenses 40,554 44,333 158,196 141,557
Production taxes 6,941 5,117 21,131 19,828
General and administrative 7,929 8,213 27,401 29,336
--------------- ----------------- ----------------- -------------------
Total expenses 75,173 87,165 349,429 296,522
--------------- ----------------- ----------------- -------------------
LOSS FROM OPERATIONS 26,345 (5,925) (55,072) (12,740)
--------------- ----------------- ----------------- -------------------
OTHER INCOME:
Gain from sale of property - - 957 -
--------------- ----------------- ----------------- -------------------
NET LOSS $ 26,345 $ (5,925) $ (54,115) $ (12,740)
=============== ================= ================= ===================
See accompanying notes to financial statements.
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I-2
ENEX OIL & GAS INCOME PROGRAM V - SERIES 1, L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE TWO YEARS ENDED DECEMBER 31, 1995
AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
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PER $500
LIMITED
PARTNER
GENERAL LIMITED UNIT OUT-
TOTAL PARTNER PARTNERS STANDING
-------------- ------------- -------------- --------
BALANCE, JANUARY 1, 1994 $ 1,008,178 $ 11,289 $ 996,889 $ 220
CASH DISTRIBUTIONS (82,396) (8,237) (74,159) (16)
NET INCOME (LOSS) (371,744) 7,355 (379,099) (84)
-------------- ------------- -------------- --------
BALANCE, DECEMBER 31, 1994 554,038 10,407 543,631 120
CASH DISTRIBUTIONS (18,567) (1,857) (16,710) (4)
NET INCOME (LOSS) (49,915) 12,331 (62,246) (14)
-------------- ------------- -------------- --------
BALANCE, DECEMBER 31, 1995 $ 485,556 $ 20,881 $ 464,675 $ 102
CASH DISTRIBUTIONS (38,375) (5,111) (33,264) (7)
NET INCOME (LOSS) 54,115 8,859 (62,974) (14)
-------------- ------------- -------------- --------
BALANCE, SEPTEMBER 30, 1996 $ 393,066 $ 24,629 $ 368,437 (1) $ 81
============== ============= ============== ========
(1) Includes 545 units purchased by the general partner as a limited partner.
See accompanying notes to financial statements.
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I-3
ENEX OIL AND GAS INCOME PROGRAM V - SERIES 1, L.P.
STATEMENTS OF CASH FLOWS
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(UNAUDITED)
NINE MONTHS ENDED
-------------------------------------------------
September 30, September 30,
1996 1995
------------------- -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $ (54,115) $ (12,740)
------------------- -------------------
Adjustments to reconcile net (loss) to net cash provided by operating
activities:
Depreciation, depletion and amortization 58,070 105,801
Impairment of property 84,631 -
Gain from sale of property (957) -
(Increase) decrease in:
Accounts receivable - oil & gas sales (4,120) 6,071
Other current assets 38 44
Increase (decrease) in:
Accounts payable (11,139) 70
Payable to general partner - (68,520)
------------------- -------------------
Total adjustments 126,523 43,466
------------------- -------------------
Net cash provided by operating activities 72,408 30,726
------------------- -------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property 957 -
Property additions - development costs (50,198) (31,421)
------------------- -------------------
Net cash used by investing activities (49,241) (31,421)
------------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (38,375) (18,567)
------------------- -------------------
NET (DECREASE) IN CASH (15,208) (19,262)
CASH AT BEGINNING OF YEAR 26,269 29,576
------------------- -------------------
CASH AT END OF PERIOD $ 11,061 $ 10,314
=================== ===================
See accompanying notes to financial statements.
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I-4
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 $10,580 representing net revenues from the sale of oil
and gas produced from properties owned by the Company. This
distribution was made on July 31, 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. On November 13, 1996, the Company submitted amended
preliminary proxy material to the SEC with respect to this
consolidation.
The terms and conditions of the proposed consolidation are set forth
in such preliminary 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 $84,631 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.
5. Effective January 1, 1996, the Company sold its interest in the Nunley
Ranch acquisition for $957. The Company recognized a gain of $957 on the
sale.
Item 2. Management's Discussion and Analysis or Plan of Operation.
Third Quarter 1995 Compared to Third Quarter 1996
Oil and gas sales for the third quarter increased to $101,518 in 1996 from
$81,240 in 1995. This represents an increase of $20,278 (25%). Oil sales
increased by $12,896 (23%). A 15% increase in the average oil sales price
increased sales by $4,292. An 8% increase in oil production increased sales by
an additional $8,604 . Gas sales increased by $7,382 (28%). A 32% increase in
the average gas sales price increased sales by $8,456. This increase was
partially offset by a 4% decrease in gas production. The increase in oil
production was primarily the result of higher production from the Binger
acqusitition which underwent the conversion of a well to a gas injection well.
The decrease in gas production was primarily due to natural production declines
partially offset by higher production from the Binger acquisition, as noted
above. The changes in average sales prices correspond with changes in the
overall market for the sale of oil and gas.
Lease operating expenses increased to $40,554 in the third quarter of 1996 from
$44,333 in the third quarter of 1995. The increase of $3,779 is primarily due to
the changes in production, noted above.
Depreciation and depletion expense decreased to $19,749 in the third quarter of
1996 from $26,483 in the third quarter of 1995. This represents a decrease of
$6,734 (25%). A 34% decrease in the depletion rate reduced depreciation and
depletion expense by $7,128. This decrease was partially offset the changes in
the production noted above. 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.
General and administrative expenses decreased to $7,929 in the third quarter of
1996 from $8,213 in the third quarter of 1995. This decrease of $284 (3%) is
primarily due to less staff time being required to manage the Company's
operations.
First Nine Months in 1995 Compared to First Nine Months in 1996
Oil and gas sales for the first nine months increased to $294,357 in 1996 from
$283,782 in 1995. This represents a increase of $10,575 (4%). Oil sales
increased by $10,901 (6%). This increase was due mainly to an 8% increase in the
average oil sales price which increased sales by $13,710 . This increase
partially offset by 2% decrased in production. Gas sales decreased by $326. A
28% decrease in gas production reduced sales by $30,050. This decrease was
offset partially by a 38% increase in the average gas sales price. The decrease
in gas production was primarily due to the sale of the Nunley Ranch acquisition,
effective January 1, 1996, and the shut-in of production from the Binger
acquisition to perform a workover in 1996, together with natural production
declines. The decrease in oil production was primarly due to natural production
decline. The changes in average sales prices correspond with changes in the
overall market for the sale of oil and gas.
Lease operating expenses increased to $158,196 in the first nine months of 1996
from $141,557 in the first nine months of 1995. The increase of $16,639 (12%) is
primarily due to the conversion of a well in the Binger acquisition to a gas
injection well.
I-6
Depreciation and depletion expense decreased to $58,070 in the first nine months
of 1996 from $93,723 in the first nine months of 1995. This represents a
decrease of $35,653 (38%). The changes in production, noted above, reduced
depreciation and depletion expense by $15,098. A 26% decrease in the depletion
rate reduced depreciation and depletion expense by an additional $20,555. 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 $957. The Company recognized a gain of $957 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. 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 $84,631 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 decreased to $27,401 in the first nine
months of 1996 from $29,336 in 1995. This decrease of $1,935 (7%) 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'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.
I-7
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. On
November 13, 1996, the Company submitted amended preliminary proxy material to
the SEC with respect to this consolidation. The terms and conditions of the
proposed consolidation are set forth in such preliminary proxy material.
As of September 30, 1996, the Company had no material commitments for capital
expenditures. The Company does not intend to engage in any significant
developmental drilling activity.
I-8
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 September 30, 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
December 23, 1996 By: /s/ James A. Klein
-------------------
James A. Klein
Controller and Chief
Accounting Officer