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 33-34348-02
ENEX OIL & GAS INCOME PROGRAM V - SERIES 3, L.P.
(Exact name of small business issuer as specified in its charter)
New Jersey 76-0303876
(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
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ENEX OIL & GAS INCOME PROGRAM V - SERIES 3, L.P.
BALANCE SHEET
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MARCH 31,
ASSETS 1996
---------------
(Unaudited)
CURRENT ASSETS:
Cash $ 1,479
Accounts receivable - oil & gas sales 18,763
Other current assets 1,693
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Total current assets 21,935
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OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 951,506
Less accumulated depreciation and depletion 686,638
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Property, net 264,868
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ORGANIZATIONAL COSTS
(Net of accumulated amortization of $39,731) 673
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TOTAL $ 287,476
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LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 15,150
Payable to general partner 23,948
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Total current liabilities 39,098
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NONCURRENT PAYABLE TO GENERAL PARTNER 23,948
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PARTNERS' CAPITAL:
Limited partners 219,845
General partner 4,585
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Total partners' capital 224,430
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TOTAL $ 287,476
==============
See accompanying notes to financial statements.
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ENEX OIL & GAS INCOME PROGRAM V - SERIES 3, L.P.
STATEMENTS OF OPERATIONS
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(UNAUDITED) THREE MONTHS ENDED
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MARCH 31, MARCH 31,
1996 1995
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REVENUES:
Oil and gas sales $ 40,212 $ 36,513
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EXPENSES:
Depreciation, depletion and amortization 15,084 19,825
Impairment of property 64,028 -
Lease operating expenses 16,250 16,804
Production taxes 2,210 2,231
General and administrative 7,651 9,414
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Total expenses 105,223 48,274
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NET LOSS $ (65,011) $ (11,761)
=============== ============
See accompanying notes to financial statements.
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ENEX OIL AND GAS INCOME PROGRAM V - SERIES 3, L.P.
STATEMENTS OF CASH FLOWS
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(UNAUDITED)
THREE MONTHS ENDED
---------------------------
MARCH 31, MARCH 31,
1996 1995
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (65,011) $ (11,761)
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Adjustments to reconcile net loss to net cash
provided by operating activities
Depreciation, depletion and amortization 15,084 19,825
Impairment of property 64,028 -
(Increase) decrease in:
Accounts receivable - oil & gas sales (1,257) (362)
Other current assets - 106
Increase (decrease) in:
Accounts payable 4,864 (1,268)
Payable to general partner (6,174) (8,506)
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Total adjustments 76,545 9,795
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Net cash provided (used) by operating activities 11,534 (1,966)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions - development costs (8,391) (3,051)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (4,632) (4,573)
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NET DECREASE IN CASH (1,489) (9,590)
CASH AT BEGINNING OF YEAR 2,968 12,272
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CASH AT END OF PERIOD $ 1,479 $ 2,682
========== ===========
See accompanying notes to financial statements.
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ENEX OIL & GAS INCOME PROGRAM V - SERIES 3, 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 $4,168, 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 impariment
provision of $64,028 for certain oil and gas properties due to market
indications that the carrying amounts were not fully recoverable.
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Item 2Management's Discussion and Analysis or Plan of Operation.
First Quarter 1996 Compared to the First Quarter 1995
Oil and gas sales for the first quarter increased from $36,513 in 1995 to
$40,212 in 1996. This represents an increase of $3,699 (10%). Oil sales
increased by $3,996 or 17%. A 9% increase in oil production increased sales by
$2,112. An 8% increase in average oil prices increased sales by an additional
$1,884. Gas sales decreased by $297 or 2%. A 20% decrease in gas production
reduced sales by $2,769. This decrease was partially offset by a 23% increase in
average gas sales prices. The increase in oil production was primarily a result
of higher production from the FEC acquisition, in which the Company obtained
additional interests from farmouts which reached payout in the first quarter of
1995. The decrease in gas production was primarily a result of natural
production declines. The changes in average prices correspond with changes in
the overall market for the sale of oil and gas.
Lease operating expenses decreased from $16,804 in the first quarter of 1995 to
$16,250 in the first quarter of 1996. The decrease of $554 (3%) was primarily
the result of the changes in production, noted above.
Depreciation and depletion expense decreased from $17,805 in the first quarter
of 1995 to $15,084 in the first quarter of 1996. This represents a decrease of
$2,721 or 15%. The changes in production, noted above, caused depreciation and
depletion expense to decrease by $1,008, while a 10% decrease in the depletion
rate reduced depreciation and depletion expense by an additional $1,713. The
rate decrease was primarily due to the lower property basis resulting from the
recognition of an impairment of property of $64,028 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 of $64,028 for certain oil
and gas properties due to market indications that the carrying amounts were not
fully recoverable.
General and administrative expenses decreased from $9,414 in the first quarter
of 1995 to $7,651 in the first quarter of 1995. This decrease of $1,763 (19%) is
primarily due to less staff time being required to manage the Company's
operations, partially offset by $2,219 higher direct expenses incurred by the
Company in 1996.
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
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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 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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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 OIL & GAS INCOME
PROGRAM V - SERIES 3, 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