FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission file number 0-20299
SOUTHWEST OIL & GAS 1990-91 INCOME PROGRAM
Southwest Oil & Gas Income Fund X-C, L.P.
(Exact name of registrant as specified
in its limited partnership agreement)
Delaware 75-2374445
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
407 N. Big Spring, Suite 300
Midland, Texas 79701
(Address of principal executive offices)
(915) 686-9927
(Registrant's telephone number,
including area code)
Indicate by check mark whether registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 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
The total number of pages contained in this report is 12.
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
The unaudited condensed financial statements included herein have been
prepared by the Registrant (herein also referred to as the "Partnership") in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01
of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all adjustments
necessary for a fair presentation have been included and are of a normal
recurring nature. The financial statements should be read in conjunction
with the audited financial statements and the notes thereto for the year
ended December 31, 1996 which are found in the Registrant's Form 10-K Report
for 1996 filed with the Securities and Exchange Commission. The December 31,
1996 balance sheet included herein has been taken from the Registrant's 1996
Form 10-K Report. Operating results for the three month period ended
March 31, 1997 are not necessarily indicative of the results that may be
expected for the full year.
Southwest Oil & Gas Income Fund X-C, L.P.
Balance Sheets
March 31, December 31,
1997 1996
--------- ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 212,766 207,773
Receivable from Managing General Partner 146,603 180,257
--------- ---------
Total current assets 359,369 388,030
--------- ---------
Oil and gas properties - using the
full-cost method of accounting 2,412,058 2,412,011
Less accumulated depreciation,
depletion and amortization 1,673,496 1,644,496
--------- ---------
Net oil and gas properties 738,562 767,515
--------- ---------
Organization costs, net of amortization - -
--------- ---------
$ 1,097,931 1,155,545
========= =========
Liabilities and Partners' Equity
Current liabilities:
Accounts payable $ 5,150 -
Distributions payable 74 91
--------- ---------
Total current liabilities 5,224 91
--------- ---------
Partners' equity:
General partners 13,489 16,864
Limited partners 1,079,218 1,138,590
--------- ---------
Total partners' equity 1,092,707 1,155,454
--------- ---------
$ 1,097,931 1,155,545
========= =========
Southwest Oil & Gas Income Fund X-C, L.P.
Statements of Operations
(unaudited)
Three Months Ended
March 31,
1997 1996
---- ----
Revenues
Oil and gas $ 336,342 257,263
Interest 1,714 805
------- -------
338,056 258,068
------- -------
Expenses
Production 163,984 172,298
General and administrative 16,319 15,809
Depreciation, depletion and amortization 29,000 31,620
------- -------
209,303 219,727
------- -------
Net income $ 128,753 38,341
======= =======
Net income allocated to:
Managing General Partner $ 14,198 6,296
======= =======
General partner $ 1,577 700
======= =======
Limited partners $ 112,978 31,345
======= =======
Per limited partner unit $ 18.09 5.02
======= =======
Southwest Oil & Gas Income Fund X-C, L.P.
Statements of Cash Flows
(unaudited)
Three Months Ended
March 31,
1997 1996
---- ----
Cash flows from operating activities:
Cash from oil and gas sales $ 386,915 312,663
Cash paid to suppliers (192,072) (194,156)
Interest received 1,714 805
------- -------
Net cash provided by operating activities 196,557 119,312
------- -------
Cash flows from investing activities:
Additions to oil and gas properties (1,834) (521)
Sale of oil and gas properties 1,787 225,549
------- -------
Net cash provided by (used in) investing
activities (47) 225,028
------- -------
Cash flows used in financing activities:
Distributions to partners (191,517) (130,091)
------- -------
Net increase in cash and cash equivalents 4,993 214,249
Beginning of period 207,773 34,680
------- -------
End of period $ 212,766 248,929
======= =======
(continued)
Southwest Oil & Gas Income Fund X-C, L.P.
Statements of Cash Flows, continued
(unaudited)
Three Months Ended
March 31,
1997 1996
---- ----
Reconciliation of net income to net
cash provided by operating activities:
Net income $ 128,753 38,341
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion and amortization 29,000 31,620
Decrease in receivables 50,573 55,400
Decrease in payables (11,769) (6,049)
------- -------
Net cash provided by operating activities $ 196,557 119,312
======= =======
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
Southwest Oil & Gas Income Fund X-C, L.P. was organized as a Delaware limited
partnership on September 20, 1991. The offering of such limited partnership
interests began October 1, 1991 as part of a shelf offering registered under
the name Southwest Oil & Gas 1990-91 Income Program. Minimum capital
requirements for the Partnership were met on January 13, 1992, and concluded
April 30, 1992.
The Partnership was formed to acquire interests in producing oil and gas
properties, to produce and market crude oil and natural gas produced from
such properties, and to distribute the net proceeds from operations to the
limited and general partners. Net revenues from producing oil and gas
properties will not be reinvested in other revenue producing assets except to
the extent that production facilities and wells are improved or reworked or
where methods are employed to improve or enable more efficient recovery of
oil and gas reserves.
Increases or decreases in Partnership revenues and, therefore, distributions
to partners will depend primarily on changes in the prices received for
production, changes in volumes of production sold, lease operating expenses,
enhanced recovery projects, offset drilling activities pursuant to farm-out
arrangements, sales of properties, and the depletion of wells. Since wells
deplete over time, production can generally be expected to decline from year
to year.
Well operating costs and general and administrative costs usually decrease
with production declines; however, these costs may not decrease
proportionately. Net income available for distribution to the partners is
therefore expected to fluctuate in later years based on these factors.
Based on current conditions, management anticipates performing workovers
during 1997 to enhance production. The Partnership could possibly experience
the following changes; a little less than normal decline in 1997, with no
decline in 1998 and thereafter, experience a low decline.
Results of Operations
A. General Comparison of the Quarters Ended March 31, 1997 and 1996
The following table provides certain information regarding performance
factors for the quarters ended March 31, 1997 and 1996.
Three Months
Ended Percentage
March 31, Increase
1997 1996 (Decrease)
---- ---- ----------
Average price per barrel of oil $ 22.33 18.00 24%
Average price per mcf of gas $ 2.88 2.08 38%
Oil production in barrels 10,900 11,100 (2%)
Gas production in mcf 32,300 27,300 18%
Gross oil and gas revenue $ 336,342 257,263 31%
Net oil and gas revenue $ 172,358 84,965 103%
Partnership distributions $ 191,500 130,000 47%
Limited partner distributions $ 172,350 120,500 43%
Per unit distribution to limited
partners $ 27.59 19.29 43%
Number of limited partner units 6,246 6,246
Revenues
The Partnership's oil and gas revenues increased to $336,342 from $257,263
for the quarters ended March 31, 1997 and 1996, respectively, an increase of
31%. The principal factors affecting the comparison of the quarters ended
March 31, 1997 and 1996 are as follows:
1. The average price for a barrel of oil received by the Partnership
increased during the quarter ended March 31, 1997 as compared to the
quarter ended March 31, 1996 by 24%, or $4.33 per barrel, resulting in an
increase of approximately $48,100 in revenues. Oil sales represented 72%
of total oil and gas sales during the quarter ended March 31, 1997 as
compared to 78% during the quarter ended March 31, 1996.
The average price for an mcf of gas received by the Partnership increased
during the same period by 38%, or $.80 per mcf, resulting in an increase
of approximately $21,800 in revenues.
The total increase in revenues due to the change in prices received from
oil and gas production is approximately $69,900. The market price for
oil and gas has been extremely volatile over the past decade and
management expects a certain amount of volatility to continue in the
foreseeable future.
2. Oil production decreased approximately 200 barrels or 2% during the
quarter ended March 31, 1997 as compared to the quarter ended March 31,
1996, resulting in a decrease of approximately $4,500 in revenues.
Gas production increased approximately 5,000 mcf or 18% during the same
period, resulting in an increase of approximately $14,400 in revenues.
The net total increase in revenues due to the change in production is
approximately $9,900.
Costs and Expenses
Total costs and expenses decreased to $209,303 from $219,727 for the quarters
ended March 31, 1997 and 1996, respectively, a decrease of 5%. The decrease
is the result of lower lease operating costs and depletion expense, offset by
an increase in general and administrative expense.
1. Lease operating costs and production taxes were 5% lower, or
approximately $8,300 less during the quarter ended March 31, 1997 as
compared to the quarter ended March 31, 1996.
2. General and administrative costs consist of independent accounting and
engineering fees, computer services, postage, and Managing General
Partner personnel costs. General and administrative costs increased 3%
or approximately $500 during the quarter ended March 31, 1997 as compared
to the quarter ended March 31, 1996.
3. Depletion expense decreased to $29,000 for the quarter ended March 31,
1997 from $30,000 for the same period in 1996. This represents a
decrease of 3%. Depletion is calculated using the units of revenue
method of amortization based on a percentage of current period gross
revenues to total future gross oil and gas revenues, as estimated by the
Partnership's independent petroleum consultants.
Liquidity and Capital Resources
The primary source of cash is from operations, the receipt of income from
interests in oil and gas properties. The Partnership knows of no material
change, nor does it anticipate any such change.
Cash flows provided by operating activities were approximately $196,600 in
the quarter ended March 31, 1997 as compared to approximately $119,300 in the
quarter ended March 31, 1996. The primary source of the 1997 cash flow from
operating activities was profitable operations.
Cash flows provided by or (used in) investing activities were approximately
$(50) in the quarter ended March 31, 1997 as compared to approximately
$225,000 in the quarter ended March 31, 1996. The principle use of the 1997
cash flow from investing activities was the additions to oil and gas
properties, partially offset by the sale of oil and gas properties.
Cash flows used in financing activities were approximately $191,500 in the
quarter ended March 31, 1997 as compared to approximately $130,100 in the
quarter ended March 31, 1996. The only use in financing activities was the
distributions to partners.
Total distributions during the quarter ended March 31, 1997 were $191,500 of
which $172,350 was distributed to the limited partners and $19,150 to the
general partners. The per unit distribution to limited partners during the
quarter ended March 31, 1997 was $27.59. Total distributions during the
quarter ended March 31, 1996 were $130,000 of which $120,500 was distributed
to the limited partners and $9,500 to the general partners. The per unit
distribution to limited partners during the quarter ended March 31, 1996 was
$19.29.
The sources for the 1997 distributions of $191,500 were oil and gas
operations of approximately $196,600 and the sale of oil and gas properties
of approximately $1,800, offset by additions to oil and gas properties of
approximately $1,800, resulting in excess cash for contingencies or
subsequent distributions. The sources for the 1996 distributions of $130,000
were oil and gas operations of approximately $119,300 and the sale of oil and
gas properties of approximately $225,500, offset by additions to oil and gas
properties of approximately $500, resulting in excess cash for contingencies
or subsequent distributions.
Since inception of the Partnership, cumulative monthly cash distributions of
$2,197,318 have been made to the partners. As of March 31, 1997, $1,994,594
or $319.34 per limited partner unit has been distributed to the limited
partners, representing a 64% return of the capital contributed.
As of March 31, 1997, the Partnership had approximately $354,100 in working
capital. The Managing General Partner knows of no unusual contractual
commitments and believes the revenues generated from operations are adequate
to meet the needs of the Partnership.
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matter to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
27 Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter for
which this report is filed.
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 thereunto duly authorized.
SOUTHWEST OIL & GAS
INCOME FUND X-C, L.P.
a Delaware limited partnership
By: Southwest Royalties, Inc.
Managing General Partner
By: /s/ Bill E. Coggin
------------------------------
Bill E. Coggin, Vice President
and Chief Financial Officer
Date: May 15, 1997