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 September 30, 1996
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 33-47667-01
SOUTHWEST OIL & GAS 1992-93 INCOME PROGRAM
Southwest Oil & Gas Income Fund XI-A, L.P.
(Exact name of registrant as specified
in its limited partnership agreement)
Delaware 75-2427267
(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 14.
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, 1995 which are found in the Registrant's Form 10-K Report
for 1995 filed with the Securities and Exchange Commission. The December 31,
1995 balance sheet included herein has been taken from the Registrant's 1995
Form 10-K Report. Operating results for the three and nine month periods
ended September 30, 1996 are not necessarily indicative of the results that
may be expected for the full year.
Southwest Oil & Gas Income Fund XI-A, L.P.
Balance Sheets
September 30, December 31,
1996 1995
------------- ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 10,243 28,968
Receivable from Managing
General Partner 54,504 44,235
--------- ---------
Total current assets 64,747 73,203
--------- ---------
Oil and gas properties - using the
full cost method of accounting 1,091,278 1,091,320
Less accumulated depreciation,
depletion and amortization 278,000 181,000
--------- ---------
Net oil and gas properties 813,278 910,320
--------- ---------
Organization costs, net 9,819 15,084
--------- ---------
$ 887,844 998,607
========= =========
Liabilities and Partners' Equity
Partners' equity:
General partners $ (4,920) (4,318)
Limited partners 892,764 1,002,925
--------- ---------
Total partners' equity 887,844 998,607
--------- ---------
$ 887,844 998,607
========= =========
Southwest Oil & Gas Income Fund XI-A, L.P.
Statements of Operations
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
Revenues
Oil and gas $ 122,905 99,573 385,125 339,232
Interest 186 715 606 1,318
------- ------- ------- -------
123,091 100,288 385,731 340,550
------- ------- ------- -------
Expenses
Production 57,191 54,719 165,238 167,569
General and administrative 6,385 6,158 26,510 25,910
Depreciation, depletion and
amortization 32,755 29,755 102,265 101,265
------- ------- ------- -------
96,331 90,632 294,013 294,744
------- ------- ------- -------
Net income $ 26,760 9,656 91,718 45,806
======= ======= ======= =======
Net income allocated to:
Managing General Partner $ 5,356 3,547 17,458 13,236
======= ======= ======= =======
General Partner $ 595 394 1,940 1,471
======= ======= ======= =======
Limited Partners $ 20,809 5,715 72,320 31,099
======= ======= ======= =======
Per limited partner
unit $ 7.38 2.03 25.64 11.02
======= ======= ======= =======
Southwest Oil & Gas Income Fund XI-A, L.P.
Statements of Cash Flows
(unaudited)
Nine Months Ended
September 30,
1996 1995
Cash flows from operating activities:
Cash received from oil and gas sales $ 374,202 359,670
Cash paid to suppliers (191,094) (239,909)
Interest received 606 1,318
------- -------
Net cash provided by operating
activities 183,714 121,079
------- -------
Cash flows from investing activities:
Additions of oil and gas properties (6,512) (4,926)
Sale of oil and gas properties 6,554 131,971
------- -------
Net cash provided by investing
activities 42 127,045
------- -------
Cash flows used in financing activities:
Distributions to partners (202,481) (187,878)
------- -------
Net increase (decrease) in cash and
cash equivalents (18,725) 60,246
Beginning of period 28,968 190
------- -------
End of period $ 10,243 60,436
======= =======
(continued)
Southwest Oil & Gas Income Fund XI-A, L.P.
Statements of Cash Flows, continued
(unaudited)
Nine Months Ended
September 30,
1996 1995
Reconciliation of net income to
net cash provided by operating
activities:
Net income $ 91,718 45,806
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion and
amortization 102,265 101,265
(Increase) decrease in receivables (10,923) 20,438
Increase (decrease) in payables 654 (46,430)
------- -------
Net cash provided by operating
activities $ 183,714 121,079
======= =======
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
Southwest Oil & Gas Income Fund XI-A, L.P. was organized as a Delaware
limited partnership on May 5, 1992. The offering of such limited partnership
interests began August 20, 1992 as part of a shelf offering registered under
the name Southwest Oil & Gas 1992-93 Income Program. Minimum capital
requirements for the Partnership were met on March 17, 1993, with the
offering of limited partnership interests concluding April 30, 1993. At the
conclusion of the offering of limited partnership interests, 122 limited
partners had purchased 2,821 units for $1,410,500.
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 farmout
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.
Results of Operations
A. General Comparison of the Quarters Ended September 30, 1996 and 1995
The following table provides certain information regarding performance
factors for the quarters ended September 30, 1996 and 1995:
Three Months
Ended Percentage
September 30, Increase
1996 1995 (Decrease)
---- ---- ----------
Average price per barrel of oil $ 20.53 15.97 29%
Average price per mcf of gas $ 1.88 1.61 17%
Oil production in barrels 3,300 2,800 18%
Gas production in mcf 29,000 33,900 (14%)
Gross oil and gas revenue $ 122,905 99,573 23%
Net oil and gas revenue $ 65,714 44,854 47%
Partnership distributions $ 61,000 98,504 (38%)
Limited partner distributions $ 54,900 89,504 (39%)
Per unit distribution to limited
partners $ 19.46 31.73 (39%)
Number of limited partner units 2,821 2,821
Revenues
The Partnership's oil and gas revenues increased to $122,905 from $99,573 for
the quarters ended September 30, 1996 and 1995, respectively, an increase of
23%. The principal factors affecting the comparison of the quarters ended
September 30, 1996 and 1995 are as follows:
1. The average price for a barrel of oil received by the Partnership
increased during the quarter ended September 30, 1996 as compared to the
quarter ended September 30, 1995 by 29%, or $4.56 per barrel, resulting
in an increase of approximately $12,800 in revenues. Oil sales
represented 56% of total oil and gas sales during the quarter ended
September 30, 1996 as compared to 45% during the quarter ended September
30, 1995.
The average price for an mcf of gas received by the Partnership increased
during the same period by 17%, or $.27 per mcf, resulting in an increase
of approximately $9,200 in revenues.
The total increase in revenues due to the change in prices received from
oil and gas production is approximately $22,000. 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 increased approximately 500 barrels or 18% during the
quarter ended September 30, 1996 as compared to the quarter ended
September 30, 1995, resulting in an increase of approximately $10,300 in
revenues.
Gas production decreased approximately 4,900 mcf or 14% during the same
period, resulting in a decrease of approximately $9,200 in revenues.
The net total increase in revenues due to the change in production is
approximately $1,100. The decrease in gas production is a result of
property sales and surface problems.
Costs and Expenses
Total costs and expenses increased to $96,331 from $90,632 for the quarters
ended September 30, 1996 and 1995, respectively, an increase of 6%. The
increase is the result of higher lease operating costs, general and
administrative expense and depletion expense.
1. Lease operating costs and production taxes were 5% higher, or
approximately $2,500 more during the quarter ended September 30, 1996 as
compared to the quarter ended September 30, 1995.
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 4%
or approximately $200 during the quarter ended September 30, 1996 as
compared to the quarter ended September 30, 1995.
3. Depletion expense increased to $31,000 for the quarter ended September
30, 1996 from $28,000 for the same period in 1995. This represents an
increase of 11%. Depletion is calculated using the gross 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. Consequently, depletion
will generally fluctuate in direct relation to oil and gas revenues. As
noted above, oil and gas revenues increased due to an increase in price
and production for the quarter ended September 30, 1996 as compared to
the same period for 1995. Depletion reflected a comparable increase.
B. General Comparison of the Nine Month Periods Ended September 30, 1996 and
1995
The following table provides certain information regarding performance
factors for the nine month periods ended September 30, 1996 and 1995:
Nine Months
Ended Percentage
September 30, Increase
1996 1995 (Decrease)
---- ---- ----------
Average price per barrel of oil $ 19.64 16.90 16%
Average price per mcf of gas $ 2.22 1.56 42%
Oil production in barrels 9,800 9,600 2%
Gas production in mcf 87,000 113,400 (23%)
Gross oil and gas revenue $ 385,125 339,232 14%
Net oil and gas revenue $ 219,887 171,663 28%
Partnership distributions $ 202,481 187,809 8%
Limited partner distributions $ 182,481 172,159 6%
Per unit distribution to limited
partners $ 64.69 61.03 6%
Number of limited partner units 2,821 2,821
Revenues
The Partnership's oil and gas revenues increased to $385,125 from $339,232
for the nine months ended September 30, 1996 and 1995, respectively, an
increase of 14%. The principal factors affecting the comparison of the nine
months ended September 30, 1996 and 1995 are as follows:
1. The average price for a barrel of oil received by the Partnership
increased during the nine months ended September 30, 1996 as compared to
the nine months ended September 30, 1995 by 16%, or $2.74 per barrel,
resulting in an increase of approximately $26,300 in revenues. Oil sales
represented 50% of total oil and gas sales during the nine months ended
September 30, 1996 as compared to 48% during the nine months ended
September 30, 1995.
The average price for an mcf of gas received by the Partnership increased
during the same period by 42%, or $.66 per mcf, resulting in an increase
of approximately $74,800 in revenues.
The total increase in revenues due to the change in prices received from
oil and gas production is approximately $101,100. 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 increased approximately 200 barrels or 2% during the nine
months ended September 30, 1996 as compared to the nine months ended
September 30, 1995, resulting in an increase of approximately $3,900 in
revenues.
Gas production decreased approximately 26,400 mcf or 23% during the same
period, resulting in a decrease of approximately $58,600 in revenues.
The net total decrease in revenues due to the change in production is
approximately $54,700. The decrease in gas production is a result of
property sales and surface problems.
Costs and Expenses
Total costs and expenses decreased to $294,013 from $294,744 for the nine
months ended September 30, 1996 and 1995, respectively, a decrease of less
than 1%. The decrease is the result of lower lease operating costs, offset
by an increase in general and administrative expense and depletion expense.
1. Lease operating costs and production taxes were 1% lower, or
approximately $2,300 less during the nine months ended September 30, 1996
as compared to the nine months ended September 30, 1995.
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 2%
or approximately $600 during the nine months ended September 30, 1996 as
compared to the nine months ended September 30, 1995.
3. Depletion expense increased to $97,000 for the nine months ended
September 30, 1996 from $96,000 for the same period in 1995. This
represents an increase of 1%. Depletion is calculated using the gross
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. Consequently,
depletion will generally fluctuate in direct relation to oil and gas
revenues. As noted above, oil and gas revenues increased due to a
increase in price and production for the nine months ended September 30,
1996 as compared to the same period for 1995. Depletion reflected a
comparable increase.
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 $183,700 in
the nine months ended September 30, 1996 as compared to approximately
$121,100 in the nine months ended September 30, 1995. The primary source of
the 1996 cash flow from operating activities was profitable operations.
Cash flows provided by investing activities were approximately $40 in the
nine months ended September 30, 1996 as compared to approximately $127,000 in
the nine months ended September 30, 1995. The principle source of the 1996
cash flow from investing activities was the sale of oil and gas properties,
offset by the additions to oil and gas properties.
Cash flows used in financing activities were approximately $202,500 in the
nine months ended September 30, 1996 as compared to approximately $187,900 in
the nine months ended September 30, 1995. The only use in financing
activities was the distributions to partners.
Total distributions during the nine months ended September 30, 1996 were
$202,481 of which $182,481 was distributed to the limited partners and
$20,000 to the general partners. The per unit distribution to limited
partners during the nine months ended September 30, 1996 was $64.69. Total
distributions during the nine months ended September 30, 1995 were $187,809
of which $172,159 was distributed to the limited partners and $15,650 to the
general partners. The per unit distribution to limited partners during the
nine months ended September 30, 1995 was $61.03.
The sources for the 1996 distributions of $202,481 were oil and gas
operations of approximately $183,700 and the sale of oil and gas properties
of approximately $6,600, offset by additions to oil and gas properties of
approximately $6,500, with the balance from available cash on hand at the
beginning of the period. The sources for the 1995 distributions of $187,809
were oil and gas operations of approximately $121,100 and the sale of oil and
gas properties of approximately $132,000, offset by additions to oil and gas
properties of approximately $4,900, resulting in excess cash for
contingencies or subsequent distributions.
Since inception of the Partnership, cumulative monthly cash distributions of
$514,142 have been made to the partners. As of September 30, 1996, $468,792
or $166.18 per limited partner unit has been distributed to the limited
partners, representing a 33% return of the capital contributed.
As of September 30, 1996, the Partnership had approximately $64,700 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) Financial Data Schedule
(b) 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 XI-A, 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 Officers
Date: November 15, 1996