Page 14 of 14
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, 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 33-47667-01
SOUTHWEST OIL & GAS 1992-93 INCOME PROGRAM
Southwest Oil and 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 note 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 and
nine month periods ended September 30, 1997 are not necessarily indicative
of the results that may be expected for the full year.
Southwest Oil and Gas Income Fund XI-A, L.P.
Balance Sheets
September 30, December 31,
1997 1996
------------- ------------
(unaudited)
Assets
Current assets
Cash and cash equivalents $ 5,407 456
Receivable from Managing General Partner 24,204 74,527
- --------- ---------
Total current assets 29,611 74,983
--------- ---------
Oil and gas properties - using the
full cost method of accounting 1,101,431 1,094,448
Less accumulated depreciation,
depletion and amortization 343,000 282,000
--------- ---------
Net oil and gas properties 758,431 812,448
--------- ---------
Organization costs, net 2,799 8,064
--------- ---------
$ 790,841 895,495
========= =========
Liabilities and Partners' Equity
Current liability - Distribution payable $ 61 -
--------- ---------
Partners' equity
General partners (7,424) (3,579)
Limited partners 798,204 899,074
--------- ---------
Total partners' equity 790,780 895,495
--------- ---------
$ 790,841 895,495
========= =========
Southwest Oil and Gas Income Fund XI-A, L.P.
Statements of Operations
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
Revenues
Oil and gas $ 96,866 122,905 315,290 385,125
Interest 80 186 400 606
------- ------- ------- -------
96,946 123,091 315,690 385,731
------- ------- ------- -------
Expenses
Production 73,361 57,191 186,615 165,238
General and administrative 6,186 6,385 26,025 26,510
Depreciation, depletion and
amortization 20,755 32,755 66,265 102,265
------- ------- ------- -------
100,302 96,331 278,905 294,013
------- ------- ------- -------
Net income (loss) $ (3,356) 26,760 36,785 91,718
======= ======= ======= =======
Net income (loss) allocated to:
Managing General Partner $ 1,566 5,356 9,275 17,458
======= ======= ======= =======
General Partner $ 174 595 1,030 1,940
======= ======= ======= =======
Limited Partners $ (5,096) 20,809 26,480 72,320
======= ======= ======= =======
Per limited partner unit $ (1.81) 7.38 9.39 25.64
========= ======= ======= =======
Southwest Oil and Gas Income Fund XI-A, L.P.
Statements of Cash Flows
(unaudited)
Nine Months Ended
September 30,
1997 1996
Cash flows from operating activities
Cash received from oil and gas sales $ 348,696 374,202
Cash paid to suppliers (195,723) (191,094)
Interest received 400 606
------- -------
Net cash provided by operating activities 153,373 183,714
------- -------
Cash flows from investing activities
Additions of oil and gas properties (8,189) (6,512)
Sale of oil and gas properties 1,206 6,554
------- -------
Net cash provided by (used in) investing activities (6,983)
42
------- -------
Cash flows used in financing activities
Distributions to partners (141,439) (202,481)
------- -------
Net increase (decrease) in cash and cash equivalents 4,951
(18,725)
Beginning of period 456 28,968
------- -------
End of period $ 5,407 10,243
======= =======
(continued)
Southwest Oil and Gas Income Fund XI-A, L.P.
Statements of Cash Flows, continued
(unaudited)
Nine Months Ended
September 30,
1997 1996
Reconciliation of net income to net cash
provided by operating activities
Net income $ 36,785 91,718
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation, depletion and amortization 66,265 102,265
(Increase) decrease in receivables 33,406 (10,923)
Increase in payables 16,917 654
------- -------
Net cash provided by operating activities $ 153,373 183,714
======= =======
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.
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 steady decline.
Results of Operations
A. General Comparison of the Quarters Ended September 30, 1997 and 1996
The following table provides certain information regarding performance
factors for the quarters ended September 30, 1997 and 1996:
Three Months
Ended Percentage
September 30, Increase
1997 1996 (Decrease)
Average price per barrel of oil $ 17.90 20.53 (13%)
Average price per mcf of gas $ 2.01 1.88 7%
Oil production in barrels 2,700 3,300 (18%)
Gas production in mcf 24,100 29,000 (17%)
Gross oil and gas revenue $ 96,866 122,905 (21%)
Net oil and gas revenue $ 23,505 65,714 (64%)
Partnership distributions $ 23,500 61,000 (61%)
Limited partner distributions $ 21,150 54,900 (61%)
Per unit distribution to limited partners $ 7.50 19.46 (61%)
Number of limited partner units 2,821 2,821
Revenues
The Partnership's oil and gas revenues decreased to $96,866 from $122,905
for the quarters ended September 30, 1997 and 1996, respectively, a
decrease of 21%. The principal factors affecting the comparison of the
quarters ended September 30, 1997 and 1996 are as follows:
1. The average price for a barrel of oil received by the Partnership
decreased during the quarter ended September 30, 1997 as compared to
the quarter ended September 30, 1996 by 13%, or $2.63 per barrel,
resulting in a decrease of approximately $8,700 in revenues. Oil sales
represented 50% of total oil and gas sales during the quarter ended
September 30, 1997 as compared to 56% during the quarter ended
September 30, 1996.
The average price for an mcf of gas received by the Partnership
increased during the same period by 7%, or $.13 per mcf, resulting in
an increase of approximately $3,800 in revenues.
The net total decrease in revenues due to the change in prices received
from oil and gas production is approximately $4,900. 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 600 barrels or 18% during the
quarter ended September 30, 1997 as compared to the quarter ended
September 30, 1996, resulting in a decrease of approximately $10,700 in
revenues.
Gas production decreased approximately 4,900 mcf or 17% during the same
period, resulting in a decrease of approximately $9,800 in revenues.
The total decrease in revenues due to the change in production is
approximately $20,500. The decrease is primarily attributable to
downtime caused by mechanical problems.
Costs and Expenses
Total costs and expenses increased to $100,302 from $96,331 for the
quarters ended September 30, 1997 and 1996, respectively, an increase of
4%. The increase is the result of higher lease operating costs, partially
offset by a decrease in general and administrative expense and depletion
expense.
1. Lease operating costs and production taxes were 28% higher, or
approximately $16,200 more during the quarter ended September 30, 1997 as
compared to the quarter ended September 30, 1996. The increase is
primarily attributable to the pulling expense incurred on an injector well
during 1997.
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 decreased
3% or approximately $200 during the quarter ended September 30, 1997 as
compared to the quarter ended September 30, 1996.
3. Depletion expense decreased to $19,000 for the quarter ended September
30, 1997 from $31,000 for the same period in 1996. This represents a
decrease of 39%. 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. Contributing
factors to the decline in depletion expense between the comparative
periods were the increase in the price of oil used to determine the
Partnership's reserves for January 1, 1997 as compared to 1996 and the
decline in gross oil and gas revenues.
B. General Comparison of the Nine Month Periods Ended September 30, 1997
and 1996
The following table provides certain information regarding performance
factors for the nine month periods ended September 30, 1997 and 1996:
Nine Months
Ended Percentage
September 30, Increase
1997 1996 (Decrease)
Average price per barrel of oil $ 19.40 19.64 (1%)
Average price per mcf of gas $ 2.17 2.22 (2%)
Oil production in barrels 8,100 9,800 (17%)
Gas production in mcf 73,000 87,000 (16%)
Gross oil and gas revenue $ 315,290 385,125 (18%)
Net oil and gas revenue $ 128,675 219,887 (41%)
Partnership distributions $ 141,500 202,481 (30%)
Limited partner distributions $ 127,350 182,481 (30%)
Per unit distribution to limited partners $ 45.14 64.69 (30%)
Number of limited partner units 2,821 2,821
Revenues
The Partnership's oil and gas revenues decreased to $315,290 from $385,125
for the nine months ended September 30, 1997 and 1996, respectively, a
decrease of 18%. The principal factors affecting the comparison of the
nine months ended September 30, 1997 and 1996 are as follows:
1. The average price for a barrel of oil received by the Partnership
decreased during the nine months ended September 30, 1997 as compared
to the nine months ended September 30, 1996 by 1%, or $.24 per barrel,
resulting in a decrease of approximately $2,400 in revenues. Oil sales
represented 50% of total oil and gas sales during the nine months ended
September 30, 1997 and 1996.
The average price for an mcf of gas received by the Partnership
decreased during the same period by 2%, or $.05 per mcf, resulting in a
decrease of approximately $4,400 in revenues.
The total decrease in revenues due to the change in prices received
from oil and gas production is approximately $6,800. 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 1,700 barrels or 17% during the
nine months ended September 30, 1997 as compared to the nine months
ended September 30, 1996, resulting in a decrease of approximately
$33,000 in revenues.
Gas production decreased approximately 14,000 mcf or 16% during the
same period, resulting in a decrease of approximately $30,400 in
revenues.
The total decrease in revenues due to the change in production is
approximately $63,400. The decrease is primarily attributable to
property sales and downtime caused by mechanical problems.
Costs and Expenses
Total costs and expenses decreased to $278,905 from $294,013 for the nine
months ended September 30, 1997 and 1996, respectively, a decrease of 5%.
The decrease is the result of lower general and administrative expense and
depletion expense, partially offset by an increase in lease operating
costs.
1. Lease operating costs and production taxes were 13% higher, or
approximately $21,400 more during the nine months ended September 30,
1997 as compared to the nine months ended September 30, 1996. The
increase is primarily attributable to the pulling expense incurred on
an injector well during 1997.
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 decreased 2%
or approximately $500 during the nine months ended September 30, 1997
as compared to the nine months ended September 30, 1996.
3. Depletion expense decreased to $61,000 for the nine months ended
September 30, 1997 from $97,000 for the same period in 1996. This
represents a decrease of 37%. 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.
Contributing factors to the decline in depletion expense between the
comparative periods were the increase in the price of oil used to
determine the Partnership's reserves for January 1, 1997 as compared to
1996 and the decline in gross oil and gas revenues.
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 $153,400 in
the nine months ended September 30, 1997 as compared to approximately
$183,700 in the nine months ended September 30, 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
($7,000) in the nine months ended September 30, 1997 as compared to
approximately $40 in the nine months ended September 30, 1996. The
principle use of the 1997 cash flow from investing activities was the
change in oil and gas properties.
Cash flows used in financing activities were approximately $141,400 in the
nine months ended September 30, 1997 as compared to approximately $202,500
in the nine months ended September 30, 1996. The only use in financing
activities was the distributions to partners.
Total distributions during the nine months ended September 30, 1997 were
$141,500 of which $127,350 was distributed to the limited partners and
$14,150 to the general partners. The per unit distribution to limited
partners during the nine months ended September 30, 1997 was $45.14. 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.
The source for the 1997 distributions of $141,500 was oil and gas
operations of approximately $153,400, partially offset by a change in oil
and gas properties of approximately $7,000, resulting in excess cash for
contingencies or subsequent distributions. The sources for the 1996
distributions of $202,481 were oil and gas operations of approximately
$183,700 and the change in oil and gas properties of approximately $40,
with the balance from available cash on hand at the beginning of the
period.
Since inception of the Partnership, cumulative monthly cash distributions
of $725,642 have been made to the partners. As of September 30, 1997,
$659,142 or $233.66 per limited partner unit has been distributed to the
limited partners, representing a 47% return of the capital contributed.
As of September 30, 1997, the Partnership had approximately $29,600 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) 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 and 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 Officer
Date: November 15, 1997