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 September 30, 1995
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 0-9378
ENEX RESOURCES CORPORATION
(Exact name of small business issuer as specified in its charter)
Delaware 93-0747806
(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) 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
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.
Class ....... Outstanding at November 11, 1995
Common Stock, $.05 par value 1,325,723
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
ENEX RESOURCES CORPORATION
CONSOLIDATED BALANCE SHEETS
- -------------------------------------------------------------------------------------
September 30, December 31,
ASSETS 1995 1994
- ------
-------------- ------------
(Unaudited)
CURRENT ASSETS:
<S> <C> <C>
Cash and certificates of deposit ............... $ 314,299 $ 642,659
Accounts receivable:
Managed limited partnerships ................. 995,477 1,226,046
Oil and gas sales ............................ 700,922 631,115
Joint owner .................................. 424,291 368,297
Other accounts receivable .................... 1,369,756 829,390
Notes receivable from managed limited
partnerships ................................. 27,831 89,266
Federal income tax receivable .................. 93,032 232,989
Deferred tax asset - current portion .......... 77,504 99,501
Prepaid expenses & other current assets ........ 811,146 257,386
----------- -----------
Total current assets ............................. 4,814,258 4,376,649
----------- -----------
PROPERTY:
Oil & gas properties (Successful efforts
accounting method) Proved mineral
interests and related equipment & facilities:
Direct ownership ............................. 7,881,335 7,598,999
Derived from investment in managed
limited partnerships ........................ 7,935,565 8,549,929
Furniture, fixtures and other (at cost) ........ 336,812 327,364
----------- -----------
Total property ................................... 16,153,712 16,476,292
----------- -----------
Less accumulated depreciation,
depletion and amortization ..................... 6,632,227 6,444,108
----------- -----------
Property, net .................................... 9,521,485 10,032,184
----------- -----------
OTHER ASSETS
Receivable from managed limited
partnerships for start-up costs ............... 2,408,733 2,655,172
Deferred tax asset ............................. 344,861 149,252
Deferred organization expenses and other ....... 9,757 17,387
----------- -----------
Total other assets ............................... 2,763,351 2,821,811
----------- -----------
TOTAL ............................................ $17,099,094 $17,230,644
=========== ===========
<FN>
See accompanying notes to consolidated financial statements.
- --------------------------------------------------------------------------------------
</FN>
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
ENEX RESOURCES CORPORATION
CONSOLIDATED BALANCE SHEETS
- ------------------------------------------------------------------------------------------
September 30, December 31,
LIABILITIES AND STOCKHOLDER'S EQUITY 1995 1994
- ------------------------------------
------------- ------------
(Unaudited)
CURRENT LIABILITIES:
<S> <C> <C>
Accounts payable ................................. $ 512,255 $ 1,093,132
Current portion of long-term debt ................ 1,200,000 950,000
------------ -------------
Total current liabilities ........................... 1,712,255 2,043,132
------------ -------------
LONG-TERM DEBT:
Note payable to a bank ............................ 500,000 974,000
COMMITMENTS AND
CONTINGENT LIABILITIES
------------ ------------
TOTAL LIABILITIES ................................... 2,212,255 3,017,132
------------- ------------
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value;
$5,000,000 shares authorized;
no shares issued
Common stock, $.05 par value;
10,000,000 shares authorized;
1,640,859 shares issued at September 30, 1995 and
1,627,859 shares issued at December 31, 1994 .... 82,043 81,393
Additional paid-in capital .......................... 9,937,567 9,814,617
Retained earnings ................................... 6,473,900 6,040,573
Less cost of treasury stock;
315,136 shares at September 30, 1995 and
337,936 shares at December 31, 1994 ................ (1,606,671) (1,723,071)
------------ -------------
TOTAL STOCKHOLDERS' EQUITY .......................... 14,886,839 14,213,512
------------ -------------
TOTAL ............................................... $ 17,099,094 $ 17,230,644
============= =============
<FN>
See accompanying notes to consolidated financial statements.
- --------------------------------------------------------------------------------------------
</FN>
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
ENEX RESOURCES CORPORATION
STATEMENTS OF OPERATIONS
- ------------------------------------------------------------------------------------------------------------------
(UNAUDITED) QUARTER ENDED NINE MONTHS ENDED
-------------------------------- -------------------------------
September 30, September 30, September 30, September 30,
1995 1994 1995 1994
------------- -------------- ------------- -------------
REVENUES:
<S> <C> <C> <C> <C>
Oil and gas sales .......................... $ 1,210,145 $ 1,330,393 $ 3,715,802 $ 4,155,503
Gas plant sales ............................ 101,496 96,345 303,826 293,702
Gain on sale of property ................... 239,068 -- 239,068 3,664
Other revenues ............................. 72,305 91,294 189,927 293,606
Interest income ............................ 5,057 5,205 25,762 21,348
----------- ----------- ----------- ------------
Total revenues ............................. 1,628,071 1,523,237 4,474,385 4,767,823
----------- ----------- ----------- ------------
EXPENSES:
General and administrative ............... 304,387 387,159 887,162 1,059,181
Lease operating and other expenses ....... 475,881 400,290 1,426,543 1,339,248
Gas purchases and plant operating expenses 68,710 175,471 201,700 339,739
Production taxes ......................... 71,783 79,914 230,509 239,273
Depreciation, depletion and amortization . 410,228 325,720 1,191,496 1,166,976
Interest expense ......................... 43,773 50,820 143,525 108,516
----------- ----------- ----------- -----------
Total expenses ............................. 1,374,762 1,419,374 4,080,935 4,252,933
----------- ----------- ----------- -----------
Income before income taxes ................. 253,309 103,863 393,450 514,890
----------- ----------- ----------- -----------
INCOME TAX CREDIT:
Current ................................. -- (76,554) -- (109,534)
Deferred ................................ (24,142) (83,635) (173,593) (144,654)
----------- ----------- ----------- -----------
Net income tax credit ...................... (24,142) (160,189) (173,593) (254,188)
----------- ----------- ----------- -----------
NET INCOME ................................. $ 277,451 $ 264,052 $ 567,043 $ 769,078
=========== =========== =========== ===========
PRIMARY EARNINGS PER SHARE ................ $ 0.20 $ 0.19 $ 0.40 $ 0.55
=========== =========== =========== ============
<FN>
See accompanying notes to consolidated financial statements.
</FN>
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
I-3
<PAGE>
<TABLE>
<CAPTION>
ENEX RESOURCES CORPORATION
STATEMENTS OF CASH FLOWS
- -----------------------------------------------------------------------------------------
(UNAUDITED) NINE MONTHS ENDED
-------------------------------
September 30, September 30,
1995 1994
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income .......................................... $ 571,614 $ 769,078
----------- ------------
Adjustments to reconcile net income to net cash
provided by operating
activities:
Depreciation, depletion and amortization ......... 1,191,496 1,166,976
Gain on sale of property ......................... (239,069) (3,664)
Tax benefit from stock options ................... -- 30,600
Noncash expense from stock purchase plan ......... 201,000 258,894
Increase in deferred tax asset ................... (178,183) (144,654)
Changes in assets and liabilities:
Decrease in accounts receivable .................... (49,202) 53,687
(Increase) in prepaid expenses & other assets ..... (551,842) (179,236)
(Decrease) in accounts payable .................... (580,877) (224,891)
(Decrease) in accrued liabilities ................. -- (47,893)
----------- -----------
Net cash provided by operating activities .......... 364,937 1,678,897
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property ................... 419,230 21,772
Property additions ............................... (855,246) (1,983,203)
Reduction in notes receivable from
managed limited partnerships ................... 61,435 202,082
----------- -----------
Net cash (used) by investing activities ............. (374,581) (1,759,349)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt ......... 260,000 2,281,583
Repayment of long-term debt ...................... (484,000) (1,593,127)
Purchase of treasury stock ....................... -- (44,550)
Payment of cash dividend ......................... (133,716) (129,707)
Proceeds from exercise of stock options .......... 39,000 60,000
----------- -----------
Net cash provided (used) by financing activities .... (318,716) 574,199
----------- -----------
NET INCREASE (DECREASE) IN CASH ..................... (328,360) 493,747
CASH AT BEGINNING OF YEAR ........................... 642,659 307,466
----------- -----------
CASH AT END OF PERIOD ............................... $ 314,299 $ 801,213
=========== ============
<FN>
See accompanying notes to financial statements.
- ------------------------------------------------------------------------------------------
</FN>
</TABLE>
I-4
<PAGE>
ENEX RESOURCES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General - Enex Resources Corporation (the "Company") acquires
interests in producing oil and gas properties and manages investment
limited partnerships. As of September 30, 1995, the Company served as
managing general partner for the 45 publicly offered limited partner-
ships of Enex Program I Partners, L.P., Enex Oil & Gas Income Programs
II, III, IV, V, VI, Enex Income and Retirement Fund, Enex 88-89 Income
and Retirement Fund, and Enex 90-91 Income and Retirement Fund
(collectively, the "Partnerships"). The Partnerships own $185 million,
at cost, of proved oil and gas properties in which the Company
generally has a 10% interest as the general partner in addition to its
proportional interest as a limited partner of approximately 1% to
53%. Accumulated depreciation and depletion for such oil and gas
properties at September 30, 1995 was $164 million.
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.
Income Per Share - Primary and fully diluted earnings per share are
based on the weighted average number of common shares outstanding and
common stock equivalents outstanding during the respective periods.
Common share equivalents include common stock options. Fully diluted
earnings are not shown because their effect is immaterial or anti-
dilutive. The weighted average number of shares used to compute primary
earnings per common share was:
Primary
---------
Quarter ended September 30, 1995 ................. 1,413,092
Quarter ended September 30, 1994 ................. 1,427,348
Nine months ended September 30, 1995 ............. 1,427,993
Nine months ended September 30, 1994 ............. 1,392,664
I-5
<PAGE>
2. DEBT
The long-term debt at September 30, 1995 consists of a $1,700,000 loan
from a bank under a $5.925 million revolving line of credit. The bank
loan proceeds were primarily used to purchase producing oil and gas
properties and additional interests in managed limited partnerships.
The loan bears interest at a rate of prime plus three-quarters of one
percent (3/4%) or an average rate of 9.60% and 8.25% during the third
quarter of 1995 and 1994, respectively. Principal payments of $84,000
were made on the debt in the third quarter of 1995. The Company expects
to repay $1,200,000 of the debt during the next twelve months.
3. COMMITMENTS AND CONTINGENT LIABILITIES
As general partner, the Company is contingently liable for all debts
and actions of the managed limited partnerships. However, in
management's opinion, the existing assets of the limited partnerships
are sufficient to satisfy any such partnership indebtedness.
4. NOTES RECEIVABLE FROM MANAGED LIMITED PARTNERSHIPS
On December 29, 1994, in order to partially finance the purchase of
producing oil and gas properties, a managed limited partnership
borrowed $87,000 from the Company. The Company receives monthly
principal payments from the partnerships on the resulting demand notes
plus interest payable at the Company's borrowing rate of prime plus
three-fourths of one percent (at September 30, 1995 the rate was
9 3/4%) on the unpaid principal. Principal payments of $23,235 were
received in the third quarter of 1995. At September 30, 1995, the
total outstanding principal balance was $27,831.
5. SALES OF PROPERTIES
In the third quarter of 1995, the Company sold a portion of its
interest in the HNG acquisition, which it owns through its limited
partner interest in Enex Program I Partners, L.P. The Company's portion
of the proceeds from the sale was $393,801. A gain of $226,931 was
recognized by the Company from the HNG sale. Additionally, the Company
sold its interests in several other acquisitions for $25,429. A net
gain of $12,138 was recognized by the Company from these sales.
6. INCOME TAXES
The Company adopted Statement of Financial Standards (SFAS) No. 109,
"Accounting for Income Taxes," effective January 1, 1993. This
Statement supersedes SFAS No. 96, "Accounting for Income Taxes," which
was adopted by the company in 1988. The Company recognized a
deferred tax credit of $24,142 and $83,635 in the third quarter of
1995 and 1994, respectively.
I-6
<PAGE>
Deferred income taxes reflect the net tax of temporary differences
between the carrying amount of assets and liabilities for financial
reporting purposes and the amount used for income tax purposes. The tax
effects of significant items comprising the Company's net deferred tax
asset as of September 30, 1995, are as follows:
Difference between tax and book net property basis ... $ 4,020
Difference between basis in managed limited
partnerships for financial reporting purposes and
income tax purposes ................................... 4,382,564
Intangible drilling costs which remain capitalized for
financial reporting purposes which were deducted for
federal income tax purposes .......................... (109,962)
Timing difference from lawsuit contingency .......... (45,281)
Net operating loss carryforward (expires 2009) ....... 354,111
-----------
Deferred tax asset .................................... 4,585,452
Valuation allowance .................................... (4,163,087)
-----------
Net deferred tax asset ............................... $ 422,365
===========
The valuation allowance reserves the net deferred tax asset at
September 30, 1995 due to uncertainties inherent in the oil and gas
market.
I-7
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
In the third quarter of 1995, lower expenses and a gain from the sale of
property offset lower oil & gas prices, producing higher net income for Enex
Resources Corporation ("the Company").
Liquidity and Capital Resources
Cash flow provided by operating activities decreased to $364,937 in the first
nine months of 1995 as compared with $1,678,897 in the same period of 1994. This
represents a decrease of $1,313,960. A decrease in accounts payable of $580,877
and an increase in other current assets of $551,842 were the primary reasons for
this decrease. The increase in current assets was primarily a result of the
$393,801 of proceeds from the sale of the HNG acquisition which were not
received until October, 1995. To this cash flow from operations, proceeds from
the sale of properties added $419,230 in the first nine months of 1995 as
compared to $21,772 in the first nine months of 1994. Payments received
on notes receivable from managed limited partnerships added $61,435 in the
first nine months of 1995 versus the Company receiving $202,082 from such loans
in 1994. In the first nine months of 1995, net payments on the Company's bank
line-of-credit were $224,000. In the first nine months of 1994, the line of
credit provided a net $688,456. Proceeds from the exercise of stock options
added $39,000 and $60,000 to the cash flow in 1995 and 1994, respectively.
The cash flow allowed the Company to continue to purchase additional limited
partnership interests and improve oil and gas properties. In the first nine
months of 1995, $855,246 was utilized to purchase interests in the Company's
managed limited partnerships, drill wells on the A&W, Dent and FEC acquisitions,
participate in a waterflood expansion program at Shafter Lake and recomplete
wells in the McBride and Florida acquisitions. The Company continued its semi-
annual dividend by utilizing $133,716 to pay a dividend of $.10 per share in
July, 1995.
In the first nine months of 1994, the Company used $773,000 to acquire a working
interest in forty-one wells in the McBride Field in Caldwell and Bastrop
Counties in Texas. The acquisition has additional acreage available for future
development. Additionally, $737,000 was used to acquire additional interests in
managed limited partnerships. The Company also purchased 5,500 shares of
treasury stock for $44,550. In June of 1994, the Company also paid a semi-annual
dividend of $.10 per share utilizing $129,707.
Working capital improved to $3,102,003 at September 30, 1995 versus $2,333,517
at December 31, 1994. At September 30, 1995, the Company's current ratio was
2.81 and its debt to equity ratio was 11%, as debt totaled $1,700,000.
I-8
<PAGE>
Results of Operations
The Company reported net income in the third quarter of 1995 of $277,451, or
$.20 per share, as compared to $264,052, or $.19 per share, in the third quarter
of 1994. In the first nine months of 1995, the Company earned $567,043 or $.40
per share versus $769,078 or $.55 per share in the first nine months of 1994.
The higher net income in the third quarter of 1995 was primarily the result of
the sale of properties, as noted below. The lower net income in the first
nine months of 1995 was attributable to decreased oil and gas revenues due
primarily to lower gas prices in the overall market for the sale of natural gas.
Oil and gas sales were $1,210,145 in the third quarter of 1995 versus $1,330,393
in the corresponding period of 1994. This decrease of $120,248 or 9% was due
primarily to the lower oil and natural gas prices experienced by the industry in
1995. Oil revenues decreased by $54,593 or 8% from $705,120 in the third quarter
of 1994 to $650,527 in the third quarter of 1995. A 3% decrease in oil
production reduced sales by $19,301. A 5% decrease in the average oil sales
price reduced sales by an additional $35,292. The decrease in oil production was
primarily a result of natural production declines, partially offset by the
purchase of additional interests in limited partnerships. The decrease in the
average oil sales price corresponds with lower prices in the overall market for
the sale of oil. Gas revenues decreased by 11% or $65,655 in the third quarter
from $625,273 in 1994 to $559,618 in 1995. A 13% decrease in the average gas
sales price reduced sales by $82,428. This decrease was partially offset by a 3%
increase in gas production. The decrease in the average gas price corresponds
with lower prices in the overall market for the sale of natural gas. The
increase in gas production was primarily a result of the acquisition of
additional partnership interests and increased production from Shafter Lake,
which had a waterflood expansion program, and from the Dent and Schlensker
acquisitions which had new wells drilled, partially offset by natural production
declines.
In the first nine months of 1995, oil and gas sales were $3,715,802 versus
$4,155,503 in the first nine months of 1994. This represents a decrease of
$439,701 or 11%. During the first nine months of 1995, oil revenues increased by
3%, or $60,859, from $2,040,417 in 1994 to $2,101,276 in the first nine months
of 1995. A 9% increase in the average oil sales price increased sales by
$169,749. This increase was partially offset by a 5% decrease in oil production
which decreased oil revenues by $108,890. The increase in the average oil sales
price corresponds with higher prices in the overall market for the sale of oil.
The decrease in oil production was primarily the result of natural production
declines, partially offset by the purchase of additional interests in limited
partnerships. Gas revenues decreased by 24% or $500,560 from $2,115,086 in the
first nine months of 1994 to $1,614,526 in the first nine months of 1995. A 23%
decrease in the average gas sales price reduced gas sales by $470,180. A 1%
decrease in gas production reduced gas sales by an additional $30,380. The
decrease in the average gas sales price corresponds with lower prices in the
overall market for the sale of gas. The decrease in gas production was primarily
a result of natural production declines, partially offset by the acquisition of
additional partnership interests and increased production from Shafter Lake,
which had a waterflood expansion program, and from the Dent and Schlensker
acquisitions which had new wells drilled.
I-9
<PAGE>
Other revenues were $72,305 and $91,294 in the third quarter of 1995 and 1994,
respectively. For the first nine months of 1995, other revenues were $189,927
versus $293,606 in the first nine months of 1994. The decreases were primarily
due to the recognition of a $163,000 gain from the early receipt of notes
receivable in 1994 versus a similar gain of $88,069 recognized in 1995. In 1994,
the Company also recognized $83,149 of commissions and selling income as
compared to $6,577 in 1995. These decreases were offset by $79,167 of rig rental
and other revenues earned in the first nine months of 1995 versus $22,972 of
such revenues earned in the first nine months of 1994.
General and administrative expenses decreased to $887,162 in the first nine
months of 1995 as compared to $1,059,181 in the first nine moths of 1994. This
represents a decrease of $172,019 or 16%. General and administrative expenses
were $304,387 in the third quarter of 1995 versus $387,159 in the third quarter
of 1994. This represents a decrease of $82,772 or 21%. The decreases were
primarily a result of the Company continuing to reduce overhead costs.
Lease operating and other expenses increased from $400,290 in the third quarter
of 1994 to $475,881 in the third quarter of 1995. This represents an increase of
$75,591 or 19%. For the first nine months of 1995, lease operating expenses
increased by $87,295 or 7% from $1,339,248 in 1994 to $1,426,543 in 1995. The
increases were primarily a result of workover expenses incurred on the McBride,
Florida and FEC acquisitions in 1995.
Depletion, depreciation and amortization expense increased from $325,720 in the
third quarter of 1994 to $410,228 in the third quarter of 1995. This represents
an increase of $84,508 or 26%. A 26% increase in the depletion rate increased
depreciation and depletion expense by $83,384. The changes in production, noted
above, increased depreciation and depletion expenses by an additional $1,124.
Depreciation, depletion and amortization expense increased from $1,166,976 in
the first nine months of 1994 to $1,191,496 in the first nine months of 1995, an
increase of $24,520 or 2%. A 5% increase in the depletion rate increased
depreciation and depletion expense by $61,499. This increase was partially
offset by the changes in production, noted above. The increases in the depletion
rate were primarily the result of a downward revision of the gas reserves at
December 31, 1994, partially offset by an upward revision of the oil reserves at
December 31, 1994.
In the third quarter of 1995, the Company had net interest expense of $38,716 as
compared with net interest expense of $45,615 in the third quarter of 1994. The
decrease was the result of the Company reducing its long-term debt in 1995. In
the first nine months of 1995, the Company had net interest expense of $117,763
versus net interest expense of $87,168 in the first nine months of 1994. The
increase from 1994 to 1995 was primarily due to an increase in the average
interest rate from 7.78% in 1994 to 9.65% in 1995, coupled with a higher
weighted average debt outstanding in 1995 due to the issuance of additional debt
in the second quarter of 1994 to provide funding for acquisitions of oil and gas
properties and additional partnership interests.
In the third quarter of 1995, the Company sold a portion of its interest in the
HNG acquisition, which it owns through its limited partner interest in Enex
Program I Partners, L.P. The Company's portion of the proceeds from the sale was
$393,801. A gain of $226,931 was recognized by the Company from the HNG sale.
Additionally, the Company sold its interests in several other acquisitions for
$25,429. A net gain of $12,138 was recognized by the Company from these sales.
<PAGE>
In the first nine months of 1995, the Company recorded an income tax credit of
$173,593 as compared with a credit of $254,188 recognized in 1994. These credits
are primarily a result of the Company's continued utilization of its deferred
tax asset which resulted from the acquisition of properties with a higher tax
basis. At September 30, 1995, the Company had a substantial net deferred tax
asset of $4,585,452. Due to uncertainties inherent in the oil and gas market, a
valuation allowance reserved all but $422,365 of the net deferred tax asset.
Future Outlook
Natural gas prices remained at marginally profitable levels in the first nine
months of 1995. The low prices detrimentally affected earnings and cash flow.
With the colder weather of fall and winter approaching, a marginal rebound in
natural gas prices should increase earnings in the near term. For the long-term,
the Company continues to believe that natural gas prices hold tremendous
potential as an environmentally clean fuel that is domestically produced. Oil
prices improved slightly from the record low levels experienced in 1994. The
long-term prospect of oil prices remains bright, as the world's appetite for
petroleum grows unabated.
While low prices adversely affected earnings, the negative impact has not
diluted the Company's strong balance sheet. The current ratio improved to 2.81
and the debt to equity ratio was reduced to 11% during 1995. We continue to
evaluate potential joint ventures or business combinations in order to maximize
shareholder value. Cash flow will continue to be used to reduce debt and acquire
additional producing properties. The Company has evaluated several drilling
locations for further development. While the Company has no other material
commitments for capital, a line of credit is maintained which allows the Company
to respond to acquisition and investment opportunities.
In June 1995, the Company declared a $.10 per share dividend, which was paid to
shareholders in July 1995. This payment continued the Company's regular
semi-annual dividend payments.
I-11
<PAGE>
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) Exhibits
(2) Not Applicable
(4) (a) Articles Fourth, Sixth, Seventh,
Fourteenth, Fifteenth, Seventeenth and
Twentieth of the Company's Certificate of
Incorporation and Article II of the
Company's By-Laws. Incorporated by reference
to the Company's Annual Report on Form
10-KSB for the fiscal year ended December
31, 1992, where the same appeared as part of
Exhibits 3(a) and 3(b).
(b) Form of Rights Agreement dated as of
September 4, 1990 between the Company's
predecessor-in-interest, Enex Resources
Corporation, a Colorado corporation (the
"Predecessor") and American Securities
Transfer, Incorporated as Rights Agent,
which includes as exhibits thereto the Form
of Rights Certificate and the Summary of
Rights to Purchase Common Stock. Incor-
porated by reference to the Predecessor's
Current Report on Form 8-K, dated as of
September 4, 1990, where the same appeared
as Exhibit 4.
(11) Not Applicable
(15) Not Applicable
II-1
<PAGE>
(18) Not Applicable
(19) Not Applicable
(20) Not Applicable
(23) Not Applicable
(24) Not Applicable
(25) Not Applicable
(28) Not Applicable
(b) Reports on Form 8-K
The Company filed no reports on Form 8-K during the quarter
ended September 30, 1995.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has this report to be signed on its behalf by the undersigned
thereunto duly authorized.
ENEX RESOURCES CORPORATION
--------------------------
(Registrant)
By: /s/ R. E. Densford
--------------------
R. E. Densford
Vice President, Secretary
Treasurer and Chief Financial
Officer
November 11, 1995 By: /s/ James A. Klein
-----------------------
James A. Klein
Controller and Chief
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
</LEGEND>
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<NAME> Enex Resources Corporation
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