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 0-13484
ENEX OIL & GAS INCOME PROGRAM II - 1, L.P.
(Exact name of small business issuer as specified in its charter)
Texas 76-0098588
(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)
Registrant'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
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
ENEX OIL & GAS INCOME PROGRAM II - 1, L.P.
BALANCE SHEET
- ------------------------------------------------------------------------
September 30,
ASSETS 1995
-------------
(Unaudited)
CURRENT ASSETS:
<S> <C>
Cash ................................................ $ 1,373
Accounts receivable - oil & gas sales ............... 14,312
Other current assets ................................ 676
----------
Total current assets .................................. 16,361
----------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 6,372,572
Less accumulated depreciation and depletion ........ 6,109,898
----------
Property, net ......................................... 262,674
----------
TOTAL ................................................. $ 279,035
==========
LIABILITIES AND PARTNERS' (DEFICIT)
CURRENT LIABILITIES:
Accounts payable ................................... $ 265
Current portion of note payable to general partner . 12,556
Payable to general partner ......................... 47,337
----------
Total current liabilities ............................. 60,158
----------
NOTE PAYABLE TO GENERAL PARTNER ....................... 274,689
----------
PARTNERS' (DEFICIT):
Limited partners ................................... (38,611)
General partner .................................... (17,201)
----------
Total partners' (deficit) ............................. (55,812)
----------
TOTAL ................................................. $ 279,035
==========
<FN>
See accompanying notes to financial statements.
- ------------------------------------------------------------------------
</FN>
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
ENEX OIL & GAS INCOME PROGRAM II - 1, L.P.
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 ................. $ 22,731 $ 20,148 $ 55,485 $ 61,583
--------- --------- --------- ---------
EXPENSES:
Depreciation and depletion ........ 3,648 3,521 9,139 10,128
Lease operating expenses .......... 8,028 4,778 21,772 23,381
Production taxes .................. 1,684 1,509 3,854 4,418
General and administrative ........ 4,523 3,152 11,254 11,636
--------- -------- -------- --------
Total expenses ...................... 17,883 12,960 46,019 49,563
--------- -------- -------- --------
INCOME FROM OPERATIONS .............. 4,848 7,188 9,466 12,020
--------- -------- -------- --------
OTHER EXPENSE:
Interest expense to general partner (6,884) (6,310) (20,692) (17,789)
--------- -------- -------- --------
NET INCOME (LOSS) ................... $ (2,036) $ 878 $(11,226) $ (5,769)
========= ========= ========= =========
<FN>
See accompanying notes to financial statements.
- ---------------------------------------------------------------------------------------------------
</FN>
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
ENEX OIL AND GAS INCOME PROGRAM II - 1, L.P.
STATEMENTS OF CASH FLOWS
- -------------------------------------------------------------------------------
(UNAUDITED) NINE MONTHS ENDED
-----------------------------
September 30, September 30,
1995 1994
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss ...................................... $(11,226) $ (5,769)
--------- ---------
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and depletion .................. 9,139 10,128
(Increase) decrease in:
Accounts receivable - oil & gas sales ....... (4,789) 5,897
Other current assets ........................ 25 --
Increase (decrease) in:
Accounts payable ........................... (5,276) (4,694)
Payable to general partner ................. 14,804 16,342
--------- ---------
Total adjustments ............................. 13,903 27,673
--------- ---------
Net cash provided by operating activities ..... 2,677 21,904
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions - development costs ..... (996) (1,047)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of note payable to general partner (308) (20,211)
--------- ---------
NET INCREASE IN CASH .......................... 1,373 646
CASH AT BEGINNING OF YEAR ..................... 0 315
--------- ---------
CASH AT END OF PERIOD ......................... $ 1,373 $ 961
========= =========
Cash paid during the period for interest ...... $ 20,692 $ 17,789
========= =========
<FN>
See accompanying notes to financial statements.
- -------------------------------------------------------------------------------
</FN>
</TABLE>
I-3
<PAGE>
ENEX OIL & GAS INCOME PROGRAM II - 1, 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. Principal payments of $3,139 were made on the note payable to the
general partner during the third quarter of 1995. Weighted average
principal outstanding was $287,631 and $293,988 during the third
quarter of 1995 and 1994, respectively. Outstanding principal bore
interest at a weighted average rate of 9.50% during the third quarter
of 1995 and 8.45% during the third quarter of 1994.
I-4
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
Third Quarter 1995 Compared to Third Quarter 1994
Oil and gas sales for the third quarter increased from $20,148 in 1994 to
$22,731 in 1995. This represents an increase of $2,583 (13%). Oil sales
decreased by $414 or 8%. A 7% decrease in production reduced sales by $357. A 1%
decrease in the average oil sales price reduced sales by an additional $57. Gas
sales increased by $2,997 or 20%. A 27% increase in gas production increased
sales $4,027. This increase was partially offset by a 5% decrease in the average
gas sales price. The changes in average prices correspond with changes in the
overall market for the sale of oil and gas. The lower oil production was
primarily the result of natural production declines. The increase in gas
production was primarily the result of higher production from the East Seven
Sisters and Comite acquisitions which were both shut-in during the third quarter
of 1994 to perform workovers.
Lease operating expenses increased from $4,778 in the third quarter of 1994 to
$8,028 in the third quarter of 1995. The increase of $3,250 (68%) is primarily
due to higher gas compression charges incurred on the East Seven Sisters and
Comite acquisitions in the third quarter of 1995 as a result of the increase in
gas production, noted above.
Depreciation and depletion expense increased from $3,521 in the third quarter of
1994 to $3,648 in the third quarter of 1995. This represents an increase of $127
(4%). The changes in production, noted above, increased depreciation and
depletion expense by $720. This increase was partially offset by a 14% decrease
in the depletion rate. The rate decrease is a primarily the result of an upward
revision of the oil and gas reserves at December 31, 1994.
General and administrative expenses increased from $3,152 in the third quarter
of 1994 to $4,523 in the third quarter of 1995. This increase of $1,371 is
primarily due to more staff time being required to manage the Company's
operations.
First Nine Months in 1995 Compared to First Nine Months in 1994
Oil and gas sales for the first nine months decreased from $61,583 in 1994 to
$55,485 in 1995. This represents a decrease of $6,098 (10%). Oil sales decreased
by $1,038 or 7%. A 15% decrease in oil production reduced sales by $2,270. This
decrease was partially offset by a 9% increase in average oil prices. Gas sales
decreased by $5,060 or 11%. A 19% decrease in average gas prices reduced sales
by $9,958. This decrease was partially offset by an 11% increase in gas
production. The changes in average prices correspond with changes in the overall
market for the sale of oil and gas. The lower oil production was primarily due
to natural production declines. The increase in gas production was primarily the
result of higher production from the East Seven Sisters and Comite acquisitions
which were both shut-in during 1994 to perform workovers.
I-5
<PAGE>
Lease operating expenses decreased from $23,381 in 1994 to $21,772 in 1995. The
decrease of $1,609 (7%) is primarily due to higer gas compression charges on the
East Seve Sisters acquisition paid by the Company in the first quarter of 1994.
Such 1993 charges were fully paid in the first quarter of 1994. This increase
was partially offset by higher gas compression charges incurred on the East
Seven Sisters and Comite acquisitions in 1995 as a result of the increase in gas
production, noted above.
Depreciation and depletion expense decreased from $10,128 in the first nine
months of 1994 to $9,139 in the first nine months of 1995. This represents a
decrease of $989 (10%). A 15% decrease in the depletion rate reduced
depreciation and depletion expense by $1,601. This decrease was partially offset
by the changes in production, noted above. The decrease in the depletion rate
was a result of an upward revision of the oil and gas reserves at December 31,
1994.
General and administrative expenses decreased from $11,636 in the first nine
months of 1994 to $11,254 in the first nine months of 1995. This decrease of
$382 (3%) is primarily due to less staff time being required to manage the
Company's operations.
CAPITAL RESOURCES AND LIQUIDITY
The Company discontinued the payment of distributions during 1990. Future
distributions are dependent upon, among other things, an increase in prices
received for oil and gas. The Company will continue to recover its reserves and
reduce its obligations in 1995 and 1996. Based upon current projected cash flows
from the properties, it does not appear that the Company will have sufficient
cash to pay its operating expenses, repay its debt obligations and pay
distributions.
Due to the failure of oil and gas prices to return to their levels of the early
1980's, the depletion of the Company's oil and gas reserves, the magnitude of
the amounts owed by the Company, the Company's inability to distribute cash to
their Limited Partners for more than five years, and the ongoing costs of
operating, the General Partner has determined that Partnership operations are
unlikely to be profitable for the foreseeable future. As a result the General
Partner is evaluating the Company and intends to present to the Limited Partners
a proposal to liquidate and dissolve the partnership.
As of September 30, 1995, the Company had no material commitments for capital
expenditures. The Company does not intend to engage in any significant
developmental drilling activity.
I-6
<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) There are no exhibits to this report.
(b) The Company filed no reports on Form 8-K during the
quarter ended September 30, 1995.
II-1
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
ENEX OIL & GAS INCOME
PROGRAM II - 1, 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
November 11, 1995 By: /s/ James A. Klein
-------------------
James A. Klein
Controller and Chief
Accounting Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Enex OIl & Gas Income Program II-1, L.P.
</LEGEND>
<CIK> 0000743801
<NAME> Enex Oil & Gas Income Program II-1, L.P.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> dec-31-1995
<PERIOD-START> jan-01-1995
<PERIOD-END> sep-30-1995
<CASH> 1373
<SECURITIES> 0
<RECEIVABLES> 14312
<ALLOWANCES> 0
<INVENTORY> 676
<CURRENT-ASSETS> 16361
<PP&E> 6372572
<DEPRECIATION> 6109898
<TOTAL-ASSETS> 279035
<CURRENT-LIABILITIES> 60158
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> (55812)
<TOTAL-LIABILITY-AND-EQUITY> 279035
<SALES> 55485
<TOTAL-REVENUES> 55485
<CGS> 34765
<TOTAL-COSTS> 34765
<OTHER-EXPENSES> 11254
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (20692)
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (11226)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
