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 June 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
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ENEX OIL & GAS INCOME PROGRAM II - 1, L.P.
BALANCE SHEET
JUNE 30,
ASSETS 1995
(Unaudited)
CURRENT ASSETS:
Cash $ 356
Accounts receivable - oil & gas sales 10,322
Other current assets 701
Total current assets 11,379
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 6,372,573
Less accumulated depreciation and depletion 6,106,250
Property, net 266,323
TOTAL $ 277,702
LIABILITIES AND PARTNERS' (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 966
Current portion of note payable to general partner 25,425
Payable to general partner 43,151
Total current liabilities 69,542
NOTE PAYABLE TO GENERAL PARTNER 261,936
PARTNERS' (DEFICIT):
Limited partners (36,577)
General partner (17,199)
Total partners' (deficit) (53,776)
TOTAL $ 277,702
See accompanying notes to financial statements.
I-1
ENEX OIL & GAS INCOME PROGRAM II - 1, L.P.
STATEMENTS OF OPERATIONS
(UNAUDITED) QUARTER ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1995 1994 1995 1994
REVENUES:
Oil and gas sales $ 16,013 $ 25,111 $ 32,754 $ 41,435
EXPENSES:
Depreciation and depletion 3,031 3,990 5,491 6,607
Lease operating expenses 7,113 5,194 13,744 18,603
Production taxes 787 1,779 2,170 2,909
General and administrative 3,881 3,993 6,731 8,484
Total expenses 14,812 14,956 28,136 36,603
INCOME FROM OPERATIONS 1,201 10,155 4,618 4,832
OTHER EXPENSE:
Interest expense to genrl ptr (7,096) (6,130) (13,808) (11,479)
NET INCOME (LOSS) $ (5,895) $ 4,025 $ (9,190) $ (6,647)
See accompanying notes to financial statements.
I-2
ENEX OIL AND GAS INCOME PROGRAM II - 1, L.P.
STATEMENTS OF CASH FLOWS
(UNAUDITED) SIX MONTHS ENDED
JUNE 30, JUNE 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (9,190) $ (6,647)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and depletion 5,491 6,607
(Increase) decrease in:
Accounts receivable - oil & gas sales (799) 5,203
Increase (decrease) in:
Accounts payable (4,575) (4,505)
Payable to general partner 10,618 13,124
Total adjustments 10,735 20,429
Net cash provided by operating activities 1,545 13,782
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions - development costs (997) -
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of note payable to general partner (192) (13,521)
NET INCREASE IN CASH 356 261
CASH AT BEGINNING OF YEAR 0 315
CASH AT END OF PERIOD $ 356 $ 576
Cash paid during the period for interest $ 13,808 $ 11,479
See accompanying notes to financial statements.
I-3
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 $606 and $13,015 were made on the note payable
to the general partner during the second quarter of 1995 and 1994,
respectively. Weighted average principal outstanding was $288,637 and
$306,092 during the second quarter of 1995 and 1994, respectively.
Outstanding principal bore interest at a weighted average rate of
9.75% during the second quarter of 1995 and 8.03% during the second
quarter of 1994.
Item 2. Management's Discussion and Analysis or Plan of Operation.
Second Quarter 1995 Compared to Second Quarter 1994
Oil and gas sales for the second quarter decreased from $25,111 in 1994 to
$16,013 in 1995. This represents a decrease of $9,098 (36%). Oil sales
decreased by $2,208 or 40%. A 47% decrease in production reduced sales by
$2,589. This decrease was partially offset by a 13% increase in average
oil prices. Gas sales decreased by $6,890 or 35%. A 32% decrease in
average gas prices reduced sales by $6,085, while a 4% decrease in gas
production reduced sales by an additional $805. 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 the correction of
an overpayment of oil produced in 1993 from the Comite acquisition, coupled
with natural production declines. The decrease in gas production was
primarily the result of natural production declines.
Lease operating expenses increased from $5,194 in the second quarter of
1994 to $7,113 in the second quarter of 1995. The increase of $1,919 (37%)
is primarily due to workover costs incurred on the East Seven Sisters
acquisition in the second quarter of 1995, partially offset by the decline
in production, noted above.
Depreciation and depletion expense decreased from $3,990 in the second
quarter of 1994 to $3,031 in the second quarter of 1995. This represents
a decrease of $959 (24%). A 14% decrease in the depletion rate reduced
depreciation and depletion expense by $492. The declines in production,
noted above, reduced depreciation and depletion expense by an additional
$467. 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 decreased from $3,993 in the second
quarter of 1994 to $3,881 in the second quarter of 1995. This decrease of
$112 (3%) is primarily due to less staff time being required to manage the
Company's operations.
First Six Months in 1995 Compared to First Six Months in 1994
Oil and gas sales for the first six months decreased from $41,435 in 1994
to $32,754 in 1995. This represents a decrease of $8,681 (21%). Oil sales
decreased by $624 or 6%. An 18% decrease in oil production reduced sales
by $1,882. This decrease was partially offset by a 15% increase in average
oil prices. Gas sales decreased by $8,057 or 26%. A 28% decrease in
average gas prices reduced sales by $9,066. This decrease was partially
offset by a 3% 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 the correction of an
overpayment of oil produced in 1993 from the Comite acquisition, coupled
with natural production declines. The increase in gas production was
primarily the result of the partial shut-in of production from the East
Seven Sisters acquisition to perform a workover in the first quarter of
1994, partially offset by natural production declines.
Lease operating expenses decreased from $18,603 in 1994 to $13,744 in 1995.
The decrease of $4,859 (26%) is primarily due to gas compression charges
paid by the Company in the first quarter of 1994 which related to
production in 1993 from the East Seven Sisters acquisition. Such 1993
charges were fully paid in the first quarter of 1994.
Depreciation and depletion expense decreased from $6,607 in the first six
months of 1994 to $5,491 in the first six months of 1995. This represents
a decrease of $1,116 (17%). The decline in production, noted above,
decreased depreciation and depletion expense by $90, while a 16% decrease
in the depletion rate reduced depreciation and depletion expense by an
additional $1,026. 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 $8,484 in the first six
months of 1994 to $6,731 in the first six months of 1995. This decrease of
$1,753 (21%) is primarily due to less staff time being required to manage
the Company's operations coupled with a $1,435 decrease in direct expenses
incurred by the Company in 1995. Direct expenses were lower due to
renegotiated tax preparation fees.
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. 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.
As of June 30, 1995, the Company had no material commitments for capital
expenditures. The Company does not intend to engage in any significant
developmental drilling activity.
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 June 30, 1995.
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
August 11, 1995 By: /s/ James A. Klein
James A. Klein
Controller and Chief
Accounting Officer
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:
R.E. Densford
Vice President, Secretary
Treasurer and Chief Financial
Officer
August 11, 1995 By:
James A. Klein
Controller and Chief
Accounting Officer
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<PERIOD-END> JUN-30-1995
<CASH> 356
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<RECEIVABLES> 10,322
<ALLOWANCES> 0
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<PP&E> 6,372,573
<DEPRECIATION> 6,106,250
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<TOTAL-COSTS> 21,405
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