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 0-13485
ENEX OIL & GAS INCOME PROGRAM II - 2, L.P.
(Exact name of small business issuer as specified in its charter)
Texas 76-0098589
(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 - 2, L.P.
BALANCE SHEET
JUNE 30,
ASSETS 1995
(Unaudited)
CURRENT ASSETS:
Cash $ 1,105
Accounts receivable - oil & gas sales 8,842
Total current assets 9,947
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 5,574,530
Less accumulated depreciation and depletion 5,411,185
Property, net 163,345
TOTAL $ 173,292
LIABILITIES AND PARTNERS' (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 2,066
Current portion of note payable to general partner 10,985
Payable to general partner 36,356
Total current liabilities 49,407
NOTE PAYABLE TO GENERAL PARTNER 223,575
PARTNERS' (DEFICIT):
Limited partners (73,873)
General partner (25,817)
Total partners' (deficit) (99,690)
TOTAL $ 173,292
See accompanying notes to financial statements.
I-1
ENEX OIL & GAS INCOME PROGRAM II - 2, 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 $ 12,175 $ 17,378 $ 21,022 $ 25,174
EXPENSES:
Depreciation and depletion 2,504 3,324 4,299 4,921
Lease operating expenses 2,726 2,309 5,421 11,955
Production taxes 502 1,153 1,046 1,633
General and administrative 4,124 3,144 5,526 4,722
Total expenses 9,856 9,930 16,292 23,231
INCOME FROM OPERATIONS 2,319 7,448 4,730 1,943
OTHER EXPENSE:
Interest expense to gen ptr (5,807) (4,834) (11,350) (9,117)
NET INCOME (LOSS) $ (3,488) $ 2,614 $ (6,620) $ (7,174)
See accompanying notes to financial statements.
I-2
ENEX OIL AND GAS INCOME PROGRAM II - 2, L.P.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED
JUNE 30, JUNE 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (6,620) $ (7,174)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and depletion 4,299 4,921
(Increase) decrease in:
Accounts receivable - oil & gas sales (3,375) 2,072
Increase (decrease) in:
Accounts payable (5,753) (7,170)
Payable to general partner 13,121 13,831
Total adjustments 8,292 13,654
Net cash provided by operating activities 1,672 6,480
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of note payable to general partner (2,650) (6,883)
NET (DECREASE) IN CASH (978) (403)
CASH AT BEGINNING OF YEAR 2,083 836
CASH AT END OF PERIOD $ 1,105 $ 433
Cash paid during the period for interest $ 11,350 $ 9,117
See accompanying notes to financial statements.
I-3
ENEX OIL & GAS INCOME PROGRAM II - 2, 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 $3,350 and $6,883 were made on the note payable
to the general partner during the second quarter of 1995 and 1994,
respectively. Weighted average principal outstanding was $236,183 and
$246,646 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 7.86% 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 $17,378 in 1994 to
$12,175 in 1995. This represents a decrease of $5,203 (30%). Oil sales
increased by $1,465 or 170%. A 160% increase in oil production increased
sales by $1,380, while a 4% increase in average oil prices increased sales
by an additional $85. Gas sales decreased by $6,668 or 40%. A 33%
decrease in average gas prices reduced sales by $4,954, while an 11%
decrease in gas production reduced sales by an additional $1,714. The
changes in average prices correspond with changes in the overall market for
the sale of oil and gas. The higher oil production was primarily due to
the shut-in of production from the Steamboat acquisition in 1994 to perform
a workover. The decrease in gas production was primarily the result of
natural production declines.
Lease operating expenses for the second quarter increased from $2,309 in
1994 to $2,726 in 1995. The increase of $417 (18%) is primarily due to
workover charges incurred on the East Seven Sisters acquisition in the
second quarter of 1995, partially offset by the decline in gas production,
noted above.
Depreciation and depletion expense decreased from $3,324 in the second
quarter of 1994 to $2,504 in the second quarter of 1995. This represents
a decrease of $820 (25%). The changes in production, noted above, reduced
depreciation and depletion expense by $149, while a 21% decrease in the
depletion rate reduced depreciation and depletion expense by an additional
$671. The decrease in the depletion rate is a result of an upward revision
of the oil and gas reserves at December 31, 1994.
General and administrative expenses increased from $3,144 in the second
quarter of 1994 to $4,124 in the second quarter of 1995. This increase of
$980 (31%) is primarily due to more staff time being required to manage the
Company's properties.
First Six Months in 1995 Compared to First Six Months in 1994
Oil and gas sales for the first six months decreased from $25,174 in 1994
to $21,022 in 1995. This represents a decrease of $4,152 (16%). Oil
sales increased by $1,268 or 72%. A 54% increase in oil production
increased sales by $949, while a 12% increase in average oil prices
increased sales by an additional $319. Gas sales decreased by $5,420 or
23%. A 26% decrease in average gas prices reduced sales by $6,230. 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 higher oil production was primarily due to
the shut-in of production from the Steamboat acquisition in 1994 to perform
a workover. 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 $11,955 in the first six months of
1994 to 5,421 in the first six months of 1995. The decrease of $6,534 is
primarily due to workover charges incurred on the East Seven Sisters
acquisition in the first quarter of 1994 coupled with gas compression
charges incurred 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 $4,921 in the first six
months of 1994 to $4,299 in the first six months of 1995. This represents
a decrease of $622 (13%). An 18% decrease in the depletion rate reduced
depreciation and depletion expense by $912. This decrease was partially
offset by the changes in production, noted above. The decrease in the
depletion rate is a result of an upward revision of the oil and gas
reserves at December 31, 1994.
General and administrative expenses increased from $4,722 in 1994 to $5,526
in 1995. This increase of $804 (17%) is primarily due to more 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. 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 - 2, 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 - 2, 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-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 1,105
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<RECEIVABLES> 8,842
<ALLOWANCES> 0
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<PP&E> 5,574,530
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<OTHER-SE> (99,690)
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<CGS> 10,766
<TOTAL-COSTS> 10,766
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