<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT
(PURSUANT TO SECTION 13(E) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 13E-3
(SS.240.13E-3) THEREUNDER)
ENEX OIL & GAS INCOME PROGRAM II-4, L.P.
- --------------------------------------------------------------------------------
(NAME OF THE ISSUER)
ENEX RESOURCES CORPORATION
- --------------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT)
$500 "UNITS" OF LIMITED PARTNERSHIP INTERESTS
- --------------------------------------------------------------------------------
(TITLE OF CLASS OF SECURITIES)
- --------------------------------------------------------------------------------
(CUSIP NUMBER OF CLASS OF SECURITIES)
R. E. DENSFORD, VICE PRESIDENT
ENEX RESOURCES CORPORATION
800 ROCKMEAD
THREE KINGWOOD PLACE, SUITE 200
KINGWOOD, TX 77339
(713) 358-8401
- --------------------------------------------------------------------------------
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND
COMMUNICATIONS ON BEHALF OF PERSON(S) FILING STATEMENT)
THIS STATEMENT IS FILED IN CONNECTION WITH (CHECK THE APPROPRIATE BOX):
A. [x] THE FILING OF SOLICITATION MATERIALS OR AN INFORMATION STATEMENT
SUBJECT TO REGULATION 14A[17 CFR 240.14A-1 TO 240.14B-1].
REGULATION 14C[17 CFR 240.14C-1 TO 240.14C-101] OR RULE 13E-3(C)
[SS.240.13E- 3(C)] UNDER THE SECURITIES EXCHANGE ACT OF 1934.
[AMENDED IN RELEASE NO.34-23789 (P.84,044), EFFECTIVE JANUARY 20,
1987,51 F.R.42048.]
B. O THE FILING OF A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933.
C. O A TENDER OFFER.
D. O NONE OF THE ABOVE. CHECK THE FOLLOWING BOX IF THE SOLICITING
MATERIALS OR INFORMATION STATEMENT REFERRED TO IN CHECKING
BOX (A) ARE PRELIMINARY COPIES:
CALCULATION OF FILING FEE
TRANSACTION VALUATION:
THE MAXIMUM AGGREGATE VALUE OF THE TRANSACTION AMOUNT OF FILING FEE:
IS $259,856 (PARTNERSHIP INDEBTEDNESS, WHICH EXCEEDS $52.00
ESTIMATED FAIR MARKET VALUE OF PARTNERSHIP ASSETS TO
BE SOLD IN LIQUIDATION PURSUANT TO PLAN OF DISSOLUTION)
CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY RULE
0-11(A)(2) AND IDENTIFY THE FILING WITH WHICH THE OFFSETTING FEE WAS
PREVIOUSLY PAID. IDENTIFY THE PREVIOUS FILING BY REGISTRATION STATEMENT
NUMBER, OR THE FORM OR SCHEDULE AND THE DATE OF ITS FILING.
AMOUNT PREVIOUSLY PAID: $52.00
FORM OR REGISTRATION NO.: SCHEDULE 14A
FILING PARTY: ENEX RESOURCES CORPORATION
DATE FILED: OCTOBER 31, 1995
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 13E-3
CROSS-REFERENCE SHEET
Cross Reference Sheet Furnished Pursuant to General Instructions of Schedule 13E-3
ITEM NUMBER AND CAPTION LOCATION IN PROXY STATEMENT
----------------------- ---------------------------
<S> <C> <C>
1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION COVER PAGE; SUMMARY AND SPECIAL FACTORS;
RECORD DATE, VOTING AND SECURITY OWNER-
SHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
2. IDENTITY AND BACKGROUND COVER PAGE; PRINCIPAL EXECUTIVE OFFICES
AND TELEPHONE NUMBER
3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS RECORD DATE, VOTING AND SECURITY OWNER-
SHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
4. TERMS OF THE TRANSACTION SUMMARY AND SPECIAL FACTORS; THE PROPOSAL
TO DISSOLVE AND LIQUIDATE
5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE SUMMARY AND SPECIAL FACTORS; THE PROPOSAL
TO DISSOLVE AND LIQUIDATE.
6. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION EXPENSES OF SOLICITATION; SUMMARY AND
SPECIAL FACTORS; THE PROPOSAL TO DISSOLVE
AND LIQUIDATE; VALUATION OF OIL AND GAS
RESERVES
7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS SUMMARY AND SPECIAL FACTORS; THE PROPOSAL
TO DISSOLVE AND LIQUIDATE; PARTNERSHIP
OPERATIONS AND FINANCIAL CONDITIONS;
REASONS FOR THE PROPOSED TRANSACTIONS;
POTENTIAL BENEFITS TO THE GENERAL PARTNER;
FEDERAL INCOME TAX CONSEQUENCES
8. FAIRNESS OF THE TRANSACTION SUMMARY AND SPECIAL FACTORS; THE PROPOSAL
TO DISSOLVE AND LIQUIDATE; PARTNERSHIP
OPERATIONS AND FINANCIAL CONDITIONS;
REASONS FOR THE PROPOSED TRANSACTIONS;
VALUATION OF OIL AND GAS RESERVES; FEDERAL
INCOME TAX CONSEQUENCES
9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS SUMMARY AND SPECIAL FACTORS; DESCRIPTION
OF PROPERTY AND OIL AND GAS RESERVES;
VALUATION OF OIL AND GAS RESERVES
<PAGE>
10. INTERESTS IN SECURITIES OF THE ISSUER SUMMARY AND SPECIAL FACTORS; RECORD DATE,
VOTING AND SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS NOT APPLICABLE
WITH RESPECT TO THE ISSUER'S SECURITIES
12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN THE PROPOSAL TO DISSOLVE AND LIQUIDATE;IN
PERSONS WITH REGARD TO THE TRANSACTION PARTNERSHIP OPERATIONS AND FINANCIAL
CONDITIONS; REASONS FOR THE PROPOSED
TRANSACTION
13 .OTHER PROVISIONS FO THE TRANSACTION THE PROPOSAL TO DISSOLVE AND LIQUIDATE
14 .FINANCIAL INFORMATION DOCUMENTS INCORPORATED BY REFERENCE
15 .PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED EXPENSES OF SOLICITATION
16 .ADDITIONAL INFORMATION NOT APPLICABLE
17 .MATERIAL TO BE FILED AS EXHIBITS NOT APPLICABLE
</TABLE>
<PAGE>
SCHEDULE 13E-3
ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION
(A) THE NAMES OF THE ISSUERS ARE:
ENEX OIL & GAS INCOME PROGRAM II-1, L.P.
ENEX OIL & GAS INCOME PROGRAM II-2, L.P.
ENEX OIL & GAS INCOME PROGRAM II-3, L.P.
ENEX OIL & GAS INCOME PROGRAM II-4, L.P.
THE ADDRESS OF EACH OF THE PRINCIPAL EXECUTIVE OFFICES OF EACH OF THE ABOVE
ISSUERS (EACH A "PARTNERSHIP" AND COLLECTIVELY, THE "PARTNERSHIPS") IS
THREE KINGWOOD PLACE, SUITE 200, 800 ROCKMEAD, KINGWOOD, TEXAS 77339.
(B) THE EXACT TITLE, THE AMOUNT OF SECURITIES OUTSTANDING OF THE CLASS OF
SECURITY WHICH IS SUBJECT TO THE PROPOSED DISSOLUTION AND LIQUIDATION OF
EACH PARTNERSHIP AS DESCRIBED HEREIN, AND THE APPROXIMATE NUMBER OF HOLDERS
OF EACH SUCH CLASS IS SET FORTH UNDER THE CAPTION "SUMMARY AND SPECIAL
FACTORS-THE SPECIAL MEETINGS-PROPOSAL TO DISSOLVE AND LIQUIDATE THE
PARTNERSHIPS" IN THE PROXY STATEMENT RELATING TO THE PARTNERSHIPS FILED BY
THE GENERAL PARTNER OF EACH PARTNERSHIP, ENEX RESOURCES CORPORATION ("ENEX"
OR THE "GENERAL PARTNER"), WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO REGISTRATION 14A UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED (THE "EXCHANGE ACT"), CONCURRENTLY WITH THE FILING OF THIS SCHEDULE
(THE "PROXY STATEMENT").
(C) THERE IS NO ESTABLISHED TRADING MARKET FOR THE SECURITIES OF THE
PARTNERSHIPS.
(D) THE PARTNERSHIPS HAVE BEEN UNABLE TO DISTRIBUTE CASH TO THEIR LIMITED
PARTNERS FOR MORE THAN FIVE YEARS. THERE ARE NO RESTRICTIONS ON THE
PARTNERSHIPS' PRESENT OR FUTURE ABILITY TO MAKE DISTRIBUTIONS.
(E) THERE HAVE BEEN NO UNDERWRITTEN PUBLIC OFFERINGS OF LIMITED PARTNERSHIP
INTERESTS ("LIMITED PARTNERSHIP INTERESTS") IN THE PARTNERSHIPS DURING THE
PAST THREE YEARS.
(F) THE GENERAL PARTNER HAS PURCHASED THE FOLLOWING UNITS OF LIMITED
PARTNERSHIP INTEREST IN ACCORDANCE WITH ITS ANNUAL OFFER TO REPURCHASE SUCH
INTERESTS, AS REQUIRED BY THE AMENDED AGREEMENT OF LIMITED PARTNERSHIP OF
EACH OF THE PARTNERSHIPS (THE "PARTNERSHIP AGREEMENTS"). NO EXECUTIVE
OFFICER OR DIRECTOR OF THE GENERAL PARTNER AND NO PERSON CONTROLLING THE
GENERAL PARTNER HAS PURCHASED ANY SUCH UNITS DURING THE PERIOD INDICATED.
1
<PAGE>
<TABLE>
<CAPTION>
ENEX OIL & GAS INCOME PROGRAM II-1, L.P.
UNITS OF AGGREGATE
LIMITED PARTNERSHIP AMOUNT PURCHASE
QUARTER ENDING INTERESTS PAID PRICE/UNIT (1)
-------------- ------------------- -------- --------------
<S> <C> <C> <C>
March 31, 1993 ... 5.00 $ 0.00 $ 0
June 30, 1993 .... 130.00 $ 205.60 $ 1.58
September 30, 1993 259.00 $ 484.11 $ 1.87
December 31, 1993 44.15 $ 82.52 $ 1.87
March 31, 1994 ... 241.50 $ 349.99 $ 1.45
June 30, 1994 .... 419.40 $ 574.96 $ 1.37
September 30, 1994 28.00 $ 38.39 $ 1.37
December 31, 1994 1,044.65 $ 1,432.11 $ 1.37
March 31, 1995 ... -- $ -- $ --
June 30, 1995 .... 56.00 $ 0.00 $ 0.00
September 30, 1995 55.00 $ 0.00 $ 0.00
</TABLE>
<TABLE>
<CAPTION>
ENEX OIL & GAS INCOME PROGRAM II-2, L.P.
UNITS OF AGGREGATE
LIMITED PARTNERSHIP AMOUNT PURCHASE
QUARTER ENDING INTERESTS PAID PRICE/UNIT (1)
-------------- ------------------- -------- --------------
<S> <C> <C> <C> <C>
MARCH 31, 1993 .66 $ 1.08 $ 1.64
JUNE 30, 1993 598.88 $ 3,147.48 $ 5.26
SEPTEMBER 30, 1993 193.08 $ 1,031.75 $ 5.34
DECEMBER 31, 1993 24.21 $ 129.63 $ 5.35
MARCH 31, 1994 298.85 $ 1,009.80 $ 3.38
JUNE 30, 1994 944.34 $ 3,082.31 $ 3.26
SEPTEMBER 30, 1994 30.21 $ 91.88 $ 3.04
DECEMBER 31, 1994 600.71 $ 1,807.38 $ 3.01
MARCH 31, 1995 - $ - $ -
JUNE 30, 1995 - $ - $ -
SEPTEMBER 30, 1995 - $ - $ -
</TABLE>
<TABLE>
<CAPTION>
ENEX OIL & GAS INCOME PROGRAM II-3, L.P.
UNITS OF AGGREGATE
LIMITED PARTNERSHIP AMOUNT PURCHASE
QUARTER ENDING INTERESTS PAID PRICE/UNIT (1)
-------------- ------------------- -------- --------------
<S> <C> <C> <C> <C>
MARCH 31, 1993 2.34 $ 27.72 $ 11.85
JUNE 30, 1993 116.66 $ 807.55 $ 6.92
SEPTEMBER 30, 1993 95.39 $ 961.25 $ 10.08
DECEMBER 31, 1993 83.02 $ 566.71 $ 6.83
MARCH 31, 1994 60.17 $ 298.46 $ 4.96
JUNE 30, 1994 325.90 $ 1,570.28 $ 4.82
SEPTEMBER 30, 1994 12.03 $ 59.26 $ 4.93
DECEMBER 31, 1994 489.45 $ 2,337.32 $ 4.78
MARCH 31, 1995 - - -
JUNE 30, 1995 142.02 $ 0.00 $ 0.00
SEPTEMBER 30, 1995 7.16 $ 0.00 $ 0.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENEX OIL & GAS INCOME PROGRAM II-4, L.P.
UNITS OF AGGREGATE
LIMITED PARTNERSHIP AMOUNT PURCHASE
QUARTER ENDING INTERESTS PAID PRICE/UNIT (1)
-------------- ------------------- -------- --------------
<S> <C> <C> <C>
MARCH 31, 1993 - - -
JUNE 30, 1993 33.00 $ 71.16 $ 2.16
SEPTEMBER 30, 1993 124.29 $ 268.05 $ 2.16
DECEMBER 31, 1993 77.00 $ 161.74 $ 2.10
MARCH 31, 1994 37.00 $ 18.48 $ .50
JUNE 30, 1994 367.29 $ 183.41 $ .50
SEPTEMBER 30, 1994 30.00 $ 14.98 $ .50
DECEMBER 31, 1994 466.00 $ 231.68 $ .50
MARCH 31, 1995 - - -
JUNE 30, 1995 32.18 $ 0.00 $ 0.00
SEPTEMBER 30, 1995 20.00 $ 0.00 $ 0.00
<FN>
(1) ALL PURCHASES DURING A GIVEN QUARTER WERE AT THE SAME PRICE PER UNIT.
</FN>
</TABLE>
ITEM 2. IDENTITY AND BACKGROUND
ENEX WAS INCORPORATED ON AUGUST 17, 1979 IN COLORADO. ON JUNE 30, 1992,
ENEX REINCORPORATED IN DELAWARE. ENEX IS ENGAGED IN THE BUSINESS OF
ACQUIRING INTERESTS IN PRODUCING OIL AND GAS PROPERTIES AND MANAGING OIL
AND GAS INCOME LIMITED PARTNERSHIPS. ENEX'S OPERATIONS ARE CONCENTRATED IN
THIS SINGLE INDUSTRY SEGMENT.
ENEX'S PRINCIPAL EXECUTIVE OFFICES ARE MAINTAINED AT 800 ROCKMEAD DRIVE,
THREE KINGWOOD PLACE, KINGWOOD, TEXAS 77339. THE TELEPHONE NUMBER AT THESE
OFFICES IS (713) 358-8401. ENEX HAS NO REGIONAL OFFICES.
DURING THE PAST FIVE YEARS NEITHER ENEX NOR ANY EXECUTIVE OFFICER OR
DIRECTOR OF ENEX OR ANY PERSON CONTROLLING ENEX HAS BEEN CONVICTED IN A
CRIMINAL PROCEEDING OR BEEN A PARTY TO A CIVIL PROCEEDING AS A RESULT OF
WHICH SUCH PERSON WAS ENJOINED FROM VIOLATING, OR PROHIBITED FROM
ACTIVITIES SUBJECT TO, ANY SECURITIES LAWS OR FOUND TO HAVE VIOLATED ANY
SUCH LAWS.
.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS
(A)(1) INFORMATION REGARDING TRANSACTIONS BETWEEN THE PARTNERSHIPS AND THE
GENERAL PARTNER IS HEREBY INCORPORATED BY REFERENCE TO ITEM 7 - FINANCIAL
STATEMENTS AND SUPPLEMENTAL DATA TO EACH PARTNERSHIP'S ANNUAL REPORT ON
FORM 10-KSB FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993 AND TO ITEM 1 -
FINANCIAL STATEMENTS OF EACH PARTNERSHIP'S QUARTERLY REPORTS ON FORM 10-QSB
FOR THE QUARTERS ENDED MARCH 31, 1995, JUNE 30, 1995 AND SEPTEMBER 30,
1995.
(A)(2) THERE HAVE BEEN NO CONTRACTS, NEGOTIATIONS OR TRANSACTIONS WHICH
HAVE BEEN ENTERED INTO OR OCCURRED SINCE JANUARY 1, 1993 BETWEEN THE
GENERAL PARTNER, ITS EXECUTIVE OFFICERS OR DIRECTORS OR ANY PERSON
3
<PAGE>
CONTROLLING ENEX OR ANY OF THE PARTNERSHIPS CONCERNING A MERGER,
CONSOLIDATION, ACQUISITION, TENDER OFFER, OR SALE OF A MATERIAL AMOUNT OF
THE ASSETS OF SUCH PARTNERSHIPS. THE ONLY ACQUISITIONS OF SECURITIES OF THE
PARTNERSHIPS BY THE GENERAL PARTNER DURING SUCH PERIOD ARE DETAILED ABOVE
IN THE RESPONSE TO ITEM 1(F).
(B) NO NEGOTIATIONS OR CONTRACTS HAVE BEEN ENTERED INTO OR HAVE OCCURRED
SINCE JANUARY 1, 1993 BETWEEN ANY AFFILIATE OF ANY OF THE PARTNERSHIPS OR
BETWEEN ANY OF THE PARTNERSHIPS OR ANY OF THEIR AFFILIATES AND ANY PERSON
WHO IS NOT AFFILIATED WITH ANY OF THE PARTNERSHIPS WHO WOULD HAVE A DIRECT
INTEREST IN SUCH MATTERS.
ITEM 4. TERMS OF THE TRANSACTION
(A) THE MATERIAL TERMS OF THE PROPOSED DISSOLUTION AND LIQUIDATION OF THE
PARTNERSHIPS ARE DESCRIBED UNDER THE CAPTIONS "SUMMARY AND SPECIAL FACTORS"
AND "THE PROPOSAL TO DISSOLVE AND LIQUIDATE" IN THE PROXY STATEMENT.
(B) NONE.
ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE
(A) THE PROPOSED DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIPS IS
DESCRIBED UNDER THE CAPTIONS "SUMMARY AND SPECIAL FACTORS" AND "THE
PROPOSAL TO DISSOLVE AND LIQUIDATE" IN THE PROXY STATEMENT.
(B) THE SALES OF THE PARTNERSHIPS' ASSETS THAT WILL FOLLOW APPROVAL OF THE
PROPOSED DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIPS IS DESCRIBED UNDER
THE CAPTION "THE PROPOSAL TO DISSOLVE AND LIQUIDATE" IN THE PROXY
STATEMENT.
(C) NONE.
(D) THE PARTNERSHIPS WILL DISSOLVE AND LIQUIDATE UPON APPROVAL OF THE
PROPOSED DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIPS DESCRIBED UNDER
THE CAPTION "THE PROPOSAL TO DISSOLVE AND LIQUIDATE" IN THE PROXY
STATEMENT.
(E) SEE THE RESPONSE TO ITEM 5(D) ABOVE.
(F) THE REGISTRATION OF THE LIMITED PARTNERSHIP INTERESTS OF THE
PARTNERSHIPS UNDER SECTION 12(G) OF THE EXCHANGE ACT WILL BE TERMINATED
FOLLOWING APPROVAL OF THE PROPOSED DISSOLUTION AND LIQUIDATION OF THE
PARTNERSHIPS.
(G) THE PARTNERSHIPS' OBLIGATIONS TO FILE REPORTS PURSUANT TO SECTION 15(D)
OF THE EXCHANGE ACT WILL TERMINATE FOLLOWING APPROVAL OF THE PROPOSED
DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIPS.
ITEM 6. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION
(A) THE FUNDS OR OTHER CONSIDERATION TO BE RECEIVED IN THE PROPOSED
DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIPS ARE DESCRIBED UNDER THE
CAPTIONS "THE PROPOSAL TO DISSOLVE AND LIQUIDATE" AND "VALUATION OF OIL AND
GAS RESERVES" IN THE PROXY STATEMENT.
4
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
LEGAL FEES .......... $2,940 $2,562 $2,393 $2,105
FILING FEES ......... $ 67 $ 56 $ 47 $ 52
APPRAISAL FEES ...... $ 585 $ 510 $ 476 $ 418
SOLICITATION EXPENSES $1,594 $2,751 $2,988 $ 978
PRINTING COSTS ...... $1,030 $ 897 $ 838 $ 737
------ ------ ------ ------
TOTAL $6,216 $6,776 $6,742 $4,290
===== ===== ===== =====
</TABLE>
THE COSTS OF THE PROPOSED DISSOLUTION AND LIQUIDATION OF THE
PARTNERSHIPS, WHICH WILL PRIMARILY INCLUDE EXPENSES IN CONNECTION WITH THE
PREPARATION AND MAILING OF THE PROXY STATEMENT AND ALL PAPERS WHICH
ACCOMPANY OR SUPPLEMENT IT, WILL BE BORNE BY THE PARTNERSHIPS PRO RATA IN
ACCORDANCE WITH THE ESTIMATED FAIR MARKET VALUE OF THEIR RESPECTIVE ASSETS
(SEE TABLE 1 IN THE PROXY STATEMENT). THIS BASIS FOR ALLOCATION WAS CHOSEN
OVER OTHERS (SUCH AS THE NUMBER OF UNITHOLDERS OF EACH PARTNERSHIP OR THE
AMOUNT OF EACH PARTNERSHIP'S ORIGINAL CAPITAL OR ALLOCATING ONE-FOURTH OF
THE COSTS TO EACH PARTNERSHIP) BECAUSE THE LARGEST SHARE OF THE COSTS OF
THIS SOLICITATION CONSIST OF THE FEES INCURRED TO OBTAIN AN INDEPENDENT
VALUATION OF THE PARTNERSHIPS' PROPERTIES AND COUNSEL FEES IN CONNECTION
WITH THE PREPARATION OF THIS PROXY STATEMENT. IN THE GENERAL PARTNER'S
OPINION, THESE COSTS ARE MOST EQUITABLY ALLOCATED IN ACCORDANCE WITH THE
VALUE OF THE PARTNERSHIPS' ASSETS.
(C) NOT APPLICABLE.
(D) NOT APPLICABLE.
ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS
(A) THE PURPOSES FOR THE PROPOSED DISSOLUTION AND LIQUIDATION OF THE
PARTNERSHIPS ARE SET FORTH UNDER THE CAPTIONS "SUMMARY AND SPECIAL FACTORS
- THE PROPOSAL TO DISSOLVE AND LIQUIDATE, "PARTNERSHIP OPERATIONS AND
FINANCIAL CONDITIONS," "REASONS FOR PROPOSED TRANSACTIONS," "POTENTIAL
BENEFITS TO THE GENERAL PARTNER" AND "FEDERAL INCOME TAX CONSEQUENCES" IN
THE PROXY STATEMENT.
(B) ALTERNATIVES TO THE PROPOSED DISSOLUTION AND LIQUIDATION OF THE
PARTNERSHIPS CONSIDERED BY THE GENERAL PARTNER AND THE REASONS FOR THEIR
REJECTION ARE DESCRIBED UNDER THE CAPTIONS "THE PROPOSAL TO DISSOLVE AND
LIQUIDATE" AND "REASONS FOR PROPOSED TRANSACTIONS" IN THE PROXY STATEMENT.
(C) THE REASONS FOR THE STRUCTURE OF THE PROPOSED DISSOLUTION AND
LIQUIDATION OF THE PARTNERSHIPS AND FOR UNDERTAKING THEM AT THIS TIME ARE
DESCRIBED UNDER THE CAPTIONS "THE PROPOSAL TO DISSOLVE AND LIQUIDATE,"
"PARTNERSHIP OPERATIONS AND FINANCIAL CONDITIONS," "REASONS FOR PROPOSED
TRANSACTIONS," "POTENTIAL BENEFITS TO THE GENERAL PARTNER" AND "FEDERAL
INCOME TAX CONSEQUENCES" IN THE PROXY STATEMENT.
(D) THE EFFECTS, INCLUDING THE BENEFITS AND DETRIMENTS, QUANTIFIED TO THE
EXTENT PRACTICABLE, OF THE PROPOSED DISSOLUTION AND LIQUIDATION OF THE
PARTNERSHIPS ON THE PARTNERSHIPS, ITS AFFILIATES AND ITS UNAFFILIATED
SECURITY HOLDERS ARE DESCRIBED UNDER THE CAPTIONS "THE PROPOSAL TO DISSOLVE
AND LIQUIDATE," "REASONS FOR PROPOSED TRANSACTIONS," "POTENTIAL BENEFITS TO
THE GENERAL PARTNER" AND "FEDERAL INCOME TAX CONSEQUENCES" IN THE PROXY
STATEMENT.
5
<PAGE>
ITEM 8. FAIRNESS OF THE TRANSACTION
(A) THE BOARD OF DIRECTORS OF THE GENERAL PARTNER HAS UNANIMOUSLY APPROVED
THE PROPOSED TRANSACTIONS AS BEING FAIR AND IN THE BEST INTERESTS OF THE
LIMITED PARTNERS. NO DIRECTORS DISSENTED OR ABSTAINED FROM SUCH APPROVAL.
(B) THE FACTORS UPON WHICH THE BELIEF STATED IN ITEM 8(A) ARE BASED, IN
ORDER OF THEIR SIGNIFICANCE, ARE EACH PARTNERSHIP'S POOR FINANCIAL
CONDITION AND PROSPECTS, THE POTENTIAL TO REALIZE FAVORABLE TAX
CONSEQUENCES, THE GENERAL PARTNER'S WILLINGNESS TO ACT AS "BUYER OF LAST
RESORT" AT THE ESTIMATED FAIR MARKET VALUES OF THE PARTNERSHIPS' PROPERTIES
AS ESTIMATED BY H.J. GRUY & ASSOCIATES, INC. ("GRUY") (EVEN IF ALL OF A
PARTNERSHIP'S INDEBTEDNESS TO THE GENERAL PARTNER HAS BEEN SATISFIED OUT OF
THE PROCEEDS OF EARLIER PROPERTY SALES) AND THE WAIVER OF THE GENERAL
PARTNER'S RIGHT TO REQUIRE LIMITED PARTNERS TO RESTORE THEIR CAPITAL
ACCOUNT DEFICITS. THESE FACTORS ARE DISCUSSED IN DETAIL UNDER THE CAPTIONS
"PARTNERSHIP OPERATIONS AND FINANCIAL CONDITIONS," "FEDERAL INCOME TAX
CONSEQUENCES," "THE PROPOSAL TO DISSOLVE AND LIQUIDATE," "REASONS FOR
PROPOSED TRANSACTIONS" AND "VALUATIONS OF OIL AND GAS RESERVES" IN THE
PROXY STATEMENT.
(C) THE APPROVAL OF A MAJORITY OF THE UNAFFILIATED SECURITY HOLDERS IS NOT
REQUIRED.
(D) NO PERSON HAD BEEN RETAINED FOR THE PURPOSE OF NEGOTIATING THE TERMS
OF, OR TO PREPARE A REPORT CONCERNING THE FAIRNESS TO THE LIMITED PARTNERS
OF, THE PROPOSED DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIPS.
(E) THE BOARD OF DIRECTORS OF THE GENERAL PARTNER UNANIMOUSLY APPROVED THE
PROPOSED TRANSACTIONS. THE MAJORITY OF THE DIRECTORS ARE NOT EMPLOYEES
OF THE GENERAL PARTNER OR THE PARTNERSHIPS.
(F) NOT APPLICABLE; NO SUCH OFFERS HAVE BEEN RECEIVED.
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS
(A) GRUY'S REPORT ON THE ESTIMATED FAIR MARKET VALUES OF THE PARTNERSHIPS'
PROPERTIES IS DESCRIBED UNDER THE CAPTIONS "DESCRIPTION OF PROPERTY AND OIL
AND GAS RESERVES" AND "VALUATION OF OIL AND GAS RESERVES" IN THE PROXY
STATEMENT. AS NOTED IN THE RESPONSE TO ITEM 8(D), NO PERSON HAS BEEN
RETAINED FOR THE PURPOSE OF NEGOTIATING THE TERMS OF, OR TO PREPARE A
REPORT CONCERNING THE FAIRNESS TO THE LIMITED PARTNERS OF, THE PROPOSED
DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIPS.
(B) GRUY'S QUALIFICATIONS, THE METHOD OF GRUY'S SELECTION, ANY MATERIAL
RELATIONSHIP BETWEEN GRUY AND THE PARTNERSHIPS AND THE GENERAL PARTNER
WHICH EXISTED DURING THE PAST TWO YEARS OR IS MUTUALLY UNDERSTOOD TO BE
CONTEMPLATED, ANY COMPENSATION RECEIVED OR TO BE RECEIVED AS A RESULT OF
SUCH RELATIONSHIP FROM THE PARTNERSHIPS, AND A SUMMARY OF GRUY'S REPORT,
INCLUDING BUT NOT LIMITED TO THE PROCEDURES FOLLOWED, THE FINDINGS, THE
BASES FOR AND METHODS OF ARRIVING AT SUCH FINDINGS, INSTRUCTIONS RECEIVED
FROM THE PARTNERSHIPS OR THE GENERAL PARTNER, AND ANY LIMITATIONS ON THE
SCOPE OF GRUY'S INVESTIGATION IMPOSED BY THE PARTNERSHIPS OR THE GENERAL
PARTNER ARE SET FORTH UNDER THE CAPTIONS "DESCRIPTION OF PROPERTY AND OIL
AND GAS RESERVES" AND "VALUATION OF OIL AND GAS RESERVES" IN THE PROXY
STATEMENT. IN ADDITION, GRUY HAS RECEIVED COMPENSATION FROM THE GENERAL
PARTNER AND OTHER LIMITED PARTNERSHIPS OF WHICH ENEX IS THE GENERAL PARTNER
DURING THE PAST TWO YEARS OF $91,312 FOR ANNUAL RESERVE REPORT VALUATIONS
AND $32,086 FOR FAIR MARKET VALUATIONS.
6
<PAGE>
(C) THE FAIR MARKET VALUATION REPORT PREPARED BY GRUY IS AVAILABLE FOR
INSPECTION AND COPYING AT THE OFFICES OF THE GENERAL PARTNER DURING REGULAR
BUSINESS HOURS BY ANY INTERESTED LIMITED PARTNER OR HIS REPRESENTATIVE WHO
HAS BEEN SO DESIGNATED IN WRITING. A COPY OF SUCH REPORT WILL BE MAILED TO
ANY INTERESTED LIMITED PARTNER OR HIS REPRESENTATIVE UPON WRITTEN REQUEST.
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER
(A) THE AGGREGATE AMOUNT AND PERCENTAGE OF LIMITED PARTNERSHIP INTERESTS
BENEFICIALLY OWNED AS OF NOVEMBER 22, 1995 BY THE GENERAL PARTNER, ANY
PENSION, PROFIT SHARING OR SIMILAR PLAN OF THE GENERAL PARTNER (THE
PARTNERSHIPS HAVE NO SUCH PLANS) AND, AFTER REASONABLE INQUIRY, EACH
EXECUTIVE OFFICER AND DIRECTOR OF THE GENERAL PARTNER, EACH PERSON
CONTROLLING THE GENERAL PARTNER, AND EACH ASSOCIATE OR MAJORITY OWNED
SUBSIDIARY OF THE GENERAL PARTNER (THE PARTNERSHIPS HAVE NO SUBSIDIARIES)
ARE SET FORTH UNDER THE CAPTIONS "SUMMARY AND SPECIAL FACTORS" AND "RECORD
DATE, VOTING AND SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT" IN THE PROXY STATEMENT.
(B) DURING THE PAST 60 DAYS THE GENERAL PARTNER PURCHASED THE FOLLOWING
LIMITED PARTNERSHIP INTERESTS IN ACCORDANCE WITH ITS ANNUAL PURCHASE
OFFER, AS REQUIRED BY THE PARTNERSHIP AGREEMENTS. NO OTHER PERSON
PURCHASED ANY PARTNERSHIP SECURITIES DURING THE PAST 60 DAYS.
<TABLE>
<CAPTION>
UNITS OF LIMITED PRICE
DATE PARTNERSHIP INTEREST PAID
<S> <C> <C> <C>
ENEX OIL & GAS INCOME PROGRAM II-1, L.P.
OCTOBER 16, 1995 10.00 $0
ENEX OIL & GAS INCOME PROGRAM II-2, L.P.
OCTOBER 16, 1995 .38 $0
OCTOBER 19, 1995 .23 $0
ENEX OIL & GAS INCOME PROGRAM II-3, L.P.
OCTOBER 16, 1995 .39 $0
OCTOBER 16, 1995 .21 $0
OCTOBER 16, 1995 .19 $0
OCTOBER 19, 1995 10.00 $0
OCTOBER 19, 1995 .13 $0
ENEX OIL & GAS INCOME PROGRAM II-4, L.P.
NONE
</TABLE>
DATE PARTNERSHIP INTEREST PAID
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS
WITH RESPECT TO THE ISSUER'S SECURITIES
THERE ARE NO OTHER CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS IN CONNECTION WITH THE PROPOSAL TO DISSOLVE AND LIQUIDATE
THE PARTNERSHIPS BETWEEN THE GENERAL PARTNER, ANY EXECUTIVE OFFICER OR
DIRECTOR OF THE GENERAL PARTNER OR ANY PERSON CONTROLLING THE GENERAL
PARTNER, AND ANY PERSON WITH RESPECT TO ANY SECURITIES OF THE
PARTNERSHIPS. HOWEVER, THE PROVISIONS OF THE PARTNERSHIP AGREEMENT OF EACH
PARTNERSHIP PROVIDE THAT THE LIMITED PARTNERS MAY DISSOLVE THE PARTNERSHIP
BY VOTE OF A MAJORITY IN INTEREST. THE
7
<PAGE>
PARTNERSHIP AGREEMENTS ALSO PROVIDE, WITH RESPECT TO THE PROPOSAL TO
DISSOLVE AND LIQUIDATE THE PARTNERSHIPS, THAT ONCE A PARTNERSHIP IS
DISSOLVED AN ACCOUNTING OF PARTNERSHIP ASSETS, LIABILITIES AND OPERATIONS
TO THE DATE OF DISSOLUTION WILL BE MADE AND THE GENERAL PARTNER WILL WIND
UP AND TERMINATE THE BUSINESS AND AFFAIRS OF THE PARTNERSHIP.
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN
PERSONS WITH REGARD TO THE TRANSACTION
(A) NO SECURITIES OF ANY OF THE PARTNERSHIPS ARE TO BE TENDERED OR SOLD IN
CONNECTION WITH THE PROPOSED DISSOLUTION AND LIQUIDATION OF THE
PARTNERSHIPS. TO THE EXTENT KNOWN TO THE GENERAL PARTNER, THE GENERAL
PARTNER AND EACH EXECUTIVE OFFICER, DIRECTOR AND OTHER AFFILIATE OF THE
GENERAL PARTNER WHO OWNS OR HOLD ANY SECURITIES OF THE PARTNERSHIPS OR
PROXIES TO VOTE SECURITIES OF THE PARTNERSHIPS INTENDS TO VOTE SUCH
SECURITIES IN THE MANNER SET FORTH UNDER THE CAPTION "RECORD DATE, VOTING
AND SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" IN THE
PROXY STATEMENT. THE REASONS THEREFOR ARE SET FORTH UNDER THE CAPTIONS
"THE PROPOSAL TO DISSOLVE AND LIQUIDATE," "PARTNERSHIP OPERATIONS AND
FINANCIAL CONDITIONS" AND "REASONS FOR THE PROPOSED TRANSACTION" IN THE
PROXY STATEMENT. THE TERMS OF EACH PARTNERSHIP'S PARTNERSHIP AGREEMENT
REQUIRE THE GENERAL PARTNER TO VOTE ITS GENERAL PARTNERSHIP INTERESTS IN
CONCURRENCE WITH THE VOTE OF THE LIMITED PARTNERS WITH RESPECT TO THE
PROPOSED DISSOLUTION AND LIQUIDATION.
(B) THE BOARD OF DIRECTORS OF THE GENERAL PARTNER HAS RECOMMENDED THAT THE
LIMITED PARTNERS VOTE IN FAVOR OF THE PROPOSED DISSOLUTION AND LIQUIDATION
OF THE PARTNERSHIPS FOR THE REASONS SET FORTH UNDER THE CAPTIONS "THE
PROPOSAL TO DISSOLVE AND LIQUIDATE," "PARTNERSHIP OPERATIONS AND FINANCIAL
CONDITIONS" AND "REASONS FOR THE PROPOSED TRANSACTION" IN THE PROXY
STATEMENT. THE GENERAL PARTNER HAS NO KNOWLEDGE AFTER MAKING REASONABLE
INQUIRY AS TO WHETHER OR NOT ANY OF ITS EXECUTIVE OFFICERS OR AFFILIATES
HAS MADE A RECOMMENDATION IN SUPPORT OF OR OPPOSED TO THE PROPOSED
DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIP.
ITEM 13. OTHER PROVISIONS OF THE TRANSACTION
(A) LIMITED PARTNERS WILL NOT HAVE, NOR BE ENTITLED TO, ANY DISSENTERS' OR
APPRAISAL RIGHTS WITH RESPECT TO THE PROPOSALS UNDER THE PARTNERSHIP
AGREEMENTS OR UNDER APPLICABLE LAW (THE TEXAS REVISED UNIFORM LIMITED
PARTNERSHIP ACT (THE "ACT"), AND NONE WILL BE PROVIDED VOLUNTARILY BY THE
PARTNERSHIPS OR THE GENERAL PARTNER. LIMITED PARTNERS WHO OBJECT TO THE
PROPOSED DISSOLUTION AND LIQUIDATION OF THEIR PARTNERSHIP HAVE NO SPECIAL
RIGHTS UNDER THE ACT. SUCH LIMITED PARTNERS WILL HAVE THE SAME RIGHTS TO
THE ASSETS OF THE PARTNERSHIP AS ALL OTHER LIMITED PARTNERS AS DESCRIBED
UNDER THE CAPTION "THE PROPOSED DISSOLUTION AND LIQUIDATION" IN THE PROXY
STATEMENT.
(B) PURSUANT TO THE PROVISIONS OF THE ACT, EACH PARTNERSHIP IS REQUIRED TO
KEEP THE FOLLOWING RECORDS AT ITS PRINCIPAL OFFICE OR MAKE THEM AVAILABLE
AT THAT OFFICE AT THE LIMITED PARTNER'S EXPENSE AT ANY REASONABLE TIME
WITHIN FIVE (5) DAYS AFTER RECEIPT OF A WRITTEN REQUEST FROM A LIMITED
PARTNER STATING THE PURPOSE FOR WHICH AN EXAMINATION THEREOF IS REQUESTED:
(1) A CURRENT LIST THAT STATES:
(A) THE NAME AND MAILING ADDRESS OF EACH PARTNER, SEPARATELY
IDENTIFYING IN ALPHABETICAL ORDER THE GENERAL PARTNER AND
THE LIMITED PARTNERS; (B) THE LAST KNOWN STREET ADDRESS OF
THE BUSINESS OR RESIDENCE OF THE GENERAL PARTNER; (C) THE
PERCENTAGE OR OTHER INTEREST IN THE PARTNERSHIP OWNED BY
EACH PARTNER;
(2) COPIES OF THE PARTNERSHIP'S FEDERAL, STATE, AND LOCAL INFORMA-
TION OR INCOME TAX RETURNS FOR EACH OF ITS SIX MOST RECENT TAX
YEARS;
8
<PAGE>
(3) A COPY OF THE PARTNERSHIP AGREEMENT AND CERTIFICATE OF LIMITED
PARTNERSHIP, ALL AMENDMENTS OR RESTATEMENTS, AND EXECUTED COPIES OF
ANY POWERS OF ATTORNEY UNDER WHICH THE PARTNERSHIP AGREEMENT,
CERTIFICATE OF LIMITED PARTNERSHIP, AND ALL AMENDMENTS OR
RESTATEMENTS TO THE AGREEMENT AND CERTIFICATE HAVE BEEN EXECUTED;
(4) UNLESS CONTAINED IN THE PARTNERSHIP AGREEMENT A WRITTEN
STATEMENT OF;
(A) THE AMOUNT OF THE CASH CONTRIBUTION AND A DESCRIPTION
AND STATEMENT OF THE AGREED VALUE OF ANY OTHER CONTRIBUTION
MADE BY EACH PARTNER, AND THE AMOUNT OF THE CASH
CONTRIBUTION AND A DESCRIPTION AND STATEMENT OF THE AGREED
VALUE OF ANY OTHER CONTRIBUTION THAT THE PARTNER HAS AGREED
TO MAKE IN THE FUTURE AS AN ADDITIONAL CONTRIBUTION; (B) THE
TIMES AT WHICH ADDITIONAL CONTRIBUTIONS ARE TO BE MADE OR
EVENTS REQUIRING ADDITIONAL CONTRIBUTIONS TO BE MADE; (C)
EVENTS REQUIRING THE PARTNERSHIP TO BE DISSOLVED AND ITS
AFFAIRS WOUND UP; AND (D) THE DATE ON WHICH EACH PARTNER
BECAME A PARTNER; AND
(5) BOOKS AND RECORDS OF ACCOUNT OF THE PARTNERSHIP.
ALSO REQUIRED TO BE MADE AVAILABLE IS OTHER INFORMATION REGARDING THE
BUSINESS, AFFAIRS, AND FINANCIAL CONDITION OF EACH PARTNERSHIP AS IS JUST
AND REASONABLE FOR THE LIMITED PARTNERS TO EXAMINE AND COPY.
PURSUANT TO THE PROVISIONS OF THE PARTNERSHIP AGREEMENTS, THE GENERAL
PARTNER WILL PERMIT ACCESS TO ALL RECORDS OF EACH PARTNERSHIP, AFTER
ADEQUATE NOTICE, DURING NORMAL BUSINESS HOURS, TO ANY LIMITED PARTNER
AND/OR HIS ACCREDITED REPRESENTATIVES. NOTWITHSTANDING THE FOREGOING, THE
GENERAL PARTNER MAY KEEP LOGS, WELL REPORTS AND OTHER DRILLING DATA
CONFIDENTIAL FOR A REASONABLE PERIOD OF TIME. THE GENERAL PARTNER
MAINTAINS A LIST OF NAMES AND ADDRESSES OF ALL LIMITED PARTNERS AT THE
PRINCIPAL OFFICE OF THE PARTNERSHIPS. SUCH LIST MAY BE REVIEWED BY ANY
LIMITED PARTNER OR HIS REPRESENTATIVE DURING NORMAL BUSINESS HOURS. ON
REQUEST, A COPY OF SUCH LIST WILL BE FURNISHED TO ANY LIMITED PARTNER OR
HIS REPRESENTATIVE UPON PAYMENT OF REPRODUCTION AND MAILING COSTS.
NO PROVISION HAS BEEN MADE BY THE PARTNERSHIPS OR THE GENERAL PARTNER TO
ALLOW UNAFFILIATED SECURITY HOLDERS TO OBTAIN ACCESS TO THE CORPORATE
FILES OF THE GENERAL PARTNER OR TO OBTAIN COUNSEL OR APPRAISAL SERVICES AT
THE EXPENSE OF THE PARTNERSHIPS OR THE GENERAL PARTNER. AS DESCRIBED UNDER
THE CAPTION "THE PROPOSAL TO DISSOLVE AND LIQUIDATE" IN THE PROXY
STATEMENT, THE GENERAL PARTNER WILL BE PREPARING A BID PACKAGE CONCERNING
THE PARTNERSHIPS' PROPERTIES WHICH WILL BE MADE AVAILABLE TO INTERESTED
LIMITED PARTNERS.
(C) NOT APPLICABLE.
ITEM 14. FINANCIAL INFORMATION
(A) THIS FINANCIAL INFORMATION REQUIRED BY THIS ITEM APPEARS IN THE
FOLLOWING DOCUMENTS WHICH HAVE BEEN FILED BY EACH PARTNERSHIP UNDER THE
EXCHANGE ACT:
(1) EACH PARTNERSHIP'S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR
ENDED DECEMBER 31, 1994, COPIES OF WHICH ACCOMPANY THE PROXY STATEMENT;
(2) EACH PARTNERSHIP'S QUARTERLY REPORTS ON FORM 10-QSB FOR THE
QUARTERS ENDED MARCH 31, 1995, JUNE 30, 1995 AND SEPTEMBER 30, 1995,
COPIES OF WHICH ACCOMPANY THE PROXY STATEMENT.
9
<PAGE>
THIS ITEM 14 SPECIFICALLY INCORPORATES HEREIN BY REFERENCE THE INFORMATION
SET FORTH IN THE FOLLOWING SECTIONS CONTAINED IN EACH PARTNERSHIP'S ANNUAL
REPORT ON FORM 10-KSB: ITEM 7-FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
THE FOLLOWING SECTIONS OF THE QUARTERLY REPORTS ON FORM 10-QSB ARE
SPECIFICALLY INCORPORATED HEREIN BY REFERENCE: ITEM 1-FINANCIAL STATEMENTS
(UNAUDITED).
(B) PRO FORMA DATA HAS BEEN OMITTED BECAUSE IT IS NOT MATERIAL.
ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED
(A) THE PARTNERSHIPS HAVE NO OFFICERS OR EMPLOYEES. CERTAIN DIRECTORS,
OFFICERS AND EMPLOYEES OF THE GENERAL PARTNER, NOT ESPECIALLY EMPLOYED FOR
THIS PURPOSE, MAY SOLICIT PROXIES RELATING TO THE PROPOSED DISSOLUTION AND
LIQUIDATION OF THE PARTNERSHIPS, WITHOUT ADDITIONAL REMUNERATION THEREFOR,
BY MAIL, TELEPHONE, TELEGRAPH OR PERSONAL INTERVIEW. THE ESTIMATED COSTS
TO BE INCURRED BY THE PARTNERSHIPS IN CONNECTION WITH THE PROPOSED
DISSOLUTION AND LIQUIDATION ARE DESCRIBED IN THE RESPONSE TO ITEM 6(B)
ABOVE.
(B) NO PERSON OTHER THAN ONE DESCRIBED IN THE RESPONSE TO ITEM 15(A) HAS
BEEN OR WILL BE RETAINED OR COMPENSATED TO MAKE SOLICITATIONS OR
RECOMMENDATIONS IN CONNECTION WITH THE PROPOSED DISSOLUTION AND
LIQUIDATION.
ITEM 16. ADDITIONAL INFORMATION
ADDITIONAL INFORMATION REGARDING THE PROPOSED DISSOLUTION AND LIQUIDATION
IS SET FORTH IN THE PROXY STATEMENT. TO THE GENERAL PARTNER'S KNOWLEDGE,
NO SUCH ADDITIONAL INFORMATION OR ANY OTHER INFORMATION IS NECESSARY TO
MAKE THE STATEMENTS HEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY
ARE MADE, NOT MATERIALLY MISLEADING.
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS
(A) NOT APPLICABLE
(B) THE FAIR MARKET VALUATION REPORTS PREPARED BY GRUY ARE FILED HEREWITH
AS EXHIBIT 1.
(C) NOT APPLICABLE.
(D) NOT APPLICABLE.
(E) NOT APPLICABLE.
(F) NOT APPLICABLE.
10
<PAGE>
November 16, 1995
Enex Resources Corporation
Three Kingwood Place, Suite 200
Kingwood, Texas 77339
Enex Oil & Gas Income Program II
Series 4, LP
95-002-106
Gentlemen:
At your request, we have estimated the fair market value as of July 1, 1995 for
certain interests owned by the limited partners in Enex Oil & Gas Income Program
II, Series 4, LP (Enex). The estimated fair market value is summarized by
acquisition for this partnership as follows:
Estimated
Acquisition Fair Market Value
---------------- ------------------
E. Seven Sisters $ 110,360
Comite A $ 9,630
Steamboat $ 0
Newport $ 24,600
Blair $ 10,250
Hanson $ 26,264
----------
TOTAL $ 181,104
The fair market value was estimated using the income approach as opposed to the
market data approach because it is difficult to identify sales of oil and gas
properties that are comparable in net reserves, product prices, location,
operating expenses, and operator expertise. For the proved producing properties,
the discounted future net revenue is reduced to a fair market value by
multiplying by a suitable fraction that accounts for the risk associated with an
investment. For proved developed non-producing and proved undeveloped reserves,
the present value of the required capital is added to the discounted future net
revenue, a suitable risk factor is applied, and the present value of the capital
is subtracted from that value. This approach assumes that the capital is
invested with certainty and the resulting cash flow stream is burdened with the
uncertainty. In all cases, the payout time and the internal rate-of-return for
each fair market value estimate is computed and compared with that which a
rational investor would expect.
<PAGE>
Enex Resources Corporation -2- November 16, 1995
The estimated discounted future net revenue is that revenue which will be
realized from the sale of the estimated net reserves after deduction of
royalties, ad valorem and production taxes, direct operating costs and capital
expenditures, when applicable and then discounted at 10 percent using mid-year
discounting. Surface and well equipment salvage values and well plugging and
field abandonment costs have been considered in the revenue projections, when
applicable. Future net revenue as stated in this report is before the deduction
of federal income tax.
At the request of Enex, the following parameters are incorporated in the
economic projections of the report. Oil prices are held constant in 1995 at
$17.25 per barrel for Louisiana and $17.00 per barrel for all other states, then
escalated per Table 1 to a maximum price of $30.69 per barrel. Gas prices varied
per area and remained flat through 1995, then escalated per Table 1 to a maximum
price of $3.80 per MMBTU. Operating and capital costs are escalated at an annual
rate of 3 percent until the primary product reaches its maximum price. The
actual prices that will be received and the associated costs may be more or less
than those projected.
Extent and character of ownership, oil and gas prices, production data, direct
operating costs, capital expenditure estimates and other data provided by Enex
have been accepted as represented. No independent well tests, property
inspections or audits of operating expenses were conducted by our staff in
conjunction with this study. We did not verify or determine the extent,
character, obligations, status or liabilities, if any, arising from any current
or possible future environmental liabilities that might be applicable.
In order to estimate the fair market value shown in this report, we have relied
in part on geological, engineering and economic data furnished by our client.
Income may be subject to regulation and contract provisions and may fluctuate
according to market demand or other factors beyond the control of the operator.
We are unrelated to Enex and we have no interest in the properties included in
this report. In particular:
1. We do not own a financial interest in Enex or its oil and gas
properties.
2. Our fee is not contingent on the outcome of our work or report.
3. We have not performed other services for or have any other
relationship with Enex that would affect our independence.
If investments or business decisions are to be made in reliance on these
estimates by anyone other than our client, such person with the approval of our
client is invited to visit our offices at his expense so that he can evaluate
the assumptions made and the completeness and extent of the data available on
which our estimates are based.
<PAGE>
Enex Resources Corporation -3- November 16, 1995
Any distribution or publication of this report or any part thereof must include
this letter in its entirety.
Yours very truly,
H.J. GRUY AND ASSOCIATES, INC.
Marilyn Wilson, P.E.
Executive Vice President
James H. Hartsock, P.E.
Executive Vice President
Sylvia Castilleja
Reservoir Engineer
MW:JHH:SC:llb
Attachments
B:\PAGES2&3.INS
<PAGE>
Enex Resources Corporation -4- November 16, 1995
TABLE 1
OIL AND GAS ESCALATIONS
Oil Escalations Gas Escalations
% %
1996 5.2 7.2
1997 5.0 7.3
1998 4.3 4.2
1999 3.2 3.0
Thereafter 3.3 3.0
<PAGE>
ATTACHMENT 1
<PAGE>
ATTACHMENT 1
DEFINITIONS FOR OIL AND GAS RESERVES 1
RESERVES
Reserves are estimated volumes of crude oil, condensate, natural gas, natural
gas liquids, and associated substances anticipated to be commercially
recoverable from known accumulations from a given date forward, under existing
economic conditions, by established operating practices, and under current
government regulations. Reserve estimates are based on interpretation of
geologic and/or engineering data available at the time of the estimate.
Reserve estimates generally will be revised as reservoirs are produced, as
additional geologic and/or engineering data become available, or as economic
conditions change.
Reserves do not include volumes of crude oil, condensate, natural gas, or
natural gas liquids being held in inventory. If required for financial
reporting or other special purposes, reserves may be reduced for on-site usage
and/or processing losses.
The ownership status of reserves may change due to the expiration of a pro-
duction license or contract; when relevant to reserve assignment such changes
should be identified for each reserve classification.
Reserves may be attributed to either natural reservoir energy, or improved
recovery methods. Improved recovery includes all methods for supplementing
natural reservoir energy to increase ultimate recovery from a reservoir. Such
methods include (1) pressure maintenance, (2) cycling, (3) waterflooding, (4)
thermal methods, (5) chemical flooding, and (6) the use of miscible and immis-
cible displacement fluids.
All reserves estimated involve some degree of uncertainty, depending chiefly on
the amount and reliability of geologic and engineering data available at the
time of the estimate and the interpretation fo these data. The relative degree
of uncertainty may be conveyed by placing reserves in one of two classifica-
tions, either proved or unproved. Unproved reserves are less certain to be re-
covered than proved reserves and may be subclassified as probable or possible to
denote progressively increasing uncertainty.
PROVED RESERVES
Proved reserves can be estimated with reasonable certainty to be recoverable
under current economic conditions. Current economic conditions include prices
and costs prevailing at the time of the estimate. Proved reserves may be devel-
oped or undeveloped.
- --------------------
1 Approved by the Board of Directors, Society of Petroleum Engineers, Inc. and
the Board of Directors of the Society of Petroleum Evaluation Engineers in 1987.
<PAGE>
In general, reserves are considered proved if commercial producibility of the
reservoir is supported by actual production or formation tests. The term proved
refers to the estimated volume of reserves and not just to the productivity of
the well or reservoir. In certain instances, proved reserves may be assigned on
the basis of electrical and other type logs and/or core analysis that indicate
subject reservoir is hydocarbon bearing and is analogous to reservoirs in the
same area that are producing, or have deomonstrated the ability to produce on a
formation test.
The area of a reservoir considered proved includes (1) the area delineated by
drilling and defined by fluid contacts, if any, and (2) the undrilled areas that
can be reasonably judged as commercially productive on the basis of available
geological and engineering data. In the absence of data on fluid contracts, the
lowest known structural occurrence of hydocarbons controls the proved limit
unless otherwise indicated by definitive engineering of performance data.
Proved reserves must have facilities to process and transport those reserves to
market that are operational at the time of the estimate, or there is a commit-
ment or reasonable expectations to install such facilities in the future.
In general, proved undeveloped reserves are assigned to undrilled locations that
satisfy the following conditions: (1) the locations are direct offsets to wells
that have indicated commercial production in the objective formation, (2) it is
reasonably certain that the locations are within the known proved productive
limits of the objective formation, (3) the locations conform to existing well
spacing regulations, if any, and (4)it is reasonably certain that the locations
will be developed. Reserves for other undrilled locations are classified as
proved undeveloped only in those cases where interpretations of data from wells
indicate that the objective formation is laterally continuous and contains com-
mercially recoverable hydrocarbons at locations beyond direct offsets.
Reserves that can be produced through the application of established improved
recovery methods are included in the proved classifications when (1) successful
testing by a pilot project or favorable production or pressure response of an
insalled program in that reservoir, or one in the immediate area with similar
rock and fluid properties, provides support for the engineering analysis on
which the project or program is based and (2) it is reasonably certain the pro-
ject will proceed.
Reserves to be recovered by improved recovery methods that have yet to be esta-
blished through repeated commercially successful applications are included in
the proved classification only (1) after a favorable production response from
subject reservoir from either (a) a representative pilot or (b) an installed
program, where the response provides support for the engineering analysis on
which the project is based, and (2) it is reasonably certain the project will
proceed.
UNPROVED RESERVES
Unproved reserves are based on geologic and/or engineering data similar to that
used in estimates of proved reserves; but technological, contractual, economic,
or regulatory uncertainties preclude such reserves being classified as proved.
They may be estimated assuming future economic
Page 2
<PAGE>
conditions different from those prevailing at the time of the estimate.
Estimates of unproved reserves may be made for internal planning or special
evaluations, but are not routinely compiled.
Unproved reserves are not to be added to proved reserves because of different
levels of uncertainty.
Unproved reserves may be divided into two subclassifications: probable and pos-
sible.
Probable Reserves - Probable reserves are less certain than proved reserves and
can be estimated with a degree of certainty sufficient to indicate they are more
likely to be recovered than not.
In general, probable reserves may include (1) reserves anticipated to be proved
by normal stepout drilling where subsurface control is inadequate to classify
these reserves as proved, (2) reserves in formations that appear to be
productive base on log characteristics but that lack core data or definitive
tests and which are not analogous to producing or proved reservoirs in the area,
(3) incremental reservoirs attributable to infill drilling that otherwise could
be classified as prove but closer to statutory spacing had not been approved at
the time of the estimate, (4) reserves attributable to an improved recovery
method which has been established by repeated commercially successful
applications when a project or pilot is planned but not in operation and rock,
fluid, and reservoir characteristics appear favorable for commercial
application, (5) reserves in an area of a formation that has been proved
productive in other areas of the field but subject area appears to be separated
from the proved area by faulting and the geologic interpretation indicates
subject area is structurally higher than the proved area, (6) reserves
attributable to a successful workover, treatment, retreatment, change of
equipment, or other mechanical procedure, where such procedure has not been
proved successful in wells exhibiting similar behavior in analogous reservoirs,
and (7) incremental reserves in a proved producing reservoir where an alternate
interpretation of performance or volumetric data indicates significantly more
reserves than can be classified as proved.
Possible Reserves - Possible reserves are less certain than probable reserves
and can be estimated with a low degree of certainty, insufficient to indicate
whether they are more likely to be recovered than not.
In general, possible reserves may include (1) reserves suggested by structural
and/or stratigraphic extrapolation beyond area classified as probable, based on
geologic and/or geophysical interpretation, (2) reserves in formations that
appear to be hydrocarbon bearing based on logs or cores but that may not be
productive at commercial rates, (3) incremental reserves attributable to infill
drilling that are subject to technical uncertainty, (4) reserves attributable to
an improved recovery method when a project or pilot is planned but not in opera-
tion and rock, fluid, and reservoir characteristics are such that a reasonable
doubt exists that the project will be commercial, and (5) reserves in an area of
a formation that has been proved productive in other areas of the field but
subject area appears to be separated from the proved area by faulting and
geologic interpretation indicates subject area is structurally lower than the
proved area.
Page 3
<PAGE>
RESERVE STATUS CATEGORIES
Reserve status categories define the development and producing status of wells
and/or reservoirs.
Developed - Developed reserves are expected to be recovered from existing wells
(including reserves behind pipe). Improved recovery reserves are considered
developed only after the necessary equipment has been installed, or when the
costs to do so are relatively minor. Developed reserves may be subcategorized as
producing or nonproducing.
Producing - Producing reserves are expected to be recovered from
completion intervals open at the time of the estimate
and producing. Improved recovery reserves are consid-
ered to be producing only after an improved recovery
project is in operation.
Nonproducing - Non producing reserves include shut-in and behind-pipe
reserves. Shut-in reserves are expected to be recover-
ed from completion intervals open at the time of the
estimate, but which had not started producing, or
where shut-in for market conditions or pipeline conec-
tion, or were not capable of production for mechanical
reasons, and the time when sales will start is uncer-
tain.
Behind-pipe reserves are expected to be recovered from zones behind casing in
existing wells, which will require additional completion work or a future
recompletion prior to the start of production.
Undeveloped - Undeveloped reserves are expected to be recovered: (1) from new
wells on undrilled acreage, (2) from deepening existing wells to a different
reservoir, or (3) where a relatively large expenditure is required to (a)
recomplete an existing well or (b) install production or transportation
facilities or improved recovery projects.
Page 4
