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 0-14253
ENEX OIL & GAS INCOME PROGRAM II - 4, L.P.
(Exact name of small business issuer as specified in its Charter)
Texas 76-0098591
(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
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
ENEX OIL & GAS INCOME PROGRAM II - 4, L.P.
BALANCE SHEET
- --------------------------------------------------------------------------------
September 30,
ASSETS 1995
-------------
(Unaudited)
CURRENT ASSETS:
<S> <C>
Cash ........................................................ $ 2,668
Accounts receivable - oil & gas sales ....................... 11,152
Other current assets ........................................ 325
-----------
Total current assets .......................................... 14,145
-----------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities ....... 4,592,581
Less accumulated depreciation and depletion ................ 4,395,347
-----------
Property, net ................................................. 197,234
-----------
TOTAL ......................................................... $ 211,379
===========
LIABILITIES AND PARTNERS'(DEFICIT)
CURRENT LIABILITIES:
Accounts payable ........................................... $ 1,641
Current portion of note payable to general partner ......... 8,416
Payable to general partner ................................. 45,873
-----------
Total current liabilities ..................................... 55,930
-----------
NOTE PAYABLE TO GENERAL PARTNER ............................... 203,938
-----------
PARTNERS' (DEFICIT):
Limited partners ........................................... (29,574)
General partner ............................................ (18,915)
-----------
Total partners' (deficit) ..................................... (48,489)
-----------
TOTAL ......................................................... $ 211,379
===========
<FN>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
</FN>
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
ENEX OIL & GAS INCOME PROGRAM II - 4, 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 ................. $ 18,476 $ 16,801 $ 50,801 $ 50,600
-------- -------- -------- --------
EXPENSES:
Depreciation and depletion ........ 4,628 4,271 12,807 13,491
Lease operating expenses .......... 6,885 4,876 17,845 20,698
Production taxes .................. 1,131 976 2,780 3,029
General and administrative ........ 5,095 3,900 12,835 14,772
-------- -------- -------- --------
Total expenses ...................... 17,739 14,023 46,267 51,990
-------- -------- -------- --------
INCOME (LOSS) FROM OPERATIONS ....... 737 2,778 4,534 (1,390)
-------- -------- -------- --------
OTHER EXPENSE:
Interest expense to general partner (5,068) (4,668) (15,427) (13,538)
-------- -------- -------- --------
NET INCOME (LOSS) ................... $ (4,331) $ 517 $(10,893) $(13,038)
========= ========= ========= =========
<FN>
See accompanying notes to financial statements.
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</FN>
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
ENEX OIL AND GAS INCOME PROGRAM II - 4, 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 ........................................... $(10,893) $(14,928)
--------- ---------
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and depletion ....................... 12,807 13,491
(Increase) decrease in:
Accounts receivable - oil & gas sales ............ (2,884) 7,302
Other current assets ............................. -- (81)
Increase (decrease) in:
Accounts payable ................................ (4,987) (3,824)
Payable to general partner ...................... 11,957 31,114
--------- ---------
Total adjustments .................................. 16,893 48,002
--------- ---------
Net cash provided by operating activities .......... 6,000 33,074
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property (additions) credits - development costs (71) 616
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Reduction in note payable to general partner ... (3,573) (34,000)
--------- ---------
NET INCREASE (DECREASE) IN CASH .................... 2,356 (310)
CASH AT BEGINNING OF YEAR .......................... 312 642
--------- ---------
CASH AT END OF PERIOD .............................. $ 2,668 $ 332
========= =========
Cash paid during the period for interest ........... $ 15,427 $ 13,538
========= =========
<FN>
See accompanying notes to financial statements.
- ----------------------------------------------------------------------------------
</FN>
</TABLE>
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<PAGE>
ENEX OIL & GAS INCOME PROGRAM II - 4, 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 $1,510 and $9,332 were made on the note payable
to the general partner during the third quarter of 1995 and 1994,
respectively. Weighted average principal outstanding was $212,146 and
$224,570 for the third quarter of 1995 and 1994, respectively.
Outstanding principal bore interest at a weighted average rate of 9.56%
during the third quarter of 1995 and 8.31% 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 $16,801 in 1994 to
$18,476 in 1995. This represents an increase of $1,675 (10%). Oil sales
decreased by $232 or 3%. A 4% decrease in average oil prices reduced sales by
$403. This decrease was partially offset by a 2% increase in oil production. Gas
sales decreased by $1,907 or 24%. A 6% increase in average gas prices increased
sales by $555, while a 17% increase in gas production increased sales by an
additional $1,352. 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 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 in the third quarter increased from $4,876 in 1994 to
$6,885 in 1995. The increase of $2,009 (41%) 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 $4,271 in the third quarter of
1994 to $4,628 in the third quarter of 1995. This represents an increase of $357
(8%). The changes in production, noted above, increased depreciation and
depletion by $478. This increase was partially offset by a 3% decrease in the
depletion rate. The decrease in the depletion rate primarily resulted from an
upward revision of the oil and gas reserves at December 31, 1994.
General and administrative expenses in the third quarter increased to $5,095 in
1995 from $3,900 in 1994. This increase of $1,195 was primarily due to more
staff time being required to manage the Company's operations in 1995.
First Nine Months in 1995 Compared to First Nine Months in 1994
Oil and gas sales for the first nine months increased from $50,600 in 1994 to
$50,801 in 1995. This represents an increase of $201 (1%). Oil sales increased
by $4,498 or 19%. A 12% increase in oil production increased sales by $2,733
while a 7% increase in average oil prices increased sales by an additional
$1,765. Gas sales decreased by $4,297 or 16%. A 19% decrease in average gas
prices reduced sales by $5,229. This decrease was partially offset by a 4%
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 receipt of revenues from the Hanson
acquisition which were produced in 1994 and the shut-in of oil production, in
1994, from the Hanson acquisition to perform a workover which was successfully
completed in the first quarter of 1994. 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 1994 to perform workovers.
I-5
<PAGE>
Lease operating expenses for the first nine months decreased from $20,698 in
1994 to $17,845 in 1995. The decrease of $2,853 (14%) is primarily due to higher
gas compression charges on the East Seven 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 $13,491 in the first nine
months of 1994 to $12,807 in the first nine months of 1995. This represents a
decrease $684 (5%). An 11% decrease in the depletion rate reduced depreciation
and depletion expense by $1,591. This decrease was partially offset by the
changes in production, noted above. The decrease in the depletion rate resulted
from an upward revision of the oil and gas reserves at December 31, 1994.
General and administrative expenses decreased from $14,772 in 1994 to $12,835 in
1995. This decrease of $1,937 (13%) 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 - 4, 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>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000769502
<NAME> Enex Oil & Gas Income Program II-4, 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> 2668
<SECURITIES> 0
<RECEIVABLES> 11152
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 14145
<PP&E> 4592581
<DEPRECIATION> 4395347
<TOTAL-ASSETS> 211379
<CURRENT-LIABILITIES> 55930
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> (48489)
<TOTAL-LIABILITY-AND-EQUITY> 211379
<SALES> 50801
<TOTAL-REVENUES> 50801
<CGS> 33432
<TOTAL-COSTS> 33423
<OTHER-EXPENSES> 12835
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (15,427)
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (10,893)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
