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 March 31, 1996
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 0-14233
ENEX PROGRAM I PARTNERS, L.P.
(Exact name of small business issuer specified in its charter)
New Jersey 76-0175128
(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
ENEX PROGRAM I PARTNERS, L.P.
BALANCE SHEET
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MARCH 31,
ASSETS 1996
---------------
(Unaudited)
CURRENT ASSETS:
Cash $ 50,097
Accounts receivable - oil & gas sales 476,224
Receivable from litigation settlement 280,050
Other current assets 190,454
-------------
Total current assets 996,825
-------------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 85,572,345
Less accumulated depreciation and depletion 82,143,677
-------------
Property, net 3,428,668
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TOTAL $ 4,425,493
=============
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 187,254
Payable to general partner 136,666
-------------
Total current liabilities 323,920
-------------
PARTNERS' CAPITAL:
Limited partners 3,104,031
General partner 997,542
-------------
Total partners' capital 4,101,573
-------------
TOTAL $ 4,425,493
=============
See accompanying notes to financial statements.
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<PAGE>
ENEX PROGRAM I PARTNERS, L.P.
STATEMENTS OF OPERATIONS
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(UNAUDITED) THREE MONTHS ENDED
----------------------------------------
MARCH 31, MARCH 31,
1996 1995
------------------- -------------------
REVENUES:
Oil and gas sales $ 633,886 $ 538,969
Gas plant sales 212,575 173,837
------------------- -------------------
Total revenues 846,461 712,806
------------------- -------------------
EXPENSES:
Depreciation and depletion 119,602 163,999
Impairment of property 125,097 -
Lease operating expenses 200,700 215,492
Gas plant purchases 158,694 122,226
Production taxes 39,897 38,275
General and administrative:
Allocated from general partner 224,603 262,032
Direct expenses 24,531 15,441
------------------- -------------------
Total expenses 893,124 817,465
------------------- -------------------
LOSS FROM OPERATIONS (46,663) (104,659)
------------------- -------------------
OTHER INCOME:
Interest income 5,695 6,524
------------------- -------------------
NET LOSS $ (40,968) $ (98,135)
=================== ===================
See accompanying notes to financial statements.
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<PAGE>
ENEX PROGRAM I PARTNERS, L.P.
STATEMENTS OF CASH FLOWS
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(UNAUDITED)
THREE MONTHS ENDED
----------------------------
MARCH 31, MARCH 31,
1996 1995
----------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (40,968) $ (98,135)
----------- ------------
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and depletion 119,602 163,999
Impairment of property 125,097 -
(Increase) decrease in:
Accounts receivable - oil & gas sales (95,817) 1,138
Receivable from litigation settlement - (6,365)
Other current assets (59,014) 10,668
Increase (decrease) in:
Accounts payable (88,201) 47,687
Payable to general partner 109,681 (85,327)
----------- ------------
Total adjustments 111,348 131,800
----------- ------------
Net cash provided by operating activities 70,380 33,665
----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions - development costs (18,493) (24,352)
----------- ------------
NET INCREASE IN CASH 51,887 9,313
----------- ------------
CASH AT BEGINNING OF YEAR 380,368 12,269
----------- ------------
CASH AT END OF PERIOD $ 432,255 $ 21,582
=========== ============
See accompanying notes to financial statements.
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I-3
<PAGE>
ENEX PROGRAM I PARTNERS, 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. The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standard ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of," which
requires certain assets to be reviewed for impairment whenever events or
circumstances indicate the carrying amount may not be recoverable. In the
first quarter of 1996, the Company recognized a non-cash impairment
provision of $125,097 for certain oil and gas properties due to market
indications that the carrying amounts were not fully recoverable.
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<PAGE>
Item 2Management's Discussion and Analysis or Plan of Operation.
First Quarter 1995 Compared to First Quarter 1994
Oil and gas sales for the first quarter increased from $538,969 in 1995 to
$633,886 in 1996. This represents an increase of $94,917 (18%). Oil sales
increased by $3,018 or 1%. An 11% increase in average oil prices increased sales
by $26,031. This increase was partially offset by a 9% decrease in oil
production. Gas sales increased by $91,899 or 34%. A 42% increase in average gas
prices increased sales by $107,143. This increase was partially offset by a 6%
decrease in gas production. The decreases in oil and gas production were
primarily the result of natural production declines. The changes in average
prices correspond with changes in the overall market for the sale of oil and
gas. Gas plant sales increased by $38,738 or 22% from $173,837 in 1995 to
$212,575 in 1995. A 20% increase in the average sales price of gas plant product
increased sales by $35,669. A 2% increase in the production of gas plant
products increased sales by an additional $3,069. The increase in the average
sales price of gas plant products correspond with higher prices in the overall
marke for the sale of gas plant products.
Lease operating expenses decreased from $215,492 in 1995 to $200,700 in 1996.
The decrease of $14,792 (7%) is primarily due to the declines in production,
noted above.
Depreciation and depletion expense decreased from $163,999 in the first quarter
of 1995 to $119,602 in the first quarter of 1996. This represents a decrease of
$44,397 (27%). The declines in production, noted above, caused depreciation and
depletion expense to decrease by $6,920. A 24% decrease in the depletion rate
reduced depreciation and depletion expense by an additional $37,477. The
decrease in the depletion rate was primarily due the lower property basis
resulting from the recognition of an property impairment of $125,097 in the
first quarter of 1996.
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standard ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long- Lived Assets to be Disposed Of," which requires
certain assets to be reviewed for impairment whenever events or circumstances
indicate the carrying amount may not be recoverable. In the first quarter of
1996, the Company recognized a non-cash impairment provision of $125,097 for
certain oil and gas properties due to market indications that the carrying
amounts were not fully recoverable.
General and administrative expenses decreased from $277,473 in 1995 to $249,134
in 1996. This decrease of $28,339 (10%) is primarily due to less staff time
being required to manage the Company's operations, partially offset by a $9,090
increase in direct expenses incurred by the Company.
CAPITAL RESOURCES AND LIQUIDITY
The Company's cash flow is a direct result of the amount of net proceeds
realized from the sale of oil and gas production and the repayment of its debt
obligations. Accordingly, the changes in cash flow from 1995 to 1996 are
primarily due to the changes in oil and gas sales described above. It is the
general partner's intention to distribute substantially all of the Company's
available cash flow, after debt repayment, to the Company's partners.
I-5
<PAGE>
The Company discontinued the payment of distributions during 1990. In the fourth
quarter of 1995, the Company paid a distribution of $730,913 to its limited
partners. The distribution in 1995 was primarily the result of the receipt of
$744,127 as proceeds from the sale of properties. Future distributions are
dependent upon, among other things, future prices received for oil and gas. The
Company will continue to recover its reserves and reduce its debt obligations.
It is anticipated that the periodic distributions will be made in the future as
cash becomes available.
As of March 31, 1996, 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 March 31, 1996.
II-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
ENEX PROGRAM I PARTNERS, 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
May 11, 1996 By: /s/ James A. Klein
-------------------
James A. Klein
Controller and Chief
Accounting Officer
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