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 0-14250
ENEX OIL & GAS INCOME PROGRAM II - 7, L.P.
(Exact name of small business issuer as specified in its charter)
New Jersey 76-0163130
(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
ENEX OIL & GAS INCOME PROGRAM II - 7, L.P.
BALANCE SHEET
- -------------------------------------------------------------------------------
MARCH 31,
ASSETS 1996
--------------
(Unaudited)
CURRENT ASSETS:
Cash $ 17,755
Accounts receivable - oil & gas sales 46,317
Other current assets 3,462
-------------
Total current assets 67,534
-------------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 2,945,642
Less accumulated depreciation and depletion 2,154,613
--------------
Property, net 791,029
--------------
TOTAL $ 858,563
=============
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 12,182
Payable to general partner 11,726
------------
Total current liabilities 23,908
------------
NONCURRENT PAYABLE TO GENERAL PARTNER 23,454
------------
PARTNERS' CAPITAL:
Limited partners 773,571
General partner 37,630
------------
Total partners' capital 811,201
------------
TOTAL $ 858,563
============
See accompanying notes to financial statements.
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<PAGE>
ENEX OIL & GAS INCOME PROGRAM II - 7, L.P.
STATEMENTS OF OPERATIONS
- ------------------------------------------------------------------------------
(UNAUDITED) THREE MONTHS ENDED
-------------------------
MARCH 31, MARCH 31,
1996 1995
------------ -----------
REVENUES:
Oil and gas sales $ 114,362 $ 92,175
------------ ------------
EXPENSES:
Depreciation and depletion 37,274 51,636
Lease operating expenses 19,295 30,243
Production taxes 5,322 4,354
General and administrative 13,643 8,420
------------ ------------
Total expenses 75,534 94,653
------------ ------------
INCOME (LOSS) FROM OPERATIONS 38,828 (2,478)
------------ ------------
OTHER EXPENSE:
Interest expense - (112)
------------- ------------
NET INCOME (LOSS ) $ 38,828 $ (2,590)
=============== ============
See accompanying notes to financial statements.
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<PAGE>
ENEX OIL AND GAS INCOME PROGRAM II - 7, L.P.
STATEMENTS OF CASH FLOWS
- -------------------------------------------------------------------------------
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31, MARCH 31,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 38,828 $ (2,590)
Adjustments to reconcile net income (loss) to net cash
provided by operating
activities:
Depreciation and depletion 37,274 51,636
(Increase) decrease in:
Accounts receivable - oil & gas sales (18,999) (7,367)
Other current assets 4,468 4,876
Increase (decrease) in:
Accounts payable (9,750) 11,348
Payable to general partner (17,917) (23,489)
Total adjustments (4,924) 37,004
Net cash provided by operating activities 33,904 34,414
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions - development costs (9,755) (17,396)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (19,366) (12,850)
NET INCREASE IN CASH 4,783 4,168
CASH AT BEGINNING OF YEAR 12,972 4,870
CASH AT END OF PERIOD $ 17,755 $ 9,038
Cash paid during the period for interest expense $ - $ 112
See accompanying notes to financial statements.
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<PAGE>
ENEX OIL & GAS INCOME PROGRAM II - 7, 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. A cash distribution was made to the limited partners of the
Company in the amount of $19,366 representing net revenues from
the sale of oil and gas produced from properties owned by the
Company. This distribution was made on January 31, 1996.
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<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
First Quarter 1996 Compared to First Quarter 1995
Oil and gas sales for the first quarter increased from $92,175 in 1995 to
$114,362 in 1996. This represents an increase of $22,187 or 24%. Oil sales
increased $16,129 or 20%. A 23% increase in average oil prices increased sales
by $18,035. This increase was partially offset by a 2% decrease in oil
production. Gas sales increased by $6,058 or 53%. A 14% increase in average gas
prices increased sales by $2,155. A 34% increase in gas production increased
sales by an additional $3,903. The decrease in oil production was primarily the
result of natural production declines. The increase in gas production was
primarily the result of enhanced production improvements on the Concord
acquisition. The changes in average prices correspond with changes in the
overall market for the sale of oil and gas.
Lease operating expenses decreased from $30,243 in the first quarter of 1995 to
$19,295 in the first quarter of 1996. The decrease of $10,948 (36%) is primarily
due to workover costs incurred on the Concord acquisition in 1995.
Depreciation and depletion expense decreased from $51,636 in the first quarter
of 1995 to $37,274 in the first quarter of 1996. This represents a decrease of
$14,362 (28%). A 30% decrease in the depletion rate reduced depreciation and
depletion expense by $16,264. This decrease was partially offset by the changes
in production, noted above. The decrease in the depletion rate was primarily the
result of upward revisions of the oil and gas reserves at December 31, 1995.
General and administrative expenses increased from $8,420 in 1995 to $13,643 in
1996. This increase of $5,223 is primarily due to $3,845 higher direct expenses
incurred by the Company in 1996 coupled with more staff time being required to
manage the Company's operations.
CAPITAL RESOURCES AND LIQUIDITY
The Company's cash flow from operations is a direct result of the amount of net
proceeds realized from the sale of oil and gas production. 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 to the
Company's partners.
The Company will continue to recover its reserves and distribute to the limited
partners the net proceeds realized from the sale of oil and gas production after
the payment of its debt obligations. Distribution amounts are subject to change
if net revenues are greater or less than expected. Nonetheless, the general
partner believes the Company will continue to have sufficient cash flow to fund
operations and to maintain a regular pattern of distributions.
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.
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<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.
<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 OIL & GAS INCOME
PROGRAM II - 7, 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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<FISCAL-YEAR-END> DEC-31-1996
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