United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from...............to...............
Commission file number 0-14249
ENEX OIL & GAS INCOME PROGRAM II - 8, L.P.
(Exact name of small business issuer as specified in its charter)
Texas 76-0163128
(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
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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
Transitional Small Business Disclosure Format (Check one):
Yes No x
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
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<CAPTION>
ENEX OIL & GAS INCOME PROGRAM II - 8, L.P.
BALANCE SHEET
- ------------------------------------------------------------------------------
JUNE 30,
ASSETS 1996
(Unaudited)
CURRENT ASSETS:
<S> <C>
Cash $ 20,304
Accounts receivable - oil & gas sales 32,160
Other current assets 2,616
-------
Total current assets 55,080
OIL & GAS PROPERTIES:
(Successful efforts accounting method)
- Proved mineral interests and related
equipment & facilities 2,401,661
Less accumulated depreciation and depletion 1,793,817
---------
Property, net 607,844
---------
TOTAL $ 662,924
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 7,360
Payable to general partner 26,915
--------
Total current liabilities 34,275
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NONCURRENT PAYABLE TO GENERAL PARTNER 53,832
-------
PARTNERS' CAPITAL
Limited partners 548,540
General partner 26,277
-------
Total partners' capital 574,817
--------
TOTAL $ 662,924
==========
</TABLE>
See accompanying notes to financial statements.
- -------------------------------------------------------------
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<PAGE>
<TABLE>
<CAPTION>
ENEX OIL & GAS INCOME PROGRAM II - 8, L.P.
STATEMENTS OF OPERATIONS
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(UNAUDITED) QUARTER ENDED SIX MONTHS ENDED
----------------------------- --------------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1996 1995
--------------- ------------- ---------------------------
REVENUES:
<S> <C> <C> <C> <C>
Oil and gas sales $ 76,357 $ 67,239 $ 163,903 $ 137,799
---------- ---------- ------------ ----------
EXPENSES:
Depreciation and depletion 24,424 36,696 54,080 77,462
Lease operating expenses 12,355 9,384 27,126 32,537
Production taxes 3,747 2,933 7,822 6,265
General and administrative 8,018 6,541 19,600 13,278
---------- ---------- ------------ ----------
Total expenses 48,544 55,554 108,628 129,542
---------- ---------- ------------ ----------
INCOME FROM OPERATIONS 27,813 11,685 55,275 8,257
---------- ---------- ------------ ----------
OTHER EXPENSE:
Interest expense - - - (112)
---------- ---------- ------------ ----------
NET INCOME $ 27,813 $ 11,685 $ 55,275 $ 8,145
========== ========== ============ ==========
</TABLE>
See accompanying notes to financial statements.
- ---------------------------------------------------------------------------
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<PAGE>
<TABLE>
<CAPTION>
ENEX OIL AND GAS INCOME PROGRAM II - 8, L.P.
STATEMENTS OF CASH FLOWS
- ------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS ENDED
----------------------------
JUNE 30, JUNE 30,
1996 1995
------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 55,275 $ 8,145
----------- ------------
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and depletion 54,080 77,462
(Increase) decrease in:
Accounts receivable - oil & gas sales (11,246) (2,805)
Other current assets 3,455 251
Increase (decrease) in:
Accounts payable (10,754) 306
Payable to general partner (33,834) (37,606)
----------- ------------
Total adjustments 1,701 37,608
----------- ------------
Net cash provided by operating activities 56,976 45,753
----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions - development costs (10,366) (21,886)
----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (37,307) (24,267)
----------- ------------
NET INCREASE (DECREASE) IN CASH 9,303 (400)
CASH AT BEGINNING OF YEAR 11,001 6,226
----------- ------------
CASH AT END OF PERIOD $ 20,304 $ 5,826
=========== ============
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
ENEX OIL & GAS INCOME PROGRAM II - 8, 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 $15,906, representing net revenues from the sale of oil
and gas produced from properties owned by the Company. This
distribution was made on April 30, 1996.
3.) On August 9, 1996, the Company's General Partner submitted preliminary
proxy material to the Securities Exchange Commission with respect to a
proposed consolidation of the Company with 33 other managed limited
partnerships. The terms and conditions of the proposed consolidation
are set forth in such preliminary proxy material.
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<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
Second Quarter 1996 Compared to Second Quarter 1995
Oil and gas sales for the second quarter increased to $76,357 in 1996 from
$67,239 in 1995. This represents an increase of $9,118 (14%). Oil sales
increased by $2,455 (4%). A 13% increase in the average oil sales price
increased sales by $7,380. This increase was partially offset by an 8% decrease
in oil production. Gas sales increased by $6,663 (105%). An 80% increase in the
average gas sales price increased sales by $5,785. A 14% increase in gas
production increased sales by an additional $878. The increases in the average
sales prices correspond with changes in the overall market for the sale of oil
and gas. The decrease in oil production was primarily due to natural production
declines. The increase in gas production was primarily due to enhanced
production improvements on the Concord acquisition.
Lease operating expenses for the second quarter increased to $12,355 in 1996
from $9,384 in 1995. The increase of $2,971 (32%) is primarily due to the
changes in production, noted above, and enhanced recovery costs incurred on the
Concord acquisition in the second quarter of 1996.
Depreciation and depletion expense decreased to $24,424 in the second quarter of
1996 from $36,696 in the second quarter of 1995. This represents a decrease of
$12,272 (33%). A 31% decrease in the depletion rate reduced depreciation and
depletion expense by $10,909. The changes in production, noted above, reduced
depreciation and depletion expense by an additional $1,363. The decrease in the
depletion rate is primarily the result of an upward revision of the oil and gas
reserves during December 1995.
General and administrative expenses for the second quarter increased to $8,018
in 1996 from $6,541 in 1995. This increase of $1,477 (23%) is primarily due to
more staff time being required to manage the Company's operations.
First Six Months in 1996 Compared to First Six Months in 1995
Oil and gas sales for the first six months increased to $163,903 in 1996 from
$137,799 in 1995. This represents an increase of $26,104 (19%). Oil sales
increased by $14,803 (12%). An 18% increase in the average oil sales price
increased sales by $20,909. This increase was partially offset by a 5% decrease
in oil production. Gas sales increased by $11,301 (75%). A 41% increase in the
average gas sales price increased sales by $7,722. A 24% increase in gas
production increased sales by an additional $3,579. The changes in the average
sales prices correspond with changes in the overall market for the sale of oil
and gas. The decrease in oil production was primarily due to natural production
declines. The increase in gas production was primarily due to enhanced
production improvements on the Concord acquisition.
Lease operating expenses decreased to $27,126 in the first six months of 1996 to
$32,537 in the first six months of 1995. The increase of $5,411 (17%) is
primarily due to the changes in production, noted above, and enhanced recovery
costs incurred on the Concord acquisition in the first quarter of 1995.
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<PAGE>
Depreciation and depletion expense increased to $54,080 in the first six months
of 1996 from $77,462 in the first six months of 1995. This represents a decrease
of $23,382 (30%). A 30% decrease in the depletion rate reduced depreciation and
depletion expense by $23,208. The changes in production, noted above, reduced
depreciation and depletion expense by an additional $174. The decrease in the
depletion rate is primarily the result of an upward revision of the oil and gas
reserves during December 1995.
General and administrative expenses increased to $19,600 in the first six months
of 1996 from 13,278 in the first six months of 1995. This increase of $6,322
(48%) is primarily due to 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.
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.
On August 9, 1996, the Company's General Partner submitted preliminary proxy
material to the Securities Exchange Commission with respect to a proposed
consolidation of the Company with 33 other managed limited partnerships. The
terms and conditions of the proposed consolidation are set forth in such
preliminary proxy material.
As of June 30, 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 June 30, 1996.
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 - 8, 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 13, 1996 By: /s/ James A. Klein
-------------------
James A. Klein
Controller and Chief
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000789882
<NAME> Enex Oil & Gas Income Program II - 8, L.P.
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> dec-31-1996
<PERIOD-START> jan-01-1996
<PERIOD-END> jun-30-1996
<CASH> 20304
<SECURITIES> 0
<RECEIVABLES> 32160
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 55080
<PP&E> 1793817
<DEPRECIATION> 607844
<TOTAL-ASSETS> 662924
<CURRENT-LIABILITIES> 34275
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 574817
<TOTAL-LIABILITY-AND-EQUITY> 662924
<SALES> 163903
<TOTAL-REVENUES> 163903
<CGS> 34948
<TOTAL-COSTS> 89028
<OTHER-EXPENSES> 19600
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 55275
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
