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 September 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
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ENEX OIL & GAS INCOME PROGRAM II - 8, L.P.
BALANCE SHEET
- -------------------------------------------------------------------------------
September 30,
ASSETS 1996
------------------
(Unaudited)
CURRENT ASSETS:
<S> <C>
Cash $ 18,189
Accounts receivable - oil & gas sales 34,771
Other current assets 1,704
----------------
Total current assets 54,664
----------------
OIL & GAS PROPERTIES:
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 2,406,154
Less accumulated depreciation and depletion 1,817,775
----------------
Property, net 588,379
----------------
TOTAL $ 643,043
================
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 4,836
Payable to general partner 28,434
----------------
Total current liabilities 33,270
----------------
NONCURRENT PAYABLE TO GENERAL PARTNER 28,434
----------------
PARTNERS' CAPITAL
Limited partners 555,062
General partner 26,277
----------------
Total partners' capital 581,339
----------------
TOTAL $ 643,043
================
Number of $500 Limited Partner units outstanding 5,863
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See accompanying notes to financial statements.
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ENEX OIL & GAS INCOME PROGRAM II - 8, L.P.
STATEMENTS OF OPERATIONS
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(UNAUDITED) QUARTER ENDED NINE MONTHS ENDED
------------------------------------- ----------------------------------------
September 30, September 30, September 30, September 30,
1996 1995 1996 1995
---------------- ----------------- ----------------- -------------------
REVENUES:
<S> <C> <C> <C> <C>
Oil and gas sales $ 81,622 $ 68,929 $ 245,525 $ 206,728
---------------- ----------------- ----------------- -------------------
EXPENSES:
Depreciation and depletion 23,957 40,270 78,037 117,732
Lease operating expenses 11,013 14,398 38,139 46,935
Production taxes 3,940 3,043 11,762 9,308
General and administrative 6,158 6,130 25,758 19,408
---------------- ----------------- ----------------- -------------------
Total expenses 45,068 63,841 153,696 193,383
---------------- ----------------- ----------------- -------------------
INCOME FROM OPERATIONS 36,554 5,088 91,829 13,345
---------------- ----------------- ----------------- -------------------
OTHER EXPENSE:
Interest expense - - - (112)
---------------- ----------------- ----------------- -------------------
NET INCOME $ 36,554 $ 5,088 $ 91,829 $ 13,233
================ ================= ================= ===================
</TABLE>
See accompanying notes to financial statements.
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<TABLE>
<CAPTION>
ENEX OIL AND GAS INCOME PROGRAM II - 8, L.P.
STATEMENTS OF CASH FLOWS
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(UNAUDITED)
NINE MONTHS ENDED
------------------------------------------
September 30, September 30,
1996 1995
------------------ -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 91,829 $ 13,233
------------------ -------------------
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and depletion 78,037 117,732
(Increase) decrease in:
Accounts receivable - oil & gas sales (13,857) (1,812)
Other current assets 4,367 4,704
(Decrease) in:
Accounts payable (13,278) (4,123)
Payable to general partner (57,713) (62,324)
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Total adjustments (2,444) 54,177
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Net cash provided by operating activities 89,385 67,410
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CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions - development costs (14,859) (30,320)
------------------ -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (67,338) (38,067)
------------------ -------------------
NET INCREASE (DECREASE) IN CASH 7,188 (977)
CASH AT BEGINNING OF YEAR 11,001 6,226
------------------ -------------------
CASH AT END OF PERIOD $ 18,189 $ 5,249
================== ===================
</TABLE>
See accompanying notes to financial statements.
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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 $20,712, representing net revenues from the sale of oil
and gas produced from properties owned by the Company. This
distribution was made on July 31, 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. On November 13, 1996, the Company submitted amended
preliminary proxy material to the SEC with respect to this consolidation
The terms and conditions of the proposed consolidation are set forth in
such preliminary proxy material.
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Item 2. Management's Discussion and Analysis or Plan of Operation.
Third Quarter 1996 Compared to Third Quarter 1995
Oil and gas sales for the third quarter increased to $81,622 in 1996 from
$68,929 in 1995. This represents an increase of $12,693 (18%). Oil sales
increased by $11,896 (20%). A 33% increase in the average oil sales price
increased sales by $17,221. This increase was partially offset by a 10% decrease
in oil production. Gas sales increased by $797 (9%). A 56% increase in the
average gas sales price increased sales by $3,427, partially offset by a 30%
decrease in gas production. 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 and gas production was primarily due to natural production declines.
Lease operating expenses for the third quarter decreased to $11,013 in 1996 from
$14,398 in 1995. The decrease of $3,385 (24%) is primarily due to the changes in
production, noted above.
Depreciation and depletion expense decreased to $23,957 in the third quarter of
1996 from $40,270 in the third quarter of 1995. This represents a decrease of
$16,313 (41%). A 31% decrease in the depletion rate reduced depreciation and
depletion expense by $10,709. The changes in production, noted above, reduced
depreciation and depletion expense by an additional $5,604. 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 third quarter increased to $6,158 in
1996 from $6,130 in 1995. This increase of $28 is primarily due to more staff
time being required to manage the Company's operations.
First Nine Months in 1996 Compared to First Nine Months in 1995
Oil and gas sales for the first nine months increased to $245,525 in 1996 from
$206,728 in 1995. This represents an increase of $38,797 (19%). Oil sales
increased by $26,699 (15%). A 23% increase in the average oil sales price
increased sales by $38,596. This increase was partially offset by a 7% decrease
in oil production. Gas sales increased by $12,098 (51%). A 43% increase in the
average gas sales price increased sales by $10,864. A 5% increase in gas
production increased sales by an additional $1,234. 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 $38,139 in the first nine months of 1996
from $46,935 in the first nine months of 1995. The decrease of $8,796 (19%) 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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Depreciation and depletion expense decreased to $78,037 in the first nine months
of 1996 from $117,732 in the first nine months of 1995. This represents a
decrease of $36,395 (34%). A 31% decrease in the depletion rate reduced
depreciation and depletion expense by $34,495. The changes in production, noted
above, reduced depreciation and depletion expense by an additional $5,200. 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 $25,758 in the first nine
months of 1996 from $19,408 in the first nine months of 1995. This increase of
$6,350 (33%) 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's "available cash flow" is essentially equal to
the net amount of cash provided by operating activities.
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. On
November 13, 1996, the Company submitted amended preliminary proxy material to
the SEC with respect to this consolidation The terms and conditions of the
proposed consolidation are set forth in such preliminary proxy material.
As of September 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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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, 1996.
II-1
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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
November 13, 1996 By: /s/ James A. Klein
-------------------
James A. Klein
Controller and Chief
Accounting Officer
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<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> 9-mos
<FISCAL-YEAR-END> dec-31-1996
<PERIOD-START> jan-01-1996
<PERIOD-END> sep-30-1996
<CASH> 18189
<SECURITIES> 0
<RECEIVABLES> 34771
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 54664
<PP&E> 2406154
<DEPRECIATION> 1817775
<TOTAL-ASSETS> 643043
<CURRENT-LIABILITIES> 33270
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 581339
<TOTAL-LIABILITY-AND-EQUITY> 643043
<SALES> 245525
<TOTAL-REVENUES> 245525
<CGS> 127938
<TOTAL-COSTS> 127938
<OTHER-EXPENSES> 25758
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 91829
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
