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 June 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 0-15432
ENEX OIL & GAS INCOME PROGRAM II - 10, L.P.
(Exact name of small business issuer as specified in its charter)
Texas 76-0163121
(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
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ENEX OIL & GAS INCOME PROGRAM II - 10, L.P.
BALANCE SHEET
JUNE 30,
ASSETS 1995
(Unaudited)
CURRENT ASSETS:
Cash $ 13,352
Accounts receivable - oil & gas sales 16,264
Other current assets 5,915
Total current assets 35,531
OIL & GAS PROPERTIES:
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 1,888,318
Less accumulated depreciation and depletion 1,365,041
Property, net 523,277
TOTAL $ 558,808
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 9,977
Payable to general partner 35,732
Total current liabilities 45,709
NONCURRENT PAYABLE TO GENERAL PARTNER 140,970
PARTNERS' CAPITAL:
Limited partners 344,329
General partner 27,800
Total partners' capital 372,129
TOTAL $ 558,808
See accompanying notes to financial statements.
I-1
ENEX OIL & GAS INCOME PROGRAM II - 10, L.P.
STATEMENTS OF OPERATIONS
(UNAUDITED) QUARTER ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1995 1994 1995 1994
REVENUES:
Oil and gas sales $ 50,529 $ 44,968 $ 103,555 $ 87,019
EXPENSES:
Depreciation and depletion 28,177 28,589 59,506 56,647
Lease operating expenses 7,053 4,388 24,451 22,022
Production taxes 2,204 2,127 4,709 4,139
General and administrative 5,761 3,340 11,051 8,846
Total expenses 43,195 38,444 99,717 91,654
INCOME (LOSS) FROM OPERATIONS 7,334 6,524 3,838 (4,635)
OTHER EXPENSE:
Interest expense - - (72) -
NET INCOME (LOSS) $ 7,334 $ 6,524 $ 3,766 $ (4,635)
See accompanying notes to financial statements.
I-2
ENEX OIL AND GAS INCOME PROGRAM II - 10, L.P.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED
JUNE 30, JUNE 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 3,766 $ (4,635)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation, depletion and amortization 59,506 56,647
(Increase) decrease in:
Accounts receivable - oil & gas sales (2,107) (3,339)
Other current assets 188 (257)
(Decrease) in:
Accounts payable (1,867) (9,646)
Payable to general partner (21,092) (9,404)
Total adjustments 34,628 34,001
Net cash provided by operating activities 38,394 29,366
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions - development costs (16,447) (7,370)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (13,247) (17,588)
NET INCREASE IN CASH 8,700 4,408
CASH AT BEGINNING OF YEAR 4,652 4,683
CASH AT END OF PERIOD $ 13,352 $ 9,091
See accompanying notes to financial statements.
I-3
ENEX OIL & GAS INCOME PROGRAM II - 10, 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 $7,105, representing net revenues from the sale of oil
and gas produced from properties owned by the Company. This
distribution was made on April 30, 1995.
Item 2. Management's Discussion and Analysis or Plan of Operation.
Second Quarter 1995 Compared to Second Quarter 1994
Oil and gas sales for the second quarter increased from $44,968 in 1994 to
$50,529 in 1995. This represents an increase of $5,561 (12%). Oil sales
increased by $5,830 (15%). A 2% increase in oil production caused sales to
increase by $744. A 13% increase in the average oil sales price caused an
additional $5,086 increase. Gas sales decreased by $269 (5%). A 20%
decrease in the average gas sales price reduced sales by $1,197. This
decrease was partially offset by a 19% increase in gas production. The
changes in the average sales prices correspond with changes in the overall
market for the sale of oil and gas. The increases in production were
primarily the result of the completion of a waterflood project on the
Schafter Lake field and the acquisition of additional interest in the
Concord acquisition in the fourth quarter of 1994.
Lease operating expenses increased from $4,388 in 1994 to $7,053 in 1995.
The increase of $2,665 (61%) is primarily due to the increases in
production, noted above, and enhanced recovery costs incurred on the
Concord acquisition in the second quarter of 1995.
Depreciation and depletion expense decreased from $28,589 in the second
quarter of 1994 to $28,177 in the second quarter of 1995. This represents
a decrease of $412 (1%). A 6% decrease in the depletion rate reduced
depreciation and depletion expense by $1,774. This decrease was partially
offset by the changes in production, noted above. The decrease in the
depletion rate is primarily the result of an upward revision of the oil
reserves at December 31, 1994, partially offset by a downward revision of
the gas reserves at December 31, 1994.
General and administrative expenses increased from $3,340 in 1994 to $5,761
in 1995. This increase of $2,421 is primarily due to more staff time being
required to manage the Company's operations.
First Six Months in 1995 Compared to First Six Months in 1994
Oil and gas sales for the first six months increased from $87,019 in 1994
to $103,555 in 1995. This represents an increase of $16,536 (19%). Oil
sales increased by $17,426 (23%). An 11% increase in oil production caused
sales to increase by $8,137. An 11% increase in the average oil sales
price caused an additional $9,289 increase. Gas sales decreased by $890
(7%). A 23% decrease in the average gas sales price reduced sales by
$3,351. This decrease was partially offset by a 20% increase in gas
production. The changes in the average sales prices correspond with
changes in the overall market for the sale of oil and gas. The increases
in production were primarily the result of the completion of a waterflood
project on the Schafter Lake field and the acquisition of additional
interest in the Concord acquisition in the fourth quarter of 1994.
Lease operating expenses increased from $22,022 in 1994 to $24,451 in 1995.
The increase of $2,429 (11%) is primarily due to the changes in production,
noted above, and enhanced recovery costs incurred on the Concord
acquisition in 1995.
Depreciation and depletion expense increased from $56,647 in the first six
months of 1994 to $59,506 in the first six months of 1995. This represents
an increase of $2,859 (5%). The changes in production, noted above,
increased depreciation and depletion expense by $7,067. This increase was
partially offset by a 7% decrease in the depletion rate. The decrease in
the depletion rate is primarily the result of an upward revision of the oil
reserves at December 31, 1994, partially offset by a downward revision of
the gas reserves at December 31, 1994.
General and administrative expenses increased from $8,846 in 1994 to
$11,051 in 1995. This increase of $2,205 (25%) 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 1994 to 1995 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.
As of June 30, 1995, the Company had no material commitments for capital
expenditures. The Company does not intend to engage in any significant
developmental drilling activity.
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, 1995.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
ENEX OIL & GAS INCOME
PROGRAM II - 10, 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 11, 1995 By: /s/ James A. Klein
James A. Klein
Controller and Chief
Accounting Officer
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ENEX OIL & GAS INCOME
PROGRAM II - 10, L.P.
(Registrant)
By:ENEX RESOURCES CORPORATION
General Partner
By:
R. E. Densford
Vice President, Secretary
Treasurer and Chief Financial
Officer
August 11, 1995 By:
James A. Klein
Controller and Chief
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 13,352
<SECURITIES> 0
<RECEIVABLES> 16,264
<ALLOWANCES> 0
<INVENTORY> 5,915
<CURRENT-ASSETS> 35,531
<PP&E> 1,888,318
<DEPRECIATION> (1,365,041)
<TOTAL-ASSETS> 558,808
<CURRENT-LIABILITIES> 45,709
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 372,129
<TOTAL-LIABILITY-AND-EQUITY> 558,808
<SALES> 103,555
<TOTAL-REVENUES> 103,555
<CGS> 88,666
<TOTAL-COSTS> 88,666
<OTHER-EXPENSES> 11,051
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 72
<INCOME-PRETAX> 3,766
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,766
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
