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, 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 0-15432
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
Transitional Small Business Disclosure Format (Check one):
Yes No x
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
ENEX OIL & GAS INCOME PROGRAM II - 10, L.P.
BALANCE SHEET
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JUNE 30,
ASSETS 1996
---------------------
(Unaudited)
CURRENT ASSETS:
<S> <C>
Cash $ 15,434
Accounts receivable - oil & gas sales 24,168
Other current assets 1,966
---------------------
Total current assets 41,568
---------------------
OIL & GAS PROPERTIES:
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 1,903,897
Less accumulated depreciation and depletion 1,429,253
---------------------
Property, net 474,644
---------------------
TOTAL $ 516,212
=====================
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 5,597
Payable to general partner 30,408
---------------------
Total current liabilities 36,005
---------------------
NONCURRENT PAYABLE TO GENERAL PARTNER 91,228
---------------------
PARTNERS' CAPITAL:
Limited partners 361,179
General partner 27,800
---------------------
Total partners' capital 388,979
---------------------
TOTAL $ 516,212
=====================
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
<TABLE>
<CAPTION>
ENEX OIL & GAS INCOME PROGRAM II - 10, 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 $ 57,382 $ 50,529 $ 123,172 $ 103,555
-------------- ----------- ----------- ------------
EXPENSES:
Depreciation and depletion 19,068 28,177 42,229 59,506
Lease operating expenses 9,285 7,053 20,385 24,451
Production taxes 2,817 2,204 5,879 4,709
General and administrative 7,034 5,761 17,112 11,051
-------------- ----------- ----------- ------------
Total expenses 38,204 43,195 85,605 99,717
-------------- ----------- ----------- ------------
INCOME FROM OPERATIONS 19,178 7,334 37,567 3,838
-------------- ----------- ----------- ------------
OTHER EXPENSE:
Interest expense - - - (72)
-------------- ----------- ----------- ------------
NET INCOME $ 19,178 $ 7,334 $ 37,567 $ 3,766
============== =========== =========== ============
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
<TABLE>
<CAPTION>
ENEX OIL AND GAS INCOME PROGRAM II - 10, 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 $ 37,567 $ 3,766
-------- --------
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and depletion 42,229 59,506
(Increase) decrease in:
Accounts receivable - oil & gas sales (8,453) (2,107)
Other current assets 2,597 188
(Decrease) in:
Accounts payable (9,236) (1,867)
Payable to general partner (30,213) (21,092)
--------- --------
Total adjustments (3,076) 34,628
--------- --------
Net cash provided by operating activities 34,491 38,394
--------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions - development costs (7,791) (16,447)
--------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (27,427) (13,247)
--------- --------
NET INCREASE (DECREASE) IN CASH (727) 8,700
CASH AT BEGINNING OF YEAR 16,161 4,652
-------- -------
CASH AT END OF PERIOD $ 15,434 $ 13,352
=========== ==========
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
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 $14,088, 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 $57,382 in 1996 from
$50,529 in 1995. This represents an increase of $6,853 (14%). Oil sales
increased by $1,844 (4%). A 13% increase in the average oil sales price
increased sales by $5,555. This increase was partially offset by an 8% decrease
in oil production. Gas sales increased by $5,009 (105%). An 80% increase in the
average gas sales price increased sales by $4,350. A 14% increase in gas
production increased sales by an additional $659. 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 the result of the
enhanced production improvements on the Concord acquisition.
Lease operating expenses for the second quarter increased to $9,285 in 1996 from
$7,053 in 1995. The increase of $2,232 (32%) is primarily due to costs incurred
on the Concord acquisition in the second quarter of 1996 to increase production.
Depreciation and depletion expense decreased to $19,068 in the second quarter of
1996 from $28,177 in the second quarter of 1995. This represents a decrease of
$9,109 (32%). A 30% decrease in the depletion rate reduced depreciation and
depletion expense by $8,056. The changes in production, noted above, reduced
depreciation and depletion expense by an additional $1,053. 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 $7,034 in the second quarter of
1996 from $5,761 in the second quarter of 1995. This increase of $1,273 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 $123,172 in 1996 from
$103,555 in 1995. This represents an increase of $19,617 (19%). Oil sales
increased by $11,122 (12%). An 18% increase in the average oil sales price
caused sales to increase by $15,729. This increase was partially offset by a 5%
decrease in oil production. Gas sales increased by $8,495 (75%). A 41% increase
in the average gas sales price increased sales by $5,805. A 24% increase in gas
production increased sales by an additional $2,690. 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 the result of the
enhanced production improvements on the Concord acquisition.
Lease operating expenses for the first six months decreased to $20,385 in 1996
from $24,451 in 1995. The decrease of $4,066 (17%) is primarily due to costs
incurred on the Concord acquisition in the first quarter of 1995 to increase
production.
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<PAGE>
Depreciation and depletion expense decreased to $42,229 in the first six months
of 1996 from $59,506 in the first six months of 1995. This represents a decrease
of $17,277 (29%). A 29% decrease in the depletion rate reduced depreciation and
depletion by $17,401. This decrease was slightly 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 and gas reserves during December 1995.
General and administrative expenses for the first six months increased to
$17,112 in 1996 from $11,051 in 1995. This increase of $6,061 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 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 13, 1996 By: /s/ James A. Klein
-------------------
James A. Klein
Controller and Chief
Accounting Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000799171
<NAME> Enex Oil & Gas Income Program II - 10, 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> 15434
<SECURITIES> 0
<RECEIVABLES> 24168
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 41568
<PP&E> 1903897
<DEPRECIATION> 1429253
<TOTAL-ASSETS> 516212
<CURRENT-LIABILITIES> 36005
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 388979
<TOTAL-LIABILITY-AND-EQUITY> 516212
<SALES> 123172
<TOTAL-REVENUES> 123172
<CGS> 26264
<TOTAL-COSTS> 68493
<OTHER-EXPENSES> 17112
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37567
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
