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 0-15432
ENEX OIL & GAS INCOME PROGRAM II - 10, L.P.
(Exact name of small business issuer as specified in its charter)
New Jersey 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)
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
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<CAPTION>
ENEX OIL & GAS INCOME PROGRAM II - 10, L.P.
BALANCE SHEET
- ------------------------------------------------------------------------------
MARCH 31,
ASSETS 1996
--------------
(Unaudited)
CURRENT ASSETS:
<S> <C>
Cash $ 12,359
Accounts receivable - oil & gas sales 26,645
Other current assets 1,993
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Total current assets 40,997
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OIL & GAS PROPERTIES:
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 1,901,718
Less accumulated depreciation and depletion 1,410,185
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Property, net 491,533
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TOTAL $ 532,530
=============
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 7,202
Payable to general partner 34,401
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Total current liabilities 41,603
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NONCURRENT PAYABLE TO GENERAL PARTNER 103,205
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PARTNERS' CAPITAL:
Limited partners 359,922
General partner 27,800
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Total partners' capital 387,722
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TOTAL $ 532,530
=============
</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) THREE MONTHS ENDED
-------------------------
MARCH 31, MARCH 31,
1996 1995
------------ ---------
REVENUES:
<S> <C> <C>
Oil and gas sales $ 65,790 53,026
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EXPENSES:
Depreciation and depletion 23,161 31,329
Lease operating expenses 11,100 17,398
Production taxes 3,062 2,505
General and administrative 10,078 5,290
------------ ---------
Total expenses 47,401 56,522
------------ ---------
INCOME (LOSS) FROM OPERATIONS 18,389 (3,496)
------------ ---------
OTHER EXPENSE:
Interest expense - (72)
------------ ---------
NET INCOME (LOSS) $ 18,389 (3,568)
============ =========
</TABLE>
See accompanying notes to financial statements.
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I-2
<PAGE>
<TABLE>
<CAPTION>
ENEX OIL AND GAS INCOME PROGRAM II - 10, L.P.
STATEMENTS OF CASH FLOWS
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(UNAUDITED)
THREE MONTHS ENDED
----------------------
MARCH 31, MARCH 31,
1996 1995
---------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income (loss) $ 18,389 (3,568)
---------- --------
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and depletion 23,161 31,329
(Increase) decrease in:
Accounts receivable - oil & gas sales (10,930) (4,238)
Other current assets 2,570 2,805
Increase (decrease) in:
Accounts payable (7,631) 771
Payable to general partner (14,243) (8,867)
---------- --------
Total adjustments (7,073) 21,800
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Net cash provided by operating activities 11,316 18,232
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CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions - development costs (5,612) (10,009)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (9,506) (6,143)
---------- --------
NET INCREASE (DECREASE) IN CASH (3,802) 2,080
CASH AT BEGINNING OF YEAR 16,161 4,652
---------- --------
CASH AT END OF PERIOD $ 12,359 6,732
========== ========
</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 $5,612, 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.
I-4
<PAGE>
Item 2Management'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 $53,026 in 1995 to
$65,790 in 1996. This represents an increase of $12,764 or 24%. Oil sales
increased $9,278 or 20%. A 23% increase in average oil prices increased sales by
$10,377. This increase was partially offset by a 2% decrease in oil production.
Gas sales increased by $3,486 or 53%. A 14% increase in average gas prices
increased sales by $1,241. A 34% increase in gas production increased sales by
an additional $2,245. 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 $17,398 in the first quarter of 1995 to
$11,100 in the first quarter of 1996. The decrease of $6,298 (36%) is primarily
due to workover costs incurred on the Concord acquisition in 1995.
Depreciation and depletion expense decreased from $31,329 in the first quarter
of 1995 to $23,161 in the first quarter of 1996. This represents a decrease of
$8,168 (26%). A 29% decrease in the depletion rate reduced depreciation and
depletion expense by $9,320. 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 $5,290 in 1995 to $10,078 in
1996. This increase of $4,788 is primarily due to $3,435 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.
I-5
<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 - 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
May 11, 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> 0000799171
<NAME> Enex Oil & Gas Income Program II - 10, L.P.
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> dec-31-1996
<PERIOD-START> jan-01-1996
<PERIOD-END> mar-31-1996
<CASH> 12359
<SECURITIES> 0
<RECEIVABLES> 26645
<ALLOWANCES> 0
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<CURRENT-ASSETS> 40997
<PP&E> 1901718
<DEPRECIATION> 1410185
<TOTAL-ASSETS> 532530
<CURRENT-LIABILITIES> 41603
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0
0
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<OTHER-SE> 387722
<TOTAL-LIABILITY-AND-EQUITY> 532530
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<CGS> 14162
<TOTAL-COSTS> 37323
<OTHER-EXPENSES> 10078
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