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, 1997
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
ENEX OIL & GAS INCOME PROGRAM II - 10, L.P.
BALANCE SHEET
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARCH 31,
ASSETS 1997
----------------
(Unaudited)
CURRENT ASSETS:
<S> <C>
Cash $ 19,393
Accounts receivable - oil & gas sales 25,237
Other current assets 1,202
----------------
Total current assets 45,832
----------------
OIL & GAS PROPERTIES:
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 1,917,736
Less accumulated depreciation and depletion 1,474,558
----------------
Property, net 443,178
----------------
TOTAL $ 489,010
================
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 13,007
Payable to general partner 77,087
----------------
Total current liabilities 90,094
----------------
PARTNERS' CAPITAL:
Limited partners 379,491
General partner 19,425
----------------
Total partners' capital 398,916
----------------
TOTAL $ 489,010
================
Number of $500 Limited Partner units outstanding 3,916
</TABLE>
See accompanying notes to financial statements.
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I-1
<PAGE>
ENEX OIL & GAS INCOME PROGRAM II - 10, L.P.
STATEMENTS OF OPERATIONS
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) THREE MONTHS ENDED
----------------------------------------
MARCH 31, MARCH 31,
1997 1996
------------------- -------------------
REVENUES:
<S> <C> <C>
Oil and gas sales $ 63,360 $ 65,790
------------------- -------------------
EXPENSES:
Depreciation and depletion 16,550 23,161
Lease operating expenses 16,685 11,100
Production taxes 3,011 3,062
General and administrative 7,307 10,078
------------------- -------------------
Total expenses 43,553 47,401
------------------- -------------------
NET INCOME $ 19,807 $ 18,389
=================== ===================
</TABLE>
See accompanying notes to financial statements.
- ------------------------------------------------------------------------------
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<PAGE>
ENEX OIL & GAS INCOME PROGRAM II - 10, L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 1996 AND
FOR THE THREE MONTHS ENDED MARCH 31, 1997
- ---------------------------------------------------------------
<TABLE>
<CAPTION>
PER $500
LIMITED
PARTNER
GENERAL LIMITED UNIT OUT-
TOTAL PARTNER PARTNERS STANDING
------------------ ------------------ ----------------- -----------------
<S> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1996 $ 378,839 $ 27,800 $ 351,039 $ 90
CASH DISTRIBUTIONS (64,187) (3,270) (60,917) (16)
NET INCOME 92,559 - 92,559 24
------------------ ------------------ ----------------- -----------------
BALANCE, DECEMBER 31, 1996 407,211 24,530 382,681 98
CASH DISTRIBUTIONS (28,102) (5,105) (22,997) (6)
NET INCOME 19,807 - 19,807 5
------------------ ------------------ ----------------- -----------------
BALANCE, MARCH 31, 1997 $ 398,916 $ 19,425 $ 379,491 (1) $ 97
================== ================== ================= =================
</TABLE>
(1) Includes 987 units purchased by the general partner as a limited partner.
See accompanying notes to financial statements.
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<PAGE>
ENEX OIL AND GAS INCOME PROGRAM II - 10, L.P.
STATEMENTS OF CASH FLOWS
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
THREE MONTHS ENDED
----------------------------------------
MARCH 31, MARCH 31,
1997 1996
------------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 19,807 $ 18,389
------------------- -----------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and depletion 16,550 23,161
(Increase) decrease in:
Accounts receivable - oil & gas sales 4,000 (10,930)
Other current assets (27) 2,570
Increase (decrease) in:
Accounts payable 416 (7,631)
Payable to general partner (4,851) (14,243)
------------------- -----------------
Total adjustments 16,088 (7,073)
------------------- -----------------
Net cash provided by operating activities 35,895 11,316
------------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions - development costs (2,163) (5,612)
------------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (28,102) (9,506)
------------------- -----------------
NET INCREASE (DECREASE) IN CASH 5,630 (3,802)
CASH AT BEGINNING OF YEAR 13,763 16,161
------------------- -----------------
CASH AT END OF PERIOD $ 19,393 $ 12,359
=================== =================
</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 $22,997, representing net revenues from the sale of oil
and gas produced from properties owned by the Company. This
distribution was made on January 31, 1997.
3. On April 7, 1997, the Company's General Partner mailed proxy material
to the limited partners 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 proxy
material.
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<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
First Quarter 1997 Compared to First Quarter 1996
Oil and gas sales for the first quarter decreased from $65,790 in 1996 to
$63,360 in 1997. This represents a decrease of $2,430 or 4%. Oil sales decreased
$892 or 2%. A 13% decline in oil production decreased sales by $7,315. This
decrease was partially offset by a 13% increase in the average oil sales price.
Gas sales decreased by $1,538 or 15%. A 38% decrease in gas production reduced
sales by $3,874. This decrease was partially offset by a 37% increase in the
average gas sales price. The decrease in oil production was primarily the result
of natural production declines. The decrease in gas production was primarily the
result of the shut-in of production from the Concord acquisition to perform
workovers in the first quarter of 1997. The changes in average prices correspond
with changes in the overall market for the sale of oil and gas.
Lease operating expenses increased from $11,100 in the first quarter of 1996 to
$16,685 in the first quarter of 1997. The increase of $5,585 (50%) is primarily
due to workover costs incurred on the Concord acquisition in 1997.
Depreciation and depletion expense decreased from $23,161 in the first quarter
of 1996 to $16,550 in the first quarter of 1997. This represents a decrease of
$6,611 (29%). The changes in production, noted above, reduced depreciation and
depletion expense by $4,299. A 12% decrease in the depletion rate reduced
depreciation and depletion expense by an additional $2,312. The decrease in the
depletion rate was primarily the result of upward revisions of the oil and gas
reserves during December 1996.
General and administrative expenses decreased from $10,078 in 1996 to $7,307 in
1997. This decrease of $2,771 is primarily due to $1,655 lower direct expenses
incurred by the Company in 1997 coupled with less 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 1996 to 1997 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 provided by operating, financing
and investing activities.
On April 7, 1997, the Company's General Partner mailed proxy material to the
limited partners 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 proxy material.
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<PAGE>
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, 1997, the Company had no material commitments for capital
expenditures. The Company does not intend to engage in any significant
developmental drilling activity.
I-7
<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, 1997.
II-1
<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, 1997 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-31-1997
<PERIOD-START> jan-01-1997
<PERIOD-END> mar-31-1997
<CASH> 19393
<SECURITIES> 0
<RECEIVABLES> 25237
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 45832
<PP&E> 1917736
<DEPRECIATION> 1474558
<TOTAL-ASSETS> 489010
<CURRENT-LIABILITIES> 90094
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 398916
<TOTAL-LIABILITY-AND-EQUITY> 489010
<SALES> 63360
<TOTAL-REVENUES> 63360
<CGS> 19696
<TOTAL-COSTS> 36246
<OTHER-EXPENSES> 7307
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19807
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
