United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
[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 0-15434
ENEX OIL & GAS INCOME PROGRAM III - SERIES 2, L.P.
(Exact name of small business issuer as specified in its charter)
New Jersey 76-0179824
(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
Transitional Small Business Disclosure Format (Check one):
Yes No x
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
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ENEX OIL & GAS INCOME PROGRAM III - SERIES 2, L.P.
BALANCE SHEET
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JUNE 30,
ASSETS 1996
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(Unaudited)
CURRENT ASSETS:
<S> <C>
Cash $ 7,697
Accounts receivable - oil & gas sales 20,899
Other current assets 1,700
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Total current assets 30,296
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OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 1,660,904
Less accumulated depreciation and depletion 1,307,712
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Property, net 353,192
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TOTAL $ 383,488
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LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 4,891
Current portion of payable to general partner 33,693
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Total current liabilities 38,584
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NONCURRENT PAYABLE TO GENERAL PARTNER 269,545
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PARTNERS' CAPITAL:
Limited partners 19,515
General partner 55,844
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Total partners' capital 75,359
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TOTAL $ 383,488
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Number of $500 Limited Partner units outstanding 4,270
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See accompanying notes to financial statements.
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Lease operating expenses incurred during the first six months decreased to
$17,192 in 1996 from $24,162 in 1995. The decrease of $6,970 (29%) is primarily
due from the settlement of the Company's equity investment in an electric
cooperative which resulted from the purchase of electricity used on the Florida
acquisition while it was owned by the Company.
Depreciation and depletion expense decreased to $31,423 in the first six months
of 1996 from $42,402 in the first six months of 1995. This represents a decrease
of $10,979 (26%). A 21% decrease in the depletion rate reduced depreciation and
depletion expense by $8,461. The changes in production, noted above, reduced
depreciation and depletion expense by an additional $2,518. 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 $16,447 in the first six months
of 1996 from $10,698 in the first six months of 1995. This increase of $5,749 is
primarily due to more staff time being required to manage the Company's
operations.
CAPITAL RESOURCES AND LIQUIDITY
The Company's cash flow is a direct result of the amount of net proceeds
realized from the sale of oil and gas production and the issuance of additional
debt. Accordingly, the changes in cash flow from 1995 to 1996 are primarily due
to the changes in oil and gas sales described above and the repayment of $11,490
on a note to the general partner in 1995. It is the general partner's intention
to distribute substantially all of the Company's remaining 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 discontinued the payment of distributions in the first quarter of
1994. Future distributions are dependent upon among other things, an increase in
the prices received for oil and gas. The Company will continue to recover its
reserves and reduce its obligations in 1996. Based on the December 31, 1995
reserve report prepared by Gruy, there appears to be sufficient future net
revenues to pay all obligations and expenses. The General Partner does not
intend to accelerate the repayment of the debt beyond the Company's cash flow
provided by operating activities. Based upon current projected cash flows from
its property, it does not appear that the Company will have sufficient cash to
pay its operating expenses, repay its debt obligations and pay distributions in
the near future.
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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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 III - SERIES 2, L.P.
----------------------------
(Registrant)
By:ENEX RESOURCES CORPORATION
--------------------------
General Partner
By: /s/ R. E. Densford
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R. E. Densford
Vice President, Secretary
Treasurer and Chief Financial
Officer
November 7, 1996 By: /s/ James A. Klein
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James A. Klein
Controller and Chief
Accounting Officer
