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 September 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 0-16551
ENEX OIL & GAS INCOME PROGRAM III - SERIES 3, L.P.
(Exact name of small business issuer as specified in its charter)
New Jersey 76-0179823
(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
<TABLE>
<CAPTION>
ENEX OIL & GAS INCOME PROGRAM III - SERIES 3, L.P.
BALANCE SHEET
- --------------------------------------------------------------------------------
September 30,
ASSETS 1995
-------------
(Unaudited)
CURRENT ASSETS:
<S> <C>
Cash ....................................................... $ 14,036
Accounts receivable - oil & gas sales ...................... 23,317
Other current assets ....................................... 3,347
----------
Total current assets ......................................... 40,700
----------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities ...... 2,619,817
Less accumulated depreciation and depletion ............... 2,071,126
----------
Property, net ................................................ 548,691
----------
TOTAL ........................................................ $ 589,391
==========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable .......................................... $ 16,146
Payable to general partner ................................ 26,762
----------
Total current liabilities .................................... 42,908
----------
NONCURRENT PAYABLE TO GENERAL PARTNER ........................ 133,813
----------
PARTNERS' CAPITAL:
Limited partners .......................................... 380,688
General partner ........................................... 31,982
----------
Total partners' capital ...................................... 412,670
----------
TOTAL ........................................................ $ 589,391
==========
<FN>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
</FN>
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
ENEX OIL & GAS INCOME PROGRAM III - SERIES 3, L.P.
STATEMENTS OF OPERATIONS
- ------------------------------------------------------------------------------------------
(UNAUDITED) QUARTER ENDED NINE MONTHS ENDED
---------------------------- ----------------------------
September 30, September 30, September 30, September 30,
1995 1994 1995 1994
------------- ------------- ------------- -------------
REVENUES:
<S> <C> <C> <C> <C>
Oil and gas sales ........ $ 74,099 $ 79,293 $220,016 $ 205,307
--------- -------- --------- ----------
EXPENSES:
Depreciation and depletion 33,445 41,357 97,131 117,445
Lease operating expenses . 19,441 17,114 55,406 49,692
Production taxes ......... 4,210 5,328 13,320 14,198
General and administrative 8,355 9,253 28,354 32,335
--------- -------- -------- ---------
Total expenses ............. 65,451 73,052 194,211 213,670
--------- -------- -------- ---------
NET INCOME (LOSS) .......... 8,648 $ 6,241 $ 25,805 $ (8,363)
======== ========= ========= =========
<FN>
See accompanying notes to financial statements.
- ------------------------------------------------------------------------------------------
</FN>
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
ENEX OIL AND GAS INCOME PROGRAM III - SERIES 3, L.P.
STATEMENTS OF CASH FLOWS
- -----------------------------------------------------------------------------------------
(UNAUDITED)
NINE MONTHS ENDED
-------------------------------
September 30, September 30,
1995 1994
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income (loss) ............................... $ 25,805 $ (8,363)
-------- --------
Adjustments to reconcile net income (loss) to net
cash
provided by operating activities:
Depreciation and depletion .................... 97,131 117,445
(Increase) decrease in:
Accounts receivable - oil & gas sales ......... (956) (2,875)
Other current assets .......................... 4,610 (301)
(Decrease) in:
Accounts payable ............................. (164) (10,769)
Payable to general partner ................... (45,190) (24,295)
--------
Total adjustments ............................... 55,431 79,205
-------- --------
Net cash provided by operating activities ....... 81,236 70,842
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions - development costs ...... (29,635) (10,780)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ........................... (40,377) (40,714)
-------- --------
NET INCREASE IN CASH ............................ 11,224 19,348
CASH AT BEGINNING OF YEAR ....................... 2,812 6,681
-------- --------
CASH AT END OF PERIOD ........................... $ 14,036 $ 26,029
======== ========
<FN>
See accompanying notes to financial statements.
- -----------------------------------------------------------------------------------------
</FN>
</TABLE>
I-3
<PAGE>
ENEX OIL & GAS INCOME PROGRAM III - SERIES 3, 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 $13,629, representing net revenues from the sale of oil
and gas produced from properties owned by the Company. This
distribution was made on July 31, 1995.
I-4
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
Third Quarter 1995 Compared to Third Quarter 1994
Oil and gas sales for the third quarter decreased from $79,293 in 1994 to
$74,099 in 1995. This represents a decrease of $5,194 (7%). Oil sales decreased
by $6,374 (9%). A 17% decrease in the average oil sales price reduced sales by
$13,072. This decrease was partially offset by a 9% increase in oil production.
Gas sales increased by $1,180 (16%). A 28% increase in gas production increased
sales by $2,110. This increase was partially offset by a 10% decrease in the
average gas sales price. The decrease in the average oil sales price was
primarily the result of lower production costs on the Larto Lake acquisition, on
which the Company pays a net profits interest, coupled with lower prices in the
overall market for the sale of oil. The decrease in the average gas sales price
corresponds with changes in the overall market for the sale of gas. The increase
in gas production was 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. The decrease in oil
production was primarily due to natural production declines partially offset by
the purchase of additional interest in the Concord acquisition in the fourth
quarter of 1994.
Lease operating expenses increased from $17,114 in 1994 to $19,441 in 1995. The
increase of $2,327 (14%) is primarily due to the increases in production, noted
above, and enhanced recovery costs incurred on the Concord acquisition in 1995,
partially offset by workover costs incurred on the Larto Lake acquisition in
1994.
Depreciation and depletion expense decreased from $41,357 in the third quarter
of 1994 to $33,445 in the third quarter of 1995. This represents a decrease of
$7,912 (19%). A 28% decrease in the depletion rate reduced depreciation and
depletion expense by $12,967. 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.
General and administrative expenses decreased from $9,253 in 1994 to $8,355 in
1995. This decrease of $898 (10%) is primarily due to less staff time being
required to manage the Company's operations.
First Nine Months in 1995 Compared to First Nine Months in 1994
Oil and gas sales for the first nine months increased from $205,307 in 1994 to
$220,016 in 1995. This represents an increase of $14,709 (7%). Oil sales
increased by $14,863 (8%). A 19% increase in oil production caused sales to
increase by $34,445. This increase was partially offset by a 9% decrease in the
average oil sales price. Gas sales decreased by $154 (1%). A 19% decrease in the
average gas sales price reduced sales by $5,628. This decrease was partially
offset by a 23% increase in gas production. The decrease in the average oil
sales price was primarily the result of lower production costs on the Larto
Lake acquisition, on which the Company pays a net profits interest, partially
offset by higher prices in the overall market for the sale of oil.
I-5
<PAGE>
The decrease in the average gas sales price corresponds with lower prices
in the overall market for the sale of gas. The increase in gas production was
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. The increase in oil production was due to the
purchase of additional interest in the Concord acquisition in the fourth quarter
of 1994.
Lease operating expenses increased from $49,692 in 1994 to $55,406 in 1995. The
increase of $5,714 (11%) is primarily due to the changes in production, noted
above, and enhanced recovery costs incurred on the Concord acquisition in 1995,
partially offset by workover costs incurred on the Larto Lake acquisition in
1994.
Depreciation and depletion expense decreased from $117,445 in the first nine
months of 1994 to $97,131 in the first nine months of 1995. This represents a
decrease of $20,314 (17%). A 31% decrease in the depletion rate reduced
depreciation and depletion expense by $43,353. 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.
General and administrative expenses decreased from $32,335 in 1994 to $28,354 in
1995. This decrease of $3,981 (12%) is primarily due to 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 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 September 30, 1995, the Company had no material commitments for capital
expenditures. The Company does not intend to engage in any significant
developmental drilling activity.
I-6
<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 September 30, 1995.
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 thereunto duly
authorized.
ENEX OIL & GAS INCOME
PROGRAM III - SERIES 3, 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
November 11, 1995 By: /s/ James A. Klein
-------------------
James A. Klein
Controller and Chief
Accounting Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Enex Oil & Gas Income Program III - Series 3, L.P.
</LEGEND>
<CIK> 0000814780
<NAME> Enex Oil & Gas Income Program III - Series 3, L.P.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> dec-31-1995
<PERIOD-START> jan-01-1995
<PERIOD-END> sep-30-1995
<CASH> 14036
<SECURITIES> 0
<RECEIVABLES> 23317
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 40700
<PP&E> 2619817
<DEPRECIATION> 2071126
<TOTAL-ASSETS> 589391
<CURRENT-LIABILITIES> 42908
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 412670
<TOTAL-LIABILITY-AND-EQUITY> 589391
<SALES> 220016
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<CGS> 165857
<TOTAL-COSTS> 165857
<OTHER-EXPENSES> 28354
<LOSS-PROVISION> 0
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<PAGE>
</TABLE>
