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, 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 0-16551
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
Transitional Small Business Disclosure Format (Check one):
Yes No x
<PAGE>
PART I. FINANCIAL INFORMATION
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Item 1. Financial Statements
ENEX OIL & GAS INCOME PROGRAM III - SERIES 3, L.P.
BALANCE SHEET
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September 30,
ASSETS 1996
---------------
(Unaudited)
CURRENT ASSETS:
<S> <C>
Cash $ 15,611
Accounts receivable - oil & gas sales 36,633
Other current assets 1,669
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Total current assets 53,913
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OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 2,636,352
Less accumulated depreciation and depletion 2,129,676
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Property, net 506,676
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TOTAL $ 560,589
=============
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 9,477
Payable to general partner 35,937
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Total current liabilities 45,414
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NONCURRENT PAYABLE TO GENERAL PARTNER 71,874
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PARTNERS' CAPITAL:
Limited partners 404,831
General partner 38,470
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Total partners' capital 443,301
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TOTAL $ 560,589
=============
Number of $500 Limited Partner units outstanding 6,410
</TABLE>
See accompanying notes to financial statements.
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<TABLE>
<CAPTION>
ENEX OIL & GAS INCOME PROGRAM III - SERIES 3, L.P.
STATEMENTS OF OPERATIONS
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(UNAUDITED) QUARTER ENDED NINE MONTHS ENDED
------------------------------------- ----------------------------------------
September 30, September 30, September 30, September 30,
1996 1995 1996 1995
---------------- ----------------- ----------------- -------------------
REVENUES:
<S> <C> <C> <C> <C>
Oil and gas sales $ 84,714 $ 74,099 $ 254,453 $ $ 220,016
---------------- ----------------- ----------------- -------------------
EXPENSES:
Depreciation and depletion 20,676 33,445 67,205 97,131
Lease operating expenses 13,451 19,441 44,776 55,406
Production taxes 4,802 4,210 14,387 13,320
General and administrative 6,518 8,355 24,912 28,354
---------------- ----------------- ----------------- -------------------
Total expenses 45,447 65,451 151,280 194,211
---------------- ----------------- ----------------- -------------------
NET INCOME $ 39,267 $ 8,648 $ 103,173 $ $ 25,805
================ ================= ================= ===================
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
<TABLE>
<CAPTION>
ENEX OIL AND GAS INCOME PROGRAM III - SERIES 3, L.P.
STATEMENTS OF CASH FLOWS
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(UNAUDITED)
NINE MONTHS ENDED
-----------------------------
September 30, September 30,
1996 1995
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CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 103,173 $ 25,805
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Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and depletion 67,205 97,131
(Increase) decrease in:
Accounts receivable - oil & gas sales (13,482) (956)
Other current assets 4,280 4,610
(Decrease) in:
Accounts payable (15,232) (164)
Payable to general partner (46,285) (45,190)
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Total adjustments (3,514) 55,431
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Net cash provided by operating activities 99,659 81,236
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CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions - development costs (14,644) (29,635)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (82,910) (40,377)
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NET INCREASE IN CASH 2,105 11,224
CASH AT BEGINNING OF YEAR 13,506 2,812
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CASH AT END OF PERIOD $ 15,611 $ 14,036
============= ============
</TABLE>
See accompanying notes to financial statements.
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<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 $26,841, representing net revenues from the sale of oil
and gas produced from properties owned by the Company. This
distribution was made on July 31, 1996.
2. 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. On November 13, 1996, the Company submitted amended
preliminary proxy material to the SEC with respect to this consolidation
The terms and conditions of the proposed consolidation are set forth in
such preliminary proxy material.
I-4
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
Third Quarter 1996 Compared to Third Quarter 1995
Oil and gas sales for the third quarter increased to $84,714 in 1996 from
$74,099 in 1995. This represents an increase of $10,615 (14%). Oil sales
increased by $9,834 (15%). A 40% increase in the average oil sales price
increased $21,008. This increase was partially offset by a 18% decrease in oil
production. Gas sales increased by $781 (9%). A 56% increase in average gas
sales prices increased sales by $3,358, partially offset by a 30% decrease in
gas production. 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
and gas production was primarily due to natural production declines.
Lease operating expenses incurred during the third quarter decreased to $13,451
in 1996 from $19,441 in 1995. The decrease of $5,990 (31%) is primarily due to
the decrease in production, noted above.
Depreciation and depletion expense decreased to $20,676 in the third quarter of
1996 from $33,445 in the third quarter of 1995. This represents a decrease of
$12,769 (42%). A 23% decrease in the depletion rate reduced depreciation and
depletion expense by $6,133. The changes in production, noted above, reduced
depreciation and depletion expense by an additional $6,636. 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 during the third quarter decreased to $6,518
in 1996 from $8,355 in 1995. This decrease of $1,837 (22%) is primarily due to
less staff time being required to manage the Company's operations.
First Nine Months in 1996 Compared to First Nine Months in 1995
Oil and gas sales for the first nine months increased to $254,453 in 1996 from
$220,016 in 1995. This represents an increase of $34,437 (16%). Oil sales
increased by $22,579 (12%). A 33% increase in the average oil sales price
increased $52,578. This increase was partially offset by a 16% decrease in oil
production. Gas sales increased by $11,858 (51%). A 43% increase in average gas
sales prices increased sales by $10,647. A 5% increase in gas production
increased sales by an additional $1,211. 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 incurred during the first nine months decreased to
$44,776 in 1996 from $55,406 in 1995. The decrease of $10,630 (19%) is primarily
due to the changes in production, noted above.
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<PAGE>
Depreciation and depletion expense decreased to $67,205 in the first nine months
of 1996 from $97,131 in the first nine months of 1995. This represents a
decrease of $29,926 (31%). A 21% decrease in the depletion rate reduced
depreciation and depletion expense by $18,081. The changes in production, noted
above, reduced depreciation and depletion expense by an additional $11,845. 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 incurred during the first nine months
decreased to $24,912 in 1996 from $28,354 in 1995. This decrease of $3,442 (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 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's "available cash flow" is essentially equal to
the net amount of cash provided by operating activities.
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. On
November 13, 1996, the Company submitted amended preliminary proxy material to
the SEC with respect to this consolidation The terms and conditions of the
proposed consolidation are set forth in such preliminary proxy material.
As of September 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 September 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 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 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> 0000814780
<NAME> Enex Oil & Gas Income Program III - Series 3, L.P.
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> dec-31-1996
<PERIOD-START> jan-01-1996
<PERIOD-END> sep-30-1996
<CASH> 15611
<SECURITIES> 0
<RECEIVABLES> 36633
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 53913
<PP&E> 2636352
<DEPRECIATION> 2129676
<TOTAL-ASSETS> 560589
<CURRENT-LIABILITIES> 45414
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 443301
<TOTAL-LIABILITY-AND-EQUITY> 560589
<SALES> 254453
<TOTAL-REVENUES> 254453
<CGS> 59163
<TOTAL-COSTS> 59163
<OTHER-EXPENSES> 24912
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 103173
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
