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 0-16549
ENEX INCOME AND RETIREMENT FUND - SERIES 1, L.P.
(Exact name of small business issuer as specified in its charter)
New Jersey 76-0222813
(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 INCOME AND RETIREMENT FUND - SERIES 1, L.P.
BALANCE SHEET
- ----------------------------------------------------------------------------
MARCH 31,
ASSETS 1995
----------------
(Unaudited)
CURRENT ASSETS:
Cash $ 661
Receivable from affiliated limited partnership 136
Accounts receivable - oil & gas sales 18,246
-----------------
Total current assets 19,043
-----------------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests 1,148,114
Less depletion 814,537
-----------------
Property, net 333,577
-----------------
TOTAL $ 352,620
=================
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 429
Payable to general partner 19,694
-----------------
Total current liabilities 20,123
-----------------
NONCURRENT PAYABLE TO GENERAL PARTNER 118,169
-----------------
PARTNERS' CAPITAL:
Limited partners 204,180
General partner 10,148
-----------------
Total partners' capital 214,328
-----------------
TOTAL $ 352,620
=================
See accompanying notes to financial statements.
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I-1
<PAGE>
ENEX INCOME AND RETIREMENT FUND - SERIES 1, L.P.
STATEMENTS OF OPERATIONS
- -----------------------------------------------------------------------------
(UNAUDITED) THREE MONTHS ENDED
-------------------------------------
MARCH 31, MARCH 31,
1996 1995
---------------- -------------------
REVENUES:
Oil and gas sales $ 16,054 $ 21,744
---------------- -------------------
EXPENSES:
Depletion 9,093 8,525
Impairment of property 50,639 -
Production taxes 670 599
General and administrative 7,526 9,022
---------------- -------------------
Total expenses 67,928 18,146
---------------- -------------------
NET INCOME (LOSS) $ (51,874) $ 3,598
================ ===================
See accompanying notes to financial statements.
- -------------------------------------------------------------------------------
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<PAGE>
ENEX INCOME AND RETIREMENT FUND - SERIES 1, L.P.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31, MARCH 31,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (51,874) $ 3,598
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depletion 9,093 8,525
Impairment of property 50,639 -
(Increase) in:
Accounts receivable - oil & gas sales (3,757) (6,445)
Increase (decrease) in:
Accounts payable (3,342) (3,025)
Payable to general partner (731) 1,691
Total adjustments 51,902 746
Net cash provided by operating activities 28 4,344
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions - (10,133)
NET INCREASE (DECREASE) IN CASH 28 (5,789)
CASH AT BEGINNING OF YEAR 633 11,971
CASH AT END OF PERIOD $ 661 $ 6,182
See accompanying notes to financial statements.
I-3
<PAGE>
ENEX INCOME AND RETIREMENT FUND - SERIES 1, 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. The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standard ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of," which
requires certain assets to be reviewed for impairment whenever events or
circumstances indicate the carrying amount may not be recoverable. In the
first quarter of 1996, the Company recognized a non-cash impairment
provision of $50,639 for certain oil and gas properties due to market
indications that the carrying amounts were not fully recoverable.
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<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 decreased from $21,744 in 1995 to
$16,054 in 1996. This represents a decrease of $5,690 (26%). Oil sales decreased
by $7,021 or 60%. A 44% decrease in average net oil prices reduced sales by
$3,562. A 30% decrease in oil production reduced sales by an additional $3,459.
Gas sales increased by $1,331 or 13%. A 50% increase in gas production increased
sales by $5,109. This increase was partially offset by a 25% decrease in average
net gas prices. The decrease in oil production was primarily a result of the
sale of the Garcia wells in the Shana acquisition, effective July 1995. The
increase in gas production was primarily the result of the shut-in of production
for two weeks in February 1995 from the Deal acquisition due to an explosion in
the field. The decreases in average net oil and gas prices were a result of
higher operating costs incurred on the Company's net profits royalty properties,
especially the Larto acquisition which incurred higher operating costs in the
first quarter of 1996, partially offset by higher prices in the overall market
for the sale of oil and gas.
Depletion expense increased from $8,525 in the first quarter of 1995 to $9,093
in the first quarter of 1996. This represents an increase of $568 (7%). The
changes in production, noted above, caused depletion expense to increase by
$699. This increase was partially offset by a 1% decrease in the depletion rate.
The rate decrease was primarily due to the lower property basis resulting from
the recognition of a $50,639 property impairment.
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standard ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long- Lived Assets to be Disposed Of," which requires
certain assets to be reviewed for impairment whenever events or circumstances
indicate the carrying amount may not be recoverable. In the first quarter of
1996, the Company recognized a non-cash impairment provision of $50,639 for
certain oil and gas properties due to market indications that the carrying
amounts were not fully recoverable.
General and administrative expenses decreased from $9,022 in the first quarter
of 1995 to $7,526 in the first quarter of 1996. This decrease of $1,496 (17%) is
primarily due to less staff time being required to manage the Company's
operations, partially offset by a $1,336 increase in direct expenses incurred by
the Company in 1996.
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
payment of its debt obligations.
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<PAGE>
Distribution amounts are subject to change if net revenues are greater or less
than expected. The general partner does not intend to accelerate the repayment
of the debt beyond the 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.
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 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 INCOME AND RETIREMENT
FUND - SERIES 1, 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
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