- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
AMENDMENT III
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from...............to...............
Commission file number 0-16549
ENEX INCOME AND RETIREMENT
FUND - Series 1, L.P.
(Name of small business issuer in its charter)
New Jersey 76-0222813
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
800 Rockmead Drive
Three Kingwood Place
Kingwood, Texas 77339
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (713) 358-8401
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Limited Partnership Interest
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
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.[x]
State issuer's revenues for its most recent fiscal year. $ 74,029
State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock as of a specified date within
the past 60 days (See definition of affiliate in Rule 12b-2 of the Exchange
Act):
Not Applicable
Documents Incorporated By Reference:
None
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
Item 5. Market for Common Equity and Related Security Holder Matters
Market Information
There is no established public trading market for the Company's
outstanding limited partnership interests.
Number of Equity Security Holders
Number of Record Holders
Title of Class (as of March 1, 1996)
----------------- ----------------------------------
General Partner's Interests 1
Limited Partnership Interests 190
Dividends
The Company made cash distributions to partners of $3 and $25 per $500
investment in 1995 and 1994, respectively. The Company discontinued the payment
of distributions in the second quarter of 1995. 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
obligations in 1996. Based upon current projected cash flows from its property,
it does not appear that the Company will have sufficient net cash flow after
debt service to pay distributions in the near future.
II-1
<PAGE>
Item 6. Management's Discussion and Analysis or Plan of Operation
Results of Operations
This discussion should be read in conjunction with the financial
statements of the Company and the notes thereto included in this Form 10-KSB.
Oil and gas sales in 1995 were $74,029 as compared with $93,715 in
1994. This represents a decrease of $19,686 or 21%. Oil sales decreased by $908
or 2%. A 4% decrease in the average net sales price reduced sales by $1,396.
This decrease was partially offset by a 1% increase in oil production. Gas sales
decreased by $18,778 or 33%. A 29% decrease in gas production reduced sales by
$18,023. A 2% decrease in the average net gas sales price reduced sales by an
additional $755. The increase in oil production was primarily due to the shut-in
of production from the Shana acquisition to complete a workover in the first
half of 1994, partially offset by natural production declines. The decrease in
average oil net sales prices is a result of higher operating costs on the
Company's net profits royalty interest properties, especially the Shana
acquisition, partially offset by higher prices in the overall market for the
sale of oil. The decrease in gas production was primarily due to natural
production declines. The lower average gas net price corresponds with lower
prices in the overall market for the sale of gas.
Depletion expense decreased to $39,501 in 1995 from $51,156 in 1994.
This represents a decrease of $11,655 or 23%. The changes in production, noted
above, reduced depletion expense by $8,385. An 8% decrease in the depletion rate
reduced depletion expense by an additional $3,270. The rate decrease was
primarily a result of an upward revision of the oil reserves during 1995,
partially offset by a downward revision of the gas reserves during 1995.
Effective July 1, 1995, the Company sold its interests in the Garcia
1, 2 & 5 wells in the Shana acquisition to Mueller Engineering Corp. for
$20,000. A $15,286 gain was recognized on the sale. Effective September 1, 1995,
the Company sold 85% of it's future assignments from the HNG drilling program to
American Exploration Corporation and Louis Dreyfus Natural Gas Corporation for
$22,338. A gain of $22,338 was recognized by the Company as such interests had
no remaining book value. The impact of these sales on current and future
revenues should not be material, as such interests represented approximately 3%
of historical and future net revenues.
General and administrative expenses decreased to $30,901 in 1995
from $39,686 in 1994. This decrease of $8,785 or 22% was primarily due to less
staff time being required to manage the Company's operations in 1995 and due to
a $2,111 decrease in direct expenses incurred by the Company in 1995. The
decrease in direct expenses was primarily due to lower audit and tax preparation
fees.
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, and the repayment of $82,971 of
debt payable to the general partner in 1995 as compared to a net of $20,059
borrowed from the general partner in 1994. It is the general partner's intention
to distribute substantially all of the Company's available net cash flow
provided by operating, financing and investing activities to the Company's
partners.
The Company will continue to recover its reserves and distribute to
the partners the net proceeds realized from the sale of oil and gas production
after payment of debt obligations. The Company plans to repay the amount owed to
the general partner over a seven year period. Distributions decreased from 1994
II-2
<PAGE>
to 1995 due primarily to the decrease in the oil and gas sales and the repayment
of debt, as noted above. The Company discontinued the payment of distributions
in the second quarter of 1995. 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. The
Company does not intend to purchase additional properties or fund extensive
development of existing oil and gas properties, and as such; has no long-term
liquidity needs. The Company's projected cash flows from operations will provide
sufficient funding to pay its operating expenses and debt obligations. The
general partner does not intend to accelerate the repayment of the debt beyond
the cash flow provided by operating, financing and investing activities. Based
upon current projected cash flows from its property, it does not appear that the
Company will have sufficient cash to pay distributions and pay its operating
expenses, and meet its debt obligations in the next twelve months.
II-3
<PAGE>
Item 7. Financial Statements and Supplementary Data
INDEPENDENT AUDITORS' REPORT
The Partners
Enex Income and Retirement Fund -
Series 1, L.P.:
We have audited the accompanying balance sheet of Enex Income and Retirement
Fund - Series 1, L.P. (a New Jersey limited partnership) as of December 31, 1995
and the related statements of operations, changes in partners' capital, and cash
flows for each of the two years in the period ended December 31, 1995. These
financial statements are the responsibility of the general partner of Enex
Income and Retirement Fund Series 1, L.P. Our responsibility is to express an
opinion on the financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Enex Income and Retirement Fund - Series 1,
L.P. at December 31, 1995 and the results of its operations and its cash flows
for each of the two years in the period ended December 31, 1995 in conformity
with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Houston, Texas
March 18, 1996
II-4
<PAGE>
<TABLE>
<CAPTION>
ENEX INCOME AND RETIREMENT FUND - SERIES 1, L.P.
BALANCE SHEET, DECEMBER 31, 1995
- ------------------------------------------------------------------------------
ASSETS
1995
--------------
CURRENT ASSETS:
<S> <C>
Cash $ 633
Accounts receivable - oil & gas sales 136
Other current assets 14,489
--------------
Total current assets 15,258
--------------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 1,148,114
Less accumulated depreciation and depletion 754,805
--------------
Property, net 393,309
--------------
TOTAL $ 408,567
==============
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 3,771
Payable to general partner 138,594
--------------
Total current liabilities 142,365
--------------
PARTNERS' CAPITAL (DEFICIT):
Limited partners 256,838
General partner 9,364
--------------
Total partners' capital 266,202
--------------
TOTAL $ 408,567
==============
Number of $500 Limited Partner units outstanding 2,736
</TABLE>
See accompanying notes to financial statements.
- ------------------------------------------------------------------------------
II-5
<PAGE>
ENEX INCOME AND RETIREMENT FUND - SERIES 1, L.P.
NOTES TO FINANCIAL STATEMENTS
FOR THE TWO YEARS ENDED DECEMBER 31, 1995
- ----------------------------------------------------------------------------
1. PARTNERSHIP ORGANIZATION
Enex Income and Retirement Fund Series 1, L.P. (the "Company"), a
New Jersey limited partnership, commenced operations on June 17,
1987 for the purpose of acquiring non-operating interests in
producing oil and gas properties. Total limited partner
contributions were $1,367,780, of which $13,678 was contributed by
Enex Resources Corporation ("Enex"), the general partner.
In accordance with the partnership agreement, the Company paid
syndication fees and due diligence expenses of $141,971 for
solicited subscriptions to Enex Securities Corporation, a
subsidiary of Enex, and reimbursed Enex for organization expenses
of approximately $41,000.
The Company owns only non-operating interests in producing oil and
gas properties. Such interests typically entitle the Company to
receive its pro rata share of net profits and royalties from the
underlying properties without obligating the Company to develop or
operate the properties or directly bear any share of development or
operating costs.
Information relating to the allocation of costs and revenues
between Enex, as general partner, and the limited partners is as
follows:
Limited
Enex Partners
Commissions and selling expenses 100%
Company reimbursement of organization
expense 100%
Company property acquisition 100%
General and administrative costs 10% 90%
Revenues from temporary investment
of partnership capital 100%
Revenues from producing properties 10% 90%
At the point in time when the cash distributions to the limited
partners equal their subscriptions ("payout"), revenues from
producing properties and general and administrative costs will be
allocated 15% to the general partner and 85% to the limited
partners.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Oil and Gas Properties - The Company uses the successful efforts
method of accounting for its oil and gas operations. Capitalized
costs are amortized on the units-of-production method based on
estimated total proved reserves. The acquisition costs of proved
oil and gas properties are capitalized and periodically assessed
for impairments.
II-9
<PAGE>
The Financial Accounting Standards Board has issued Statement of
Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long Lived Assets and for Long-Lived Assets to Be
Disposed Of." This statement requires that long-lived assets and
certain identifiable intangibles held and used by the Company be
reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be
recoverable.
The Company has not determined the effect, if any, on its financial
position or results of operations which may result from the
adoption of this statement in the first quarter of 1996.
Cash Flows - The Company has presented its cash flows using the
indirect method and considers all highly liquid investments with an
original maturity of three months or less to be cash equivalents.
General and Administrative Expenses - The Company reimburses the
General Partner for direct costs and administrative costs incurred
on its behalf. Administrative costs allocated to the Company are
computed on a cost basis in accordance with standard industry
practices by allocating the time spent by the General Partner's
personnel among all projects and by allocating rent and other
overhead on the basis of the relative direct time charges.
Uses of Estimates - The preparation of the financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contigent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during
the reporting periods. Actual results could differ from these
estimates.
3. FEDERAL INCOME TAXES
General - The Company is not a taxable entity for federal income
tax purposes. Such taxes are liabilities of the individual partners
and the amounts thereof will vary depending on the individual
situation of each partner. Accordingly, there is no provision for
income taxes in the accompanying financial statements.
II-10
<PAGE>
4. PAYABLE TO GENERAL PARTNER
The payable to general partner primarily consists of general and
administrative expenses allocated to the Company by Enex during the
Company's start-up phase and for its ongoing operations. The
Company plans to repay the amounts owed to the general partner over
a period of seven years.
5. REPURCHASE OF LIMITED PARTNER INTERESTS
In accordance with the partnership agreement, the general partner
is required to purchase limited partner interests (at the option of
the limited partners) at annual intervals beginning after the
second year following the formation of the Company. The purchase
price, as specified in the partnership agreement, is based
primarily on reserve reports prepared by independent petroleum
engineers as reduced by a specified risk factor.
6. SIGNIFICANT PURCHASERS
American Exploration Company accounted for 26%, Samson Production
Services Company purchased 14% and Exxon Company, USA accounted for
13% of the Company's total sales in 1995. Samson Production
Services Company purchased 31%, American Exploration Company
accounted for 25% and Exxon Company, USA accounted for 23% of the
Company's total sales in 1994. No other purchaser individually
accounted for more than 10% of such sales.
7. SALE OF PROPERTY
Effective July 1, 1995, the Company sold its interests in the
Garcia 1, 2 & 5 wells in the Shana acquisition to Mueller
Engineering Corp. for $20,000. A $15,286 gain was recognized on the
sale. Effective September 1, 1995, the Company sold 85% of it's
future assignments from the HNG drilling program to American
Exploration Corporation and Louis Dreyfus Natural Gas Corporation
for $22,338. A gain of $22,338 was recognized by the Company as
such interests had no remaining book value.
II-12
<PAGE>
Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure
Not Applicable
II-14
<PAGE>
SIGNATURES
In accordance with Section 13 or 15 (d) of the Exchange Act,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ENEX INCOME AND RETIREMENT FUND -
SERIES 1, L.P.
By: ENEX RESOURCES CORPORATION
the General Partner
December 23, 1996 By: /s/ G. B. Eckley
--------------------
G. B. Eckley, President
In accordance with the Exchange Act, this report has been
signed below on December 23, 1996, by the following persons in the capacities
indicated.
ENEX RESOURCES CORPORATION
By: /s/ G. B. Eckley General Partner
-----------------------
G. B. Eckley, President
/s/ G. B. Eckley
President, Chief Executive
------------------ Officer and Director
G. B. Eckley
/s/ R. E. Densford Vice President, Secretary, Treasurer,
Chief Financial Officer and Director
-------------------
R. E. Densford
/s/ James A. Klein Controller and Chief Accounting Officer
-----------------
James A. Klein
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000820750
<NAME> ENEX INCOME AND RETIREMENT FUND - SERIES 1, L.P.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> dec-31-1996
<PERIOD-START> jan-01-1996
<PERIOD-END> dec-31-1996
<CASH> 633
<SECURITIES> 0
<RECEIVABLES> 136
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 15258
<PP&E> 1148114
<DEPRECIATION> 754805
<TOTAL-ASSETS> 408567
<CURRENT-LIABILITIES> 142365
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 266202
<TOTAL-LIABILITY-AND-EQUITY> 408567
<SALES> 74029
<TOTAL-REVENUES> 74029
<CGS> 42157
<TOTAL-COSTS> 73058
<OTHER-EXPENSES> 30901
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 38610
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
