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 0-16553
ENEX OIL & GAS INCOME PROGRAM III - SERIES 5, L.P.
(Exact name of small business issuer as specified in its charter)
New Jersey 76-0214445
(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
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<CAPTION>
ENEX OIL & GAS INCOME PROGRAM III - SERIES 5, L.P.
BALANCE SHEET
- ------------------------------------------------------------------------------
MARCH 31,
ASSETS 1996
-----------------
(Unaudited)
CURRENT ASSETS:
<S> <C>
Cash $ 10,022
Accounts receivable - oil & gas sales 38,790
Other current assets 3,283
-----------------
Total current assets 52,095
-----------------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 3,553,853
Less accumulated depreciation and depletion 3,365,600
-----------------
Property, net 188,253
-----------------
TOTAL $ 240,348
=================
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 14,469
Payable to general partner 34,688
-----------------
Total current liabilities 49,157
-----------------
NONCURRENT PAYABLE TO GENERAL PARTNER 138,755
-----------------
PARTNERS' CAPITAL:
Limited partners 22,868
General partner 29,568
-----------------
Total partners' capital 52,436
-----------------
TOTAL $ 240,348
=================
</TABLE>
See accompanying notes to financial statements.
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I-1
<PAGE>
<TABLE>
<CAPTION>
ENEX OIL & GAS INCOME PROGRAM III - SERIES 5, L.P.
STATEMENTS OF OPERATIONS
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(UNAUDITED) THREE MONTHS ENDED
---------------------------
MARCH 31, MARCH 31,
1996 1995
------------ -----------
REVENUES:
<S> <C> <C>
Oil and gas sales $ 92,521 $ 104,673
------------ -----------
EXPENSES:
Depreciation and depletion 13,893 31,483
Impairment of property 147,948 -
Lease operating expenses 53,454 45,096
Production taxes 5,719 5,732
General and administrative 12,443 14,002
------------ -----------
Total expenses 233,457 96,313
------------ -----------
NET INCOME (LOSS) $ (140,936) $ 8,360
============ ===========
</TABLE>
See accompanying notes to financial statements.
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I-2
<PAGE>
<TABLE>
<CAPTION>
ENEX OIL AND GAS INCOME PROGRAM III - SERIES 5, L.P.
STATEMENTS OF CASH FLOWS
- -------------------------------------------------------------------------------
(UNAUDITED)
THREE MONTHS ENDED
-----------------------
MARCH 31, MARCH 31,
1996 1995
------------ --------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income (loss) $ (140,936) 8,360
------------ --------
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation, depletion and amortization 13,893 31,483
Impairment of property 147,948 -
(Increase) decrease in:
Accounts receivable - oil & gas sales (12,158) (8,436)
Other current assets 132 (1,112)
Increase (decrease) in:
Accounts payable (18,675) (5,025)
Payable to general partner 6,310 (1,263)
------------ --------
Total adjustments 137,450 15,647
------------ --------
Net cash provided (used) by operating activities (3,486) 24,007
------------ --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property (additions) credits - development costs 228 (610)
------------ --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions - (23,998)
------------ --------
NET (DECREASE) IN CASH (3,258) (601)
CASH AT BEGINNING OF YEAR 13,280 10,432
------------ --------
CASH AT END OF PERIOD $ 10,022 9,831
============ ========
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
ENEX OIL & GAS INCOME PROGRAM III - SERIES 5, 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 impariment
provision of $147,948 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 $104,673 in 1995 to
$92,651 in 1996. This represents a decrease of $12,022 (11%). Oil sales
decreased by $15,733 or 17%. A 20% decrease in oil production caused sales to
decrease by $18,198. This decrease was partially offset by a 3% increase in
average oil prices. Gas sales increased by $3,581 or 24%. A 3% increase in gas
production increased sales by $461. A 20% increase in average gas prices
increased sales by an additional $3,120. The decrease in oil production was
primarily the result of the Company not participating in a workover on the L.L.
Butler well in the Hightower acquisition. The increase in gas production was
primarily due to higher production from the RIC acquisition resulting from a
higher level of available compression. The changes in average prices correspond
with changes in the overall market for the sale of oil and gas.
Lease operating expenses increased from $45,096 in the first quarter of 1995 to
$53,454 in the first quarter of 1996. The increase of $8,358 (19%) is primarily
due road repair expenses incurred on the Corkscrew acquisition in 1996.
Depreciation and depletion expense decreased from $31,483 in the first quarter
of 1995 to $13,893 in the first quarter of 1996. This represents a decrease of
$17,590 (56%). The changes in production, noted above, reduced depreciation and
depletion expense by $5,204. A 47% decrease in the depletion rate reduced
depreciation and depletion expense by an additional $12,386. The rate decrease
was primarily due to the lower property basis resulting from the recognition of
an impairment of property for $147,948 in the first quarter of 1996.
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 $147,948 for
certain oil and gas properties due to market indications that the carrying
amounts were not fully recoverable.
General and administrative expenses decreased from $14,002 in the first quarter
of 1995 to $12,443 in the first quarter of 1996. This decrease of $1,559 or 11%
was primarily due to less staff time being required to manage the Company's
operations in 1996, partially offset by a $3,620 increase in the amount of
direct expenses incurred by the Company.
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.
I-5
<PAGE>
The Company discontinued the payment of distributions in the third 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 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.
As of March 31, 1996, 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 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 OIL & GAS INCOME
PROGRAM III - 5, 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
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000825247
<NAME> Enex Oil & Gas Income Program III - Series 5, L.P.
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> dec-31-1996
<PERIOD-START> jan-01-1996
<PERIOD-END> mar-31-1996
<CASH> 10022
<SECURITIES> 0
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