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 0-16574
ENEX OIL & GAS INCOME PROGRAM III - SERIES 6, L.P.
(Exact name of small business issuer as specified in its charter)
New Jersey 76-0214443
(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
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
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ENEX OIL & GAS INCOME PROGRAM III - SERIES 6, L.P.
BALANCE SHEET
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MARCH 31,
ASSETS 1996
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(Unaudited)
CURRENT ASSETS:
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Cash $ 115
Accounts receivable - oil & gas sales 43,924
Other current assets 3,134
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Total current assets 47,173
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OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 2,818,250
Less accumulated depreciation and depletion 2,580,265
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Property, net 237,985
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TOTAL $ 285,158
==============
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 16,622
Payable to general partner 28,821
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Total current liabilities 45,443
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NONCURRENT PAYABLE TO GENERAL PARTNER 78,644
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PARTNERS' CAPITAL:
Limited partners 103,189
General partner 57,882
--------------
Total partners'capital 161,071
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TOTAL $ 285,158
==============
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See accompanying notes to financial statements.
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ENEX OIL & GAS INCOME PROGRAM III - SERIES 6, L.P.
STATEMENTS OF OPERATIONS
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(UNAUDITED) THREE MONTHS ENDED
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MARCH 31, MARCH 31,
1996 1995
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REVENUES:
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Oil and gas sales $ 99,297 102,018
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EXPENSES:
Depreciation and depletion 19,464 40,847
Impairment of property 194,403 -
Lease operating expenses 52,087 46,316
Production taxes 6,149 5,738
General and administrative 12,879 14,777
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Total expenses 284,982 107,678
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LOSS FROM OPERATIONS (185,685) (5,660)
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OTHER INCOME:
Gain on sale of property 656 -
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NET LOSS $ (185,029) (5,660)
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See accompanying notes to financial statements.
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ENEX OIL AND GAS INCOME PROGRAM III - SERIES 6, L.P.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31, MARCH 31,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
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Net loss $ (185,029) $ (5,660)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and depletion 19,464 40,847
Impairment of property 194,403 -
Gain on sale of property (656) -
(Increase) decrease in:
Accounts receivable - oil & gas sales (14,553) (7,756)
Other current assets 194 (948)
Increase (decrease) in:
Accounts payable (12,726) (3,056)
Payable to general partner (16,917) 338
Total adjustments 169,209 29,425
Net cash provided (used) by operating activities (15,820) 23,765
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property 10,500 -
Property additions - development costs (70) (177)
Net cash provided (used) by investing activities 10,430 (177)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions - (18,118)
NET INCREASE (DECREASE) IN CASH (5,390) 5,470
CASH AT BEGINNING OF YEAR 5,505 3,248
CASH AT END OF PERIOD $ 115 $ 8,718
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See accompanying notes to financial statements.
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ENEX OIL & GAS INCOME PROGRAM III - SERIES 6, 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 $194,403 for certain oil and gas properties due to market
indications that the carrying amounts were not fully recoverable.
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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 $102,018 in 1995 to
$99,297 in 1996. This represents a decrease of $2,721 (3%). Oil sales increased
by $10,748 or 14%. A 19% decrease in oil production reduced sales by $14,200.
This decrease was partially offset by a 6% increase in the average oil sales
price. Gas sales increased by $8,027 or 32%. A 7% increase in gas production
increased sales by $1,891. A 23% increase in average gas prices increased sales
by an additional $6,136. 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 $46,316 in 1995 to $52,087 in 1996. The
increase of $5,771 (12%) is primarily due to road repair expenses incurred on
the Corkscrew acquisition in 1996.
Depreciation and depletion expense decreased from $40,847 in the first quarter
of 1995 to $19,464 in the first quarter of 1996. This represents a decrease of
$21,383 (52%). The changes in production, noted above, reduced depreciation and
depletion expense by $4,340, while a 47% decrease in the depletion rate reduced
depreciation and depletion expense by an additional $17,043. The rate decrease
was primarily due to the lower property basis resulting from the recognition of
an impairment of property for $194,403 in the first quarter of 1996.
Effective February 1, 1996, the Company sold its interest in the Credo
acquisition for $10,500. The Company recognized a $656 gain from the sale.
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 $194,403 for
certain oil and gas properties due to market indications that the carrying
amounts were not fully recoverable.
General and administrative expenses decreased from $14,777 in the first quarter
of 1995 to $12,879 in the first quarter of 1996. This decrease of $1,898 (13%)
is primarily due to less staff time required to manage the Company's operations,
partially offset by $3,413 higher direct expenses incurred by the Company in
1996.
CAPITAL RESOURCES AND LIQUIDITY
The Company's cash flow is a direct result of the amount of net proceeds
realized from the sale of oil and gas production after the payment of its debt
obligations. Accordingly, the changes in
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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 remaining available cash flow to the
Company's partners.
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.
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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 - 6, 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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<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000830319
<NAME> Enex Oil & Gas Income Program III - Series 6, 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> 115
<SECURITIES> 0
<RECEIVABLES> 43924
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<PP&E> 2818250
<DEPRECIATION> 2580265
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0
0
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