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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(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, 1996
[ ] 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 0-16575
ENEX INCOME AND RETIREMENT
FUND - Series 3, L.P.
(Name of small business issuer in its charter)
New Jersey 76-0222818
(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. $ 118,862
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
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<PAGE>
TABLE OF CONTENTS
FORM 10-KSB ANNUAL REPORT
FOR THE YEAR ENDED DECEMBER 31, 1996
ENEX INCOME AND RETIREMENT FUND - SERIES 3, L.P.
Item No. Part I Page
- ------- -------- ------
1 Description of Business I-1
2 Description of Property I-3
3 Legal Proceedings I-5
4 Submission of Matters to a Vote
of Security Holders I-5
Part II
---------
5 Market for Common Equity and
Related Security Holder Matters II-1
6 Management's Discussion and Analysis
or Plan of Operation II-2
7 Financial Statements and Supplementary
Data II-4
8 Changes In and Disagreements With Accountants
on Accounting and Financial Disclosure II-14
Part III
-----------
9 Directors, Executive Officers, Promoters and
Control Persons; Compliance with Section 16(a)
of the Exchange Act III-1
10 Executive Compensation III-3
11 Security Ownership of Certain
Beneficial Owners and Management III-4
12 Certain Relationships and Related
Transactions III-4
13 Exhibits and Reports on Form 8-K III-4
Signatures S-1
<PAGE>
PART I
Item 1. Description of Business
General
Enex Income and Retirement Fund - Series 3, L.P. (the "Company")
was formed under the New Jersey Uniform Limited Partnership Act (1976) on August
29, 1985 and commenced operations on December 30, 1987 with aggregate
subscriptions of $1,493,792, $1,478,854 of which was received from 142 limited
partners, including investors whose distributions from earlier partnerships
sponsored by the Company's general partner, Enex Resources Corporation ("Enex"),
were automatically invested in the Company.
The Company is engaged in the oil and gas business through the
ownership of non-operating interests in producing oil and gas properties, as
detailed in Item 2, below. A non-operating interest typically entitles the
holder to receive a specified share of such production, without obligation to
develop or operate such property, or bear any development or operating costs
(such obligations being assumed by the owner of the working interest in the
property).
The Company's non-operating interests are net profits royalties
or other royalty interests which entitle the Company to a share of gross
revenues from producing oil and gas properties measured by a specified
percentage of the net profits realized by the owners of the underlying working
interests in such properties, after deducting operating costs, geological and
engineering costs, property, severance and other taxes, and certain other
specified expenses. If such taxes, operating costs or other expenses exceed
gross revenues in any specified measuring period, a net profits royalty holder
will not be liable for payment of any portion of such excess, but a percentage
of such excess equal to the specified percentage of net profits (together with
interest thereon) will be carried over to subsequent periods and will reduce
future amounts accruing to the holder. The Company's net profits royalties and
other non-operating interests are generally derived from working interests in
oil and gas properties owned by other affiliates of Enex .
The Company owns royalty interests in certain oil and gas
properties. A "royalty interest" is an interest retained by the lessor in the
lease and payable out of 100% of proceeds before deducting any other interests.
The Company also owns overriding royalty interests in certain oil and gas
properties. An "overriding royalty interest" is an interest in a property which
was carved out of the working interest, that is not subject to most operating
costs associated with the property.
The Company does not own working interests nor does it engage
directly in any drilling, completing or operating activities, but may benefit
from such activities undertaken by the owners of the working interests in
properties burdened by the Company's non-operating interests. The Company's
operations are concentrated in a single industry segment.
The principal executive office of the Company is maintained at
800 Rockmead Drive, Suite 200, Three Kingwood Place, Kingwood, Texas 77339. The
telephone number at this office is (713) 358-8401.
The Company has no regional offices.
I-1
<PAGE>
The Company has no employees. On March 1, 1997, Enex and its subsidiaries
employed 23 persons.
Marketing
The marketing of oil and gas produced by the Company is affected
by a number of factors which are beyond the Company's control, the exact nature
of which cannot be accurately predicted. These factors include the quantity and
price of crude oil imports, fluctuating supply and demand, pipeline and other
transportation facilities, the marketing of competitive fuels, state and federal
regulation of oil and gas production and distribution and other matters
affecting the availability of a ready market. All of these factors are extremely
volatile.
Torch Operating Company, Samson Production Services Company and
Exxon Company, USA accounted for 45%, 30% and 19%, respectively, of the
Company's total sales in 1996. Torch Operating Company and Samson Production
Services Company accounted for 53% and 35%, respectively, of the Company's total
sales in 1995. No other purchaser individually accounted for more than 10% of
such sales. Although the Company marketed a significant portion of its sales to
the above noted companies, such a concentration does not pose a significant risk
due to the commodity nature of the Company's products.
The Company's operators of the properties are noted in Item 2
below. Although a significant portion of the Company's properties were operated
by a limited number of operators, this concentration does not pose a significant
risk since the Company's rights are secured by joint operating agreements.
Environmental and Conservation Regulation
State regulatory authorities in the states in which the Company
owns net profits interests in producing properties are empowered to make and
enforce regulations to prevent waste of oil and gas and to protect correlative
rights and opportunities to produce oil and gas for owners of a common
reservoir. Each of such regulatory authorities also regulates the amount of oil
and gas produced by assigning allowable rates of production, which may be
increased or decreased in accordance with supply and demand. Requirements
regarding the prevention and clean-up of pollution and similar environmental
matters are also generally applicable. The costs, if any, that may be incurred
in this regard cannot be predicted.
The existence of such regulations has had no material adverse
effects on the Company's operations to date, and the cost of compliance has not
yet been material. There are no material administrative or judicial proceedings
arising under such laws or regulations pending against the Company. The Company
is unable to assess or predict the impact that compliance with environmental and
pollution control laws and regulations may have on its future operation, capital
expenditures, earnings or competitive position.
Tax Laws
The operations of the Company are affected by the federal income
tax laws contained in the Internal Revenue Code of 1986, as amended (the
"Code"). In general, the limited partners of the Company will generate income
from the receipt of royalties and net profits interests and will be entitled to
a depletion
I-2
<PAGE>
deduction. Net income, if any, will generally be characterized as portfolio
income under the Code and will be taxed in the same manner as dividends and
interest.
Partnerships with interests that are "publicly traded" are taxed
as corporations unless at least 90% of their income is "qualifying income."
Passive income or loss from publicly traded partnerships that are not taxed as
corporations generally cannot be applied against passive income or loss from
other sources. As stated in Item 5 of this Annual Report, there is no
established public trading market for the Company's limited partnership
interests. In addition, the Company derives more than 90% of its income within
the meaning of section 7704(d) of the Code. Therefore, the Company should not be
affected by the publicly traded partnership rules.
Item 2. Description of Property
Presented below is a summary of the Company's property
acquisitions.
PECAN ISLAND acquisition. Mineral interests and royalty interests
in 3 gas wells were acquired from Naomi Morel Kiern effective May 1988 for a
purchase price of $136,800. These wells are located in North Pecan Island Field
in Vermilion Parish, Louisiana. The Pecan Island acquisition is operated by
Exxon Corporation. The Company owns a .80% royalty interest in the wells in the
Pecan Island acquisition at December 31, 1996.
CORINNE acquisition. The Company acquired royalty and mineral
interests in 16 wells in Corinne Field, Monroe County, Mississippi, effective
July 1, 1988 from Lehndorff of Dallas, Texas for $532,730. The Corinne
acquisition is operated by Samson Resources Corp. The Company owns royalty
interests ranging from .04% to 2.96% in the wells in the Corinne acquisition at
December 31, 1996.
EAST CAMERON acquisition. The Company acquired an overriding
royalty interest in the State Lease 11508 located in East Cameron Block 17,
offshore Louisiana. This interest was acquired from John Warren Doyle for
$54,500 effective October 1988. The East Cameron acquisition is operated by
Torch Operating Co. and Oryx Energy Corp. The Company owns overriding royalty
interests ranging from .02% to .5% in the East Cameron acquisition at December
31, 1996.
BARNES ESTATE acquisition. Effective February 1, 1989, net
profits royalty interests in 5 oil and gas wells in Brettchance Field, Webb
County, Texas were purchased for $302,806. Enex has assumed operation of these
wells. The Company owns net profits royalty interests ranging from 1.625% to
13.0% in the wells in the Barnes Estate acquisition at December 31, 1996.
RIGNEY acquisition. This acquisition consists of overriding
royalty interests in 9 wells located in 4 counties in Michigan. These interests
were acquired from M. Spencer Rigney et ux for $31,500 effective March 1, 1989.
The Rigney acquisition is operated by Terra Energy, Ltd, West Bay Exploration,
Northern Processors, Inc. and Somoco, Inc. Effective August 1, 1996 the Company
sold its interest in the Spider Lake 3-2 well for $1,640. The Company recognized
a gain of $209 from the sale. The Company owns overriding royalty interests
ranging from .01% to .51% in the Rigney acquisition at December 31, 1996.
I-3
<PAGE>
BAGLEY acquisition. Net profits royalty interests in 7 oil wells
located in Bagley Field, Otsego County, Michigan, were acquired for $249,667
effective July 1989. The Bagley acquisition is operated by Terra Energy, Ltd.
The Company owns net profits royalty interests ranging from 1.56% to 1.575% in
the wells in the Bagley acquisition at December 31, 1996.
Purchase price as used above is defined as the actual contract
price plus finders' fees, if applicable. Miscellaneous acquisition expenses,
subsequent capital additions, etc. are not included.
Oil and Gas Reserves
For quantitative information regarding the Company's oil and gas
reserves, please see Supplementary Oil and Gas Information and related tables
which follow the Notes to Financial Statements in Item 7 of this report. The
Company has not filed any current oil and gas reserve estimates or included any
such estimates in reports to any federal or foreign governmental authority or
agency, including the Securities and Exchange Commission.
Proved oil and gas reserves reported herein are based on
engineering reports prepared by the petroleum engineering consulting firm of H.
J. Gruy and Associates, Inc. The reserves included in this report are estimates
only and should not be construed as exact quantities. Future conditions may
affect recovery of estimated reserves and revenue, and all reserves may be
subject to revision as more performance data become available. The proved
reserves used in this report conform to the applicable definitions promulgated
by the Securities and Exchange Commission. No major discovery or other favorable
or adverse event that could potentially cause a significant change in the
estimated proved reserves has occurred since December 31, 1996.
Net Oil and Gas Production
The following table shows for the years ended December 31, 1996
and 1995, the approximate production attributable to the Company's oil and gas
interests. The figures in the table represent "net production"; i.e., production
owned by the Company and produced to its interest after deducting royalty and
other similar interests. All production occurred in the United States.
1996 1995
Crude oil and condensate (Bbls)....................... 1,120 915
Natural gas (Mcf)..................................... 47,767 44,632
I-4
<PAGE>
The following table sets forth the Company's average sales
price per barrel of oil, per Mcf of gas, and average production cost per unit
produced for the years ended December 31, 1996 and 1995. The average prices are
lower than the average market prices for oil and gas as they are computed using
the net revenues received from the Company's ownership of net profit royalty
interests.
1996 1995
Average sales price per barrel of oil........... $ 16.26 $ 14.70
Average sales price per Mcf of gas.............. 2.11 1.23
Average production taxes per equivalent
barrel of production......................... 0.60 0.61
Item 3. Legal Proceedings
There are no material pending legal proceedings to which the
Company is a party.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of security holders during
the fourth quarter of the fiscal year covered by this report.
I-5
<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, 1997)
----------------- --------------------------
General Partner's Interests 1
Limited Partnership Interests 135
Dividends
The Company made cash distributions to partners of $4 and $9 per $500
investment in 1996 and 1995, respectively. The Company temporarily discontinued
the payment of distributions in the third quarter of 1995. A distribution was
made in the fourth quarter of 1996. 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 1997.
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 1996 were $118,862 as compared with $68,527 in
1995. This represents an increase of $50,335 or 73%. Oil sales increased by
$4,766 or 35%. A 22% increase in oil production caused sales to increase by
$3,014. An 11% increase in the average oil net sales price increased sales by an
additional $1,752. Gas sales increased by $45,569 or 83%. A 7% increase in gas
production increased sales by $3,856. A 72% increase in average gas net sales
prices increased sales by an additional $41,713. The increases in oil and gas
production were primarily due to higher production from the Pecan Island
acquisition which had new wells drilled on it in 1996. The increases in the
average net oil and gas sales prices were due to relatively higher net profits
royalty payments received from the Barnes Estate acquisition, which had lower
operating costs in 1996, coupled with higher prices in the overall market for
the sale of oil and gas.
Depletion expense decreased to $25,415 in 1996 from $48,531 in 1995.
This represents a decrease of $23,116 or 48%. A 52% decrease in the depletion
rate reduced depletion expense by $27,346. This decrease was partially offset by
the changes in production, noted above. The decrease in the depletion rate was
primarily due to the lower property basis resulting from the recognition of a
$52,602 impairment of property in the first quarter of 1996, as noted below,
coupled with upward revisions of the oil and gas reserves during 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. Prior to this
pronouncement, the Company assessed properties on an aggregate basis. Upon
adoption of SFAS 121, the Company began assessing properties on an individual
basis, wherein total capitalized costs may not exceed the property's fair market
value. The fair market value of each property was determined by H. J. Gruy and
Associates, ("Gruy"). To determine the fair market value, Gruy estimated each
property's oil and gas reserves, applied certain assumptions regarding price and
cost escalations, applied a 10% discount factor for time and certain discount
factors for risk, location, type of ownership interest, category of reserves,
operational characteristics, and other factors. In the first quarter of 1996,
the Company recognized a non-cash impairment of $52,602 for certain oil and gas
properties due to changes in the overall market for the sale of oil and gas and
significant decreases in the projected production from certain of the Company's
oil and gas properties.
Effective August 1, 1996 the Company sold its interest in the Spider
Lake 3-2 well for $1,640. The Company recognized a gain of $209 from the sale.
The impact of these sales on current and future net revenues are not expected to
be material, as such interests represented approximately 1% of historical and
future net revenues.
General and administrative expenses were $30,690 in 1996 as compared
with $35,296 in 1995. This decrease of $4,606 or 13% was primarily due to less
staff time being required to manage the Company's operations in 1996.
II-2
<PAGE>
Capital Resources and Liquidity
The Company's cash flows 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 flows from 1995 to 1996 are 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 net cash flows 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. The Company plans to repay the amount owed to the general
partner over a two year period. Distributions decreased from 1995 to 1996 due
primarily to the repayment of $40,095 of debt payable to the general partner in
1996 as compared to repayment of $18,402 in 1995. The Company temporarily
discontinued the payment of distributions in the third quarter of 1995. A
distribution was made in the fourth quarter of 1996. 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 1997. 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 net cash flow after
debt service to pay distributions in the near future.
II-3
<PAGE>
Item 7. Financial Statements and Supplementary Data
INDEPENDENT AUDITORS' REPORT
The Partners
Enex Income and Retirement Fund -
Series 3, L.P.:
We have audited the accompanying balance sheet of Enex Income and Retirement
Fund - Series 3, L.P. (a New Jersey limited partnership) as of December 31, 1996
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, 1996. These
financial statements are the responsibility of the general partner of Enex
Income and Retirement Fund Series 3, 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 3,
L.P. at December 31, 1996 and the results of its operations and its cash flows
for each of the two years in the period ended December 31, 1996 in conformity
with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Houston, Texas
March 18, 1997
II-4
<PAGE>
ENEX INCOME AND RETIREMENT FUND - SERIES 3, L.P.
BALANCE SHEET, DECEMBER 31, 1996
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<TABLE>
<CAPTION>
ASSETS
1996
---------------------
CURRENT ASSETS:
<S> <C>
Cash $ 8,244
Accounts receivable - oil & gas sales 34,657
---------------------
Total current assets 42,901
---------------------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests 1,312,406
Less accumulated depletion 1,150,513
---------------------
Property, net 161,893
---------------------
TOTAL $ 204,794
=====================
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 2,178
Payable to general partner 42,408
---------------------
Total current liabilities 44,586
---------------------
PARTNERS' CAPITAL:
Limited partners 150,235
General partner 9,973
---------------------
Total partners' capital 160,208
---------------------
TOTAL $ 204,794
=====================
</TABLE>
Number of $500 Limited Partner units outstanding 2,988
See accompanying notes to financial statements.
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II-5
<PAGE>
ENEX INCOME AND RETIREMENT FUND - SERIES 3, L.P.
STATEMENTS OF OPERATIONS
FOR THE TWO YEARS ENDED DECEMBER 31, 1996
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995
------------------- -------------------
REVENUES:
<S> <C> <C>
Oil and gas sales $ 118,862 $ 68,527
------------------- -------------------
EXPENSES:
Depletion 25,415 48,531
Impairment of property 52,602 -
Production taxes 5,446 5,127
General and administrative:
Allocated from general partner 28,526 30,983
Direct expense 2,164 4,313
------------------- -------------------
Total expenses 114,153 88,954
------------------- -------------------
INCOME (LOSS) FROM OPERATIONS 4,709 (20,427)
------------------- -------------------
OTHER INCOME
Gain on sale of property 209 -
------------------- -------------------
NET INCOME (LOSS) $ 4,918 $ (20,427)
=================== ===================
</TABLE>
See accompanying notes to financial statements.
- ----------------------------------
II-6
<PAGE>
ENEX INCOME AND RETIREMENT FUND - SERIES 3, L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE TWO YEARS ENDED DECEMBER 31, 1996
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
PER $500
LIMITED
PARTNER
GENERAL LIMITED UNIT OUT-
TOTAL PARTNER PARTNERS STANDING
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1995 $ 220,414 $ 3,340 $ 217,074 $ 72
CASH DISTRIBUTIONS (30,255) (3,027) (27,228) (9)
NET INCOME (LOSS) (20,427) 2,811 (23,238) (8)
----------------- ----------------- ----------------- -----------------
BALANCE, DECEMBER 31, 1995 169,732 3,124 166,608 55
CASH DISTRIBUTIONS (14,442) (1,444) (12,998) (4)
NET INCOME (LOSS) 4,918 8,293 (3,375) (1)
----------------- ----------------- ----------------- -----------------
BALANCE, DECEMBER 31, 1996 $ 160,208 $ 9,973 $ 150,235 (1) $ 50
================= ================= ================= =================
</TABLE>
(1) Includes 505 units purchased by the general partner as a limited partner.
See accompanying notes to financial statements.
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II-7
<PAGE>
ENEX INCOME AND RETIREMENT FUND - SERIES 3, L.P.
STATEMENTS OF CASH FLOWS
FOR THE TWO YEARS ENDED DECEMBER 31, 1996
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995
------------------- -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income (loss) $ 4,918 $ (20,427)
------------------- -------------------
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Depletion 25,415 48,531
Impairment of property 52,602 -
Gain on sale of property (209) -
(Increase) decrease in:
Accounts receivable - oil & gas sales (21,496) 13,677
Increase (decrease) in:
Accounts payable (2,114) 1,383
Payable to general partner (40,095) (18,402)
------------------- -------------------
Total adjustments 14,103 45,189
------------------- -------------------
Net cash provided by operating activities 19,021 24,762
------------------- -------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property 1,640 -
------------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (14,442) (30,255)
------------------- -------------------
NET INCREASE (DECREASE) IN CASH 6,219 (5,493)
CASH AT BEGINNING OF YEAR 2,025 7,518
------------------- -------------------
CASH AT END OF YEAR $ 8,244 $ 2,025
=================== ===================
</TABLE>
See accompanying notes to financial statements.
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II-8
<PAGE>
ENEX INCOME AND RETIREMENT FUND - SERIES 3, L.P.
NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
FOR THE TWO YEARS ENDED DECEMBER 31, 1996
1. PARTNERSHIP ORGANIZATION
Enex Income and Retirement Fund Series 3, L.P. (the "Company"), a
New Jersey limited partnership, commenced operations on December
30, 1987 for the purpose of acquiring non-operating interests in
producing oil and gas properties. Total limited partner
contributions were $1,493,792, of which $14,938 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 $154,825 for
solicited subscriptions to Enex Securities Corporation, a
subsidiary of Enex, and reimbursed Enex for organization expenses
of approximately $45,000.
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.
II-9
<PAGE>
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.
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. Prior to this pronouncement, the
Company assessed properties on an aggregate basis. Upon adoption of
SFAS 121, the Company began assessing properties on an individual
basis, wherein total capitalized costs may not exceed the
property's fair market value. The fair market value of each
property was determined by H. J. Gruy and Associates, ("Gruy"). To
determine the fair market value, Gruy estimated each property's oil
and gas reserves, applied certain assumptions regarding price and
cost escalations, applied a 10% discount factor for time and
certain discount factors for risk, location, type of ownership
interest, category of reserves, operational characteristics, and
other factors. In the first quarter of 1996, the Company recognized
a non-cash impairment of $52,602 for certain oil and gas properties
due to changes in the overall market for the sale of oil and gas
and significant decreases in the projected production from certain
of the Company's oil and gas properties.
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
contingent 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>
Set forth below is a reconciliation of net income(loss) as reflected in the
accompanying financial statements and net income (loss) for federal income tax
purposes for the year ended December 31, 1996:
<TABLE>
<CAPTION>
Allocable to Per $500
-------------------------------------
Limited
General Limited Partner Unit
TOTAL Partner Partners Outstanding
----------------- ------------------ ------------------ ---------------------
Net income (loss) as reflected in the
<S> <C> <C> <C> <C>
accompanying financial statements $ 4,918 $ 8,293 $ (3,375) $ (1)
Reconciling items:
Difference in gain on property sales
for federal income tax purposes and
the amount computed for financial
reporting purposes 201 (21) 222 -
Difference in depletion computed
for federal income tax purposes
and the amount computed for
financial reporting purposes 29,630 - 29,630 10
----------------- ------------------ ------------------ ---------------------
Net income for federal
income tax purposes $ 34,749 $ 8,272 $ 26,477 $ 9
================= ================== ================== =====================
</TABLE>
Net income for federal income tax purposes is a summation of ordinary income
(loss), portfolio income (loss), cost depletion and intangible drilling costs as
presented in the Company's federal income tax return.
Set forth below is a reconciliation between partners' capital as reflected in
the accompanying financial statements and partners' capital for federal income
tax purposes as of December 31, 1996:
<TABLE>
<CAPTION>
Allocable to Per $500
-------------------------------------
Limited
General Limited Partner Unit
TOTAL Partner Partners Outstanding
----------------- ------------------ ------------------ ---------------------
Partners' capital as reflected in the
<S> <C> <C> <C> <C>
accompanying financial statements $ 160,208 $ 9,973 $ 150,235 $ 50
Reconciling items:
Difference in accumulated
depletion and amortization
for financial reporting and
federal income tax purposes 57,584 - 57,584 19
Accumulated difference in property
sales for financial reporting purposes
and for federal income tax purposes 201 (21) 222 -
Commissions and syndication
fees capitalized for federal
income tax purposes 154,825 - 154,825 52
----------------- ------------------ ------------------ ---------------------
Partners' capital for federal
income tax purposes $ 372,818 $ 9,952 $ 362,866 $ 121
================= ================== ================== =====================
</TABLE>
II-11
<PAGE>
4. PAYABLE TO GENERAL PARTNER
The payable to general partner primarily consists of general and
administrative expenses allocated to the Company by Enex for its
ongoing operations. The Company plans to repay the amount owed to
the general partner over a period of two 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
Torch Operating Company, Samson Production Services Company and
Exxon Company, USA accounted for 45%, 30% and 19%, respectively, of
the Company's total sales in 1996. Torch Operating Company and
Samson Production Services Company accounted for 53% and 35%,
respectively, of the Company's total sales in 1995. No other
purchaser individually accounted for more than 10% of such sales.
7. SALE OF PROPERTY
Effective August 1, 1996 the Company sold its interest in the
Spider Lake 3-2 well for $1,640. The Company recognized a gain of
$209 from the sale.
II-12
<PAGE>
ENEX INCOME AND RETIREMENT FUND - SERIES 3, L.P.
SUPPLEMENTARY OIL AND GAS INFORMATION
FOR THE TWO YEARS ENDED DECEMBER 31, 1996
- -----------------------------------------------------------------------------
Proved Oil and Gas Reserve Quantities (Unaudited)
The following presents an estimate of the Company's proved oil and gas reserve
quantities and changes therein for each of the two years in the period ended
December 31, 1996. Oil reserves are stated in barrels ("BBLS") and natural gas
in thousand cubic feet ("MCF"). The amounts per $500 limited partner unit do not
include a potential 5% reduction after payout. All of the Company's reserves are
located within the United States.
<TABLE>
<CAPTION>
Per $500 Per $500
Limited Natural Limited
Oil Partner Unit Gas Partner Unit
(BBLS) Outstanding (MCF) Outstanding
----------------- ------------------ ------------------ ------------------
PROVED DEVELOPED AND
UNDEVELOPED RESERVES:
<S> <C> <C> <C> <C>
January 1, 1995 4,960 1 288,752 87
Revisions of previous estimates 443 - 18,998 6
Production (915) - (44,632) (14)
----------------- ------------------ ------------------ ------------------
December 31, 1995 4,488 1 263,118 79
Revisions of previous estimates 1,036 - 69,237 21
Production (1,120) - (47,767) (14)
----------------- ------------------ ------------------ ------------------
December 31, 1996 4,404 1 284,588 86
================= ================== ================== ==================
PROVED DEVELOPED RESERVES:
January 1, 1995 4,960 1 288,752 87
================= ================== ================== ==================
December 31, 1995 4,488 1 263,118 79
================= ================== ================== ==================
December 31, 1996 4,404 1 284,588 86
================= ================== ================== ==================
</TABLE>
II-13
<PAGE>
Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure
Not Applicable
II-14
<PAGE>
PART III
- ------------------------------------------------------------------------------
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act
The Company's sole General Partner is Enex Resources Corporation,
a Delaware corporation. The Company has no Directors or executive officers. The
Directors and executive officers of Enex are:
Gerald B. Eckley. Mr. Eckley, age 70, has served as a Director,
President and Chief Executive Officer of the General Partner since its formation
in 1979. He was employed by Shell Oil Company from 1951 to 1967 and served in
managerial capacities from 1959 to 1967. From 1967 to 1969, he was Director of
Fund Raising at the University of Oklahoma and from 1969 to 1971, was Vice
President of Land and Operations for Imperial American Management Company. In
1971, Mr. Eckley was a petroleum consultant and in 1972-1973 was General Counsel
and Executive Director of the Oil Investment Institute. From 1973 to 1974, he
was Manager of Oil Properties, Inc. and from 1974 to 1976, was Vice President,
Land and Joint Ventures for Petro-Lewis Corporation. From 1977 to August 1979,
Mr. Eckley was President of Eckley Energy, Inc., a company engaged in purchasing
and selling oil and gas properties. Mr. Eckley received an L.L.B. degree from
the University of Oklahoma in 1951 and a Juris Doctor degree from the University
of Oklahoma in 1970.
William C. Hooper, Jr. Mr. Hooper, age 59, has been a Director of
the General Partner since its formation in 1979 and is a member of the General
Partner's Audit and Compensation and Options Committees. In 1960 he was a staff
engineer in the Natural Gas Department of the Railroad Commission of Texas, with
principal duties involving reservoir units and gas proration. In 1961 he was
employed by the California Company as a Drilling Engineer and Supervisor. In
1963 he was employed as a Staff Engineer by California Research Corporation and
in 1964 rejoined the California Company as a project manager having various
duties involving drilling and reservoir evaluations. In 1966 he was Executive
Vice President for Moran Bros. Inc., coordinating and managing all company
activities, drilling operations, bidding and engineering. From 1970 until the
present, he has been self-employed as a consulting petroleum engineer providing
services to industry and government and engaged in business as an independent
oil and gas operator and investor. From 1975 to 1987 he was also a Director and
President of Verna Corporation, a drilling contractor and service organization.
He received a B.S. degree in Petroleum Engineering in 1960 from the University
of Texas and an M.S. degree in Petroleum Engineering from that same University
in 1961.
Stuart Strasner. Mr. Strasner, age 67, was a Director of the
General Partner from its formation until October of 1986. He was reappointed to
the Board on April 19, 1990 to fill a vacancy. He is a member of the Audit
Committee. He is a professor of business law at Oklahoma City University and was
Dean of the law school at Oklahoma City University from July 1984 until June
1991. Prior to July 1984, Mr. Strasner was an attorney in private practice with
McCollister, McCleary, Fazio and Holliday in Oklahoma City, Oklahoma. From 1959
to 1974, he was employed by various banks, bank holding companies and an
insurance company in executive capacities. From 1974 to 1978, he was a
consultant to various corporations such as insurance companies, bank holding
companies and small business investment companies. From 1978 until late 1981, he
was Executive Director of the Oklahoma Bar Association, and from 1981 to 1983
was a Director and President of PRST Enterprises, Inc., a real estate
development company. Mr. Strasner holds an A.B. degree from Panhandle A&M
College, Oklahoma, and a J.D. degree from the University of Oklahoma. He is a
member of the Fellows of the American Bar Association and a member of the
Oklahoma Bar Association. Mr. Strasner is also a director of Health Images,
Inc., a public company which provides fixed site magnetic resonance imaging
("MRI") services.
III-1
<PAGE>
Martin J. Freedman. Mr. Freedman, age 72, was one of the General Partner's
founders and a member of its Board of Directors as well as a board member of
Enex Securities Corporation until June of 1986. He was reappointed to the Board
on April 19, 1990 to fill a vacancy. He is a member of the Compensation and
Options Committee. He is currently President of Freedman Oil & Gas Company,
engaged primarily in the management of its exploration and producing properties,
and the managing partner Martin J. Freedman & Company which has an interest in
approximately one hundred producing oil and/or gas wells. Mr. Freedman is a
lifetime member of the Denver Petroleum Club as well as being a lifetime member
of the Denver Association of Petroleum Landmen. He was an officer and Director
and/or founder of several former private and public companies. Mr. Freedman
entered the oil and gas business in 1954 when he joined Mr. Marvin Davis of the
Davis Oil Company. In 1956, he became President of Central Oil Corporation, a
company engaged in oil and gas exploration. From 1958 on, Mr. Freedman operated
as Martin J. Freedman Oil Properties and was President of Oil Properties, Inc.,
a private corporation. Mr. Freedman attended Long Island University and New York
University. He received a bachelor's degree in Psychology and also attended New
York University's graduate school.
James Thomas Shorney. Mr. Shorney, age 71, has been a Director of
the General Partner since April of 1990 and is a member of the Compensation and
Options Committee. He has been a petroleum consultant and Secretary/Treasurer of
the Shorney Company, a privately held oil and gas exploration company, from 1970
to date. From 1970 to 1976, he also served as a petroleum consultant in Land and
Lease Research Analysis Studies for the GHK Company. He was an oil and gas lease
broker from 1962 to 1970 and employed by Shell Oil Company in the Land
Department from 1954 to 1962. Before joining Shell Oil Company, he served as
Public Information Officer in the U.S. Army Air Force from 1950 to 1953
including attending Georgetown University Graduate School in 1952. Mr. Shorney
graduated from the University of Oklahoma with a B.A. degree in Journalism in
1950. From 1943 to 1945, he served in the U.S. Army Air Force as an air crew
member on a B-24 Bomber. Mr. Shorney is a member of the Oklahoma City
Association of Petroleum Landmen on which he has served as Director and
Secretary/Treasurer. He is an active member of the American Association of
Petroleum Landmen. In 1975, Mr. Shorney was first listed in the London Financial
Times' Who's Who in World Oil and Gas.
Robert D. Carl, III. Mr. Carl, age 43, was appointed a Director of the
General Partner on July 30, 1991 and is a member of the Audit Committee. He is
President, Chief Executive Officer and Chairman of the Board of Health Images,
Inc., a public company whose securities are traded on NYSE, which provides fixed
site magnetic resonance imaging ("MRI") services. From 1978 to 1981, Mr. Carl
also served as President of Carl Investment Associates, Inc. a registered
investment advisor. In 1981, Mr. Carl joined Cardio-Tech, Inc., as general
counsel and as an officer and Director. Upon the sale and reorganization of
Cardio-Tech, Inc. into Cardiopul Technologies in 1982, he served as its
Executive Vice President and as a Director. In March, 1985 he was elected
President, Chief Executive Officer and Chairman of Cardiopul Technologies which
spun off its non-imaging medical services business and changed its name to
Health Images, Inc. Mr. Carl received a B.A. in History from Franklin and
Marshall College, Lancaster, Pennsylvania in 1975 and a J.D. from Emory
University School of Law, Atlanta, Georgia in 1978. Mr. Carl is a trustee of
Franklin & Marshall College and is a member of the State Bar of Georgia.
On January 4, 1996, the SEC filed a complaint in the United States
District Court for the District of Columbia against Mr. Carl alleging that Mr.
Carl violated Section 16(a) of the Securities Exchange Act of 1934 ("Exchange
Act"), and Rule 16a-2 and 16a-3 (and former Rule 16a-1) thereunder, by failing
to timely file reports concerning thirty-eight securities transactions in his
mother's brokerage accounts involving shares of Health Images, Inc. stock. The
SEC took the position that because Mr. Carl (1) provided substantial
III-2
<PAGE>
financial support to his mother, (2) commingled his mother's assets with his
own, (3) provided a substantial portion of the funds used to purchase the shares
in question, and (4) received from his mother a substantial portion of the sales
proceeds, he, therefore, had a pecuniary interest in, and was a beneficial owner
of, the shares in question.
In response to the SEC's action, Mr. Carl disgorged to Health
Images, Inc. approximately $92,400 in short-swing profits from the trading in
his mother's account, plus interest thereon of approximately $52,600. The SEC
further requested the court to impose a $10,000 civil penalty against Mr. Carl
pursuant to Section 21(d)(3) of the Exchange Act. Without admitting or denying
the allegations in the complaint, Mr. Carl consented to the entry of a final
judgement imposing the $10,000 penalty. On January 12, 1996, a federal judge
entered the final judgement in this matter, and Mr. Carl has since filed amended
reports on Forms 4 and 5 reflecting these transactions in his mother's accounts.
In relation to the same matter, the SEC has issued an
administrative Order pursuant to Section 21C of the Exchange Act against Mr.
Carl, finding that he violated Section 16(a) and the rules thereunder and
requiring him to cease and desist from committing or causing any violation or
future violation of those provisions. Without admitting allegations in the SEC's
Order, Mr. Carl consented to the entry of the Order.
Robert E. Densford. Mr. Densford, age 39, was appointed a Director of the
General Partner on September 11, 1991. He joined the General Partner as
Controller on May 1, 1985 and became Vice President- Finance, Secretary and
Treasurer on March 1, 1989. From January 1983 to April 1985, he was Senior
Accountant for Deloitte Haskins & Sells in Houston, Texas, auditing both closely
held and publicly owned oil and gas companies. From September 1981 to December
1982, he was a staff accountant for Coopers & Lybrand in Houston. Mr. Densford
is a C.P.A. and holds a B.B.A. degree in Accounting and an M.S. degree in Oil
and Gas Accounting from Texas Tech University and is a member of the American
Institute of Certified Public Accountants and the Texas Society of Certified
Public Accountants.
James A. Klein. Mr. Klein, age 33, joined the General Partner as Controller
in February 1991. In June 1993, he was appointed President and Principal of Enex
Securities Corporation. From June 1988 to February 1991, he was employed by
Positron Corporation in Houston. From July 1987 to May 1988, he was employed by
Transworld Oil Company in Houston and from September 1985 until July 1987, he
was an accountant with Deloitte Haskins & Sells in Houston, Texas, auditing oil
and gas and oil service companies. Mr. Klein is a Certified Public Accountant
and holds a B.A. in Accounting (1985) from the University of Iowa. He is a
member of the American Institute of Certified Public Accountants and the Iowa
Society of Certified Public Accountants.
Item 10. Executive Compensation
The Company has no Directors or executive officers.
The Company does not pay a proportional or fixed share of the
compensation paid to the officers of the General Partner.
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. The Company incurred $28,526 and $30,983 of such
administrative costs payable to the General Partner in 1996 and 1995,
respectively.
III-3
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management
$500 Limited
Name of Partner Units Percent
Title of Class Beneficial Owner Owned Directly of Class
--------------- ----------------- --------------- ----------
Limited Partner Enex Resources 505 16.9010%
Item 12. Certain Relationships and Related Transactions
See the Statements of Operations included in the Financial
Statements in Item 7 of this report for information concerning general and
administrative costs incurred by Enex and allocated to the Company, and Note 1
to such Financial Statements for information concerning payments to Enex
Securities Corporation, a wholly owned subsidiary of Enex and to Enex for
certain offering and organization expenses incurred by the Company.
See Item Number 2 - "Description of Property" in this report for a
description of the properties operated by Enex. Enex operates such properties
under the terms of a Joint Operating Agreement ("JOA"). Overhead charges allowed
to third parties under the JOA in accordance with the Council of Petroleum
Accountants Societies are not charged to the Company. Such costs are considered
to be within the general and administrative overhead charges allocated to the
Company.
Item 13. Exhibits and Reports on Form 8-K
Sequential
Page No.
--------------
(a) Exhibits
(3) (a) Certificate of Limited Partnership, as
amended. Incorporated by reference to Exhibit
3(a) to the Company's Annual Report on Form
10-K for the year ended December 31, 1987.
(b) Amended Agreement of Limited Partnership.
Incorporated by reference to
Exhibit 3(a) to Post-Effective Amendment No.
2 to the Registration
Statement on Form S-1 (No. 2-99874) of Enex
Income and Retirement Fund
filed with the Securities and Exchange
Commission on April 22, 1987.
(4) Not Applicable
(10) Not Applicable
(11) Not Applicable
(12) Not Applicable
(13) Not Applicable
III-4
<PAGE>
(18) Not Applicable
(19) Not Applicable
(22) Not Applicable
(23) Not Applicable
(24) Not Applicable
(25) Not Applicable
(28) Not Applicable
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the last quarter of
the period covered by this report.
III-5
<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 3, L.P.
By: ENEX RESOURCES CORPORATION
the General Partner
March 18, 1997 By: /s/ G. B. Eckley
-----------------
G. B. Eckley, President
In accordance with the Exchange Act, this report has been signed below on
March 18, 1997, by the following persons in the capacities indicated.
ENEX RESOURCES CORPORATION General Partner
By: /s/ G. B. Eckley
------------
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
S-1
<PAGE>
/s/ Robert D. Carl, III
--------------------------
Robert D. Carl, III Director
/s/ Martin J. Freedman
--------------------------
Martin J. Freedman Director
/s/ William C. Hooper, Jr.
--------------------------
William C. Hooper, Jr. Director
/s/ Tom Shorney
--------------------------
Tom Shorney Director
/s/ Stuart Strasner
--------------------------
Stuart Strasner Director
S-2
<PAGE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000830320
<NAME> ENEX INCOME AND RETIREMENT FUND - SERIES 3, 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> 8244
<SECURITIES> 0
<RECEIVABLES> 34657
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 42901
<PP&E> 1312406
<DEPRECIATION> 1150513
<TOTAL-ASSETS> 204794
<CURRENT-LIABILITIES> 44586
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 160208
<TOTAL-LIABILITY-AND-EQUITY> 204794
<SALES> 118862
<TOTAL-REVENUES> 118862
<CGS> 83463
<TOTAL-COSTS> 83463
<OTHER-EXPENSES> 30690
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4918
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
