United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER TO 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 0-17562
ENEX OIL & GAS INCOME PROGRAM III - SERIES 8, L.P.
(Exact name of small business issuer as specified in its charter)
New Jersey 76-0214442
(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)
Registrant'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 of 1934 during the preceding 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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ENEX OIL & GAS INCOME PROGRAM III - SERIES 8, L.P.
BALANCE SHEET
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MARCH 31,
ASSETS 1996
--------------
(Unaudited)
CURRENT ASSETS:
<S> <C>
Cash $ 1,860
Accounts receivable - oil & gas sales 53,145
Other current assets 2,845
--------------
Total current assets 57,850
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OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 2,562,863
Less accumulated depreciation and depletion 2,372,804
--------------
Property, net 190,059
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TOTAL $ 247,909
==============
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 8,996
Payable to general partner 26,150
--------------
Total current liabilities 35,146
--------------
NONCURRENT PAYABLE TO GENERAL PARTNER 97,451
--------------
PARTNERS' CAPITAL:
Limited partners 67,708
General partner 47,604
--------------
Total partners' capital 115,312
--------------
TOTAL $ 247,909
==============
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See accompanying notes to financial statements.
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I-1
<PAGE>
<TABLE>
<CAPTION>
ENEX OIL & GAS INCOME PROGRAM III - SERIES 8, L.P.
STATEMENTS OF OPERATIONS
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(UNAUDITED) THREE MONTHS ENDED
---------------------------
MARCH 31, MARCH 31,
1996 1995
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REVENUES:
<S> <C> <C>
Oil and gas sales $ 95,765 85,808
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EXPENSES:
Depreciation and depletion 19,306 44,720
Impairment of property 291,307 -
Lease operating expenses 44,600 40,546
Production taxes 6,470 5,552
General and administrative 10,160 11,345
----------- -----------
Total expenses 371,843 102,163
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LOSS FROM OPERATIONS (276,078) (16,355)
----------- -----------
OTHER INCOME:
Gain from sale of property 1,409 -
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NET LOSS $ (274,669) (16,355)
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See accompanying notes to financial statements.
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I-2
<PAGE>
<TABLE>
<CAPTION>
ENEX OIL AND GAS INCOME PROGRAM III - SERIES 8, 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 loss $ (274,669) $ (16,355)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and depletion 19,306 44,720
Impairment of property 291,307 -
Gain on sale of property (1,409) -
(Increase) decrease in:
Accounts receivable - oil & gas sales (23,410) (6,110)
Other current assets 29 (1,569)
(Decrease) in:
Accounts payable (8,040) (3,485)
Payable to general partner (26,568) (11,985)
Total adjustments 251,215 21,571
Net cash provided (used) by operating activities (23,454) 5,216
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property 22,575 -
Property (additions) credits - development costs 150 (1,492)
Net cash provided (used) by investing activities 22,725 -
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions - (18,201)
NET DECREASE IN CASH (729) (14,477)
CASH AT BEGINNING OF YEAR 2,589 16,214
CASH AT END OF PERIOD $ 1,860 $ 1,737
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
ENEX OIL & GAS INCOME PROGRAM III - SERIES 8, 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 $291,307 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 increased from $85,808 in 1995 to
$95,765 in 1996. This represents an increase of $9,957 (12%). Oil sales
increased by $1,685 or 3%. A 10% increase in average oil sales prices increased
sales by $5,206. This increase was partially offset by a 7% decrease in oil
production. Gas sales increased by $8,272 or 26%. A 7% increase in gas
production increased sales by $2,303. A 17% increase in average gas sales prices
increased sales by an additional $5,969. The decrease in oil production was
primarily the result of natural production declines. 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 $40,546 in the first quarter of 1995 to
$44,600 in the first quarter of 1996. The increase of $4,054 (10%) is primarily
due to road repair expenses incurred on the Corkscrew acquisition in 1996.
Depreciation and depletion expense decreased from $44,720 in the first quarter
of 1995 to $19,306 in the first quarter of 1996. This represents a decrease of
$25,414 (57%). The changes in production, noted above, reduced depreciation and
depletion expense by $625. A 56% decrease in the depletion rate reduced
depreciation and depletion expense by an additional $24,789. The rate decrease
is primarily due to the lower property basis resulting from the recognition of
an impairment of property for $291,307 in the first quarter of 1996.
Effective February 1, 1996, the Company sold its interest in the Credo
acquisition for $22,575. The Company recognized a gain of $1,409 on 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 $291,307 for
certain oil and gas properties due to market indications that the carrying
amounts were not fully recoverable.
General and administrative expenses decreased from $11,345 in the first quarter
of 1995 to $10,160 in the first quarter of 1996. This decrease of $1,185 (10%)
is primarily due to less staff time being required to manage the Company's
operations, partially offset by $3,545 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 repayment of its debt
obligations. Accordingly, the changes in cash flow from 1995 to 1996 are
primarily due to the changes in oil and gas sales described above. It is the
general partner's intention to distribute substantially all of the Company's
remaining available cash flow to the Company's partners.
I-5
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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 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.
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 - 8, 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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<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000837894
<NAME> Enex Oil & Gas Income Program III - Series 8, 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> 1860
<SECURITIES> 0
<RECEIVABLES> 53145
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