FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission file number 0-18397
Southwest Oil & Gas Income Fund IX-A, L.P.
(Exact name of registrant as specified
in its limited partnership agreement)
Delaware 75-2274632
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
407 N. Big Spring, Suite 300
Midland, Texas 79701
(Address of principal executive offices)
(915) 686-9927
(Registrant's telephone number,
including area code)
Indicate by check mark whether registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities 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
The total number of pages contained in this report is 12.
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PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
The unaudited condensed financial statements included herein have been
prepared by the Registrant (herein also referred to as the "Partnership") in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01
of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all adjustments
necessary for a fair presentation have been included and are of a normal
recurring nature. The financial statements should be read in conjunction
with the audited financial statements and the notes thereto for the year
ended December 31, 1995 which are found in the Registrant's Form 10-K Report
for 1995 filed with the Securities and Exchange Commission. The December 31,
1995 balance sheet included herein has been taken from the Registrant's 1995
Form 10-K Report. Operating results for the three month period ended
March 31, 1996 are not necessarily indicative of the results that may be
expected for the full year.
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Southwest Oil & Gas Income Fund IX-A, L.P.
Balance Sheets
March 31, December 31,
1996 1995
--------- ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 271,899 36,949
Receivable from Managing General
Partner 64,250 80,686
Other receivable 160 -
--------- ---------
Total current assets 336,309 117,635
--------- ---------
Oil and gas properties - using the
full-cost method of accounting 3,345,433 3,604,574
Less accumulated depreciation,
depletion and amortization 2,398,000 2,372,000
--------- ---------
Net oil and gas properties 947,433 1,232,574
--------- ---------
$ 1,283,742 1,350,209
========= =========
Liabilities and Partners' Equity
Current liabilities:
Distributions payable $ 237 645
Accounts payable 5,550 -
--------- ---------
Total current liabilities 5,787 645
--------- ---------
Partners' equity:
General partners (34,786) (33,376)
Limited partners 1,312,741 1,382,940
--------- ---------
Total partners' equity 1,277,955 1,349,564
--------- ---------
$ 1,283,742 1,350,209
========= =========
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Southwest Oil & Gas Income Fund IX-A, L.P.
Statements of Operations
(unaudited)
Three Months Ended
March 31,
1996 1995
---- ----
Revenues
Oil and gas revenue $ 240,891 279,405
Interest income from operations 919 249
------- -------
241,810 279,654
------- -------
Expenses
Production 168,374 177,429
General and administrative 27,536 29,229
Depreciation, depletion and amortization 26,000 50,000
------- -------
221,910 256,658
------- -------
Net income $ 19,900 22,996
======= =======
Net income allocated to:
Managing General Partner $ 4,131 6,570
======= =======
General partner $ 459 730
======= =======
Limited partners $ 15,310 15,696
======= =======
Per limited partner unit $ 1.46 1.50
======= =======
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Southwest Oil & Gas Income Fund IX-A, L.P.
Statements of Cash Flows
(unaudited)
Three Months Ended
March 31,
1996 1995
---- ----
Cash flows from operating activities:
Cash received from oil and gas sales $ 275,519 279,604
Cash paid to suppliers (208,712) (197,928)
Interest received 919 249
------- -------
Net cash provided by operating
activities 67,726 81,925
------- -------
Cash flows from investing activities:
Additions to oil and gas properties (6,178) (11,643)
Sale of oil and gas properties 265,319 -
------- -------
Net cash provided by (used in)
investing activities 259,141 (11,643)
------- -------
Cash flows used in financing activities:
Distributions to partners (91,917) (68,091)
------- -------
Net increase in cash 234,950 2,191
Cash and cash equivalents:
Beginning of period 36,949 16,958
------- -------
End of period $ 271,899 19,149
======= =======
(continued)
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Southwest Oil & Gas Income Fund IX-A, L.P.
Statements of Cash Flows, continued
(unaudited)
Three Months Ended
March 31,
1996 1995
---- ----
Reconciliation of net income to
net cash provided by operating
activities:
Net income $ 19,900 22,996
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation, depletion and
amortization 26,000 50,000
Decrease in receivables 34,628 199
Increase (decrease) in payables (12,802) 8,730
------- -------
Net cash provided by operating
activities $ 67,726 81,925
======= =======
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
Southwest Oil & Gas Income Fund IX-A, L.P. was organized as a Delaware
limited partnership on March 9, 1989. The offering of such limited
partnership interests began on May 11, 1989, minimum capital requirements
were met on October 25, 1989, and the offering concluded on March 31, 1990,
with total limited partner contributions of $5,226,500.
The Partnership was formed to acquire interests in producing oil and gas
properties, to produce and market crude oil and natural gas produced from
such properties, and to distribute the net proceeds from operations to the
limited and general partners. Net revenues from producing oil and gas
properties are not reinvested in other revenue producing assets except to the
extent that production facilities and wells are improved or reworked or where
methods are employed to improve or enable more efficient recovery of oil and
gas reserves.
Increases or decreases in Partnership revenues and, therefore, distributions
to partners will depend primarily on changes in the prices received for
production, changes in volumes of production sold, increases and decreases in
lease operating expenses, enhanced recovery projects, offset drilling
activities pursuant to farm-out arrangements, sales of properties, and the
depletion of wells. Since wells deplete over time, production can generally
be expected to decline from year to year.
Well operating costs and general and administrative costs usually decrease
with production declines; however, these costs may not decrease
proportionately. Net income available for distribution to the partners is
therefore expected to fluctuate in later years based on these factors.
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Results of Operations
A. General Comparison of the Quarters Ended March 31, 1996 and 1995
The following table provides certain information regarding performance
factors for the quarters ended March 31, 1996 and 1995:
Three Months
Ended Percentage
March 31, Increase
1996 1995 (Decrease)
---- ---- ----------
Average price per barrel of oil $ 16.88 15.70 8%
Average price per mcf of gas $ 1.56 1.43 9%
Oil production in barrels 10,500 12,900 (19%)
Gas production in mcf 40,200 54,100 (26%)
Gross oil and gas revenue $ 240,891 279,405 (14%)
Net oil and gas revenue $ 72,517 101,976 (29%)
Partnership distributions $ 91,509 68,000 35%
Limited partner distributions $ 85,509 61,200 40%
Per unit distribution to limited
partners $ 8.18 5.85 40%
Number of limited partner units 10,453 10,453
Revenues
The Partnership's oil and gas revenues decreased to $240,891 from $279,405
for the quarters ended March 31, 1996 and 1995, respectively, a decrease of
14%. The principal factors affecting the comparison of the quarters ended
March 31, 1996 and 1995 are as follows:
1. The average price for a barrel of oil received by the Partnership
increased during the quarter ended March 31, 1996 as compared to the
quarter ended March 31, 1995 by 8%, or $1.18 per barrel, resulting in an
increase of approximately $15,200 in revenues. Oil sales represented 74%
of total oil and gas sales during the quarter ended March 31, 1996 as
compared to 72% during the quarter ended March 31, 1995.
The average price for an mcf of gas received by the Partnership increased
during the same period by 9%, or $.13 per mcf, resulting in an increase
of approximately $7,000 in revenues.
The total increase in revenues due to the change in prices received from
oil and gas production is approximately $22,200. The market price for
oil and gas has been extremely volatile over the past decade, and
management expects a certain amount of volatility to continue in the
foreseeable future.
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2. Oil production decreased approximately 2,400 barrels or 19% during the
quarter ended March 31, 1996 as compared to the quarter ended March 31,
1995, resulting in a decrease of approximately $40,500 in revenues.
Gas production decreased approximately 13,900 mcf or 26% during the same
period, resulting in a decrease of approximately $21,700 in revenues.
The total decrease in revenues due to the change in production is
approximately $62,200. The decrease is a result of downhole problems and
property sales.
Costs and Expenses
Total costs and expenses decreased to $221,910 from $256,658 for the quarters
ended March 31, 1996 and 1995, respectively, a decrease of 14%. The decrease
is the result of lower lease operating costs, general and administrative
expense and depletion expense.
1. Lease operating costs and production taxes were 5% lower, or
approximately $9,100 less during the quarter ended March 31, 1996 as
compared to the quarter ended March 31, 1995.
2. General and administrative costs consist of independent accounting and
engineering fees, computer services, postage, and Managing General
Partner personnel costs. General and administrative costs decreased 6%
or approximately $1,700 during the quarter ended March 31, 1996 as
compared to the quarter ended March 31, 1995.
3. Depletion expense decreased to $26,000 for the quarter ended March 31,
1996 from $50,000 for the same period in 1995. This represents a
decrease of 48%. Depletion is calculated using the gross revenue method
of amortization based on a percentage of current period gross revenues to
total future gross oil and gas revenues, as estimated by the
Partnership's independent petroleum consultants.
Three factors that attributed to the decline in depletion expense between
the comparative periods were the increase in the price of oil and gas
used to determine the Partnership's reserves for January 1, 1996 as
compared to 1995, the increase in property sales and the decrease in oil
and gas revenues.
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Liquidity and Capital Resources
The primary source of cash is from operations, the receipt of income from
interests in oil and gas properties. The Partnership knows of no material
change, nor does it anticipate any such change.
Cash flows provided by operating activities were approximately $67,700 in the
three months ended March 31, 1996 as compared to approximately $81,900 in the
three months ended March 31, 1995. The primary source of the 1996 cash flow
from operating activities was profitable operations.
Cash flows provided by or (used in) investing activities were approximately
$259,100 in the three months ended March 31, 1996 as compared to
approximately $(11,600) in the three months ended March 31, 1995. The
principle source of the 1996 cash flow from investing activities was the sale
of oil and gas properties, offset by the additions to oil and gas properties.
Cash flows used in financing activities were approximately $91,900 in the
three months ended March 31, 1996 as compared to approximately $68,100 in the
three months ended March 31, 1995. The only use in financing activities was
the distributions to partners.
Total distributions during the three months ended March 31, 1996 were $91,509
of which $85,509 was distributed to the limited partners and $6,000 to the
general partners. The per unit distribution to limited partners during the
three months ended March 31, 1996 was $8.18. Total distributions during the
three months ended March 31, 1995 were $68,000 of which $61,200 was
distributed to the limited partners and $6,800 to the general partners. The
per unit distribution to limited partners during the three months ended March
31, 1995 was $5.85.
The sources for the 1996 distributions of $91,509 were oil and gas operations
of approximately $67,700 and the sale of oil and gas properties of
approximately $265,300, offset by additions to oil and gas properties of
approximately $6,200, resulting in excess cash for contingencies or
subsequent distributions. The source for the 1995 distributions of $68,000
was oil and gas operations of approximately $81,900, offset by additions to
oil and gas properties of approximately $11,600, resulting in excess cash for
contingencies or subsequent distributions.
Since inception of the Partnership, cumulative monthly cash distributions of
$4,667,018 have been made to the partners. As of March 31, 1996, $4,253,650
or $406.93 per limited partner unit has been distributed to the limited
partners, representing an 81% return of the capital contributed.
As of March 31, 1996, the Partnership had approximately $330,500 in working
capital. The Managing General Partner knows of no unusual contractual
commitments and believes the revenues generated from operations are adequate
to meet the needs of the Partnership.
PAGE
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PART II. - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matter to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) None
(b) No reports on Form 8-K were filed during the quarter for
which this report is filed.
PAGE
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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 thereunto duly authorized.
SOUTHWEST OIL & GAS
INCOME FUND IX-A, L.P.
a Delaware limited partnership
By: Southwest Royalties, Inc.
Managing General Partner
By: /s/ Bill E. Coggin
------------------------------
Bill E. Coggin, Vice President
and Chief Financial Officer
Date: May 11, 1996
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Balance
Sheet at March 31, 1996 (Unaudited) and the Statement of Operations for the
Three Months Ended March 31, 1996 (Unaudited) and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 271,899
<SECURITIES> 0
<RECEIVABLES> 64,410
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 336,309
<PP&E> 3,345,433
<DEPRECIATION> 2,398,000
<TOTAL-ASSETS> 1,283,742
<CURRENT-LIABILITIES> 5,787
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,277,955
<TOTAL-LIABILITY-AND-EQUITY> 1,283,742
<SALES> 240,891
<TOTAL-REVENUES> 241,810
<CGS> 168,374
<TOTAL-COSTS> 168,374
<OTHER-EXPENSES> 53,536
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 19,900
<INCOME-TAX> 0
<INCOME-CONTINUING> 19,900
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,900
<EPS-PRIMARY> 1.46
<EPS-DILUTED> 1.46
</TABLE>
