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 June 30, 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 0-18321
ENEX OIL & GAS INCOME PROGRAM IV - SERIES 4, L.P.
(Exact name of small business issuer as specified in its charter)
New Jersey 76-0251422
(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) has 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
Transitional Small Business Disclosure Format (Check one):
Yes No x
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
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<CAPTION>
ENEX OIL & GAS INCOME PROGRAM IV - SERIES 4, L.P.
BALANCE SHEET
- ------------------------------------------------------------------------------
JUNE 30,
ASSETS 1996
---------------------
(Unaudited)
CURRENT ASSETS:
<S> <C>
Cash $ 7,951
Accounts receivable - oil & gas sales 10,180
Other current assets 1,040
---------------------
Total current assets 19,171
---------------------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 1,159,479
Less accumulated depreciation and depletion 1,041,239
---------------------
Property, net 118,240
---------------------
TOTAL $ 137,411
=====================
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 1,732
Payable to general partner 26,881
---------------------
Total current liabilities 28,613
---------------------
NONCURRENT PAYABLE TO GENERAL PARTNER 53,764
---------------------
PARTNERS' CAPITAL:
Limited partners 48,090
General partner 6,944
---------------------
Total partners' capital 55,034
---------------------
TOTAL $ 137,411
=====================
</TABLE>
See accompanying notes to financial statements.
- ---------------------------------------------------------------
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<PAGE>
<TABLE>
<CAPTION>
ENEX OIL & GAS INCOME PROGRAM IV - SERIES 4, L.P.
STATEMENTS OF OPERATIONS
- -----------------------------------------------------------------------------
(UNAUDITED) QUARTER ENDED SIX MONTHS ENDED
-------------------------------------- --------------------------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1996 1995
----------------- ----------------- ----------------- -----------------
REVENUES:
<S> <C> <C> <C> <C>
Oil, gas and gas plant sales $ 25,274 $ 24,684 $ 53,679 $ 49,179
----------------- ----------------- ----------------- -----------------
EXPENSES:
Depreciation and depletion 4,813 17,936 12,241 31,707
Impairment of property - - 243,005 -
Lease operating expenses 4,940 4,767 10,233 13,044
Production taxes 1,462 1,181 2,950 2,488
General and administrative 4,679 4,247 10,659 9,468
----------------- ----------------- ----------------- -----------------
Total expenses 15,894 28,131 279,088 56,707
----------------- ----------------- ----------------- -----------------
NET INCOME (LOSS) $ 9,380 $ (3,447) $ (225,409) $ (7,528)
================= ================= ================= =================
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
<TABLE>
<CAPTION>
ENEX OIL AND GAS INCOME PROGRAM IV - SERIES 4, L.P.
STATEMENTS OF CASH FLOWS
- -----------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS ENDED
--------------------------------------------
JUNE 30, JUNE 30,
1996 1995
-------------- -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $ (225,409) $ (7,528)
-------------- -------------------
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and depletion 12,241 31,707
Impairment of property 243,005 -
(Increase) decrease in:
Accounts receivable - oil & gas sales (2,467) 1,508
Receivable from affiliated limited partnership - (509)
Other current assets 767 (303)
Increase (decrease) in:
Accounts payable (6,931) (3,907)
Payable to general partner (4,543) (8,041)
-------------- -------------------
Total adjustments 242,072 20,455
-------------- -------------------
Net cash provided by operating activities 16,663 12,927
-------------- -------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions - development costs (2,298) (2,818)
-------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (9,652) (9,354)
-------------- -------------------
NET INCREASE IN CASH 4,713 755
CASH AT BEGINNING OF YEAR 3,238 4,633
-------------- -------------------
CASH AT END OF PERIOD $ 7,951 $ 5,388
============== ===================
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
ENEX OIL & GAS INCOME PROGRAM IV - SERIES 4, 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. A cash distribution was made to the limited partners of the Company in
the amount of $7,069, representing net revenues from the sale of oil
and gas produced from properties owned by the Company. This
distribution was made on April 30, 1996.
3.) On August 9, 1996, the Company's General Partner submitted preliminary
proxy material to the Securities Exchange Commission with respect to a
proposed consolidation of the Company with 33 other managed limited
partnerships. The terms and conditions of the proposed consolidation
are set forth in such preliminary proxy material.
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<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
Second Quarter 1995 Compared to Second Quarter 1996
Oil, gas and gas plant sales for the second quarter increased to $25,274 in 1996
from $24,684 in 1995. This represents an increase of $590 (2%). Oil sales
increased by $618 or 3%. A 13% increase in the average oil sales price increased
sales by $2,203. This increase was partially offset by a 9% decrease in oil
production. Gas sales increased by $2,747 or 79%. A 75% increase in the average
gas sales price increased sales by $2,668. A 2% increase in gas production
increased sales by an additional $79. Sales of plant products decreased by
$2,775. A 93% decrease in the production of plant products reduced sales by
$3,039. This decrease was partially offset by a 107% increase in the average
plant product sales price. The decrease in oil production was primarily due to
natural production declines. The increase in gas production was primarily the
result of enhanced production improvements on the Concord acquisition, partially
offset by natural production declines. The lower production of plant products
was due to the recognition of back revenues from the Kalkaska gas plant in the
second quarter of 1995. The higher average plant product sales price was
primarily due to recognition of back revenues from the Kalkaska gas plant in the
second quarter of 1995, which had a relatively lower sales price. The changes in
the average oil sales price correspond with changes in the overall market for
the sale of oil. The higher average gas sales price was primarily the result of
relatively higher production from the Concord acquisition, which has a
relatively higher gas sales price, coupled with higher prices in the overall
market for the sale of gas.
Lease operating expenses increased to $4,940 in the second quarter of 1996 from
$4,767 in the second quarter of 1995. The increase of $173 (4%) is primarily due
to higher operating costs on the Concord acquisition in the second quarter of
1996.
Depreciation and depletion expense decreased to $4,813 in the second quarter of
1996 from $17,936 in the second quarter of 1995. This represents a decrease of
$13,123 (73%). A 62% decrease in the depletion rate reduced depreciation and
depletion expense by $7,744. The changes in production, noted above, reduced
depreciation and depletion expense by an additional $5,379. The rate decrease
was primarily due to the lower property basis resulting from the recognition of
a $243,005 impairment of property in the first quarter of 1996.
General and administrative expenses increased to $4,679 in the second quarter of
1996 from $4,247 in the second quarter of 1995. This increase of $432 (10%) is
primarily due to more staff time being required to manage the Company's
operations.
First Six Months in 1995 Compared to First Six Months in 1996
Oil, gas and gas plant sales for the first six months increased to $53,679 in
1996 from $49,179 in 1995. This represents an increase of $4,500 (9%). Oil sales
increased by $3,626 or 10%. A
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<PAGE>
16% increase in the average oil sales price increased sales by $5,423. This
increase was partially offset by a 5% decrease in oil production. Gas sales
increased by $4,297 or 47%. A 5% increase in gas production increased sales by
$422. A 41% increase in the average gas sales price increased sales by an
additional $3,875. Sales of plant products decreased by $3,423. An 88% decrease
in the production of plant products reduced sales by $3,886. This decrease was
partially offset by a 91% increase in the average plant product sales price. The
decrease in oil production was primarily due to natural production declines. The
increase in gas production was primarily the result of enhanced production
improvements on the Concord acquisition, partially offset by natural production
declines. The lower production of plant products was due to the recognition of
back revenues from the Kalkaska gas plant in the second quarter of 1995. The
higher average plant product sales price was primarily due to recognition of
back revenues from the Kalkaska gas plant in the second quarter of 1995, which
had a relatively lower sales price. The changes in the average oil sales price
correspond with changes in the overall market for the sale of oil. The higher
average gas sales price was primarily the result of relatively higher production
from the Concord acquisition, which has a relatively higher gas sales price,
coupled with higher prices in the overall market for the sale of gas.
Lease operating expenses decreased to $10,233 in the first six months of 1996
from $13,044 in the first six months of 1995. The decrease of $2,811 (22%) is
primarily due to the changes in production, noted above.
Depreciation and depletion expense decreased to $12,241 in the first six months
of 1996 from $31,707 in the first six months of 1995. This represents a decrease
of $19,466 (61%). The changes in production, noted above, caused depreciation
and depletion expense to decrease by $5,951, while a 52% decrease in the
depletion rate reduced depreciation and depletion expense by an additional
$13,515. The rate decrease was primarily due to the lower property basis
resulting from the recognition of a $243,005 impairment of property in the first
quarter of 1996.
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standard ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long- Lived Assets to be Disposed Of," which requires
certain assets to be reviewed for impairment whenever events or circumstances
indicate the carrying amount may not be recoverable. In the first quarter of
1996, the Company recognized a non-cash impairment provision of $243,005 for
certain oil and gas properties due to market conditions and reserve revisions on
the Lake Decade acquisition, which indicated that the carrying amounts were not
fully recoverable.
General and administrative expenses increased to $10,659 in the first six months
of 1996 from $9,468 in the first six months of 1995. This increase of $1,191
(13%) is primarily due to more staff time being required to manage the Company's
operations in 1996.
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<PAGE>
CAPITAL RESOURCES AND LIQUIDITY
The Company's cash flow from operations is a direct result of the amount of net
proceeds realized from the sale of oil and gas production. Accordingly, the
changes in cash flow from 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 available cash flow to the
Company's partners.
The Company will continue to recover its reserves and distribute to the limited
partners the net proceeds realized from the sale of oil and gas production.
Distribution amounts are subject to change if net revenues are greater or less
than expected. Nonetheless, the general partner believes the Company will
continue to have sufficient cash flow to fund operations and to maintain a
regular pattern of distributions.
On August 9, 1996, the Company's General Partner submitted preliminary proxy
material to the Securities Exchange Commission with respect to a proposed
consolidation of the Company with 33 other managed limited partnerships. The
terms and conditions of the proposed consolidation are set forth in such
preliminary proxy material.
As of June 30, 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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<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 June 30, 1996.
II-1
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
ENEX OIL & GAS INCOME
PROGRAM IV - SERIES 4, 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
August 13, 1996 By: /s/ James A. Klein
-------------------
James A. Klein
Controller and Chief
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000855112
<NAME> Enex Oil & Gas Income Program IV-Series 4,L.P.
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> dec-31-1996
<PERIOD-START> jan-01-1996
<PERIOD-END> jun-30-1996
<CASH> 7951
<SECURITIES> 0
<RECEIVABLES> 10180
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 19171
<PP&E> 1159479
<DEPRECIATION> 1041239
<TOTAL-ASSETS> 137411
<CURRENT-LIABILITIES> 28613
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 55034
<TOTAL-LIABILITY-AND-EQUITY> 137411
<SALES> 53679
<TOTAL-REVENUES> 53679
<CGS> 13183
<TOTAL-COSTS> 268429
<OTHER-EXPENSES> 10659
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (225409)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
