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 0-18330
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 5, L.P.
(Exact name of small business issuer as specified in its charter)
New Jersey 76-0259722
(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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ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 5, L.P.
BALANCE SHEET
- ------------------------------------------------------------------------------
JUNE 30,
ASSETS 1996
---------------
CURRENT ASSETS:
<S> <C>
Cash .......................................... $ 6,654
Accounts receivable - oil & gas sales ......... 15,779
----------
Total current assets ............................ 22,433
----------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests ............................ 1,011,033
Less accumulated depletion ................... 954,484
----------
Property, net ................................... 56,549
----------
TOTAL ........................................... $ 78,982
==========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable ............................. $ 112
Payable to general partner ................... 10,912
----------
Total current liabilities ....................... 11,024
----------
NONCURRENT PAYABLE TO GENERAL PARTNER ........... 32,739
----------
PARTNERS' CAPITAL:
Limited partners ............................. 27,867
General partner .............................. 7,352
----------
Total partners' capital ......................... 35,219
----------
TOTAL ........................................... $ 78,982
==========
</TABLE>
See accompanying notes to financial statements.
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I-1
<PAGE>
<TABLE>
<CAPTION>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 5, L.P.
STATEMENTS OF OPERATIONS
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(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 and gas sales ........ $18,634 $14,295 $29,650 $24,058
------- ------- ------- -------
EXPENSES:
Depletion ................ 4,168 9,572 7,171 17,217
Production taxes ......... 356 373 691 907
General and administrative 2,595 2,287 6,027 4,557
------- ------- ------- -------
Total expenses ............. 7,119 12,232 13,889 22,681
------- ------- ------- -------
NET INCOME ................. $11,515 $ 2,063 $15,761 $ 1,377
======= ======= ======= =======
</TABLE>
See accompanying notes to financial statements.
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I-2
<PAGE>
<TABLE>
<CAPTION>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 5, L.P.
STATEMENTS OF CASH FLOWS
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(UNAUDITED)
SIX MONTHS ENDED
----------------------
JUNE 30 JUNE 30,
1996 1995
-------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income .................................... $ 15,761 $ 1,377
-------- --------
Adjustments to reconcile net income to net cash provided by operating
activities:
Depletion ................................... 7,171 17,217
(Increase) decrease in:
Accounts receivable - oil & gas sales ....... (3,603) 2,391
(Decrease) in:
Accounts payable ........................... (1,903) (2,871)
Payable to general partner ................. (12,362) (10,730)
-------- --------
Total adjustments ............................. (10,697) 6,007
-------- --------
Net cash provided by operating activities ..... 5,064 7,384
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ........................ -- (7,575)
-------- --------
NET INCREASE (DECREASE) IN CASH ............... 5,064 (191)
CASH AT BEGINNING OF YEAR ..................... 1,590 1,725
-------- --------
CASH AT END OF PERIOD ......................... $ 6,654 $ 1,534
======== ========
</TABLE>
See accompanying notes to financial statements.
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I-3
<PAGE>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 5, 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. 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.
I-4
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
Second Quarter 1995 Compared to Second Quarter 1996
Oil and gas sales for the second quarter increased to $18,634 in 1996 from
$14,295 in 1995. This represents an increase of $4,339 (30%). Oil sales
increased by $1,786 or 22%. A 43% increase in the average net oil sales price
caused sales to increase by $3,010. This increase was partially offset by a 15%
decrease in oil production. Gas sales increased $2,553 or 42%. A 14% increase in
gas production increased sales by $878. A 24% increase in the average net gas
sales price increased sales by an additional $1,675. The decrease in oil
production was primarily the result of natural production declines. The increase
in gas production was primarily the result of the higher production from the
Speary acquisition on which a compressor was successfully reworked. The
increases in average net sales prices correspond with higher prices in the
overall market for the sale of oil and gas.
Depletion expense decreased to $4,168 in the second quarter of 1996 from $9,572
in the second quarter of 1995. This represents a decrease of $5,404 (56%). A 58%
decrease in the depletion rate reduced depletion expense by $5,670. This
decrease was partially offset by the changes in production, noted above. The
decrease in the depletion rate was primarily due to upward revisions of the oil
and gas reserves during December 1995.
General and administrative expenses increased to $2,595 in 1996 from $2,287 in
1995. This increase of $308 (13%) 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 and gas sales for the first six months increased to $29,650 in 1996 from
$24,058 in 1995. This represents an increase of $5,592 (23%). Oil sales
increased by $2,202 or 16%. A 40% increase in the average net oil sales price
caused sales to increase by $4,609. This increase was partially offset by a 17%
decrease in oil production. Gas sales increased $3,390 or 33%. A 34% increase in
the average net gas sales price increased sales by $3,423. This increase was
partially offset by a 1% decrease in gas production. The decrease in oil
production was primarily the result of natural production declines. The decrease
in gas production was primarily the result of natural production declines,
partially offset by higher production from the Speary acquisition on which a
compressor was successfully reworked. The increases in average net sales prices
correspond with higher prices in the overall market for the sale of oil and gas.
Depletion expense decreased to $7,171 in the first six months of 1996 from
$17,217 in the first six months of 1995. This represents a decrease $10,046
(58%). The decreases in production, noted above, reduced depletion expense by
$1,223. A 55% decrease in the depletion rate reduced depletion expense by an
additional $8,823. The decrease in the depletion rate was primarily due to
upward revisions of the oil and gas reserves during December 1995.
General and administrative expenses increased to $6,027 in 1996 from $4,557 in
1995. This increase of $1,470 is primarily due to more staff time being required
to manage the Company's operations.
I-5
<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 partners
the net proceeds realized from the sale of oil and gas production after payment
of debt obligations. 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
in the near future.
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.
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 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 88-89 INCOME AND RETIREMENT
FUND - SERIES 5, 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
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<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000857507
<NAME> Enex 88-89 Income & Retirement Fund - Sr 5, 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> 6654
<SECURITIES> 0
<RECEIVABLES> 15779
<ALLOWANCES> 0
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0
0
<COMMON> 0
<OTHER-SE> 35219
<TOTAL-LIABILITY-AND-EQUITY> 78982
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<CGS> 691
<TOTAL-COSTS> 7862
<OTHER-EXPENSES> 6027
<LOSS-PROVISION> 0
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<NET-INCOME> 15761
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</TABLE>
