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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
AMENDMENT III
(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, 1995
[ ] 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 0-18330
ENEX 88-89 INCOME AND RETIREMENT FUND - Series 5, L.P.
(Name of small business issuer in its charter)
New Jersey 76-0259722
(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. $48,447
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>
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, 1996)
----------------- -------------------------------
General Partner's Interests 1
Limited Partnership Interests 208
Dividends
The Company made cash distributions to partners of $3 and $13 per $500
investment in 1995 and 1994, respectively. 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
obligations in 1996. 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
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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 decreased to $48,447 in 1995 from $64,966 in 1994.
This represents a decrease of $16,519 or 25%. Oil sales decreased by $6,978 or
20%. An 18% decrease in oil production caused revenues to decrease by $6,252. A
3% decrease in average oil net sales prices caused sales to decrease by an
additional $726. Gas sales decreased by $9,541 or 31%. A 20% decrease in gas
production reduced sales by $5,943. A 15% decrease in average gas net sales
prices reduced sales by an additional $3,598. The decreases in oil and gas
production were primarily the result of the partial shut-in of production from
the Speary acquisition in 1995 to perform a workover coupled with natural
production declines. The decrease in the average oil net sales price was
primarily due to lower net royalty payments from the Speary acquisition, which
incurred workover costs in 1995, partially offset by higher prices in the
overall market for the sale of oil. The decrease in the average gas net sales
price was primarily due to lower net royalty payments from the Speary
acquisition, which incurred workover costs in 1995, coupled with lower prices in
the overall market for the sale of gas.
Depletion expense decreased to $23,707 in 1995 from $44,080 in 1994.
This represents a decrease of $20,373 or 46%. The changes in production, noted
above, caused depletion expense to decrease by $8,416. A 34% decrease in the
depletion rate reduced depletion expense by an additional $11,957. The decrease
in the depletion rate was primarily the result of an upward revision of the oil
and gas reserves during 1995.
General and administrative expenses decreased to $11,393 in 1995
from $15,955 in 1994. This decrease of $4,562 or 29% was primarily due to a
$3,800 decrease in direct expenses in 1995 coupled with less staff time being
required to manage the Company's operations. The decrease in direct expenses was
due to lower audit and tax preparation fees incurred by the Company in 1995.
Capital Resources and Liquidity
The Company's cash flows from operations is a result of the amount
of net proceeds realized from the sale of oil and gas production. Accordingly,
the changes in cash flows from 1994 to 1995 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 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 obligations. The Company plans to repay the amount owed to
the general partner from such proceeds over a four year period. Distributions
decreased from 1994 to 1995 due primarily to the decrease in the oil and gas
sales as noted above. 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 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 cash to pay distributions and pay its operating
expenses, and meet its debt obligations in the next twelve months.
II-2
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Item 7. Financial Statements and Supplementary Data
INDEPENDENT AUDITORS' REPORT
The Partners
Enex 88-89 Income and Retirement Fund Series 5, L.P.:
We have audited the accompanying balance sheet of Enex 88-89 Income and
Retirement Fund - Series 5, L.P. (a New Jersey limited partnership) as of
December 31, 1995 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, 1995.
These financial statements are the responsibility of the general partner of
Enex 88-89 Income and Retirement Fund - Series 5, 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 88-89 Income and Retirement Fund -
Series 5, L.P. at December 31, 1995 and the results of its operations and its
cash flows for each of the two years in the period ended December 31, 1995 in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Houston, Texas
March 18, 1996
II-3
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<TABLE>
<CAPTION>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 5, L.P.
BALANCE SHEET, DECEMBER 31, 1995
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ASSETS
1995
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CURRENT ASSETS:
<S> <C>
Cash $ 1,590
Accounts receivable - oil & gas sales 12,176
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Total current assets 13,766
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OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 1,011,033
Less accumulated depreciation and depletion 947,313
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Property, net 63,720
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TOTAL $ 77,486
==============
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 2,015
Payable to general partner 56,013
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Total current liabilities 58,028
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PARTNERS' CAPITAL (DEFICIT):
Limited partners 14,400
General partner 5,058
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Total partners' capital 19,458
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TOTAL $ 77,486
==============
Number of $500 Limited Partner units outstanding 2,300
</TABLE>
See accompanying notes to financial statements.
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II-4
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ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 5, L.P.
NOTES TO FINANCIAL STATEMENTS
FOR THE TWO YEARS ENDED DECEMBER 31, 1995
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1. PARTNERSHIP ORGANIZATION
Enex 88-89 Income and Retirement Fund Series 5, L.P. (the
"Company"), a New Jersey limited partnership, commenced operations
on August 28, 1989 for the purpose of acquiring non-operating
interests in producing oil and gas properties. Total limited
partner contributions were $1,150,169, of which $11,502 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 $117,737 for
solicited subscriptions to a subsidiary of Enex, and reimbursed
Enex for organization expenses of approximately $35,000.
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
expenses 100%
Company property acquisitions 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.
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.
II-8
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The Financial Accounting Standards Board has issued Statement of
Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long Lived Assets and for Long-Lived Assets to Be
Disposed Of." This statement requires that long-lived assets and
certain identifiable intangibles held and used by the Company be
reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be
recoverable.
The Company has not determined the effect, if any, on its financial
position or results of operations which may result from the
adoption of this statement in the first quarter of 1996.
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
contigent 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-9
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4. PAYABLE TO GENERAL PARTNER
The payable to general partner primarily consists of general and
administrative expenses allocated to the Company by Enex during the
Company's start-up phase and for its ongoing operations. The
Company plans to repay the amounts owed to the general partner over
a period of four 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
Union Pacific Resources and Coalinga Corporation accounted for 75%
and 21%, respectively, of the company's total sales in 1995. Union
Pacific Resources and Coalinga Corporation accounted for 78% and
15%, respectively, of the company's total sales in 1994. No other
purchaser individually accounted for more than 10% of such sales.
II-11
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Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure
Not Applicable
II-13
<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 88-89 INCOME AND RETIREMENT
FUND - SERIES 5, L.P.
By: ENEX RESOURCES CORPORATION
the General Partner
December 23, 1996 By: /s/ G. B. Eckley
-------------------
G. B. Eckley, President
In accordance with the Exchange Act, this report has been
signed below on December 23, 1996, 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
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(Replace this text with the legend)
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<CIK> 0000857507
<NAME> ENEX 88-89INCOME 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> 1590
<SECURITIES> 0
<RECEIVABLES> 12176
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 13766
<PP&E> 1011033
<DEPRECIATION> 947313
<TOTAL-ASSETS> 77486
<CURRENT-LIABILITIES> 58028
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 19458
<TOTAL-LIABILITY-AND-EQUITY> 77486
<SALES> 48447
<TOTAL-REVENUES> 48447
<CGS> 26026
<TOTAL-COSTS> 37419
<OTHER-EXPENSES> 11393
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11028
<EPS-PRIMARY> 0
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