United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 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
<TABLE>
<CAPTION>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 5, L.P.
BALANCE SHEET
- ------------------------------------------------------------------------------
September 30,
ASSETS 1996
---------------------
CURRENT ASSETS:
<S> <C>
Cash $ 4,840
Accounts receivable - oil & gas sales 15,597
---------------------
Total current assets 20,437
---------------------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests 1,011,033
Less accumulated depletion 958,275
---------------------
Property, net 52,758
---------------------
TOTAL $ 73,195
=====================
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to general partner $ 36,010
---------------------
PARTNERS' CAPITAL:
Limited partners 29,261
General partner 7,924
---------------------
Total partners' capital 37,185
---------------------
TOTAL $ 73,195
=====================
Number of $500 Limited Partner units outstanding 2,300
</TABLE>
See accompanying notes to financial statements.
- ------------------------------------------------------------------------------
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<PAGE>
<TABLE>
<CAPTION>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 5, L.P.
STATEMENTS OF OPERATIONS
- ------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
QUARTER ENDED NINE MONTHS ENDED
-------------------------------------- ----------------------------------------
September 30, September 30, September 30, September 30,
1996 1995 1996 1995
----------------- ----------------- ----------------- -------------------
REVENUES:
<S> <C> <C> <C> <C>
Oil and gas sales $ 15,241 $ 11,570 $ 44,891 $ 35,628
----------------- ----------------- ----------------- -------------------
EXPENSES:
Depletion 3,791 7,343 10,962 24,560
Production taxes 151 285 842 1,192
General and administrative 2,463 2,406 8,490 6,963
----------------- ----------------- ----------------- -------------------
Total expenses 6,405 10,034 20,294 32,715
----------------- ----------------- ----------------- -------------------
NET INCOME $ 8,836 $ 1,536 $ 24,597 $ 2,913
================= ================= ================= ===================
</TABLE>
See accompanying notes to financial statements.
- ------------------------------------------------------------------------
I-2
<PAGE>
<TABLE>
<CAPTION>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 5, L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE TWO YEARS ENDED DECEMBER 31, 1995
AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------
PER $500
LIMITED
PARTNER
GENERAL LIMITED UNIT OUT-
TOTAL PARTNER PARTNERS STANDING
-------------- ------------- -------------- --------
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1994 $ 49,984 $ 870 $ 49,114 $ 21
CASH DISTRIBUTIONS (32,107) (3,210) (28,897) (13)
NET INCOME (LOSS) (1,871) 4,682 (6,553) (2)
-------------- ------------- -------------- --------
BALANCE, DECEMBER 31, 1994 16,006 2,342 13,664 6
CASH DISTRIBUTIONS (7,576) (758) (6,818) (3)
NET INCOME 11,028 3,474 7,554 3
-------------- ------------- -------------- --------
BALANCE, DECEMBER 31, 1995 $ 19,458 $ 5,058 $ 14,400 $ 6
CASH DISTRIBUTIONS (6,870) (689) (6,181) (2)
NET INCOME 24,597 3,555 21,042 9
-------------- ------------- -------------- --------
BALANCE, SEPTEMBER 30, 1996 $ 37,185 $ 7,924 $ 29,261 (1) $ 13
============== ============= ============== ========
</TABLE>
(1) Includes 132 units purchased by the general partner as a limited partner.
See accompanying notes to financial statements.
- ------------------------------------------------------------------------------
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<PAGE>
<TABLE>
<CAPTION>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 5, L.P.
STATEMENTS OF CASH FLOWS
- -----------------------------------------------------------------
(UNAUDITED)
NINE MONTHS ENDED
--------------------------------------------
September 30, September 30,
1996 1995
------------------- -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 24,597 $ 2,913
------------------- -------------------
Adjustments to reconcile net income to net cash provided by operating
activities:
Depletion 10,962 24,560
(Increase) decrease in:
Accounts receivable - oil & gas sales (3,421) 4,642
(Decrease) in:
Accounts payable (2,015) (2,871)
Payable to general partner (20,003) (19,585)
------------------- -------------------
Total adjustments (14,477) 6,746
------------------- -------------------
Net cash provided by operating activities 10,120 9,659
------------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (6,870) (7,575)
------------------- -------------------
NET INCREASE IN CASH 3,250 2,084
CASH AT BEGINNING OF YEAR 1,590 1,725
------------------- -------------------
CASH AT END OF PERIOD $ 4,840 $ 3,809
=================== ===================
</TABLE>
See accompanying notes to financial statements.
- -----------------------------------------------------------------------------
I-4
<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. A cash distribution was made to the limited partners of the Company in
the amount of $5,829, representing net revenues from the sale of oil
and gas produced from properties owned by the Company. This
distribution was made on July 31, 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. On November 13, 1996, the Company submitted amended
preliminary proxy material to the SEC with respect to this
consolidation. The terms and conditions of the proposed consolidation
are set forth in such preliminary proxy material.
4. 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. Prior to
this pronouncement, the Company assessed properties on an aggregate basis.
Upon adoption of SFAS 121, the Company began assessing properties on an
individual basis, wherein total capitalized costs may not exceed the
property's fair market value. The fair market value of each property was
determined by H. J. Gruy and Associates, ("Gruy"). To determine the fair
market value, Gruy estimated each property's oil and gas reserves, applied
certain assumptions regarding price and cost escalations, applied a 10%
discount factor for time and certain discount factors for risk, location,
type of ownership interest, category of reserves, operational
characteristics, and other factors.
I-5
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
Third Quarter 1995 Compared to Third Quarter 1996
Oil and gas sales for the third quarter increased to $15,241 in 1996 from
$11,570 in 1995. This represents an increase of $3,671 (32%). Oil sales
increased by $936 or 15%. A 4% increase in the average net oil sales price
caused sales to increase by $659. A 10% increase in oil production increased
sales by an additional $277. Gas sales increased $2,735 or 56%. A 42% increase
in gas production increased sales by $2,153. A 10% increase in the average net
gas sales price increased sales by an additional $582. The increases in oil and
gas production were primarily the result of 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 $3,791 in the third quarter of 1996 from $7,343
in the third quarter of 1995. This represents a decrease of $3,552 (48%). A 53%
decrease in the depletion rate reduced depletion expense by $4,241. 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 $2,463 in 1996 from $2,406 in
1995. This increase of $57 (3%) is primarily due to more staff time being
required to manage the Company's operations.
First Nine Months in 1995 Compared to First Nine Months in 1996
Oil and gas sales for the first nine months increased to $44,891 in 1996 from
$35,628 in 1995. This represents an increase of $9,263 (26%). Oil sales
increased by $3,165 or 17%. A 27% increase in the average net oil sales price
caused sales to increase by $4,729. This increase was partially offset by a 8%
decrease in oil production. Gas sales increased $6,098 or 40%. A 37% increase in
the average net gas sales price increased sales by $5,654. A 3% increase in gas
production increased sales by an additional $444. The decrease in oil production
was primarily the result of natural production declines. The increase in gas
production was primarily the result of 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 $10,962 in the first nine months of 1996 from
$24,560 in the first nine months of 1995. This represents a decrease $13,598
(55%). The decreases in production, noted above, reduced depletion expense by
$402. A 55% decrease in the depletion rate reduced depletion expense by an
additional $13,196. 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 $8,490 in 1996 from $6,963 in
1995. This increase
I-6
<PAGE>
of $1,527 is primarily due to more staff time being required to manage the
Company's operations.
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's "available cash flow" is essentially equal to
the net amount of cash provided by operating, financing and investing
activities.
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. There
appears to be sufficient net revenues to pay all operating obligations and
expenses. 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.
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. On
November 13, 1996, the Company submitted amended preliminary proxy material to
the SEC with respect to this consolidation. The terms and conditions of the
proposed consolidation are set forth in such preliminary proxy material.
I-7
<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 September 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
December 23, 1996 By: /s/ James A. Klein
-------------------
James A. Klein
Controller and Chief
Accounting Officer
<PAGE>
<TABLE> <S> <C>
<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> 9-mos
<FISCAL-YEAR-END> dec-31-1996
<PERIOD-START> jan-01-1996
<PERIOD-END> sep-30-1996
<CASH> 4840
<SECURITIES> 0
<RECEIVABLES> 15597
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 20437
<PP&E> 1011033
<DEPRECIATION> 958275
<TOTAL-ASSETS> 73195
<CURRENT-LIABILITIES> 36010
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 37185
<TOTAL-LIABILITY-AND-EQUITY> 73195
<SALES> 44891
<TOTAL-REVENUES> 44891
<CGS> 842
<TOTAL-COSTS> 20294
<OTHER-EXPENSES> 19452
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24597
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
