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 September 30, 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 0-18996
SOUTHWEST OIL & GAS 1990-91 INCOME PROGRAM
Southwest Oil & Gas Income Fund X-A, L.P.
(Exact name of registrant as specified
in its limited partnership agreement)
Delaware 75-2310854
(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 14.
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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 and nine month periods
ended September 30, 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 X-A, L.P.
Balance Sheets
September 30, December 31,
1996 1995
------------- ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 15,921 41,056
Receivable from Managing
General Partner 65,115 2,318
--------- ---------
Total current assets 81,036 43,374
--------- ---------
Oil and gas properties - using the
full cost method of accounting 3,937,842 3,928,315
Less accumulated depreciation,
depletion and amortization 3,497,000 3,413,000
--------- ---------
Net oil and gas properties 440,842 515,315
--------- ---------
$ 521,878 558,689
========= =========
Liabilities and Partners' Equity
Current liability - Distributions payable 566 724
--------- ---------
Partners' equity:
General partners (7,881) (12,615)
Limited partners 529,193 570,580
--------- ---------
Total partners' equity 521,312 557,965
--------- ---------
$ 521,878 558,689
========= =========
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Southwest Oil & Gas Income Fund X-A, L.P.
Statements of Operations
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
Revenues
Oil and gas $ 182,348 123,469 611,603 474,899
Interest 252 167 767 712
------- ------- ------- -------
182,600 123,636 612,370 475,611
------- ------- ------- -------
Expenses
Production 117,699 129,980 391,978 383,730
General and administrative 20,511 20,213 68,045 70,021
Depreciation, depletion and
amortization 25,000 17,667 84,000 71,447
------- ------- ------- -------
163,210 167,860 544,023 525,198
------- ------- ------- -------
Net income (loss) $ 19,390 (44,224) 68,347 (49,587)
======= ======= ======= =======
Net income (loss) allocated to:
Managing General Partner $ 3,995 (2,390) 13,711 1,967
======= ======= ======= =======
General Partner $ 444 (266) 1,523 219
======= ======= ======= =======
Limited Partners $ 14,951 (41,568) 53,113 (51,773)
======= ======= ======= =======
Per limited partner
unit $ 1.43 (3.96) 5.07 (4.94)
======= ======= ======= =======
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Southwest Oil & Gas Income Fund X-A, L.P.
Statements of Cash Flows
(unaudited)
Nine Months Ended
September 30,
1996 1995
Cash flows from operating activities:
Cash received from sale of
oil and gas $ 573,935 502,657
Cash paid to suppliers (485,152) (443,974)
Interest received 767 712
-------- -------
Net cash provided by operating
activities 89,550 59,395
-------- -------
Cash flows from investing activities:
Additions to oil and gas properties (10,567) (5,327)
Sale of oil and gas properties 1,040 -
Sale of equipment - 4,026
-------- -------
Net cash used in investing activities (9,527) (1,301)
-------- -------
Cash flows used in financing activities:
Distributions to partners (105,158) (74,013)
-------- -------
Net decrease in cash and cash equivalents (25,135) (15,919)
Beginning of period 41,056 35,997
-------- -------
End of period $ 15,921 20,078
======== =======
(continued)
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Southwest Oil & Gas Income Fund X-A, L.P.
Statements of Cash Flows, continued
(unaudited)
Nine Months Ended
September 30,
1996 1995
Reconciliation of net income (loss)
to net cash provided by operating activities:
Net income (loss) $ 68,347 (49,587)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion and
amortization 84,000 71,447
(Increase) decrease in receivables (37,668) 27,758
Increase (decrease) in payables (25,129) 9,777
Net cash provided by operating ------- -------
activities $ 89,550 59,395
======= =======
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
Southwest Oil & Gas Income Fund X-A, L.P. was organized as a Delaware limited
partnership on January 29, 1990. The offering of such limited partnership
interests began on May 11, 1990 as part of a shelf offering registered under
the name Southwest Oil & Gas 1990-91 Income Program. Minimum capital
requirements for the Partnership were met on August 15, 1990, with the
offering of limited partnership interests concluding on November 30, 1990,
with total limited partner contributions of $5,242,000.
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 will not be 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, 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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<PAGE>
Results of Operations
A. General Comparison of the Quarters Ended September 30, 1996 and 1995
The following table provides certain information regarding performance
factors for the quarters ended September 30, 1996 and 1995:
Three Months
Ended Percentage
September 30, Increase
1996 1995 (Decrease)
---- ---- ----------
Average price per barrel of oil $ 20.95 15.30 37%
Average price per mcf of gas $ 2.14 2.16 (1%)
Oil production in barrels 7,900 7,200 10%
Gas production in mcf 7,800 6,000 30%
Gross oil and gas revenue $ 182,348 123,469 48%
Net oil and gas revenue(loss) $ 64,649 (6,511) 1,093%
Partnership distributions $ 54,000 15,000 260%
Limited partner distributions $ 48,600 14,000 247%
Per unit distribution to limited
partners $ 4.64 1.34 247%
Number of limited partner units 10,484 10,484
Revenues
The Partnership's oil and gas revenues increased to $182,348 from $123,469
for the quarters ended September 30, 1996 and 1995, respectively, an increase
of 48%. The principal factors affecting the comparison of the quarters ended
September 30, 1996 and 1995 are as follows:
1. The average price for a barrel of oil received by the Partnership
increased during the quarter ended September 30, 1996 as compared to the
quarter ended September 30, 1995 by 37%, or $5.65 per barrel, resulting
in an increase of approximately $40,700 in revenues. Oil sales
represented 91% of total oil and gas sales during the quarter ended
September 30, 1996 as compared to 89% during the quarter ended September
30, 1995.
The average price for an mcf of gas received by the Partnership decreased
during the same period by 1%, or $.02 per mcf, resulting in a decrease of
approximately $100 in revenues.
The net total increase in revenues due to the change in prices received
from oil and gas production is approximately $40,600. 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 increased approximately 700 barrels or 10% during the
quarter ended September 30, 1996 as compared to the quarter ended
September 30, 1995, resulting in an increase of approximately $14,700 in
revenues.
Gas production increased approximately 1,800 mcf or 30% during the same
period, resulting in an increase of approximately $3,900 in revenues.
The total increase in revenues due to the change in production is
approximately $18,600.
Costs and Expenses
Total costs and expenses decreased to $163,210 from $167,860 for the quarters
ended September 30, 1996 and 1995, respectively, a decrease of 3%. The
decrease is the result of lower lease operating costs, offset by an increase
in general and administrative expense and depletion expense.
1. Lease operating costs and production taxes were 9% lower, or
approximately $12,300 less during the quarter ended September 30, 1996 as
compared to the quarter ended September 30, 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 increased 1%
or approximately $300 during the quarter ended September 30, 1996 as
compared to the quarter ended September 30, 1995.
3. Depletion expense increased to $25,000 for the quarter ended September
30, 1996 from $17,000 for the same period in 1995. This represents an
increase of 47%. 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. Consequently, depletion
will generally fluctuate in direct relation to oil and gas revenues. As
noted above, oil and gas revenues increased due to an increase in price
and production for the quarter ended September 30, 1996 as compared to
the same period for 1995. Depletion reflected a comparable increase.
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B. General Comparison of the Nine Month Periods Ended September 30, 1996 and
1995
The following table provides certain information regarding performance
factors for the nine month periods ended September 30, 1996 and 1995:
Nine Months
Ended Percentage
September 30, Increase
1996 1995 (Decrease)
---- ---- ----------
Average price per barrel of oil $ 18.97 16.40 16%
Average price per mcf of gas $ 2.43 2.08 17%
Oil production in barrels 29,400 26,600 11%
Gas production in mcf 22,300 18,800 19%
Gross oil and gas revenue $ 611,603 474,899 29%
Net oil and gas revenue $ 219,625 91,169 141%
Partnership distributions $ 105,000 74,000 42%
Limited partner distributions $ 94,500 67,100 41%
Per unit distribution to limited
partners $ 9.01 6.40 41%
Number of limited partner units 10,484 10,484
Revenues
The Partnership's oil and gas revenues increased to $611,603 from $474,899
for the nine months ended September 30, 1996 and 1995, respectively, an
increase of 29%. The principal factors affecting the comparison of the nine
months ended September 30, 1996 and 1995 are as follows:
1. The average price for a barrel of oil received by the Partnership
increased during the nine months ended September 30, 1996 as compared to
the nine months ended September 30, 1995 by 16%, or $2.57 per barrel,
resulting in an increase of approximately $68,400 in revenues. Oil sales
represented 91% of total oil and gas sales during the nine months ended
September 30, 1996 as compared to 92% during the nine months ended
September 30, 1995.
The average price for an mcf of gas received by the Partnership increased
during the same period by 17%, or $.35 per mcf, resulting in an increase
of approximately $6,600 in revenues.
The total increase in revenues due to the change in prices received from
oil and gas production is approximately $75,000. 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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<PAGE>
2. Oil production increased approximately 2,800 barrels or 11% during the
nine months ended September 30, 1996 as compared to the nine months ended
September 30, 1995, resulting in an increase of approximately $53,100 in
revenues.
Gas production increased approximately 3,500 mcf or 19% during the same
period, resulting in an increase of approximately $8,500 in revenues.
The total increase in revenues due to the change in production is
approximately $61,600.
Costs and Expenses
Total costs and expenses increased to $544,023 from $525,198 for the nine
months ended September 30, 1996 and 1995, respectively, an increase of 4%.
The increase is the result of higher lease operating costs and depletion
expense, offset by a decrease in general and administrative expense.
1. Lease operating costs and production taxes were 2% higher, or
approximately $8,200 more during the nine months ended September 30, 1996
as compared to the nine months ended September 30, 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 3%
or approximately $2,000 during the nine months ended September 30, 1996
as compared to the nine months ended September 30, 1995.
3. Depletion expense increased to $84,000 for the nine months ended
September 30, 1996 from $67,000 for the same period in 1995. This
represents an increase of 25%. 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. Consequently,
depletion will generally fluctuate in direct relation to oil and gas
revenues. As noted above, oil and gas revenues increased due to an
increase in price and production for the nine months ended September 30,
1996 as compared to the same period for 1995. Depletion reflected a
comparable increase.
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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 $89,600 in the
nine months ended September 30, 1996 as compared to approximately $59,400 in
the nine months ended September 30, 1995. The primary source of the 1996
cash flow from operating activities was profitable operations.
Cash flows used in investing activities were approximately $9,500 in the nine
months ended September 30, 1996 as compared to approximately $1,300 in the
nine months ended September 30, 1995. The principle use 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 $105,200 in the
nine months ended September 30, 1996 as compared to approximately $74,000 in
the nine months ended September 30, 1995. The only use in financing
activities was the distributions to partners.
Total distributions during the nine months ended September 30, 1996 were
$105,000 of which $94,500 was distributed to the limited partners and $10,500
to the general partners. The per unit distribution to limited partners
during the nine months ended September 30, 1996 was $9.01. Total
distributions during the nine months ended September 30, 1995 were $74,000 of
which $67,100 was distributed to the limited partners and $6,900 to the
general partners. The per unit distribution to limited partners during the
nine months ended September 30, 1995 was $6.40.
The sources for the 1996 distributions of $105,000 were oil and gas
operations of approximately $89,600 and the sale of oil and gas properties of
approximately $1,000, offset by additions to oil and gas properties of
approximately $10,600, with the balance from available cash on hand at the
beginning of the period. The sources for the 1995 distributions of $74,000
were oil and gas operations of approximately $59,400 and the sale of oil and
gas properties of approximately $4,000, offset by additions to oil and gas
properties of approximately $5,300, with the balance from available cash on
hand at the beginning of the period.
Since inception of the Partnership, cumulative monthly cash distributions of
$2,440,906 have been made to the partners. As of September 30, 1996,
$2,247,285 or $214.35 per limited partner unit has been distributed to the
limited partners, representing a 43% return of the capital contributed.
As of September 30, 1996, the Partnership had approximately $80,500 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.
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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) Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter for which
this report is filed.
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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 X-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: November 15, 1996
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Balance
Sheet at September 30, 1996 (Unaudited) and the Statement of Operations for the
Nine Months Ended September 30, 1996 (Unaudited) and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 15,921
<SECURITIES> 0
<RECEIVABLES> 65,115
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 81,036
<PP&E> 3,937,842
<DEPRECIATION> 3,497,000
<TOTAL-ASSETS> 521,878
<CURRENT-LIABILITIES> 566
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 521,312
<TOTAL-LIABILITY-AND-EQUITY> 521,878
<SALES> 611,603
<TOTAL-REVENUES> 612,370
<CGS> 391,978
<TOTAL-COSTS> 391,978
<OTHER-EXPENSES> 152,045
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 68,347
<INCOME-TAX> 0
<INCOME-CONTINUING> 68,347
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 68,347
<EPS-PRIMARY> 5.07
<EPS-DILUTED> 5.07
</TABLE>
