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 June 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 six month periods
ended June 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
June 30, December 31,
1996 1995
--------- ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 28,835 41,056
Receivable from Managing
General Partner 65,442 2,318
--------- ---------
Total current assets 94,277 43,374
--------- ---------
Oil and gas properties - using the
full cost method of accounting 3,937,669 3,928,315
Less accumulated depreciation,
depletion and amortization 3,472,000 3,413,000
--------- ---------
Net oil and gas properties 465,669 515,315
--------- ---------
$ 559,946 558,689
========= =========
Liabilities and Partners' Equity
Current liabilities:
Accounts payable $ 3,350 -
Distributions payable 673 724
--------- ---------
Total current liabilities 4,023 724
--------- ---------
Partners' equity:
General partners (6,919) (12,615)
Limited partners 562,842 570,580
--------- ---------
Total partners' equity 555,923 557,965
--------- ---------
$ 559,946 558,689
========= =========
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Southwest Oil & Gas Income Fund X-A, L.P.
Statements of Operations
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
Revenues
Oil and gas $ 191,517 173,027 429,255 351,429
Interest 254 274 515 545
------- ------- ------- -------
191,771 173,301 429,770 351,974
------- ------- ------- -------
Expenses
Production 97,966 125,039 274,280 253,749
General and administrative 19,404 20,451 47,532 49,807
Depreciation, depletion and
amortization 27,000 26,890 59,000 53,780
------- ------- ------- -------
144,370 172,380 380,812 357,336
------- ------- ------- -------
Net income (loss) $ 47,401 921 48,958 (5,362)
======= ======= ======= =======
Net income (loss) allocated to:
Managing General Partner $ 6,696 2,503 9,716 4,358
======= ======= ======= =======
General Partner $ 744 278 1,080 484
======= ======= ======= =======
Limited Partners $ 39,961 (1,860) 38,162 (10,204)
======= ======= ======= =======
Per limited partner
unit $ 3.81 (.18) 3.64 (.97)
======= ======= ======= =======
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Southwest Oil & Gas Income Fund X-A, L.P.
Statements of Cash Flows
(unaudited)
Six Months Ended
June 30,
1996 1995
Cash flows from operating activities:
Cash received from sale of
oil and gas $ 406,795 358,391
Cash paid to suppliers (359,126) (304,049)
Interest received 515 545
------- -------
Net cash provided by operating
activities 48,184 54,887
------- -------
Cash flows from investing activities:
Additions to oil and gas properties (9,359) (3,829)
Sale of oil and gas properties 5 -
Sale of equipment - 750
------- -------
Net cash used in investing activities (9,354) (3,079)
------- -------
Cash flows used in financing activities:
Distributions to partners (51,051) (59,149)
------- -------
Net decrease in cash and cash equivalents (12,221) (7,341)
Beginning of period 41,056 35,997
------- -------
End of period $ 28,835 28,656
======= =======
(continued)
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Southwest Oil & Gas Income Fund X-A, L.P.
Statements of Cash Flows, continued
(unaudited)
Six Months Ended
June 30,
1996 1995
Reconciliation of net income (loss)
to net cash provided by operating
activities:
Net income (loss) $ 48,958 (5,362)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion and
amortization 59,000 53,780
(Increase) decrease in receivables (22,460) 6,962
Decrease in payables (37,314) (493)
------- -------
Net cash provided by operating
activities $ 48,184 54,887
======= =======
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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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Results of Operations
A. General Comparison of the Quarters Ended June 30, 1996 and 1995
The following table provides certain information regarding performance
factors for the quarters ended June 30, 1996 and 1995:
Three Months
Ended Percentage
June 30, Increase
1996 1995 (Decrease)
---- ---- ----------
Average price per barrel of oil $ 20.01 17.32 16%
Average price per mcf of gas $ 2.59 2.15 20%
Oil production in barrels 8,700 9,200 (5%)
Gas production in mcf 7,000 6,200 13%
Gross oil and gas revenue $ 191,517 173,027 11%
Net oil and gas revenue $ 93,551 47,988 95%
Partnership distributions $ 40,000 30,000 33%
Limited partner distributions $ 36,000 27,000 33%
Per unit distribution to limited
partners $ 3.43 2.58 33%
Number of limited partner units 10,484 10,484
Revenues
The Partnership's oil and gas revenues increased to $191,517 from $173,027
for the quarters ended June 30, 1996 and 1995, respectively, an increase of
11%. The principal factors affecting the comparison of the quarters ended
June 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 June 30, 1996 as compared to the
quarter ended June 30, 1995 by 16%, or $2.69 per barrel, resulting in an
increase of approximately $24,700 in revenues. Oil sales represented 91%
of total oil and gas sales during the quarter ended June 30, 1996 as
compared to 92% during the quarter ended June 30, 1995.
The average price for an mcf of gas received by the Partnership increased
during the same period by 20%, or $.44 per mcf, resulting in an increase
of approximately $2,700 in revenues.
The total increase in revenues due to the change in prices received from
oil and gas production is approximately $27,400. 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 decreased approximately 500 barrels or 5% during the
quarter ended June 30, 1996 as compared to the quarter ended June 30,
1995, resulting in a decrease of approximately $10,000 in revenues.
Gas production increased approximately 800 mcf or 13% during the same
period, resulting in an increase of approximately $2,100 in revenues.
The net total decrease in revenues due to the change in production is
approximately $7,900.
Costs and Expenses
Total costs and expenses decreased to $144,370 from $172,380 for the quarters
ended June 30, 1996 and 1995, respectively, a decrease of 16%. The decrease
is the result of lower lease operating costs and general and administrative
expense, offset by an increase in depletion expense.
1. Lease operating costs and production taxes were 22% lower, or
approximately $27,100 less during the quarter ended June 30, 1996 as
compared to the quarter ended June 30, 1995. The decrease is a result of
an adjustment for an overcharge during a prior period.
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 5%
or approximately $1,000 during the quarter ended June 30, 1996 as
compared to the quarter ended June 30, 1995.
3. Depletion expense increased to $27,000 for the quarter ended June 30,
1996 from $26,890 for the same period in 1995. This represents an
increase of less than 1%. 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.
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B. General Comparison of the Six Month Periods Ended June 30, 1996 and 1995
The following table provides certain information regarding performance
factors for the six month periods ended June 30, 1996 and 1995:
Six Months
Ended Percentage
June 30, Increase
1996 1995 (Decrease)
---- ---- ----------
Average price per barrel of oil $ 18.24 16.82 8%
Average price per mcf of gas $ 2.41 2.04 18%
Oil production in barrels 21,500 19,300 11%
Gas production in mcf 15,500 12,800 21%
Gross oil and gas revenue $ 429,255 351,429 22%
Net oil and gas revenue $ 154,975 97,680 59%
Partnership distributions $ 51,000 59,000 (14%)
Limited partner distributions $ 45,900 53,100 (14%)
Per unit distribution to limited
partners $ 4.38 5.06 (14%)
Number of limited partner units 10,484 10,484
Revenues
The Partnership's oil and gas revenues increased to $429,255 from $351,429
for the six months ended June 30, 1996 and 1995, respectively, an increase of
22%. The principal factors affecting the comparison of the six months ended
June 30, 1996 and 1995 are as follows:
1. The average price for a barrel of oil received by the Partnership
increased during the six months ended June 30, 1996 as compared to the
six months ended June 30, 1995 by 8%, or $1.42 per barrel, resulting in
an increase of approximately $27,400 in revenues. Oil sales represented
91% of total oil and gas sales during the six months ended June 30, 1996
as compared to 93% during the six months ended June 30, 1995.
The average price for an mcf of gas received by the Partnership increased
during the same period by 18%, or $.37 per mcf, resulting in an increase
of approximately $4,700 in revenues.
The total increase in revenues due to the change in prices received from
oil and gas production is approximately $32,100. 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 2,200 barrels or 11% during the
six months ended June 30, 1996 as compared to the six months ended June
30, 1995, resulting in an increase of approximately $40,100 in revenues.
Gas production increased approximately 2,700 mcf or 21% during the same
period, resulting in an increase of approximately $6,500 in revenues.
The total increase in revenues due to the change in production is
approximately $46,600.
Costs and Expenses
Total costs and expenses increased to $380,812 from $357,336 for the six
months ended June 30, 1996 and 1995, respectively, an increase of 7%. The
increase is the result of higher lease operating costs and depletion expense,
offset by a decline in general and administrative expense.
1. Lease operating costs and production taxes were 8% higher, or
approximately $20,500 more during the six months ended June 30, 1996 as
compared to the six months ended June 30, 1995. The increase in lease
operating costs is primarily attributable to litigation costs on one
lease, offset by an adjustment for an overcharge during a prior period
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 5%
or approximately $2,300 during the six months ended June 30, 1996 as
compared to the six months ended June 30, 1995.
3. Depletion expense increased to $59,000 for the six months ended June 30,
1996 from $53,780 for the same period in 1995. This represents an
increase of 10%. 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 six months ended June 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 $48,200 in the
six months ended June 30, 1996 as compared to approximately $54,900 in the
six months ended June 30, 1995. The primary source of the 1996 cash flow
from operating activities was profitable operations.
Cash flows used in investing activities were approximately $9,400 in the six
months ended June 30, 1996 as compared to approximately $3,100 in the six
months ended June 30, 1995. The principle use of the 1996 cash flow used in
investing activities was the additions to oil and gas properties, offset by
the sale of oil and gas properties.
Cash flows used in financing activities were approximately $51,100 in the six
months ended June 30, 1996 as compared to approximately $59,100 in the six
months ended June 30, 1995. The only use in financing activities was the
distributions to partners.
Total distributions during the six months ended June 30, 1996 were $51,000 of
which $45,900 was distributed to the limited partners and $5,100 to the
general partners. The per unit distribution to limited partners during the
six months ended June 30, 1996 was $4.38. Total distributions during the six
months ended June 30, 1995 were $59,000 of which $53,100 was distributed to
the limited partners and $5,900 to the general partners. The per unit
distribution to limited partners during the six months ended June 30, 1995
was $5.06.
The sources for the 1996 distributions of $51,000 were oil and gas operations
of approximately $48,200 and the sale of oil and gas properties of
approximately $5, offset by additions to oil and gas properties of
approximately $9,400, with the balance from available cash on hand at the
beginning of the period. The sources for the 1995 distributions of $59,000
were oil and gas operations of approximately $54,900 and the sale of oil and
gas properties of approximately $800, offset by additions to oil and gas
properties of approximately $3,800, with the balance from available cash on
hand at the beginning of the period.
Since inception of the Partnership, cumulative monthly cash distributions of
$2,386,906 have been made to the partners. As of June 30, 1996, $2,198,685
or $209.72 per limited partner unit has been distributed to the limited
partners, representing a 42% return of the capital contributed.
As of June 30, 1996, the Partnership had approximately $90,300 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) None
(b) No reports on Form 8-K were filed during the quarter for which
this report is filed.
PAGE
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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: August 12, 1996
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Balance
Sheet at June 30, 1996 (Unaudited) and the Statement of Operations for the Six
Months Ended June 30, 1996 (Unaudited) and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 28,835
<SECURITIES> 0
<RECEIVABLES> 65,442
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 94,277
<PP&E> 3,937,669
<DEPRECIATION> 3,472,000
<TOTAL-ASSETS> 559,946
<CURRENT-LIABILITIES> 4,023
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 555,923
<TOTAL-LIABILITY-AND-EQUITY> 559,946
<SALES> 429,255
<TOTAL-REVENUES> 429,770
<CGS> 274,280
<TOTAL-COSTS> 274,280
<OTHER-EXPENSES> 106,532
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 48,958
<INCOME-TAX> 0
<INCOME-CONTINUING> 48,958
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 48,958
<EPS-PRIMARY> 3.64
<EPS-DILUTED> 3.64
</TABLE>
