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 0-19585
SOUTHWEST OIL & GAS 1990-91 INCOME PROGRAM
Southwest Oil & Gas Income Fund X-B, L.P.
(Exact name of registrant as specified
in its limited partnership agreement)
Delaware 75-2332176
(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-B, L.P.
Balance Sheets
September 30, December 31,
1996 1995
------------- ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 30,298 45,580
Receivable from Managing
General Partner 154,326 147,946
--------- ---------
Total current assets 184,624 193,526
--------- ---------
Oil and gas properties - using the
full cost method of accounting 4,562,923 4,672,435
Less accumulated depreciation,
depletion and amortization 3,095,604 2,952,604
--------- ---------
Net oil and gas properties 1,467,319 1,719,831
--------- ---------
Organization costs, net - 1,494
--------- ---------
$ 1,651,943 1,914,851
========= =========
Liabilities and Partners' Equity
Current liability - Distributions payable $ 83 340
--------- ---------
Partners' equity:
General partners 8,608 19,892
Limited partners 1,643,252 1,894,619
--------- ---------
Total partners' equity 1,651,860 1,914,511
--------- ---------
$ 1,651,943 1,914,851
========= =========
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Southwest Oil & Gas Income Fund X-B, L.P.
Statements of Operations
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
Revenues
Oil and gas $ 386,978 354,374 1,123,865 1,126,330
Interest 532 574 2,258 1,837
------- ------- --------- ---------
387,510 354,948 1,126,123 1,128,167
------- ------- --------- ---------
Expenses
Production 207,714 208,225 637,960 631,810
General and administrative 18,243 18,314 64,013 66,423
Depreciation, depletion and
amortization 50,000 56,250 144,494 179,750
------- ------- --------- ---------
275,957 282,789 846,467 877,983
------- ------- --------- ---------
Net income $ 111,553 72,159 279,656 250,184
======= ======= ========= =========
Net income allocated to:
Managing General Partner $ 14,540 11,557 38,174 38,694
======= ======= ========= =========
General Partner $ 1,616 1,284 4,242 4,299
======= ======= ========= =========
Limited Partners $ 95,397 59,318 237,240 207,191
======= ======= ========= =========
Per limited partner
unit $ 8.76 5.45 21.79 19.03
======= ======= ========= =========
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Southwest Oil & Gas Income Fund X-B, L.P.
Statements of Cash Flows
(unaudited)
Nine Months Ended
September 30,
1996 1995
Cash flows from operating activities:
Cash from oil and gas sales $ 1,092,346 1,131,499
Cash paid to suppliers (676,946) (665,244)
Interest received 2,258 1,837
--------- ---------
Net cash provided by operating
activities 417,658 468,092
--------- ---------
Cash flows from investing activities:
Additions to oil and gas properties (14,841) (11,373)
Sale of oil and gas properties 124,465 6,677
--------- ---------
Net cash provided by (used in)
investing activities 109,624 (4,696)
--------- ---------
Cash flows used in financing activities:
Distributions to partners (542,564) (438,972)
--------- ---------
Net increase (decrease) in cash and
cash equivalents (15,282) 24,424
Beginning of period 45,580 22,463
--------- ---------
End of period $ 30,298 46,887
========= =========
(continued)
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Southwest Oil & Gas Income Fund X-B, L.P.
Statements of Cash Flows, continued
(unaudited)
Nine Months Ended
September 30,
1996 1995
Reconciliation of net income to
net cash provided by operating
activities:
Net income $ 279,656 250,184
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion and
amortization 144,494 179,750
(Increase) decrease in receivables (31,519) 5,169
Increase in payables 25,027 32,989
------- ---------
Net cash provided by operating
activities $ 417,658 468,092
======= =========
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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-B, L.P. was organized as a Delaware limited
partnership on November 27, 1990. The offering of such limited partnership
interests began on December 1, 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 March 1, 1991, with the offering
of limited partnership interests concluding on September 30, 1991, with total
limited partner contributions of $5,444,500.
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 farmout
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 $ 20.42 15.72 30%
Average price per mcf of gas $ 2.06 1.50 37%
Oil production in barrels 15,700 18,600 (16%)
Gas production in mcf 32,500 41,000 (21%)
Gross oil and gas revenue $ 386,978 354,374 9%
Net oil and gas revenue $ 179,264 146,149 23%
Partnership distributions $ 142,000 146,000 (3%)
Limited partner distributions $ 127,800 131,400 (3%)
Per unit distribution to limited
partners $ 11.74 12.07 (3%)
Number of limited partner units 10,889 10,889
Revenues
The Partnership's oil and gas revenues increased to $386,978 from $354,374
for the quarters ended September 30, 1996 and 1995, respectively, an increase
of 9%. 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 30%, or $4.70 per barrel, resulting
in an increase of approximately $87,400 in revenues. Oil sales
represented 83% of total oil and gas sales during the quarters ended
September 30, 1996 and 1995.
The average price for an mcf of gas received by the Partnership increased
during the same period by 37%, or $.56 per mcf, resulting in an increase
of approximately $23,000 in revenues.
The total increase in revenues due to the change in prices received from
oil and gas production is approximately $110,400. 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 2,900 barrels or 16% during the
quarter ended September 30, 1996 as compared to the quarter ended
September 30, 1995, resulting in a decrease of approximately $59,200 in
revenues.
Gas production decreased approximately 8,500 mcf or 21% during the same
period, resulting in a decrease of approximately $17,500 in revenues.
The total decrease in revenues due to the change in production is
approximately $76,700. The decrease is primarily attributable to
property sales.
Costs and Expenses
Total costs and expenses decreased to $275,957 from $282,789 for the quarters
ended September 30, 1996 and 1995, respectively, a decrease of 2%. The
decrease is the result of lower lease operating costs, general and
administrative expense and depletion expense.
1. Lease operating costs and production taxes were less than 1% lower, or
approximately $500 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 decreased less
than 1% or approximately $100 during the quarter ended September 30, 1996
as compared to the quarter ended September 30, 1995.
3. Depletion expense decreased to $50,000 for the quarter ended September
30, 1996 from $54,000 for the same period in 1995. This represents a
decrease of 7%. 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. Two factors that
attributed to the decline in depletion expense between the comparative
periods were the increase in the price of oil and gas used to determine
the Partnership's reserves for January 1, 1996 as compared to 1995 and
the increase in property sales.
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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 $ 19.46 16.46 18%
Average price per mcf of gas $ 2.09 1.49 40%
Oil production in barrels 47,400 57,500 (18%)
Gas production in mcf 96,500 120,400 (20%)
Gross oil and gas revenue $ 1,123,865 1,126,330 (.2%)
Net oil and gas revenue $ 485,905 494,520 (2%)
Partnership distributions $ 542,307 439,000 24%
Limited partner distributions $ 488,607 395,100 24%
Per unit distribution to limited
partners $ 44.87 36.28 24%
Number of limited partner units 10,889 10,889
Revenues
The Partnership's oil and gas revenues decreased to $1,123,865 from
$1,126,330 for the nine months ended September 30, 1996 and 1995,
respectively, a decrease of less than 1%. 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 18%, or $3.00 per barrel,
resulting in an increase of approximately $172,500 in revenues. Oil
sales represented 82% of total oil and gas sales during the nine months
ended September 30, 1996 as compared to 84% 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 40%, or $.60 per mcf, resulting in an increase
of approximately $72,200 in revenues.
The total increase in revenues due to the change in prices received from
oil and gas production is approximately $244,700. 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 decreased approximately 10,100 barrels or 18% during the
nine months ended September 30, 1996 as compared to the nine months ended
September 30, 1995, resulting in a decrease of approximately $196,500 in
revenues.
Gas production decreased approximately 23,900 mcf or 20% during the same
period, resulting in a decrease of approximately $50,000 in revenues.
The total decrease in revenues due to the change in production is
approximately $246,500. The decrease is primarily attributable to
property sales.
Costs and Expenses
Total costs and expenses decreased to $846,467 from $877,983 for the nine
months ended September 30, 1996 and 1995, respectively, a decrease of 4%.
The decrease is the result of lower general and administrative expense and
depletion expense, offset by an increase in lease operating costs.
1. Lease operating costs and production taxes were 1% higher, or
approximately $6,200 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 4%
or approximately $2,400 during the nine months ended September 30, 1996
as compared to the nine months ended September 30, 1995.
3. Depletion expense decreased to $143,000 for the nine months ended
September 30, 1996 from $173,000 for the same period in 1995. This
represents a decrease of 17%. 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. Two factors that
attributed to the decline in depletion expense between the comparative
periods were the increase in the price of oil and gas used to determine
the Partnership's reserves for January 1, 1996 as compared to 1995 and
the increase in property sales.
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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 $417,700 in
the nine months ended September 30, 1996 as compared to approximately
$468,100 in the nine months ended September 30, 1995. The primary source of
the 1996 cash flow from operating activities was profitable operations.
Cash flows provided by (used in) investing activities were approximately
$109,600 in the nine months ended September 30, 1996 as compared to
approximately $(4,700) in the nine months ended September 30, 1995. The
principle source 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 $542,600 in the
nine months ended September 30, 1996 as compared to approximately $439,000 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
$542,307 of which $488,607 was distributed to the limited partners and
$53,700 to the general partners. The per unit distribution to limited
partners during the nine months ended September 30, 1996 was $44.87. Total
distributions during the nine months ended September 30, 1995 were $439,000
of which $395,100 was distributed to the limited partners and $43,900 to the
general partners. The per unit distribution to limited partners during the
nine months ended September 30, 1995 was $36.28.
The sources for the 1996 distributions of $542,307 were oil and gas
operations of approximately $417,700 and the sale of oil and gas properties
of approximately $124,500, offset by additions to oil and gas properties of
approximately $14,800, with the balance from available cash on hand at the
beginning of the period. The sources for the 1995 distributions of $439,000
were oil and gas operations of approximately $468,100 and the sale of oil and
gas properties of approximately $6,700, offset by additions to oil and gas
properties of approximately $11,400, resulting in excess cash for
contingencies and subsequent distributions.
Since inception of the Partnership, cumulative monthly cash distributions of
$3,669,238 have been made to the partners. As of September 30, 1996,
$3,320,113 or $304.91 per limited partner unit has been distributed to the
limited partners, representing a 61% return of the capital contributed.
As of September 30, 1996, the Partnership had approximately $184,500 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-B, 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> 30,298
<SECURITIES> 0
<RECEIVABLES> 154,326
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 184,624
<PP&E> 4,562,923
<DEPRECIATION> 3,095,604
<TOTAL-ASSETS> 1,651,943
<CURRENT-LIABILITIES> 83
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,651,860
<TOTAL-LIABILITY-AND-EQUITY> 1,651,943
<SALES> 1,123,865
<TOTAL-REVENUES> 1,126,123
<CGS> 637,960
<TOTAL-COSTS> 637,960
<OTHER-EXPENSES> 208,507
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 279,656
<INCOME-TAX> 0
<INCOME-CONTINUING> 279,656
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 279,656
<EPS-PRIMARY> 21.79
<EPS-DILUTED> 21.79
</TABLE>
