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 0-19585
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 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-B, L.P.
Balance Sheets
June 30, December 31,
1996 1995
--------- ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 33,454 45,580
Receivable from Managing
General Partner 141,925 147,946
--------- ---------
Total current assets 175,379 193,526
--------- ---------
Oil and gas properties - using the
full cost method of accounting 4,552,874 4,672,435
Less accumulated depreciation,
depletion and amortization 3,045,604 2,952,604
--------- ---------
Net oil and gas properties 1,507,270 1,719,831
--------- ---------
Organization costs, net - 1,494
--------- ---------
$ 1,682,649 1,914,851
========= =========
Liabilities and Partners' Equity
Current liability - Distributions payable $ 344 340
--------- ---------
Partners' equity:
General partners 6,652 19,892
Limited partners 1,675,653 1,894,619
--------- ---------
Total partners' equity 1,682,305 1,914,511
--------- ---------
$ 1,682,649 1,914,851
========= =========
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Southwest Oil & Gas Income Fund X-B, L.P.
Statements of Operations
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
Revenues
Oil and gas $ 390,300 372,803 736,887 771,957
Interest 1,078 693 1,726 1,264
------- ------- ------- -------
391,378 373,496 738,613 773,221
------- ------- ------- -------
Expenses
Production 243,707 222,357 430,246 423,585
General and administrative 17,960 18,508 45,772 48,110
Depreciation, depletion and
amortization 49,000 60,250 94,494 123,500
------- ------- ------- -------
310,667 301,115 570,512 595,195
------- ------- ------- -------
Net income $ 80,711 72,381 168,101 178,026
======= ======= ======= =======
Net income allocated to:
Managing General Partner $ 11,674 11,937 23,634 27,137
======= ======= ======= =======
General Partner $ 1,297 1,326 2,626 3,016
======= ======= ======= =======
Limited Partners $ 67,740 59,118 141,841 147,873
======= ======= ======= =======
Per limited partner
unit $ 6.22 5.43 13.03 13.58
======= ======= ======= =======
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Southwest Oil & Gas Income Fund X-B, L.P.
Statements of Cash Flows
(unaudited)
Six Months Ended
June 30,
1996 1995
Cash flows from operating activities:
Cash from oil and gas sales $ 691,490 754,956
Cash paid to suppliers (424,712) (454,269)
Interest received 1,726 1,264
------- -------
Net cash provided by operating
activities 268,504 301,951
------- -------
Cash flows from investing activities:
Additions to oil and gas properties (4,384) (6,720)
Sale of oil and gas properties 124,057 -
Sale of equipment - 6,372
------- -------
Net cash provided by (used in)
investing activities 119,673 (348)
------- -------
Cash flows used in financing activities:
Distributions to partners (400,303) (292,956)
------- -------
Net increase (decrease) in cash and
cash equivalents (12,126) 8,647
Beginning of period 45,580 22,463
------- -------
End of period $ 33,454 31,110
======= =======
(continued)
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Southwest Oil & Gas Income Fund X-B, L.P.
Statements of Cash Flows, continued
(unaudited)
Six Months Ended
June 30,
1996 1995
Reconciliation of net income to
net cash provided by operating
activities:
Net income $ 168,101 178,026
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion and
amortization 94,494 123,500
Increase in receivables (45,397) (17,001)
Increase in payables 51,306 17,426
------- -------
Net cash provided by operating
activities $ 268,504 301,951
======= =======
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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 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 $ 20.20 17.25 17%
Average price per mcf of gas $ 2.24 1.35 66%
Oil production in barrels 15,800 18,700 (16%)
Gas production in mcf 31,800 37,100 (14%)
Gross oil and gas revenue $ 390,300 372,803 5%
Net oil and gas revenue $ 146,593 150,446 (3%)
Partnership distributions $ 210,000 139,000 51%
Limited partner distributions $ 189,000 125,100 51%
Per unit distribution to limited
partners $ 17.36 11.49 51%
Number of limited partner units 10,889 10,889
Revenues
The Partnership's oil and gas revenues increased to $390,300 from $372,803
for the quarters ended June 30, 1996 and 1995, respectively, an increase of
5%. 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 17%, or $2.95 per barrel, resulting in an
increase of approximately $55,200 in revenues. Oil sales represented 82%
of total oil and gas sales during the quarter ended June 30, 1996 as
compared to 87% 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 66%, or $.89 per mcf, resulting in an increase
of approximately $33,000 in revenues.
The total increase in revenues due to the change in prices received from
oil and gas production is approximately $88,200. 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 June 30, 1996 as compared to the quarter ended June 30,
1995, resulting in a decrease of approximately $58,600 in revenues.
Gas production decreased approximately 5,300 mcf or 14% during the same
period, resulting in a decrease of approximately $11,900 in revenues.
The total decrease in revenues due to the change in production is
approximately $70,500. The decrease is primarily a result of property
sales.
Costs and Expenses
Total costs and expenses increased to $310,667 from $301,115 for the quarters
ended June 30, 1996 and 1995, respectively, an increase of 3%. The increase
is the result of higher lease operating costs, offset by lower general and
administrative expense and depletion expense.
1. Lease operating costs and production taxes were 10% higher, or
approximately $21,400 more during the quarter ended June 30, 1996 as
compared to the quarter ended June 30, 1995. The increase is primarily
a result of converting a well to an injection well to provide support to
the three producing wells on the lease.
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 $500 during the quarter ended June 30, 1996 as compared
to the quarter ended June 30, 1995.
3. Depletion expense decreased to $49,000 for the quarter ended June 30,
1996 from $58,000 for the same period in 1995. This represents a
decrease of 16%. 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 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 $ 18.99 16.81 13%
Average price per mcf of gas $ 2.11 1.49 42%
Oil production in barrels 31,700 38,900 (19%)
Gas production in mcf 64,000 79,400 (19%)
Gross oil and gas revenue $ 736,887 771,957 (5%)
Net oil and gas revenue $ 306,641 348,372 (12%)
Partnership distributions $ 400,307 293,000 37%
Limited partner distributions $ 360,807 263,700 37%
Per unit distribution to limited
partners $ 33.13 24.22 37%
Number of limited partner units 10,889 10,889
Revenues
The Partnership's oil and gas revenues decreased to $736,887 from $771,957
for the six months ended June 30, 1996 and 1995, respectively, a decrease of
5%. 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 13%, or $2.18 per barrel, resulting in
an increase of approximately $84,800 in revenues. Oil sales represented
82% of total oil and gas sales during the six months ended June 30, 1996
as compared to 85% 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 42%, or $.62 per mcf, resulting in an increase
of approximately $49,200 in revenues.
The total increase in revenues due to the change in prices received from
oil and gas production is approximately $134,000. 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 decreased approximately 7,200 barrels or 19% during the
six months ended June 30, 1996 as compared to the six months ended June
30, 1995, resulting in a decrease of approximately $136,700 in revenues.
Gas production decreased approximately 15,400 mcf or 19% during the same
period, resulting in a decrease of approximately $32,500 in revenues.
The total decrease in revenues due to the change in production is
approximately $169,200. The decrease is primarily a result of property
sales.
Costs and Expenses
Total costs and expenses decreased to $570,512 from $595,195 for the six
months ended June 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 higher lease operating costs.
1. Lease operating costs and production taxes were 2% higher, or
approximately $6,700 more during the six months ended June 30, 1996 as
compared to the six months ended June 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 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 decreased to $93,000 for the six months ended June 30,
1996 from $119,000 for the same period in 1995. This represents a
decrease of 22%. 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.
Three 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, the increase in property sales and the decrease in oil
and gas revenues.
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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 $268,500 in
the six months ended June 30, 1996 as compared to approximately $302,000 in
the six months ended June 30, 1995. The primary source of the 1996 cash flow
from operating activities was profitable operations.
Cash flows provided by or (used in) investing activities were approximately
$119,700 in the six months ended June 30, 1996 as compared to approximately
$(350) in the six months ended June 30, 1995. The principle source of the
1996 cash flow from investing activities was the sale of oil and gas
properties and equipment, offset by the additions to oil and gas properties.
Cash flows used in financing activities were approximately $400,300 in the
six months ended June 30, 1996 as compared to approximately $293,000 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 $400,307
of which $360,807 was distributed to the limited partners and $39,500 to the
general partners. The per unit distribution to limited partners during the
six months ended June 30, 1996 was $33.13. Total distributions during the
six months ended June 30, 1995 were $293,000 of which $263,700 was
distributed to the limited partners and $29,300 to the general partners. The
per unit distribution to limited partners during the six months ended June
30, 1995 was $24.22.
The sources for the 1996 distributions of $400,307 were oil and gas
operations of approximately $268,500 and the sale of oil and gas properties
of approximately $124,100, offset by the addition to oil and gas properties
of approximately $4,400, with the balance from available cash on hand at the
beginning of the period. The sources for the 1995 distributions of $293,000
were oil and gas operations of approximately $302,000 and the sale of oil and
gas properties of approximately $6,400, offset by the additions to oil and
gas properties of approximately $6,700, resulting in excess cash for
contingencies or subsequent distributions.
Since inception of the Partnership, cumulative monthly cash distributions of
$3,527,238 have been made to the partners. As of June 30, 1996, $3,192,313
or $293.17 per limited partner unit has been distributed to the limited
partners, representing a 59% return of the capital contributed.
As of June 30, 1996, the Partnership had approximately $175,000 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.
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<PAGE>
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: August 12, 1996
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<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> 33,454
<SECURITIES> 0
<RECEIVABLES> 141,925
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 175,379
<PP&E> 4,552,874
<DEPRECIATION> 3,045,604
<TOTAL-ASSETS> 1,682,649
<CURRENT-LIABILITIES> 344
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,682,305
<TOTAL-LIABILITY-AND-EQUITY> 1,682,649
<SALES> 736,887
<TOTAL-REVENUES> 738,613
<CGS> 430,246
<TOTAL-COSTS> 430,246
<OTHER-EXPENSES> 140,266
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 168,101
<INCOME-TAX> 0
<INCOME-CONTINUING> 168,101
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 168,101
<EPS-PRIMARY> 13.03
<EPS-DILUTED> 13.03
</TABLE>
