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 March 31, 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 12.
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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 month period ended
March 31, 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
March 31, December 31,
1996 1995
--------- ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 113,408 45,580
Receivable from Managing General
Partner 136,026 147,946
Other receivable 26 -
--------- ---------
Total current assets 249,460 193,526
--------- ---------
Oil and gas properties - using the
full-cost method of accounting 4,565,466 4,672,435
Less accumulated depreciation,
depletion and amortization 2,996,604 2,952,604
--------- ---------
Net oil and gas properties 1,568,862 1,791,831
--------- ---------
Organization costs, net of
amortization - 1,494
--------- ---------
$ 1,818,322 1,914,851
========= =========
Liabilities and Partners' Equity
Current liabilities:
Accounts payable $ 6,600 -
Distributions payable 128 340
--------- ---------
Total current liabilities 6,728 340
--------- ---------
Partners' equity:
General partners 14,680 19,892
Limited partners 1,796,914 1,894,619
--------- ---------
Total partners' equity 1,811,594 1,914,511
--------- ---------
$ 1,818,322 1,914,851
========= =========
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Southwest Oil & Gas Income Fund X-B, L.P.
Statements of Operations
(unaudited)
Three Months Ended
March 31,
1996 1995
---- ----
Revenues
Oil and gas revenue $ 346,587 399,154
Interest income from operations 648 571
------- -------
347,235 399,725
------- -------
Expenses
Production 186,539 201,228
General and administrative 27,812 29,603
Depreciation, depletion and
amortization 45,494 63,250
------- -------
259,845 294,081
------- -------
Net income $ 87,390 105,644
======= =======
Net income allocated to:
Managing General Partner $ 11,960 15,200
======= =======
General partner $ 1,329 1,689
======= =======
Limited partners $ 74,101 88,755
======= =======
Per limited partner unit $ 6.81 8.15
======= =======
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Southwest Oil & Gas Income Fund X-B, L.P.
Statements of Cash Flows
(unaudited)
Three Months Ended
March 31,
1996 1995
---- ----
Cash flows from operating activities:
Cash from oil and gas sales $ 352,128 380,409
Cash paid to suppliers (201,484) (221,920)
Interest received 648 571
------- -------
Net cash provided by operating
activities 151,292 159,060
------- -------
Cash flows from investing activities:
Additions to oil and gas properties (306) -
Sale of oil and gas properties 107,361 2,254
------- -------
Net cash provided by investing
activities 107,055 2,254
------- -------
Cash flows used in financing activities:
Distributions to partners (190,519) (153,748)
------- -------
Net increase in cash 67,828 7,566
Cash and cash equivalents:
Beginning of period 45,580 22,463
------- -------
End of period $ 113,408 30,029
======= =======
(continued)
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Southwest Oil & Gas Income Fund X-B, L.P.
Statements of Cash Flows, continued
(unaudited)
Three Months Ended
March 31,
1996 1995
---- ----
Reconciliation of net income to
net cash provided by operating
activities:
Net income $ 87,390 105,644
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion and
amortization 45,494 63,250
(Increase) decrease in receivables 5,541 (18,745)
Increase in payables 12,867 8,911
------- -------
Net cash provided by operating
activities $ 151,292 159,060
======= =======
Supplemental schedule of noncash investing
and financing activities:
Sale of oil and gas properties include
in receivables $ 26 -
======= =======
<PAGE>
<PAGE>
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 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.
PAGE
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Results of Operations
A. General Comparison of the Quarters Ended March 31, 1996 and 1995
The following table provides certain information regarding performance
factors for the quarters ended March 31, 1996 and 1995:
Three Months
Ended Percentage
March 31, Increase
1996 1995 (Decrease)
---- ---- ----------
Average price per barrel of oil $ 17.78 16.40 8%
Average price per mcf of gas $ 1.98 1.62 22%
Oil production in barrels 15,900 20,200 (21%)
Gas production in mcf 32,200 42,300 (24%)
Gross oil and gas revenue $ 346,587 399,154 (13%)
Net oil and gas revenue $ 160,048 197,926 (19%)
Partnership distributions $ 190,307 154,000 24%
Limited partner distributions $ 171,807 138,600 24%
Per unit distribution to limited
partners $ 15.78 12.73 24%
Number of limited partner units 10,889 10,889
Revenues
The Partnership's oil and gas revenues decreased to $346,587 from $399,154
for the quarters ended March 31, 1996 and 1995, respectively, a decrease of
13%. The principal factors affecting the comparison of the quarters ended
March 31, 1996 and 1995 are as follows:
1. The average price for a barrel of oil received by the Partnership
increased during the quarter ended March 31, 1996 as compared to the
quarter ended March 31, 1995 by 8%, or $1.38 per barrel, resulting in an
increase of approximately $27,900 in revenues. Oil sales represented 82%
of total oil and gas sales during the quarter ended March 31, 1996 as
compared to 83% during the quarter ended March 31, 1995.
The average price for an mcf of gas received by the Partnership increased
during the same period by 22%, or $.36 per mcf, resulting in an increase
of approximately $15,200 in revenues.
The total increase in revenues due to the change in prices received from
oil and gas production is approximately $43,100. 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.
<PAGE>
<PAGE>
2. Oil production decreased approximately 4,300 barrels or 21% during the
quarter ended March 31, 1996 as compared to the quarter ended March 31,
1995, resulting in a decrease of approximately $76,500 in revenues.
Gas production decreased approximately 10,100 mcf or 24% during the same
period, resulting in a decrease of approximately $20,000 in revenues.
The total decrease in revenues due to the change in production is
approximately $96,500. The decrease is a result of mechanical and
equipment failures and property sales.
Costs and Expenses
Total costs and expenses decreased to $259,845 from $294,081 for the quarters
ended March 31, 1996 and 1995, respectively, a decrease of 12%. 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 7% lower, or
approximately $14,700 less during the quarter ended March 31, 1996 as
compared to the quarter ended March 31, 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 6%
or approximately $1,800 during the quarter ended March 31, 1996 as
compared to the quarter ended March 31, 1995.
3. Depletion expense decreased to $44,000 for the quarter ended March 31,
1996 from $61,000 for the same period in 1995. This represents a
decrease of 28%. 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 declined due to a decrease in
production for the quarter ended March 31, 1996 as compared to the same
period for 1995. Depletion reflected a comparable decline.
PAGE
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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 $151,300 in
the three months ended March 31, 1996 as compared to approximately $159,100
in the three months ended March 31, 1995. The primary source of the 1996
cash flow from operating activities was profitable operations.
Cash flows provided by investing activities were approximately $107,100 in
the three months ended March 31, 1996 as compared to approximately $2,300 in
the three months ended March 31, 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 $190,500 in the
three months ended March 31, 1996 as compared to approximately $153,700 in
the three months ended March 31, 1995. The only use in financing activities
was the distributions to partners.
Total distributions during the three months ended March 31, 1996 were
$190,307 of which $171,807 was distributed to the limited partners and
$18,500 to the general partners. The per unit distribution to limited
partners during the three months ended March 31, 1996 was $15.78. Total
distributions during the three months ended March 31, 1995 were $154,000 of
which $138,600 was distributed to the limited partners and $15,400 to the
general partners. The per unit distribution to limited partners during the
three months ended March 31, 1995 was $12.73.
The sources for the 1996 distributions of $190,307 were oil and gas
operations of approximately $151,300 and the sale of oil and gas properties
of approximately $107,400, offset by additions to oil and gas properties of
approximately $300, resulting in excess cash for contingencies or subsequent
distributions. The sources for the 1995 distributions of $154,000 were oil
and gas operations of approximately $159,100 and the sale of oil and gas
properties of approximately $2,300, resulting in excess cash for
contingencies or subsequent distributions.
Since inception of the Partnership, cumulative monthly cash distributions of
$3,317,238 have been made to the partners. As of March 31, 1996, $3,003,313
or $275.81 per limited partner unit has been distributed to the limited
partners, representing a 55% return of the capital contributed.
As of March 31, 1996, the Partnership had approximately $242,700 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.
PAGE
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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-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: May 11, 1996
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Balance
Sheet at March 31, 1996 (Unaudited) and the Statement of Operations for the
Three Months Ended March 31, 1996 (Unaudited) and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 113,408
<SECURITIES> 0
<RECEIVABLES> 136,052
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 249,460
<PP&E> 4,565,466
<DEPRECIATION> 2,996,604
<TOTAL-ASSETS> 1,818,322
<CURRENT-LIABILITIES> 6,728
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,811,594
<TOTAL-LIABILITY-AND-EQUITY> 1,818,322
<SALES> 346,587
<TOTAL-REVENUES> 347,235
<CGS> 186,539
<TOTAL-COSTS> 186,539
<OTHER-EXPENSES> 73,306
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 87,390
<INCOME-TAX> 0
<INCOME-CONTINUING> 87,390
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 87,390
<EPS-PRIMARY> 6.81
<EPS-DILUTED> 6.81
</TABLE>
