Page 1 of 14
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, 1997
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 and 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.
<PAGE>
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 note thereto for
the year ended December 31, 1996 which are found in the Registrant's Form
10-K Report for 1996 filed with the Securities and Exchange Commission.
The December 31, 1996 balance sheet included herein has been taken from the
Registrant's 1996 Form 10-K Report. Operating results for the three and
nine month periods ended September 30, 1997 are not necessarily indicative
of the results that may be expected for the full year.
<PAGE>
Southwest Oil and Gas Income Fund X-B, L.P.
Balance Sheets
September 30, December 31,
1997 1996
------------- ------------
(unaudited)
Assets
Current assets
Cash and cash equivalents $ 16,889 13,682
Receivable from Managing General Partner 86,714 171,297
- --------- ---------
Total current assets 103,603 184,979
--------- ---------
Oil and gas properties - using the
full cost method of accounting 4,583,730 4,562,827
Less accumulated depreciation,
depletion and amortization 3,191,604 3,096,604
--------- ---------
Net oil and gas properties 1,392,126 1,466,223
--------- ---------
$1,495,729 1,651,202
========= =========
Liabilities and Partners' Equity
Current liability - Distribution payable $ 451 168
--------- ---------
Partners' equity
General partners 2,804 8,624
Limited partners 1,492,474 1,642,410
--------- ---------
Total partners' equity 1,495,278 1,651,034
--------- ---------
$1,495,729 1,651,202
========= =========
<PAGE>
Southwest Oil and Gas Income Fund X-B, L.P.
Statements of Operations
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
Revenues
Oil and gas $ 303,167 386,978 981,722 1,123,865
Interest 320 532 1,079 2,258
------- ------- ------- ---------
303,487 387,510 982,801 1,126,123
------- ------- ------- ---------
Expenses
Production 187,802 207,714 577,430 637,960
General and administrative 17,967 18,243 63,572 64,013
Depreciation, depletion and
amortization 31,000 50,000 95,000 144,494
------- ------- ------- ---------
236,769 275,957 736,002 846,467
------- ------- ------- ---------
Net income $ 66,718 111,553 246,799 279,656
======= ======= ======= =========
Net income allocated to:
Managing General Partner $ 8,795 14,540 30,762 38,174
======= ======= ======= =========
General Partner $ 977 1,616 3,418 4,242
======= ======= ======= =========
Limited Partners $ 56,946 95,397 212,619 237,240
======= ======= ======= =========
Per limited partner unit $ 5.23 8.76 19.53 21.79
======= ======= ======= =========
<PAGE>
Southwest Oil and Gas Income Fund X-B, L.P.
Statements of Cash Flows
(unaudited)
Nine Months Ended
September 30,
1997 1996
Cash flows from operating activities
Cash received from oil and gas sales $1,053,814 1,092,346
Cash paid to suppliers (628,511) (676,946)
Interest received 1,079 2,258
--------- ---------
Net cash provided by operating activities 426,382 417,658
--------- ---------
Cash flows from investing activities
Additions to oil and gas properties (22,981) (14,841)
Sale of oil and gas properties 2,078 124,465
--------- ---------
Net cash provided by (used in)
investing activities (20,903) 109,624
--------- ---------
Cash flows used in financing activities
Distributions to partners (402,272) (542,564)
--------- ---------
Net increase (decrease) in cash and cash
equivalents 3,207 (15,282)
Beginning of period 13,682 45,580
--------- ---------
End of period $ 16,889 30,298
========= =========
(continued)
<PAGE>
Southwest Oil and Gas Income Fund X-B, L.P.
Statements of Cash Flows, continued
(unaudited)
Nine Months Ended
September 30,
1997 1996
Reconciliation of net income to net cash
provided by operating activities
Net income $ 246,799 279,656
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation, depletion and amortization 95,000 144,494
(Increase) decrease in receivables 72,092 (31,519)
Increase in payables 12,491 25,027
------- -------
Net cash provided by operating activities $ 426,382 417,658
======= =======
<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 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.
Based on current conditions, management anticipates performing workovers
during the next few years to enhance production. The Partnership could
possibly experience the following changes; a slight increase in 1997,
another increase in 1998 and 1999, leveling off in 2000 and beginning a
decline in 2001.
<PAGE>
Results of Operations
A. General Comparison of the Quarters Ended September 30, 1997 and 1996
The following table provides certain information regarding performance
factors for the quarters ended September 30, 1997 and 1996:
Three Months
Ended Percentage
September 30, Increase
1997 1996 (Decrease)
Average price per barrel of oil $ 17.20 20.42 (16%)
Average price per mcf of gas $ 2.06 2.06 -
Oil production in barrels 14,300 15,700 (9%)
Gas production in mcf 27,800 32,500 (14%)
Gross oil and gas revenue $ 303,167 386,978 (22%)
Net oil and gas revenue $ 115,365 179,264 (36%)
Partnership distributions $ 82,000 142,000 (42%)
Limited partner distributions $ 73,800 127,800 (42%)
Per unit distribution to limited partners $ 6.78 11.74 (42%)
Number of limited partner units 10,889 10,889
Revenues
The Partnership's oil and gas revenues decreased to $303,167 from $386,978
for the quarters ended September 30, 1997 and 1996, respectively, a
decrease of 22%. The principal factors affecting the comparison of the
quarters ended September 30, 1997 and 1996 are as follows:
1. The average price for a barrel of oil received by the Partnership
decreased during the quarter ended September 30, 1997 as compared to
the quarter ended September 30, 1996 by 16%, or $3.22 per barrel,
resulting in a decrease of approximately $50,600 in revenues. Oil
sales represented 81% of total oil and gas sales during the quarter
ended September 30, 1997 as compared to 83% during the quarter ended
September 30, 1996.
The average price for an mcf of gas received by the Partnership
remained unchanged during the same period.
The total decrease in revenues due to the change in prices received
from oil and gas production is approximately $50,600. 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.
<PAGE>
2. Oil production decreased approximately 1,400 barrels or 9% during the
quarter ended September 30, 1997 as compared to the quarter ended
September 30, 1996, resulting in a decrease of approximately $24,100 in
revenues.
Gas production decreased approximately 4,700 mcf or 14% during the same
period, resulting in a decrease of approximately $9,700 in revenues.
The total decrease in revenues due to the change in production is
approximately $33,800. The decrease is primarily a result of property
sales during 1996 and the loss of gas production on one well. Also
contributing to the production decline is the natural decline of oil
and gas production. Since the Partnership does not drill or purchase
oil and gas properties, it is normal to expect production to continue
to decline over the remaining life of the wells.
Costs and Expenses
Total costs and expenses decreased to $236,769 from $275,957 for the
quarters ended September 30, 1997 and 1996, respectively, a decrease of
14%. 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 10% lower, or
approximately $19,900 less during the quarter ended September 30, 1997 as
compared to the quarter ended September 30, 1996. The decrease is
primarily a result of workover costs incurred in 1996 as compared to 1997.
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
2% or approximately $300 during the quarter ended September 30, 1997 as
compared to the quarter ended September 30, 1996.
3. Depletion expense decreased to $31,000 for the quarter ended September
30, 1997 from $50,000 for the same period in 1996. This represents a
decrease of 38%. Depletion is calculated using the units of 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. Contributing
factors to the decline in depletion expense between the comparative
periods were the increase in the price of oil used to determine the
Partnership's reserves for January 1, 1997 as compared to 1996 and the
decline in gross oil and gas revenues.
<PAGE>
B. General Comparison of the Nine Month Periods Ended September 30, 1997
and 1996
The following table provides certain information regarding performance
factors for the nine month periods ended September 30, 1997 and 1996:
Nine Months
Ended Percentage
September 30, Increase
1997 1996 (Decrease)
Average price per barrel of oil $ 18.73 19.46 (4%)
Average price per mcf of gas $ 2.20 2.09 5%
Oil production in barrels 42,600 47,400 (10%)
Gas production in mcf 83,500 96,500 (13%)
Gross oil and gas revenue $ 981,722 1,123,865 (13%)
Net oil and gas revenue $ 404,292 485,905 (17%)
Partnership distributions $ 402,555 542,307 (26%)
Limited partner distributions $ 362,555 488,607 (26%)
Per unit distribution to limited partners $ 33.30 44.87 (26%)
Number of limited partner units 10,889 10,889
Revenues
The Partnership's oil and gas revenues decreased to $981,722 from
$1,123,865 for the nine months ended September 30, 1997 and 1996,
respectively, a decrease of 13%. The principal factors affecting the
comparison of the nine months ended September 30, 1997 and 1996 are as
follows:
1. The average price for a barrel of oil received by the Partnership
decreased during the nine months ended September 30, 1997 as compared
to the nine months ended September 30, 1996 by 4%, or $.73 per barrel,
resulting in a decrease of approximately $34,600 in revenues. Oil
sales represented 81% of total oil and gas sales during the nine months
ended September 30, 1997 as compared to 82% during the nine months
ended September 30, 1996.
The average price for an mcf of gas received by the Partnership
increased during the same period by 5%, or $.11 per mcf, resulting in
an increase of approximately $10,600 in revenues.
The net total decrease in revenues due to the change in prices received
from oil and gas production is approximately $24,000. 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.
<PAGE>
2. Oil production decreased approximately 4,800 barrels or 10% during the
nine months ended September 30, 1997 as compared to the nine months
ended September 30, 1996, resulting in a decrease of approximately
$89,900 in revenues.
Gas production decreased approximately 13,000 mcf or 13% during the
same period, resulting in a decrease of approximately $28,600 in
revenues.
The total decrease in revenues due to the change in production is
approximately $118,500. The decrease is primarily a result of property
sales during 1996 and the loss of gas production on one well. Also
contributing to the production decline is the natural decline of oil
and gas production. Since the Partnership does not drill or purchase
oil and gas properties, it is normal to expect production to continue
to decline over the remaining life of the wells.
Costs and Expenses
Total costs and expenses decreased to $736,002 from $846,467 for the nine
months ended September 30, 1997 and 1996, respectively, a decrease of 13%.
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 9% lower, or
approximately $60,500 less during the nine months ended September 30,
1997 as compared to the nine months ended September 30, 1996. The
decrease is primarily a result of workover costs incurred in 1996 as
compared to 1997.
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 1%
or approximately $400 during the nine months ended September 30, 1997
as compared to the nine months ended September 30, 1996.
3. Depletion expense decreased to $95,000 for the nine months ended
September 30, 1997 from $143,000 for the same period in 1996. This
represents a decrease of 34%. Depletion is calculated using the units
of 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.
Contributing factors to the decline in depletion expense between the
comparative periods were the increase in the price of oil used to
determine the Partnership's reserves for January 1, 1997 as compared to
1996 and the decline in gross oil and gas revenues.
<PAGE>
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 $426,400 in
the nine months ended September 30, 1997 as compared to approximately
$417,700 in the nine months ended September 30, 1996. The primary source
of the 1997 cash flow from operating activities was profitable operations.
Cash flows provided by or (used in) investing activities were approximately
($20,900) in the nine months ended September 30, 1997 as compared to
approximately $109,600 in the nine months ended September 30, 1996. The
principle use of the 1997 cash flow from investing activities was the
change in oil and gas properties.
Cash flows used in financing activities were approximately $402,300 in the
nine months ended September 30, 1997 as compared to approximately $542,600
in the nine months ended September 30, 1996. The only use in financing
activities was the distributions to partners.
Total distributions during the nine months ended September 30, 1997 were
$402,555 of which $362,555 was distributed to the limited partners and
$40,000 to the general partners. The per unit distribution to limited
partners during the nine months ended September 30, 1997 was $33.30. 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.
The source for the 1997 distributions of $402,555 was oil and gas
operations of approximately $426,400, partially offset by a change in oil
and gas property of approximately $20,900, resulting in excess cash for
contingencies or subsequent distributions. The sources for the 1996
distributions of $542,307 were oil and gas operations of approximately
$417,700 and the change in oil and gas property of approximately $109,600,
with the balance from available cash on hand at the beginning of the
period.
Since inception of the Partnership, cumulative monthly cash distributions
of $4,254,793 have been made to the partners. As of September 30, 1997,
$3,847,368 or $353.33 per limited partner unit has been distributed to the
limited partners, representing a 71% return of the capital contributed.
As of September 30, 1997, the Partnership had approximately $103,200 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>
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)Exhibits:
27 Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter for
which this report is filed.
<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 and 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, 1997
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Balance Sheet at September 30, 1997 (Unaudited) and the Statement of
Operations for the Nine Months Ended September 30, 1997 (Unaudited) and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 16,889
<SECURITIES> 0
<RECEIVABLES> 86,714
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 103,603
<PP&E> 4,583,730
<DEPRECIATION> 3,191,604
<TOTAL-ASSETS> 1,495,729
<CURRENT-LIABILITIES> 451
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,495,278
<TOTAL-LIABILITY-AND-EQUITY> 1,495,729
<SALES> 981,722
<TOTAL-REVENUES> 982,801
<CGS> 577,430
<TOTAL-COSTS> 577,430
<OTHER-EXPENSES> 158,572
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 246,799
<INCOME-TAX> 0
<INCOME-CONTINUING> 246,799
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 246,799
<EPS-PRIMARY> 19.53
<EPS-DILUTED> 19.53
</TABLE>
