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, 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 & 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.
PAGE
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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, 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 month period ended
March 31, 1997 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,
1997 1996
--------- ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 25,520 13,682
Receivable from Managing General Partner 123,257 171,297
--------- ---------
Total current assets 148,777 184,979
--------- ---------
Oil and gas properties - using the
full-cost method of accounting 4,562,087 4,562,827
Less accumulated depreciation,
depletion and amortization 3,131,604 3,096,604
--------- ---------
Net oil and gas properties 1,430,483 1,466,223
--------- ---------
$ 1,579,260 1,651,202
========= =========
Liabilities and Partners' Equity
Current liabilities:
Accounts payable $ 6,350 -
Distributions payable 97 168
--------- ---------
Total current liabilities 6,447 168
--------- ---------
Partners' equity:
General partners 4,557 8,624
Limited partners 1,568,256 1,642,410
--------- ---------
Total partners' equity 1,572,813 1,651,034
--------- ---------
$ 1,579,260 1,651,202
========= =========
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Southwest Oil & Gas Income Fund X-B, L.P.
Statements of Operations
(unaudited)
Three Months Ended
March 31,
1997 1996
---- ----
Revenues
Oil and gas $ 372,807 346,587
Interest 310 648
------- -------
373,117 347,235
------- -------
Expenses
Production 193,935 186,539
General and administrative 26,848 27,812
Depreciation, depletion and amortization 35,000 45,494
------- -------
255,783 259,845
------- -------
Net income $ 117,334 87,390
======= =======
Net income allocated to:
Managing General Partner $ 13,710 11,960
======= =======
General partner $ 1,523 1,329
======= =======
Limited partners $ 102,101 74,101
======= =======
Per limited partner unit $ 9.38 6.81
======= =======
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Southwest Oil & Gas Income Fund X-B, L.P.
Statements of Cash Flows
(unaudited)
Three Months Ended
March 31,
1997 1996
---- ----
Cash flows from operating activities:
Cash from oil and gas sales $ 422,874 352,128
Cash paid to suppliers (216,460) (201,484)
Interest received 310 648
-------- --------
Net cash provided by operating activities 206,724 151,292
-------- --------
Cash flows from investing activities:
Additions to oil and gas properties (1,179) (306)
Sale of oil and gas properties 1,919 107,361
-------- --------
Net cash provided by investing activities 740 107,055
-------- --------
Cash flows used in financing activities:
Distributions to partners (195,626) (190,519)
-------- --------
Net increase in cash and cash equivalents 11,838 67,828
Beginning of period 13,682 45,580
-------- --------
End of period $ 25,520 113,408
======== ========
(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,
1997 1996
---- ----
Reconciliation of net income to net cash
provided by operating activities:
Net income $ 117,334 87,390
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion and amortization 35,000 45,494
Decrease in receivables 50,067 5,541
Increase in payables 4,323 12,867
------- -------
Net cash provided by operating activities $ 206,724 151,292
======= =======
Supplemental schedule of noncash investing
and financing activities:
Sale of oil and gas properties included
in receivables $ - 26
======= =======
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<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.
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.
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<PAGE>
Results of Operations
A. General Comparison of the Quarters Ended March 31, 1997 and 1996
The following table provides certain information regarding performance
factors for the quarters ended March 31, 1997 and 1996:
Three Months
Ended Percentage
March 31, Increase
1997 1996 (Decrease)
---- ---- ----------
Average price per barrel of oil $ 21.34 17.78 20%
Average price per mcf of gas $ 2.58 1.98 30%
Oil production in barrels 14,400 15,900 (9%)
Gas production in mcf 25,400 32,200 (21%)
Gross oil and gas revenue $ 372,807 346,587 8%
Net oil and gas revenue $ 178,872 160,048 12%
Partnership distributions $ 195,555 190,307 3%
Limited partner distributions $ 176,255 171,807 3%
Per unit distribution to limited
partners $ 16.19 15.78 3%
Number of limited partner units 10,889 10,889
Revenues
The Partnership's oil and gas revenues increased to $372,807 from $346,587
for the quarters ended March 31, 1997 and 1996, respectively, an increase of
8%. The principal factors affecting the comparison of the quarters ended
March 31, 1997 and 1996 are as follows:
1. The average price for a barrel of oil received by the Partnership
increased during the quarter ended March 31, 1997 as compared to the
quarter ended March 31, 1996 by 20%, or $3.56 per barrel, resulting in an
increase of approximately $56,600 in revenues. Oil sales represented 82%
of total oil and gas sales during the quarters ended March 31, 1997 and
1996.
The average price for an mcf of gas received by the Partnership increased
during the same period by 30%, or $.60 per mcf, resulting in an increase
of approximately $19,300 in revenues.
The total increase in revenues due to the change in prices received from
oil and gas production is approximately $75,900. 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 1,500 barrels or 9% during the
quarter ended March 31, 1997 as compared to the quarter ended March 31,
1996, resulting in a decrease of approximately $32,000 in revenues.
Gas production decreased approximately 6,800 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 $49,500. The decrease is primarily a result of property
sales during 1996. 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 $255,783 from $259,845 for the quarters
ended March 31, 1997 and 1996, respectively, a decrease of 2%. The decrease
is the result of lower general and administrative expense and depletion
expense, partially offset by an increase in lease operating costs.
1. Lease operating costs and production taxes were 4% higher, or
approximately $7,400 more during the quarter ended March 31, 1997 as
compared to the quarter ended March 31, 1996.
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 $1,000 during the quarter ended March 31, 1997 as
compared to the quarter ended March 31, 1996.
3. Depletion expense decreased to $35,000 for the quarter ended March 31,
1997 from $44,000 for the same period in 1996. This represents a
decrease of 20%. 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
property sales and the increase in the price of oil used to determine the
Partnership's reserves for January 1, 1997 as compared to 1996.
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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 $206,700 in
the quarter ended March 31, 1997 as compared to approximately $151,300 in the
quarter ended March 31, 1996. The primary source of the 1997 cash flow from
operating activities was profitable operations.
Cash flows provided by investing activities were approximately $700 in the
quarter ended March 31, 1997 as compared to approximately $107,100 in the
quarter ended March 31, 1996. The principle source of the 1997 cash flow
from investing activities was the sale of oil and gas properties, partially
offset by the additions to oil and gas properties.
Cash flows used in financing activities were approximately $195,600 in the
quarter ended March 31, 1997 as compared to approximately $190,500 in the
quarter ended March 31, 1996. The only use in financing activities was the
distributions to partners.
Total distributions during the quarter ended March 31, 1997 were $195,555 of
which $176,255 was distributed to the limited partners and $19,300 to the
general partners. The per unit distribution to limited partners during the
quarter ended March 31, 1997 was $16.19. Total distributions during the
quarter 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 quarter ended March 31, 1996 was
$15.78.
The sources for the 1997 distributions of $195,555 were oil and gas
operations of approximately $206,700 and the sale of oil and gas properties
of approximately $1,900, offset by the additions to oil and gas properties of
approximately $1,200, resulting in excess cash for contingencies or
subsequent distributions. 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 the additions to oil and
gas properties of approximately $300, resulting in excess cash for
contingencies or subsequent distributions.
Since inception of the Partnership, cumulative monthly cash distributions of
$4,047,793 have been made to the partners. As of March 31, 1997, $3,661,068
or $336.22 per limited partner unit has been distributed to the limited
partners, representing a 67% return of the capital contributed.
As of March 31, 1997, the Partnership had approximately $142,300 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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<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) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter for
which this report is filed.
<PAGE>
<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: May 15, 1997
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Balance Sheet at March 31, 1997 (Unaudited) and the Statement of Operations
for the Three Months Ended March 31, 1997 (Unaudited) and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 25,520
<SECURITIES> 0
<RECEIVABLES> 123,257
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 148,777
<PP&E> 4,562,087
<DEPRECIATION> 3,131,604
<TOTAL-ASSETS> 1,579,260
<CURRENT-LIABILITIES> 6,447
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,572,813
<TOTAL-LIABILITY-AND-EQUITY> 1,579,260
<SALES> 372,807
<TOTAL-REVENUES> 373,117
<CGS> 193,935
<TOTAL-COSTS> 193,935
<OTHER-EXPENSES> 61,848
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 117,334
<INCOME-TAX> 0
<INCOME-CONTINUING> 117,334
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 117,334
<EPS-PRIMARY> 9.38
<EPS-DILUTED> 9.38
</TABLE>
