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 0-18997
SOUTHWEST ROYALTIES INSTITUTIONAL 1990-91 INCOME PROGRAM
Southwest Royalties Institutional Income Fund X-A, L.P.
(Exact name of registrant as specified
in its limited partnership agreement)
Delaware 75-2310852
(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 Royalties Institutional Income Fund X-A, L.P.
Balance Sheets
June 30, December 31,
1996 1995
--------- ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 20,969 46,452
Receivable from Managing
General Partner 84,706 19,003
Other receivable 3,350 -
--------- ---------
Total current assets 109,025 65,455
--------- ---------
Oil and gas properties - using the
full cost method of accounting 4,388,192 4,388,192
Less accumulated depreciation,
depletion and amortization 3,784,000 3,717,000
--------- ---------
Net oil and gas properties 604,192 671,192
--------- ---------
$ 713,217 736,647
========= =========
Liabilities and Partners' Equity
Current liability - Distributions payable $ 192 273
--------- ---------
Partners' equity:
General partners (451) (4,816)
Limited partners 713,476 741,190
--------- ---------
Total partners' equity 713,025 736,374
--------- ---------
$ 713,217 736,647
========= =========
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, Southwest Royalties Institutional Income Fund X-A, L.P.
Statements of Operations
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
Revenues
Income from net profits
interests $ 108,102 64,257 186,464 128,189
Interest 322 346 610 671
------- ------- ------- -------
108,424 64,603 187,074 128,860
------- ------- ------- -------
Expenses
General and administrative 22,830 21,835 53,423 54,768
Depreciation, depletion and
amortization 31,000 34,440 67,000 69,690
------- ------- ------- -------
53,830 56,275 120,423 124,458
------- ------- ------- -------
Net income $ 54,594 8,328 66,651 4,402
======= ======= ======= =======
Net income (loss) allocated to:
Managing General Partner $ 7,703 3,849 12,029 6,668
======= ======= ======= =======
General Partner $ 856 428 1,337 741
======= ======= ======= =======
Limited Partners $ 46,035 4,051 53,285 (3,007)
======= ======= ======= =======
Per limited partner
unit $ 4.07 .36 4.71 (.27)
======= ======= ======= =======
PAGE
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Southwest Royalties Institutional Income Fund X-A, L.P.
Statements of Cash Flows
(unaudited)
Six Months Ended
June 30,
1996 1995
Cash flows from operating activities:
Cash received from income from net
profits interests $ 117,370 132,731
Cash paid to suppliers (53,423) (54,992)
Interest received 610 671
------- -------
Net cash provided by operating
activities 64,557 78,410
------- -------
Cash flows provided by investing activities:
Cash received from sale of oil
and gas property interest 41 -
------- -------
Cash flows used in financing activities:
Distributions to partners (90,081) (78,768)
------- -------
Net decrease in cash and cash equivalents (25,483) (358)
Beginning of period 46,452 37,681
------- -------
End of period $ 20,969 37,323
======= =======
(continued)
PAGE
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Southwest Royalties Institutional Income Fund X-A, 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 $ 66,651 4,402
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion and
amortization 67,000 69,690
(Increase) decrease in receivables (69,094) 4,542
Decrease in payables - (224)
------- -------
Net cash provided by operating
activities $ 64,557 78,410
======= =======
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
Southwest Royalties Institutional Income Fund X-A, L.P. was organized as a
Delaware limited partnership on January 29, 1990. The offering of such
limited partnership interests began May 11, 1990 as part of a shelf offering
registered under the name Southwest Royalties Institutional 1990-91 Income
Program. Minimum capital requirements for the Partnership were met on July
30, 1990, with the offering of limited partnership interests concluding on
November 30, 1990, with total limited partner contributions of $5,658,000.
The Partnership was formed to acquire royalty and net profits 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.
PAGE
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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 $ 20.07 17.32 16%
Average price per mcf of gas $ 2.39 1.76 36%
Oil production in barrels 9,500 10,200 (7%)
Gas production in mcf 13,600 13,300 2%
Income from net profits interests $ 108,102 64,257 68%
Partnership distributions $ 61,000 37,000 65%
Limited partner distributions $ 54,900 33,300 65%
Per unit distribution to limited
partners $ 4.85 2.94 65%
Number of limited partner units 11,316 11,316
Revenues
The Partnership's income from net profits interests increased to $108,102
from $64,257 for the quarters ended June 30, 1996 and 1995, respectively, an
increase of 68%. 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 16%, or $2.75 per barrel, resulting in an
increase of approximately $28,100 in income from net profits interests.
Oil sales represented 85% of total oil and gas sales during the quarter
ended June 30, 1996 as compared to 88% 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 36%, or $.63 per mcf, resulting in an increase
of approximately $8,400 in income from net profits interests.
The total increase in income from net profits interests due to the change
in prices received from oil and gas production is approximately $36,500.
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 700 barrels or 7% during the
quarter ended June 30, 1996 as compared to the quarter ended June 30,
1995, resulting in a decrease of approximately $14,000 in income from net
profits interests.
Gas production increased approximately 300 mcf or 2% during the same
period, resulting in an increase of approximately $700 in income from net
profits interests.
The net total decrease in income from net profits interests due to the
change in production is approximately $13,300.
3. Lease operating costs and production taxes were 16% lower, or
approximately $21,700 less during the quarter ended June 30, 1996 as
compared to the quarter ended June 30, 1995. The decrease is a result of
an adjustment of an overcharge from a prior period.
Costs and Expenses
Total costs and expenses decreased to $53,830 from $56,275 for the quarters
ended June 30, 1996 and 1995, respectively, a decrease of 4%. The decrease
is the result of lower depletion expense, offset by an increase in general
and administrative expense.
1. General and administrative costs consists of independent accounting and
engineering fees, computer services, postage, and Managing General
Partner personnel costs. General and administrative costs increased 5%
or approximately $1,000 during the quarter ended June 30, 1996 as
compared to the quarter ended June 30, 1995.
2. Depletion expense decreased to $31,000 for the quarter ended June 30,
1996 from $34,440 for the same period in 1995. This represents a
decrease of 10%. 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.
A factor that contributed to the decline in depletion expense between the
comparative period was the increase in the price of oil and gas used to
determine the Partnership's reserves for January 1, 1996 as compared to
1995.
PAGE
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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 $ 18.31 16.82 9%
Average price per mcf of gas $ 2.44 1.80 36%
Oil production in barrels 23,200 21,200 9%
Gas production in mcf 26,200 26,500 (1%)
Income from net profits interests $ 186,464 128,189 45%
Partnership distributions $ 90,000 79,000 14%
Limited partner distributions $ 81,000 71,100 14%
Per unit distribution to limited
partners $ 7.16 6.28 14%
Number of limited partner units 11,316 11,316
Revenues
The Partnership's income from net profits interests increased to $186,464
from $128,189 for the six months ended June 30, 1996 and 1995, respectively,
an increase of 45%. 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 9%, or $1.49 per barrel, resulting in
an increase of approximately $31,600 in income from net profits
interests. Oil sales represented 87% of total oil and gas sales during
the six months ended June 30, 1996 as compared to 88% 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 36%, or $.64 per mcf, resulting in an increase
of approximately $17,000 in income from net profits interests.
The total increase in income from net profits interests due to the change
in prices received from oil and gas production is approximately $48,600.
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
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2. Oil production increased approximately 2,000 barrels or 9% during the six
months ended June 30, 1996 as compared to the six months ended June 30,
1995, resulting in an increase of approximately $36,600 in income from
net profits interests.
Gas production decreased approximately 300 mcf or 1% during the same
period, resulting in a decrease of approximately $700 in income from net
profits interests.
The net total increase in income from net profits interests due to the
change in production is approximately $35,900.
3. Lease operating costs and production taxes were 9% higher, or
approximately $25,200 more during the six months ended June 30, 1996 as
compared to the six months ended June 30, 1995. The increase in lease
operating costs is primarily attributable to litigation costs on one
lease, offset by an adjustment for an overcharge during a prior period
Costs and Expenses
Total costs and expenses decreased to $120,423 from $124,458 for the six
months ended June 30, 1996 and 1995, respectively, a decrease of 3%. The
decrease is the result of a decrease in general and administrative expense
and depletion expense.
1. General and administrative costs consists of independent accounting and
engineering fees, computer services, postage, and Managing General
Partner personnel costs. General and administrative costs decreased 2%
or approximately $1,300 during the six months ended June 30, 1996 as
compared to the six months ended June 30, 1995.
2. Depletion expense decreased to $67,000 for the six months ended June 30,
1996 from $69,690 for the same period in 1995. This represents a
decrease of 4%. 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.
A factor that contributed to the decline in depletion expense between the
comparative period was the increase in the price of oil and gas used to
determine the Partnership's reserves for January 1, 1996 as compared to
1995.
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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 $64,600 in the
six months ended June 30, 1996 as compared to approximately $78,400 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 investing activities were approximately $40 in the six
months ended June 30, 1996 as compared to none 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.
Cash flows used in financing activities were approximately $90,100 in the six
months ended June 30, 1996 as compared to approximately $78,800 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 $90,000 of
which $81,000 was distributed to the limited partners and $9,000 to the
general partners. The per unit distribution to limited partners during the
six months ended June 30, 1996 was $7.16. Total distributions during the six
months ended June 30, 1995 were $79,000 of which $71,100 was distributed to
the limited partners and $7,900 to the general partners. The per unit
distribution to limited partners during the six months ended June 30, 1995
was $6.28.
The sources for the 1996 distributions of $90,000 were oil and gas operations
of approximately $64,600 and the sale of oil and gas properties of
approximately $40, with the balance from available cash on hand at the
beginning of the period. The source for the 1995 distributions of $79,000
was oil and gas operations of approximately $78,400, with the balance from
available cash on hand at the beginning of the period.
Since inception of the Partnership, cumulative monthly cash distributions of
$2,617,122 have been made to the partners. As of June 30, 1996, $2,403,761
or $212.42 per limited partner unit has been distributed to the limited
partners, representing a 42% return of the capital contributed.
As of June 30, 1996, the Partnership had approximately $108,800 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 ROYALTIES INSTITUTIONAL
INCOME FUND X-A, 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
<PAGE>
<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> 20,969
<SECURITIES> 0
<RECEIVABLES> 88,056
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 109,025
<PP&E> 4,388,192
<DEPRECIATION> 3,784,000
<TOTAL-ASSETS> 713,217
<CURRENT-LIABILITIES> 192
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 713,025
<TOTAL-LIABILITY-AND-EQUITY> 713,217
<SALES> 186,464
<TOTAL-REVENUES> 187,074
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 120,423
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 66,651
<INCOME-TAX> 0
<INCOME-CONTINUING> 66,651
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 66,651
<EPS-PRIMARY> 4.71
<EPS-DILUTED> 4.71
</TABLE>
