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 0-18997
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 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 Royalties Institutional Income Fund X-A, L.P.
Balance Sheets
March 31, December 31,
1996 1995
--------- ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 29,968 46,452
Receivable from Managing General
Partner 60,481 19,003
--------- ---------
Total current assets 90,449 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 3,753,000 3,717,000
--------- ---------
Net oil and gas properties 635,192 671,192
--------- ---------
$ 725,641 736,647
========= =========
Liabilities and Partners' Equity
Current liabilities:
Accounts payable $ 5,700 -
Distributions payable 510 273
--------- ---------
Total current liabilities 6,210 273
--------- ---------
Partners' equity:
General partners (2,910) (4,816)
Limited partners 722,341 741,190
--------- ---------
Total partners' equity 719,431 736,374
--------- ---------
$ 725,641 736,647
========= =========
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Southwest Royalties Institutional Income Fund X-A, L.P.
Statements of Operations
(unaudited)
Three Months Ended
March 31,
1996 1995
---- ----
Revenues
Income from net profits interests $ 78,361 63,932
Interest income from operations 287 326
------- -------
78,648 64,258
------- -------
Expenses
General and administrative 30,591 32,935
Depreciation, depletion and
amortization 36,000 35,250
------- -------
66,591 68,185
------- -------
Net income (loss) $ 12,057 (3,927)
======= =======
Net income (loss) allocated to:
Managing General Partner $ 4,325 2,819
======= =======
General partner $ 481 313
======= =======
Limited partners $ 7,251 (7,059)
======= =======
Per limited partner unit $ .64 (.62)
======= =======
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Southwest Royalties Institutional Income Fund X-A, L.P.
Statements of Cash Flows
(unaudited)
Three Months Ended
March 31,
1996 1995
---- ----
Cash flows from operating activities:
Cash received from net profits
interests $ 36,842 64,410
Cash paid to suppliers (24,891) (24,634)
Interest received 287 326
------- -------
Net cash provided by operating activities 12,238 40,102
------- -------
Cash flows provided by investing activities:
Sale of oil and gas properties 41 -
------- -------
Cash flows used in financing activities:
Distributions to partners (28,763) (41,941)
------- -------
Net decrease in cash (16,484) (1,839)
Cash and cash equivalents:
Beginning of period 46,452 37,681
------- -------
End of period $ 29,968 35,842
======= =======
(continued)
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Southwest Royalties Institutional Income Fund X-A, L.P.
Statements of Cash Flows, continued
(unaudited)
Three Months Ended
March 31,
1996 1995
---- ----
Reconciliation of net income (loss) to net
cash provided by operating activities:
Net income (loss) $ 12,057 (3,927)
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation, depletion and
amortization 36,000 35,250
(Increase) decrease in receivables (41,519) 478
Increase in payables 5,700 8,301
------- -------
Net cash provided by operating
activities $ 12,238 40,102
======= =======
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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 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.
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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 $ 17.10 16.37 4%
Average price per mcf of gas $ 1.48 1.83 (19%)
Oil production in barrels 13,700 11,000 25%
Gas production in mcf 21,100 13,200 60%
Income from net profits interests $ 78,361 63,932 23%
Partnership distributions $ 29,000 42,000 (31%)
Limited partner distributions $ 26,100 37,800 (31%)
Per unit distribution to limited
partners $ 2.31 3.34 (31%)
Number of limited partner units 11,316 11,316
Revenues
The Partnership's income from net profits interests increased to $78,361 from
$63,932 for the quarters ended March 31, 1996 and 1995, respectively, an
increase of 23%. 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 4%, or $.73 per barrel, resulting in an
increase of approximately $8,000 in income from net profits interests.
Oil sales represented 88% of total oil and gas sales during the quarters
ended March 31, 1996 and 1995.
The average price for an mcf of gas received by the Partnership decreased
during the same period by 19%, or $.35 per mcf, resulting in a decrease
of approximately $4,600 in income from net profits interests.
The net total increase in income from net profits interests due to the
change in prices received from oil and gas production is approximately
$3,400. 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.
2. Oil production increased approximately 2,700 barrels or 25% during the
quarter ended March 31, 1996 as compared to the quarter ended March 31,
1995, resulting in an increase of approximately $46,200 in income from
net profits interests.
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Gas production increased approximately 7,900 mcf or 60% during the same
period, resulting in an increase of approximately $11,700 in income from
net profits interests.
The total increase in income from net profits interests due to the change
in production is approximately $57,900.
The change in production is primarily attributable to eleven months of
revenue, on one lease, being held in suspense during litigation between
a third party operator, a pumper and the Managing General Partner. Upon
conclusion of the litigation, all revenues were released.
3. Lease operating costs and production taxes were 33% higher, or
approximately $46,900 more during the quarter ended March 31, 1996 as
compared to the quarter ended March 31, 1995. The increase in lease
operating costs is primarily attributable to litigation costs, on one
lease, of approximately $56,000.
Costs and Expenses
Total costs and expenses decreased to $66,591 from $68,185 for the quarters
ended March 31, 1996 and 1995, respectively, a decrease of 2%. The decrease
is the result of higher depletion expense, offset by a decline 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 decreased 7% or
approximately $2,300 during the quarter ended March 31, 1996 as compared
to the quarter ended March 31, 1995.
2. Depletion expense increased to $36,000 for the quarter ended March 31,
1996 from $33,000 for the same period in 1995. This represents an
increase of 9%. 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 increased due to an increase in price
and production for the quarter ended March 31, 1996 as compared to the
same period for 1995. Depletion reflected a comparable increase.
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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 $12,200 in the
three months ended March 31, 1996 as compared to approximately $40,100 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 $40 in the
three months ended March 31, 1996 as compared to none 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.
Cash flows used in financing activities were approximately $28,800 in the
three months ended March 31, 1996 as compared to approximately $41,900 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 $29,000
of which $26,100 was distributed to the limited partners and $2,900 to the
general partners. The per unit distribution to limited partners during the
three months ended March 31, 1996 was $2.31. Total distributions during the
three months ended March 31, 1995 were $42,000 of which $37,800 was
distributed to the limited partners and $4,200 to the general partners. The
per unit distribution to limited partners during the three months ended March
31, 1995 was $3.34.
The sources for the 1996 distributions of $29,000 were oil and gas operations
of approximately $12,200 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 $42,000
was oil and gas operations of approximately $40,100, with the balance from
available cash on hand at the beginning of the period.
Since inception of the Partnership, cumulative monthly cash distributions of
$2,556,122 have been made to the partners. As of March 31, 1996, $2,348,861
or $207.57 per limited partner unit has been distributed to the limited
partners, representing a 42% return of the capital contributed.
As of March 31, 1996, the Partnership had approximately $84,200 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.
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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: 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> 29,968
<SECURITIES> 0
<RECEIVABLES> 60,481
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 90,449
<PP&E> 4,388,192
<DEPRECIATION> 3,753,000
<TOTAL-ASSETS> 725,641
<CURRENT-LIABILITIES> 6,210
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 719,431
<TOTAL-LIABILITY-AND-EQUITY> 725,641
<SALES> 78,361
<TOTAL-REVENUES> 78,648
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 66,591
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 12,057
<INCOME-TAX> 0
<INCOME-CONTINUING> 12,057
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,057
<EPS-PRIMARY> .64
<EPS-DILUTED> .64
</TABLE>
