United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from...............to...............
Commission file number 0-18327
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 6, L.P.
(Exact name of small business issuer as specified in its charter)
New Jersey 76-0259723
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 200, Three Kingwood Place
Kingwood, Texas 77339
(Address of principal executive offices)
Issuer's telephone number:
(713) 358-8401
Check whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 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
Transitional Small Business Disclosure Format (Check one):
Yes No x
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 6, L.P.
BALANCE SHEET
- ------------------------------------------------------------------------------
September 30,
ASSETS 1996
---------------------
CURRENT ASSETS:
<S> <C>
Cash $ 5,610
Accounts receivable - oil & gas sales 9,299
---------------------
Total current assets 14,909
---------------------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests 906,914
Less accumulated depletion 836,164
---------------------
Property, net 70,750
---------------------
TOTAL $ 85,659
=====================
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Payable to general partner $ 65,043
---------------------
PARTNERS' CAPITAL (DEFICIT):
Limited partners 12,945
General partner 7,671
---------------------
Total partners' deficit 20,616
---------------------
TOTAL $ 85,659
=====================
Number of $500 Limited Partner units outstanding 2,067
</TABLE>
See accompanying notes to financial statements.
- ------------------------------------------------------------------------------
I-1
<PAGE>
<TABLE>
<CAPTION>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 6, L.P.
STATEMENTS OF OPERATIONS
- -------------------------------------------------------------------------------------------------------------------
(UNAUDITED) QUARTER ENDED NINE MONTHS ENDED
-------------------------------------- ----------------------------------------
September 30, September 30, September 30, September 30,
1996 1995 1996 1995
----------------- ----------------- ----------------- -------------------
REVENUES:
<S> <C> <C> <C> <C>
Oil, gas & gas plant sales $ 17,088 $ 10,665 $ 47,642 $ 34,603
----------------- ----------------- ----------------- -------------------
EXPENSES:
Depletion 3,807 5,711 10,778 17,519
Production taxes 654 611 2,324 2,689
General and administrative 2,542 2,421 8,665 7,135
----------------- ----------------- ----------------- -------------------
Total expenses 7,003 8,743 21,767 27,343
----------------- ----------------- ----------------- -------------------
NET INCOME $ 10,085 $ 1,922 $ 25,875 $ 7,260
================= ================= ================= ===================
</TABLE>
See accompanying notes to financial statements.
- -----------------------------------------------------------------------
I-2
<PAGE>
<TABLE>
<CAPTION>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 6, L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE TWO YEARS ENDED DECEMBER 31, 1995
AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------
PER $500
LIMITED
PARTNER
GENERAL LIMITED UNIT OUT-
TOTAL PARTNER PARTNERS STANDING
-------------- ------------- -------------- --------
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1994 $ 27,856 $ 643 $ 27,213 $ 13
CASH DISTRIBUTIONS (29,199) (2,919) (26,280) (13)
NET INCOME (LOSS) (2,142) 4,465 (6,607) (3)
-------------- ------------- -------------- --------
BALANCE, DECEMBER 31, 1994 (3,485) 2,189 (5,674) (3)
CASH DISTRIBUTIONS (5,182) (518) (4,664) (2)
NET INCOME 10,584 3,053 7,531 4
-------------- ------------- -------------- --------
BALANCE, DECEMBER 31, 1995 $ 1,917 $ 4,724 $ (2,807) $ (1)
CASH DISTRIBUTIONS (7,176) (717) (6,459) (3)
NET INCOME 25,875 3,666 22,209 10
-------------- ------------- -------------- --------
BALANCE, SEPTEMBER 30, 1996 $ 20,616 $ 7,673 $ 12,943 (1) $ 6
============== ============= ============== ========
</TABLE>
(1) Includes 127 units purchased by the general partner as a limited partner.
See accompanying notes to financial statements.
- ------------------------------------------------------------------------------
I-3
<PAGE>
<TABLE>
<CAPTION>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 6, L.P.
STATEMENTS OF CASH FLOWS
- ------------------------------------------------------------------------------------------------
(UNAUDITED)
NINE MONTHS ENDED
--------------------------------------------
September 30, September 30,
1996 1995
------------------- -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 25,875 $ 7,260
------------------- -------------------
Adjustments to reconcile net income to net cash
provided by operating activities
Depletion 10,778 17,519
(Increase) decrease in:
Accounts receivable - oil & gas sales (782) 3,042
(Decrease) in:
Accounts payable (1,833) (2,857)
Payable to general partner (23,985) (22,368)
------------------- -------------------
Total adjustments (15,822) (4,664)
------------------- -------------------
Net cash provided by operating activities 10,053 2,596
------------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (7,176) (5,182)
------------------- -------------------
NET INCREASE (DECREASE) IN CASH 2,877 (2,586)
CASH AT BEGINNING OF YEAR 2,733 5,754
------------------- -------------------
CASH AT END OF PERIOD $ 5,610 $ 3,168
=================== ===================
</TABLE>
See accompanying notes to financial statements.
- -------------------------------------------------------------------
I-4
<PAGE>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 6, L.P.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
1. The interim financial information included herein is unaudited;
however, such information reflects all adjustments (consisting solely
of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair presentation of results for the
interim periods.
3. A cash distribution was made to the limited partners ot the Company in
the amount of $5,635, representing net revenues from the sale of oil
and gas produced from properties owned by the Company. This
distribution was made on July 31, 1996.
3. On August 9, 1996, the Company's General Partner submitted preliminary
proxy material to the Securities Exchange Commission with respect to a
proposed consolidation of the Company with 33 other managed limited
partnerships. On November 13, 1996, the Company submitted amended
preliminary proxy material to the SEC with respect to this
consolidation. The terms and conditions of the proposed consolidation
are set forth in such preliminary proxy material.
4. The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standard ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of," which
requires certain assets to be reviewed for impairment whenever events or
circumstances indicate the carrying amount may not be recoverable. Prior to
this pronouncement, the Company assessed properties on an aggregate basis.
Upon adoption of SFAS 121, the Company began assessing properties on an
individual basis, wherein total capitalized costs may not exceed the
property's fair market value. The fair market value of each property was
determined by H. J. Gruy and Associates, ("Gruy"). To determine the fair
market value, Gruy estimated each property's oil and gas reserves, applied
certain assumptions regarding price and cost escalations, applied a 10%
discount factor for time and certain discount factors for risk, location,
type of ownership interest, category of reserves, operational
characteristics, and other factors.
I-5
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
Third Quarter 1995 Compared to Third Quarter 1996
Oil and gas sales for the third quarter increased to $17,088 in 1996 from
$10,665 in 1995. This represents an increase of $6,423 (60%). Oil sales
increased by $1,972 or 65%. A 47% increase in the average net oil sales price
increased sales by $1,385. A 12% increase in oil production increased sales an
additional $587. Gas sales increased $4,451 or 69%. A 7% increase in gas
production increased sales by $468. A 58% increase in the average net gas sales
price increased sales by an additional $3,983. The increases in oil and gas
production were primarily due to higher production from the Speary acquisition
on which a compressor was successfully reworked coupled with higher production
from the Wardner Ranch acquisition which was shut-in for a workover in the
second quarter of 1995. The increases in average net sales prices correspond
with higher prices in the overall market for the sale of oil and gas.
Depletion expense decreased to $3,807 in the third quarter of 1996 from $5,711
in the third quarter of 1995. This represents a decrease of $1,904 (33%). A 37%
decrease in the depletion rate reduced depletion expense by $2,284. This
decrease was partially offset by the changes in production, noted above. The
decrease in the depletion rate was primarily due upward revisions of the oil and
gas reserves during December 1995.
General and administrative expenses increased to $2,542 in 1996 from $2,421 in
1995. This increase of $121 (5%) is primarily due to more staff time being
required to manage the Company's operations.
First Nine Months in 1995 Compared to First Nine Months in 1996
Oil and gas sales for the first nine months increased to $47,642 in 1996 from
$34,603 in 1995. This represents an increase of $13,039 (38%). Oil sales
increased by $2,489 or 28%. A 44% increase in the average net oil sales price
increased sales by $3,391. This increase was partially offset by a 12% decrease
in oil production. Gas sales increased $10,550 or 51%. A 3% increase in gas
production increased sales by $523. A 47% increase in the average net gas sales
price increased sales by an additional $10,027. The decrease in oil production
was primarily due to seasonal production declines. The increase in gas
production was primarily due to higher production from the Speary acquisition on
which a compressor was successfully reworked coupled with higher production from
the Wardner Ranch acquisition which was shut-in for a workover in the second
quarter of 1995, partially offset by natural production declines. The increases
in average net sales prices correspond with higher prices in the overall market
for the sale of oil and gas.
Depletion expense decreased to $10,778 in the first nine months of 1996 from
$17,519 in the first nine months of 1995. This represents a decrease of $6,741
(38%). The decreases in production, noted above, reduced depletion expense by
$342. A 37% decrease in the depletion rate reduced depletion expense by an
additional $6,399. The decrease in the depletion rate was primarily due upward
revisions of the oil and gas reserves during December 1995.
I-6
<PAGE>
General and administrative expenses increased to $8,665 in 1996 from $7,135 in
1995. This increase of $1,530 (21%) is primarily due to more staff time being
required to manage the Company's operations.
CAPITAL RESOURCES AND LIQUIDITY
The Company's cash flow from operations is a direct result of the amount of net
proceeds realized from the sale of oil and gas production. Accordingly, the
changes in cash flow from 1995 to 1996 are primarily due to the changes in oil
and gas sales described above. It is the general partner's intention to
distribute substantially all of the Company's available cash flow to the
Company's partners. The Company's "available cash flow" is essentially equal to
the net amount of cash provided by operating, financing and investing
activities.
The Company discontinued the payment of distributions during 1995. Future
distributions are dependent upon, among other things, an increase in prices
received for oil and gas. The Company will continue to recover its reserves and
distribute to the limited partners the net proceeds realized form the sale of
oil and gas production. Distribution amounts are subject to change if net
revenues are greater or less than expected. Based on the December 31, 1995
reserve report prepared by Gruy, there appears to be sufficient future net
revenues to pay all obligations and expenses. The Company does not intend to
purchase additional properties or fund extensive development of existing oil and
gas properties, and as such; has no long-term liquidity needs. The Company's
projected cash flows from operations will provide sufficient funding to pay its
operating expenses and debt obligations. The general partner does not intend to
accelerate the repayment of the debt beyond the cash flow provided by operating,
financing and investing activities. Based upon current projected cash flows from
its property, it does not appear that the Company will have sufficient cash to
pay distributions and pay its operating expenses, and meet its debt obligations.
Future periodic distributions will be made once sufficient net revenues are
accumulated.
On August 9, 1996, the Company's General Partner submitted preliminary proxy
material to the Securities Exchange Commission with respect to a proposed
consolidation of the Company with 33 other managed limited partnerships. On
November 13, 1996, the Company submitted amended preliminary proxy material to
the SEC with respect to this consolidation. The terms and conditions of the
proposed consolidation are set forth in such preliminary proxy material.
I-7
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders.
Not Applicable
Item 5. Other Information.
Not Applicable
Item 6. Exhibits and Reports on Form 8-K.
(a) There are no exhibits to this report.
(b) The Company filed no reports on Form 8-K during the
quarter ended September 30, 1996.
II-1
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
ENEX 88-89 INCOME AND RETIREMENT
FUND - SERIES 6, L.P.
(Registrant)
By:ENEX RESOURCES CORPORATION
General Partner
By: /s/ R. E. Densford
R. E. Densford
Vice President, Secretary
Treasurer and Chief Financial
Officer
December 23, 1996 By: /s/ James A. Klein
-------------------
James A. Klein
Controller and Chief
Accounting Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000861065
<NAME> Enex 88-89 Income & Retirement Fund - Sr 6, L.P.
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> dec-31-1996
<PERIOD-START> jan-01-1996
<PERIOD-END> sep-30-1996
<CASH> 5610
<SECURITIES> 0
<RECEIVABLES> 9299
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 14909
<PP&E> 906914
<DEPRECIATION> 836164
<TOTAL-ASSETS> 85659
<CURRENT-LIABILITIES> 65043
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 20616
<TOTAL-LIABILITY-AND-EQUITY> 85659
<SALES> 47642
<TOTAL-REVENUES> 47642
<CGS> 2324
<TOTAL-COSTS> 21767
<OTHER-EXPENSES> 19443
<LOSS-PROVISION> 0
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<NET-INCOME> 25875
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</TABLE>
