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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
AMENDMENT III
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from...............to...............
Commission file number 0-18327
ENEX 88-89 INCOME AND RETIREMENT FUND - Series 6, L.P.
(Name of small business issuer in its charter)
New Jersey 76-0259723
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
800 Rockmead Drive
Three Kingwood Place
Kingwood, Texas 77339
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (713) 358-8401
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Limited Partnership Interest
Check whether the issuer (1) 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
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.[x]
State issuer's revenues for its most recent fiscal year. $47,786
State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock as of a specified date within
the past 60 days (See definition of affiliate in Rule 12b-2 of the Exchange
Act):
Not Applicable
Documents Incorporated By Reference:
None
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<PAGE>
PART II
Item 5. Market for Common Equity and Related Security Holder Matters
Market Information
There is no established public trading market for the Company's
outstanding limited partnership interests.
Number of Equity Security Holders
Number of Record Holders
Title of Class (as of March 1, 1996)
----------------- -------------------------------
General Partner's Interests 1
Limited Partnership Interests 206
Dividends
The Company made cash distributions to partners of $2 and $13 per $500
investment in 1995 and 1994, respectively. The Company discontinued the payment
of distributions in the second quarter of 1995. Future distributions are
dependent upon, among other things, an increase in the prices received for oil
and gas. The Company will continue to recover its reserves and reduce
obligations in 1996. Based upon current projected cash flows from its property,
it does not appear that the Company will have sufficient net cash flow after
debt service to pay distributions in the near future.
II-1
<PAGE>
Item 6. Management's Discussion and Analysis or Plan of Operation
Results of Operations
This discussion should be read in conjunction with the financial
statements of the Company and the notes thereto included in this Form 10-KSB.
Oil and gas sales decreased to $47,786 in 1995 from $66,213 in 1994.
This represents a decrease of $18,427 or 28%. Oil sales decreased by $5,330 or
22%. A 14% decrease in oil production caused revenues to decrease by $3,230. A
10% decrease in average oil net sales prices reduced sales by an additional
$2,100. Gas sales decreased by $13,097 or 31%. A 19% decrease in gas production
reduced sales by $7,957. A 14% decrease in average gas net sales prices reduced
sales by an additional $5,140. The decrease in oil production was primarily due
to natural production declines. The decrease in gas production was primarily due
to the partial shut-in of production from the Speary acquisition, to perform a
workover in 1995, coupled with natural production declines, which were
especially pronounced on the Wardner Ranch acquisition. The decreases in average
net oil and gas sales prices were primarily a result of higher operating costs
incurred on the Speary acquisition, in which the Company has a net profits
royalty interest, coupled with lower prices in the overall market for the sale
of gas, partially offset by higher prices in the overall market for the sale of
oil.
Depletion expense decreased to $19,937 in 1995 from $41,628 in 1994.
This represents a decrease of $21,691 or 52%. The changes in production, noted
above, reduced depletion expense by $7,115. A 42% decrease in the depletion rate
reduced depletion expense by an additional $14,576. The decrease in the
depletion rate was due to an upward revision of oil and gas reserves during
1995.
General and administrative expenses decreased to $11,412 in 1995
from $16,300 in 1994. This decrease of $4,888 or 30% was primarily due to a
$4,136 decrease in direct costs incurred by the Company in 1995, coupled with
less staff time being required to manage the Company's operations. The decrease
in direct expenses was due to lower audit and tax preparation fees incurred by
the Company in 1995.
Capital Resources and Liquidity
The Company's cash flows from operations is a result of the amount
of net proceeds realized from the sale of oil and gas production. Accordingly,
the changes in cash flows from 1994 to 1995 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 net cash flows to the
Company's partners.
The Company will continue to recover its reserves and distribute to
the partners the net proceeds realized from the sale of oil and gas production
after payment of debt obligations. The Company plans to repay the amount owed to
the general partner from such proceeds over a six year period. Distributions
decreased from 1994 to 1995 due primarily to the decrease in the oil and gas
sales as noted above. The Company discontinued the payment of distributions in
the second quarter of 1995. Future distributions are dependent upon among other
things, an increase in the prices received for oil and gas. The Company will
continue to recover its reserves and reduce its obligations in 1996. 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 in the next twelve months .
II-2
<PAGE>
Item 7. Financial Statements and Supplementary Data
INDEPENDENT AUDITORS' REPORT
The Partners
Enex 88-89 Income and Retirement Fund Series 6, L.P.:
We have audited the accompanying balance sheet of Enex 88-89 Income and
Retirement Fund - Series 6, L.P. (a New Jersey limited partnership) as of
December 31, 1995 and the related statements of operations, changes in partners'
capital (deficit), and cash flows for each of the two years in the period ended
December 31, 1995. These financial statements are the responsibility of the
general partner of Enex 88-89 Income and Retirement Fund - Series 6, L.P. Our
responsibility is to express an opinion on the financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Enex 88-89 Income and Retirement Fund -
Series 6, L.P. at December 31, 1995 and the results of its operations and its
cash flows for each of the two years in the period ended December 31, 1995 in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Houston, Texas
March 18, 1996
II-3
<PAGE>
<TABLE>
<CAPTION>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 6, L.P.
BALANCE SHEET, DECEMBER 31, 1995
- ------------------------------------------------------------------------------
ASSETS
1995
--------------
CURRENT ASSETS:
<S> <C>
Cash $ 2,733
Accounts receivable - oil & gas sales 8,517
--------------
Total current assets 11,250
--------------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 906,914
Less accumulated depreciation and depletion 825,386
--------------
Property, net 81,528
--------------
TOTAL $ 92,778
==============
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 1,833
Payable to general partner 89,028
--------------
Total current liabilities 90,861
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PARTNERS' CAPITAL (DEFICIT):
Limited partners (2,807)
General partner 4,724
--------------
Total partners' capital 1,917
--------------
TOTAL $ 92,778
==============
Number of $500 Limited Partner units outstanding 2,067
</TABLE>
See accompanying notes to financial statements.
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II-4
<PAGE>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 6, L.P.
STATEMENTS OF OPERATIONS
FOR THE TWO YEARS ENDED DECEMBER 31, 1995
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<TABLE>
<CAPTION>
1995 1994
------------------- -------------------
REVENUES:
<S> <C> <C>
Oil, gas & gas plant sales $ 47,786 $ 66,213
------------------- -------------------
EXPENSES:
Depletion and amortization 19,937 46,795
Production taxes 5,853 5,260
General and administrative:
Allocated from general partner 10,350 11,102
Direct expense 1,062 5,198
------------------- -------------------
Total expenses 37,202 68,355
------------------- -------------------
NET INCOME (LOSS) $ 10,584 $ (2,142)
=================== ===================
</TABLE>
See accompanying notes to financial statements.
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II-5
<PAGE>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 6, L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
FOR THE TWO YEARS ENDED DECEMBER 31, 1995
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<TABLE>
<CAPTION>
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)$ (1)
================ ================== ================== ==================
</TABLE>
(1) Includes 127 units purchased by the general partner as a limited partner.
See accompanying notes to financial statements.
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II-6
<PAGE>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 6, L.P.
STATEMENTS OF CASH FLOWS
FOR THE TWO YEARS ENDED DECEMBER 31, 1995
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<TABLE>
<CAPTION>
1995 1994
------------------- -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income (loss) $ 10,584 $ (2,142)
------------------- -------------------
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Depletion and amortization 19,937 46,795
(Increase) decrease in:
Accounts receivable - oil & gas sales 1,635 (4,559)
Increase (decrease) in:
Accounts payable (1,024) 1,926
Payable to general partner (28,971) (9,820)
------------------- -------------------
Total adjustments (8,423) 34,342
------------------- -------------------
Net cash provided by operating activities 2,161 32,200
------------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (5,182) (29,199)
------------------- -------------------
NET INCREASE (DECREASE) IN CASH (3,021) 3,001
CASH AT BEGINNING OF YEAR 5,754 2,753
------------------- -------------------
CASH AT END OF YEAR $ 2,733 $ 5,754
=================== ===================
</TABLE>
See accompanying notes to financial statements.
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II-7
<PAGE>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 6, L.P.
NOTES TO FINANCIAL STATEMENTS
FOR THE TWO YEARS ENDED DECEMBER 31, 1995
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1. PARTNERSHIP ORGANIZATION
Enex 88-89 Income and Retirement Fund Series 6, L.P. (the
"Company"), a New Jersey limited partnership, commenced operations
on November 9, 1989 for the purpose of acquiring non-operating
interests in producing oil and gas properties. Total limited
partner contributions were $1,033,402, of which $10,334 was
contributed by Enex Resources Corporation ("Enex"), the general
partner.
In accordance with the partnership agreement, the Company paid
syndication fees and due diligence expenses of $104,945 for
solicited subscriptions to Enex Securities Corporation, a
subsidiary of Enex, and reimbursed Enex for organization expenses
of approximately $31,000.
The Company owns only non-operating interests in producing oil and
gas properties. Such interests typically entitle the Company to
receive its pro rata share of net profits and royalties from the
underlying properties without obligating the Company to develop or
operate the properties or directly bear any share of development or
operating costs.
Information relating to the allocation of costs and revenues
between Enex, as general partner, and the limited partners is as
follows:
Limited
Enex Partners
Commissions and selling expenses 100%
Company reimbursement of organization
expenses 100%
Company property acquisitions 100%
General and administrative costs 10% 90%
Revenues from temporary investment
of partnership capital 100%
Revenues from producing properties 10% 90%
At the point in time when the cash distributions to the limited
partners equal their subscriptions ("payout"), revenues from
producing properties and general and administrative costs will be
allocated 15% to the general partner and 85% to the limited
partners.
II-8
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Oil and Gas Properties - The Company uses the successful efforts
method of accounting for its oil and gas operations. Capitalized
costs are amortized on the units-of-production method based on
estimated total proved reserves. The acquisition costs of proved
oil and gas properties are capitalized and periodically assessed
for impairments.
The Financial Accounting Standards Board has issued Statement of
Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long Lived Assets and for Long-Lived Assets to Be
Disposed Of." This statement requires that long-lived assets and
certain identifiable intangibles held and used by the Company be
reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be
recoverable.
The Company has not determined the effect, if any, on its financial
position or results of operations which may result from the
adoption of this statement in the first quarter of 1996.
Organization Costs - Organization costs are being amortized on a
straight-line basis over a five-year period.
Cash Flows - The Company has presented its cash flows using the
indirect method and considers all highly liquid investments with an
original maturity of three months or less to be cash equivalents.
General and Administrative Expenses - The Company reimburses the
General Partner for direct costs and administrative costs incurred
on its behalf. Administrative costs allocated to the Company are
computed on a cost basis in accordance with standard industry
practices by allocating the time spent by the General Partner's
personnel among all projects and by allocating rent and other
overhead on the basis of the relative direct time charges.
Uses of Estimates - The preparation of the financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contigent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during
the reporting periods. Actual results could differ from these
estimates.
3. FEDERAL INCOME TAXES
General - The Company is not a taxable entity for federal income
tax purposes. Such taxes are liabilities of the individual partners
and the amounts thereof will vary depending on the individual
situation of each partner. Accordingly, there is no provision for
income taxes in the accompanying financial statements.
II-9
<PAGE>
Set forth below is a reconciliation of net income as reflected in the
accompanying financial statements and net income (loss) for federal income tax
purposes for the year ended December 31, 1995:
<TABLE>
<CAPTION>
Allocable to Per $500
-------------------------------------
Limited
General Limited Partner Unit
TOTAL Partner Partners Outstanding
------------------ ------------------ ----------------- -------------------
Net income as reflected in the
<S> <C> <C> <C> <C>
accompanying financial statements $ 10,584 $ 3,053 $ 7,531 $ 4
Reconciling item:
Difference in depletion and
amortization computed for
federal income tax purposes
and the amount computed for
financial reporting purposes (29,483) - (29,483) (15)
------------------ ------------------ ----------------- -------------------
Net income (loss) for federal
income tax purposes $ (18,899) $ 3,053 $ (21,952) $ (11)
================== ================== ================= ===================
</TABLE>
Net income (loss) for federal income tax purposes is a summation of ordinary
income (loss), portfolio income (loss), cost depletion and intangible drilling
costs as presented in the federal income tax return.
Set forth below is a reconciliation between partners' capital as reflected in
the accompanying financial statements and partners' capital for federal income
tax purposes as of December 31, 1995:
<TABLE>
<CAPTION>
Allocable to Per $500
-------------------------------------
Limited
General Limited Partner Unit
TOTAL Partner Partners Outstanding
------------------ ------------------ ----------------- -------------------
Partners' capital (deficit) as
reflected in the accompanying
<S> <C> <C> <C> <C>
financial statements $ 1,917 $ 4,724 $ (2,807) $ (1)
Reconciling items:
Difference in accumulated
depletion and amortization
for financial reporting and
federal income tax purposes 94,177 - 94,177 45
Commissions and syndication
fees capitalized for federal
income tax purposes 104,945 - 104,945 51
------------------ ------------------ ----------------- -------------------
Partners' capital for federal
income tax purposes $ 201,039 $ 4,724 $ 196,315 $ 95
================== ================== ================= ===================
</TABLE>
II-10
<PAGE>
4. PAYABLE TO GENERAL PARTNER
The payable to general partner primarily consists of general and
administrative expenses allocated to the Company by Enex during the
Company's start-up phase and for its ongoing operations. The
Company plans to repay the amounts owed the general partner over a
period of six years.
5. REPURCHASE OF LIMITED PARTNER INTERESTS
In accordance with the partnership agreement, the general partner
is required to purchase limited partner interests (at the option of
the limited partners) at annual intervals beginning after the
second year following the formation of the Company. The purchase
price, as specified in the partnership agreement, is based
primarily on reserve reports prepared by independent petroleum
engineers as reduced by a specified risk factor.
6. SIGNIFICANT PURCHASERS
Union Pacific Resources accounted for 89% of the Company's total
sales in 1995. Union Pacific Resources accounted for 90% of the
Company's total sales in 1994. No other purchaser individually
accounted for more than 10% of such sales.
II-11
<PAGE>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 6, L.P.
SUPPLEMENTARY OIL AND GAS INFORMATION
FOR THE TWO YEARS ENDED DECEMBER 31, 1995
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Proved Oil and Gas Reserve Quantities (Unaudited)
The following presents an estimate of the Company's proved oil and gas reserve
quantities and changes therein for each of the two years in the period ended
December 31, 1995. Oil reserves are stated in barrels ("BBLS") and natural gas
in thousand cubic feet ("MCF"). The amounts per $500 limited partner unit do not
include a potential 5% reduction after payout. All of the Company's reserves are
located within the United States.
<TABLE>
<CAPTION>
Per $500 Per $500
Limited Natural Limited
Oil Partner Unit Gas Partner Unit
(BBLS) Outstanding (MCF) Outstanding
----------------- ------------------ ------------------ ------------------
PROVED DEVELOPED AND
UNDEVELOPED RESERVES:
<S> <C> <C> <C> <C>
January 1, 1994 5,355 2 151,079 66
Revisions of previous estimates 434 - 35,197 15
Production (2,093) (1) (30,065) (13)
----------------- ------------------ ------------------ ------------------
December 31, 1994 3,696 1 156,211 68
Revisions of previous estimates 1,535 1 8,961 4
Production (1,810) (1) (24,478) (11)
----------------- ------------------ ------------------ ------------------
December 31, 1995 3,421 1 140,694 61
================= ================== ================== ==================
PROVED DEVELOPED RESERVES:
January 1, 1994 5,355 2 151,079 66
================= ================== ================== ==================
December 31, 1994 3,696 1 156,211 68
================= ================== ================== ==================
December 31, 1995 3,421 1 140,694 61
================= ================== ================== ==================
</TABLE>
II-12
<PAGE>
Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure
Not Applicable
II-13
<PAGE>
SIGNATURES
In accordance with Section 13 or 15 (d) 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.
By: ENEX RESOURCES CORPORATION
the General Partner
December 23, 1996 By: /s/ G. B. Eckley
-------------------
G. B. Eckley, President
In accordance with the Exchange Act, this report has been
signed below on December 23, 1996, by the following persons in the capacities
indicated.
ENEX RESOURCES CORPORATION General Partner
By: /s/ G. B. Eckley
------------------------
G. B. Eckley, President
/s/ G. B. Eckley
President, Chief Executive
------------------ Officer and Director
G. B. Eckley
/s/ R. E. Densford Vice President, Secretary, Treasurer,
Chief Financial Officer and Director
-------------------
R. E. Densford
/s/ James A. Klein Controller and Chief Accounting Officer
-----------------
James A. Klein
S-1
<PAGE>
/s/ Robert D. Carl, III
--------------------------
Robert D. Carl, III Director
/s/ Martin J. Freedman
--------------------------
Martin J. Freedman Director
/s/ William C. Hooper, Jr.
--------------------------
William C. Hooper, Jr. Director
/s/ Tom Shorney
--------------------------
Tom Shorney Director
/s/ Stuart Strasner
--------------------------
Stuart Strasner Director
S-2
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000861065
<NAME> ENEX 88-89 INCOME & RETIREMENT FUND-SERIES 3, L.P.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> dec-31-1996
<PERIOD-START> jan-01-1996
<PERIOD-END> dec-31-1996
<CASH> 2733
<SECURITIES> 0
<RECEIVABLES> 8517
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 11250
<PP&E> 906914
<DEPRECIATION> 825386
<TOTAL-ASSETS> 92778
<CURRENT-LIABILITIES> 90861
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1917
<TOTAL-LIABILITY-AND-EQUITY> 92778
<SALES> 47786
<TOTAL-REVENUES> 47786
<CGS> 25790
<TOTAL-COSTS> 37202
<OTHER-EXPENSES> 11412
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10584
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>