United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[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 0-18327
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 7, L.P.
(Exact name of registrant as specified in its Charter)
New Jersey 76-0259724
(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) (Zip Code)
Registrant's telephone number, including area code:
(713) 358-8401
Indicate by check mark whether the 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
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 7, L.P.
BALANCE SHEET
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARCH 31,
ASSETS 1997
-------------------
(Unaudited)
CURRENT ASSETS:
<S> <C>
Cash $ 36,181
Accounts receivable - oil & gas sales 7,557
---------------------
Total current assets 43,738
---------------------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests 1,341,371
Less accumulated depletion 995,995
---------------------
Property, net 345,376
---------------------
TOTAL $ 389,114
=====================
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 1,130
Payable to general partner 10,105
---------------------
Total current liabilities 11,235
PARTNERS' CAPITAL:
Limited partners 370,794
General partner 7,085
---------------------
Total partners' capital 377,879
---------------------
TOTAL $ 389,114
=====================
Number of $500 Limited Partner units outstanding 3,089
</TABLE>
See accompanying notes to financial statements.
- -----------------------------------------------------------------------------
I-1
<PAGE>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 7, L.P.
STATEMENTS OF OPERATIONS
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) THREE MONTHS ENDED
------------------------------------------
MARCH 31, MARCH 31,
1996 1996
------------------- -------------------
REVENUES:
<S> <C> <C>
Oil and gas sales $ 48,714 $ 31,405
------------------- -------------------
EXPENSES:
Depletion 13,270 16,426
Production taxes 3,552 2,392
General and administrative 5,574 4,417
------------------- -------------------
Total expenses 22,396 23,235
------------------- -------------------
NET INCOME $ 26,318 $ 8,170
=================== ===================
</TABLE>
See accompanying notes to financial statements.
- ----------------------------------------------------------------------------
I-2
<PAGE>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 7, L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 1996 AND
FOR THE THREE MONTHS ENDED MARCH 31, 1997
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PER $500
LIMITED
PARTNER
GENERAL LIMITED UNIT OUT-
TOTAL PARTNER PARTNERS STANDING
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1996 $ 389,799 $ 7,293 $ 382,506 $ 124
CASH DISTRIBUTIONS (66,255) (9,945) (56,310) (18)
NET INCOME 57,714 11,178 46,536 15
------------------ ------------------ ------------------ ------------------
BALANCE, DECEMBER 31, 1996 381,258 8,526 372,732 121
CASH DISTRIBUTIONS (29,697) (5,399) (24,298) (8)
NET INCOME 26,318 3,958 22,360 7
------------------ ------------------ ------------------ ------------------
BALANCE, MARCH 31, 1997 $ 377,879 $ 7,085 $ 370,794 (1)$ 120
================== ================== ================== ==================
</TABLE>
(1) Includes 324 units purchased by the general partner as a limited partner.
See accompanying notes to financial statements.
- ---------------------------------------------------------------------------
I-3
<PAGE>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 7, L.P.
STATEMENTS OF CASH FLOWS
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
THREE MONTHS ENDED
------------------------------------------
MARCH 31, MARCH 31,
1997 1996
------------------- -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 26,318 $ 8,170
------------------- -------------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depletion 13,270 16,426
Decrease in:
Accounts receivable - oil & gas sales 8,499 310
Other current assets 184 -
Increase (decrease) in:
Accounts payable (4,753) (991)
Payable to general partner 10,105 (11,260)
------------------- -------------------
Total adjustments 27,305 4,485
------------------- -------------------
Net cash provided by operating activities 53,623 12,655
------------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (29,697) (12,122)
------------------- -------------------
NET INCREASE IN CASH 23,926 533
CASH AT BEGINNING OF YEAR 12,255 9,004
------------------- -------------------
CASH AT END OF PERIOD $ 36,181 $ 9,537
=================== ===================
</TABLE>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------
I-4
<PAGE>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 7, 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.
2. A cash distribution was made to the limited partners of the Company in
the amount of $24,298, representing net revenues from the sale of oil
and gas produced from properties owned by the Company. This
distribution was made on January 31, 1997.
3. On April 7, 1997, the Company's General Partner mailed proxy material
to the limited partners with respect to a proposed consolidation of the
Company with 33 other managed limited partnerships. The terms and
conditions of the proposed consolidation are set forth in such proxy
material.
I-5
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
First Quarter 1997 Compared to First Quarter 1996
Oil and gas sales for the first quarter increased from $31,405 in 1996 to
$48,714 in 1997. This represents an increase of $17,309 (55%). Oil sales
increased by $3,219 or 44%. A 46% increase in the average oil net sales price
increased sales by $3,337. This increase was partially offset by a 2% decline in
oil production. Gas sales increased $14,090 or 59%. A 42% increase in the
average net gas sales price increased sales by $11,302. A 12% increase in gas
production increased sales by an additional $2,788. The increases in average net
prices correspond with higher prices in the overall market for the sale of oil
and gas. The decrease in oil production was primarily due to natural production
declines. The increase in gas production was primarily due to higher production
from Wardner Ranch acquisition which was shut-in for a workover in the first
quarter of 1996.
Depletion expense decreased from $16,426 in the first quarter of 1996 to $13,270
in the first quarter of 1997. This represents a decrease of $3,156 (19%). A 26%
decrease in the depletion rate reduced depletion expense by $4,590. 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 1996.
General and administrative expenses increased from $4,417 in 1996 to $5,574 in
1997. This increase of $1,157 (26%) was primarily a result of a $1,905 increase
in direct expenses incurred by the Company in 1997, partially offset by less
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 1996 to 1997 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 will continue to recover its reserves and distribute to the limited
partners the net proceeds realized from the sale of oil and gas production.
Distribution amounts are subject to change if net revenues are greater or less
than expected. Nonetheless, the general partner believes the Company will
continue to have sufficient cash flow to fund operations and to maintain a
regular pattern of distributions.
On April 7, 1997, the Company's General Partner mailed proxy material to the
limited partners with respect to a proposed consolidation of the Company with 33
other managed limited partnerships. The terms and conditions of the proposed
consolidation are set forth in such proxy material.
I-6
<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 March 31, 1997.
II-1
<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 hereunto duly authorized.
ENEX 88-89 INCOME AND RETIREMENT
FUND - SERIES 7, 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
May 11, 1997 By: /s/ James A. Klein
-------------------
James A. Klein
Controller and Chief
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000862023
<NAME> ENEX 88-89 INCOME & RETIREMENT FUND-SERIES 7, L.P.
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> dec-31-1997
<PERIOD-START> jan-01-1997
<PERIOD-END> mar-31-1997
<CASH> 36181
<SECURITIES> 0
<RECEIVABLES> 7557
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 43738
<PP&E> 1341371
<DEPRECIATION> 995995
<TOTAL-ASSETS> 389114
<CURRENT-LIABILITIES> 11235
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 377879
<TOTAL-LIABILITY-AND-EQUITY> 389114
<SALES> 48714
<TOTAL-REVENUES> 48714
<CGS> 16822
<TOTAL-COSTS> 16822
<OTHER-EXPENSES> 5574
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 26318
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
