United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
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 0-18854
ENEX OIL & GAS INCOME PROGRAM V - SERIES 1, L.P.
(Exact name of small business issuer as specified in its charter)
New Jersey 76-0303870
(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) 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
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ENEX OIL & GAS INCOME PROGRAM V - SERIES 1, L.P.
BALANCE SHEET
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARCH 31,
ASSETS 1997
---------------------
(Unaudited)
CURRENT ASSETS:
<S> <C>
Cash $ 51,440
Accounts receivable - oil & gas sales 40,074
Other current assets 4,186
---------------------
Total current assets 95,700
---------------------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 1,608,285
Less accumulated depreciation and depletion 1,247,602
---------------------
Property, net 360,683
---------------------
TOTAL $ 456,383
=====================
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 72,054
Payable to general partner 9,537
---------------------
Total current liabilities 81,591
---------------------
PARTNERS' CAPITAL:
Limited partners 355,381
General partner 19,411
---------------------
Total partners' capital 374,792
---------------------
TOTAL $ 456,383
=====================
Number of $500 Limited Partner units outstanding 4,529
</TABLE>
See accompanying notes to financial statements.
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I-1
<PAGE>
ENEX OIL & GAS INCOME PROGRAM V - SERIES 1, L.P.
STATEMENTS OF OPERATIONS
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED) THREE MONTHS ENDED
----------------------------------
MARCH 31, MARCH 31,
1997 1996
--------------- -------------
REVENUES:
<S> <C> <C>
Oil and gas sales $ 82,059 $ 96,031
--------------- -------------
EXPENSES:
Depreciation and depletion 10,025 19,352
Impairment of property - 84,631
Lease operating expenses 61,477 52,544
Production taxes 6,115 6,990
General and administrative 8,697 10,536
--------------- -------------
Total expenses 86,314 174,053
--------------- -------------
LOSS FROM OPERATIONS (4,255) (78,022)
--------------- -------------
OTHER INCOME:
Gain from sale of property - 936
--------------- -------------
NET LOSS $ (4,255) $ (77,086)
=============== =============
</TABLE>
See accompanying notes to financial statements.
- ---------------------------------------------------------------------------
I-2
<PAGE>
ENEX OIL & GAS INCOME PROGRAM V - SERIES 1, 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 $ 485,556 $ 20,881 $ 464,675 $ 103
CASH DISTRIBUTIONS (63,119) (9,609) (53,510) (12)
NET INCOME (LOSS) (14,404) 12,830 (27,234) (6)
------------ ----------- ------------ --------
BALANCE, DECEMBER 31, 1996 408,033 24,102 383,931 85
CASH DISTRIBUTIONS (28,986) (5,268) (23,718) (5)
NET INCOME (LOSS) (4,255) 577 (4,832) (1)
------------ ----------- ------------ --------
BALANCE, MARCH 31, 1997 $ 374,792 $ 19,411 $ 355,381 (1)$ 79
============ =========== ============ ========
</TABLE>
(1) Includes 545 units purchased by the general partner as a limited partner.
See accompanying notes to financial statements.
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I-3
<PAGE>
ENEX OIL AND GAS INCOME PROGRAM V - SERIES 1, 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 loss $ (4,255) $ (77,086)
------------- -------------
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and depletion 10,025 19,352
Impairment of property - 84,631
Gain on sale of property - (936)
(Increase) decrease in:
Accounts receivable - oil & gas sales 32,698 (3,873)
Increase in:
Accounts payable 13,814 30,162
Payable to general partner 4,739 -
------------- -------------
Total adjustments 61,276 129,336
------------- -------------
Net cash provided by operating activities 57,021 52,250
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property - 936
Property additions - development costs (1,242) (43,158)
------------- -------------
Net cash used by investing activities (1,242) (42,222)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (28,986) (9,453)
------------- -------------
NET INCREASE IN CASH 26,793 575
CASH AT BEGINNING OF YEAR 24,647 26,269
------------- -------------
CASH AT END OF PERIOD $ 51,440 $ 26,844
============= =============
</TABLE>
See accompanying notes to financial statements.
- ------------------------------------------------------------------------------
I-4
<PAGE>
ENEX OIL & GAS INCOME PROGRAM V - SERIES 1, 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 $23,718 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.
4. Effective January 1, 1996, the Company sold its interest in the Nunley
Ranch acquisition for $936. The Company recognized a gain of $936 on the
sale.
5. 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. In the first quarter of 1996, the
Company recognized a non-cash impairment provision of $84,631 for certain
oil and gas properties due to changes in the overall market for the sale of
oil and gas and significant decreases in the projected production from
certain of the Company's oil and gas properties.
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 decreased from $96,031 in 1996 to
$82,059 in 1997. This represents a decrease of $13,972 (15%). Oil sales
decreased by $7,222 or 12%. A 25% decrease in oil production reduced sales by
$14,716. This decrease was partially offset by a 17% increase in average oil
sales prices. Gas sales decreased by $6,750 or 18%. A 36% decrease in gas
production reduced sales by $13,210. This decrease was partially offset by a 28%
increase in average gas sales prices. The decreases in oil and gas production
were primarily a result of the shut in of production from the FEC acquisition to
perform a workover in the first quarter of 1997, coupled with natural production
declines which were especially pronounced on the Binger acquisition. The
increases in average prices correspond with higher prices in the overall market
for the sale of oil and gas.
Lease operating expenses increased from $52,544 in the first quarter of 1996 to
$61,477 in the first quarter of 1997. The increase of $8,933 (17%) is primarily
due to workover charges incurred on the FEC acquisition in the first quarter of
1997.
Depreciation and depletion expense decreased from $19,352 in the first quarter
of 1996 to $10,025 in the first quarter of 1997. This represents a decrease of
$9,327 (48%). The changes in production, noted above, reduced depreciation and
depletion expense by $5,826. A 26% decrease in the depletion rate reduced
depreciation and depletion expense by an additional $3,501. The rate decrease
was primarily due to upward revisions of the oil and gas reserves during
December 1996.
Effective January 1, 1996, the Company sold its interest in the Nunley Ranch
acquisition for $936. The Company recognized a gain of $936 on the sale.
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. In the first quarter of 1996,
the Company recognized a non-cash impairment provision of $84,631 for certain
oil and gas properties due to changes in the overall market for the sale of oil
and gas and significant decreases in the projected production from certain of
the Company's oil and gas properties.
General and administrative expenses decreased from $10,536 in the first quarter
of 1996 to $8,697 in the first quarter of 1997. This decrease of $1,839 (17%) is
primarily due to less staff time being required to manage the Company's
operations.
I-6
<PAGE>
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.
As of March 31, 1997, the Company had no material commitments for capital
expenditures. The Company does not intend to engage in any significant
developmental drilling activity.
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 March 31, 1997.
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 OIL & GAS INCOME
PROGRAM V - SERIES 1, 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> 0000868664
<NAME> Enex Oil & Gas Income Program V - Series 1, 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> 51440
<SECURITIES> 0
<RECEIVABLES> 40074
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 95700
<PP&E> 1608285
<DEPRECIATION> 1247602
<TOTAL-ASSETS> 456383
<CURRENT-LIABILITIES> 81591
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 374792
<TOTAL-LIABILITY-AND-EQUITY> 456383
<SALES> 82059
<TOTAL-REVENUES> 82059
<CGS> 67592
<TOTAL-COSTS> 77617
<OTHER-EXPENSES> 8697
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4255)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
