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 June 30, 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 33-38511
SOUTHWEST DEVELOPMENTAL DRILLING PROGRAM 1991-92
Southwest Developmental Drilling Fund 91-A, L.P.
(Exact name of registrant as specified
in its limited partnership agreement)
Delaware 75-2387814
(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 14.
<PAGE>
<PAGE>
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 and six month periods
ended June 30, 1996 are not necessarily indicative of the results that may be
expected for the full year.
<PAGE>
<PAGE>
Southwest Developmental Drilling Fund 91-A, L.P.
Balance Sheets
June 30, December 31,
1996 1995
--------- ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 37,013 51,601
Receivable from Managing
General Partner 52,183 27,699
--------- ---------
Total current assets 89,196 79,300
--------- ---------
Oil and gas properties - using the
full cost method of accounting 1,020,246 1,020,045
Less accumulated depreciation,
depletion and amortization 794,000 735,000
--------- ---------
Net oil and gas properties 226,246 285,045
--------- ---------
Organization costs, net 5,769 9,615
--------- ---------
$ 321,211 373,960
========= =========
Liabilities and Partners' Equity
Current liability - Distribution payable $ - 58
--------- ---------
Partners' equity:
Managing General Partner 22,101 20,984
Investor partners 299,110 352,918
--------- ---------
Total partners' equity 321,211 373,902
--------- ---------
$ 321,211 373,960
========= =========
<PAGE>
<PAGE>
Southwest Developmental Drilling Fund 91-A, L.P.
Statements of Operations
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
Revenues
Oil and gas $ 150,986 72,186 235,523 147,466
Interest 350 228 761 420
------- ------- ------- -------
151,336 72,414 236,284 147,886
------- ------- ------- -------
Expenses
Production 29,914 28,692 105,783 54,674
General and administrative 3,676 4,274 12,346 12,548
Depreciation, depletion and
amortization 39,923 22,923 62,846 46,846
------- ------- ------- -------
73,513 55,889 180,975 114,068
------- ------- ------- -------
Net income $ 77,823 16,525 55,309 33,818
======= ======= ======= =======
Net income allocated to:
Managing General Partner $ 12,952 4,339 12,997 8,873
======= ======= ======= =======
Investor Partners $ 64,871 12,186 42,312 24,945
======= ======= ======= =======
Per investor partner
unit $ 56.68 10.65 36.97 21.80
======= ======= ======= =======
<PAGE>
<PAGE>
Southwest Developmental Drilling Fund 91-A, L.P.
Statements of Cash Flows
(unaudited)
Six Months Ended
June 30,
1996 1995
Cash flows from operating activities:
Cash received from oil and gas sales $ 209,193 157,038
Cash paid to suppliers (116,283) (69,347)
Interest received 761 420
------- -------
Net cash provided by operating
activities 93,671 88,111
------- -------
Cash flows from investing activities:
Additions of oil and gas properties (201) (2,628)
Sale of oil and gas properties - 1,659
------- -------
Net cash used in investing activities (201) (969)
------- -------
Cash flows used in financing activities:
Distributions to partners (108,058) (80,942)
------- -------
Net increase (decrease) in cash and
cash equivalents (14,588) 6,200
Beginning of period 51,601 17,587
------- -------
End of period $ 37,013 23,787
======= =======
(continued)
<PAGE>
<PAGE>
Southwest Developmental Drilling Fund 91-A, L.P.
Statements of Cash Flows, continued
(unaudited)
Six Months Ended
June 30,
1996 1995
Reconciliation of net income to
net cash provided by operating
activities:
Net income $ 55,309 33,818
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion and
amortization 62,846 46,846
(Increase) decrease in receivables (26,330) 9,572
Increase (decrease) in payables 1,846 (2,125)
------- -------
Net cash provided by operating
activities $ 93,671 88,111
======= =======
<PAGE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
Southwest Developmental Drilling Fund 91-A, L.P. was organized as a Delaware
limited partnership on January 7, 1991. The offering of such limited and
general partner interests began September 17, 1991 as part of a shelf
offering registered under the name Southwest Developmental Drilling Program
1991-92. Minimum capital requirements for the partnership were met on April
22, 1992, with the offering of limited and general partner interests
concluding April 30, 1992, with total investor partner contributions of
$1,144,500. The Managing General Partner made a contribution to the capital
of the Partnership at the conclusion of its offering period in an amount
equal to 1% of its net capital contributions. The Managing General Partner's
contribution was $9,800. The total capital contributions are $1,154,300.
The Partnership was formed to engage primarily in the business of drilling
developmental and exploratory wells, to produce and market crude oil and
natural gas produced from such properties, to distribute any net proceeds
from operations to the general and investor partners and to the extent
necessary, acquire leases which contain drilling prospects. Net revenues
will not be reinvested in other revenue producing assets except to the extent
that performance of remedial work is needed to improve a well's producing
capabilities. The economic life of the Partnership thus depends on the
period over which the Partnership's oil and gas reserves are economically
recoverable.
The Partnership has expended its capital and acquired leasehold interests and
completed drilling operations. 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, increases and decreases in 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.
<PAGE>
<PAGE>
Results of Operations
A. General Comparison of the Quarters Ended June 30, 1996 and 1995
The following table provides certain information regarding performance
factors for the quarters ended June 30, 1996 and 1995:
Three Months
Ended Percentage
June 30, Increase
1996 1995 (Decrease)
---- ---- ----------
Average price per barrel of oil $ 20.98 18.52 13%
Average price per mcf of gas $ 2.44 1.65 48%
Oil production in barrels 5,700 3,400 68%
Gas production in mcf 12,500 5,600 123%
Gross oil and gas revenue $ 150,986 72,186 109%
Net oil and gas revenue $ 121,072 43,494 178%
Partnership distributions $ 66,000 27,000 144%
Investor partner distributions $ 58,740 24,030 144%
Per unit distribution to investor
partners $ 51.32 21.00 144%
Number of investor partner units 1,144.5 1,144.5
Revenues
The Partnership's oil and gas revenues increased to $150,986 from $72,186 for
the quarters ended June 30, 1996 and 1995, respectively, an increase of 109%.
The principal factors affecting the comparison of the quarters ended June 30,
1996 and 1995 are as follows:
1. The average price for a barrel of oil received by the Partnership
increased during the quarter ended June 30, 1996 as compared to the
quarter ended June 30, 1995 by 13%, or $2.46 per barrel, resulting in an
increase of approximately $8,400 in revenues. Oil sales represented 80%
of total oil and gas sales during the quarter ended June 30, 1996 as
compared to 87% during the quarter ended June 30, 1995.
The average price for an mcf of gas received by the Partnership increased
during the same period by 48%, or $.79 per mcf, resulting in an increase
of approximately $4,400 in revenues.
The total increase in revenues due to the change in prices received from
oil and gas production is approximately $12,800. 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.
<PAGE>
<PAGE>
2. Oil production increased approximately 2,300 barrels or 68% during the
quarter ended June 30, 1996 as compared to the quarter ended June 30,
1995, resulting in an increase of approximately $48,300 in revenues.
Gas production increased approximately 6,900 mcf or 123% during the same
period, resulting in an increase of approximately $16,800 in revenues.
The total increase in revenues due to the change in production is
approximately $65,100. The increase is primarily a result of a
successful workover on a well during 1996.
Costs and Expenses
Total costs and expenses increased to $73,513 from $55,889 for the quarters
ended June 30, 1996 and 1995, respectively, an increase of 32%. The increase
is the result of higher lease operating costs and depletion expense, offset
by a decline in general and administrative expense.
1. Lease operating costs and production taxes were 4% higher, or
approximately $1,200 more during the quarter ended June 30, 1996 as
compared to the quarter ended June 30, 1995.
2. General and administrative costs consist of independent accounting and
engineering fees, computer services, postage, and Managing General
Partner personnel costs. General and administrative costs decreased 14%
or approximately $600 during the quarter ended June 30, 1996 as compared
to the quarter ended June 30, 1995.
3. Depletion expense increased to $38,000 for the quarter ended June 30,
1996 from $21,000 for the same period in 1995. This represents an
increase of 81%. 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 June 30, 1996 as compared to the
same period for 1995. Depletion reflected a comparable increase.
<PAGE>
<PAGE>
B. General Comparison of the Six Month Periods Ended June 30, 1996 and 1995
The following table provides certain information regarding performance
factors for the six month periods ended June 30, 1996 and 1995:
Six Months
Ended Percentage
June 30, Increase
1996 1995 (Decrease)
---- ---- ----------
Average price per barrel of oil $ 20.19 18.17 11%
Average price per mcf of gas $ 2.32 1.79 30%
Oil production in barrels 9,500 7,000 36%
Gas production in mcf 18,500 11,500 61%
Gross oil and gas revenue $ 235,523 147,466 60%
Net oil and gas revenue $ 129,740 92,792 40%
Partnership distributions $ 108,000 81,000 33%
Investor partner distributions $ 96,120 72,090 33%
Per unit distribution to investor
partners $ 83.98 62.99 33%
Number of investor partner units 1,144.5 1,144.5
Revenues
The Partnership's oil and gas revenues increased to $235,523 from $147,466
for the six months ended June 30, 1996 and 1995, respectively, an increase of
60%. The principal factors affecting the comparison of the six months ended
June 30, 1996 and 1995 are as follows:
1. The average price for a barrel of oil received by the Partnership
increased during the six months ended June 30, 1996 as compared to the
six months ended June 30, 1995 by 11%, or $2.02 per barrel, resulting in
an increase of approximately $14,100 in revenues. Oil sales represented
82% of total oil and gas sales during the six months ended June 30, 1996
as compared to 86% during the six months ended June 30, 1995.
The average price for an mcf of gas received by the Partnership increased
during the same period by 30%, or $.53 per mcf, resulting in an increase
of approximately $6,100 in revenues.
The total increase in revenues due to the change in prices received from
oil and gas production is approximately $20,200. 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.
PAGE
<PAGE>
2. Oil production increased approximately 2,500 barrels or 36% during the
six months ended June 30, 1996 as compared to the six months ended June
30, 1995, resulting in an increase of approximately $50,500 in revenues.
Gas production increased approximately 7,000 mcf or 61% during the same
period, resulting in an increase of approximately $16,200 in revenues.
The total increase in revenues due to the change in production is
approximately $66,700. The increase is primarily a result of a
successful workover on one well in 1996.
Costs and Expenses
Total costs and expenses increased to $180,975 from $114,068 for the six
months ended June 30, 1996 and 1995, respectively, an increase of 59%. The
increase is the result of higher lease operating costs and depletion expense,
offset by a decline in general and administrative expense.
1. Lease operating costs and production taxes were 93% higher, or
approximately $51,100 more during the six months ended June 30, 1996 as
compared to the six months ended June 30, 1995. The increase is a result
of a workover on one well in 1996.
2. General and administrative costs consist of independent accounting and
engineering fees, computer services, postage, and Managing General
Partner personnel costs. General and administrative costs decreased 2%
or approximately $200 during the six months ended June 30, 1996 as
compared to the six months ended June 30, 1995.
3. Depletion expense increased to $59,000 for the six months ended June 30,
1996 from $43,000 for the same period in 1995. This represents an
increase of 37%. 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 six months ended June 30, 1996 as compared to the
same period for 1995. Depletion reflected a comparable increase.
<PAGE>
<PAGE>
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 $93,700 in the
six months ended June 30, 1996 as compared to approximately $88,100 in the
six months ended June 30, 1995. The primary source of the 1996 cash flow
from operating activities was profitable operations.
Cash flows used in investing activities were approximately $200 in the six
months ended June 30, 1996 as compared to approximately $1,000 in the six
months ended June 30, 1995. The principle use of the 1996 cash flow used in
investing activities was the additions to oil and gas properties.
Cash flows used in financing activities were approximately $108,100 in the
six months ended June 30, 1996 as compared to approximately $80,900 in the
six months ended June 30, 1995. The only use in financing activities was the
distributions to partners.
Total distributions during the six months ended June 30, 1996 were $108,000
of which $96,120 was distributed to the investor partners and $11,880 to the
Managing General Partner. The per unit distribution to investor partners
during the six months ended June 30, 1996 was $83.98. Total distributions
during the six months ended June 30, 1995 were $81,000 of which $72,090 was
distributed to the investor partners and $8,910 to the Managing General
Partner. The per unit distribution to investor partners during the six
months ended June 30, 1995 was $62.99.
The source for the 1996 distributions of $108,000 was oil and gas operations
of approximately $93,700, offset by the addition to oil and gas properties of
approximately $200, with the balance from available cash on hand at the
beginning of the period. The sources for the 1995 distributions of $81,000
were oil and gas operations of approximately $88,100 and the sale of oil and
gas properties of approximately $1,700, offset by the addition to oil and gas
properties of approximately $2,600, resulting in excess cash for
contingencies or subsequent distributions.
Since inception of the Partnership, cumulative monthly cash distributions of
$652,240 have been made to the partners. As of June 30, 1996, $582,405 or
$508.87 per investor partner unit has been distributed to the investor
partners, representing a 51% return of the capital contributed.
As of June 30, 1996, the Partnership had approximately $89,200 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.
<PAGE>
<PAGE>
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>
<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 thereunto duly authorized.
SOUTHWEST DEVELOPMENTAL
DRILLING FUND 91-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: August 12, 1996
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Balance
Sheet at June 30, 1996 (Unaudited) and the Statement of Operations for the Six
Months Ended June 30, 1996 (Unaudited) and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 37,013
<SECURITIES> 0
<RECEIVABLES> 52,183
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 89,196
<PP&E> 1,020,246
<DEPRECIATION> 794,000
<TOTAL-ASSETS> 321,211
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 321,211
<TOTAL-LIABILITY-AND-EQUITY> 321,211
<SALES> 235,523
<TOTAL-REVENUES> 236,284
<CGS> 105,783
<TOTAL-COSTS> 105,783
<OTHER-EXPENSES> 75,192
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 55,309
<INCOME-TAX> 0
<INCOME-CONTINUING> 55,309
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 55,309
<EPS-PRIMARY> 36.97
<EPS-DILUTED> 36.97
</TABLE>
