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 March 31, 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 12.
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 month period ended
March 31, 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
March 31, December 31,
1996 1995
--------- ------------
(unaudited)
Assets
Current assets:
Cash $ 23,814 51,601
Receivable from Managing General
Partner 17,311 27,699
--------- ---------
Total current assets 41,125 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 756,000 735,000
--------- ---------
Net oil and gas properties 264,246 285,045
--------- ---------
Organization costs, net of
amortization 7,692 9,615
--------- ---------
$ 313,063 373,960
========= =========
Liabilities and Partners' Equity
Current liabilities:
Accounts payable $ 3,675 -
Distribution payable - 58
--------- ---------
3,675 58
--------- ---------
Partners' equity:
Managing General Partner 16,409 20,984
Investor partners 292,979 352,918
--------- ---------
Total partners' equity 309,388 373,902
--------- ---------
$ 313,063 373,960
========= =========
PAGE
<PAGE>
Southwest Developmental Drilling Fund 91-A, L.P.
Statements of Operations
(unaudited)
Three Months Ended
March 31,
1996 1995
---- ----
Revenues
Oil and gas revenues $ 84,537 75,280
Interest income from operations 411 193
------- -------
84,948 75,473
------- -------
Expenses
Production 75,869 25,982
General and administrative 8,670 8,273
Depreciation, depletion and
amortization 22,923 23,923
------- -------
107,462 58,178
------- -------
Net income (loss) $ (22,514) 17,295
======= =======
Net income (loss) allocated to:
Managing General Partner $ 45 4,534
======= =======
Investor partners $ (22,559) 12,761
======= =======
Per investor partner unit $ (19.71) 11.15
======= =======
PAGE
<PAGE>
Southwest Developmental Drilling Fund 91-A, L.P.
Statements of Cash Flows
(unaudited)
Three Months Ended
March 31,
1996 1995
---- ----
Cash flows from operating activities:
Cash received from oil and gas sales $ 84,180 81,061
Cash paid to suppliers (70,119) (33,194)
Interest received 411 193
------- -------
Net cash provided by operating
activities 14,472 48,060
------- -------
Cash flows used in investing activities:
Additions to oil and gas properties (201) -
------- -------
Cash flows used in financing activities:
Distributions to partners (42,058) (54,000)
------- -------
Net decrease in cash (27,787) (5,940)
Cash and cash equivalents:
Beginning of period 51,601 17,587
------- -------
End of period $ 23,814 11,647
======= =======
(continued)
PAGE
<PAGE>
Southwest Developmental Drilling Fund 91-A, L.P.
Statements of Cash Flows, continued
(unaudited)
Three Months Ended
March 31,
1996 1995
---- ----
Reconciliation of net income (loss)
to net cash provided by operating
activities:
Net income (loss) $ (22,514) 17,295
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion and
amortization 22,923 23,923
(Increase) decrease in receivables (357) 5,781
Increase in payables 14,420 1,061
------- -------
Net cash provided by operating
activities $ 14,472 48,060
======= =======
<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 March 31, 1996 and 1995
The following table provides certain information regarding performance
factors for the quarters ended March 31, 1996 and 1995:
Three Months
Ended Percentage
March 31, Increase
1996 1995 (Decrease)
---- ---- ----------
Average price per barrel of oil $ 19.00 17.83 7%
Average price per mcf of gas $ 2.09 1.92 9%
Oil production in barrels 3,800 3,600 6%
Gas production in mcf 6,100 5,900 3%
Gross oil and gas revenue $ 84,537 75,280 12%
Net oil and gas revenue $ 8,668 49,298 (82%)
Partnership distributions $ 42,000 54,000 (22%)
Investor partner distributions $ 37,380 48,060 (22%)
Per unit distribution to investor
partners $ 32.66 41.99 (22%)
Number of investor partner units 1,144.5 1,144.5
Revenues
The Partnership's oil and gas revenues increased to $84,537 from $75,280 for
the quarters ended March 31, 1996 and 1995, respectively, an increase of 12%.
The principal factors affecting the comparison of the quarters ended March
31, 1996 and 1995 are as follows:
1. The average price for a barrel of oil received by the Partnership
increased during the quarter ended March 31, 1996 as compared to the
quarter ended March 31, 1995 by 7%, or $1.17 per barrel, resulting in an
increase of approximately $4,200 in revenues. Oil sales represented 85%
of total oil and gas sales during the quarters ended March 31, 1996 and
1995.
The average price for an mcf of gas received by the Partnership increased
during the same period by 9%, or $.17 per mcf, resulting in an increase
of approximately $1,000 in revenues.
The total increase in revenues due to the change in prices received from
oil and gas production is approximately $5,200. 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 200 barrels or 6% during the
quarter ended March 31, 1996 as compared to the quarter ended March 31,
1995, resulting in an increase of approximately $3,800 in revenues.
Gas production increased approximately 200 mcf or 3% during the same
period, resulting in an increase of approximately $400 in revenues.
The total increase in revenues due to the change in production is
approximately $4,200.
Costs and Expenses
Total costs and expenses increased to $107,462 from $58,178 for the quarters
ended March 31, 1996 and 1995, respectively, an increase of 85%. The
increase is the result of higher lease operating costs and general and
administrative expense, offset by a decline in depletion expense.
1. Lease operating costs and production taxes were 192% higher, or
approximately $49,900 more during the quarter ended March 31, 1996 as
compared to the quarter ended March 31, 1995. The increase is a result
of workover on one lease during 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 increased 5%
or approximately $400 during the quarter ended March 31, 1996 as compared
to the quarter ended March 31, 1995.
3. Depletion expense decreased to $21,000 for the quarter ended March 31,
1996 from $22,000 for the same period in 1995. This represents a
decrease of 5%. 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. Although oil and gas
sales increased for the quarter ended March 31, 1996 as compared to the
quarter ended March 31, 1995, the decrease in depletion expense is the
result of the change in oil prices since 1995.
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 $14,500 in the
three months ended March 31, 1996 as compared to approximately $48,100 in the
three months ended March 31, 1995. The primary source of the 1996 cash flow
from operating activities was profitable operations.
<PAGE>
<PAGE>
Cash flows used in investing activities were approximately $200 in the three
months ended March 31, 1996 as compared to none in the three months ended
March 31, 1995. The principle use of the 1996 cash flow in investing
activities was the additions to oil and gas properties.
Cash flows used in financing activities were approximately $42,100 in the
three months ended March 31, 1996 as compared to approximately $54,000 in the
three months ended March 31, 1995. The only use in financing activities was
the distributions to partners.
Total distributions during the three months ended March 31, 1996 were $42,000
of which $37,380 was distributed to the limited partners and $4,620 to the
general partners. The per unit distribution to limited partners during the
three months ended March 31, 1996 was $32.66. Total distributions during the
three months ended March 31, 1995 were $54,000 of which $48,060 was
distributed to the limited partners and $5,940 to the general partners. The
per unit distribution to limited partners during the three months ended March
31, 1995 was $41.99.
The source for the 1996 distributions of $42,000 was oil and gas operations
of approximately $14,500, offset by the additions to oil and gas properties
of approximately $200, with the balance from available cash on hand at the
beginning of the period. The source for the 1995 distributions of $54,000
was oil and gas operations of approximately $48,100, with the balance from
available cash on hand at the beginning of the period.
Since inception of the Partnership, cumulative monthly cash distributions of
$586,240 have been made to the partners. As of March 31, 1996, $523,665 or
$457.55 per limited partner unit has been distributed to the limited
partners, representing a 46% return of the capital contributed.
As of March 31, 1996, the Partnership had approximately $37,500 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: May 11, 1996
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Balance
Sheet at March 31, 1996 (Unaudited) and the Statment of Operations for the Three
Months Ended March 31, 1996 (Unaudited) and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 23,814
<SECURITIES> 0
<RECEIVABLES> 17,311
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 41,125
<PP&E> 1,020,246
<DEPRECIATION> 756,000
<TOTAL-ASSETS> 313,063
<CURRENT-LIABILITIES> 3,675
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 309,388
<TOTAL-LIABILITY-AND-EQUITY> 313,063
<SALES> 84,537
<TOTAL-REVENUES> 84,948
<CGS> 75,869
<TOTAL-COSTS> 75,869
<OTHER-EXPENSES> 31,593
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (22,514)
<INCOME-TAX> 0
<INCOME-CONTINUING> (22,514)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (22,514)
<EPS-PRIMARY> (19.71)
<EPS-DILUTED> (19.71)
</TABLE>
