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, 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 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.
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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, 1996 which are found in the Registrant's Form 10-K Report
for 1996 filed with the Securities and Exchange Commission. The December 31,
1996 balance sheet included herein has been taken from the Registrant's 1996
Form 10-K Report. Operating results for the three month period ended
March 31, 1997 are not necessarily indicative of the results that may be
expected for the full year.
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Southwest Developmental Drilling Fund 91-A, L.P.
Balance Sheets
March 31, December 31,
1997 1996
--------- ------------
(unaudited)
Assets
Current assets:
Cash and equivalents $ 75,191 72,991
Receivable from Managing General Partner 40,147 60,583
--------- ---------
Total current assets 115,338 133,574
--------- ---------
Oil and gas properties - using the
full-cost method of accounting 1,020,246 1,020,246
Less accumulated depreciation,
depletion and amortization 804,000 793,000
--------- ---------
Net oil and gas properties 216,246 227,246
--------- ---------
Organization costs, net - 1,923
--------- ---------
$ 331,584 362,743
========= =========
Liabilities and Partners' Equity
Current liabilities:
Accounts payable $ 3,900 -
Distribution payable 110 -
--------- ---------
Total current liabilities 4,010 -
--------- ---------
Partners' equity:
Managing General Partner 24,536 26,983
Investor partners 303,038 335,760
--------- ---------
Total partners' equity 327,574 362,743
--------- ---------
$ 331,584 362,743
========= =========
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Southwest Developmental Drilling Fund 91-A, L.P.
Statements of Operations
(unaudited)
Three Months Ended
March 31,
1997 1996
---- ----
Revenues
Oil and gas $ 91,575 84,537
Interest 715 411
------- -------
92,290 84,948
------- -------
Expenses
Production 21,353 75,869
General and administrative 8,683 8,670
Depreciation, depletion and amortization 12,923 22,923
------- -------
42,959 107,462
------- -------
Net income (loss) $ 49,331 (22,514)
======= =======
Net income (loss) allocated to:
Managing General Partner $ 6,848 45
======= =======
Investor partners $ 42,483 (22,559)
======= =======
Per investor partner unit $ 37.12 (19.71)
======= =======
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Southwest Developmental Drilling Fund 91-A, L.P.
Statements of Cash Flows
(unaudited)
Three Months Ended
March 31,
1997 1996
---- ----
Cash flows from operating activities:
Cash received from oil and gas sales $ 114,305 84,180
Cash paid to suppliers (28,430) (70,119)
Interest received 715 411
------- -------
Net cash provided by operating activities 86,590 14,472
------- -------
Cash flows used in investing activities:
Additions to oil and gas properties - (201)
------- -------
Cash flows used in financing activities:
Distributions to partners (84,390) (42,058)
------- -------
Net increase (decrease) in cash and cash
equivalents 2,200 (27,787)
Beginning of period 72,991 51,601
------- -------
End of period $ 75,191 23,814
======= =======
(continued)
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Southwest Developmental Drilling Fund 91-A, L.P.
Statements of Cash Flows, continued
(unaudited)
Three Months Ended
March 31,
1997 1996
---- ----
Reconciliation of net income (loss) to
net cash provided by operating activities:
Net income (loss) $ 49,331 (22,514)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation, depletion and amortization 12,923 22,923
(Increase) decrease in receivables 22,730 (357)
Increase in payables 1,606 14,420
------ -------
Net cash provided by operating activities $ 86,590 14,472
======= =======
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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.
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.
Based on current conditions, management anticipates performing workovers
during 1997 to enhance production. The Partnership could possibly experience
the following changes; an increase during 1997 and 1998, with a decrease in
1999 and thereafter, a normal decline.
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Results of Operations
A. General Comparison of the Quarters Ended March 31, 1997 and 1996
The following table provides certain information regarding performance
factors for the quarters ended March 31, 1997 and 1996:
Three Months
Ended Percentage
March 31, Increase
1997 1996 (Decrease)
---- ---- ----------
Average price per barrel of oil $ 23.11 19.00 22%
Average price per mcf of gas $ 2.00 2.09 (4%)
Oil production in barrels 3,400 3,800 (11%)
Gas production in mcf 6,500 6,100 7%
Gross oil and gas revenue $ 91,575 84,537 8%
Net oil and gas revenue $ 70,222 8,668 710%
Partnership distributions $ 84,500 42,000 101%
Investor partner distributions $ 75,205 37,380 101%
Per unit distribution to investor
partners $ 65,71 32.66 101%
Number of investor partner units 1,144.5 1,144.5
Revenues
The Partnership's oil and gas revenues increased to $91,575 from $84,537 for
the quarters ended March 31, 1997 and 1996, respectively, an increase of 8%.
The principal factors affecting the comparison of the quarters ended March
31, 1997 and 1996 are as follows:
1. The average price for a barrel of oil received by the Partnership
increased during the quarter ended March 31, 1997 as compared to the
quarter ended March 31, 1996 by 22%, or $4.11 per barrel, resulting in an
increase of approximately $15,600 in revenues. Oil sales represented 86%
of total oil and gas sales during the quarter ended March 31, 1997 as
compared to 85% during the quarter ended March 31, 1996.
The average price for an mcf of gas received by the Partnership decreased
during the same period by 4%, or $.09 per mcf, resulting in a decrease of
approximately $500 in revenues.
The net total increase in revenues due to the change in prices received
from oil and gas production is approximately $15,100. 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.
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2. Oil production decreased approximately 400 barrels or 11% during the
quarter ended March 31, 1997 as compared to the quarter ended March 31,
1996, resulting in a decrease of approximately $9,200 in revenues.
Gas production increased approximately 400 mcf or 7% during the same
period, resulting in an increase of approximately $800 in revenues.
The net total decrease in revenues due to the change in production is
approximately $8,400.
Costs and Expenses
Total costs and expenses decreased to $42,959 from $107,462 for the quarters
ended March 31, 1997 and 1996, respectively, a decrease of 60%. The decrease
is the result of lower lease operating costs and depletion expense, partially
offset by an increase in general and administrative expense.
1. Lease operating costs and production taxes were 72% lower, or
approximately $54,500 less during the quarter ended March 31, 1997 as
compared to the quarter ended March 31, 1996. The decrease is primarily
attributable to workover costs incurred on one lease during the first
quarter of 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
less than 1% or approximately $10 during the quarter ended March 31, 1997
as compared to the quarter ended March 31, 1996.
3. Depletion expense decreased to $11,000 for the quarter ended March 31,
1997 from $21,000 for the same period in 1996. This represents a
decrease of 48%. Depletion is calculated using the units of 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. A contributing factor
to the decline of depletion expense between the comparative periods was
the increase in the price of oil used to determine the Partnership's
reserves for January 1, 1997 as compared to 1996.
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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 $86,600 in the
quarter ended March 31, 1997 as compared to approximately $14,500 in the
quarter ended March 31, 1996. The primary source of the 1997 cash flow from
operating activities was profitable operations.
There were no cash flows used in investing activities in the quarter ended
March 31, 1997 as compared to approximately $200 in the quarter ended March
31, 1996.
Cash flows used in financing activities were approximately $84,400 in the
quarter ended March 31, 1997 as compared to approximately $42,100 in the
quarter ended March 31, 1996. The only use in financing activities was the
distributions to partners.
Total distributions during the quarter ended March 31, 1997 were $84,500 of
which $75,205 was distributed to the investor partners and $9,295 to the
Managing General Partner. The per unit distribution to investor partners
during the quarter ended March 31, 1997 was $65.71. Total distributions
during the quarter ended March 31, 1996 were $42,000 of which $37,380 was
distributed to the investor partners and $4,620 to the Managing General
Partner. The per unit distribution to investor partners during the quarter
ended March 31, 1996 was $32.66.
The source for the 1997 distributions of $84,500 was oil and gas operations
of approximately $86,600, resulting in excess cash for contingencies or
subsequent distributions. 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.
Since inception of the Partnership, cumulative monthly cash distributions of
$881,740 have been made to the partners. As of March 31, 1997, $786,660 or
$687.34 per investor partner unit has been distributed to the investor
partners, representing a 69% return of the capital contributed.
As of March 31, 1997, the Partnership had approximately $111,300 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.
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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) Exhibits:
27 Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter for
which this report is filed.
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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 15, 1997
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Balance Sheet at March 31, 1997 (Unaudited) and the Statement of Operations
for the Three Months Ended March 31, 1997 (Unaudited) and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 75,191
<SECURITIES> 0
<RECEIVABLES> 40,147
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 115,338
<PP&E> 1,020,246
<DEPRECIATION> 804,000
<TOTAL-ASSETS> 331,584
<CURRENT-LIABILITIES> 4,010
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 327,574
<TOTAL-LIABILITY-AND-EQUITY> 331,584
<SALES> 91,575
<TOTAL-REVENUES> 92,290
<CGS> 21,353
<TOTAL-COSTS> 21,353
<OTHER-EXPENSES> 21,606
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 49,331
<INCOME-TAX> 0
<INCOME-CONTINUING> 49,331
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 49,331
<EPS-PRIMARY> 37.12
<EPS-DILUTED> 37.12
</TABLE>
