Page 1 of 14
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 September 30, 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 92-A, L.P.
(Exact name of registrant as specified
in its limited partnership agreement)
Delaware 75-2387816
(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>
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 note 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 and
nine month periods ended September 30, 1997 are not necessarily indicative
of the results that may be expected for the full year.
<PAGE>
Southwest Developmental Drilling Fund 92-A, L.P.
Balance Sheets
September 30, December 31,
1997 1996
------------- ------------
(unaudited)
Assets
Current assets
Cash and cash equivalents $ 6,600 17,730
Receivable from Managing General Partner 31,780 53,520
- --------- ---------
Total current assets 38,380 71,250
--------- ---------
Oil and gas properties - using the
full cost method of accounting 1,315,352 1,315,532
Less accumulated depreciation,
depletion and amortization 643,000 601,000
--------- ---------
Net oil and gas properties 672,352 714,532
--------- ---------
Organization costs, net 2,204 8,756
- --------- ---------
$ 712,936 794,538
========= =========
Liabilities and Partners' Equity
Partners' equity
Investor partners $ 685,539 763,505
Managing General Partner 27,397 31,033
--------- ---------
Total partners' equity $ 712,936 794,538
========= =========
<PAGE>
Southwest Developmental Drilling Fund 92-A, L.P.
Statements of Operations
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
Revenues
Oil and gas $ 75,978 104,678 255,164 324,425
Interest 130 233 447 596
------ ------- ------- -------
76,108 104,911 255,611 325,021
------ ------- ------- -------
Expenses
Production 32,265 36,118 98,853 118,324
General and administrative 3,069 3,146 15,308 15,839
Depreciation, depletion and
amortization 15,184 23,184 48,552 72,552
------ ------- ------- -------
50,518 62,448 162,713 206,715
------ ------- ------- -------
Net income $ 25,590 42,463 92,898 118,306
====== ======= ======= =======
Net income allocated to:
Managing General Partner $ 4,485 7,222 15,559 20,995
====== ======= ======= =======
Investor Partners $ 21,105 35,241 77,339 97,311
====== ======= ======= =======
Per investor partner unit $ 15.00 25.05 54.97 69.16
====== ======= ======= =======
<PAGE>
Southwest Developmental Drilling Fund 92-A, L.P.
Statements of Cash Flows
(unaudited)
Nine Months Ended
September 30,
1997 1996
Cash flows from operating activities
Cash received from oil and gas sales $ 277,255 320,037
Cash paid to suppliers (114,512) (130,466)
Interest income 447 596
------- -------
Net cash provided by operating activities 163,190 190,167
------- -------
Cash flows provided by investing activities
Cash received from sale of oil and gas
property 180 -
------- -------
Cash flows used in financing activities
Distributions to partners (174,500) (184,500)
------- -------
Net increase (decrease) in cash and cash
equivalents (11,130) 5,667
Beginning of period 17,730 7,614
------- -------
End of period $ 6,600 13,281
======= =======
(continued)
<PAGE>
Southwest Developmental Drilling Fund 92-A, L.P.
Statements of Cash Flows, continued
(unaudited)
Nine Months Ended
September 30,
1997 1996
Reconciliation of net income to net cash
provided by operating activities
Net income $ 92,898 118,306
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation, depletion and amortization 48,552 72,552
(Increase) decrease in receivables 22,091 (4,388)
Increase (decrease) in payables (351) 3,697
------- -------
Net cash provided by operating activities $ 163,190 190,167
======= =======
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
Southwest Developmental Drilling Fund 92-A, L.P. (the Partnership) was
organized as a Delaware limited partnership on May 5, 1992. The offering
of limited and general partner interests began August 11, 1992 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 December 28, 1992, with the offering of limited and general partner
interests concluding December 31, 1992, with total investor partner
contributions of $1,407,000, representing 1,407 interests ($1,000 per
interest). The Managing General Partner made a contribution to the capital
of the Partnership at the conclusion of the offering period in an amount
equal to 1% of its net capital contributions. The Managing General Partner
contribution was $12,030, for total capital contributions of $1,419,030.
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 limited 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 the Partnership could
possibly experience a normal decline of 5% to 7% a year. There are no
current plans to perform any workovers in the future.
<PAGE>
Results of Operations
A. General Comparison of the Quarters Ended September 30, 1997 and 1996
The following table provides certain information regarding performance
factors for the quarters ended September 30, 1997 and 1996:
Three Months
Ended Percentage
September 30, Increase
1997 1996 (Decrease)
Average price per barrel of oil $ 18.74 22.88 (18%)
Average price per mcf of gas $ 2.67 2.58 3%
Oil production in barrels 2,900 3,500 (17%)
Gas production in mcf 8,100 9,500 (15%)
Gross oil and gas revenue $ 75,978 104,678 (27%)
Net oil and gas revenue $ 43,713 68,560 (36%)
Partnership distributions $ 49,000 64,000 (23%)
Investor partner distributions $ 43,610 56,960 (23%)
Per unit distribution to investor partners $ 31.00 40.48 (23%)
Number of investor partner units 1,407 1,407
Revenues
The Partnership's oil and gas revenues decreased to $75,978 from $104,678
for the quarters ended September 30, 1997 and 1996, respectively, a
decrease of 27%. The principal factors affecting the comparison of the
quarters ended September 30, 1997 and 1996 are as follows:
1. The average price for a barrel of oil received by the Partnership
decreased during the quarter ended September 30, 1997 as compared to
the quarter ended September 30, 1996 by 18%, or $4.14 per barrel,
resulting in a decrease of approximately $14,500 in revenues. Oil
sales represented 72% of total oil and gas sales during the quarter
ended September 30, 1997 as compared to 77% during the quarter ended
September 30, 1996.
The average price for an mcf of gas received by the Partnership
increased during the same period by 3%, or $.09 per mcf, resulting in
an increase of approximately $900 in revenues.
The net total decrease in revenues due to the change in prices received
from oil and gas production is approximately $13,600. 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>
2. Oil production decreased approximately 600 barrels or 17% during the
quarter ended September 30, 1997 as compared to the quarter ended
September 30, 1996, resulting in a decrease of approximately $11,200 in
revenues.
Gas production decreased approximately 1,400 mcf or 15% during the same
period, resulting in a decrease of approximately $3,700 in revenues.
The total decrease in revenues due to the change in production is
approximately $14,900. The decline in production is primarily
attributable to the expected sharp decline following a successful
workover and downtime due to mechanical problems.
Costs and Expenses
Total costs and expenses decreased to $50,518 from $62,448 for the quarters
ended September 30, 1997 and 1996, respectively, a decrease of 19%. The
decrease is the result of lower lease operating costs, general and
administrative expense and depletion expense.
1. Lease operating costs and production taxes were 11% lower, or
approximately $3,900 less during the quarter ended September 30, 1997 as
compared to the quarter ended September 30, 1996. The decline is primarily
attributable to workover cost incurred in 1996 as compared to 1997.
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 $80 during the quarter ended September 30, 1997 as
compared to the quarter ended September 30, 1996.
3. Depletion expense decreased to $13,000 for the quarter ended September
30, 1997 from $21,000 for the same period in 1996. This represents a
decrease of 38%. 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. Contributing
factors to the decline in depletion expense between the comparative
periods were the increase in the price of oil used to determine the
Partnership's reserves for January 1, 1997 as compared to 1996 and the
decline in gross oil and gas revenues.
<PAGE>
Results of Operations
B. General Comparison of the Nine Month Periods Ended September 30, 1997
and 1996
The following table provides certain information regarding performance
factors for the nine month periods ended September 30, 1997 and 1996:
Nine Months
Ended Percentage
September 30, Increase
1997 1996 (Decrease)
Average price per barrel of oil $ 20.65 21.06 (2%)
Average price per mcf of gas $ 2.52 2.73 (8%)
Oil production in barrels 9,400 11,700 (20%)
Gas production in mcf 24,200 28,900 (16%)
Gross oil and gas revenue $ 255,164 324,425 (21%)
Net oil and gas revenue $ 156,311 206,101 (24%)
Partnership distributions $ 174,500 184,500 (5%)
Investor partner distributions $ 155,305 164,205 (5%)
Per unit distribution to investor partners $ 110.38 116.71 (5%)
Number of investor partner units 1,407 1,407
Revenues
The Partnership's oil and gas revenues decreased to $255,164 from $324,425
for the nine months ended September 30, 1997 and 1996, respectively, a
decrease of 21%. The principal factors affecting the comparison of the
nine months ended September 30, 1997 and 1996 are as follows:
1. The average price for a barrel of oil received by the Partnership
decreased during the nine months ended September 30, 1997 as compared
to the nine months ended September 30, 1996 by 2%, or $.41 per barrel,
resulting in a decrease of approximately $4,800 in revenues. Oil sales
represented 76% of total oil and gas sales during the nine months ended
September 30, 1997 and 1996.
The average price for an mcf of gas received by the Partnership
decreased during the same period by 8%, or $.21 per mcf, resulting in a
decrease of approximately $6,100 in revenues.
The total decrease in revenues due to the change in prices received
from oil and gas production is approximately $10,900. 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>
2. Oil production decreased approximately 2,300 barrels or 20% during the
nine months ended September 30, 1997 as compared to the nine months
ended September 30, 1996, resulting in a decrease of approximately
$47,500 in revenues.
Gas production decreased approximately 4,700 mcf or 16% during the same
period, resulting in a decrease of approximately $11,800 in revenues.
The total decrease in revenues due to the change in production is
approximately $59,300. The decline in production is primarily
attributable to the expected sharp decline following a successful
workover and downtime due to mechanical problems.
Costs and Expenses
Total costs and expenses decreased to $162,713 from $206,715 for the nine
months ended September 30, 1997 and 1996, respectively, a decrease of 21%.
The decrease is the result of higher lease operating costs, general and
administrative expense and depletion expense.
1. Lease operating costs and production taxes were 16% lower, or
approximately $19,500 less during the nine months ended September 30,
1997 as compared to the nine months ended September 30, 1996. The
decline is primarily attributable to workover cost incurred in 1996 as
compared to 1997.
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 3%
or approximately $500 during the nine months ended September 30, 1997
as compared to the nine months ended September 30, 1996.
3. Depletion expense decreased to $42,000 for the nine months ended
September 30, 1997 from $66,000 for the same period in 1996. This
represents a decrease of 36%. 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.
Contributing factors to the decline in depletion expense between the
comparative periods were the increase in the price of oil used to
determine the Partnership's reserves for January 1, 1997 as compared to
1996 and the decline in gross oil and gas revenues.
<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 $163,200 in
the nine months ended September 30, 1997 as compared to approximately
$190,200 in the nine months ended September 30, 1996. The primary source
of the 1997 cash flow from operating activities was profitable operations.
Cash flows provided by investing activities were approximately $200 in the
nine months ended September 30, 1997 as compared to none in the nine months
ended September 30, 1996. The principle source of the 1997 cash flow from
investing activities was the change in oil and gas properties.
Cash flows used in financing activities were approximately $174,500 in the
nine months ended September 30, 1997 as compared to approximately $184,500
in the nine months ended September 30, 1996. The only use in financing
activities was the distributions to partners.
Total distributions during the nine months ended September 30, 1997 were
$174,500 of which $155,305 was distributed to the investor partners and
$19,195 to the Managing General Partner. The per unit distribution to
investor partners during the nine months ended September 30, 1997 was
$110.38. Total distributions during the nine months ended September 30,
1996 were $184,500 of which $164,205 was distributed to the investor
partners and $20,295 to the Managing General Partner. The per unit
distribution to investor partners during the nine months ended September
30, 1996 was $116.71.
The sources for the 1997 distributions of $174,500 were oil and gas
operations of approximately $163,200 and the change in 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 1996 distributions
of $184,500 was oil and gas operations of approximately $190,200, resulting
in excess cash for contingencies or subsequent distributions.
Since inception of the Partnership, cumulative monthly cash distributions
of $944,715 have been made to the partners. As of September 30, 1997,
$841,172 or $597.85 per investor partner unit has been distributed to the
investor partners, representing a 60% return of the capital contributed.
As of September 30, 1997, the Partnership had approximately $38,400 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>
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) No reports on Form 8-K were filed during the quarter for
which this report is filed.
<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 92-
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: November 15, 1997
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Balance Sheet at September 30, 1997 (Unaudited) and the Statement of
Operations for the Nine Months Ended September 30, 1997 (Unaudited) and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 6,600
<SECURITIES> 0
<RECEIVABLES> 31,780
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 38,380
<PP&E> 1,315,352
<DEPRECIATION> 643,000
<TOTAL-ASSETS> 712,936
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 712,936
<TOTAL-LIABILITY-AND-EQUITY> 712,936
<SALES> 255,164
<TOTAL-REVENUES> 255,611
<CGS> 98,853
<TOTAL-COSTS> 98,853
<OTHER-EXPENSES> 63,860
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 92,898
<INCOME-TAX> 0
<INCOME-CONTINUING> 92,898
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 92,898
<EPS-PRIMARY> 54.97
<EPS-DILUTED> 54.97
</TABLE>
