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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
AMENDMENT III
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from...............to...............
Commission file number 0-19033
ENEX 90-91 INCOME AND RETIREMENT FUND - Series 2, L.P.
(Name of small business issuer in its charter)
New Jersey 76-0299898
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
800 Rockmead Drive
Three Kingwood Place
Kingwood, Texas 77339
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (713) 358-8401
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Limited Partnership Interest
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
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.[x]
State issuer's revenues for its most recent fiscal year. $51,420
State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock as of a specified date within
the past 60 days (See definition of affiliate in Rule 12b-2 of the Exchange
Act):
Not Applicable
Documents Incorporated By Reference:
None
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PART II
Item 5. Market for Common Equity and Related Security Holder Matters
Market Information
There is no established public trading market for the Company's
outstanding limited partnership interests.
Number of Equity Security Holders
Number of Record Holders
Title of Class (as of March 1, 1996)
----------------- -----------------------------
General Partner's Interests 1
Limited Partnership Interests 218
Dividends
The Company made cash distributions to partners of $11 and $28 per
$500 investment in 1995 and 1994, respectively. The payment of future
distributions will depend on the Company's earnings, financial condition,
working capital requirements and other factors, although it is anticipated that
regular quarterly distributions will continue through 1996.
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Item 6. Management's Discussion and Analysis or Plan of Operation
Results of Operations
This discussion should be read in conjunction with the financial
statements of the Company and the notes thereto included in this Form 10-KSB.
Oil and gas sales decreased to $51,420 in 1995 from $76,941 in 1994.
This represents a decrease of $25,521 or 33%. Oil sales decreased by $22,279 or
33%. A 10% decrease in oil production reduced revenues by $7,026. A 25% decrease
in average net oil prices received reduced sales by an additional $15,253. Gas
sales decreased by $3,241 or 33%. A 4% decrease in gas production reduced sales
by $191. A 30% decrease in average net gas prices received reduced sales by an
additional $3,050. The decreases in oil and gas production were primarily the
result of natural production declines, partially offset by the acquisition of
additional interest in a gas well in the FEC acquisition from farmouts which
achieved payout in the fourth quarter of 1994 and the first quarter of 1995. The
decreases in average net prices received were primarily due to workover expenses
incurred on the FEC acquisition, in which the Company has a net profits royalty
interest.
Depletion expense decreased to $64,841 in 1995 from $98,386 in 1994.
This represents a decrease of $33,545 or 34%. The changes in production, noted
above, reduced depletion expense by $7,430. A 29% decrease in the depletion rate
reduced depletion expense by an additional $26,115. The decrease in the
depletion rate was due to the lower property basis resulting from the
recognition of an impairment of property for $109,543 in December 1994, coupled
with an upward revision of the oil and gas reserves during 1995.
As a result of declining oil and gas prices, the Company recorded an
impairment of property for $109,543 in 1994, which represented the excess of the
net capitalized costs over the undiscounted future net revenues of the reserves.
General and administrative expenses decreased to $25,700 in 1995
from $35,407 in 1994. This decrease of $9,707 or 27% was primarily due to less
staff time being required to manage the Company's operations in 1995, coupled
with a $1,498 decrease in direct cost incurred by the Company in 1995. The
decrease in direct expenses was due to lower audit and tax preparation fees
incurred in 1995.
Capital Resources and Liquidity
Cash flow from operations is a direct result of the amount of the
net proceeds realized from the sale of oil and gas production. Accordingly, the
change in cash flow from 1994 to 1995 was primarily due to the changes in oil
and gas sales, as described above. It is the general partner's intention to
distribute substantially all of the Company's available net cash flow provided
by operating, financing and investing activities to the Company's partners.
The Company will continue to recover its reserves and distribute to
the partners the net proceeds realized from the sale of oil and gas production
after payment of its debt obligations. The Company plans to repay the amount
owed to the general partner over a three year period. Distributions decreased
from 1994 to 1995 due to the lower revenues received by the Company in 1995, as
noted above. 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.
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Item 7. Financial Statements and Supplementary Data
INDEPENDENT AUDITORS' REPORT
The Partners
Enex 90-91 Income and Retirement Fund Series 2, L.P.:
We have audited the accompanying balance sheet of Enex 90-91 Income and
Retirement Fund - Series 2, L.P. (a New Jersey limited partnership) as of
December 31, 1995, and the related statements of operations, changes in
partners' capital, and cash flows for each of the two years in the period ended
December 31, 1995. These financial statements are the responsibility of the
general partner of Enex 90-91 Income and Retirement Fund - Series 2, L.P. Our
responsibility is to express an opinion on the financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Enex 90-91 Income and Retirement Fund -
Series 2, L.P. at December 31, 1995 and the results of its operations and its
cash flows for each of the two years in the period ended December 31, 1995 in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Houston, Texas
March 18, 1996
II-3
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<TABLE>
<CAPTION>
ENEX 90-91 INCOME AND RETIREMENT FUND - SERIES 2 L.P.
BALANCE SHEET, DECEMBER 31, 1995
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ASSETS
1995
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CURRENT ASSETS:
<S> <C>
Cash $ 4,666
Accounts receivable - oil & gas sales 19,244
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Total current assets 23,910
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OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 894,954
Less accumulated depreciation and depletion 576,331
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Property, net 318,623
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ORGANIZATION COSTS
(Net of accumulated amortization of $34,765) 589
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TOTAL $ 343,122
==============
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 4,131
Payable to general partner 71,876
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Total current liabilities 76,007
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PARTNERS' CAPITAL (DEFICIT):
Limited partners 265,281
General partner 1,834
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Total partners' capital 267,115
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TOTAL $ 343,122
==============
Number of $500 Limited Partner units outstanding 2,020
</TABLE>
See accompanying notes to financial statements.
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II-4
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ENEX 90-91 INCOME AND RETIREMENT FUND - SERIES 2, L.P.
NOTES TO FINANCIAL STATEMENTS
FOR THE TWO YEARS ENDED DECEMBER 31, 1995
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1. PARTNERSHIP ORGANIZATION
Enex 90-91 Income and Retirement Fund Series 2, L.P. (the
"Company"), a New Jersey limited partnership, commenced operations
on February 8, 1991 for the purpose of acquiring non-operating
interests in producing oil and gas properties. Total limited
partner contributions were $1,010,101, of which $96,466 was
contributed by Enex Resources Corporation ("Enex"), the general
partner.
In accordance with the partnership agreement, the Company paid
syndication fees and due diligence expenses of $87,250 for
solicited subscriptions to Enex Securities Corporation, a
subsidiary of Enex, and reimbursed Enex for organization expenses
of approximately $35,000.
The Company owns only non-operating interests in producing oil and
gas properties. Such interests typically entitle the Company to
receive its pro rata share of net profits and royalties from the
underlying properties without obligating the Company to develop or
operate the properties or directly bear any share of development or
operating costs.
Information relating to the allocation of costs and revenues
between Enex, as general partner, and the limited partners is as
follows:
Limited
Enex Partners
Commissions and selling expenses 100%
Company reimbursement of organization
expense 100%
Company property acquisition 100%
General and administrative costs 10% 90%
Revenues from temporary investment
of partnership capital 100%
Revenues from producing properties 10% 90%
At the point in time when the cash distributions to the limited
partners equal their subscriptions ("payout"), revenues from
producing properties and general and administrative costs will be
allocated 15% to the general partner and 85% to the limited
partners.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Oil and Gas Properties - The Company uses the successful efforts
method of accounting for its oil and gas operations. Capitalized
costs are amortized on the units-of-production method based on
estimated total proved reserves. The acquisition costs of proved
oil and gas properties are capitalized and periodically assessed
for impairments.
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The Financial Accounting Standards Board has issued Statement of
Financial Accounting Standards No. 121, "Accounting for the
impairment of Long Lived Assets and for Long-Lived Assets to Be
Disposed Of." This statement requires that long-lived assets and
certain identifiable intangibles held and used by the Company be
reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be
recoverable.
The Company has not determined the effect, if any, on its financial
position or results of operations which may result from the
adoption of this statement in the first quarter of 1996.
Organization Costs - Organization costs are being amortized on a
straight-line basis over a five-year period.
Cash Flows - The Company has presented its cash flows using the
indirect method and considers all highly liquid investments with an
original maturity of three months or less to be cash equivalents.
General and Administrative Expenses - The Company reimburses the
General Partner for direct costs and administrative costs incurred
on its behalf. Administrative costs allocated to the Company are
computed on a cost basis in accordance with standard industry
practices by allocating the time spent by the General Partner's
personnel among all projects and by allocating rent and other
overhead on the basis of the relative direct time charges.
Uses of Estimates - The preparation of the financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contigent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during
the reporting periods. Actual results could differ from these
estimates.
3. FEDERAL INCOME TAXES
General - The Company is not a taxable entity for federal income
tax purposes. Such taxes are liabilities of the individual partners
and the amounts thereof will vary depending on the individual
situation of each partner. Accordingly, there is no provision for
income taxes in the accompanying financial statements.
II-9
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4. PAYABLE TO GENERAL PARTNER
The payable to general partner primarily consists of general and
administrative expenses allocated to the Company by Enex during the
Company's start-up phase and for its ongoing operations. The
Company plans to repay the amounts owed to the general partner over
a period of three years.
5. REPURCHASE OF LIMITED PARTNER INTERESTS
In accordance with the partnership agreement, the general partner
is required to purchase limited partner interests (at the option of
the limited partners) at annual intervals beginning after the
second year following the formation of the Company. The purchase
price, as specified in the partnership agreement, is based
primarily on reserve reports prepared by independent petroleum
engineers as reduced by a specified risk factor.
6. SIGNIFICANT PURCHASERS
Koch Energy Inc., Amoco Production Company and Anson Company
accounted for 37%, 33% and 25%, respectively, of the Company's
total sales in 1995. Amoco Production Company and Anson Company
each accounted for 31%, while Koch Energy Inc. accounted for 28% of
the Company's total sales in 1994. No other purchaser individually
accounted for more than 10% of such sales.
7. IMPAIRMENT OF PROPERTY
A noncash write-down of capitalized costs of $109,543 was made in
1994. The write-down was computed as the excess of the net
capitalized costs over the undiscounted future net revenues from
proved oil and gas reserves. The undiscounted future net revenues
were computed using certain arbitrary assumptions such as holding
the oil and gas prices constant at the prices in effect at the time
of the computation.
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Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure
Not Applicable
II-13
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SIGNATURES
In accordance with Section 13 or 15 (d) of the Exchange Act,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ENEX 90-91 INCOME AND RETIREMENT
FUND - SERIES 2, L.P.
By: ENEX RESOURCES CORPORATION
the General Partner
December 23, 1996 By: /s/ G. B. Eckley
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G. B. Eckley, President
In accordance with the Exchange Act, this report has been
signed below on December 23, 1996, by the following persons in the capacities
indicated.
ENEX RESOURCES CORPORATION General Partner
By: /s/ G. B. Eckley
------------------------
G. B. Eckley, President
/s/ G. B. Eckley
President, Chief Executive
------------------ Officer and Director
G. B. Eckley
/s/ R. E. Densford Vice President, Secretary, Treasurer,
Chief Financial Officer and Director
-------------------
R. E. Densford
/s/ James A. Klein Controller and Chief Accounting Officer
-----------------
James A. Klein
S-1
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(Replace this text with the legend)
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<CIK> 0000872658
<NAME> ENEX 90-91 INCOME & RETIREMENT FUND-SERIES 1, L.P.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> dec-31-1996
<PERIOD-START> jan-01-1996
<PERIOD-END> dec-31-1996
<CASH> 9004
<SECURITIES> 0
<RECEIVABLES> 8362
<ALLOWANCES> 0
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<CURRENT-ASSETS> 17366
<PP&E> 1341371
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<CURRENT-LIABILITIES> 40278
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0
0
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<OTHER-SE> 389799
<TOTAL-LIABILITY-AND-EQUITY> 430077
<SALES> 106571
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<CGS> 89728
<TOTAL-COSTS> 102578
<OTHER-EXPENSES> 12850
<LOSS-PROVISION> 0
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