United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from...............to...............
Commission file number 33-34348-01
ENEX OIL & GAS INCOME PROGRAM V - SERIES 2, L.P.
(Exact name of small business issuer as specified in its charter)
New Jersey 76-0303857
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 200, Three Kingwood Place
Kingwood, Texas 77339
(Address of principal executive offices)
Issuer's telephone number:
(713) 358-8401
Check whether the issuer (1) has 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
Transitional Small Business Disclosure Format (Check one):
Yes No x
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
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ENEX OIL & GAS INCOME PROGRAM V - SERIES 2, L.P.
BALANCE SHEET
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JUNE 30,
ASSETS 1996
---------------------
(Unaudited)
CURRENT ASSETS:
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Cash $ 7,524
Accounts receivable - oil & gas sales 20,843
Other current assets 1,777
---------------------
Total current assets 30,144
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OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 1,007,365
Less accumulated depreciation and depletion 741,202
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Property, net 266,163
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TOTAL $ 296,307
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LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 10,999
Payable to general partner 23,638
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Total current liabilities 34,637
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NONCURRENT PAYABLE TO GENERAL PARTNER 70,915
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PARTNERS' CAPITAL:
Limited partners 186,148
General partner 4,607
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Total partners' capital 190,755
---------------------
TOTAL $ 296,307
=====================
Number of $500 Limited Partner units outstanding 2,972
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See accompanying notes to financial statements.
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ENEX OIL & GAS INCOME PROGRAM V - SERIES 2, L.P.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
1. The interim financial information included herein is unaudited;
however, such information reflects all adjustments (consisting solely
of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair presentation of results for the
interim periods.
2. A cash distribution was made to the limited partners of the Company in
the amount of $8,108, representing net revenues from the sale of oil
and gas produced from properties owned by the Company. This
distribution was made on April 30, 1996.
3. On August 9, 1996, the Company's General Partner submitted preliminary
proxy material to the Securities Exchange Commission with respect to a
proposed consolidation of the Company with 33 other managed limited
partnerships. The terms and conditions of the proposed consolidation
are set forth in such preliminary proxy material.
4. The Financial Accounting Standards Board has issued Statement
of Financial Accounting Standard ("SFAS") No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of," which requires certain assets to be reviewed for
impairment whenever events or circumstances indicate the carrying
amount may not be recoverable. Prior to this pronouncement, the
Company assessed properties on an aggregate basis. Upon adoption of
SFAS 121, the Company began assessing properties on an individual
basis, wherein total capitalized costs may not exceed the property's
fair market value. The fair market value of each property was
determined by H. J. Gruy and Associates, ("Gruy"). To determine the
fair market value, Gruy estimated each property's oil and gas
reserves, applied certain assumptions regarding price and cost
escalations, applied a 10% discount factor for time and certain
discount factors for risk, location, type of ownership interest,
category of reserves, operational characteristics, and other factors.
In the first quarter of 1996, the Company recognized a non-cash
impairment provision of $43,262 for certain oil and gas properties due
to market indications that the carrying amounts were not fully
recoverable.
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price was due to higher prices in the overall gas market coupled with relatively
higher production from properties with a higher gas sales price.
Lease operating expenses increased to $36,108 in the first six month of 1996
from $31,764 in the first six months of 1995. The increase of $4,344 (14%) is
due to ad valorem taxes paid by the operator of the FEC acquisition in 1996 for
the 1995 and 1996 tax years.
Depreciation and depletion expense decreased to $28,005 in the first six months
of 1996 from $45,510 in the first six months of 1995. This represents a decrease
of $17,505 (38%). The changes in production, noted above, caused depreciation
and depletion expense to decrease by $15,768. A 6% decrease in the depletion
rate reduced depreciation and depletion expense by an additional $1,737. The
rate decrease was primarily due to the lower property basis resulting from the
recognition of an impairment of property of $43,262 in the first quarter of
1996.
Effective January 1, 1996, the Company sold its interest in the Nunley Ranch
acquisition for $598. The Company recognized a gain of $598 on the sale.
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standard ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long- Lived Assets to be Disposed Of," which requires
certain assets to be reviewed for impairment whenever events or circumstances
indicate the carrying amount may not be recoverable. Prior to this
pronouncement, the Company assessed properties on an aggregate basis. Upon
adoption of SFAS 121, the Company began assessing properties on an individual
basis, wherein total capitalized costs may not exceed the property's fair market
value. The fair market value of each property was determined by H. J. Gruy and
Associates, ("Gruy"). To determine the fair market value, Gruy estimated each
property's oil and gas reserves, applied certain assumptions regarding price and
cost escalations, applied a 10% discount factor for time and certain discount
factors for risk, location, type of ownership interest, category of reserves,
operational characteristics, and other factors. In the first quarter of 1996,
the Company recognized a non-cash impairment provision of $43,262 for certain
oil and gas properties due to market indications that the carrying amounts were
not fully recoverable.
General and administrative expenses decreased to $15,032 in the first six months
of 1996 from $16,368 in 1995. This decrease of $1,336 (8%) is primarily due to
less staff time being required to manage the Company's operations.
CAPITAL RESOURCES AND LIQUIDITY
The Company's cash flow from operations is a direct result of the amount of net
proceeds realized from the sale of oil and gas production. Accordingly, the
changes in cash flow from 1995 to 1996 are primarily due to the changes in oil
and gas sales described above. It is the general partner's intention to
distribute substantially all of the Company's available cash flow to the
Company's partners. The Company's "available cash flow" is essentially equal to
the net amount of cash provided by operating activities.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
ENEX OIL & GAS INCOME
PROGRAM V - SERIES 2, L.P.
(Registrant)
By:ENEX RESOURCES CORPORATION
General Partner
By: /s/ R. E. Densford
R. E. Densford
Vice President, Secretary
Treasurer and Chief Financial
Officer
November 7, 1996 By: /s/ James A. Klein
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James A. Klein
Controller and Chief
Accounting Officer
