United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 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) 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
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ENEX OIL & GAS INCOME PROGRAM V - SERIES 2, L.P.
BALANCE SHEET
- -------------------------------------------------------------------------------
MARCH 31,
ASSETS 1996
----------------
(Unaudited)
CURRENT ASSETS:
Cash $ 1,622
Accounts receivable - oil & gas sales 19,865
Other current assets 1,793
------------
Total current assets 23,280
------------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 1,007,476
Less accumulated depreciation and depletion 727,027
------------
Property, net 280,449
------------
TOTAL $ 303,729
============
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 16,035
Payable to general partner 22,395
------------
Total current liabilities 38,430
------------
NONCURRENT PAYABLE TO GENERAL PARTNER 67,187
------------
PARTNERS' CAPITAL:
Limited partners 193,333
General partner 4,779
------------
Total partners' capital 198,112
------------
TOTAL $ 303,729
============
See accompanying notes to financial statements.
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<PAGE>
ENEX OIL & GAS INCOME PROGRAM V - SERIES 2, L.P.
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------
(UNAUDITED) THREE MONTHS ENDED
--------------------------
MARCH 31, MARCH 31,
1996 1995
----------- -----------
REVENUES:
Oil and gas sales $ 42,720 42,770
----------- -----------
EXPENSES:
Depreciation, depletion and amortization 13,831 25,226
Impairment of property 43,262 -
Lease operating expenses 17,317 19,258
Production taxes 2,335 2,636
General and administrative 8,113 10,032
----------- -----------
Total expenses 84,858 57,152
----------- -----------
LOSS FROM OPERATIONS (42,138) (14,382)
----------- -----------
OTHER INCOME:
Gain from sale of property 598 -
----------- -----------
NET LOSS $ (41,540) (14,382)
=========== ===========
See accompanying notes to financial statements.
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I-2
<PAGE>
ENEX OIL AND GAS INCOME PROGRAM V - SERIES 2, L.P.
STATEMENTS OF CASH FLOWS
(UNAUDITED) THREE MONTHS ENDED
MARCH 31, MARCH 31,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (41,540) $ (14,382)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation, depletion and amortization 13,831 25,226
Impairment of property 43,262 -
Gain from sale of property (598) -
(Increase) decrease in:
Accounts receivable - oil & gas sales (803) (4)
Other current assets - 112
Increase (decrease) in:
Accounts payable 4,859 (1,905)
Payable to general partner (9,217) (10,838)
Total adjustments 51,334 12,591
Net cash provided (used) by operating activities 9,794 (1,791)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property 598 -
Property additions - development costs (8,885) (3,232)
Net cash used by investing activities (8,287) (3,232)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (5,702) (6,396)
NET DECREASE IN CASH (4,195) (11,419)
CASH AT BEGINNING OF YEAR 5,817 14,237
CASH AT END OF PERIOD $ 1,622 $ 2,818
See accompanying notes to financial statements.
I-3
<PAGE>
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 $5,132, representing net revenues from the sale of oil and gas
produced from properties owned by the Company. This distribution was made
on January 31, 1996.
3. 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. 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.
4. 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.
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<PAGE>
Item 2Management's Discussion and Analysis or Plan of Operation.
First Quarter 1996 Compared to First Quarter 1995
Oil and gas sales for the first quarter decreased from $42,770 in 1995 to
$42,720 in 1996. This represents a decrease of $50 (.1%). Oil sales increased by
$4,062 or 17%. An 8% increase in average oil prices increased sales by $2,017.
An 8% increase in oil production increased sales by an additional $2,045. Gas
sales decreased by $4,112 or 23%. A 39% decrease in gas production reduced sales
by $7,091. This decrease was partially offset by a 27% increase in the average
gas sales price. The increase in oil production was primarily the result of
increased production from the FEC acquisition in which the Company obtained
additional interests from farmouts in the first quarter of 1995. The decrease in
gas production was primarily a result of the sale of the Nunley Ranch
acquisition effective January 1, 1996, coupled with natural production declines
which were especially pronounced on the Binger acquisition. The changes in
average prices correspond with changes in the overall market for the sale of oil
and gas.
Lease operating expenses decreased from $19,258 in the first quarter of 1995 to
$17,317 in the first quarter of 1996. The decrease of $1,941 (10%) is primarily
due to the changes in production, noted above.
Depreciation and depletion expense decreased from $22,253 in the first quarter
of 1995 to $13,831 in the first quarter of 1995. This represents a decrease of
$8,422 (38%). The changes in production, noted above, caused depreciation and
depletion expense to decrease by $4,088. A 24% decrease in the depletion rate
reduced depreciation and depletion expense by an additional $4,334. 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. In the first quarter of
1996, the Company recognized a non-cash impariment 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 from $10,032 in the first quarter
of 1995 to $8,113 in the first quarter of 1995. This decrease of $1,919 (19%) is
primarily due to less staff time being required to manage the Company's
operations, partially offset by $2,168 higher direct expenses incurred by the
Company in 1996.
I-5
<PAGE>
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 will continue to recover its reserves and distribute to the limited
partners the net proceeds realized from the sale of oil and gas production after
payment of its debt obligations. 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.
As of March 31, 1996, the Company had no material commitments for capital
expenditures. The Company does not intend to engage in any significant
developmental drilling activity.
I-6
<PAGE>
PART II. OTHER INFORMATION
Item 1Legal Proceedings.
None
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders.
Not Applicable
Item 5. Other Information.
Not Applicable
Item 6. Exhibits and Reports on Form 8-K.
(a) There are no exhibits to this report.
(b) The Company filed no reports on Form 8-K during the quarter
ended March 31, 1996.
I-1
<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 hereunto 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
May 11, 1996 By: /s/ James A. Klein
-------------------
James A. Klein
Controller and Chief
Accounting Officer
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<NAME> Enex Oil & Gas Income Program V - Series 2, L.P.
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<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> dec-31-1996
<PERIOD-START> jan-01-1996
<PERIOD-END> mar-31-1996
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