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 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 33-34348-02
ENEX OIL & GAS INCOME PROGRAM V - SERIES 3, L.P.
(Exact name of small business issuer as specified in its charter)
New Jersey 76-0303876
(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)
Registrant'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
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
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ENEX OIL & GAS INCOME PROGRAM V - SERIES 3, L.P.
BALANCE SHEET
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JUNE 30,
ASSETS 1996
------------------
(Unaudited)
CURRENT ASSETS:
<S> <C>
Cash $ 7,446
Accounts receivable - oil & gas sales 19,683
Other current assets 1,679
------------------
Total current assets 28,808
------------------
OIL & GAS PROPERTIES
(Successful efforts accounting method) - Proved
mineral interests and related equipment & facilities 951,400
Less accumulated depreciation and depletion 700,024
------------------
Property, net 251,376
------------------
TOTAL $ 280,184
==================
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 10,392
Payable to general partner 26,254
------------------
Total current liabilities 36,646
------------------
NONCURRENT PAYABLE TO GENERAL PARTNER 26,255
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PARTNERS' CAPITAL:
Limited partners 212,774
General partner 4,509
------------------
Total partners' capital 217,283
------------------
TOTAL $ 280,184
==================
</TABLE>
See accompanying notes to financial statements.
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I-1
<PAGE>
<TABLE>
<CAPTION>
ENEX OIL & GAS INCOME PROGRAM V - SERIES 3, L.P.
STATEMENTS OF OPERATIONS
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(UNAUDITED) QUARTER ENDED SIX MONTHS ENDED
--------------------------------------- --------------------------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1996 1995
------------------ ------------------ ----------------- -----------------
REVENUES:
<S> <C> <C> <C> <C>
Oil and gas sales $ 43,010 $ 34,119 $ 83,222 $ 70,632
------------------ ------------------ ----------------- -----------------
EXPENSES:
Depreciation, depletion and amortization 14,059 19,588 29,143 39,413
Impairment of property - - 64,028 -
Lease operating expenses 17,747 9,865 33,997 26,669
Production taxes 2,411 1,947 4,621 4,178
General and administrative 6,572 6,142 14,223 15,556
------------------ ------------------ ----------------- -----------------
Total expenses 40,789 37,542 146,012 85,816
------------------ ------------------ ----------------- -----------------
NET INCOME (LOSS) $ 2,221 $ (3,423) $ (62,790) $ (15,184)
================== ================== ================= =================
</TABLE>
See accompanying notes to financial statements.
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I-2
<PAGE>
<TABLE>
<CAPTION>
ENEX OIL AND GAS INCOME PROGRAM V - SERIES 3, L.P.
STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS ENDED
--------------------------------------------
JUNE 30, JUNE 30,
1996 1995
------------------- -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net (loss) $ (62,790) $ (15,184)
------------------- -------------------
Adjustments to reconcile net (loss) to net cash
provided by operating activities
Depreciation, depletion and amortization 29,143 39,413
Impairment of property 64,028 -
(Increase) decrease in:
Accounts receivable - oil & gas sales (2,177) (362)
Other current assets 14 94
Increase (decrease) in:
Accounts payable 106 (7,854)
Payable to general partner (1,561) (10,728)
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Total adjustments 89,553 20,563
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Net cash provided by operating activities 26,763 5,379
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CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions - development costs (8,285) (2,927)
------------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions (14,000) (8,891)
------------------- -------------------
NET INCREASE (DECREASE) IN CASH 4,478 (6,439)
CASH AT BEGINNING OF YEAR 2,968 12,272
------------------- -------------------
CASH AT END OF PERIOD $ 7,446 $ 5,833
=================== ===================
</TABLE>
See accompanying notes to financial statements.
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I-3
<PAGE>
ENEX OIL & GAS INCOME PROGRAM V - SERIES 3, 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 $6,160, 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.
I-4
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
Second Quarter 1995 Compared to the Second Quarter of 1996
Oil and gas sales for the second quarter increased to $43,010 in 1996 from
$34,119 in 1995. This represents an increase of $8,891 (26%). Oil sales
increased by $1,979 (8%). A 14% increase in the average oil sales price
increased sales by $3,458. This increase was partially offset by a 6% decrease
in oil production. Gas sales increased by $6,912 (79%). A 74% increase in the
average gas sales price increased sales by $6,693. A 2% increase in gas
production increased sales by an additional $219. The decrease in oil production
was primarily due to natural production declines. The increase in gas production
is a result of higher production from the FEC acquisition, in which the Company
obtained additional interests from farmouts which reached payout during 1995.
The increase in the average oil sales price corresponds with higher prices in
the overall market for the sale of oil. The increase in the average gas sales
price was due to higher expenses incurred on the FEC acquisition on which the
Company pays a net profits royalty, coupled with higher prices in the overall
market for the sale of gas.
Lease operating expenses increased to $17,747 in the second quarter of 1996 from
$9,865 in the second quarter of 1995. The increase of $7,882 is primarily due to
ad valorem taxes paid by the operator of the FEC acquisition in the second
quarter of 1996 for the 1995 and 1996 tax years.
Depreciation and depletion expense decreased to $14,059 in the second quarter of
1996 from $17,568 in the second quarter of 1995. This represents a decrease of
$3,509 (20%). The changes in production, noted above, caused depreciation and
depletion expense to decrease by $357, while an 18% decrease in the depletion
rate reduced depreciation and depletion expense by an additional $3,152. The
rate decrease was primarily due to the lower property basis resulting from the
recognition of an impairment of property of $64,028 in the first quarter of
1996.
General and administrative expenses increased to $6,572 in the second quarter of
1996 from $6,142 in the second quarter of 1995. This increase of $430 (7%) is
primarily due to more staff time being required to manage the Company's
operations.
First Six Months in 1995 Compared to First Six Months in 1996
Oil and gas sales for the first six months increased to $83,222 in 1996 from
$70,632 in 1995. This represents an increase of $12,590 (18%). Oil sales
increased by $5,975 (12%). An 11% increase in the average oil sales price
increased sales by $5,294. A 1% increase in oil production increased sales by an
additional $681. Gas sales increased by $6,615 (30%). A 43% increase in the
average gas sales price increased sales by $8,753. This increase was partially
offset by a 10% decrease in gas production. The increase in oil production is a
result of higher production from the FEC acquisition, in which the Company
obtained additional interests from farmouts which reached payout during 1995.
The decrease in gas production was primarily due to natural production declines.
The increase in the average oil sales price corresponds with higher prices in
the overall market for the sale of oil. The increase in the average gas sales
price was due to higher expenses incurred on the FEC acquisition on which the
Company pays a net profits royalty, coupled with higher prices in the overall
market for the sale of gas.
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<PAGE>
Lease operating expenses increased to $33,997 in the first six month of 1996
from $26,669 in the first six months of 1995. The increase of $7,328 is
primarily due to ad valorem taxes paid by the operator of the FEC acquisition in
the second quarter of 1996 for the 1995 and 1996 tax years.
Depreciation and depletion expense decreased to $29,143 in the first six months
of 1994 to $35,373 in the first six months of 1995. This represents a decrease
of $6,230 (18%). The changes in production, noted above, caused depreciation and
depletion expense to decrease by $1,364, while a 14% decrease in the depletion
rate reduced depreciation and depletion expense by an additional $4,866. The
rate decrease was primarily due to the lower property basis resulting from the
recognition of an impairment of property of $64,028 in the first quarter of
1996.
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 of $64,028 for certain oil
and gas properties due to market indications that the carrying amounts were not
fully recoverable.
General and administrative expenses decreased to $14,223 in the first six months
of 1996 from $15,556 in the first six months of 1995. This decrease of $1,333
(9%) 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 will continue to recover its reserves and distribute to the limited
partners the net proceeds realized from the sale of oil and gas production.
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.
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.
As of June 30, 1996, the Company had no material commitments for capital
expenditures. The Company does not intend to engage in any significant
developmental drilling activity.
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<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal 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 June 30, 1996.
II-1
<PAGE>
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 3, 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
August 13, 1996 By: /s/ James A. Klein
-------------------
James A. Klein
Controller and Chief
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000878659
<NAME> Enex Oil & Gas Income Program V-Series 3,L.P.
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> dec-31-1996
<PERIOD-START> jan-01-1996
<PERIOD-END> jun-30-1996
<CASH> 7446
<SECURITIES> 0
<RECEIVABLES> 19683
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 28808
<PP&E> 951400
<DEPRECIATION> 700024
<TOTAL-ASSETS> 280184
<CURRENT-LIABILITIES> 36646
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 217283
<TOTAL-LIABILITY-AND-EQUITY> 280184
<SALES> 83222
<TOTAL-REVENUES> 83222
<CGS> 38618
<TOTAL-COSTS> 131789
<OTHER-EXPENSES> 14223
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (62790)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
