Page 14 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 33-47668-01
SOUTHWEST ROYALTIES INSTITUTIONAL 1992-93 INCOME PROGRAM
Southwest Royalties Institutional Income Fund XI-A, L.P.
(Exact name of registrant as specified
in its limited partnership agreement)
Delaware 75-2427297
(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 Royalties Institutional Income Fund XI-A, L.P.
Balance Sheets
September 30, December 31,
1997 1996
------------- ------------
(unaudited)
Assets
Current assets
Cash and cash equivalents $ 11,302 6,595
Receivable from Managing General Partner 54,800 118,399
Accounts receivable 60,000 57,669
--------- ---------
Total current assets 126,102 182,663
--------- ---------
Oil and gas properties - using the
full cost method of accounting 2,150,198 2,150,198
Less accumulated depreciation,
depletion and amortization 610,000 501,000
--------- ---------
Net oil and gas properties 1,540,198 1,649,198
--------- ---------
Organization costs, net 1,683 9,153
--------- ---------
$1,667,983 1,841,014
========= =========
Liabilities and Partners' Equity
Current liability - Distribution payable $ 179 20
--------- ---------
Partners' equity
General partners (12,373) (3,468)
Limited partners 1,680,177 1,844,462
--------- ---------
Total partners' equity 1,667,804 1,840,994
--------- ---------
$1,667,983 1,841,014
========= =========
<PAGE>
Southwest Royalties Institutional Income Fund XI-A, L.P.
Statements of Operations
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
Revenues
Income from net profits
interests $ 44,237 85,587 196,366 327,272
Interest 182 558 928 1,785
Miscellaneous income 12,425 41,666 32,331 41,666
------ ------- ------- -------
56,844 127,811 229,625 370,723
------ ------- ------- -------
Expenses
General and administrative 10,558 10,795 39,345 39,416
Depreciation, depletion and
amortization 34,490 55,123 116,470 177,283
------ ------- ------- -------
45,048 65,918 155,815 216,699
------ ------- ------- -------
Net income $ 11,796 61,893 73,810 154,024
====== ======= ======= =======
Net income allocated to:
Managing General Partner $ 3,047 6,782 14,215 26,068
====== ======= ======= =======
General Partner $ 339 754 1,580 2,896
====== ======= ======= =======
Limited Partners $ 8,410 54,357 58,015 125,060
====== ======= ======= =======
Per limited partner unit $ 1.55 10.03 10.71 23.08
====== ======= ======= =======
<PAGE>
Southwest Royalties Institutional Income Fund XI-A, L.P.
Statements of Cash Flows
(unaudited)
Nine Months Ended
September 30,
1997 1996
Cash flows from operating activities
Cash received from income from net
profits interests $ 289,965 311,554
Cash paid to suppliers (39,345) (39,416)
Interest received 928 1,785
------- -------
Net cash provided by operating activities 251,548 273,923
------- -------
Cash flows provided by investing activities
Cash received from sale of oil and gas
property interest - 6,199
Refund of organization cost - 1,682
------- -------
Net cash provided by investing activities - 7,881
------- -------
Cash flows used in financing activities
Distributions to partners (246,841) (336,785)
------- -------
Net increase (decrease) in cash and cash
equivalents 4,707 (54,981)
Beginning of period 6,595 73,533
------- -------
End of period $ 11,302 18,552
======= =======
(continued)
<PAGE>
Southwest Royalties Institutional Income Fund XI-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 $ 73,810 154,024
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation, depletion and amortization 116,470 177,283
(Increase) decrease in receivables 61,268 (57,384)
------- -------
Net cash provided by operating activities $ 251,548 273,923
======= =======
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
Southwest Royalties Institutional Income Fund XI-A, L.P. (the Partnership)
was organized as a Delaware limited partnership on May 5, 1992. The
offering of such limited partnership interests began August 20, 1992, as
part of a shelf offering registered under the name Southwest Royalties
Institutional 1992-93 Income Program. Minimum capital requirements for the
Partnership were met on December 10, 1992 and the offering concluding on
April 30, 1993 with total limited partner contributions of $2,709,000.
The Partnership was formed to acquire royalty and net profits interests in
producing oil and gas properties, to produce and market crude oil and
natural gas produced from such properties, and to distribute the net
proceeds from operations to the limited and general partners. Net revenues
from producing oil and gas properties will not be reinvested in other
revenue producing assets except to the extent that production facilities
and wells are improved or reworked or where methods are employed to improve
or enable more efficient recovery of oil and gas reserves.
Increases or decreases in Partnership revenues and, therefore,
distributions to partners will depend primarily on changes in the prices
received for production, changes in volumes of production sold, lease
operating expenses, enhanced recovery projects, offset drilling activities
pursuant to farm-out arrangements, sales of properties, and the depletion
of wells. Since wells deplete over time, production can generally be
expected to decline from year to year.
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 performing workovers
during 1997 to enhance production. The Partnership could possibly
experience the following changes; a little less than normal decline in
1997, with no decline in 1998 and thereafter, experience a steady decline.
<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 $ 17.30 21.11 (18%)
Average price per mcf of gas $ 1.98 1.84 8%
Oil production in barrels 3,800 5,000 (24%)
Gas production in mcf 42,500 50,500 (16%)
Income from net profits interests $ 44,237 85,587 (48%)
Partnership distributions $ 40,000 124,682 (68%)
Limited partner distributions $ 36,000 112,382 (68%)
Per unit distribution to limited partners $ 6.64 20.74 (68%)
Number of limited partner units 5,418 5,418
Revenues
The Partnership's income from net profits interests decreased to $44,237
from $85,587 for the quarters ended September 30, 1997 and 1996,
respectively, a decrease of 48%. 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 $3.81 per barrel,
resulting in a decrease of approximately $19,100 in income from net
profits interests. Oil sales represented 44% of total oil and gas
sales during the quarter ended September 30, 1997 as compared to 53%
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 8%, or $.14 per mcf, resulting in
an increase of approximately $7,100 in income from net profits
interests.
The net total decrease in income from net profits interests due to the
change in prices received from oil and gas production is approximately
$12,000. 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 1,200 barrels or 24% during the
quarter ended September 30, 1997 as compared to the quarter ended
September 30, 1996, resulting in a decrease of approximately $20,800 in
income from net profits interests.
Gas production decreased approximately 8,000 mcf or 16% during the same
period, resulting in a decrease of approximately $15,800 in income from
net profits interests.
The total decrease in income from net profits interests due to the
change in production is approximately $36,600. The decrease is
primarily attributable to the sharp natural decline on one well,
downtime due to mechanical problems and property sales.
3. Lease operating costs and production taxes were 7% lower, or
approximately $7,500 less during the quarter ended September 30, 1997
as compared to the quarter ended September 30, 1996.
Costs and Expenses
Total costs and expenses decreased to $45,048 from $65,918 for the quarters
ended September 30, 1997 and 1996, respectively, a decrease of 32%. The
decrease is the result of lower general and administrative expense and
depletion expense.
1. General and administrative costs consists of independent accounting and
engineering fees, computer services, postage, and Managing General
Partner personnel costs. General and administrative costs decreased 2%
or approximately $200 during the quarter ended September 30, 1997 as
compared to the quarter ended September 30, 1996.
2. Depletion expense decreased to $32,000 for the quarter ended September
30, 1997 from $53,000 for the same period in 1996. This represents a
decrease of 40%. 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>
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 $ 19.49 21.01 (7%)
Average price per mcf of gas $ 2.13 2.08 2%
Oil production in barrels 12,300 15,000 (18%)
Gas production in mcf 125,100 152,000 (18%)
Income from net profits interests $ 196,366 327,272 (40%)
Partnership distributions $ 247,000 336,785 (27%)
Limited partner distributions $ 222,300 308,335 (28%)
Per unit distribution to limited partners $ 41.03 56.91 (28%)
Number of limited partner units 5,418 5,418
Revenues
The Partnership's income from net profits interests decreased to $196,366
from $327,272 for the nine months ended September 30, 1997 and 1996,
respectively, a decrease of 40%. 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 7%, or $1.52 per barrel,
resulting in a decrease of approximately $22,800 in income from net
profits interests. Oil sales represented 47% of total oil and gas
sales during the nine months ended September 30, 1997 as compared to
50% during the nine months ended September 30, 1996.
The average price for an mcf of gas received by the Partnership
increased during the same period by 2%, or $.05 per mcf, resulting in
an increase of approximately $7,600 in income from net profits
interests.
The net total decrease in income from net profits interests due to the
change in prices received from oil and gas production is approximately
$15,200. 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 2,700 barrels or 18% during the
nine months ended September 30, 1997 as compared to the nine months
ended September 30, 1996, resulting in a decrease of approximately
$52,600 in income from net profits interests.
Gas production decreased approximately 26,900 mcf or 18% during the
same period, resulting in a decrease of approximately $57,300 in income
from net profits interests.
The total decrease in income from net profits interests due to the
change in production is approximately $109,900. The decrease is
primarily attributable to the sharp natural decline on one well,
downtime due to mechanical problems and property sales.
3. Lease operating costs and production taxes were 2% higher, or
approximately $5,600 more during the nine months ended September 30,
1997 as compared to the nine months ended September 30, 1996.
Costs and Expenses
Total costs and expenses decreased to $155,815 from $216,699 for the nine
months ended September 30, 1997 and 1996, respectively, a decrease of 28%.
The decrease is the result of lower general and administrative expense and
depletion expense.
1. General and administrative costs consists of independent accounting and
engineering fees, computer services, postage, and Managing General
Partner personnel costs. General and administrative costs decreased
less than 1% or approximately $100 during the nine months ended
September 30, 1997 as compared to the nine months ended September 30,
1996.
2. Depletion expense decreased to $109,000 for the nine months ended
September 30, 1997 from $170,000 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 $251,500 in
the nine months ended September 30, 1997 as compared to approximately
$273,900 in the nine months ended September 30, 1996. The primary source
of the 1997 cash flow from operating activities was profitable operations.
There were no cash flows provided by investing activities in the nine
months ended September 30, 1997 as compared to approximately $7,900 in the
nine months ended September 30, 1996.
Cash flows used in financing activities were approximately $246,800 in the
nine months ended September 30, 1997 as compared to approximately $336,800
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
$247,000 of which $222,300 was distributed to the limited partners and
$24,700 to the general partners. The per unit distribution to limited
partners during the nine months ended September 30, 1997 was $41.03. Total
distributions during the nine months ended September 30, 1996 were $336,785
of which $308,335 was distributed to the limited partners and $28,450 to
the general partners. The per unit distribution to limited partners during
the nine months ended September 30, 1996 was $56.91.
The source for the 1997 distributions of $247,000 was oil and gas
operations of approximately $251,500, resulting in excess cash for
contingencies or subsequent distributions. The sources for the 1996
distributions of $336,785 were oil and gas operations of approximately
$273,900, the change in oil and gas properties of approximately $6,200 and
the refund of organization costs of approximately $1,700, with the balance
from available cash on hand at the beginning of the period.
Since inception of the Partnership, cumulative monthly cash distributions
of $1,238,492 have been made to the partners. As of September 30, 1997,
$1,130,642 or $208.68 per limited partner unit has been distributed to the
limited partners, representing a 42% return of the capital contributed.
As of September 30, 1997, the Partnership had approximately $125,900 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 Royalties Institutional Income
Fund XI-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> 11,302
<SECURITIES> 0
<RECEIVABLES> 114,800
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 126,102
<PP&E> 2,150,198
<DEPRECIATION> 610,000
<TOTAL-ASSETS> 1,667,983
<CURRENT-LIABILITIES> 179
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,667,804
<TOTAL-LIABILITY-AND-EQUITY> 1,667,983
<SALES> 196,366
<TOTAL-REVENUES> 229,625
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 155,815
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 73,810
<INCOME-TAX> 0
<INCOME-CONTINUING> 73,810
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 73,810
<EPS-PRIMARY> 10.71
<EPS-DILUTED> 10.71
</TABLE>
