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 March 31, 1996
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 33-47667-01
SOUTHWEST OIL & GAS 1992-93 INCOME PROGRAM
Southwest Oil & Gas Income Fund XI-A, L.P.
(Exact name of registrant as specified
in its limited partnership agreement)
Delaware 75-2427267
(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 12.
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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 notes thereto for the year
ended December 31, 1995 which are found in the Registrant's Form 10-K Report
for 1995 filed with the Securities and Exchange Commission. The December 31,
1995 balance sheet included herein has been taken from the Registrant's 1995
Form 10-K Report. Operating results for the three month period ended
March 31, 1996 are not necessarily indicative of the results that may be
expected for the full year.
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Southwest Oil & Gas Income Fund XI-A, L.P.
Balance Sheets
March 31, December 31,
1996 1995
--------- ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 12,774 28,968
Receivable from Managing General Partner 60,061 44,235
--------- ---------
Total current assets 72,835 73,203
--------- ---------
Oil and gas properties - using the
full-cost method of accounting 1,091,876 1,091,320
Less accumulated depreciation,
depletion and amortization 213,000 181,000
--------- ---------
Net oil and gas properties 878,876 910,320
--------- ---------
Organization costs, net of
amortization 13,329 15,084
--------- ---------
$ 965,040 998,607
========= =========
Liabilities and Partners' Equity
Current liability - Accounts payable $ 5,000 -
--------- ---------
Partners' equity:
General partners (4,799) (4,318)
Limited partners 964,839 1,002,925
--------- ---------
Total partners' equity 960,040 998,607
--------- ---------
$ 965,040 998,607
========= =========
PAGE
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Southwest Oil & Gas Income Fund XI-A, L.P.
Statements of Operations
(unaudited)
Three Months Ended
March 31,
1996 1995
---- ----
Revenues
Oil and gas revenues $ 133,937 106,317
Interest 177 -
------- -------
134,114 106,317
------- -------
Expenses
Production 55,172 55,282
General and administrative 12,754 11,822
Depreciation, depletion and
amortization 33,755 33,755
------- -------
101,681 100,859
------- -------
Net income $ 32,433 5,458
======= =======
Net income allocated to:
Managing General Partner $ 5,957 3,529
======= =======
General partner $ 662 392
======= =======
Limited partners $ 25,814 1,537
======= =======
Per limited partner unit $ 9.15 .54
======= =======
PAGE
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Southwest Oil & Gas Income Fund XI-A, L.P.
Statements of Cash Flows
(unaudited)
Three Months Ended
March 31,
1996 1995
---- ----
Cash flows from operating activities:
Cash received from oil and gas sales $ 122,382 114,356
Interest received 177 -
Cash paid to suppliers (67,197) (105,690)
------- -------
Net cash provided by operating
activities 55,362 8,666
------- -------
Cash flows from investing activities:
Additions to oil and gas properties (556) (2,212)
Sale of oil and gas properties - 6,226
------- -------
Net cash provided by (used in) investing
activities (556) 4,014
------- -------
Cash flows used in financing activities:
Distributions to partners (71,000) (9,360)
------- -------
Net increase (decrease) in cash (16,194) 3,320
Cash and cash equivalents:
Beginning of period 28,968 190
------- -------
End of period $ 12,774 3,510
======= =======
(continued)
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Southwest Oil & Gas Income Fund XI-A, L.P.
Statements of Cash Flows, continued
(unaudited)
Three Months Ended
March 31,
1996 1995
---- ----
Reconciliation of net income
to net cash provided by operating
activities:
Net income $ 32,433 5,458
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation, depletion and
amortization 33,755 33,755
(Increase) decrease in receivables (11,555) 8,039
Increase (decrease) in payables 729 (38,586)
------- -------
Net cash provided by operating
activities $ 55,362 8,666
======= =======
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
Southwest Oil & Gas Income Fund XI-A, L.P. 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 Oil & Gas 1992-93 Income Program. Minimum capital
requirements for the Partnership were met on March 17, 1993, with the
offering of limited partnership interests concluding April 30, 1993. At the
conclusion of the offering of limited partnership interests, 122 limited
partners had purchased 2,821 units for $1,410,500.
The Partnership was formed to acquire 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 farmout
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.
PAGE
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Results of Operations
A. General Comparison of the Quarters Ended March 31, 1996 and 1995
The following table provides certain information regarding performance
factors for the quarters ended March 31, 1996 and 1995.
Three Months
Ended Percentage
March 31, Increase
1996 1995 (Decrease)
---- ---- ----------
Average price per barrel of oil $ 18.22 16.75 9%
Average price per mcf of gas $ 2.08 1.48 41%
Oil production in barrels 3,400 3,000 13%
Gas production in mcf 34,600 38,300 (10%)
Gross oil and gas revenue $ 133,937 106,317 26%
Net oil and gas revenue $ 78,765 51,035 54%
Partnership distributions $ 71,000 9,305 663%
Limited partner distributions $ 63,900 8,655 638%
Per unit distribution to limited
partners $ 22.65 3.07 638%
Number of limited partner units 2,821 2,821
Revenues
The Partnership's oil and gas revenues increased to $133,937 from $106,317
for the quarters ended March 31, 1996 and 1995, respectively, an increase of
26%. The principal factors affecting the comparison of the quarters ended
March 31, 1996 and 1995 are as follows:
1. The average price for a barrel of oil received by the Partnership
increased during the quarter ended March 31, 1996 as compared to the
quarter ended March 31, 1995 by 9%, or $1.47 per barrel, resulting in an
increase of approximately $4,400 in revenues. Oil sales represented 46%
of total oil and gas sales during the quarter ended March 31, 1996 as
compared to 47% during the quarter ended March 31, 1995.
The average price for an mcf of gas received by the Partnership increased
during the same period by 41%, or $.60 per mcf, resulting in an increase
of approximately $23,000 in revenues.
The total increase in revenues due to the change in prices received from
oil and gas production is approximately $27,400. 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.
2. Oil production increased approximately 400 barrels or 13% during the
quarter ended March 31, 1996 as compared to the quarter ended March 31,
1995, resulting in an increase of approximately $7,300 in revenues.
<PAGE>
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Gas production decreased approximately 3,700 mcf or 10% during the same
period, resulting in a decrease of approximately $7,700 in revenues.
The net total decrease in revenues due to the change in production is
approximately $400. The decrease in gas production is a result of
property sales and surface problems.
Costs and Expenses
Total costs and expenses increased to $101,681 from $100,859 for the quarters
ended March 31, 1996 and 1995, respectively, an increase of 1%. The increase
is the result of higher general and administrative expense, offset by a
decline in lease operating costs.
1. Lease operating costs and production taxes were less than 1% lower, or
approximately $100 less during the quarter ended March 31, 1996 as
compared to the quarter ended March 31, 1995.
2. General and administrative costs consist of independent accounting and
engineering fees, computer services, postage, and Managing General
Partner personnel costs. General and administrative costs increased 8%
or approximately $900 during the quarter ended March 31, 1996 as compared
to the quarter ended March 31, 1995.
3. Depletion expense remained unchanged for the quarters ended March 31,
1996 and 1995. Depletion is calculated using the gross 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.
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 $55,400 in the
three months ended March 31, 1996 as compared to approximately $8,700 in the
three months ended March 31, 1995. The primary source of the 1996 cash flow
from operating activities was profitable operations.
<PAGE>
<PAGE>
Cash flows provided by or (used in) investing activities were approximately
$(600) in the three months ended March 31, 1996 as compared to approximately
$4,000 in the three months ended March 31, 1995. The principle use of the
1996 cash flow from investing activities was the additions to oil and gas
properties.
Cash flows used in financing activities were approximately $71,000 in the
three months ended March 31, 1996 as compared to approximately $9,400 in the
three months ended March 31, 1995. The only use in financing activities was
the distributions to partners.
Total distributions during the three months ended March 31, 1996 were $71,000
of which $63,900 was distributed to the limited partners and $7,100 to the
general partners. The per unit distribution to limited partners during the
three months ended March 31, 1996 was $22.65. Total distributions during the
three months ended March 31, 1995 were $9,305 of which $8,655 was distributed
to the limited partners and $650 to the general partners. The per unit
distribution to limited partners during the three months ended March 31, 1995
was $3.07.
The source for the 1996 distributions of $71,000 was oil and gas operations
of approximately $55,400, offset by additions to oil and gas properties of
approximately $600, with the balance from available cash on hand at the
beginning of the period. The sources for the 1995 distributions of $9,305
were oil and gas operations of approximately $8,700 and the sale of oil and
gas properties of approximately $6,200, offset by additions to oil and gas
properties of approximately $2,200, resulting in excess cash for
contingencies or subsequent distributions.
Since inception of the Partnership, cumulative monthly cash distributions of
$382,661 have been made to the partners. As of March 31, 1996, $350,211 or
$124.14 per limited partner unit has been distributed to the limited
partners, representing a 25% return of the capital contributed.
As of March 31, 1996, the Partnership had approximately $67,800 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
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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) None
(b) No reports on Form 8-K were filed during the quarter for
which this report is filed.
PAGE
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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 OIL & GAS
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: May 11, 1996
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Balance
Sheet at March 31, 1996 (Unaudited) and the Statement of Operations for the
Three Months Ended March 31, 1996 (Unaudited) and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 12,774
<SECURITIES> 0
<RECEIVABLES> 60,061
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 72,835
<PP&E> 1,091,876
<DEPRECIATION> 213,000
<TOTAL-ASSETS> 965,040
<CURRENT-LIABILITIES> 5,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 960,040
<TOTAL-LIABILITY-AND-EQUITY> 965,040
<SALES> 133,937
<TOTAL-REVENUES> 134,114
<CGS> 55,172
<TOTAL-COSTS> 55,172
<OTHER-EXPENSES> 46,509
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 32,433
<INCOME-TAX> 0
<INCOME-CONTINUING> 32,433
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 32,433
<EPS-PRIMARY> 9.15
<EPS-DILUTED> 9.15
</TABLE>
