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 June 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 33-47667-01
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 14.
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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, 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 six month periods
ended June 30, 1997 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
June 30, December 31,
1997 1996
--------- ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 2,201 456
Receivable from Managing General Partner 36,483 74,527
--------- ---------
Total current assets 38,684 74,983
--------- ---------
Oil and gas properties - using the
full cost method of accounting 1,098,625 1,094,448
Less accumulated depreciation,
depletion and amortization 324,000 282,000
--------- ---------
Net oil and gas properties 774,625 812,448
--------- ---------
Organization costs, net 4,554 8,064
--------- ---------
$ 817,863 895,495
========= =========
Liabilities and Partners' Equity
Current liabilities:
Accounts payable $ 209 -
Distribution payable 19 -
--------- ---------
Total current liabilities 228 -
--------- ---------
Partners' equity:
General partners (6,814) (3,579)
Limited partners 824,449 899,074
--------- ---------
Total partners' equity 817,635 895,495
--------- ---------
$ 817,863 895,495
========= =========
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Southwest Oil & Gas Income Fund XI-A, L.P.
Statements of Operations
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
Revenues
Oil and gas $ 98,419 128,283 218,425 262,220
Interest 201 243 320 420
------- ------- ------- -------
98,620 128,526 218,745 262,640
------- ------- ------- -------
Expenses
Production 61,559 52,875 113,255 108,047
General and administrative 6,652 7,371 19,840 20,125
Depreciation, depletion and
amortization 20,755 35,755 45,510 69,510
------- ------- ------- -------
88,966 96,001 178,605 197,682
------- ------- ------- -------
Net income $ 9,654 32,525 40,140 64,958
======= ======= ======= =======
Net income allocated to:
Managing General Partner $ 2,737 6,145 7,709 12,102
======= ======= ======= =======
General Partner $ 304 683 856 1,345
======= ======= ======= =======
Limited partners $ 6,613 25,697 31,575 51,511
======= ======= ======= =======
Per limited partner unit $ 2.34 9.11 11.19 18.26
======= ======= ======= =======
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Southwest Oil & Gas Income Fund XI-A, L.P.
Statements of Cash Flows
(unaudited)
Six Months Ended
June 30,
1997 1996
Cash flows from operating activities:
Cash received from oil and gas sales $ 256,879 245,986
Cash paid to suppliers (133,296) (130,769)
Interest received 320 420
-------- --------
Net cash provided by operating activities 123,903 115,637
-------- --------
Cash flows from investing activities:
Additions of oil and gas properties (4,906) (3,056)
Sale of oil and gas properties 729 5,945
-------- --------
Net cash provided by (used in) investing
activities (4,177) 2,889
-------- --------
Cash flows used in financing activities:
Distributions to partners (117,981) (141,481)
-------- --------
Net increase (decrease) in cash and cash
equivalents 1,745 (22,955)
Beginning of period 456 28,968
-------- --------
End of period $ 2,201 6,013
======== ========
(continued)
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Southwest Oil & Gas Income Fund XI-A, L.P.
Statements of Cash Flows, continued
(unaudited)
Six Months Ended
June 30,
1997 1996
Reconciliation of net income to net
cash provided by operating activities:
Net income $ 40,140 64,958
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation, depletion and amortization 45,510 69,510
(Increase) decrease in receivables 38,454 (16,234)
Decrease in payables (201) (2,597)
------- -------
Net cash provided by operating activities $ 123,903 115,637
======= =======
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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.
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.
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Results of Operations
A. General Comparison of the Quarters Ended June 30, 1997 and 1996
The following table provides certain information regarding performance
factors for the quarters ended June 30, 1997 and 1996:
Three Months
Ended Percentage
June 30, Increase
1997 1996 (Decrease)
---- ---- ----------
Average price per barrel of oil $ 18.90 20.26 (7%)
Average price per mcf of gas $ 1.99 2.27 (12%)
Oil production in barrels 2,600 3,100 (16%)
Gas production in mcf 24,700 29,100 (15%)
Gross oil and gas revenue $ 98,419 128,283 (23%)
Net oil and gas revenue $ 36,860 75,408 (51%)
Partnership distributions $ 50,000 70,481 (29%)
Limited partner distributions $ 45,000 63,681 (29%)
Per unit distribution to limited
partners $ 15.95 22.57 (29%)
Number of limited partner units 2,821 2,821
Revenues
The Partnership's oil and gas revenues decreased to $98,419 from $128,283 for
the quarters ended June 30, 1997 and 1996, respectively, a decrease of 23%.
The principal factors affecting the comparison of the quarters ended June 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 June 30, 1997 as compared to the
quarter ended June 30, 1996 by 7%, or $1.36 per barrel, resulting in a
decrease of approximately $4,200 in revenues. Oil sales represented 50%
of total oil and gas sales during the quarter ended June 30, 1997 as
compared to 49% during the quarter ended June 30, 1996.
The average price for an mcf of gas received by the Partnership decreased
during the same period by 12%, or $.28 per mcf, resulting in a decrease
of approximately $8,100 in revenues.
The total decrease in revenues due to the change in prices received from
oil and gas production is approximately $12,300. 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.
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2. Oil production decreased approximately 500 barrels or 16% during the
quarter ended June 30, 1997 as compared to the quarter ended June 30,
1996, resulting in a decrease of approximately $9,500 in revenues.
Gas production decreased approximately 4,400 mcf or 15% during the same
period, resulting in a decrease of approximately $8,800 in revenues.
The total decrease in revenues due to the change in production is
approximately $18,300. The decrease is primarily attributable to
downtime caused by mechanical problems.
Costs and Expenses
Total costs and expenses decreased to $88,966 from $96,001 for the quarters
ended June 30, 1997 and 1996, respectively, a decrease of 7%. The decrease
is the result of lower general and administrative expense and depletion
expense, partially offset by an increase in lease operating costs.
1. Lease operating costs and production taxes were 16% higher, or
approximately $8,700 more during the quarter ended June 30, 1997 as
compared to the quarter ended June 30, 1996. The increase is primarily
attributable to the pulling expense incurred on an injector well during
1997.
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 decreased 10%
or approximately $700 during the quarter ended June 30, 1997 as compared
to the quarter ended June 30, 1996.
3. Depletion expense decreased to $19,000 for the quarter ended June 30,
1997 from $34,000 for the same period in 1996. This represents a
decrease of 44%. 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
decrease in oil and gas revenues and the increase in the price of oil
used to determine the Partnership's reserves for January 1, 1997 as
compared to 1996.
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B. General Comparison of the Six Month Periods Ended June 30, 1997 and 1996
The following table provides certain information regarding performance
factors for the six month periods ended June 30, 1997 and 1996:
Six Months
Ended Percentage
June 30, Increase
1997 1996 (Decrease)
---- ---- ----------
Average price per barrel of oil $ 20.15 19.19 5%
Average price per mcf of gas $ 2.24 2.30 (3%)
Oil production in barrels 5,400 6,500 (17%)
Gas production in mcf 48,900 60,100 (19%)
Gross oil and gas revenue $ 218,425 262,220 (17%)
Net oil and gas revenue $ 105,170 154,173 (32%)
Partnership distributions $ 118,000 141,481 (17%)
Limited partner distributions $ 106,200 127,581 (17%)
Per unit distribution to limited
partners $ 37.65 45.23 (17%)
Number of limited partner units 2,821 2,821
Revenues
The Partnership's oil and gas revenues decreased to $218,425 from $262,220
for the six months ended June 30, 1997 and 1996, respectively, a decrease of
17%. The principal factors affecting the comparison of the six months ended
June 30, 1997 and 1996 are as follows:
1. The average price for a barrel of oil received by the Partnership
increased during the six months ended June 30, 1997 as compared to the
six months ended June 30, 1996 by 5%, or $.96 per barrel, resulting in an
increase of approximately $6,200 in revenues. Oil sales represented 50%
of total oil and gas sales during the six months ended June 30, 1997 as
compared to 47% during the six months ended June 30, 1996.
The average price for an mcf of gas received by the Partnership decreased
during the same period by 3%, or $.06 per mcf, resulting in a decrease of
approximately $3,600 in revenues.
The net total increase in revenues due to the change in prices received
from oil and gas production is approximately $2,600. 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.
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2. Oil production decreased approximately 1,100 barrels or 17% during the
six months ended June 30, 1997 as compared to the six months ended June
30, 1996, resulting in a decrease of approximately $22,200 in revenues.
Gas production decreased approximately 11,200 mcf or 19% during the same
period, resulting in a decrease of approximately $25,100 in revenues.
The total decrease in revenues due to the change in production is
approximately $47,300. The decrease is primarily attributable to
property sales and downtime caused by mechanical problems.
Costs and Expenses
Total costs and expenses decreased to $178,605 from $197,682 for the six
months ended June 30, 1997 and 1996, respectively, a decrease of 10%. The
decrease is the result of lower general and administrative expense and
depletion expense, partially offset by an increase in lease operating costs.
1. Lease operating costs and production taxes were 5% higher, or
approximately $5,200 more during the six months ended June 30, 1997 as
compared to the six months ended June 30, 1996. The increase is
primarily attributable to the pulling expense incurred on an injector
well during 1997.
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 decreased 1%
or approximately $300 during the six months ended June 30, 1997 as
compared to the six months ended June 30, 1996.
3. Depletion expense decreased to $42,000 for the six months ended June 30,
1997 from $66,000 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
decrease in oil and gas revenues and the increase in the price of oil
used to determine the Partnership's reserves for January 1, 1997 as
compared to 1996.
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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 $123,900 in
the six months ended June 30, 1997 as compared to approximately $115,600 in
the six months ended June 30, 1996. The primary source of the 1997 cash flow
from operating activities was profitable operations.
Cash flows provided by or (used in) investing activities were approximately
$(4,200) in the six months ended June 30, 1997 as compared to approximately
$2,900 in the six months ended June 30, 1996. The principle use of the 1997
cash flow from investing activities was the additions to oil and gas
properties, partially offset by the sale of oil and gas properties.
Cash flows used in financing activities were approximately $118,000 in the
six months ended June 30, 1997 as compared to approximately $141,500 in the
six months ended June 30, 1996. The only use in financing activities was the
distributions to partners.
Total distributions during the six months ended June 30, 1997 were $118,000
of which $106,200 was distributed to the limited partners and $11,800 to the
general partners. The per unit distribution to limited partners during the
six months ended June 30, 1997 was $37.65. Total distributions during the
six months ended June 30, 1996 were $141,481 of which $127,581 was
distributed to the limited partners and $13,900 to the general partners. The
per unit distribution to limited partners during the six months ended June
30, 1996 was $45.23.
The source for the 1997 distributions of $118,000 was oil and gas operations
of approximately $123,900, partially offset by the net change in oil and gas
properties of approximately $4,200, resulting in excess cash for
contingencies or subsequent distributions. The sources for the 1996
distributions of $141,481 were oil and gas operations of approximately
$115,600 and the net change in oil and gas properties of approximately
$2,900, with the balance from available cash on hand at the beginning of the
period.
Since inception of the Partnership, cumulative monthly cash distributions of
$702,142 have been made to the partners. As of June 30, 1997, $637,992 or
$226.16 per limited partner unit has been distributed to the limited
partners, representing a 45% return of the capital contributed.
As of June 30, 1997, the Partnership had approximately $38,500 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.
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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) Exhibits:
27 Financial Data Schedule
(b) Reports on Form 8-K:
On June 12, 1997, the Partnership filed Form 8-K and on June
24, 1997, the Partnership filed Form 8-K Amended, with
respect to Item 4, Changes in Registrant's Certifying
Accountant.
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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 Officers
Date: August 15, 1997
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Balance Sheet at June 30, 1997 (Unaudited) and the Statement of Operations
for the Six Months Ended June 30, 1997 (Unaudited) and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,201
<SECURITIES> 0
<RECEIVABLES> 36,483
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 38,684
<PP&E> 1,098,625
<DEPRECIATION> 324,000
<TOTAL-ASSETS> 817,863
<CURRENT-LIABILITIES> 228
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 817,635
<TOTAL-LIABILITY-AND-EQUITY> 817,863
<SALES> 218,425
<TOTAL-REVENUES> 218,745
<CGS> 113,255
<TOTAL-COSTS> 113,255
<OTHER-EXPENSES> 65,350
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 40,140
<INCOME-TAX> 0
<INCOME-CONTINUING> 40,140
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 40,140
<EPS-PRIMARY> 11.19
<EPS-DILUTED> 11.19
</TABLE>