Back to GetFilings.com
1 of 26
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, 2003
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 0-20298
SOUTHWEST ROYALTIES INSTITUTIONAL 1990-91 INCOME PROGRAM
Southwest Royalties Institutional Income Fund X-C, L.P.
(Exact name of registrant as specified
in its limited partnership agreement)
Delaware 75-2374449
(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)
________(432) 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 _____
Indicate by check mark whether registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes ____ No __X__
The total number of pages contained in this report is 26.
Glossary of Oil and Gas Terms
The following are abbreviations and definitions of terms commonly used in
the oil and gas industry that are used in this filing. All volumes of
natural gas referred to herein are stated at the legal pressure base to the
state or area where the reserves exit and at 60 degrees Fahrenheit and in
most instances are rounded to the nearest major multiple.
Bbl. One stock tank barrel, or 42 United States gallons liquid volume.
Developmental well. A well drilled within the proved area of an oil or
natural gas reservoir to the depth of a stratigraphic horizon known to be
productive.
Exploratory well. A well drilled to find and produce oil or gas in an
unproved area to find a new reservoir in a field previously found to be
productive of oil or natural gas in another reservoir or to extend a known
reservoir.
Farm-out arrangement. An agreement whereby the owner of the leasehold
or working interest agrees to assign his interest in certain specific
acreage to the assignee, retaining some interest, such as an overriding
royalty interest, subject to the drilling of one (1) or more wells or other
performance by the assignee.
Field. An area consisting of a single reservoir or multiple reservoirs
all grouped on or related to the same individual geological structural
feature and/or stratigraphic condition.
Mcf. One thousand cubic feet.
Net Profits Interest. An agreement whereby the owner receives a
specified percentage of the defined net profits from a producing property
in exchange for consideration paid. The net profits interest owner will
not otherwise participate in additional costs and expenses of the property.
Oil. Crude oil, condensate and natural gas liquids.
Overriding royalty interest. Interests that are carved out of a
working interest, and their duration is limited by the term of the lease
under which they are created.
Present value and PV-10 Value. When used with respect to oil and
natural gas reserves, the estimated future net revenue to be generated from
the production of proved reserves, determined in all material respects in
accordance with the rules and regulations of the SEC (generally using
prices and costs in effect as of the date indicated) without giving effect
to non-property related expenses such as general and administrative
expenses, debt service and future income tax expenses or to depreciation,
depletion and amortization, discounted using an annual discount rate of
10%.
Production costs. Costs incurred to operate and maintain wells and
related equipment and facilities, including depreciation and applicable
operating costs of support equipment and facilities and other costs of
operating and maintaining those wells and related equipment and facilities.
Proved Area. The part of a property to which proved reserves have been
specifically attributed.
Proved developed oil and gas reserves. Proved developed oil and gas
reserves are reserves that can be expected to be recovered from existing
wells with existing equipment and operating methods.
Proved properties. Properties with proved reserves.
Proved reserves. The estimated quantities of crude oil, natural gas,
and natural gas liquids that geological and engineering data demonstrate
with reasonable certainty to be recoverable in future years from known
reservoirs under existing economic and operating conditions.
Proved undeveloped reserves. Proved undeveloped oil and gas reserves
are reserves that are expected to be recovered from new wells on undrilled
acreage, or from existing wells where a relatively major expenditure is
required for recompletion.
Reservoir. A porous and permeable underground formation containing a
natural accumulation of producible oil or gas that is confined by
impermeable rock or water barriers and is individual and separate from
other reservoirs.
Royalty interest. An interest in an oil and natural gas property
entitling the owner to a share of oil or natural gas production free of
costs of production.
Working interest. The operating interest that gives the owner the
right to drill, produce and conduct operating activities on the property
and a share of production.
Workover. Operations on a producing well to restore or increase
production.
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, 2002, which are found in the Registrant's
Amendment No. 1 to its Annual Report on Form 10-K for 2002 filed with the
Securities and Exchange Commission on November 12, 2003. The December 31,
2002 balance sheet included herein has been derived from the Registrant's
Amendment No. 1 to its Annual Report on Form 10-K for 2002. Operating
results for the three and nine month periods ended September 30, 2003 are
not necessarily indicative of the results for the full year.
Introductory Note - Statement of Financial Accounting Standard No. 143
The Partnership implemented SFAS No. 143 effective January 1, 2003 (See
Note 3) to the Partnership's financial statements.
Introductory Note - Depletion Method
During the fourth quarter of 2002, the Partnership changed its method of
providing for depletion from the units-of-revenue method to the units-of-
production method as described in Notes 4 and 6 to the Partnership's
financial statements.
This change in depletion method was applied as a cumulative effect of a
change in accounting principle effective as of January 1, 2002. The
unaudited condensed financial statements of the Partnership for the periods
ended September 30, 2002, included herein, have been restated (as described
in Notes 4 and 6 to the Partnership's financial statements) using the new
depletion method and differ from those previously issued in the
Partnership's Quarterly Report on Form 10-Q for the periods ended September
30, 2002.
Southwest Royalties Institutional Income Fund X-C, L.P.
Balance Sheets
Septembe December
r 30, 31,
2003 2002
---- ----
(unaudit
ed)
Assets
- ----------
Current assets:
Cash and cash equivalents $ 37,160 20,887
Receivable from Managing 39,221 79,843
General Partner
Receivable from sales - 7,000
proceeds
-------- --------
---- ---
Total current assets 76,381 107,730
-------- --------
---- ----
Oil and gas properties -
using the full-
method of accounting 2,495,64 2,214,66
2 2
Less accumulated
depreciation,
depletion and 2,225,14 2,045,47
amortization 3 9
-------- --------
---- ----
Net oil and gas 270,499 169,183
properties
-------- --------
---- ----
$ 346,880 276,913
======= =======
Liabilities and Partners'
Equity
- ----------------------------
- -----------
Liabilities:
Other long term liabilities $ 824,523 -
-------- --------
---- ----
Partners' equity:
General partners (92,909) (21,978)
Limited partners (384,734 298,891
)
-------- --------
---- ----
(477,643 276,913
)
-------- --------
---- ----
Total partners' equity $ 346,880 276,913
======= =======
Southwest Royalties Institutional Income Fund X-C, L.P.
Statements of Operations
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
(Restate (Restate
d) d)
---- ---- ---- ----
Revenues
- ------------
Income from net profits $ 5,840 41,993 95,789 32,923
interests
Interest 86 23 233 80
Miscellaneous settlement - - - 1,131
-------- -------- -------- --------
- - - -
5,926 42,016 96,022 34,134
-------- -------- -------- --------
- - - -
Expenses
- ------------
General and administrative 12,633 11,374 39,950 31,889
Depreciation, depletion and 9,000 9,000 32,000 32,000
amortization
Accretion of asset retirement 15,557 - 47,977 -
obligation
-------- -------- -------- --------
- - - -
37,190 20,374 119,927 63,889
-------- -------- -------- --------
- - - -
Net income (loss) from (31,264) 21,642 (23,905) (29,755)
continuing operations
Results from discontinued
operation -
sale of oil and gas lease - 3,276 5,292 21,622 9,335
See Note 5
-------- -------- -------- --------
- - - -
Net income (loss) before (27,988) 26,934 (2,283) (20,420)
cumulative effect
Cumulative effect of change in
accounting
principle - SFAS No. 143 - - - (599,030 -
See Note 3 )
Cumulative effect of change in
accounting principle
- change in depletion method - - - 59,000
- - See Note 4
-------- -------- -------- --------
- - - -
Net income (loss) $ (27,988) 26,934 (601,313 38,580
)
===== ===== ===== =====
continued
Southwest Royalties Institutional Income Fund X-C, L.P.
Statements of Operations
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
(Restate (Restate
d) d)
---- ---- ---- ----
Net income (loss) allocated
to:
Managing General Partner $ (1,709) 3,234 (51,238) 1,042
===== ===== ===== =====
General Partner $ (190) 359 (5,693) 116
===== ===== ===== =====
Limited Partners $ (26,089) 23,341 (544,382 37,422
)
===== ===== ===== =====
Per limited partner unit
before discontinued
operations and cumulative $ (4.85) (5.02)
effect 3.10 (4.13)
Discontinued operations per .49 .80 3.25 1.40
limited partner unit
Cumulative effects per - - (90.11)
limited partner unit 9.87
-------- -------- -------- --------
- - - -
Per limited partner unit $ (4.36)
3.90 (90.99) 6.25
===== ===== ===== =====
Pro forma amounts assuming
change is applied
retroactively (See Note 3):
Net income (loss) before $ - 11,967 - (65,325)
cumulative effect
===== ===== ===== =====
Per limited partner unit $ - 1.65 - (10.36)
(5,983.0)
===== ===== ===== =====
Net income (loss) $ - 11,967 - (6,325)
===== ===== ===== =====
Per limited partner unit $ - 1.65 - (.49)
(5,983.0)
===== ===== ===== =====
Southwest Royalties Institutional Income Fund X-C, L.P.
Statements of Cash Flows
(unaudited)
Nine Months Ended
September 30,
2003 2002
(Restated
)
---- ----
Cash flows from operating
activities
Cash received from income from net $ 122,821 15,837
profits interests
Cash paid to suppliers (26,360 (29,349)
)
Cash received from discontinued 21,622 9,335
operations
Interest received 233 80
Miscellaneous settlement - 1,131
------- ---------
---
Net cash provided by (used in) 118,316 (2,966)
operating activities
------- ---------
---
Cash flows provided by investing
activities
Sale of oil and gas properties 51,200
------- ---------
---
Cash flows used in financing
activities
Distributions to partners (153,24 -
3)
------- ---------
---
Net increase (decrease) in cash 16,273 (2,966)
and cash equivalents
Beginning of period 20,887 15,300
------- ---------
---
End of period $ 37,160 12,334
====== =====
Reconciliation of net income (loss)
to net cash provided by
(used in) operating activities
Net (loss) income $ (601,31 38,580
3)
Adjustments to reconcile net (loss)
income to net
cash provided by (used in)
operating activities
Depreciation, depletion and 32,000 32,000
amortization
Accretion of asset retirement 47,977 -
obligation
Cumulative effect retirement
obligation
principle - SFAS No. 143 599,030 -
Cumulative effect of change in
accounting
principle - change in depletion - (59,000)
method
Decrease (increase) in receivables 27,032 (17,086)
Increase in payables 13,590 2,540
------- ---------
---
Net cash provided by (used in) $ 118,316 (2,966)
operating activities
====== =====
Noncash investing and financing
activities:
Increase in oil and gas properties
- - Adoption
of SFAS No. 143 $ 214,465 -
====== =====
Decrease in oil and gas properties
- - SFAS No. 143
sale of property $ 6,114 -
====== =====
Decrease in oil and gas properties
- - SFAS No. 143
Asset retirement obligation $ 30,835 -
settlement
====== =====
Southwest Royalties Institutional Income Fund X-C, L.P.
(a Delaware limited partnership)
Notes to Financial Statements
1. Organization
Southwest Royalties Institutional Income Fund X-C, L.P. was organized
under the laws of the state of Delaware on September 20, 1991, for the
purpose of acquiring producing oil and gas properties and to produce
and market crude oil and natural gas produced from such properties for
a term of 50 years, unless terminated at an earlier date as provided
for in the Partnership Agreement. The Partnership sells its oil and
gas production to several purchasers with the prices it receives being
dependent upon the oil and gas economy. Southwest Royalties, Inc.
serves as the Managing General Partner and H. H. Wommack, III, as the
individual general partner. Revenues, costs and expenses are
allocated as follows:
Limited General
Partners Partners
-------- --------
Interest income on capital 100% -
contributions
Oil and gas sales 90% 10%
All other revenues 90% 10%
Organization and offering 100% -
costs (1)
Syndication costs 100% -
Amortization of organization 100% -
costs
Property acquisition costs 100% -
Gain/loss on property 90% 10%
disposition
Operating and administrative 90% 10%
costs (2)
Depreciation, depletion and
amortization
of oil and gas properties 100% -
All other costs 90% 10%
(1) All organization costs in excess of 3% of initial capital
contributions will be paid by the Managing General Partner and
will be treated as a capital contribution. The Partnership paid
the Managing General Partner an amount equal to 3% of initial
capital contributions for such organization costs.
(2) Administrative costs in any year which exceed 2% of capital
contributions shall be paid by the Managing General Partner and
will be treated as a capital contribution.
2. Summary of Significant Accounting Policies
The interim financial information as of September 30, 2003, and for
the three and nine months ended September 30, 2003, is unaudited.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted in this Form 10-Q
pursuant to the rules and regulations of the Securities and Exchange
Commission. However, in the opinion of management, these interim
financial statements include all the necessary adjustments to fairly
present the results of the interim periods and all such adjustments
are of a normal recurring nature. The interim consolidated financial
statements should be read in conjunction with the Partnership's
Amendment No. 1 to its Annual Report on Form 10-K for the year ended
December 31, 2002, filed with SEC on November 14, 2003.
Southwest Royalties Institutional Income Fund X-C, L.P.
(a Delaware limited partnership)
Notes to Financial Statements
3. Cumulative effect of change in accounting principle - SFAS No. 143
On January 1, 2003, the Partnership adopted Statement of Financial
Accounting Standards No. 143, Accounting for Asset Retirement
Obligations ("SFAS No. 143"). Adoption of SFAS No. 143 is required
for all companies with fiscal years beginning after June 15, 2002.
The new standard requires the Partnership to recognize a liability for
the present value of all legal obligations associated with the
retirement of tangible long-lived assets and to capitalize an equal
amount as a cost of the asset and depreciate the additional cost over
the estimated useful life of the asset. On January 1, 2003, the
Partnership recorded additional costs, net of accumulated
depreciation, of approximately $214,465, a long term liability of
approximately $813,495 and a loss of approximately $599,030 for the
cumulative effect on depreciation of the additional costs and
accretion expense on the liability related to expected abandonment
costs of its oil and natural gas producing properties. At September
30, 2003, the asset retirement obligation was $824,523. The increase
in the balance from January 1, 2003 is due to accretion expense of
$47,977, partially offset by the sale and plug and abandonment of oil
and gas properties, which decreased the asset retirement obligation by
$36,949. The pro forma amounts for the three and nine months ended
September 30, 2002, which are presented on the face of the statements
of operations, reflect the effect of retroactive application of SFAS
No. 143.
4. Cumulative effect of change in accounting principle - change in
depletion method
In the fourth quarter of 2002, the Partnership changed methods of
accounting for depletion of capitalized costs from the units-of-
revenue method to the units-of-production method. The newly adopted
accounting principle is preferable in the circumstances because the
units-of-production method results in a better matching of the costs
of oil and gas production against the related revenue received in
periods of volatile prices for production as have been experienced in
recent periods. Additionally, the units-of-production method is the
predominant method used by full cost companies in the oil and gas
industry, accordingly, the change improves the comparability of the
Partnership's financial statements with its peer group. The
Partnership adopted the units-of-production method through the
recording of a cumulative effect of a change in accounting principle
in the amount of $59,000 effective as of January 1, 2002. The
Partnership's depletion for the three and nine months ended September
30, 2003 and 2002 has been calculated using the units-of-production
method. The effect of the change on the three and nine months ended
September 30, 2002 was to decrease income before cumulative effect of
a change in accounting principle by $2,000 and $10,000 ($.33 and $1.67
per limited partner unit), respectively and decrease and increase net
income by $2,000 and $49,000 ($.33 and $8.19 per limited partner
unit), respectively.
5. Discontinued Operations - Sale of oil and gas leases
During the nine months ended September 30, 2003, the Partnership sold
its interest in certain oil and gas wells for $44,200 sales proceeds
and retired $6,144 of asset retirement obligation associated with the
properties. Since the Partnership is under the full cost pool method
of accounting, the sales proceeds and asset retirement obligation
liability were taken against the oil and gas properties asset account
and therefore, no gain or loss was recorded and shown on the statement
of operations as part of the discontinued operations. Pursuant to the
requirements of SFAS No. 144, the historical operating results from
these properties have been reported as discontinued operations in the
accompanying statements of operations. The following table summarizes
certain historical operating information related to the discontinued
operations:
Three Months Ended Nine Months Ended
2003 2002 2003 2002
Income from net profit $3,276 5,292 21,622 9,335
interests
Southwest Royalties Institutional Income Fund X-C, L.P.
(a Delaware limited partnership)
Notes to Financial Statements
6. September 30, 2002 Restatement
During the fourth quarter of 2002, the Partnership changed its method
of providing for depletion from the units-of-revenue method to the
units-of-production method as described in Note 4.
This change in the method used to implement the Partnership's change
in the manner in which it determines depletion resulted in an increase
in the Partnership's previously reported net oil and gas properties of
$48,000 from $121,183 to $169,183 as of December 31, 2002 and did not
effect the Partnership's 2002 cash flows from operations, investing or
financing activities.
The change had the following effects on the Statement of Operations
for the three and nine months ended September 30, 2002.
Three Months Ended Nine Months Ended
Previousl Previousl
y y
Restated Reported Restated Reported
Depreciation,
depletion and
amortization $9,000 7,000 32,000 32,000
Income (loss) before 26,934 28,934 (20,420) (10,420)
cumulative effect
Cumulative effect of
change in
accounting principle - - 59,000 -
Net income (loss) 26,934 28,934 38,580 (10,420)
Net income (loss)
allocated to:
Managing General 3,234 3,234 1,042 1,042
Partner
General partner 359 359 116 116
Limited partners 23,341 25,341 37,422 (11,578)
Income (loss) per
limited partner
unit before 3.90 4.24
cumulative effect (3.62) (1.94)
Cumulative effect
per limited
partner unit - - -
9.87
Net income (loss)
per limited
partner unit 3.90 4.24
6.25 (1.94)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
Southwest Royalties Institutional Income Fund X-C, L.P. was organized as a
Delaware limited partnership on September 20, 1991. The offering of such
limited partnership interests began October 1, 1991 as part of a shelf
offering registered under the name Southwest Royalties Institutional 1990-
91 Income Program. Minimum capital requirements for the Partnership were
met on January 28, 1992, with the offering of limited partnership interests
concluding April 30, 1992, with 340 limited partners purchasing 5,983 units
for $2,991,500.
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 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 no workovers
during 2003 or 2004 to enhance production. The Partnership will most
likely experience the historical production decline, which has approximated
10% per year.
Oil and Gas Properties
Oil and gas properties are accounted for at cost under the full-cost
method. Under this method, all productive and nonproductive costs incurred
in connection with the acquisition, exploration and development of oil and
gas reserves are capitalized. Gain or loss on the sale of oil and gas
properties is not recognized unless significant oil and gas reserves are
involved.
In the fourth quarter of 2002, the Partnership changed methods of
accounting for depletion of capitalized costs from the units-of-revenue
method to the units-of-production method. The newly adopted accounting
principle is preferable in the circumstances because the units-of-
production method results in a better matching of the costs of oil and gas
production against the related revenue received in periods of volatile
prices for production as have been experienced in recent periods.
Additionally, the units-of-production method is the predominant method used
by full cost companies in the oil and gas industry, accordingly, the change
improves the comparability of the Partnership's financial statements with
its peer group.
Should the net capitalized costs exceed the estimated present value of oil
and gas reserves, discounted at 10%, such excess costs would be charged to
current expense. As of September 30, 2003, the net capitalized costs did
not exceed the estimated present value of oil and gas reserves.
The Partnership's interest in oil and gas properties consists of net
profits interests in proved properties located within the continental
United States. A net profits interest is created when the owner of a
working interest in a property enters into an arrangement providing that
the net profits interest owner will receive a stated percentage of the net
profit from the property. The net profits interest owner will not
otherwise participate in additional costs and expenses of the property.
The Partnership recognizes income from its net profits interest in oil and
gas property on an accrual basis, while the quarterly cash distributions of
the net profits interest are based on a calculation of actual cash received
from oil and gas sales, net of expenses incurred during that quarterly
period. If the net profits interest calculation results in expenses
incurred exceeding the oil and gas income received during a quarter, no
cash distribution is due to the Partnership's net profits interest until
the deficit is recovered from future net profits. The Partnership accrues
a quarterly loss on its net profits interest provided there is a cumulative
net amount due for accrued revenue as of the balance sheet date.
Critical Accounting Policies
Full cost ceiling calculations The Partnership follows the full cost method
of accounting for its oil and gas properties. The full cost method
subjects companies to quarterly calculations of a "ceiling", or limitation
on the amount of properties that can be capitalized on the balance sheet.
If the Partnership's capitalized costs are in excess of the calculated
ceiling, the excess must be written off as an expense.
The Partnership's discounted present value of its proved oil and natural
gas reserves is a major component of the ceiling calculation, and
represents the component that requires the most subjective judgments.
Estimates of reserves are forecasts based on engineering data, projected
future rates of production and the timing of future expenditures. The
process of estimating oil and natural gas reserves requires substantial
judgment, resulting in imprecise determinations, particularly for new
discoveries. Different reserve engineers may make different estimates of
reserve quantities based on the same data. The Partnership's reserve
estimates are prepared by outside consultants.
The passage of time provides more qualitative information regarding
estimates of reserves, and revisions are made to prior estimates to reflect
updated information. However, there can be no assurance that more
significant revisions will not be necessary in the future. If future
significant revisions are necessary that reduce previously estimated
reserve quantities, it could result in a full cost property writedown. In
addition to the impact of these estimates of proved reserves on calculation
of the ceiling, estimates of proved reserves are also a significant
component of the calculation of DD&A.
While estimating the quantities of proved reserves require substantial
judgment, the associated prices of oil and natural gas reserves that are
included in the discounted present value of the reserves do not require
judgment. The ceiling calculation dictates that prices and costs in effect
as of the last day of the period are generally held constant indefinitely.
Because the ceiling calculation dictates that prices in effect as of the
last day of the applicable quarter are held constant indefinitely, the
resulting value may not be indicative of the true fair value of the
reserves. Oil and natural gas prices have historically been cyclical and,
on any particular day at the end of a quarter, can be either substantially
higher or lower than the Partnership's long-term price forecast that is a
barometer for true fair value.
In the fourth quarter of 2002, the Partnership changed methods of
accounting for depletion of capitalized costs from the units-of-revenue
method to the units-of-production method. The newly adopted accounting
principle is preferable in the circumstances because the units-of-
production method results in a better matching of the costs of oil and gas
production against the related revenue received in periods of volatile
prices for production as have been experienced in recent periods.
Additionally, the units-of-production method is the predominant method used
by full cost companies in the oil and gas industry, accordingly, the change
improves the comparability of the Partnership's financial statements with
its peer group.
Results of Operations
A. General Comparison of the Quarters Ended September 30, 2003 and 2002
The following table provides certain information regarding performance
factors for the quarters ended September 30, 2003 and 2002:
Three Months
Ended Percenta
ge
September 30, Increase
2003 2002 (Decreas
e)
---- ---- --------
--
Average price per barrel of $ 25.90 2%
oil 25.44
Average price per mcf of gas $ 3.33 26%
2.64
Oil production in barrels 6,300 6,800 (7%)
Gas production in mcf 5,200 9,000 (42%)
Income from net profits $ 5,840 41,993 (86%)
interests
Partnership distributions $ 28,243 - 100%
Limited partner $ 26,743 - 100%
distributions
Per unit distribution to
limited
partners $ 4.47 - 100%
Number of limited partner 5,983 5,983
units
Revenues
The Partnership's income from net profits interests decreased to $5,840
from $41,993 for the quarters ended September 30, 2003 and 2002,
respectively, a decrease of 86%. The principal factors affecting the
comparison of the quarters ended September 30, 2003 and 2002 are as
follows:
1. The average price for a barrel of oil received by the Partnership
increased during the quarter ended September 30, 2003 as compared to
the quarter ended September 30, 2002 by 2%, or $.46 per barrel,
resulting in an increase of approximately $2,900 in income from net
profits interests. Oil sales represented 90% of total oil and gas
sales during the quarter ended September 30, 2003 as compared to 88%
during the quarter ended September 30, 2002.
The average price for an mcf of gas received by the Partnership
increased during the same period by 26%, or $.69 per mcf, resulting in
an increase of approximately $3,600 in income from net profits
interests.
The total increase in income from net profits interests due to the
change in prices received from oil and gas production is approximately
$6,500. 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 decreased approximately 500 barrels or 7% during the
quarter ended September 30, 2003 as compared to the quarter ended
September 30, 2002, resulting in a decrease of approximately $12,700 in
income from net profits interests.
Gas production decreased approximately 3,800 mcf or 42% during the same
period, resulting in a decrease of approximately $10,000 in income from
net profits interests.
The total decrease in income from net profits interests due to the
change in production is approximately $22,700. The decrease in gas
production is due primarily to the sale of a gas lease in April 2003,
which represented approximately 430 mcfs per month during the quarter
ended September 30, 2002. In addition another lease experienced
downtime during 2002 and has not recovered production to previous
levels.
3. Lease operating costs and production taxes were 17% higher, or
approximately $25,300 more during the quarter ended September 30, 2003
as compared to the quarter ended September 30, 2002. The increase in
lease operating expense is due primarily to the plug and abandonment of
four oil wells, in addition one lease had a workover performed during
the quarter ended September 30, 2003.
Costs and Expenses
Total costs and expenses increased to $37,190 from $20,374 for the quarters
ended September 30, 2003 and 2002, respectively, an increase of 83%. The
increase is the result of higher general and administrative expense and
accretion 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 increased
11% or approximately $1,300 during the quarter ended September 30, 2003
as compared to the quarter ended September 30, 2002. The increase in
general and administrative expense is due to an increase in independent
accounting review and audit fees.
2. Depletion expense remained unchanged for the quarter ended September
30, 2003 and 2002. In the fourth quarter of 2002, the Partnership
changed methods of accounting for depletion of capitalized costs from
the units-of-revenue method to the units-of-production method. The
newly adopted accounting principle is preferable in the circumstances
because the units-of-production method results in a better matching of
the costs of oil and gas production against the related revenue
received in periods of volatile prices for production as have been
experienced in recent periods. Additionally, the units-of-production
method is the predominant method used by full cost companies in the oil
and gas industry, accordingly, the change improves the comparability of
the Partnership's financial statements with its peer group. The effect
of this change in method was to increase depletion expense for the
three months ended September 30, 2002 by $2,000 and decrease net income
for the three months ended September 30, 2002 by $2,000(See Note 4 of
the notes to the financial statements).
B. General Comparison of the Nine Month Periods Ended September 30, 2003
and 2002
The following table provides certain information regarding performance
factors for the nine month periods ended September 30, 2003 and 2002:
Nine Months
Ended Percenta
ge
September 30, Increase
2003 2002 (Decreas
e)
---- ---- --------
--
Average price per barrel of $ 27.54 28%
oil 21.50
Average price per mcf of gas $ 4.23 74%
2.43
Oil production in barrels 19,800 20,300 (2%)
Gas production in mcf 17,900 24,700 (28%)
Income from net profits $ 95,789 32,923 191%
interests
Partnership distributions $ 153,243 - 100%
Limited partner $ 139,243 - 100%
distributions
Per unit distribution to
limited
partners $ 23.27 - 100%
Number of limited partner 5,983 5,983
units
Revenues
The Partnership's income from net profits interests increased to $95,789
from $32,923 for the nine months ended September 30, 2003 and 2002,
respectively, an increase of 191%. The principal factors affecting the
comparison of the nine months ended September 30, 2003 and 2002 are as
follows:
1. The average price for a barrel of oil received by the Partnership
increased during the nine months ended September 30, 2003 as compared
to the nine months ended September 30, 2002 by 28%, or $6.04 per
barrel, resulting in an increase of approximately $119,600 in income
from net profits interests. Oil sales represented 88% of total oil and
gas sales during the nine months ended September 30, 2003 as compared
to 88% during the nine months ended September 30, 2002.
The average price for an mcf of gas received by the Partnership
increased during the same period by 74%, or $1.80 per mcf, resulting in
an increase of approximately $32,200 in income from net profits
interests.
The total increase in income from net profits interests due to the
change in prices received from oil and gas production is approximately
$151,800. 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 decreased approximately 500 barrels or 2% during the
nine months ended September 30, 2003 as compared to the nine months
ended September 30, 2002, resulting in a decrease of approximately
$10,800 in income from net profits interests.
Gas production decreased approximately 6,800 mcf or 28% during the same
period, resulting in a decrease of approximately $16,500 in income from
net profits interests.
The total decrease in income from net profits interests due to the
change in production is approximately $27,300. The decrease in gas
production is due primarily to the sale of a gas lease in April 2003,
which represented approximately 600 mcfs per month. In addition
another lease experienced downtime during 2002 and 2003 and has not
recovered production to previous levels.
3. Lease operating costs and production taxes were 14% higher, or
approximately $59,400 more during the nine months ended September 30,
2003 as compared to the nine months ended September 30, 2002.
Costs and Expenses
Total costs and expenses increased to $119,927 from $63,889 for the nine
months ended September 30, 2003 and 2002, respectively, an increase of 88%.
The increase is the result of higher general and administrative expense and
accretion 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 increased
25% or approximately $8,100 during the nine months ended September 30,
2003 as compared to the nine months ended September 30, 2002. The
increase in general and administrative expense is due to an increase in
independent accounting review and audit fees.
2. Depletion expense remained unchanged for the nine months ended
September 30, 2003 and 2002. In the fourth quarter of 2002, the
Partnership changed methods of accounting for depletion of capitalized
costs from the units-of-revenue method to the units-of-production
method. The newly adopted accounting principle is preferable in the
circumstances because the units-of-production method results in a
better matching of the costs of oil and gas production against the
related revenue received in periods of volatile prices for production
as have been experienced in recent periods. Additionally, the units-of-
production method is the predominant method used by full cost companies
in the oil and gas industry, accordingly, the change improves the
comparability of the Partnership's financial statements with its peer
group. The effect of this change in method was to increase depletion
expense for the nine months ended September 30, 2002 by $10,000 and
increase net income for the nine months ended September 30, 2002 by
$49,000(See Note 4 of the notes to the financial statements).
Cumulative effect of change in accounting principle
On January 1, 2003, the Partnership adopted Statement of Financial
Accounting Standards No. 143, Accounting for Asset Retirement Obligations
("SFAS No. 143"). Adoption of SFAS No. 143 is required for all companies
with fiscal years beginning after June 15, 2002. The new standard requires
the Partnership to recognize a liability for the present value of all legal
obligations associated with the retirement of tangible long-lived assets
and to capitalize an equal amount as a cost of the asset and depreciate the
additional cost over the estimated useful life of the asset. On January 1,
2003, the Partnership recorded additional costs, net of accumulated
depreciation, of approximately $214,465, a long term liability of
approximately $813,495 and a loss of approximately $599,030 for the
cumulative effect on depreciation of the additional costs and accretion
expense on the liability related to expected abandonment costs of its oil
and natural gas producing properties. At September 30, 2003, the asset
retirement obligation was $824,523. The increase in the balance from
January 1, 2003 is due to accretion expense of $47,977, partially offset by
the sale and plug and abandonment of oil and gas properties, which
decreased the asset retirement obligation by $36,949. The pro forma
amounts for the three and nine months ended September 30, 2002, which are
presented on the face of the statements of operations, reflect the effect
of retroactive application of SFAS No. 143.
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 (used in) operating activities were approximately
$118,300 in the nine months ended September 30, 2003 as compared to
approximately $(3,000) in the nine months ended September 30, 2002. The
primary source of the 2003 cash flow from operating activities was oil and
gas operations.
Cash flows provided by investing activities were approximately $51,200 in
the nine months ended September 30, 2003. There were no cash flows from
investing activities during the nine months ended September 30, 2002. The
principle source of the 2003 cash flow from investing activities was the
sale of oil and gas properties.
Cash flows used in financing activities were approximately $153,200 in the
nine months ended September 30, 2003. There were no cash flows used in
investing activities in the nine months ended September 30, 2002. The only
use in financing activities was the distributions to partners.
Total distributions during the nine months ended September 30, 2003 were
$153,243 of which $139,243 was distributed to the limited partners and
$14,000 to the general partners. The per unit distribution to limited
partners during the nine months ended September 30, 2003 was $23.27.
There were no distributions during the nine months ended September 30,
2002.
The sources for the 2003 distributions of $153,243 was oil and gas
operations of approximately $118,300, the change in oil and gas property of
approximately $51,200, resulting in excess cash for contingencies or
subsequent distributions.
Since inception of the Partnership, cumulative cash distributions of
$3,417,302 have been made to the partners. As of September 30, 2003,
$3,090,380 or $516.53 per limited partner unit has been distributed to the
limited partners, representing a 100% return of the capital and a 3% return
on capital contributed.
As of September 30, 2003, the Partnership had approximately $76,400 in
working capital. Although the partnership held many long-lived properties
at inception, because of the restrictions on property development imposed
by the partnership agreement, the Partnership cannot develop its non-
producing properties, if any. Without continued development, the producing
reserves continue to deplete. Accordingly, as the Partnership's properties
have matured and depleted, the net cash flows from operations for the
partnership has steadily declined, except in periods of substantially
increased commodity pricing. Maintenance of properties and administrative
expenses for the Partnership are increasing relative to production. As the
properties continue to deplete, maintenance of properties and
administrative costs as a percentage of production are expected to continue
to increase.
The Managing General Partner has examined various alternatives to address
the issue of depleting producing reserves. Continuing operations exposes
the partnership to an inevitable decline in operating results and
distributions of cash. Liquidating the partnership would result in
immediate realization of cash for limited partners, but prices paid by
purchasers of Partnership property in liquidation would likely include a
substantial discount for risks and uncertainties of future cash flows.
After reviewing various alternatives, the Managing General Partner
initiated a plan to merge the Partnership and 20 other limited partnerships
with and into the Managing General Partner. On October 17, 2002, the
Managing General Partner filed a Registration Statement on Form S-4 with
the Securities and Exchange Commission relating to this proposed merger.
There is no assurance, however, that this merger will be consummated.
Currently the Managing General Partner is evaluating whether or not to
continue to pursue the proposed merger.
Liquidity - Managing General Partner
In previous reports the Partnership provided that the Managing General
Partner had $124.0 million of principal scheduled to mature between
December 31, 2002 and December 31, 2004. Subsequent to September 30, 2003
the Managing General Partner refinanced the majority of its debt
obligations and currently has $71.7 million in debt scheduled to mature on
June 1, 2006 and $40.0 million in debt scheduled to mature on October 15,
2008. The Managing General Partner believes that it has adequate cash
flows to meet its debt principal maturities scheduled for 2004.
Recent Accounting Pronouncements
The FASB has issued Statement No. 143 "Accounting for Asset Retirement
Obligations" which establishes requirements for the accounting of removal-
type costs associated with asset retirements. The standard is effective
for fiscal years beginning after June 15, 2002, with earlier application
encouraged. This statement has been adopted by the Partnership effective
January 1, 2003. The transition adjustment resulting from the adoption of
SFAS No. 143 has been reported as a cumulative effect of a change in
accounting principle.
In April 2003, the FASB issued Statement of Financial Accounting Standards
No. 149, Amendment of Statement No. 133 on Derivative Instruments and
Hedging Activities ("SFAS No. 149"). SFAS No. 149 amendments require that
contracts with comparable characteristics be accounted for similarly,
clarifies when a contract with an initial investment meets the
characteristic of a derivative and clarifies when a derivative requires
special reporting in the statement of cash flows. SFAS No. 149 is
effective for hedging relationships designated and for contracts entered
into or modified after June 30, 2003, except for provisions that relate to
SFAS No. 133 Statement Implementation Issues that have been effective for
fiscal quarters prior to June 15, 2003, should be applied in accordance
with their respective effective dates and certain provisions relating to
forward purchases or sales of when-issued securities or other securities
that do not yet exist, should be applied to existing contracts as well as
new contracts entered into after June 30, 2003. Assessment by the Managing
General Partner revealed this pronouncement to have no impact on the
Partnership.
In May 2003, the FASB issued Statement of Financial Accounting Standards
No.150, Accounting for Certain Financial Instruments with Characteristics
of both Liabilities and Equity ("SFAS 150"). SFAS 150 establishes
standards for how an issuer classifies and measures certain financial
instruments with characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within the
scope of SFAS 150 as a liability (or an asset in some circumstances). Many
of those instruments were previously classified as equity. The application
of SFAS 150 is not expected to have a material effect on the Partnership's
consolidated financial statements. This Statement is effective for
financial instruments entered into or modified after May 31, 2003, and
otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Partnership is not a party to any derivative or embedded
derivative instruments.
Item 4. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures. The senior
management of the Partnership's Managing General Partner is responsible for
establishing and maintaining a system of disclosure controls and procedures
(as defined in Rule 13a-14 and 15d-14 under the Securities Exchange Act of
1934 (the "Exchange Act")) designed to ensure that information required to
be disclosed by the Partnership in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the Securities and Exchange
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that
information required to be disclosed by the issuer in the reports that it
files or submits under the Exchange Act is accumulated and communicated to
the issuer's management, including its principal executive officer of
officers and principal financial officer or officers, or person performing
similar functions, as appropriate to allow timely decisions regarding
required disclosure.
In accordance with Exchange Act Rules 13a-15 and 15d-15, the Partnership
carried out an evaluation, with the participation of the Chief Executive
Officer and Chief Financial Officer of the Managing General Partner, as
well as other key members of the Managing General Partner's management, of
the effectiveness of the Partnership's disclosure controls and procedures
as of the end of the period covered by this report. Based on that
evaluation, the Managing General Partner's Chief Executive Officer and
Chief Financial Officer concluded that the Partnership's disclosure
controls and procedures were effective, as of the end of the period covered
by this report, to provide reasonable assurance that information required
to be disclosed in the Partnership's reports filed or submitted under the
Exchange Act is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission's rules
and forms.
(b) Changes in Internal Controls. There have not been any changes in
the Partnership's
internal controls over financial reporting identified in connection with
the evaluation
described above that occurred during the Partnership's last fiscal
quarter that has
materially affected, or is reasonably likely to materially affect,
these internal
controls over financial reporting.
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:
31.1 Rule 13a-14(a)/15d-14(a) Certification
31.2 Rule 13a-14(a)/15d-14(a) Certification
32.1 Certification of Chief Executive Officer Pursuant to
18 U.S.C. Section
1350, as
adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
32.2 Certification of Chief Financial Officer Pursuant to
18 U.S.C. Section
1350, as
adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
(b) No reports on Form 8-K were filed during the quarter for which
this report is filed.
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 X-C, L.P.
a Delaware limited partnership
By: Southwest Royalties, Inc.
Managing General Partner
By: /s/ Bill E. Coggin
------------------------------
Bill E. Coggin, Executive Vice
President
and Chief Financial Officer
Date: November 14, 2003
SECTION 302 CERTIFICATION Exhibit 31.1
I, H.H. Wommack, III, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Southwest
Royalties Institutional Income Fund X-C, L.P.
2.Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered
by this report;
3.Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules 13a-
15(f) and 15d-15(f) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared;
b)Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles;
c)Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a)All significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting which
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls over financial reporting.
Date: November 14, 2003 /s/ H.H. Wommack, III
H. H. Wommack, III
Chairman, President and Chief Executive
Officer
of Southwest Royalties, Inc., the
Managing General Partner of
Southwest Royalties Institutional Income
Fund X-C, L.P.
SECTION 302 CERTIFICATION Exhibit 31.2
I, Bill E. Coggin, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Southwest
Royalties Institutional Income Fund X-C, L.P.
2.Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered
by this report;
3.Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules 13a-
15(f) and 15d-15(f) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared;
b)Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles;
c)Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a)All significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting which
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls over financial reporting.
Date: November 14, 2003 /s/ Bill E. Coggin
Bill E. Coggin
Executive Vice President
and Chief Financial Officer of
Southwest Royalties, Inc., the
Managing General Partner of
Southwest Royalties Institutional Income
Fund X-C, L.P.
CERTIFICATION PURSUANT TO Exhibit 32.1
19 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Southwest Royalties
Institutional Income Fund X-C, Limited Partnership (the "Company") on Form
10-Q for the period ending September 30, 2003 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, H.H. Wommack,
III, Chief Executive Officer of the Managing General Partner of the
Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to
906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operation of the
Company.
Date: November 14, 2003
/s/ H.H. Wommack, III
H. H. Wommack, III
Chairman, President, Director and Chief Executive Officer
of Southwest Royalties, Inc., the
Managing General Partner of
Southwest Royalties Institutional Income Fund X-C, L.P.
CERTIFICATION PURSUANT TO Exhibit 32.2
19 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Southwest Royalties
Institutional Income Fund X-C, Limited Partnership (the "Company") on Form
10-Q for the period ending September 30, 2003 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, Bill E.
Coggin, Chief Financial Officer of the Managing General Partner of the
Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to
906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operation of the
Company.
Date: November 14, 2003
/s/ Bill E. Coggin
Bill E. Coggin
Executive Vice President
and Chief Financial Officer of
Southwest Royalties, Inc., the
Managing General Partner of
Southwest Royalties Institutional Income Fund X-C, L.P.