Back to GetFilings.com
1 of 1
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, 2005
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 0-15411
Southwest Royalties, Inc. Income Fund VI
(Exact name of registrant as specified
in its limited partnership agreement)
Tennessee 75-2127812
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6 Desta Drive, Suite 6500
Midland, Texas 79705
(Address of principal executive offices)
(432) 682-6324
(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 the registrant is an accelerated filer
(as defined in Exchange Act Rule 12b-2). Yes No X
The registrant's outstanding securities consist of Units of limited
partnership interests for which there exists no established public
market from which to base a calculation of aggregate market value.
The total number of pages contained in this report is 20.
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.
BOE. Equivalent barrels of oil, with natural gas converted to oil
equivalents based on a ratio of six Mcf of natural gas to one Bbl of
oil.
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 a leasehold
or working interest agrees to assign his interest in certain specific
acreage to an assignee, retaining some interest, such as an overriding
royalty interest, subject to the drilling of one (1) or more wells or
other specified 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 oil and gas reserves
that can be expected to be recovered from existing wells with existing
equipment and operating methods.
Proved properties. Properties with proved reserves.
Proved oil and gas reserves. The estimated quantities of crude oil,
natural gas, and natural gas liquids with geological and engineering
data that demonstrate with reasonable certainty to be recoverable in
future years from known reservoirs under existing economic and operating
conditions, i.e., prices and costs as of the date the estimate is made.
Proved undeveloped reserves. Proved oil and gas 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, 2004, which are found in the Registrant's Form 10-K Report for 2004
filed with the Securities and Exchange Commission. The December 31,
2004 balance sheet included herein has been taken from the Registrant's
2004 Form 10-K Report. Operating results for the three-month period
ended March 31, 2005 are not necessarily indicative of the results that
may be expected for the full year.
Southwest Royalties, Inc. Income Fund VI
Balance Sheets
March December
31, 31,
2005 2004
------ ------
(unaudit
ed)
Assets
- ---------
Current assets:
Cash and cash equivalents $ 158,522 128,990
Receivable from Managing General 347,655 342,286
Partner
Oklahoma withholding prepayment 368 313
-------- --------
------ ------
Total current assets 506,545 471,589
-------- --------
------ ------
Oil and gas properties - using the
full-
cost method of accounting 8,549,33 8,547,31
2 7
Less accumulated depreciation,
depletion and amortization 6,270,22 6,245,11
7 4
-------- --------
------ ------
Net oil and gas properties 2,279,10 2,302,20
5 3
-------- --------
------ ------
$ 2,785,65 2,773,79
0 2
======== ========
Liabilities and Partners' Equity
- -------------------------------------
- ---
Current liability:
Distribution payable $ 8,598 -
-------- --------
------ ------
Asset retirement obligation 509,557 501,653
-------- --------
------ ------
Partners' equity (deficit):
General partner (627,585 (627,121
) )
Limited partners 2,895,08 2,899,26
0 0
-------- --------
------ ------
Total partners' equity 2,267,49 2,272,13
5 9
-------- --------
------ ------
$ 2,785,65 2,773,79
0 2
======== ========
The accompanying notes are an integral
part of these financial statements.
Southwest Royalties, Inc. Income Fund VI
Statements of Operations
(unaudited)
Three Months Ended
March 31,
2005 2004
------ ------
Revenues
- -------------
Income from net profits $ 565,429 381,225
interests
Interest 844 462
Other 856 250
-------- --------
--- ---
567,129 381,937
-------- --------
--- ---
Expenses
- -------------
Depreciation, depletion and 25,113 27,000
amortization
Accretion expense 5,889 10,268
General and administrative 40,771 40,284
-------- --------
--- ---
71,773 77,552
-------- --------
--- ---
Net income $ 495,356 304,385
====== ======
Net income allocated to:
Managing General Partner $ 49,536 30,438
====== ======
Limited partners $ 445,820 273,947
====== ======
Per limited partner unit $ 22.29
13.70
====== ======
The accompanying notes are an integral
part of these financial statements.
Southwest Royalties, Inc. Income Fund VI
Statements of Cash Flows
(unaudited)
Three Months Ended
March 31,
2005 2004
------ ------
Cash flows from operating
activities:
Cash received from income from
net profits
interests $ 560,005 324,799
Cash paid to suppliers (40,771) (40,284)
Interest received 844 462
Other 856 250
-------- --------
-- --
Net cash provided by operating 520,934 285,227
activities
-------- --------
-- --
Cash flows from financing
activities:
Distributions to partners (500,000 (325,000
) )
Increase in distribution payable 8,598 -
-------- --------
-- --
Net cash used in financing (491,402 (325,000
activities ) )
-------- --------
-- --
Net (decrease) increase in cash 29,532 (39,773)
and cash equivalents
Beginning of period 128,990 234,954
-------- --------
-- --
End of period $ 158,522 195,181
====== ======
Reconciliation of net income to
net
cash provided by operating
activities:
Net income $ 495,356 304,385
Adjustments to reconcile net
income to
net cash provided by operating
activities:
Depreciation, depletion and 25,113 27,000
amortization
Accretion of asset retirement 5,889 10,268
obligation
Increase in receivables (5,424) (56,426)
Increase in payables - -
-------- --------
-- --
Net cash provided by operating $ 520,934 285,227
activities
====== ======
Noncash investing and financing
activities:
Increase in oil and gas
properties - SFAS No. 143
additional wells $ 2,015 -
====== ======
The accompanying notes are an integral
part of these financial statements.
Southwest Royalties, Inc. Income Fund VI
(a Tennessee limited partnership)
Notes to Financial Statements
1. Organization
Southwest Royalties, Inc. Income Fund VI was organized under
the laws of the state of Tennessee on December 4, 1986, 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 a variety of purchasers with the
prices it receives being dependent upon the oil and gas economy.
Southwest Royalties, Inc., a wholly owned subsidiary of Clayton
Williams Energy, Inc., serves as the Managing 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 costs (1) 100% -
Amortization of organization costs 100% -
Property acquisition costs 100% -
Gain/loss on property disposition 90% 10%
Operating and administrative costs (2) 90% 10%
Depreciation, depletion and
amortization
of oil and gas properties 90% 10%
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 March 31, 2005, and for the
three months ended March 31, 2005, 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 Annual Report on Form 10-K for the year
ended December 31, 2004.
In September 2004, the Securities and Exchange Commission issued
Staff Accounting Bulletin No. 106 ("SAB 106"). SAB 106 expresses
the SEC staff's views regarding SFAS No. 143 and its impact on both
the full-cost ceiling test and the calculation of depletion
expense. In accordance with SAB 106, beginning in the first
quarter of 2005, undiscounted abandonment costs for wells to be
drilled in the future to develop proved reserves are included in
the unamortized cost of oil and gas properties, net of related
salvage value, for purposes of computing depreciation, depletion
and amortization ("DD&A"). The implementation of SAB 106 did not
have a material impact on our financial statements.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
General
Southwest Royalties, Inc. Income Fund VI was organized as a Tennessee
limited partnership on December 4, 1986. The offering of such limited
partnership interests began August 25, 1986 minimum capital requirements
were met October 3, 1986 and concluded January 29, 1987, with total
limited partner contributions of $10,000,000.
The Partnership was formed to acquire royalty and net profits interests
in producing oil and gas properties, to produce and market crude oil and
natural gas produced from such properties, and to distribute the net
proceeds from operations to the limited and general partners. Net
revenues from producing oil and gas properties will not be reinvested in
other revenue producing assets except to the extent that production
facilities and wells are improved or reworked or where methods are
employed to improve or enable more efficient recovery of oil and gas
reserves. The economic life of the partnership thus depends on the
period over which the Partnership's oil and gas reserves are
economically recoverable.
Increases or decreases in Partnership revenues and, therefore,
distributions to partners will depend primarily on changes in the prices
received for production, changes in volumes of production sold, lease
operating expenses, enhanced recovery projects, offset drilling
activities pursuant to farm-out arrangements, sales of properties, and
the depletion of wells. Since wells deplete over time, production can
generally be expected to decline from year to year.
Well operating costs and general and administrative costs usually
decrease with production declines; however, these costs may not decrease
proportionately. Net income available for distribution to the partners
is therefore expected to decline in later years based on these factors.
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 sold.
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 March 31, 2005, 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. As of March 31, 2005, there were no timing
differences, which resulted in a deficit net profit interest.
Critical Accounting Policies
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 depletion,
depreciation, and amortization ("DD&A").
While 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 is not 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.
Results of Operations
General Comparison of the Quarters Ended March 31, 2005 and 2004
The following table provides certain information regarding performance
factors for the quarters ended March 31, 2005 and 2004:
Three Months
Ended Percenta
ge
March 31, Increase
2005 2004 (Decreas
e)
----- ----- --------
--
Oil production in 5,453 5,880 (7%)
barrels
Gas production in 70,712 58,800 20%
mcf
Total BOE 17,238 10%
15,680
Average price per $ 51.92 57%
barrel of oil 33.10
Average price per $ 5.79 2%
mcf of gas 5.67
Income from net $ 565,429 381,225 48%
profits interests
Partnership $ 500,000 325,000 54%
distributions
Limited partner $ 450,000 292,500 54%
distributions
Per unit
distribution to
limited
partners $ 22.50 54%
14.63
Number of limited 20,000 20,000
partner units
Income from net profits
The Partnership's income from net profits interests increased to
$565,429 from $381,225 for the quarters ended March 31, 2005 and 2004,
respectively, an increase of 48%. The principal factors affecting the
comparison of the quarters ended March 31, 2005 and 2004 are as follows:
The average price for a barrel of oil received by the Partnership
increased during the quarter ended March 31, 2005 as compared to the
quarter ended March 31, 2004 by 57%, or $18.82 per barrel, resulting in
an increase of approximately $102,600 in income from net profits
interests. Oil sales represented 41% of total oil and gas sales during
the quarter ended March 31, 2005 as compared to 37% during the quarter
ended March 31, 2004.
The average price for an mcf of gas received by the Partnership
increased during the same period by 2%, or $.12 per mcf, resulting in an
increase of approximately $8,500 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
$111,100. 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.
Oil production decreased approximately 427 barrels or 7% during the
quarter ended March 31, 2005 as compared to the quarter ended March 31,
2004, resulting in a decrease of approximately $14,100 in income from
net profits interests.
Gas production increased approximately 11,912 mcf or 20% during the same
period, resulting in an increase of approximately $67,500 in income from
net profits interests.
The net total increase in income from net profits interests due to the
change in production is approximately $53,400. The increase in gas
volumes is from improved production on a gas well after a formation
stimulation. Also adding to the increase is production from three new
gas wells drilled under farm out arrangements that were competed in the
first quarter 2005.
Lease operating costs and production taxes were 13% lower, or
approximately $19,600 less during the quarter ended March 31, 2005 as
compared to the quarter ended March 31, 2004. Lease operating costs are
lower due to well pulling expenses on several wells in 2004.
Costs and Expenses
Total costs and expenses decreased to $71,773 for the quarter ended
March 31, 2005 from $77,552 for the same period in 2004. This
represents a decrease of 7%. The decrease is theresult of lower
accretion expense and depletion expense, partially offset by an increase
in general and administrative expense.
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 1%
or approximately $500 during the quarter ended March 31, 2005 as
compared to the quarter ended March 31, 2004.
Depletion expense decreased to $25,113 for the quarter ended March 31,
2005 from $27,000 for the same period in 2004. This represents a
decrease of 7%. The contributing factor to the decrease in depletion
expense is in relation to the BOE depletion rate for the quarter ended
March 31, 2005, which was $1.46 applied to 17,238 BOE as compared to
$1.72 applied to 15,680 BOE for the same period in 2004. The lower
depletion rate in 2005 is due to the upward revision in reserve
estimates resulting from higher oil and gas prices.
Accretion expense decreased to $5,889 for the quarter ended March 31,
2005 from $10,268 for the same period in 2004. This represents a
decrease of 43%. The decrease in accretion is from discontinuing
accretion on several wells that reached their projected end of life in
2004.
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 $520,900
in the quarter ended March 31, 2005 as compared to approximately
$285,200 in the quarter ended March 31, 2004.
Cash flows used in financing activities were approximately $491,400 in
the quarter ended March 31, 2005 as compared to approximately $325,000
in the quarter ended March 31, 2004. The only use in financing
activities was the distributions to partners.
Total distributions during the quarter ended March 31, 2005 were
$500,000 of which $450,000 ($22.50 per unit) was distributed to the
limited partners and $50,000 to the general partner. Total
distributions during the quarter ended March 31, 2004 were $325,000 of
which $292,500 ($14.63 per unit) was distributed to the limited partners
and $32,500 to the general partner.
The source for the 2005 distributions of $500,000 was oil and gas
operations of approximately $520,900, resulting in excess cash for
contingencies or subsequent distributions. The source for the 2004
distributions of $325,000 was oil and gas operations of approximately
$285,200, with the balance from available cash on hand at the beginning
of the period.
Cumulative cash distributions of $19,828,986 have been made to the
general and limited partners. As of March 31, 2005, $17,861,791 or
$893.09 per limited partner unit has been distributed to the limited
partners, representing a 179% return of the capital contributed.
As of March 31, 2005, the Partnership had approximately $497,900 in
working capital. The Managing General Partner knows of no unusual
contractual commitments. 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.
Recent Accounting Pronouncements
In December 2004, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards No. 153 "Exchanges of
Nonmonetary Assets, an amendment of APB Opinion No. 29" ("SFAS 153").
SFAS 153 specifies the criteria required to record a nonmonetary asset
exchange using carryover basis. SFAS 153 is effective for nonmonetary
asset exchanges occurring after July 1, 2005. The Partnership will
adopt this statement in the third quarter of 2005, and it is not
expected to have a material effect on the financial statements when
adopted.
In September 2004, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 106 ("SAB 106"). SAB 106 expresses the SEC
staff's views regarding SFAS No. 143 and its impact on both the full-
cost ceiling test and the calculation of depletion expense. In
accordance with SAB 106, beginning in the first quarter of 2005,
undiscounted abandonment costs for wells to be drilled in the future to
develop proved reserves are included in the unamortized cost of oil and
gas properties, net of related salvage value, for purposes of computing
depreciation, depletion and amortization ("DD&A"). The implementation of
SAB 106 did not have a material impact on our financial statements.
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
The Managing General Partner has established disclosure controls and
procedures that are adequate to provide reasonable assurance that
management will be able to collect, process and disclose both financial
and non-financial information, on a timely basis, in the Partnership's
reports to the SEC. Disclosure controls and procedures include all
processes necessary to ensure that material information is recorded,
processed, summarized and reported within the time periods specified in
the SEC's rules and forms, and is accumulated and communicated to
management, including our chief executive and chief financial officers,
to allow timely decisions regarding required disclosures.
With respect to these disclosure controls and procedures:
management has evaluated the effectiveness of the disclosure
controls and procedures as of the end of the period covered by
this report;
this evaluation was conducted under the supervision and with
the participation of management, including the chief executive
and chief financial officers of the Managing General Partner;
and
it is the conclusion of chief executive and chief financial
officers of the Managing General Partner that these disclosure
controls and procedures are effective in ensuring that
information that is required to be disclosed by the
Partnership in reports filed or submitted with the SEC is
recorded, processed, summarized and reported within the time
periods specified in the rules and forms established by the
SEC.
Internal Control Over Financial Reporting
There has not been any change in the Partnership's internal control over
financial reporting that occurred during the quarter ended March 31,
2005 that has materially affected, or is reasonably likely to materially
affect, its internal control 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 and Chief Financial
Officer
Pursuant to 18 U.S.C. Section 1350, as adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
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, Inc. Income Fund VI, a
Tennessee limited partnership
By: Southwest Royalties, Inc., Managing
General Partner
By: /s/ L. Paul Latham
L. Paul Latham
President and Chief Executive Officer
Date: May 16, 2005
SECTION 302 CERTIFICATION Exhibit 31.1
I, L. Paul Latham, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Southwest
Royalties, Inc. Income Fund VI
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 15d-15(e)) 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)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
c)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 control 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 control over financial reporting.
Date: May 16, 2005 /s/ L. Paul Latham
L. Paul Latham
President and Chief Executive Officer
of Southwest Royalties, Inc., the
Managing General Partner of
Southwest Royalties, Inc. Income Fund
VI
SECTION 302 CERTIFICATION Exhibit 31.2
I, Mel G. Riggs, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Southwest
Royalties, Inc. Income Fund VI
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 15d-15(e)) 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)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
c)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 control 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 control over financial reporting.
Date: May 16, 2005 /s/ Mel G. Riggs
Mel G. Riggs
Vice President and Chief Financial
Officer of
Southwest Royalties, Inc., the
Managing General Partner of
Southwest Royalties, Inc. Income Fund
VI
Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND
CHIEF FINANCIAL OFFICER
Pursuant to 18 U.S.C. 1350 and in connection with the accompanying
report on Form 10-Q for the period ended March 31, 2005 that is being
filed concurrently with the Securities and Exchange Commission on the
date hereof (the "Report"), each of the undersigned officers of
Southwest Royalties, Inc. Income Fund VI (the "Company"), hereby
certifies 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.
/s/ L. Paul Latham
L. Paul Latham
President and Chief Executive Officer
of Southwest Royalties, Inc.,
the
Managing General Partner of
Southwest Royalties, Inc. Income
Fund VI
May 16, 2005
/s/ Mel G. Riggs
Mel G. Riggs
Vice President and Chief Financial
Officer of
Southwest Royalties, Inc., the
Managing General Partner of
Southwest Royalties, Inc. Income
Fund VI
May 16, 2005