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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 000-24181
Southwest Partners III, L.P.
(Exact name of registrant as specified
in its limited partnership agreement)
Delaware 75-2699554________
(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 17.
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
The Registrant (herein also referred to as the "Partnership" has prepared
the unaudited condensed financial statements included herein 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 Form
10-K Report for 2002 filed with the Securities and Exchange Commission.
The December 31, 2002 balance sheet included herein has been taken from the
Registrant's 2002 Form 10-K Report. Operating results for the three and
nine month periods ended September 30, 2003 are not necessarily indicative
of the results that may be expected for the full year.
Southwest Partners III, L.P.
(a Delaware limited partnership)
Balance Sheets
Septembe December
r 30, 31,
2003 2002
----- -----
(unaudit
ed)
Assets
- ----------
Current asset:
Cash and cash equivalents $ 24,400 24,828
-------- --------
-- --
Total current assets 24,400 24,828
-------- --------
-- --
Investment 380,506 380,000
-------- --------
-- --
Total assets $ 404,906 404,828
====== ======
Liabilities and Partners'
Equity
- ----------------------------
- ------------
Current liability:
Payable to General Partner $ 360,174 348,077
-------- --------
-- --
Total current liabilities 360,174 348,077
-------- --------
-- --
Partners' equity:
General Partner (910,116 (908,313
) )
Limited partners 954,848 965,064
-------- --------
-- --
Total partners' equity 44,732 56,751
-------- --------
-- --
$ 404,906 404,828
====== ======
Southwest Partners III, L.P.
(a Delaware limited partnership)
Statement of Operations
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
---- ---- ---- ----
Revenues
- --------
Interest income $ 25 60 78 183
-------- -------- -------- -------
- - - --
25 60 78 183
-------- -------- -------- -------
- - - --
Expenses
- --------
General and 2,823 1,929 12,097 4,571
administrative
-------- -------- -------- -------
- - - --
2,823 1,929 12,097 4,571
-------- -------- -------- -------
- - - --
Net loss $ (2,798) (1,869) (12,019) (4,388)
===== ===== ===== =====
Net loss allocated to:
General Partner $ (420) (280) (1,803) (658)
===== ===== ===== =====
Limited Partners $ (2,378) (1,589) (10,216) (3,730)
===== ===== ===== =====
Per limited partner unit $ (9)
(14) (60) (22)
===== ===== ===== =====
Southwest Partners III, L.P.
(a Delaware limited partnership)
Statement of Cash Flows
(Unaudited)
Nine Months Ended
September 30,
2003 2002
---- ----
Cash flows from operating activities
Interest received $ 78 183
------- --------
-- -
Net cash provided by operating activities 78 183
------- --------
-- -
Cash flows used in investing activities
Purchase of Basic investment (506) -
------- --------
-- -
Net increase (decrease) in cash and cash (428) 183
equivalents
Beginning of period 24,828 28,120
------- --------
-- -
End of period $ 24,400 28,303
===== =====
Reconciliation of net loss to net cash
provided by operating activities
Net loss $ (12,019 (4,388)
)
Adjustments to reconcile net loss to net
cash provided by operating activities
Increase in accounts payable 12,097 4,571
------- -------
--
Net cash provided by operating activities $ 78 183
===== =====
Southwest Partners III, L.P.
(a Delaware limited partnership)
Notes to Financial Statements
1. Organization
Southwest Partners III, L.P. (the "Partnership") was organized under
the laws of the State of Delaware on March 11, 1997 for the purpose of
investing in or acquiring oil field service companies assets. The
Partnership intends to wind up its operations and distribute its
assets or the proceeds therefrom on or before December 31, 2008, at
which time the Partnership's existence will terminate, unless sooner
terminated or extended in accordance with the terms of the Partnership
Agreement. Southwest Royalties, Inc., a Delaware corporation formed
in 1983, is the General Partner of the Partnership. Revenues, costs
and expenses are allocated as follows:
Limited General
Partners Partner
-------- -------
Interest income on capital (1) (1)
contributions
All other revenues 85% 15%
Organization and offering 100% -
costs
Syndication costs 100% -
Amortization of organization 100% -
costs
Gain or loss on property 85% 15%
disposition
Operating and administrative 85% 15%
costs
All other costs 85% 15%
After payout, allocations will be seventy-five (75%) to the limited
partners and twenty-five (25%) to the General Partner. Payout is when
the limited partners have received an amount equal to one hundred ten
percent (110%) of their limited partner capital contributions.
(1) Interest earned on promissory notes related to Capital
Contributions is allocated to the specific holders of those notes.
Method of Allocation of Administrative Costs
For the purpose of allocating Administrative Costs, the Managing
General Partner will allocate each employee's time among three
divisions: (1) operating partnerships; (2) corporate activities; and
(3) currently offered or proposed partnerships. The Managing General
Partner determines a percentage of total Administrative Costs per
division based on the total allocated time per division and personnel
costs (salaries) attributable to such time. Within the operating
partnership division, Administrative Costs are further allocated on
the basis of the total capital of each partnership invested in its
operations.
Southwest Partners III, L.P.
(a Delaware limited partnership)
Notes to Financial Statements
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 financial statements
should be read in conjunction with the audited financial statements
for the year ended December 31, 2002.
3. Liquidity - Partnership
The Partnership as of September 30, 2003 has negative working capital
of $335,800 and a payable to the General Partner of $350,000. The
Partnership does not generate operating income and has no current
means of settling the liability to the General Partner, but believes
the fair value of its assets are sufficient to meet their current
obligations if necessary. The General Partner, should it become
necessary, has agreed to either extend the payment terms until the
Partnership can comfortably pay the balance or make other mutually
acceptable arrangements to settle the payable by transfer, sale or
assignment of Partnership assets.
4. Liquidity - General Partner
The General Partner has a highly leveraged capital structure with
approximately $124.0 million of principal due between December 31,
2002 and December 31, 2004. The General Partner is constantly
monitoring its cash position and its ability to meet its financial
obligations as they become due, and in this effort, is continually
exploring various strategies for addressing its current and future
liquidity needs. The General Partner regularly pursues and evaluates
recapitalization strategies and acquisition opportunities (including
opportunities to engage in mergers, consolidations or other business
combinations) and at any given time may be in various stages of
evaluating such opportunities.
Based on current production, commodity prices and cash flow from
operations, the General Partner has adequate cash flow to fund debt
service, developmental projects and day to day operations, but it is
not sufficient to build a cash balance which would allow the General
Partner to meet its debt principal maturities scheduled for 2004.
Therefore the General Partner is currently seeking to renegotiate the
terms of its obligations, including extending maturity dates, or to
engage new lenders or equity investors in order to satisfy its
financial obligations maturing in 2004.
There can be no assurance that the General Partner's debt
restructuring efforts will be successful. In the event these efforts
are unsuccessful, the General Partner would need to look to other
alternatives to meet its debt obligations, including potentially
selling its assets. There can be no assurance, however, that the
sales of assets can be successfully accomplished on terms acceptable
to the General Partner.
The liquidity of the General Partner, however, does not have a
material impact on the operations of the Partnership. The partnership
agreement of the Partnership allows the limited partners to elect a
successor managing general partner to continue Partnership operations.
Southwest Partners III, L.P.
(a Delaware limited partnership)
Notes to Financial Statements
5. Investments
Common stock ownership in Basic Energy Services, Inc. was as follows:
December 31, 1997 to March 31, 45.89%
1999
March 31, 1999 to December 21, 44.94%
2000
December 21, 2000 to December 31, 10.57%
2000
January 1, 2001 to May 20, 2001 8.11%
May 21, 2001 to February 13, 2002 6.32%
February 14, 2002 to May 4, 2003 5.39%
May 5, 2003 to September 30, 2003 6.63%
Southwest Partners III consist entirely of an investment in Basic's
common stock. The investment had been accounted for using the equity
method. Based on the December 21, 2000 transaction discussed below,
the Partnership accounted for the investment using the cost method.
Southwest Partners III no longer holds a 20% or more interest in Basic
and exerts no significant influence over Basic's operations.
On December 21, 2000, Basic entered into a refinancing and
restructuring of its debt and equity. Upon the signing of the
documents, the Partnership's percentage of ownership was diluted from
44.94% to 10.57%. A new equity investor, in exchange for 1,441,730
shares of Basic's common stock, purchased and retired $24.5 million of
Basic's debt from its previous lender. The equity investor received a
76% ownership. Additionally, $10.5 million of the debt held by the
previous lender was refinanced with a new lender. The remaining debt
held by the previous lender of approximately $21.7 million was
cancelled.
Basic's new equity investor mentioned in the above paragraphs
purchased an additional 576,709 shares, during the first part of 2001,
thereby increasing their ownership from 76% to 81.6%. As a result of
the purchase, the Partnership's ownership decreased at that time from
10.57% to 8.11%.
On May 21, 2001, Basic issued a Notice to Stockholders of Preemptive
Rights. The Partnership purchased an additional 19,000 shares of
common stock at $380,000.
On February 13, 2002, Basic sold 600,000 shares of common stock to a
group of related investors. Based on this transaction, the
Partnerships ownership percentage was diluted from 6.32% to 5.39%.
Basic's Board of Directors according to the Supplemental Warrant
Agreement awarded all holders of EBITDA Contingent Warrants 50% of the
maximum warrants that could have been earned, if the financial goals
of Basic were achieved. The Partnership exercised their warrants on
May 5, 2003 and purchased 50,632 shares of stock for $.01 per share.
The Partnership at June 30, 2003 owned a total of 6.63%, or 270,132
shares of Basic's outstanding common stock.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Southwest Partners III
General
Southwest Partners III, L.P., a Delaware limited partnership (the
"Partnership"), was formed on March 11, 1997 to invest in Basic Energy
Services, Inc. ("Basic"), an oilfield service company which provides
services and products to oil and gas operators for the workover,
maintenance and plugging of existing oil and gas wells in the southwestern
United States. As of September 30, 2003, the Partnership owned a 6.63%
interest in Basic Energy, which is accounted for using the cost method of
accounting.
Results of Operations
For the quarter ended September 30, 2003
Revenues
Revenues consisted of interest income. Interest income generated $25 for
the quarter ended September 30, 2003 as compared to $60 for the quarter
ended September 30, 2002.
Expenses
Direct expenses for the quarter ended September 30, 2003 were $2,823 as
compared to $1,929 for the quarter ended September 30, 2002, and consisted
of general and administrative expenses. General and administrative
expenses primarily represent independent accounting fees incurred to audit
the Partnership. The increase in general and administrative expense is due
to an increase in independent accounting review and audit fees.
Results of Operations
For the nine months ended September 30, 2003
Revenues
Revenues consisted of interest income. Interest income generated $78 for
the nine months ended September 30, 2003 as compared to $183 for the nine
months ended September 30, 2002.
Expenses
Direct expenses totaled $12,097 and $4,571 for the nine months ended
September 30, 2003 and 2002, respectively, and consisted of general and
administrative expenses. General and administrative expenses primarily
represent independent accounting fees incurred to audit the Partnership.
The increase in general and administrative expense is due to an increase in
independent accounting review and audit fees.
Liquidity and Capital Resources
The proceeds from the sale of partnership units in March 1997 funded the
Partnership's investment in Basic.
Net Cash Provided by Operating Activities. Cash flows provided by
operating activities for the period consisted primarily of interest income
from a financial institution of $78.
Net Cash Used in Investing Activities. Cash flows used in investing
activities for the period consisted of an additional investment in Basic of
$506.
Liquidity - 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. The Partnership adopted this standard on January 1, 2003. The
standard had 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
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.
Critical Accounting Policies
The Partnership used the cost method of accounting for its investment in
Basic since December 21, 2000. Prior to December 21, 2000 the Partnership
used the equity method of accounting for the investment. Under the cost
method of accounting the Partnership recognizes as income dividends
received that are distributed from net accumulated earnings of an investee
subsequent to the date of acquisition of the investment. The Partnership
would recognize a loss when there is a loss in value in the investment,
which is other than a temporary decline. In its assessment of value the
Partnership considers future cash flows either in the form of dividends or
other distributions from the investee or from selling it's investment to an
unrelated party.
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) Reports on Form 8-K:
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 PARTNERS III, 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 Partners
III, 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 Partners III, 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 Partners
III, 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 Partners III, 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 Partners III,
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 Partners III, 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 Partners III,
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 Partners III, L.P.