FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 30, 2009

¨ 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 033-47668-03

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		(I.R.S. Employer
of incorporation or organization)		Identification No.)

6 Desta Drive, Suite 6500, Midland, Texas		79705
(Address of principal executive office)		(Zip Code)

(432) 682-6324

(Registrant's telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

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:YesxNo¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
¨ Yes	¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ¨		Accelerated filer ¨		Non-accelerated filer x		Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
¨ Yes	x No

	Table of Contents
		Page
	Glossary	3
	Part I - FINANCIAL INFORMATION
Item 1.	Financial Statements	5
	Balance Sheets as of June 30, 2009 and December 31, 2008	6
	Balance Sheets as of September 30, 2009 and December 31, 2008	6
	Statements of Operations for the three months and six months ended June 30, 2009 and 2008	7
	Statements of Operations for the three months and nine months ended September 30, 2009 and 2008	7
	Statements of Cash flows for the six months ended June 30, 2009 and 2008	8
	Statements of Cash flows for the nine months ended September 30, 2009 and 2008	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4.	Controls and Procedures	16
	Part II – OTHER INFORMATION
Item 1.	Legal Proceedings	17
Item 1A.	Risk Factors	17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3.	Defaults Upon Senior Securities	18
Item 4.	Submission of Matter to a Vote of Security Holders	18
Item 5.	Other Information	18
Item 6.	Exhibits	18
	Signatures	19

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 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.

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.

Standardized measure of discounted future net cash flows. Present value of proved reserves, as adjusted to give effect to estimated future abandonment costs, net of the estimated salvage value of related equipment.

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, 2008, which are found in the Registrant's Annual Report on Form 10-K for the year ended December 31, 2008 filed with the Securities and Exchange Commission. The December 31, 2008 balance sheet included herein has been taken from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2008. Operating results for the three and ~~six~~nine month periods ended ~~June~~September 30, 2009 are not necessarily indicative of the results that may be expected for the full year.

Southwest Royalties Institutional Income Fund X-C, L.P.

Balance Sheets

	June 30,			December 31,
	September 30,			December 31,
	2009			2008
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	227,~~216~~718		$	31,523
Receivable from Managing General Partner		-67,507			12,661
New Mexico income tax deposits		~~3,000~~978			4,027
Total current assets		596,~~216~~203			48,211
Oil and gas properties - using the full-cost
method of accounting		2,765,931			2,485,381
Less accumulated depreciation,
depletion and amortization		2,~~328~~340,~~032~~599			2,312,034
Net oil and gas properties		~~437~~425,~~899~~332			173,347
	$	~~443~~521,~~115~~535		$	221,558
Liabilities and Partners' Deficit
Current liability:
Asset retirement obligation	$	1,229,612		$	898,668
Payable to Managing General Partner	$	18,781		$	-
Asset retirement obligation		1,204,883			898,668
Partners' deficit:
General partners		(~~111~~102,~~015~~511	)		(101,951	)
Limited partners		(~~669~~605,~~534~~566	)		(575,159	)
Total partners' deficit		(~~780~~708,~~549~~077	)		(677,110	)
	$	~~443~~521,~~115~~535		$	221,558

The accompanying notes are an integral

part of these financial statements.

Southwest Royalties Institutional Income Fund X-C, L.P.

Statements of Operations

(unaudited)

	Three Months Ended				~~Six~~Nine Months Ended
	June 30,				June 30,
	September 30,				September 30,
	2009		2008		2009			2008
Revenues
Income (loss) from net profits interests	$	81,453	$	405,155	$	(11,396	)	$	686,682
Income from net profits interests	$	126,850	$	269,872	$	115,455		$	956,553
Interest		13		~~161~~202		1518			~~425~~628
		81,454		405,316		(11,381	)		687,107
		126,853		270,074		115,473			957,181
Expenses
Depreciation, depletion and amortization		1012,~~143~~567		2,~~548~~608		1528,~~998~~565			811,~~978~~586
Accretion expense		2024,~~590~~729		2019,~~382~~856		4065,~~705~~434			4161,~~886~~742
General and administrative		1317,~~059~~086		2013,~~951~~345		3350,~~866~~952			3548,~~453~~798
		43,792		43,881		90,569			86,317
		54,382		35,809		144,951			122,126
Net (loss) income	$	37,662	$	361,435	$	(101,950	)	$	600,790
Net income (loss)	$	72,471	$	234,265	$	(29,478	)	$	835,055
Net (loss) income allocated to:
Net income (loss) allocated to:
Managing General Partner	$	47,~~302~~654	$	3221,~~758~~318	$	(~~7,736~~82	)	$	5476,~~879~~198
General Partner	$	~~478~~850	$	32,~~640~~369	$	(~~859~~9	)	$	68,~~098~~466
Limited Partners	$	3263,~~882~~967	$	~~325~~210,~~037~~578	$	(9329,~~355~~387	)	$	~~539~~750,~~813~~391
Per limited partner unit	$	510.5069	$	5435.3320	$	(154.6091	)	$	90125.2242

The accompanying notes are an integral

part of these financial statements.

Southwest Royalties Institutional Income Fund X-C, L.P.

Statements of Cash Flows

(unaudited)

	Six Months Ended
	Nine Months Ended
	June 30,
	September 30,
	2009			2008
Cash flows from operating activities:
Cash (payable from loss) received from net profits interests	$	(12,748	)	$	484,744
Cash received from income from net profits interests	$	48,618		$	867,003
Cash paid to suppliers		(1550,~~085~~952	)		(3548,~~453~~798	)
Interest received		1518			~~425~~628
Net cash (used in) provided by operating activities		(27,818	)		449,716
Net cash provided by operating activities		(2,316	)		818,833
Cash flows used in financing activities:
Distributions to partners		(1,489	)		(~~430~~800,270	)
Net (decrease) increase in cash and cash equivalents		(293,~~307~~805	)		1918,~~446~~563
Beginning of period		31,523			42,900
End of period	$	227,~~216~~718		$	6261,~~346~~463
Reconciliation of net (loss) income to net
cash provided by operating activities:
Net (loss) income	$	(~~101~~29,~~950~~478	)	$	~~600~~835,~~790~~055
Adjustments to reconcile net (loss) income to net
cash provided by operating activities:
Depreciation, depletion and amortization		1528,~~998~~565			811,~~978~~586
Accretion of asset retirement obligation		65,434			61,742
Settlement of asset retirement obligations
for plugged and abandoned wells		(15,040	)		(5,765	)
Accretion of asset retirement obligation		40,705			41,886
Increase in receivables		(51,797	)		(83,785	)
Decrease (increase) in receivables		13,688			(196,173	)
Net cash provided by operating activities	$	(2,316	)	$	818,833
Increase in payables		18,781			-
Net cash provided by operating activities	$	(27,818	)	$	449,716
Noncash investing and financing activities:
Increase (decrease) in oil and gas properties – SFAS No. 143	$	280,550		$	(182,647	)
Increase (decrease) in oil and gas
properties – Asset retirement obligations	$	280,550		$	(182,647	)

The accompanying notes are an integral

part of these financial statements.

Southwest Royalties Institutional Income Fund X-C, L.P.

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., a wholly owned subsidiary of Clayton Williams Energy, Inc., serves as the Managing General Partner ~~of the Partnership~~.

Revenues, costs and expenses are allocated as follows:

	Limited	General
	Partners	Partners
Interest income on capital contributions	100%	-
Oil and gas sales	90%	10%
All other revenues	90%	10%
Organization and offering costs (1)	100%	-
Syndication costs	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	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, ~~exceeding~~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 ~~June~~September 30, 2009, and for the three and nine ~~six~~ months ended ~~June~~September 30, 2009, 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, 2008.

3. Abandonment Obligations

The Partnership follows the provisions of ~~Statement~~ASC oftopic ~~Financial~~410-20, ~~Accounting~~formerly ~~Standards~~SFAS No. 143 , “Accounting for Asset Retirement Obligations” (“SFAS 143”)~~, as amended~~. ~~SFAS~~ASC ~~143~~topic 410-20 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 capitalize an equal amount as a cost of the asset. The cost associated with the abandonment obligations, along with any estimated salvage value, is included in the computation of depreciation, depletion and amortization.

Changes in abandonment obligations for the ~~six~~nine months ended ~~June~~September 30, 2009 and 2008 are as follows:

	2009			2008
Beginning of period	$	898,668		$	1,016,810
Accretion expense		4065,~~705~~434			4161,~~886~~742
Revision of estimates		280,550			(182,647	)
Revisions of estimates		280,550			(182,647	)
Settlement of obligations for plugged and abandoned wells		(15,040	)		(5,765	)
End of period	$	1,~~204~~229,~~883~~612		$	~~870~~890,~~284~~140

Southwest Royalties Institutional Income Fund X-C, L.P.

Notes to Financial Statements

4. Recent Accounting Pronouncements

Effective July ~~April~~ 1, 2009, the Partnership adopted ~~Statement~~SFAS ofNo. 168, “The Financial Accounting Standards Board (“~~SFAS~~FASB”) ~~No.~~Accounting ~~165~~Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, ~~“Subsequent~~a ~~Events~~replacement of FASB Statement No. 162” (“SFAS ~~165~~168”), ~~which~~superseded ~~establishes~~by ~~principles~~topic ~~and~~105-10-5 ~~requirements~~of ~~for~~the ~~disclosure~~FASB ofAccounting ~~subsequent~~Standards Codification ~~events~~(“ASC”). ItSFAS 168 establishes the ~~period~~ASC ~~after~~as the ~~balance~~source ~~sheet~~of authoritative ~~date~~accounting ~~during which~~principles ~~events~~recognized orby ~~transactions~~the ~~are~~FASB to be ~~evaluated~~applied ~~for~~by nongovernmental ~~potential~~entities ~~disclosure. It~~in ~~also establishes~~ the ~~circumstances~~preparation ~~under~~of ~~which~~financial anstatements ~~entity~~in conformity ~~shall~~with ~~recognize~~GAAP. Other ~~events~~than orthe ~~transactions~~manner ~~occurring~~in ~~after~~which ~~the~~new ~~balance~~accounting guidance ~~sheet~~is ~~date.~~referenced, ~~The~~the adoption ~~of SFAS 165~~ did not have a material impact on ~~the~~our financial ~~Partnership’s disclosure of subsequent events~~statements.

InEffective April ~~June~~1, 2009, the ~~FASB~~Partnership ~~issued~~adopted SFAS No. ~~168~~165, “~~The~~Subsequent ~~FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162~~Events” (“SFAS ~~168~~ 165”). ~~SFAS~~(superseded ~~168~~by ~~became~~ASC ~~effective~~topic ~~for~~855-10-5), ~~the~~which ~~Partnership~~establishes onprinciples ~~July~~and requirements 1,for ~~2009~~disclosure of subsequent events. ~~SFAS~~It ~~168~~ establishes the ~~FASB Accounting~~ ~~Standards~~period ~~Codification~~after as the ~~source~~balance ofsheet ~~authoritative~~date ~~accounting~~during ~~principles~~which ~~recognized~~events byor ~~the~~transactions ~~FASB~~are to be ~~applied~~evaluated byfor ~~nongovernmental~~potential ~~entities~~disclosure. It inalso establishes the circumstances ~~preparation~~under ofwhich ~~financial~~an ~~statements~~entity inshall ~~conformity~~recognize ~~with~~events ~~generally~~or ~~accepted~~transactions occurring ~~accounting~~after ~~principles~~the ~~(“GAAP”). SFAS~~balance ~~168~~sheet isdate. ~~not~~The ~~expected~~adoption toof ~~change~~SFAS ~~GAAP~~165 ~~and~~did is not ~~expected to~~ have a material impact on ~~the~~our ~~Partnership’s~~disclosure ~~financial~~of ~~statements~~subsequent events.

In December 2008, the ~~Securities and Exchange Commission (“~~SEC”) released Final Rule, “Modernization of Oil and Gas Reporting”. The new disclosure requirements include provisions that permit the use of new technologies to determine proved reserves if those technologies have been demonstrated empirically to lead to reliable conclusions about reserves volumes. The new requirements also will allow companies to disclose their probable and possible reserves to investors. In addition, the new disclosure requirements require companies to: (1) report the independence and qualifications of its reserves preparer or auditor, (2) file reports when a third party is relied upon to prepare reserves estimates or conducts a reserves audit, and (3) report oil and gas reserves using an average price based upon the prior 12-month period rather than year-end prices. The new disclosure requirements are effective for financial statements for fiscal years ending on or after December 31, 2009. The effect of adopting the SEC rule has not been determined, but it is not expected to have a significant effect on our ~~the Partnership’s~~ reported financial position or results of operations.

5. Subsequent Events

The Partnership has evaluated events and transactions that occurred after the balance sheet date of ~~June~~September 30, 2009 through ~~August~~November 1416, 2009, the date the financial statements were available to be issued. The Partnership did not have any subsequent events that would require recognition in the financial statements or disclosures in these notes to the financial statements.

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 on 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 on 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. 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, increases and decreases in production costs, 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.

Production costs and general and administrative costs usually decrease with production declines; however, these costs may not decrease proportionately to production volumes or revenue. Net income available for distribution to the partners is therefore expected to decline in later years based on these factors.

Oil and Gas Properties

The Partnership uses the full cost method of accounting for its oil and gas producing activities. Accordingly, all costs associated with acquisition, exploration, and development of oil and gas reserves are capitalized. Depletion is provided using the unit-of production method based upon estimates of proved oil and gas reserves. The amortizable base includes estimated future development costs and dismantlement, restoration and abandonment costs, net of estimated salvage value. All of the Partnership’s oil and gas properties are located within the United States. 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 ~~June~~September 30, 2009, 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 ~~June~~September 30, 2009, there were ~~was~~no atiming ~~balance~~difference, ~~due~~which toresulted ~~the~~in ~~Managing~~a ~~General~~deficit ~~Partner~~net ~~of $18,781~~profits 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”).

Oil and gas prices have a significant impact on the discounted present value of the Partnership’s estimated proved oil and gas reserves. The ceiling calculation dictates that prices and costs in effect as of the last day of the period are generally held constant indefinitely. As a result, the changes in oil and gas prices have a significant impact on the computation of the ceiling calculation.

Supplemental Information

The following unaudited information is intended to supplement the financial statements included in this Form 10-Q with data that is not readily available from those statements.

	Three Months Ended
	June 30,
	September 30,
	2009		2008
Oil production in barrels		34,~~676~~330		4,~~791~~353
Gas production in mcf		21,~~060~~696		2,~~091~~093
Total (BOE)		4,~~019~~613		54,~~140~~702
Average price per barrel of oil	$	5564.63	$	~~117~~116.9212
Average price per mcf of gas	$	45.9001	$	10.3951
Partnership distributions	$	~~1,489~~-	$	~~230~~370,~~270~~000
Limited partner distributions	$	~~1,020~~-	$	~~207~~333,~~195~~000
Per unit distribution to limited partners	$	~~.17~~-	$	3455.6366
Number of limited partner units		5,983		5,983

Operating Results

The following discussion compares our results for the quarters ended ~~June~~September 30, 2009 and 2008. Unless otherwise indicated, references to 2009 and 2008 within this section refer to the respective quarterly period.

Revenue

Comparing 2009 to 2008, oil and gas sales decreased $~~372~~239,~~088~~090, of which price variances accounted for a $~~240~~232,~~281~~247 decrease and production variances accounted for a $~~131~~6,~~807~~843 decrease.

Production in 2009 (on a BOE basis) was 222% lower than 2008. Our oil production decreased 231% in 2009. Our ~~due~~gas ~~primarily to~~ production ~~decline~~was on19% alower ~~property~~in ~~and~~2009 ~~the~~than 2008 ~~cessation~~due ofprimarily to production decline on ana ~~oil~~gas well~~. Our~~ ~~gas~~due ~~production~~to ~~was~~high 1%pressure ~~lower~~ in purchaser’s ~~2009 than 2008~~line.

In 2009, our realized oil price was 5344% lower than 2008, while our realized gas price was 53 52% lower. Historically, the markets for oil and gas have been volatile, and they are likely to continue to be volatile.

Oil and gas production costs on a BOE basis decreased from $3554.3278 per BOE in 2008 to $3335.1301 per BOE in 2009. The decrease in oil and gas production ~~costs~~ cost in 2009 was due primarily to ~~lower~~higher ~~lease~~surface ~~operating~~and ~~expenses~~subsurface repairs on ~~two~~one property ~~properties~~in 2008.

Expenses

Depletion on a BOE basis increased ~~409~~391% in 2009. Comparing 2009 to 2008, depletion expense increased $79,~~595~~959, of which rate variances accounted for a $810,~~150~~008 increase and production variances accounted for a $~~555~~ 49 decrease.

Accretion expense increased 125% in 2009 asdue ~~compared~~primarily to ~~2008~~changes in asset retirement obligations.

General and administrative (“G&A”) expenses were 3828% ~~lower~~higher in 2009 due primarily to increases ~~decreases~~ in professional fees.

Supplemental Information

The following unaudited information is intended to supplement the financial statements included in this Form 10-Q with data that is not readily available from those statements.

	Six Months Ended
	Nine Months Ended
	June 30,
	September 30,
	2009		2008
Oil production in barrels		711,~~520~~850		813,~~928~~281
Gas production in mcf		35,~~867~~563		35,~~593~~686
Total (BOE)		812,~~165~~777		914,~~527~~229
Average price per barrel of oil	$	4451.3576	$	~~106~~109.3454
Average price per mcf of gas	$	4.1440	$	10.8371
Partnership distributions	$	1,489	$	~~430~~800,270
Limited partner distributions	$	1,020	$	~~387~~720,195
Per unit distribution to limited partners	$	.17	$	64120.7237
Number of limited partner units		5,983		5,983

Operating Results

The following discussion compares our results for the ~~six~~nine months ended ~~June~~ September 30, 2009 and 2008. Unless otherwise indicated, references to 2009 and 2008 within this section refer to the respective ~~six~~nine-month period.

Revenue

Comparing 2009 to 2008, oil and gas sales decreased $~~638~~877,~~757~~847, of which price variances accounted for a $~~492~~719,~~005~~776 decrease and production variances accounted for a $~~146~~158,~~752~~071 decrease.

Production in 2009 (on a BOE basis) was 1410% lower than 2008. Our oil production decreased 1611% in 2009 due primarily to ~~production decline on~~ a ~~property~~well ~~and~~that ~~the~~stopped ~~cessation~~producing ~~of production on an oil well~~in 2008. ~~Gas~~Our gas production was 82% ~~higher~~lower in 2009 than 2008.

In 2009, our realized oil price was 5853% lower than 2008, while our realized gas price was 62 59% lower. Historically, the markets for oil and gas have been volatile, and they are likely to continue to be volatile.

Oil and gas production costs on a BOE basis increased from $3139.6630 per BOE in 2008 to $4440.2189 per BOE in 2009. ~~The increase in oil and gas production costs in 2009 was due primarily to the cost to plug and abandon five wells.~~

Expenses

Depletion on a BOE basis increased ~~108~~175% in 2009. Comparing 2009 to 2008, depletion expense increased $716,~~020~~979, of which rate variances accounted for a $818,~~304~~161 increase and production variances accounted for a $1,~~284~~ 182 decrease.

Accretion expense ~~decreased~~increased 36% in 2009 as compared to 2008.

General and administrative (“G&A”) expenses were 4% ~~lower~~higher inthan 2009.

Texas Margin Taxes

In May 2006, the State of Texas adopted House Bill 3, which modified the state’s franchise tax structure, replacing the previous tax based on capital or earned surplus with a margin tax (the “Texas Margin Tax”) effective with franchise tax reports filed on or after January 1, 2008. The Texas Margin Tax is computed by applying the applicable tax rate (1% for the Partnership’s business) to the profit margin, which is generally determined by total revenue less either cost of goods sold or compensation as applicable. The Partnership believes, based on its interpretation, that the Texas Margin Tax does not apply to the Partnership since substantially all of its income is derived from a net profits interest.

Liquidity and Capital Resources

Partnership distributions during the ~~six~~nine months ~~ended~~ending ~~June~~September 30, 2009 were $1,489, of which $1,020 was distributed to the limited partners and $469 to the general partners. Cumulative cash distributions of $5,697,734 have been made to the general and limited partners as of ~~June~~September 30, 2009. As of September ~~June~~ 30, 2009, $5,144,663 or $859.88 per limited partner unit has been distributed to the limited partners, representing 172% of contributed capital.

The Partnership reported a deficit in partners’ equity of $~~780~~708,~~549~~077 at ~~June~~September 30, 2009. This deficit originated primarily in connection with the recording of asset retirement obligations in accordance with SFAS 143. Many of the Partnership’s wells are nonproductive and must be plugged in compliance with applicable regulations. Since the Partnership’s ownership in the wells is structured as a net profits interest, the Partnership is not liable for asset retirement costs except to the extent of its future cash flow. As costs are incurred to plug and abandon Partnership wells, cash flow from operations will be reduced or eliminated.

Recent Accounting Pronouncements

Effective July ~~April~~ 1, 2009, the Partnership adopted ~~Statement~~SFAS ofNo. 168, “The Financial Accounting Standards Board (“~~SFAS~~FASB”) ~~No.~~Accounting ~~165~~Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, ~~“Subsequent~~a ~~Events”~~replacement of FASB Statement No. 162” (“SFAS ~~165~~168”), ~~which~~superseded ~~establishes~~by ~~principles~~topic ~~and~~105-10-5 ~~requirements~~of ~~for~~the ~~disclosure~~FASB ofAccounting ~~subsequent~~Standards Codification ~~events~~(“ASC”). ItSFAS 168 establishes the ~~period~~ASC ~~after~~as the ~~balance~~source ~~sheet~~of authoritative ~~date~~accounting ~~during~~principles ~~which events~~recognized orby ~~transactions~~the ~~are~~FASB to be ~~evaluated~~applied ~~for~~by nongovernmental ~~potential~~entities ~~disclosure. It~~in ~~also establishes~~ the ~~circumstances~~preparation ~~under~~of ~~which~~financial anstatements ~~entity~~in conformity ~~shall~~with ~~recognize~~GAAP. Other ~~events~~than orthe ~~transactions~~manner ~~occurring~~in ~~after~~which ~~the~~new ~~balance~~accounting guidance ~~sheet~~is ~~date.~~referenced, ~~The~~the adoption ~~of SFAS 165~~ did not have a material impact on ~~the~~our financial ~~Partnership’s disclosure of subsequent events~~statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Partnership financial condition, results of operations, and capital resources are highly dependent upon the prevailing market prices of, and demand for, oil and natural gas. These commodity prices are subject to wide fluctuations and market uncertainties due to a variety of factors that are beyond our control. These factors include the level of global demand for petroleum products, foreign supply of oil and gas, the establishment of and compliance with production quotas by oil-exporting countries, trading activities in commodities future markets, weather conditions, the price and availability of alternative fuels, and overall economic conditions, both foreign and domestic. The Partnership cannot predict future oil and gas prices with any degree of certainty. Sustained weakness in oil and gas prices may adversely affect our financial condition, results of operations and cash distributions to partners.

The Partnership is not a party to any derivative or embedded derivative instruments.

Item 4. Controls and Procedures

Disclosure 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 ~~six~~nine months ended ~~June~~September 30, 2009 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 1A. Risk Factors

In evaluating all forward-looking statements, you should specifically consider various factors that may cause actual results to vary from those contained in the forward-looking statements. Our risk factors are included in our Annual Report on Form 10-K for the year ended December 31, 2008, as filed with the U.S. Securities and Exchange Commission on March 27, 2009 and available at www.sec.gov. Following are additional risk factors that could affect our financial performance or could cause actual results to differ materially from estimates contained in our forward-looking statements.

Certain U.S. federal income tax deductions currently available with respect to oil and gas exploration and development may be eliminated as a result of future legislation.

The Proposed Fiscal Year 2010 Budget includes proposed legislation that would, if enacted into law, make significant changes to United States tax laws, including the elimination of certain key U.S. federal income tax incentives currently available to oil and natural gas exploration and production companies. These changes include, but are not limited to: (1) the repeal of the percentage depletion allowance for oil and natural gas properties, (2) the elimination of current deductions for intangible drilling and development costs, (3) the elimination of the deduction for certain domestic production activities, and (4) an extension of the amortization period for certain geological and geophysical expenditures. It is unclear whether any such changes will be enacted or how soon any such changes could become effective. The passage of any legislation as a result of these proposals or any other similar changes in U.S. federal income tax laws could eliminate certain tax deductions that are currently available with respect to oil and gas exploration and development, and any such change could negatively affect our financial condition and results of operations.

The adoption of climate change legislation by Congress could result in increased operating costs and reduced demand for the oil and natural gas we produce.

On June 26, 2009, the U.S. House of Representatives approved adoption of the “American Clean Energy and Security Act of 2009,” also known as the “Waxman-Markey cap-and-trade legislation” or ACESA. The purpose of ACESA is to control and reduce emissions of “greenhouse gases,” or “GHGs,” in the United States. GHGs are certain gases, including carbon dioxide and methane, that may be contributing to warming of the Earth’s atmosphere and other climatic changes. ACESA would establish an economy-wide cap on emissions of GHGs in the United States and would require an overall reduction in GHG emissions of 17% (from 2005 levels) by 2020, and by over 80% by 2050. Under ACESA, most sources of GHG emissions would be required to obtain GHG emission “allowances” corresponding to their annual emissions of GHGs. The number of emission allowances issued each year would decline as necessary to meet ACESA’s overall emission reduction goals. As the number of GHG emission allowances declines each year, the cost or value of allowances is expected to escalate significantly. The net effect of ACESA will be to impose increasing costs on the combustion of carbon-based fuels such as oil, refined petroleum products, and natural gas.

The U.S. Senate has begun work on its own legislation for controlling and reducing emissions of GHGs in the United States. If the Senate adopts GHG legislation that is different from ACESA, the Senate legislation would need to be reconciled with ACESA and both chambers would be required to approve identical legislation before it could become law. President Obama has indicated that he is in support of the adoption of legislation to control and reduce emissions of GHGs through an emission allowance permitting system that results in fewer allowances being issued each year but that allows parties to buy, sell and trade allowances as needed to fulfill their GHG emission obligations. Although it is not possible at this time to predict whether or when the Senate may act on climate change legislation or how any bill approved by the Senate would be reconciled with ACESA, any laws or regulations that may be adopted to restrict or reduce emissions of GHGs would likely require us to incur increased operating costs, and could have an adverse effect on demand for the oil and natural gas we produce.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

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

(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 Institutional Income Fund
	X-C, L.P., a Delaware limited partnership
By:	Southwest Royalties, Inc., Managing
	General Partner
By:	/s/ L. Paul Latham
	L. Paul Latham
	President and Chief Executive Officer
Date:	~~August~~November 1416, 2009

Filing Compare · SOUTHWEST ROYALTIES INSTITUTIONAL INCOME FUND X-C LP