UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2000
Commission File No. 33-19659-02
PARKER & PARSLEY 88-B, L.P.
-----------------------------
(Exact name of Registrant as specified in its charter)
Delaware 75-2240121
---------------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1400 Williams Square West, 5205 N. O'Connor Blvd., Irving, Texas 75039
- ---------------------------------------------------------------- ---------
(Address of principal executive offices) (Zip code)
Registrant's Telephone Number, including area code : (972) 444-9001
Not applicable (Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the 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 / /
PARKER & PARSLEY 88-B, L.P.
TABLE OF CONTENTS
Page
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of September 30, 2000 and
December 31, 1999...................................... 3
Statements of Operations for the three and nine
months ended September 30, 2000 and 1999................ 4
Statement of Partners' Capital for the nine months
ended September 30, 2000................................ 5
Statements of Cash Flows for the nine months ended
September 30, 2000 and 1999............................. 6
Notes to Financial Statements............................. 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..................... 7
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K.......................... 10
27.1 Financial Data Schedule
Signatures................................................ 11
2
PARKER & PARSLEY 88-B, L.P.
(A Delaware Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
September 30, December 31,
2000 1999
------------ ------------
(Unaudited)
ASSETS
Current assets:
Cash $ 169,668 $ 129,430
Accounts receivable - oil and gas sales 167,755 138,030
----------- -----------
Total current assets 337,423 267,460
----------- -----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 6,953,903 7,129,071
Accumulated depletion (5,954,144) (6,083,367)
----------- -----------
Net oil and gas properties 999,759 1,045,704
----------- -----------
$ 1,337,182 $ 1,313,164
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 41,021 $ 21,245
Partners' capital:
Managing general partner 12,931 12,888
Limited partners (8,954 interests) 1,283,230 1,279,031
----------- -----------
1,296,161 1,291,919
----------- -----------
$ 1,337,182 $ 1,313,164
=========== ===========
The financial information included as of September 30, 2000 has been prepared by
the managing general partner without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
3
PARKER & PARSLEY 88-B, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
---------------------- ----------------------
2000 1999 2000 1999
--------- --------- --------- ---------
Revenues:
Oil and gas $ 352,159 $ 193,105 $ 943,505 $ 464,466
Interest 3,636 1,871 8,813 4,402
Gain on disposition of assets 7,108 - 15,953 -
-------- -------- -------- --------
362,903 194,976 968,271 468,868
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 114,143 91,163 319,196 259,829
General and administrative 10,565 5,793 28,305 13,934
Depletion 16,274 18,378 51,791 84,841
Abandoned property 8,226 - 8,226 -
-------- -------- -------- --------
149,208 115,334 407,518 358,604
-------- -------- -------- --------
Net income $ 213,695 $ 79,642 $ 560,753 $ 110,264
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 2,137 $ 796 $ 5,608 $ 1,102
======== ======== ======== ========
Limited partners $ 211,558 $ 78,846 $ 555,145 $ 109,162
======== ======== ======== ========
Net income per limited
partnership interest $ 23.63 $ 8.80 $ 62.00 $ 12.19
======== ======== ======== ========
The financial information included herein has been prepared by
the managing general partner without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
4
PARKER & PARSLEY 88-B, L.P.
(A Delaware Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
---------- ---------- ----------
Balance at January 1, 2000 $ 12,888 $1,279,031 $1,291,919
Distributions (5,565) (550,946) (556,511)
Net income 5,608 555,145 560,753
--------- --------- ---------
Balance at September 30, 2000 $ 12,931 $1,283,230 $1,296,161
========= ========= =========
The financial information included herein has been prepared by
the managing general partner without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
5
PARKER & PARSLEY 88-B, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
September 30,
------------------------
2000 1999
---------- ----------
Cash flows from operating activities:
Net income $ 560,753 $ 110,264
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 51,791 84,841
Gain on disposition of assets (15,953) -
Changes in assets and liabilities:
Accounts receivable (29,725) (45,418)
Accounts payable 22,569 9,419
--------- ---------
Net cash provided by operating activities 589,435 159,106
--------- ---------
Cash flows from investing activities:
Additions to oil and gas properties (5,788) (5,650)
Proceeds from asset dispositions 13,102 10,758
--------- ---------
Net cash provided by investing activities 7,314 5,108
--------- ---------
Cash flows used in financing activities:
Cash distributions to partners (556,511) (138,124)
--------- ---------
Net increase in cash 40,238 26,090
Cash at beginning of period 129,430 110,641
--------- ---------
Cash at end of period $ 169,668 $ 136,731
========= =========
The financial information included herein has been prepared by
the managing general partner without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
6
PARKER & PARSLEY 88-B, L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
(Unaudited)
Note 1. Organization and nature of operations
Parker & Parsley 88-B, L.P. (the "Partnership") is a limited partnership
organized in 1988 under the laws of the State of Delaware.
The Partnership engages in oil and gas development and production in Texas and
is not involved in any industry segment other than oil and gas.
Note 2. Basis of presentation
In the opinion of management, the unaudited financial statements of the
Partnership as of September 30, 2000 and for the three and nine months ended
September 30, 2000 and 1999 include all adjustments and accruals consisting only
of normal recurring accrual adjustments which are necessary for a fair
presentation of the results for the interim period. These interim results are
not necessarily indicative of results for a full year. Certain reclassifications
may have been made to the September 30, 1999 financial statements to conform to
the September 30, 2000 financial statement presentations.
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. The financial statements
should be read in conjunction with the financial statements and the notes
thereto contained in the Partnership's Report on Form 10-K for the year ended
December 31, 1999, as filed with the Securities and Exchange Commission, a copy
of which is available upon request by writing to Rich Dealy, Vice President and
Chief Accounting Officer, 5205 North O'Connor Boulevard, 1400 Williams Square
West, Irving, Texas 75039-3746.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (1)
Results of Operations
Nine months ended September 30, 2000 compared with nine months ended September
30, 1999
Revenues:
The Partnership's oil and gas revenues increased 103% to $943,505 for the nine
months ended September 30, 2000 as compared to $464,466 for the same period in
1999. The increase in revenues resulted from higher average prices received and
an increase in production. For the nine months ended September 30, 2000, 24,263
7
barrels of oil, 10,130 barrels of natural gas liquids ("NGLs") and 41,502 mcf of
gas were sold, or 41,310 barrel of oil equivalents ("BOEs"). For the nine months
ended September 30, 1999, 20,455 barrels of oil, 10,153 barrels of NGLs and
42,206 mcf of gas were sold, or 37,642 BOEs.
The average price received per barrel of oil increased $13.32, or 89%, from
$15.00 for the nine months ended September 30, 1999 to $28.32 for the same
period in 2000. The average price received per barrel of NGLs increased $6.38,
or 73%, from $8.73 during the nine months ended September 30, 1999 to $15.11 for
the same period in 2000. The average price received per mcf of gas increased 53%
from $1.63 during the nine months ended September 30, 1999 to $2.49 for the same
period in 2000. The market price for oil and gas has been extremely volatile in
the past decade and management expects a certain amount of volatility to
continue in the foreseeable future. The Partnership may therefore sell its
future oil and gas production at average prices lower or higher than that
received during the nine months ended September 30, 2000.
Gain on disposition of assets of $15,953 was recognized during the nine months
ended September 30, 2000. The gain was comprised of $11,638 received from the
sale of equipment on one well plugged and abandoned during the current period
and $4,315 from equipment credits received on one well.
Costs and Expenses:
Total costs and expenses increased to $407,518 for the nine months ended
September 30, 2000 as compared to $358,604 for the same period in 1999, an
increase of $48,914, or 14%. This increase was due to increases in production
costs, general and administrative expenses ("G&A") and abandoned property costs,
offset by a decline in depletion.
Production costs were $319,196 for the nine months ended September 30, 2000 and
$259,829 for the same period in 1999, resulting in an increase of $59,367, or
23%. The increase was primarily due to higher production taxes of $31,582
associated with higher oil and gas prices, additional well maintenance costs of
$19,994 and $4,321 of workover expenses incurred to stimulate well production.
Abandoned property costs of $8,226 were recognized during the nine months ended
September 30, 2000 resulting from one well plugged and abandoned during the
current period.
G&A's components are independent accounting and engineering fees and managing
general partner personnel and operating costs. During this period, G&A
increased, in aggregate, 103% from $13,934 for the nine months ended September
30, 1999 to $28,305 for the same period in 2000 primarily due to a higher
allocation of the managing general partner's G&A being allocated (limited to 3%
of oil and gas revenues) as a result of increased oil and gas revenues.
Depletion was $51,791 for the nine months ended September 30, 2000 compared to
$84,841 for the same period in 1999, representing a decrease of $33,050, or 39%.
This decrease was the result of an increase in proved reserves due to higher
commodity prices as compared to the same period in 1999, offset by an increase
in oil production of 3,808 barrels for the nine months ended September 30, 2000
compared to the same period in 1999.
8
Three months ended September 30, 2000 compared with three months ended September
30, 1999
Revenues:
The Partnership's oil and gas revenues increased 82% to $352,159 for the three
months ended September 30, 2000 as compared to $193,105 for the same period in
1999. The increase in revenues resulted from higher average prices received and
an increase in production. For the three months ended September 30, 2000, 7,752
barrels of oil, 3,707 barrels of NGLs and 14,807 mcf of gas were sold, or 13,927
BOEs. For the three months ended September 30, 1999, 6,842 barrels of oil, 3,449
barrels of NGLs and 14,272 mcf of gas were sold, or 12,670 BOEs.
The average price received per barrel of oil increased $12.62, or 68%, from
$18.69 for the three months ended September 30, 1999 to $31.31 for the same
period in 2000. The average price received per barrel of NGLs increased $5.88,
or 53%, from $11.02 during the three months ended September 30, 1999 to $16.90
for the same period in 2000. The average price received per mcf of gas increased
65% from $1.91 during the three months ended September 30, 1999 to $3.16 for the
same period in 2000.
Gain on disposition of assets of $7,108 was recognized during the three months
ended September 30, 2000. The gain was comprised of $4,315 from equipment
credits received on one well and $2,793 received from the sale of equipment on
one well plugged and abandoned during the current period.
Costs and Expenses:
Total costs and expenses increased to $149,208 for the three months ended
September 30, 2000 as compared to $115,334 for the same period in 1999, an
increase of $33,874, or 29%. This increase was due to increases in production
costs, abandoned property costs and G&A, offset by a decline in depletion.
Production costs were $114,143 for the three months ended September 30, 2000 and
$91,163 for the same period in 1999 resulting in a $22,980 increase, or 25%. The
increase was primarily due to higher production taxes of $11,404 associated with
higher oil and gas prices, additional workover expenses of $4,321 and well
maintenance costs of $2,396 incurred to stimulate well production.
Abandoned property costs of $8,226 was recognized during the three months ended
September 30, 2000 resulting from one well plugged and abandoned during the
current period.
During this period, G&A increased, in aggregate, 82% from $5,793 for the three
months ended September 30, 1999 to $10,565 for the same period in 2000 primarily
due to a higher allocation of the managing general partner's G&A being allocated
(limited to 3% of oil and gas revenues) as a result of increased oil and gas
revenues.
Depletion was $16,274 for the three months ended September 30, 2000 compared to
$18,378 for the same period in 1999, representing a decrease of $2,104, or 11%.
This decrease was due to an increase in proved reserves as a result of higher
9
commodity prices as compared to the same period in 1999, offset by an increase
in oil production of 910 barrels for the three months ended September 30, 2000
compared to the same period in 1999.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $430,329 during the nine
months ended September 30, 2000 from the same period ended September 30, 1999.
This increase was due to an increase in oil and gas sales receipts of $499,143,
offset by increases in production costs paid of $47,274, abandoned property
costs of $8,226 and G&A expenses paid of $13,314.
Net Cash Provided by Investing Activities
The Partnership's investing activities during the nine months ended September
30, 2000 and 1999 were related to upgrades of oil and gas equipment on various
oil and gas properties.
Proceeds of $13,102 recognized during the nine months ended September 30, 2000
were comprised of $8,845 on one well plugged and abandoned during the current
period and $4,257 from equipment credits on one well. Proceeds of $10,758
recognized for the same period in 1999 were from equipment credits on two wells.
Net Cash Used in Financing Activities
For the nine months ended September 30, 2000, cash distributions to the partners
were $556,511, of which $5,565 was distributed to the managing general partner
and $550,946 to the limited partners. For the same period ended September 30,
1999, cash distributions to the partners were $138,124, of which $1,381 was
distributed to the managing general partner and $136,743 to the limited
partners.
- ---------------
(1) "Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations" contains forward looking statements that involve
risks and uncertainties. Accordingly, no assurances can be given that the
actual events and results will not be materially different than the
anticipated results described in the forward looking statements.
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27.1 Financial Data Schedule
(b) Reports on Form 8-K - none
10
PARKER & PARSLEY 88-B, L.P.
(A Delaware Limited Partnership)
S I G N A T U R E S
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.
PARKER & PARSLEY 88-B, L.P.
By: Pioneer Natural Resources USA, Inc.,
Managing General Partner
Dated: November 13, 2000 By: /s/ Rich Dealy
----------------------------------
Rich Dealy, Vice President and
Chief Accounting Officer
11