UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
/ x / Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 1996
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 No. 33-26097-05
PARKER & PARSLEY 90-B, L.P.
(Exact name of Registrant as specified in its charter)
Delaware 75-2329287
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
303 West Wall, Suite 101, Midland, Texas 79701
(Address of principal executive offices) (Zip code)
Registrant's Telephone Number, including area code : (915) 683-4768
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 / /
Page 1 of 10 pages.
-There are no exhibits-
PARKER & PARSLEY 90-B, L.P.
(A Delaware Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
March 31, December 31,
1996 1995
------------ ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $241,737 at March 31
and $288,853 at December 31 $ 248,342 $ 289,053
Accounts receivable - oil and gas sales 340,044 305,505
----------- -----------
Total current assets 588,386 594,558
Oil and gas properties - at cost, based on the
successful efforts accounting method 25,937,831 25,958,413
Accumulated depletion (17,024,663) (16,839,804)
----------- -----------
Net oil and gas properties 8,913,168 9,118,609
----------- -----------
$ 9,501,554 $ 9,713,167
=========== ============
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 90,984 $ 196,847
Partners' capital:
Limited partners (32,264 interests) 9,316,460 9,421,164
Managing general partner 94,110 95,156
----------- -----------
9,410,570 9,516,320
----------- -----------
$ 9,501,554 $ 9,713,167
=========== ===========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
2
PARKER & PARSLEY 90-B, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
March 31,
1996 1995
---------- ----------
Revenues:
Oil and gas sales $ 820,083 $ 845,540
Interest income 3,786 3,946
Salvage income from equipment disposals 7,405 -
--------- ---------
Total revenues 831,274 849,486
Costs and expenses:
Production costs 362,247 390,552
General and administrative expenses 24,602 27,851
Depletion 184,859 207,396
Amortization of organization costs - 3,398
--------- ---------
Total costs and expenses 571,708 629,197
--------- ---------
Net income $ 259,566 $ 220,289
========= =========
Allocation of net income:
Managing general partner $ 2,596 $ 2,237
========= =========
Limited partners $ 256,970 $ 218,052
========= =========
Net income per limited partnership interest $ 7.96 $ 6.76
========= =========
Distributions per limited partnership interest $ 11.21 $ 13.41
========= =========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
3
PARKER & PARSLEY 90-B, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
----------- ------------ ------------
Balance at January 1, 1995 $ 106,047 $ 10,509,618 $ 10,615,665
Distributions (4,370) (432,689) (437,059)
Net income 2,237 218,052 220,289
---------- ----------- -----------
Balance at March 31, 1995 $ 103,914 $ 10,294,981 $ 10,398,895
========== =========== ===========
Balance at January 1, 1996 $ 95,156 $ 9,421,164 $ 9,516,320
Distributions (3,642) (361,674) (365,316)
Net income 2,596 256,970 259,566
---------- ----------- -----------
Balance at March 31, 1996 $ 94,110 $ 9,316,460 $ 9,410,570
========== =========== ===========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
4
PARKER & PARSLEY 90-B, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended
March 31,
1996 1995
---------- ----------
Cash flows from operating activities:
Net income $ 259,566 $ 220,289
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion and amortization 184,859 210,794
Salvage income from equipment disposals (7,405) -
Changes in assets and liabilities:
Increase in accounts receivable (34,539) (23,284)
Increase (decrease) in accounts payable (76,963) 32,494
--------- ---------
Net cash provided by operating activities 325,518 440,293
Cash flows from investing activities:
Additions to oil and gas properties (8,318) (4,655)
Proceeds from salvage income on equipment
disposals 7,405 -
--------- ---------
Net cash used in investing activities (913) (4,655)
Cash flows from financing activities:
Cash distributions to partners (365,316) (437,059)
---------- ---------
Net decrease in cash and cash equivalents (40,711) (1,421)
Cash and cash equivalents at beginning of period 289,053 180,890
--------- ---------
Cash and cash equivalents at end of period $ 248,342 $ 179,469
========= =========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
5
PARKER & PARSLEY 90-B, L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
(Unaudited)
NOTE 1.
Parker & Parsley 90-B, L.P. (the "Registrant") is a limited partnership
organized in 1990 under the laws of the State of Delaware.
The Registrant engages primarily in oil and gas development and production in
Texas and is not involved in any industry segment other than oil and gas.
NOTE 2.
In the opinion of management, the unaudited financial statements as of March 31,
1996 the Registrant 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. However, these interim results are not
necessarily indicative of results for a full year.
The financial statements should be read in conjunction with the financial
statements and the notes thereto contained in the Registrant's Report on Form
10-K for the year ended December 31, 1995, as filed with the Securities and
Exchange Commission, a copy of which is available upon request by writing to
Steven L. Beal, Senior Vice President, 303 West Wall, Suite 101, Midland, Texas
79701.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations(1)
The Registrant was formed October 5, 1990. On January 1, 1995, Parker & Parsley
Development L.P. ("PPDLP"), a Texas limited partnership, became the sole
managing general partner of the Registrant, by acquiring the rights and assuming
the obligations of Parker & Parsley Development Company ("PPDC"). PPDLP
acquired PPDC's rights and obligations as managing general partner of the
Registrant in connection with the merger of PPDC, P&P Producing, Inc. and
Spraberry Development Corporation into MidPar L.P., which survived the merger
with a change of name to PPDLP. PPDLP has the power and authority to manage,
control and administer all Registrant affairs. The limited partners contributed
$32,264,000 representing 32,264 interests ($1,000 per interest) sold to a total
of 2,248 limited partners.
Since its formation, the Registrant invested $26,117,105 in various prospects
that were drilled in Texas. One well was plugged and abandoned in 1995 due to
uneconomical operations. At March 31, 1996, the Registrant had 103 producing oil
and gas wells.
6
Results of Operations
Revenues:
The Registrant's oil and gas revenues decreased to $820,083 from $845,540 for
the three months ended March 31, 1996 and 1995, respectively, a decrease of 3%.
The decrease in revenues was the result of a 13% decline in barrels of oil
produced and sold and a 14% decline in mcf of gas produced and sold, offset by
an 11% increase in the average price received per barrel of oil and a 15%
increase in the average price received per mcf of gas. For the three months
ended March 31, 1996, 32,906 barrels of oil were sold compared to 37,896 for the
same period in 1995, a decrease of 4,990 barrels. For the three months ended
March 31, 1996, 86,144 mcf of gas were sold compared to 99,844 for the same
period in 1995, a decrease of 13,700 mcf. Because of the decline characteristics
of the Registrant's oil and gas properties, management expects a certain amount
of decline in production to continue in the future until the Registrant's
economically recoverable reserves are fully depleted.
The average price received per barrel of oil increased $1.85 from $17.19 for the
three months ended March 31, 1995 to $19.04 for the same period in 1996 while
the average price received per mcf of gas increased from $1.95 for the three
months ended March 31, 1995 to $2.25 for the same period in 1996. 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 Registrant may therefore sell its future oil and gas production at
average prices lower or higher than that received during the three months ended
March 31, 1996.
Salvage income totaling $7,405 was received during the three months ended March
31, 1996, attributable to credits received from the disposal of oil and gas
equipment on one well that was plugged and abandoned in a prior year.
Costs and Expenses:
Total costs and expenses decreased to $571,708 for the three months ended March
31, 1996 as compared to $629,197 for the same period in 1995, a decrease of
$57,849, or 9%. The decrease was due to declines in production costs, general
and administrative expenses ("G&A"), depletion and amortization of organization
costs.
Production costs were $362,247 for the three months ended March 31, 1996 and
$390,552 for the same period in 1995, resulting in a $28,305 decrease, or 7%.
The decrease was due to declines in well repair and maintenance costs and ad
valorem taxes.
G&A's components are independent accounting and engineering fees, computer
services, postage and managing general partner personnel costs. During this
period, G&A decreased, in aggregate, 12% from $27,851 for the three months ended
March 31, 1995 to $24,602 for the same period in 1996. The Partnership agreement
limits G&A to 3% of the gross oil and gas revenues.
Depletion was $184,859 for the three months ended March 31, 1996 compared to
$207,396 for the same period in 1995. This represented a decrease of $22,537, or
7
11%, primarily attributable to the adoption of the provisions of Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of" effective for the
fourth quarter of 1995 and the reduction of net depletable basis resulting from
the charge taken upon such adoption. Depletion was computed property-by-property
utilizing the unit-of-production method based upon the dominant mineral
produced, generally oil. Oil production decreased 4,990 barrels for the three
months ended March 31, 1996 from the same period in 1995, while oil reserves of
barrels were revised downward by 213,660 barrels, or 11%.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased to $325,518 for the three
months ended March 31, 1996, a 26% decrease from the same period ended March 31,
1995. This decrease resulted from a decline in oil and gas sales receipts and an
increase in expenditures for production costs. The decline in oil and gas sales
receipts was attributable to production declines for both oil and gas.
Additional well repair and maintenance costs contributed to the increase in
production cost expenditures.
Net Cash Used in Investing Activities
The Registrant's investing activities for the three months ended March 31, 1996
and 1995, respectively, included $8,318 and $4,655 in expenditures related to
repair and maintenance activity on various oil and gas properties.
Proceeds of $7,405 from salvage income received during the three months ended
March 31, 1996 were derived from the disposal of oil and gas equipment on a
property abandoned in a prior year.
Net Cash Used in Financing Activities
Cash was sufficient for the three months ended March 31, 1996 to cover
distributions to the partners of $365,316 of which $361,674 was distributed to
the limited partners and $3,642 to the managing general partner. For the same
period ended March 31, 1995, cash was sufficient for distributions to the
partners of $437,059 of which $432,689 was distributed to the limited partners
and $4,370 to the managing general partner.
It is expected that future net cash provided by operating activities will be
sufficient for any capital expenditures and any distributions. As the production
from the properties declines, distributions are also expected to decrease.
- - ---------------
(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.
8
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - none
(b Form 8-K - none
9
PARKER & PARSLEY 90-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 90-B, L.P.
By: Parker & Parsley Development L.P.,
Managing General Partner
By: Parker & Parsley Petroleum USA, Inc.
("PPUSA"), General Partner
Dated: May 14, 1996 By: /s/ Steven L. Beal
--------------------------------------
Steven L. Beal, Senior Vice President
and Chief Financial Officer of PPUSA
10