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 September 30, 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. 33-26097-07
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 __ pages.
-There are no exhibits-
PARKER & PARSLEY 90-B, L.P.
TABLE OF CONTENTS
Page
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of September 30, 1996 and
December 31, 1995 ................................... 3
Statements of Operations for the three and nine
months ended September 30, 1996 and 1995................ 4
Statement of Partners' Capital for the nine months
ended September 30, 1996................................ 5
Statements of Cash Flows for the nine months ended
September 30, 1996 and 1995............................. 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......................................... 11
Signatures............................................ 12
2
PARKER & PARSLEY 90-B, L.P.
(A Delaware Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
September 30, December 31,
1996 1995
------------ ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $393,825 at September 30
and $288,853 at December 31 $ 394,012 $ 289,053
Accounts receivable - oil and gas sales 338,937 305,505
----------- -----------
Total current assets 732,949 594,558
----------- -----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 25,938,592 25,958,413
Accumulated depletion (17,362,945) (16,839,804)
----------- -----------
Net oil and gas properties 8,575,647 9,118,609
----------- -----------
$ 9,308,596 $ 9,713,167
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 132,440 $ 196,847
Partners' capital:
Limited partners (32,264 interests) 9,084,390 9,421,164
Managing general partner 91,766 95,156
----------- -----------
9,176,156 9,516,320
----------- -----------
$ 9,308,596 $ 9,713,167
=========== ===========
The financial information included as of September 30, 1996 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 OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
--------------------- -----------------------
1996 1995 1996 1995
--------- --------- ---------- ----------
Revenues:
Oil and gas $ 856,112 $ 736,486 $2,581,343 $2,388,644
Interest 5,898 5,497 14,559 14,265
Salvage income from
equipment disposals 540 - 7,945 -
Gain on sale of property - 2,326 - 2,326
-------- -------- --------- ---------
862,550 744,309 2,603,847 2,405,235
-------- -------- --------- ---------
Costs and expenses:
Oil and gas production 341,736 357,213 1,054,746 1,107,466
General and administrative 27,320 26,287 82,130 78,337
Depletion 164,954 189,405 525,838 593,337
(Gain) loss on abandoned
property - (124) 2,017 (8,259)
Abandoned property - 1,322 - 6,974
Amortization of organization
costs - 3,397 - 10,195
-------- -------- --------- ---------
534,010 577,500 1,664,731 1,788,050
-------- -------- --------- ---------
Net income $ 328,540 $ 166,809 $ 939,116 $ 617,185
======== ======== ========= =========
Allocation of net income:
Managing general partner $ 3,285 $ 1,702 $ 9,391 $ 6,274
======== ======== ========= =========
Limited partners $ 325,255 $ 165,107 $ 929,725 $ 610,911
======== ======== ========= =========
Net income per limited
partnership interest $ 10.08 $ 5.11 $ 28.82 $ 18.93
======== ======== ========= =========
Distributions per limited
partnership interest $ 14.45 $ 11.82 $ 39.25 $ 38.36
======== ======== ========= =========
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)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
--------- ----------- -----------
Balance at January 1, 1996 $ 95,156 $ 9,421,164 $ 9,516,320
Distributions (12,781) (1,266,499) (1,279,280)
Net income 9,391 929,725 939,116
-------- ---------- ----------
Balance at September 30, 1996 $ 91,766 $ 9,084,390 $ 9,176,156
======== ========== ==========
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)
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
September 30,
---------------------------
1996 1995
----------- -----------
Cash flows from operating activities:
Net income $ 939,116 $ 617,185
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion and amortization 525,838 603,532
(Gain) loss on abandoned property 2,017 (8,259)
Gain on sale of property - (2,326)
Salvage income from equipment disposals (7,945) -
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (33,432) 31,964
Increase (decrease) in accounts payable (35,508) 52,548
---------- ----------
Net cash provided by operating activities 1,390,086 1,294,644
---------- ----------
Cash flows from investing activities:
Additions to oil and gas properties (13,792) (14,503)
Proceeds from salvage income on equipment
disposals 7,945 -
Proceeds from equipment salvage on abandoned
property - 8,259
Proceeds from sale of property - 2,326
---------- ----------
Net cash used in investing activities (5,847) (3,918)
---------- ----------
Cash flows from financing activities:
Cash distributions to partners (1,279,280) (1,250,307)
---------- ----------
Net increase in cash and cash equivalents 104,959 40,419
Cash and cash equivalents at beginning of period 289,053 180,890
---------- ----------
Cash and cash equivalents at end of period $ 394,012 $ 221,309
========== ==========
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.
6
PARKER & PARSLEY 90-B, L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 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 Registrant's unaudited financial statements as
of September 30, 1996 and for the three and nine months ended September 30, 1996
and 1995 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 information and footnote disclosure 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 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)
Results of Operations
Nine months ended September 30, 1996 compared with nine months ended September
30, 1995
Revenues:
The Registrant's oil and gas revenues increased 8% to $2,581,343 from $2,388,644
for the nine months ended September 30, 1996 and 1995, respectively. The
increase in revenues resulted from a 21% increase in the average price received
per barrel of oil and a 28% increase in the average price received per mcf of
gas, offset by a 12% decline in barrels of oil produced and sold and a 10%
7
decline in mcf of gas produced and sold. For the nine months ended September 30,
1996, 95,365 barrels of oil were sold compared to 108,390 for the same period in
1995, a decrease of 13,025 barrels. For the nine months ended September 30,
1996, 269,367 mcf of gas were sold compared to 299,477 mcf for the same period
in 1995, a decrease of 30,110 mcf. The decrease in production volumes was due to
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 $3.57 from $17.24 for the
nine months ended September 30, 1995 to $20.81 for the same period in 1996 while
the average price received per mcf of gas increased from $1.74 for the nine
months ended September 30, 1995 to $2.22 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 nine months ended
September 30, 1996.
Salvage income totaling $7,945 was received during the nine months ended
September 30, 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.
A gain on sale of property of $2,326 was recognized during the nine months ended
September 30, 1995. This gain was the result of proceeds received from the sale
of mineral rights in an undevel oped property.
Costs and Expenses:
Total costs and expenses decreased to $1,664,731 for the nine months ended
September 30, 1996 as compared to $1,788,050 for the same period in 1995, a
decrease of $123,319, or 7%. The decrease was due to declines in production
costs, depletion, abandoned property costs and amortization of organization
costs, offset by increases in general and administrative expenses ("G&A") and
loss on abandoned property.
Production costs were $1,054,746 for the nine months ended September 30, 1996
and $1,107,466 for the same period in 1995, resulting in a $52,720 decrease, or
5%. The decrease was the result of less well repair and maintenance costs,
offset by an increase in workover costs incurred in an effort to stimulate well
production.
G&A's components are independent accounting and engineering fees, computer
services, postage and managing general partner personnel costs. During this
period, G&A increased, in aggregate, 5% from $78,337 for the nine months ended
September 30, 1995 to $82,130 for the same period in 1996.
Depletion was $525,838 for the nine months ended September 30, 1996 compared to
$593,337 for the same period in 1995, representing a decrease of $67,499, or
8
11%. This decrease was primarily attributable to the following factors: (i) a
reduction in the Registrant's net depletable basis from charges taken in
accordance with Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of" ("FAS 121"), (ii) a reduction in oil production of 13,025 barrels for the
nine months ended September 30, 1996 as compared to the same period in 1995, and
(iii) an increase in oil and gas reserves during the third quarter of 1996 as a
result of higher commodity prices.
A loss on abandoned property of $2,017 was recognized during the nine months
ended September 30, 1996. This loss resulted from the write-off of remaining
capitalized well costs on the abandonment of one saltwater disposal well. A gain
on abandoned property of $8,259 was recognized during the nine months ended
September 30, 1995. This gain was the result of proceeds received from equipment
salvage on one fully depleted abandoned property. Abandoned property costs of
$6,974 were incurred on one well abandoned during the nine months ended
September 30, 1995.
Three months ended September 30, 1996 compared with three months ended September
30, 1995
Revenues:
The Registrant's oil and gas revenues increased to $856,112 from $736,486 for
the three months ended September 30, 1996 and 1995, respectively, an increase of
16%. The increase in revenues resulted from a 31% increase in the average price
received per barrel of oil and a 25% increase in the average price received per
mcf of gas, offset by an 11% decline in barrels of oil produced and sold and an
8% decline in mcf of gas produced and sold. For the three months ended September
30, 1996, 30,765 barrels of oil were sold compared to 34,451 for the same period
in 1995, a decrease of 3,686 barrels. For the three months ended September 30,
1996, 93,680 mcf of gas were sold compared to 102,217 for the same period in
1995, a decrease of 8,537 mcf. The decreases were due to the decline
characteristics of the Registrant's oil and gas properties.
The average price received per barrel of oil increased $5.04 from $16.49 during
the three months ended September 30, 1995 to $21.53 in 1996, while the average
price received per mcf of gas increased from $1.65 during the three months ended
September 30, 1995 to $2.07 in 1996.
Salvage income totaling $540 was received during the three months ended
September 30, 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.
A gain on sale of property of $2,326 was recognized during the three months
ended September 30, 1995. This gain was the result of proceeds received from the
sale of mineral rights in an undeveloped property.
Costs and Expenses:
Total costs and expenses decreased to $534,010 for the three months ended
September 30, 1996 as compared to $577,500 for the same period in 1995, a
9
decrease of $43,490, or 8%. This decrease was due to declines in production
costs, depletion, abandoned property costs, gain on abandoned property and
amortization of organization costs, offset by an increase in G&A.
Production costs were $341,736 for the three months ended September 30, 1996 and
$357,213 for the same period in 1995 resulting in a $15,477 decrease, or 4%. The
decrease was the result of less well repair and maintenance costs.
G&A's components are independent accounting and engineering fees, computer
services, postage and managing general partner personnel costs. During this
period, G&A increased, in aggregate, 4%, from $26,287 for the three months ended
September 30, 1995 to $27,320 for the same period in 1996.
Depletion was $164,954 for the three months ended September 30, 1996 compared to
$189,405 for the same period in 1995, representing a decrease of $24,451, or
13%, primarily attributable to the following factors: (i) a reduction in the
Registrant's net depletable basis from charges taken in accordance with FAS 121,
(ii) a reduction in oil production of 3,686 barrels for the three months ended
September 30, 1996 as compared to the same period in 1995, and (iii) an increase
in oil and gas reserves during the third quarter of 1996 as a result of higher
commodity prices.
A gain on abandoned property of $124 was recognized during the three months
ended September 30, 1995. This gain was the result of proceeds received from
equipment salvage on one fully depleted abandoned property. Abandoned property
costs of $1,322 were incurred on one well abandoned during the three months
ended September 30, 1995. There was no abandonment activity for the same period
ended September 30, 1996.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $95,442 during the nine
months ended September 30, 1996 from the same period ended September 30, 1995.
This increase was due to an increase in oil and gas sales, offset by an increase
in production costs paid.
Net Cash Used in Investing Activities
The Registrant's investing activities during the nine months ended September 30,
1996 and 1995, respectively, included $13,792 and $14,503 for expenditures
related to equipment replacement on various oil and gas properties.
Proceeds of $7,945 were received during the nine months ended September 30, 1996
from the sale of oil and gas equipment one well abandoned in a prior year.
Proceeds of $8,259 were received from the salvage of equipment on one well
abandoned during the nine months ended September 30, 1995.
Proceeds of $2,326 were received during the nine months ended September 30, 1995
from the sale of mineral rights on an undeveloped property.
10
Net Cash Used in Financing Activities
Cash was sufficient for the nine months ended September 30, 1996 to cover
distributions to the partners of $1,279,280 of which $1,266,499 was distributed
to the limited partners and $12,781 to the managing general partner. For the
same period ended September 30, 1995, cash was sufficient for distributions to
the partners of $1,250,307 of which $1,237,804 was distributed to the limited
partners and $12,503 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.
Part II. Other Information
None
11
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: November 13, 1996 By: /s/ Steven L. Beal
-------------------------------------
Steven L. Beal, Senior Vice President
and Chief Financial Officer of PPUSA
12