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 June 30, 2001
Commission File No. 33-26097-10
PARKER & PARSLEY 90-C CONV., L.P.
(Exact name of Registrant as specified in its charter)
Delaware 75-2347264
----------------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
5205 N. O'Connor Blvd., Suite 1400, Irving, Texas 75039
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(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 90-C CONV., L.P.
TABLE OF CONTENTS
Page
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of June 30, 2001 and
December 31, 2000..................................... 3
Statements of Operations for the three and six
months ended June 30, 2001 and 2000.................... 4
Statement of Partners' Capital for the six months
ended June 30, 2001.................................... 5
Statements of Cash Flows for the six months ended
June 30, 2001 and 2000................................. 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......................... 11
Signatures............................................... 12
2
PARKER & PARSLEY 90-C CONV., L.P.
(A Delaware Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
June 30, December 31,
2001 2000
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash $ 221,203 $ 106,593
Accounts receivable - oil and gas sales 89,315 119,396
---------- ----------
Total current assets 310,518 225,989
---------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 5,801,749 5,798,493
Accumulated depletion (5,028,486) (5,000,618)
---------- ----------
Net oil and gas properties 773,263 797,875
---------- ----------
$ 1,083,781 $ 1,023,864
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 23,477 $ 14,074
Partners' capital:
Managing general partner 10,572 10,067
Limited partners (7,531 interests) 1,049,732 999,723
---------- ----------
1,060,304 1,009,790
---------- ----------
$ 1,083,781 $ 1,023,864
========== ==========
The financial information included as of June 30, 2001 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 90-C CONV., L.P.
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended
June 30, June 30,
---------------------- ----------------------
2001 2000 2001 2000
--------- --------- --------- ---------
Revenues:
Oil and gas $ 213,193 $ 221,187 $ 444,118 $ 414,898
Interest 1,624 1,946 3,412 3,443
-------- -------- -------- --------
214,817 223,133 447,530 418,341
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 97,643 77,437 193,283 161,148
General and administrative 6,504 7,156 14,679 13,090
Depletion 14,385 12,574 27,868 26,316
-------- -------- -------- --------
118,532 97,167 235,830 200,554
-------- -------- -------- --------
Net income $ 96,285 $ 125,966 $ 211,700 $ 217,787
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 963 $ 1,260 $ 2,117 $ 2,178
======== ======== ======== ========
Limited partners $ 95,322 $ 124,706 $ 209,583 $ 215,609
======== ======== ======== ========
Net income per limited
partnership interest $ 12.66 $ 16.56 $ 27.83 $ 28.63
======== ======== ======== ========
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 90-C CONV., L.P.
(A Delaware Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
--------- ---------- ----------
Balance at January 1, 2001 $ 10,067 $ 999,723 $1,009,790
Distributions (1,612) (159,574) (161,186)
Net income 2,117 209,583 211,700
-------- --------- ---------
Balance at June 30, 2001 $ 10,572 $1,049,732 $1,060,304
======== ========= =========
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 90-C CONV., L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended
June 30,
-------------------------
2001 2000
---------- ----------
Cash flows from operating activities:
Net income $ 211,700 $ 217,787
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 27,868 26,316
Changes in assets and liabilities:
Accounts receivable 30,081 (13,427)
Accounts payable 9,403 7,249
--------- ---------
Net cash provided by operating activities 279,052 237,925
--------- ---------
Cash flows used in investing activities:
Additions to oil and gas properties (3,256) (15,344)
Cash flows used in financing activities:
Cash distributions to partners (161,186) (216,896)
--------- ---------
Net increase in cash 114,610 5,685
Cash at beginning of period 106,593 107,295
--------- ---------
Cash at end of period $ 221,203 $ 112,980
========= =========
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 90-C CONV., L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 2001
(Unaudited)
Note 1. Organization and nature of operations
Parker & Parsley 90-C Conv., L.P. (the "Partnership") was organized as a general
partnership in 1990 under the laws of the State of Texas and was converted to a
Delaware limited partnership on August 1, 1991.
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 June 30, 2001 and for the three and six months ended June 30,
2001 and 2000 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 June 30, 2000 financial statements to conform to the June 30, 2001
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, 2000, 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, Suite 1400, Irving,
Texas 75039-3746.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (1)
Results of Operations
Six months ended June 30, 2001 compared with six months
ended June 30, 2000
Revenues:
The Partnership's oil and gas revenues increased 7% to $444,118 for the six
months ended June 30, 2001 as compared to $414,898 for the same period in 2000.
The increase in revenues resulted from higher average prices received, offset by
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a decline in production. For the six months ended June 30, 2001, 11,505 barrels
of oil, 2,477 barrels of natural gas liquids ("NGLs") and 17,805 mcf of gas were
sold, or 16,950 barrel of oil equivalents ("BOEs"). For the six months ended
June 30, 2000, 11,959 barrels of oil, 4,427 barrels of NGLs and 14,092 mcf of
gas were sold, or 18,735 BOEs.
The average price received per barrel of oil increased slightly from $27.46 for
the six months ended June 30, 2000 to $27.55 for the same period in 2001. The
average price received per barrel of NGLs increased $3.24, or 25%, from $12.80
during the six months ended June 30, 2000 to $16.04 for the same period in 2001.
The average price received per mcf of gas increased 133% from $2.11 during the
six months ended June 30, 2000 to $4.91 for the same period in 2001. 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 six months ended
June 30, 2001.
Costs and Expenses:
Total costs and expenses increased to $235,830 for the six months ended June 30,
2001 as compared to $200,554 for the same period in 2000, an increase of
$35,276, or 18%. This increase was due to increases in production costs, general
and administrative expenses ("G&A") and depletion.
Production costs were $193,283 for the six months ended June 30, 2001 and
$161,148 for the same period in 2000, resulting in a $32,135 increase, or 20%.
The increase was primarily due to additional well maintenance and workover costs
incurred to stimulate well production and higher production taxes associated
with higher oil and gas prices.
G&A's components are independent accounting and engineering fees and managing
general partner personnel and operating costs. During this period, G&A increased
12% from $13,090 for the six months ended June 30, 2000 to $14,679 for the same
period in 2001, primarily due to a higher percentage 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 and an increase in audit and tax fees.
Depletion was $27,868 for the six months ended June 30, 2001 as compared to
$26,316 for the same period in 2000, an increase of $1,552, or 6%. This increase
was the result of a reduction in proved reserves during the period ended June
30, 2001 due to lower commodity prices, offset by a decline in oil production of
454 barrels for the six months ended June 30, 2001 compared to the same period
in 2000.
Three months ended June 30, 2001 compared with three months
ended June 30, 2000
Revenues:
The Partnership's oil and gas revenues decreased 4% to $213,193 for the three
months ended June 30, 2001 as compared to $221,187 for the same period in 2000.
The decrease in revenues resulted from a decline in production and lower average
prices received for oil, offset by higher average prices received for gas and
NGLs. For the three months ended June 30, 2001, 5,694 barrels of oil, 1,618
8
barrels of NGLs and 9,654 mcf of gas were sold, or 8,921 BOEs. For the three
months ended June 30, 2000, 6,157 barrels of oil, 2,484 barrels of NGLs and
7,658 mcf of gas were sold, or 9,917 BOEs.
The average price received per barrel of oil decreased $.75, or 3%, from $27.75
for the three months ended June 30, 2000 to $27.00 for the same period in 2001.
The average price received per barrel of NGLs increased $1.82, or 14%, from
$12.68 during the three months ended June 30, 2000 to $14.50 for the same period
in 2001. The average price received per mcf of gas increased 52% from $2.44
during the three months ended June 30, 2000 to $3.72 for the same period in
2001.
Costs and Expenses:
Total costs and expenses increased to $118,532 for the three months ended June
30, 2001 as compared to $97,167 for the same period in 2000, an increase of
$21,365, or 22%. This increase was due to increases in production costs and
depletion, offset by a decrease in G&A.
Production costs were $97,643 for the three months ended June 30, 2001 and
$77,437 for the same period in 2000, resulting in a $20,206 increase, or 26%.
The increase was primarily due to additional well maintenance and workover costs
incurred to stimulate well production.
During this period, G&A decreased 9% from $7,156 for the three months ended June
30, 2000 to $6,504 for the same period in 2001, primarily due to a lower
percentage of the managing general partner's G&A being allocated (limited to 3%
of oil and gas revenues) as a result of a decline in oil and gas revenues and a
decline in audit and tax fees.
Depletion was $14,385 for the three months ended June 30, 2001 as compared to
$12,574 for the same period in 2000, an increase of $1,811, or 14%. This
increase was the result of a reduction in proved reserves during the period
ended June 30, 2001 due to lower commodity prices, offset by a decline in oil
production of 463 barrels for the three months ended June 30, 2001 compared to
the same period in 2000.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $41,127 during the six
months ended June 30, 2001 from the same period ended June 30, 2000. This
increase was due to a reduction in working capital of $45,662 and an increase of
$29,189 in oil and gas sales receipts, offset by increases in production costs
of $32,135 and G&A expenses of $1,589. The increase in oil and gas receipts
resulted from the increase in commodity prices during 2001 which contributed an
additional $54,741 to oil and gas receipts, offset by $25,552 resulting from the
decline in production during 2001 as compared to the same period in 2000. The
increase in production costs was primarily due to additional well maintenance
and workover costs incurred to stimulate well production and increased
production taxes associated with higher oil and gas prices. The increase in G&A
was primarily due to a higher percentage 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 and an increase in audit and tax fees.
9
Net Cash Used in Investing Activities
The Partnership's principal investing activities during the six months ended
June 30, 2001 and 2000 were related to expenditures for oil and gas equipment
upgrades on active properties.
Net Cash Used in Financing Activities
For the six months ended June 30, 2001, cash distributions to the partners were
$161,186, of which $1,612 was distributed to the managing general partner and
$159,574 to the limited partners. For the same period ended June 30, 2000, cash
distributions to the partners were $216,896, of which $2,169 was distributed to
the managing general partner and $214,727 to the limited partners.
For the three months ended June 30, 2001, no distributions were made by the
partnership to its partners. Subsequent to June 30, 2001 the cash distribution
that otherwise would have been mailed to partners in late June was made to
holders of record as of July 9, 2001 and was mailed on July 13, 2001. For
further information, see "Proposal to acquire partnerships" below.
Proposal to acquire partnerships
On June 29, 2001, Pioneer Natural Resources Company ("Pioneer") filed with the
Securities and Exchange Commission Amendment No. 1 to the Form S-4 Registration
Statement (File No. 333-59094) (the "preliminary proxy statement/prospectus"),
which proposes an agreement and plan of merger among Pioneer, Pioneer Natural
Resources USA, Inc. ("Pioneer USA"), a wholly-owned subsidiary of Pioneer, and
46 Parker & Parsley limited partnerships. Each partnership that approves the
agreement and plan of merger and the other related merger proposals will merge
with and into Pioneer USA upon the closing of the transactions described in the
preliminary proxy statement/prospectus, and the partnership interests of each
such partnership will be converted into the right to receive Pioneer common
stock. The Partnership is one of the 46 Parker & Parsley limited partnerships
that will be asked to approve the agreement and plan of merger. The preliminary
proxy statement/prospectus is non-binding and is subject to, among other things,
consideration of offers from third parties to purchase any partnership or its
assets and the majority approval of the limited partnership interests in each
partnership.
Pioneer USA will solicit proxies from limited partners to approve the mergers
only when the proxy statement/prospectus is final and declared effective. No
solicitation will be made using preliminary materials. Nonetheless, copies of
the preliminary proxy statement/prospectus may be obtained without charge upon
request from Pioneer Natural Resources Company, 5205 North O'Connor Blvd., Suite
1400, Irving, Texas 75039, Attention: Investor Relations.
The limited partners are urged to read the proxy statement/prospectus of Pioneer
filed with the Securities and Exchange Commission, when it is finalized, because
it contains important information about the proposed mergers, including
information about the direct and indirect interests of Pioneer USA and Pioneer
in the mergers. The limited partners may also obtain the preliminary and (when
filed) final proxy statement/prospectus and other relevant documents relating to
the proposed mergers free through the internet web site that the Securities and
Exchange Commission maintains at www.sec.gov.
10
- ---------------
(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 - none
(b) Form 8-K - none
11
PARKER & PARSLEY 90-C CONV., 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-C CONV., L.P.
By: Pioneer Natural Resources USA, Inc.,
Managing General Partner
Dated: August 7, 2001 By: /s/ Rich Dealy
--------------------------------
Rich Dealy, Vice President and
Chief Accounting Officer
12