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 June 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. 33-26097-10
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)
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 11 pages.
-There are no exhibits-
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,
1996 1995
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $91,329 at June 30
and $81,814 at December 31 $ 91,523 $ 82,151
Accounts receivable - oil and gas sales 74,891 69,436
---------- ----------
Total current assets 166,414 151,587
Oil and gas properties - at cost, based on the
successful efforts accounting method 5,742,448 5,829,695
Accumulated depletion (4,238,281) (4,252,391)
---------- ----------
Net oil and gas properties 1,504,167 1,577,304
---------- ----------
$ 1,670,581 $ 1,728,891
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 27,723 $ 49,135
Partners' capital:
Limited partners (7,531 interests) 1,626,457 1,662,989
Managing general partner 16,401 16,767
---------- ----------
1,642,858 1,679,756
---------- ----------
$ 1,670,581 $ 1,728,891
========== ==========
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-C CONV., L.P.
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
1996 1995 1996 1995
--------- --------- --------- ---------
Revenues:
Oil and gas sales $ 204,766 $ 187,764 $ 395,682 $ 389,345
Interest income 1,225 1,326 2,208 2,320
Gain on abandoned property - 7,983 - 7,983
-------- -------- -------- --------
Total revenues 205,991 197,073 397,890 399,648
Costs and expenses:
Production costs 85,679 93,510 169,212 179,823
General and administrative
expenses 6,798 5,383 12,525 12,138
Depletion 29,723 33,667 63,391 71,264
Abandoned property costs - 4,183 - 4,183
Amortization of organization
costs - 794 - 1,588
Loss on sale of assets 6,743 - 6,743 -
-------- -------- -------- --------
Total costs and expenses 128,943 137,537 251,871 268,996
-------- -------- -------- --------
Net income $ 77,048 $ 59,536 $ 146,019 $ 130,652
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 770 $ 603 $ 1,460 $ 1,322
======== ======== ======== ========
Limited partners $ 76,278 $ 58,933 $ 144,559 $ 129,330
======== ======== ======== ========
Net income per limited
partnership interest $ 10.13 $ 7.82 $ 19.20 $ 17.17
======== ======== ======== ========
Distributions per limited
partnership interest $ 13.53 $ 12.58 $ 24.05 $ 25.44
======== ======== ======== ========
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-C CONV., L.P.
(A Delaware Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
--------- ---------- ----------
Balance at January 1, 1995 $ 18,549 $1,842,493 $1,861,042
Distributions (1,935) (191,571) (193,506)
Net income 1,322 129,330 130,652
-------- --------- ---------
Balance at June 30, 1995 $ 17,936 $1,780,252 $1,798,188
========= ========= =========
Balance at January 1, 1996 $ 16,767 $1,662,989 $1,679,756
Distributions (1,826) (181,091) (182,917)
Net income 1,460 144,559 146,019
--------- --------- ---------
Balance at June 30, 1996 $ 16,401 $1,626,457 $1,642,858
========= ========= =========
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-C CONV., L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended
June 30,
1996 1995
---------- ----------
Cash flows from operating activities:
Net income $ 146,019 $ 130,652
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion and amortization 63,391 72,852
Gain on abandoned property - (7,983)
Loss on sale of assets 6,743 -
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (5,455) 5,973
Increase (decrease) in accounts payable (21,412) 10,695
--------- ---------
Net cash provided by operating activities 189,286 212,189
Cash flows from investing activities:
Additions to oil and gas properties (1,446) (4,157)
Proceeds from equipment salvage on abandoned
property - 1,964
Proceeds from sale of assets 4,449 -
--------- ---------
Net cash provided by (used in) operating
activities 3,003 (2,193)
Cash flows from financing activities:
Cash distributions to partners (182,917) (193,506)
--------- ---------
Net increase in cash and cash equivalents 9,372 16,490
Cash and cash equivalents at beginning of period 82,151 47,974
--------- ---------
Cash and cash equivalents at end of period $ 91,523 $ 64,464
========= =========
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-C CONV., L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
NOTE 1.
Parker & Parsley 90-C Conv., L.P. (the "Registrant") 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 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 June 30, 1996 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.
NOTE 3.
A loss of $6,743 on sale of assets to Costilla Energy, L.L.C. was recognized
during the six months ended June 30, 1996. This loss was the result of the
write-off of remaining capitalized well costs for one gas well of $11,192 less
proceeds received of $4,449.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (1)
Results of Operations
Six months ended June 30, 1996 compared with six months ended
June 30, 1995
Revenues:
The Registrant's oil and gas revenues increased to $395,682 from $389,345 for
the six months ended June 30, 1996 and 1995, respectively. The increase in
revenues resulted from higher average prices received per barrel of oil and mcf
of gas, offset by a 13% decrease in barrels of oil produced and sold and a 26%
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decrease in mcf of gas produced and sold. For the six months ended June 30,
1996, 15,187 barrels of oil were sold compared to 17,380 for the same period in
1995, a decrease of 2,193 barrels. For the six months ended June 30, 1996,
34,670 mcf of gas were sold compared to 46,579 for the same period in 1995, a
decrease of 11,909 mcf. Of the decrease, 1,880 mcf, or 4%, was attributable to
the sale of one gas well during the six months ended June 30, 1996, with the
remaining 10,029 mcf, or 22%, due to production declines. Due to the decline
characteristics of the Registrant's oil and gas properties, management expects a
certain amount of decline in production in the future until the Registrant's
economically recoverable reserves are fully depleted.
The average price received per barrel of oil increased $3.01, or 17%, from
$17.60 for the six months ended June 30, 1995 to $20.61 for the same period in
1996 while the average price received per mcf of gas increased 33% from $1.79
during the six months ended June 30, 1995 to $2.38 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 six months ended June 30,
1996.
A gain on abandoned property of $7,983 was recognized during the six months
ended June 30, 1995. This gain was the result of proceeds received from
equipment salvage on one fully depleted abandoned property. Expenses incurred
during the six months ended June 30, 1995 to plug and abandon one well totaled
$4,183. There was no abandonment activity for the same period in 1996.
Costs and Expenses:
Total costs and expenses decreased to $251,871 for the six months ended June 30,
1996 as compared to $268,996 for the same period in 1995, a decrease of $17,125,
or 6%. This 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 sale of
assets.
Production costs were $169,212 for the six months ended June 30, 1996 and
$179,823 for the same period in 1995, resulting in a $10,611 decrease, or 6%.
The decrease was the result of less workover expense and reduced 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, 3% from $12,138 for the six months ended
June 30, 1995 to $12,525 for the same period in 1996.
Depletion was $63,391 for the six months ended June 30, 1996 compared to $71,264
for the same period in 1995. This represented a decrease in depletion of $7,873,
or 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" ("FAS 121")
7
effective the fourth quarter of 1995 and the reduction of net depletable basis
resulting from the charge taken upon such adoption. Depletion was computed on a
property-by-property basis utilizing the unit-of-production method based upon
the dominant mineral produced, generally oil. Oil production decreased 2,193
barrels for the six months ended June 30, 1996 from the same period in 1995,
while oil reserves of barrels were revised downward by 13,797 barrels, or 3%.
A loss on sale of assets of $6,743 was recognized during the six months June 30,
1996. This loss resulted from the write-off of remaining capitalized well costs
for one gas well of $11,192 less proceeds received of $4,449.
Three months ended June 30, 1996 compared with three months ended
June 30, 1995
Revenues:
The Registrant's oil and gas revenues increased to $204,766 from $187,764 for
the three months ended June 30, 1996 and 1995, respectively, an increase of 9%.
The increase in revenues resulted from higher average prices received per barrel
of oil and mcf of gas, offset by a 12% decrease in barrels of oil produced and
sold and a 31% decrease in mcf of gas produced and sold. For the three months
ended June 30, 1996, 7,283 barrels of oil were sold compared to 8,248 for the
same period in 1995, a decrease of 965 barrels. For the three months ended June
30, 1996, 16,876 mcf of gas were sold compared to 24,343 for the same period in
1995, a decrease of 7,467 mcf. Of the decrease, 1,192 mcf, or 5%, was
attributable to the fact that one gas well was sold during the six months ended
June 30, 1996, with the remaining decrease of 6,275 mcf, or 26%, due to the
decline characteristics of the Registrant's oil and gas properties.
The average price received per barrel of oil increased $4.22, or 23%, from
$18.03 for the three months ended June 30, 1995 to $22.25 for the same period in
1996 while the average price received per mcf of gas increased 58% from $1.60
during the three months ended June 30, 1995 to $2.53 in 1996.
A gain on abandoned property of $7,983 was recognized during the three months
ended June 30, 1995. This gain was the result of proceeds received from
equipment salvage on one fully depleted abandoned property. Expenses incurred
during the three months ended June 30, 1995 to plug and abandon one well totaled
$4,183. There was no abandonment activity for the same period in 1996.
Costs and Expenses:
Total costs and expenses decreased to $128,943 for the three months ended June
30, 1996 as compared to $137,537 for the same period in 1995, a decrease of
$8,594, or 6%. This decrease was due to declines in production costs, depletion,
abandoned property costs and amortization of organization costs, offset by
increases in G&A and loss on sale of assets.
Production costs were $85,679 for the three months ended June 30, 1996 and
$93,510 for the same period in 1995 resulting in a $7,831 decrease, or 8%. The
decrease was primarily due to declines in workover expense and well repair and
maintenance costs, offset by an increase in production taxes.
8
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, 26% from $5,383 for the three months ended
June 30, 1995 to $6,798 for the same period in 1996.
Depletion was $29,723 for the three months ended June 30, 1995 compared to
$33,667 for the same period in 1995. This represented a decrease in depletion of
$3,944, or 12%, primarily attributable to the adoption of FAS 121 the fourth
quarter of 1995, as discussed previously. Oil production decreased 965 barrels
for the three months ended June 30, 1996 from the same period in 1995.
A loss on sale of assets of $6,743 was recognized during the three months June
30, 1996. This loss resulted from the write-off of remaining capitalized well
costs for one gas well of $11,192 less proceeds received of $4,449.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased during the six months ended
June 30, 1996 $22,903 from the same period ended June 30, 1995. This decrease
was primarily due to an increase in production costs paid.
Net Cash Provided by (Used in) Investing Activities
The Registrant's principal investing activities during the six months ended June
30, 1996 and 1995 were for expenditures related to equipment replacement on
various oil and gas properties.
Proceeds of $4,449 from the sale of one gas well were received during the six
months ended June 30, 1996. Proceeds of $1,964 were received from the salvage of
equipment on one well abandoned during the six months ended June 30, 1995.
Net Cash Used in Financing Activities
Cash was sufficient for the six months ended June 30, 1996 to cover
distributions to the partners of $182,917 of which $181,091 was distributed to
the limited partners and $1,826 to the managing general partner. For the same
period ended June 30, 1995, cash was sufficient for distributions to the
partners of $193,506 of which $191,571 was distributed to the limited partners
and $1,935 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.
9
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - none
(b) Form 8-K - none
10
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: Parker & Parsley Development L.P.,
Managing General Partner
By: Parker & Parsley Petroleum USA, Inc.
("PPUSA"), General Partner
Dated: August 12, 1996 By: /s/ Steven L. Beal
----------------------------------------
Steven L. Beal, Senior Vice President
and Chief Financial Officer of PPUSA
11