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, 1997
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.
Exhibit index on page 10.
PARKER & PARSLEY 90-C CONV., L.P.
TABLE OF CONTENTS
Page
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of September 30, 1997 and
December 31, 1996 ....................................... 3
Statements of Operations for the three and nine
months ended September 30, 1997 and 1996.................... 4
Statement of Partners' Capital for the nine months
ended September 30, 1997.................................... 5
Statements of Cash Flows for the nine months ended
September 30, 1997 and 1996................................. 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. Financial Data Schedule
Signatures.................................................... 11
2
PARKER & PARSLEY 90-C CONV., L.P.
(A Delaware Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
September 30, December 31,
1997 1996
------------ -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $92,676 at September 30
and $79,483 at December 31 $ 92,788 $ 79,564
Accounts receivable - oil and gas sales 63,195 124,287
----------- ----------
Total current assets 155,983 203,851
----------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 5,750,858 5,744,947
Accumulated depletion (4,366,467) (4,287,671)
----------- ----------
Net oil and gas properties 1,384,391 1,457,276
----------- ----------
$ 1,540,374 $ 1,661,127
=========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 26,967 $ 17,442
Partners' capital:
Managing general partner 15,103 16,406
Limited partners (7,531 interests) 1,498,304 1,627,279
----------- ----------
1,513,407 1,643,685
----------- ----------
$ 1,540,374 $ 1,661,127
=========== ==========
The financial information included as of September 30, 1997 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 OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
--------------------- ---------------------
1997 1996 1997 1996
--------- --------- --------- ---------
Revenues:
Oil and gas $ 145,486 $ 189,248 $ 490,257 $ 584,930
Interest 1,450 1,443 4,389 3,651
Gain (loss) on disposition
of assets 7 (7) 800 (6,750)
-------- -------- -------- --------
146,943 190,684 495,446 581,831
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 73,715 78,363 239,766 247,575
General and administrative 5,888 6,029 16,906 18,554
Depletion 26,566 23,532 78,796 86,923
-------- -------- -------- --------
106,169 107,924 335,468 353,052
-------- -------- -------- --------
Net income $ 40,774 $ 82,760 $ 159,978 $ 228,779
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 408 $ 828 $ 1,600 $ 2,288
======== ======== ======== ========
Limited partners $ 40,366 $ 81,932 $ 158,378 $ 226,491
======== ======== ======== ========
Net income per limited
partnership interest $ 5.36 $ 10.87 $ 21.03 $ 30.07
======== ======== ======== ========
Distributions per limited
partnership interest $ 10.27 $ 12.96 $ 38.16 $ 37.01
======== ======== ======== ========
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)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
--------- ---------- ----------
Balance at January 1, 1997 $ 16,406 $1,627,279 $1,643,685
Distributions (2,903) (287,353) (290,256)
Net income 1,600 158,378 159,978
-------- --------- ---------
Balance at September 30, 1997 $ 15,103 $1,498,304 $1,513,407
======== ========= =========
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)
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
September 30,
------------------------
1997 1996
---------- ----------
Cash flows from operating activities:
Net income $ 159,978 $ 228,779
Adjustments to reconcile net income to
net cash provided by operating activities:
Depletion 78,796 86,923
(Gain) loss on disposition of assets (800) 6,750
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 61,092 (10,164)
Increase (decrease) in accounts payable 9,525 (18,395)
--------- ---------
Net cash provided by operating activities 308,591 293,893
--------- ---------
Cash flows from investing activities:
Additions to oil and gas properties (5,911) (3,875)
Proceeds from disposition of assets 800 4,442
--------- ---------
Net cash provided by (used in) investing
activities (5,111) 567
--------- ---------
Cash flows from financing activities:
Cash distributions to partners (290,256) (281,565)
--------- ---------
Net increase in cash and cash equivalents 13,224 12,895
Cash and cash equivalents at beginning of period 79,564 82,151
--------- ---------
Cash and cash equivalents at end of period $ 92,788 $ 95,046
========= =========
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-C CONV., L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
(Unaudited)
Note 1. Basis of presentation
In the opinion of management, the unaudited financial statements of Parker &
Parsley 90-C Conv., L.P. (the "Partnership") as of September 30, 1997 and for
the three and nine months ended September 30, 1997 and 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. These interim results are not necessarily indicative of results for a
full year. Certain reclassifications have been made to prior period financial
statements to conform to the 1997 financial presentations.
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 Partnership's Report on Form 10-K for the year ended
December 31, 1996, as filed with the Securities and Exchange Commission, a copy
of which is available upon request by writing to Rich Dealy, Vice President and
Controller, 303 West Wall, Suite 101, Midland, Texas 79701.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (1)
As of August 8, 1997, Pioneer Natural Resources USA, Inc. ("Pioneer USA") became
the general partner of the Partnership. Prior to August 8, 1997, the
Partnership's general partner was Parker & Parsley Development L.P. ("PPDLP"), a
wholly-owned subsidiary of Parker & Parsley Petroleum Company ("Parker &
Parsley"). On August 7, 1997, Parker & Parsley and Mesa Inc. received
shareholder approval to merge and create Pioneer Natural Resources Company
("Pioneer"). On August 8, 1997, PPDLP was merged with and into Pioneer USA, a
wholly-owned subsidiary of Pioneer, resulting in Pioneer USA becoming the
general partner of the Partnership as PPDLP's successor by merger. For a more
complete description of the Parker & Parsley and Mesa Inc. merger, see Pioneer's
Registration Statement on Form S-4 as filed with the Securities and Exchange
Commission.
Results of Operations
Nine months ended September 30, 1997 compared with nine months ended
September 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 16% to $490,257 from $584,930
for the nine months ended September 30, 1997 as compared to the nine months
ended September 30, 1996. The decrease in revenues resulted from declines in
7
barrels of oil and mcf of gas produced and sold and a decrease in the average
price received per barrel of oil, offset by an increase in the average price
received per mcf of gas. For the nine months ended September 30, 1997, 19,209
barrels of oil were sold compared to 22,429 for the same period in 1996, a
decrease of 3,220 barrels, or 14%. For the nine months ended September 30, 1997,
45,111 mcf of gas were sold compared to 49,479 mcf for the same period in 1996,
a decrease of 4,368 mcf, or 9%. Due to the decline characteristics of the
Partnership's properties, management expects a certain amount of decline in
production to continue in the future until the Partnership's economically
recoverable reserves are fully depleted.
The average price received per barrel of oil decreased $1.18, or 6%, from $20.97
for the nine months ended September 30, 1996 to $19.79 for the same period in
1997, while the average price received per mcf of gas increased 5% from $2.32
during the nine months ended September 30, 1996 to $2.44 in 1997. 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, 1997.
Gain on disposition of assets of $800 for the nine months ended September 30,
1997 was attributable to credits received from the disposal of oil and gas
equipment on one fully depleted well. Loss on disposition of assets of $6,750
was recognized during the nine months ended September 30, 1996 from the sale of
one gas well to Costilla Energy L.L.C.
Costs and Expenses:
Total costs and expenses decreased to $335,468 for the nine months ended
September 30, 1997 as compared to $353,052 for the same period in 1996, a
decrease of $24,334, or 7%. This decrease was due to declines in depletion,
production costs and general and administrative expenses ("G&A").
Production costs were $239,766 for the nine months ended September 30, 1997 and
$247,575 for the same period in 1996, resulting in a $7,809 decrease, or 3%. The
decrease was the result of lower well maintenance costs and production taxes,
offset by a slight increase in ad valorem taxes.
G&A's components are independent accounting and engineering fees and managing
general partner personnel and operating costs. During this period, G&A
decreased, in aggregate, 9% from $18,554 for the nine months ended September 30,
1996 to $16,906 for the same period in 1997.
Depletion was $78,796 for the nine months ended September 30, 1997 compared to
$86,923 for the same period in 1996, representing a decrease of $8,127, or 9%.
This decrease was primarily attributable to a decline in oil production of 3,220
barrels for the nine months ended September 30, 1997 as compared to the same
period in 1996, offset by a decline in oil reserves during 1997 as a result of
lower commodity prices.
8
Three months ended September 30, 1997 compared with three months ended
September 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 23% to $145,486 from $189,248
for the three months ended September 30, 1997 as compared to the three months
ended September 30, 1996. The decrease in revenues resulted from lower average
prices received per barrel of oil and mcf of gas and a decline in barrels of oil
produced and sold, offset by an increase in mcf of gas produced and sold. For
the three months ended September 30, 1997, 6,195 barrels of oil were sold
compared to 7,242 for the same period in 1996, a decrease of 1,047 barrels, or
15%. For the three months ended September 30, 1997, 15,309 mcf of gas were sold
compared to 14,809 for the same period in 1996, an increase of 500 mcf, or 3%.
The increase in gas production was the result of operational changes on several
wells. The decrease in oil production was due to the decline characteristics of
the Partnership's oil properties.
The average price received per barrel of oil decreased $3.36, or 16%, from
$21.73 for the three months ended September 30, 1996 to $18.37 for the same
period in 1997, while the average price received per mcf of gas decreased 4%
from $2.15 during the three months ended September 30, 1996 to $2.07 in 1997.
Costs and Expenses:
Total costs and expenses decreased to $106,169 for the three months ended
September 30, 1997 as compared to $107,924 for the same period in 1996, a
decrease of $1,755. This decrease was due to declines in production costs and
G&A, offset by an increase in depletion.
Production costs were $73,715 for the three months ended September 30, 1997 and
$78,363 for the same period in 1996, resulting in a $4,648 decrease, or 6%. The
decrease was the result of lower well maintenance costs and production taxes,
offset by an increase in ad valorem taxes.
G&A's components are independent accounting and engineering fees and managing
general partner personnel and operating costs. During this period, G&A decreased
slightly from $6,029 for the three months ended September 30, 1996 to $5,888 for
the same period in 1997.
Depletion was $26,566 for the three months ended September 30, 1997 compared to
$23,532 for the same period in 1996, representing an increase of $3,034, or 13%,
primarily attributable to a decline in oil reserves during the third quarter of
1997 as a result of lower commodity prices.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $14,698 during the nine
months ended September 30, 1997 from the same period ended September 30, 1996.
This increase was due to a decrease in G&A and production costs paid, offset by
a decline in oil and gas sales receipts.
9
Net Cash Provided by (Used in) Investing Activities
The Partnership's investing activities during the nine months ended September
30, 1997 and 1996 included expenditures related to equipment replacement on
various oil and gas properties.
Proceeds of $800 from the salvage of equipment on one fully depleted well were
received during the nine months ended September 30, 1997. Proceeds of $4,442
from the sale of one gas well were received during the nine months ended
September 30, 1996.
Net Cash Used in Financing Activities
Cash was sufficient for the nine months ended September 30, 1997 to cover
distributions to the partners of $290,256 of which $2,903 was distributed to the
managing general partner and $287,353 to the limited partners. For the same
period ended September 30, 1996, cash was sufficient for distributions to the
partners of $281,565 of which $2,813 was distributed to the managing general
partner and $278,752 to the limited partners.
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
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27. Financial Data Schedule
(b) Reports on 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: Pioneer Natural Resources USA, Inc.,
Managing General Partner
Dated: November 10, 1997 By: /s/ Rich Dealy
----------------------------------
Rich Dealy, Vice President and
Controller
11