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. 33-26097-08
PARKER & PARSLEY 90-B CONV., L.P.
(Exact name of Registrant as specified in its charter)
Delaware 75-2329284
----------------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
5205 N. O'Connor Blvd., Suite 1400, Irving, Texas 75039
------------------------------------------------- ------------
(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-B 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-B 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 $ 369,346 $ 132,300
Accounts receivable - oil and gas sales 166,716 209,552
---------- ----------
Total current assets 536,062 341,852
---------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 9,564,578 9,628,120
Accumulated depletion (8,066,067) (8,075,752)
---------- ----------
Net oil and gas properties 1,498,511 1,552,368
---------- ----------
$ 2,034,573 $ 1,894,220
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 32,466 $ 15,580
Partners' capital:
Managing general partner 20,020 18,785
Limited partners (11,897 interests) 1,982,087 1,859,855
---------- ----------
2,002,107 1,878,640
---------- ----------
$ 2,034,573 $ 1,894,220
========== ==========
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-B 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 $ 338,348 $ 356,486 $ 763,083 $ 687,189
Interest 2,579 2,684 5,086 4,777
Gain on disposition of assets 1,079 - 3,054 2,023
-------- -------- -------- --------
342,006 359,170 771,223 693,989
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 138,987 143,700 282,193 277,308
General and administrative 9,322 11,592 22,884 21,724
Depletion 27,479 25,752 54,399 52,512
Abandoned property 3,059 - 3,059 -
-------- -------- -------- --------
178,847 181,044 362,535 351,544
-------- -------- -------- --------
Net income $ 163,159 $ 178,126 $ 408,688 $ 342,445
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 1,632 $ 1,781 $ 4,087 $ 3,424
======== ======== ======== ========
Limited partners $ 161,527 $ 176,345 $ 404,601 $ 339,021
======== ======== ======== ========
Net income per limited
partnership interest $ 13,58 $ 14.83 $ 34.01 $ 28.50
======== ======== ======== ========
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-B CONV., L.P.
(A Delaware Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
---------- ---------- ----------
Balance at January 1, 2001 $ 18,785 $1,859,855 $1,878,640
Distributions (2,852) (282,369) (285,221)
Net income 4,087 404,601 408,688
--------- --------- ---------
Balance at June 30, 2001 $ 20,020 $1,982,087 $2,002,107
========= ========= =========
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-B 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 $ 408,688 $ 342,445
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 54,399 52,512
Gain on disposition of assets (3,054) (2,023)
Changes in assets and liabilities:
Accounts receivable 42,836 (25,998)
Accounts payable 16,886 12,818
--------- ---------
Net cash provided by operating activities 519,755 379,754
--------- ---------
Cash flows from investing activities:
Additions to oil and gas properties (542) (10,356)
Proceeds from asset dispositions 3,054 2,023
--------- ---------
Net cash provided by (used in)
investing activities 2,512 (8,333)
--------- ---------
Cash flows used in financing activities:
Cash distributions to partners (285,221) (362,661)
--------- ---------
Net increase in cash 237,046 8,760
Cash at beginning of period 132,300 132,031
--------- ---------
Cash at end of period $ 369,346 $ 140,791
========= =========
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-B 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-B 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 11% to $763,083 for the six
months ended June 30, 2001 as compared to $687,189 for the same period in 2000.
The increase in revenues resulted from higher average prices received, offset by
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a decrease in production. For the six months ended June 30, 2001, 17,353 barrels
of oil, 6,410 barrels of natural gas liquids ("NGLs") and 35,369 mcf of gas were
sold, or 29,658 barrel of oil equivalents ("BOEs"). For the six months ended
June 30, 2000, 17,958 barrels of oil, 8,604 barrel of NGLs and 33,016 mcf of gas
were sold, or 32,065 BOEs.
The average price received per barrel of oil increased $.54, or 2%, from $27.72
for the six months ended June 30, 2000 to $28.26 for the same period in 2001.
The average price received per barrel of NGLs increased $2.09, or 15%, from
$14.00 during the six months ended June 30, 2000 to $16.09 for the same period
in 2001. The average price received per mcf of gas increased 130% from $2.08 for
the six months ended June 30, 2000 to $4.79 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.
Gains on disposition of assets of $3,054 and $2,023 were recognized during the
six months ended June 30, 2001 and 2000, respectively. The gain recognized
during the period in 2001 was due to salvage income received on one well plugged
and abandoned during the current year. The gain recognized during the period in
2000 was from the sale of equipment on one fully depleted well.
Costs and Expenses:
Total costs and expenses increased to $362,535 for the six months ended June 30,
2001 as compared to $351,544 for the same period in 2000, an increase of
$10,991, or 3%. This increase was due to increases in production costs,
abandoned property costs, depletion and general and administrative expenses
("G&A").
Production costs were $282,193 for the six months ended June 30, 2001 and
$277,308 for the same period in 2000, resulting in a $4,885 increase, or 2%.
This increase was primarily due to 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
5% from $21,724 for the six months ended June 30, 2000 to $22,884 for the same
period in 2001, primarily due to an increase in audit and tax fees.
Depletion was $54,399 for the six months ended June 30, 2001 as compared to
$52,512 for the same period in 2000, an increase of $1,887, or 4%. This increase
was due to downward revisions to proved reserves on several wells during the
period ended June 30, 2001, offset by a reduction in the Partnership'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" ("SFAS 121") during the
fourth quarter of 2000 and a decline in oil production of 605 barrels for the
six months ended June 30, 2001 as compared to the same period in 2000.
Abandoned property costs of $3,059 were incurred during the six months ended
June 30, 2001 due to the plugging and abandonment of one well during the current
period.
8
Three months ended June 30, 2001 compared with three months ended June 30, 2000
Revenues:
The Partnership's oil and gas revenues decreased 5% to $338,348 for the three
months ended June 30, 2001 as compared to $356,486 for the same period in 2000.
The decrease in revenues resulted from lower average prices received for oil and
NGLs and a decline in production, offset by higher average prices received for
gas. For the three months ended June 30, 2001, 8,598 barrels of oil, 3,171
barrels of NGLs and 16,373 mcf of gas were sold, or 14,498 BOEs. For the three
months ended June 30, 2000, 8,968 barrels of oil, 4,625 barrels of NGLs and
17,395 mcf of gas were sold, or 16,492 BOEs.
The average price received per barrel of oil decreased $.51, or 2%, from $27.75
for the three months ended June 30, 2000 to $27.24 for the same period in 2001.
The average price received per barrel of NGLs decreased $.22, or 2%, from $14.10
during the three months ended June 30, 2000 to $13.88 for the same period in
2001. The average price received per mcf of gas increased 50% from $2.44 during
the three months ended June 30, 2000 to $3.67 for the same period in 2001.
Gain on disposition of assets of $1,079 was recognized during the three months
ended June 30, 2001 due to salvage income received on one well plugged and
abandoned during the current period.
Costs and Expenses:
Total costs and expenses decreased to $178,847 for the three months ended June
30, 2001 as compared to $181,044 for the same period in 2000, a decrease of
$2,197, or 1%. This decrease was due to declines in production costs and G&A,
offset by increases in abandoned property costs and depletion.
Production costs were $138,987 for the three months ended June 30, 2001 and
$143,700 for the same period in 2000, resulting in a $4,713 decrease, or 3%. The
decrease was primarily due to lower workover expense.
During this period, G&A decreased 20% from $11,592 for the three months ended
June 30, 2000 to $9,322 for the same period in 2001, principally 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 decreased oil and gas revenues and a
decline in audit and tax fees.
Depletion was $27,479 for the three months ended June 30, 2001 as compared to
$25,752 for the same period in 2000, an increase of $1,727, or 7%. This increase
was due to downward revisions to proved reserves on several properties during
the period ended June 30, 2001, offset by a reduction in the Partnership's net
depletable basis from charges taken in accordance with SFAS 121 during the
fourth quarter of 2000 and a decline in oil production of 370 barrels for the
three months ended June 30, 2001 as compared to the same period in 2000.
9
Abandoned property costs of $3,059 were incurred during the three months ended
June 30, 2001 due to the plugging and abandonment of one well during the current
period.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $140,001 during the six
months ended June 30, 2001 from the same period ended June 30, 2000. This
increase resulted from an increase of $76,203 in oil and gas sales receipts and
a reduction in working capital of $72,902, offset by increases in production
costs of $4,885, abandoned property costs of $3,059 and G&A expenses of $1,160.
The increase in oil and gas receipts resulted from the increase in commodity
prices during 2001 which contributed an additional $117,367 to oil and gas
receipts, offset by $41,164 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 increased production taxes associated with higher oil and gas
prices. The increase in G&A was primarily due to an increase in audit and tax
fees.
Net Cash Provided by (Used in) Investing Activities
The Partnership's principal investing activities for the six months ended June
30, 2001 and 2000 were for expenditures related to oil and gas equipment
upgrades on active properties.
Proceeds from asset dispositions of $3,054 and $2,023 were received during the
six months ended June 30, 2001 and 2000, respectively. The proceeds recognized
during the period in 2001 were due to salvage income from one well plugged and
abandoned during the current year. The proceeds recognized during 2000 were
derived from the sale of equipment on one fully depleted well.
Net Cash Used in Financing Activities
For the six months ended June 30, 2001, cash distributions to the partners were
$285,221, of which $2,852 was distributed to the managing general partner and
$282,369 to the limited partners. For the same period ended June 30, 2000, cash
distributions to the partners were $362,661, of which $3,627 was distributed to
the managing general partner and $359,034 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
10
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.
- ---------------
(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-B 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-B CONV., L.P.
By: Pioneer Natural Resources USA, Inc.,
Managing General Partner
Dated: August 6, 2001 By: /s/ Rich Dealy
---------------------------------
Rich Dealy, Vice President and
Chief Accounting Officer
12