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 March 31, 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. 33-26097-08
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)
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 10 pages.
-There are no exhibits-
PARKER & PARSLEY 90-B CONV., L.P.
(A Delaware Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
March 31, December 31,
1996 1995
------------ ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $87,567 at March 31
and $104,683 at December 31 $ 90,240 $ 104,953
Accounts receivable - oil and gas sales 125,393 112,651
----------- -----------
Total current assets 215,633 217,604
Oil and gas properties - at cost, based on the
successful efforts accounting method 9,564,293 9,571,882
Accumulated depletion (6,276,844) (6,208,665)
----------- -----------
Net oil and gas properties 3,287,449 3,363,217
----------- -----------
$ 3,503,082 $ 3,580,821
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 33,434 $ 72,585
Partners' capital:
Limited partners (11,897 interests) 3,434,952 3,473,154
Managing general partner 34,696 35,082
----------- -----------
3,469,648 3,508,236
----------- -----------
$ 3,503,082 $ 3,580,821
=========== ===========
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-B CONV., L.P.
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
March 31,
1996 1995
---------- ----------
Revenues:
Oil and gas sales $ 302,409 $ 311,779
Interest income 1,376 1,437
Salvage income from equipment disposals 2,730 -
--------- ---------
Total revenues 306,515 313,216
Costs and expenses:
Production costs 133,581 144,021
General and administrative expenses 9,072 10,271
Depletion 68,179 76,463
Amortization of organization costs - 1,255
--------- ---------
Total costs and expenses 210,832 232,010
--------- ---------
Net income $ 95,683 $ 81,206
========= =========
Allocation of net income:
Managing general partner $ 957 $ 825
========= =========
Limited partners $ 94,726 $ 80,381
========= =========
Net income per limited partnership interest $ 7.96 $ 6.76
========= =========
Distributions per limited partnership interest $ 11.17 $ 13.41
========= =========
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-B CONV., L.P.
(A Delaware Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
----------- ----------- -----------
Balance at January 1, 1995 $ 39,099 $ 3,874,618 $ 3,913,717
Distributions (1,611) (159,536) (161,147)
Net income 825 80,381 81,206
---------- ---------- ----------
Balance at March 31, 1995 $ 38,313 $ 3,795,463 $ 3,833,776
========== ========== ==========
Balance at January 1, 1996 $ 35,082 $ 3,473,154 $ 3,508,236
Distributions (1,343) (132,928) (134,271)
Net income 957 94,726 95,683
---------- ---------- ----------
Balance at March 31, 1996 $ 34,696 $ 3,434,952 $ 3,469,648
========== ========== ==========
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 CONV., L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended
March 31,
1996 1995
---------- ----------
Cash flows from operating activities:
Net income $ 95,683 $ 81,206
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion and amortization 68,179 77,718
Salvage income from equipment disposals (2,730) -
Changes in assets and liabilities:
Increase in accounts receivable (12,742) (8,572)
Increase (decrease) in accounts payable (28,494) 11,824
--------- ---------
Net cash provided by operating activities 119,896 162,176
Cash flows from investing activities:
Proceeds from salvage income on equipment
disposals 2,730 -
Additions to oil and gas properties (3,068) (1,717)
--------- ---------
Net cash used in investing activities (338) (1,717)
Cash flows from financing activities:
Cash distributions to partners (134,271) (161,147)
--------- ---------
Net decrease in cash and cash equivalents (14,713) (688)
Cash and cash equivalents at beginning of period 104,953 65,099
--------- ---------
Cash and cash equivalents at end of period $ 90,240 $ 64,411
========= =========
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 CONV., L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
(Unaudited)
Note 1.
Parker & Parsley 90-B 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 unaudited financial statements as of March 31,
1996 of the Registrant 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.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations(1)
The Registrant was formed October 5, 1990. On January 1, 1995, Parker & Parsley
Development L.P. ("PPDLP"), a Texas limited partnership, became the sole
managing general partner of the Registrant, by acquiring the rights and assuming
the obligations of Parker & Parsley Development Company ("PPDC"). PPDLP acquired
PPDC's rights and obligations as managing general partner of the Registrant in
connection with the merger of PPDC, P&P Producing, Inc. and Spraberry
Development Corporation into MidPar L.P., which survived the merger with a
change of name to PPDLP. PPDLP has the power and authority to manage, control
and administer all Registrant affairs. The partners contributed $11,897,000
representing 11,897 interests ($1,000 per interest) sold to a total of 668
partners. The Registrant converted to a Delaware limited partnership on August
1, 1991. The managing general partner received an opinion of legal counsel to
the effect that such conversion would not result in material adverse tax
consequences to the Registrant.
6
Since its formation, the Registrant invested $9,630,398 in various prospects
that were drilled in Texas. One well was plugged and abandoned in 1995 due to
uneconomical operations. At March 31, 1996, the Registrant had 103 producing oil
and gas wells.
Results of Operations
Revenues:
The Registrant's oil and gas revenues decreased to $302,409 from $311,779 for
the three months ended March 31, 1996 and 1995, respectively, a decrease of 3%.
The decrease in revenues was the result of a 13% decline in barrels of oil
produced and sold and a 14% decline in mcf of gas produced and sold, offset by
an 11% increase in the average price received per barrel of oil and a 15%
increase in the average price received per mcf of gas. For the three months
ended March 31, 1996, 12,130 barrels of oil were sold compared to 13,970 for the
same period in 1995, a decrease of 1,840 barrels. For the three months ended
March 31, 1996, 31,751 mcf of gas were sold compared to 36,813 for the same
period in 1995, a decrease of 5,062 mcf. Because of 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 $1.85 from $17.19 for the
three months ended March 31, 1995 to $19.04 for the same period in 1996, while
the average price received per mcf of gas increased from $1.95 for the three
months ended March 31, 1995 to $2.25 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 three months ended
March 31, 1996.
Salvage income totaling $2,730 was received during the three months ended March
31, 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.
Costs and Expenses:
Total costs and expenses decreased to $210,832 for the three months ended March
31, 1996 as compared to $232,010 for the same period in 1995, a decrease of
$21,178, or 9%. The decrease was due to declines in production costs, general
and administrative expenses ("G&A"), depletion and amortization of organization
costs.
Production costs were $133,581 for the three months ended March 31, 1996 and
$144,021 for the same period in 1995, resulting in a $10,440 decrease, or 7%.
The decrease was due to declines in well repair and maintenance costs and ad
valorem taxes.
7
G&A's components are independent accounting and engineering fees, computer
services, postage and managing general partner personnel costs. During this
period, G&A decreased, in aggregate, 12% from $10,271 for the three months ended
March 31, 1995 to $9,072 for the same period in 1996. The Partnership agreement
limits G&A to 3% of the gross oil and gas revenues.
Depletion was $68,179 for the three months ended March 31, 1996 compared to
$76,463 for the same period in 1995. This represented a decrease of $8,284, 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" effective for the
fourth quarter of 1995 and the reduction of net depletable basis resulting from
the charge taken upon such adoption. Depletion was computed property-by-property
utilizing the unit-of-production method based upon the dominant mineral
produced, generally oil. Oil production decreased 1,840 barrels for the three
months ended March 31, 1996 from the same period in 1995, while oil reserves of
barrels were revised downward by 78,777 barrels, or 11%.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased to $119,896 during the three
months ended March 31, 1996, a 26% decrease from the same period ended March 31,
1995. This decrease resulted from a decline in oil and gas sales receipts and an
increase in expenditures for production costs. The decline in oil and gas sales
receipts was attributable to production declines for both oil and gas.
Additional well repair and maintenance costs contributed to the increase in
production cost expenditures.
Net Cash Used in Investing Activities
The Registrant's investing activities for the three months ended March 31, 1996
and 1995, respectively, included $3,068 and $1,717 in expenditures related to
repair and maintenance activity on various oil and gas properties.
Proceeds of $2,730 from salvage income received during the three months ended
March 31, 1996, were derived from the disposal of oil and gas equipment on a
property abandoned in a prior year.
Net Cash Used in Financing Activities
Cash was sufficient for the three months ended March 31, 1996 to cover
distributions to the partners of $134,271 of which $132,928 was distributed to
the limited partners and $1,343 to the managing general partner. For the same
period ended March 31, 1995, cash was sufficient for distributions to the
partners of $161,147 of which $159,536 was distributed to the limited partners
and $1,611 to the managing general partner.
8
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 - none
(b) Form 8-K - none
9
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: Parker & Parsley Development L.P.,
Managing General Partner
By: Parker & Parsley Petroleum USA, Inc.
("PPUSA"), General Partner
Dated: May 14, 1996 By: /s/ Steven L. Beal
-------------------------------------
Steven L. Beal, Senior Vice President
and Chief Financial Officer of PPUSA
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