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, 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 __ pages.
-There are no exhibits-
PARKER & PARSLEY 90-B CONV., L.P.
TABLE OF CONTENTS
Page
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of September 30, 1996 and
December 31, 1995 ................................... 3
Statements of Operations for the three and nine
months ended September 30, 1996 and 1995................ 4
Statement of Partners' Capital for the nine months
ended September 30, 1996................................ 5
Statements of Cash Flows for the nine months ended
September 30, 1996 and 1995............................. 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......................................... 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
September 30, December 31,
1996 1995
------------ -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $143,699 at September 30
and $104,683 at December 31 $ 143,755 $ 104,953
Accounts receivable - oil and gas sales 124,967 112,651
---------- ----------
Total current assets 268,722 217,604
---------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 9,564,573 9,571,882
Accumulated depletion (6,401,688) (6,208,665)
---------- ----------
Net oil and gas properties 3,162,885 3,363,217
---------- ----------
$ 3,431,607 $ 3,580,821
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 48,544 $ 72,585
Partners' capital:
Limited partners (11,897 interests) 3,349,233 3,473,154
Managing general partner 33,830 35,082
---------- ----------
3,383,063 3,508,236
---------- ----------
$ 3,431,607 $ 3,580,821
========== ==========
The financial information included as of September 30, 1996 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 OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
--------------------- ---------------------
1996 1995 1996 1995
--------- --------- --------- ---------
Revenues:
Oil and gas $ 315,670 $ 271,559 $ 951,839 $ 880,783
Interest 2,158 2,012 5,315 5,237
Salvage income from equipment
disposals 200 - 2,930 -
Gain on sale of property - 858 - 858
-------- -------- -------- --------
318,028 274,429 960,084 886,878
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 126,020 131,721 388,934 408,367
General and administrative 10,073 9,693 30,284 28,888
Depletion 60,875 69,910 194,017 218,868
(Gain) loss on abandoned
property - (45) 744 (3,045)
Abandoned property - 487 - 2,572
Amortization of organization
costs - 1,248 - 3,756
-------- -------- -------- --------
196,968 213,014 613,979 659,406
-------- -------- -------- --------
Net income $ 121,060 $ 61,415 $ 346,105 $ 227,472
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 1,211 $ 626 $ 3,461 $ 2,312
======== ======== ======== ========
Limited partners $ 119,849 $ 60,789 $ 342,644 $ 225,160
======== ======== ======== ========
Net income per limited
partnership interest $ 10.07 $ 5.11 $ 28.80 $ 18.93
======== ======== ======== ========
Distributions per limited
partnership interest $ 14.45 $ 11.83 $ 39.22 $ 38.35
======== ======== ======== ========
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)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
--------- ---------- ----------
Balance at January 1, 1996 $ 35,082 $3,473,154 $3,508,236
Distributions (4,713) (466,565) (471,278)
Net income 3,461 342,644 346,105
-------- --------- ---------
Balance at September 30, 1996 $ 33,830 $3,349,233 $3,383,063
======== ========= =========
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)
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
September 30,
----------------------
1996 1995
--------- ---------
Cash flows from operating activities:
Net income $ 346,105 $ 227,472
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion and amortization 194,017 222,624
(Gain) loss on abandoned property 744 (3,045)
Gain on sale of property - (858)
Salvage income from equipment disposals (2,930) -
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (12,316) 11,792
Increase (decrease) in accounts payable (13,384) 19,207
-------- --------
Net cash provided by operating activities 512,236 477,192
-------- -------
Cash flows from investing activities:
Additions to oil and gas properties (5,086) (5,348)
Proceeds from salvage income on equipment disposals 2,930 -
Proceeds from equipment salvage on abandoned property - 3,045
Proceeds from sale of property - 858
-------- --------
Net cash used in investing activities (2,156) (1,445)
-------- --------
Cash flows from financing activities:
Cash distributions to partners (471,278) (460,855)
-------- --------
Net increase in cash and cash equivalents 38,802 14,892
Cash and cash equivalents at beginning of period 104,953 65,099
-------- --------
Cash and cash equivalents at end of period $ 143,755 $ 79,991
======== ========
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-B CONV., L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
Note 1.
Parker & Parsley 90-B Conv., L.P. (the "Registrant") is a limited partnership
organized 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 September 30, 1996 and for the three and nine months ended September 30, 1996
and 1995 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.
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)
Results of Operations
Nine months ended September 30, 1996 compared with nine months ended September
30, 1995
Revenues:
The Registrant's oil and gas revenues increased 8% to $951,839 from $880,783 for
the nine months ended September 30, 1996 and 1995, respectively. The increase in
revenues resulted from a 21% increase in the average price received per barrel
of oil and a 28% increase in the average price received per mcf of gas, offset
by a 12% decline in barrels of oil produced and sold and a 10% decline in mcf of
gas produced and sold. For the nine months ended September 30, 1996, 35,167
barrels of oil were sold compared to 39,969 for the same period in 1995, a
decrease of 4,802 barrels. For the nine months ended September 30, 1996, 99,322
mcf of gas were sold compared to 110,419 mcf for the same period in 1995, a
7
decrease of 11,097 mcf. The decrease in production volumes was due to 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 $3.57 from $17.24 for the
nine months ended September 30, 1995 to $20.81 for the same period in 1996 while
the average price received per mcf of gas increased from $1.74 for the nine
months ended September 30, 1995 to $2.22 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 nine months ended
September 30, 1996.
Salvage income totaling $2,930 was received during the nine months ended
September 30, 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.
A gain on sale of property of $858 was recognized during the nine months ended
September 30, 1995. This gain was the result of proceeds received from the sale
of mineral rights in an undevel oped property.
Costs and Expenses:
Total costs and expenses decreased to $613,979 for the nine months ended
September 30, 1996 as compared to $659,406 for the same period in 1995, a
decrease of $45,427, or 7%. The 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 abandoned property.
Production costs were $388,934 for the nine months ended September 30, 1996 and
$408,367 for the same period in 1995, resulting in a $19,433 decrease, or 5%.
The decrease was the result of less well repair and maintenance costs, offset by
an increase in workover costs incurred in an effort to stimulate well
production.
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, 5% from $28,888 for the nine months ended
September 30, 1995 to $30,284 for the same period in 1996.
Depletion was $194,017 for the nine months ended September 30, 1996 compared to
$218,868 for the same period in 1995, representing a decrease of $24,851, or
11%. This decrease was primarily attributable to the following factors: (i) a
reduction in the Registrant'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" ("FAS 121"), (ii) a reduction in oil production of 4,802 barrels for the
nine months ended September 30, 1996 as compared to the same period in 1995, and
(iii) an increase in oil and gas reserves during the third quarter of 1996 as a
result of higher commodity prices.
8
A loss on abandoned property of $744 was recognized during the nine months ended
September 30, 1996. The loss resulted from the write-off of remaining
capitalized well costs on the abandonment of one saltwater disposal well. A gain
on abandoned property of $3,045 was recognized during the nine months ended
September 30, 1995. This gain was the result of proceeds received from equipment
salvage on one fully depleted abandoned property. Abandoned property costs of
$2,572 were incurred on one well abandoned during the nine months ended
September 30, 1995.
Three months ended September 30, 1996 compared with three months ended September
30, 1995
Revenues:
The Registrant's oil and gas revenues increased to $315,670 from $271,559 for
the three months ended September 30, 1996 and 1995, respectively, an increase of
16%. The increase in revenues resulted from a 31% increase in the average price
received per barrel of oil and a 25% increase in the average price received per
mcf of gas, offset by an 11% decline in barrels of oil produced and sold and an
8% decline in mcf of gas produced and sold. For the three months ended September
30, 1996, 11,348 barrels of oil were sold compared to 12,706 for the same period
in 1995, a decrease of 1,358 barrels. For the three months ended September 30,
1996, 34,546 mcf of gas were sold compared to 37,678 for the same period in
1995, a decrease of 3,132 mcf. The decreases were due to the decline
characteristics of the Registrant's oil and gas properties.
The average price received per barrel of oil increased $5.03 from $16.49 during
the three months ended September 30, 1995 to $21.52 for the same period in 1996
while the average price received per mcf of gas increased from $1.65 during the
three months ended September 30, 1995 to $2.07 for the same period in 1996.
Salvage income totaling $200 was received during the three months ended
September 30, 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.
A gain on sale of property of $858 was recognized during the three months ended
September 30, 1995. This gain was the result of proceeds received on the sale of
mineral rights in an undevel oped property.
Costs and Expenses:
Total costs and expenses decreased to $196,968 for the three months ended
September 30, 1996 as compared to $213,014 for the same period in 1995, a
decrease of $16,046, or 8%. This decrease was due to declines in production
costs, amortization of organization costs, gain on abandoned property, depletion
and abandoned property costs, offset by an increase in G&A.
9
Production costs were $126,020 for the three months ended September 30, 1996 and
$131,721 for the same period in 1995, resulting in an $5,701 decrease, or 4%.
The decrease was the result of less 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, 4%, from $9,693 for the three months ended
September 30, 1995 to $10,073 for the same period in 1996.
Depletion was $60,875 for the three months ended September 30, 1996 compared to
$69,910 for the same period in 1995, representing a decrease of $9,035, or 13%.
This decrease was primarily attributable to the following factors: (i) a
reduction in the Registrant's net depletable basis from charges taken in
accordance with FAS 121, (ii) a reduction in oil production of 1,358 barrels for
the three months ended September 30, 1996 as compared to the same period in
1995, and (iii) an increase in oil and gas reserves during the third quarter of
1996 as a result of higher commodity prices.
A gain on abandoned property of $45 was recognized during the three months ended
September 30, 1995. This gain was the result of proceeds received from equipment
salvage on one fully depleted abandoned property. Abandoned property costs of
$487 were incurred on one well abandoned during the three months ended September
30, 1995. There was no abandonment activity for the same period ended September
30, 1996.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $35,044 during the nine
months ended September 30, 1996 from the same period ended September 30, 1995.
This increase was due to an increase in oil and gas sales, offset by an increase
in production costs paid.
Net Cash Used in Investing Activities
The Registrant's investing activities during the nine months ended September 30,
1996 and 1995, respectively, included $5,086 and $5,348 for expenditures related
to equipment replacement on various oil and gas properties.
Proceeds of $2,930 were received during the nine months ended September 30, 1996
from the sale of oil and gas equipment on one well abandoned in a prior year.
Proceeds of $3,045 were received from the salvage of equipment on one well
abandoned during the nine months ended September 30, 1995.
Proceeds of $858 were received during the nine months ended September 30, 1995
from the sale of mineral rights in an undeveloped property.
10
Net Cash Used in Financing Activities
Cash was sufficient for the nine months ended September 30, 1996 to cover
distributions to the partners of $471,278 of which $466,565 was distributed to
the limited partners and $4,713 to the managing general partner. For the same
period ended September 30, 1995, cash was sufficient for distributions to the
partners of $460,855 of which $456,247 was distributed to the limited partners
and $4,608 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.
Part II. Other Information
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: Parker & Parsley Development L.P.,
Managing General Partner
By: Parker & Parsley Petroleum USA, Inc.
("PPUSA"), General Partner
Dated: November 13, 1996 By: /s/ Steven L. Beal
---------------------------------------
Steven L. Beal, Senior Vice President
and Chief Financial Officer of PPUSA
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