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, 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. 33-26097-08
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 11 pages.
Exhibit index on page 10.
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, 1997 and
December 31, 1996 .................................... 3
Statements of Operations for the three and six
months ended June 30, 1997 and 1996...................... 4
Statement of Partners' Capital for the six months
ended June 30, 1997...................................... 5
Statements of Cash Flows for the six months ended
June 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-B CONV., L.P.
(A Delaware Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
June 30, December 31,
1997 1996
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $123,844 at June 30
and $121,219 at December 31 $ 124,050 $ 123,797
Accounts receivable - oil and gas sales 118,230 205,562
---------- ----------
Total current assets 242,280 329,359
---------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 9,569,201 9,563,173
Accumulated depletion (6,612,541) (6,489,600)
---------- ----------
Net oil and gas properties 2,956,660 3,073,573
---------- ----------
$ 3,198,940 $ 3,402,932
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 33,679 $ 25,296
Partners' capital:
Managing general partner 31,652 33,776
Limited partners (11,897 interests) 3,133,609 3,343,860
---------- ----------
3,165,261 3,377,636
---------- ----------
$ 3,198,940 $ 3,402,932
========== ==========
The financial information included as of June 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-B CONV., L.P.
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
1997 1996 1997 1996
--------- --------- --------- ---------
Revenues:
Oil and gas $ 263,377 $ 333,760 $ 588,581 $ 636,169
Interest 2,430 1,781 4,622 3,157
Salvage income from equipment
disposals - - - 2,730
-------- -------- -------- --------
265,807 335,541 593,203 642,056
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 130,858 129,333 257,985 262,914
General and administrative 8,187 11,139 18,819 20,211
Depletion 61,046 64,963 122,941 133,142
Loss on abandoned property - 744 - 744
-------- -------- -------- --------
200,091 206,179 399,745 417,011
-------- -------- -------- --------
Net income $ 65,716 $ 129,362 $ 193,458 $ 225,045
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 658 $ 1,293 $ 1,935 $ 2,250
======== ======== ======== ========
Limited partners $ 65,058 $ 128,069 $ 191,523 $ 222,795
======== ======== ======== ========
Net income per limited
partnership interest $ 5.47 $ 10.77 $ 16.10 $ 18.73
======== ======== ======== ========
Distributions per limited
partnership interest $ 14.45 $ 13.60 $ 33.77 $ 24.77
======== ======== ======== ========
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, 1997 $ 33,776 $3,343,860 $3,377,636
Distributions (4,059) (401,774) (405,833)
Net income 1,935 191,523 193,458
-------- --------- ---------
Balance at June 30, 1997 $ 31,652 $3,133,609 $3,165,261
======== ========= =========
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)
Six months ended
June 30,
------------------------
1997 1996
---------- ----------
Cash flows from operating activities:
Net income $ 193,458 $ 225,045
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 122,941 133,142
Salvage income from equipment disposals - (2,730)
Loss on abandoned property - 744
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 87,332 (16,304)
Increase (decrease) in accounts payable 8,383 (19,220)
--------- ---------
Net cash provided by operating activities 412,114 320,677
--------- ---------
Cash flows from investing activities:
Additions to oil and gas properties (6,028) (3,107)
Proceeds from salvage income on equipment disposals - 2,730
--------- ---------
Net cash used in investing activities (6,028) (377)
--------- ---------
Cash flows from financing activities:
Cash distributions to partners (405,833) (297,642)
--------- ---------
Net increase in cash and cash equivalents 253 22,658
Cash and cash equivalents at beginning of period 123,797 104,953
--------- ---------
Cash and cash equivalents at end of period $ 124,050 $ 127,611
========= =========
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
June 30, 1997
(Unaudited)
Note 1. Basis of presentation
In the opinion of management, the unaudited financial statements of Parker &
Parsley 90-B Conv., L.P. (the "Partnership") as of June 30, 1997 and for the
three and six months ended June 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 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, Controller, 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
Six months ended June 30, 1997 compared with six months ended
June 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 7% to $588,581 from $636,169
for the six months ended June 30, 1997 as compared to the six months ended June
30, 1996. The decrease in revenues resulted from a 9% decline in barrels of oil
produced and sold, an 8% decline in mcf of gas produced and sold and a decrease
in the average price received per barrel of oil, offset by a 6% increase in the
average price received per mcf of gas. For the six months ended June 30, 1997,
21,770 barrels of oil were sold compared to 23,819 for the same period in 1996,
a decrease of 2,049 barrels. For the six months ended June 30, 1997, 59,429 mcf
of gas were sold compared to 64,776 for the same period in 1996, a decrease of
5,347 mcf. The decreases in production volumes were primarily due to the decline
characteristics of the Partnership's oil and gas 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.
7
The average price received per barrel of oil decreased slightly from $20.47 for
the six months ended June 30, 1996 to $20.40 for the same period in 1997, while
the average price received per mcf of gas increased from $2.29 for the six
months ended June 30, 1996 to $2.43 for the same period 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 six months ended
June 30, 1997.
Salvage income totaling $2,730 was received during the six months ended June 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.
Costs and Expenses:
Total costs and expenses decreased to $399,745 for the six months ended June 30,
1997 as compared to $417,011 for the same period in 1996, a decrease of $17,266,
or 4%. The decrease was due to declines in depletion, production costs, general
and administrative expenses ("G&A") and loss on abandoned property.
Production costs were $257,985 for the six months ended June 30, 1997 and
$262,914 for the same period in 1996, resulting in a $4,929 decrease. The
decrease was primarily the result of less workover costs.
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, 7% from $20,211 for the six months ended June 30, 1996
to $18,819 for the same period in 1997.
Depletion was $122,941 for the six months ended June 30, 1997 compared to
$133,142 for the same period in 1996. This represented a decrease in depletion
of $10,201, or 8%.
A loss on abandoned property of $744 was recognized during the six months ended
June 30, 1996. This loss resulted from the abandonment of a saltwater disposal
well.
Three months ended June 30, 1997 compared with three months ended
June 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 21% to $263,377 from $333,760
for the three months ended June 30, 1997 as compared to the three months ended
June 30, 1996. The decrease in revenues resulted from a 15% decline in the
average price received per barrel of oil, an 11% decline in mcf of gas produced
and sold, a 10% decline in barrels of oil produced and sold and a 5% decline in
the average price received per mcf of gas. For the three months ended June 30,
1997, 10,553 barrels of oil were sold compared to 11,689 for the same period in
8
1996, a decrease of 1,136 barrels. For the three months ended June 30, 1997,
29,519 mcf of gas were sold compared to 33,041 for the same period in 1996, a
decrease of 3,522 mcf. The decreases in production volumes were due to the
decline characteristics of the Partnership's oil and gas properties.
The average price received per barrel of oil decreased $3.21 from $21.95 for the
three months ended June 30, 1996 to $18.74 for the same period in 1997, while
the average price received per mcf of gas decreased from $2.34 during the three
months ended June 30, 1996 to $2.22 for the same period in 1997.
Costs and Expenses:
Total costs and expenses decreased to $200,091 for the three months ended June
30, 1997 as compared to $206,179 for the same period in 1996, a decrease of
$6,088, or 3%. This decrease was due to declines in depletion, G&A and loss on
abandoned property, offset by an increase in production costs.
Production costs were $130,858 for the three months ended June 30, 1997 and
$129,333 for the same period in 1996, resulting in a $1,525 increase. The
increase was due to additional well repair and maintenance costs incurred in an
effort to stimulate well production, offset by a decline in workover costs.
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, 27% from $11,139 for the three months ended June 30,
1996 to $8,187 for the same period in 1997.
Depletion was $61,046 for the three months ended June 30, 1997 compared to
$64,963 for the same period in 1996. This represented a decrease in depletion of
$3,917, or 6%.
A loss on abandoned property of $744 was recognized during the three months
ended June 30, 1996. This loss resulted from the abandonment of a saltwater
disposal well.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $91,437 during the six
months ended June 30, 1997 from the same period ended June 30, 1996. This
increase was primarily due to an increase in oil and gas sales receipts and a
decline in production costs paid.
Net Cash Used in Investing Activities
The Partnership's principal investing activities for the six months ended June
30, 1997 and 1996 included expenditures related to equipment replacement on
various oil and gas properties.
Proceeds of $2,730 were received during the six months ended June 30, 1996 from
the sale of oil and gas equipment on one well abandoned in a prior year.
9
Net Cash Used in Financing Activities
Cash was sufficient for the six months ended June 30, 1997 to cover
distributions to the partners of $405,833 of which $4,059 was distributed to the
managing general partner and $401,774 to the limited partners. For the same
period ended June 30, 1996, cash was sufficient for distributions to the
partners of $297,642 of which $2,976 was distributed to the managing general
partner and $294,666 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) Form 8-K - none
10
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: August 13, 1997 By: /s/ Rich Dealy
----------------------------------
Rich Dealy, Controller of PPUSA
11