CONFORMED COPY
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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 and Exchange Act of 1934
For the period ended June 30, 1998
or
[ ] Transition Report Pursuant to Section 13 of 15(d) of
the Securities and Exchange Act of 1934
For the transition period from to
Commission file number 033-63635-04
I.R.S. Employer Identification Number 55-0751154
PDC 1996-D LIMITED PARTNERSHIP
(A West Virginia Limited Partnership)
103 East Main Street
Bridgeport, WV 26330
Telephone: (304) 842-6256
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 XX No
<PAGE>
PDC 1996-D LIMITED PARTNERSHIP
(A West Virginia Limited Partnership)
INDEX
PART I - FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
Balance Sheets - June 30, 1998 and December 31, 1997 1
Statement of Operations - Three Months and
Six Months Ended June 30, 1998 and 1997 2
Statement of Partners' Equity -
Six Months Ended June 30, 1998 3
Statement of Cash Flows-
Six Months Ended June 30, 1998 and 1997 4
Notes to Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
PART II OTHER INFORMATION
Item 1. Legal Proceedings 7
Item 6. Exhibits and Reports on Form 8-K 7
<PAGE>
PDC 1996-D LIMITED PARTNERSHIP
(A West Virginia Limited Partnership)
Balance Sheets
June 30, 1998 and December 31, 1997
<TABLE>
<S> <S> <S>
Assets
1998 1997
(Unaudited)
Current assets:
Cash $ 1,011 2,756
Accounts receivable - oil and gas revenues 306,871 450,068
Due from PDC 3,667 -
Total current assets 311,549 452,824
Oil and gas properties, successful
efforts method 16,620,628 16,620,628
Less accumulated depreciation, depletion,
and amortization 1,515,695 972,229
15,104,933 15,648,399
$15,416,482 16,101,223
Current Liabilities and Partners' Equity
Current liabilities:
Accrued expenses 39,505 41,951
Total current liabilities 39,505 41,951
Partners' Equity 15,376,977 16,059,272
$15,416,482 16,101,223
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
PDC 1996-D LIMITED PARTNERSHIP
(A West Virginia Limited Partnership)
Statements of Operations
Three Months and Six Months ended June 30, 1998 and 1997
(Unaudited)
<TABLE>
<S> <S> <S> <S> <S>
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
Revenues:
Sales of oil and gas $410,914 $284,265 $903,067 $358,496
Interest income - - 2,004 -
410,914 284,265 905,071 358,496
Expenses:
Lifting costs 107,723 44,853 205,316 51,953
Direct administrative cost 25 1,501 81 1,501
Depreciation, depletion and
amortization 255,279 194,673 543,466 230,590
363,027 241,027 748,863 284,044
Net income $ 47,887 $ 43,238 $156,208 $ 74,452
Net income per limited and
additional general partner unit $ 50 $ 45 $ 163 $ 78
</TABLE>
See accompanying notes to financial statements.
-2-
<PAGE>
PDC 1996-D LIMITED PARTNERSHIP
(A West Virginia Limited Partnership)
Statement of Partners' Equity
Six months ended June 30, 1998
(Unaudited)
<TABLE>
<S> <S> <S> <S>
Limited and
additional Managing
general partners general partner Total
Balance, December 31, 1997 $12,847,417 3,211,855 16,059,272
Net income 124,968 31,240 156,208
Distributions to partners (670,804) (167,699) (838,503)
Balance, June 30, 1998 $12,301,581 3,075,396 15,376,977
</TABLE>
See accompanying notes to financial statements.
-3-
<PAGE>
PDC 1996-D LIMITED PARTNERSHIP
(A West Virginia Limited Partnership)
Statement of Cash Flows
Six months ended June 30, 1998 and 1997
(Unaudited)
<TABLE>
<S> <S> <S>
1998 1997
Cash flows from operating activities:
Net income $156,208 74,452
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion,
and amortization 543,466 230,590
Changes in operating assets
and liabilities:
Decrease (increase) in accounts
receivable - oil and gas revenues 143,197 (249,964)
(Increase) in due from PDC (3,667) -
Decrease in accrued expenses (2,446) (17,166)
Net cash provided from
operating activities 836,758 37,912
Cash flows from financing activities:
Distributions to partners (838,503) (56,579)
Net cash used by
financing activities (838,503) (56,579)
Net change in cash (1,745) (18,667)
Cash at beginning of period 2,756 20,000
Cash at end of period $ 1,011 $ 1,333
</TABLE>
See accompanying notes to financial statements.
-4-<PAGE>
PDC 1996-D LIMITED PARTNERSHIP
(A West Virginia Limited Partnership)
Notes to Financial Statements
(Unaudited)
1. Accounting Policies
Reference is hereby made to the Partnership's Annual Report on Form
10-K for 1997, which contains a summary of major accounting policies
followed by the Partnership in the preparation of its financial
statements. These policies were also followed in preparing the
quarterly report included herein.
2. Basis of Presentation
The Management of the Partnership believes that all adjustments
(consisting of only normal recurring accruals) necessary to a fair
statement of the results of such periods have been made. The results
of operations for the six months ended June 30, 1998 are not
necessarily indicative of the results to be expected for the full year.
3. Oil and Gas Properties
Oil and Gas Properties are reported on the successful efforts method.
-5-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
The Partnership was funded on December 31, 1996 with initial
Limited and Additional General Partner contributions of $15,301,726
and the Managing General Partner contributed $3,328,126 in accordance
with the Agreement. Syndication and management fee costs of
$1,989,224 were incurred leaving available capital of $16,640,628 for
Partnership activities.
The Partnership began exploration and development activities
subsequent to the funding of the Partnership and completed well
drilling activities by March 31, 1997. Eighty-four wells have been
drilled, of which seventy-nine have been completed as producing wells.
Operations will be conducted with available funds and revenues
generated from oil and gas activities. No bank borrowings are
anticipated.
The Partnership had net working capital at June 30, 1998 of
$272,044.
The Partnership's revenues from oil and gas will be affected by
changes in prices. As a result of changes in federal regulations,
gas prices are highly dependent on the balance between supply and
demand. The Partnership's gas sales prices are subject to increase
and decrease based on various market sensitive indices.
Results of Operations
Three Months Ended June 30, 1998 Compared with 1997
Revenue and expense during the second quarter of 1998 include
natural gas sales and related expenses for all of the Partnership's
wells. During the same period in 1997 all of the wells were not yet
turned into the line and producing for the entire quarter. While the
Partnership experienced a modest net income, depreciation,
depletion and amortization is non-cash expense and therefore the
partnership distributed $303,166 to the partners during the second
quarter of 1997.
Six Months Ended June 30, 1998 Compare with 1997
Revenue and expenses during the first six months of 1998 include
natural gas sales and related expenses for all of the Partnership's
wells. During the same period in 1997 all of the wells were not
turned into line and producing for the entire period. While the
Partnership experienced a modest net income, depreciation,
depletion, and amortization is non-cash expense and therefore the
Partnership distributed $838,503 to the partners during the first
six months of 1997.
Year 2000 Issue
PDC, who administers all aspects of the Partnership, has
assessed the extent of Year 2000 Issues affecting PDC and the
Partnership. PDC believes that the new computer system, including
operating software currently being installed along with
modifications being made by PDC's computer technicians will address
the dating system flaw inherent in most operating systems. PDC
expects to be fully Year 2000 Compliant by the end of 1998. PDC
does not currently expect to charge the Partnership for any
portion of PDC's cost to become Year 2000 Compliant.
New Accounting Standard
Statement of Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities (SFAS No. 133), was
issued by the Financial Accounting Standards Board in June, 1998.
Statement 133 standardizes the accounting for derivative instruments,
including certain derivative instruments embedded in other contracts.
The Partnership must adopt SFAS No. 133 by January 1, 2000; however,
early adoption is permitted. On adoption, the provisions of SFAS No.
133 must be applied prospectively. The Partnership had not
determined the impact that SFAS No. 133 will have on its financial
statements.
-6-<PAGE>
CONFORMED COPY
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 6. Exhibits and Reports on Form 8-K
(a) None.
(b) No reports on Form 8-K have been filed during the quarter ended
June 30, 1998.
SIGNATURES
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.
PDC 1996-D Limited Partnership
(Registrant)
By its Managing General Partner
Petroleum Development Corporation
Date: August 12, 1998 /s/ Steven R. Williams
Steven R. Williams
President
Date: August 12, 1998 /s/ Dale G. Rettinger
Dale G. Rettinger
Executive Vice President
and Treasurer
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 1,011
<SECURITIES> 0
<RECEIVABLES> 306,871
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 311,549
<PP&E> 16,620,628
<DEPRECIATION> 1,515,695
<TOTAL-ASSETS> 15,416,482
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 15,416,482
<SALES> 903,067
<TOTAL-REVENUES> 905,071
<CGS> 205,316
<TOTAL-COSTS> 748,863
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 156,208
<INCOME-TAX> 0
<INCOME-CONTINUING> 156,208
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 156,208
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
