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 March 31, 1999
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 - March 31, 1999 and December 31, 1998 1
Statements of Operations -
Three Months Ended March 31, 1999 and 1998 2
Statement of Partners' Equity -
Three Months Ended March 31, 1999 3
Statements of Cash Flows-
Three Months Ended March 31, 1999 and 1998 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 8
Item 6. Exhibits and Reports on Form 8-K 8
<PAGE>
PDC 1996-D LIMITED PARTNERSHIP
(A West Virginia Limited Partnership)
Balance Sheets
March 31, 1999 and December 31, 1998
<TABLE>
<C> <C> <C>
Assets
1999 1998
(Unaudited)
Current assets:
Cash $ 8,094 6,712
Accounts receivable - oil and gas revenues 135,947 225,131
Total current assets 144,041 231,843
Oil and gas properties, successful
efforts method 8,810,568 8,810,568
Less accumulated depreciation,
depletion, and amortization 2,608,198 2,503,192
6,202,370 6,307,376
$6,346,411 6,539,219
Current Liabilities and Partners' Equity
Current liabilities:
Accrued expenses $ 38,838 47,071
Total current liabilities 38,838 47,071
Partners' Equity 6,307,573 6,492,148
$6,346,411 6,539,219
</TABLE>
See accompanying notes to financial statements.
-1-
<PAGE>
PDC 1996-D LIMITED PARTNERSHIP
(A West Virginia Limited Partnership)
Statements of Operations
Three months ended March 31, 1999 and 1998
(Unaudited)
<TABLE>
<C> <C> <C>
1999 1998
Revenues:
Sales of oil and gas $ 233,099 492,153
Interest income 1,388 2,004
234,487 494,157
Expenses:
Lifting cost 124,707 97,593
Direct administration cost 7 56
Depreciation, depletion, and amortization 105,006 288,187
229,720 385,836
Net income $ 4,767 108,321
Net income per limited and additional
general partner unit $ 5 113
</TABLE>
See accompanying notes to financial statements.
-2-
<PAGE>
PDC 1996-D LIMITED PARTNERSHIP
(A West Virginia Limited Partnership)
Statement of Partners' Equity
Three months ended March 31, 1999
(Unaudited)
<TABLE>
<C> <C> <C> <C>
Limited and
additional Managing
general partners general partner Total
Balance, December 31, 1998 $5,193,718 1,298,430 6,492,148
Net income 3,814 953 4,767
Distributions to partners (151,474) (37,868) (189,342)
Balance, March 31, 1999 $5,046,058 1,261,515 6,307,573
</TABLE>
See accompanying notes to financial statements.
-3-
<PAGE>
PDC 1996-D LIMITED PARTNERSHIP
(A West Virginia Limited Partnership)
Statements of Cash Flows
Three months ended March 31, 1999 and 1998
(Unaudited)
<TABLE>
<C> <C> <C>
1999 1998
Cash flows from operating activities:
Net income $ 4,767 108,321
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation, depletion, and
amortization 105,006 288,187
Changes in operating assets and
liabilities:
Decrease in accounts receivable -
oil and gas revenues 89,184 140,777
Decrease in accounts payable (8,233) -
Net cash provided by
operating activities 190,724 537,285
Cash flow from financing activities:
Distributions to partners (189,342) (535,337)
Net cash used by financing activities (189,342) (535,337)
Net change in cash 1,382 1,948
Cash at beginning of period 6,712 2,756
Cash at end of period $ 8,094 4,704
</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 1998, which contains a summary of significant 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
three months ended March 31, 1999 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 March 31, 1999 of $105,203.
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
Sales of oil and gas decreased 52.6% during the first quarter of 1999
compared to 1998 due to lower sales volumes of natural gas and lower
average sales prices. While the Partnership experienced a modest net
income of $4,767, depreciation, depletion and amortization is a non-cash
expense and therefore the partnership distributed $189,342 to the partners
during the first quarter of 1999.
Year 2000 Issue
State of Readiness
The Year 2000 Issue is the risk that computer programs using two-digit
data fields will fail to properly recognize the year 2000, with the result
being business interruption due to computer system failures by PDC's
software or hardware or that of government entities, service providers and
vendors. PDC, who administers all aspects of the Partnership, has assessed
the extent of the Year 2000 Issues affecting PDC and the Partnership. PDC
believes that the new computer system including operating software
installed during 1998 along with modifications made by PDC's computer
technicians have addressed the dating system flaw inherent in most
operating systems. PDC has completed a remediation plan and believes it is
currently fully Year 2000 compliant.
-6-<PAGE>
PDC has initiated formal communications with its significant suppliers
and service providers to determine the extent to which PDC may be
vulnerable to their failure to correct their own Year 2000 issues. It is
expected that full identification will be completed by June 30, 1999. To
the extent that responses to Year 2000 readiness are unsatisfactory, PDC
intends to take appropriate action, including identifying alternative
suppliers and service providers who have demonstrated Year 2000 readiness.
Cost of Readiness
PDC does not currently expect to charge the Partnership for any
portion of PDC's cost to become Year 2000 compliant.
Risks of Year 2000 Issues
PDC presently believes the Year 2000 Issue will not present a
materially adverse risk to PDC's or the Partnership's future results of
operations, liquidity, and capital resources. However, if the level of the
timely compliance by key suppliers or service providers is not sufficient,
the Year 2000 Issue could have a material impact on PDC's or the
Partnership's operations including, but not limited to, increased operating
costs, loss of customers or suppliers, loss of accounting functions,
including well revenue distributions, or other significant disruptions to
PDC's or the Partnership's business.
Contingency Plan
PDC has a contingency plan, and will implement it on any system that
remains non-compliant at December 31, 1999, if any.
-7-
<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
March 31, 1999.
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: May 12, 1999 /s/ Steven R. Williams
Steven R. Williams
President
Date: May 12, 1999 /s/ Dale G. Rettinger
Dale G. Rettinger
Executive Vice President
and Treasurer
-8-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 8,094
<SECURITIES> 0
<RECEIVABLES> 135,947
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 144,041
<PP&E> 8,810,568
<DEPRECIATION> 2,608,198
<TOTAL-ASSETS> 6,346,411
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 6,346,411
<SALES> 233,099
<TOTAL-REVENUES> 234,487
<CGS> 124,707
<TOTAL-COSTS> 229,720
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4,767
<INCOME-TAX> 0
<INCOME-CONTINUING> 4,767
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,767
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
