FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
{x} ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-10267
C&K 1980 FUND-B, LTD.
(Exact name of registrant as specified in its charter)
Texas 76-0307698
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7555 East Hampden Ave., Suite 600
Denver, Colorado 80231
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (303) 695-3600
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of Each Exchange
Title of Each Class Which Registered
None None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Limited Partnership Interests
(Title of Class)
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.
x
Yes No
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Registrant's Registration Statement No. 2-66548 are
incorporated by reference into Part IV of this report.
<PAGE>
PART I
ITEM 1 - Business
General
The response to this item is submitted as a separate section in Part
IV of this report under Notes to Financial Statements, Note 1 -
Organization.
Operating Hazards and Uninsured Risks
All of the Partnership's oil and gas activities are subject to the
risks normally associated with exploration for and production of oil and
gas, including blowouts, cratering and fires, each of which could result in
damage to life and property. The General Partner believes that its
operations and facilities are in compliance with applicable environmental
regulations. Nevertheless, the risks of costs and liabilities are inherent
in operations such as the Partnership's, and there can be no assurance that
significant costs and liabilities will not be incurred in the future. The
General Partner does carry insurance against some, but not all, of these
risks. Losses and liabilities arising from such events would reduce
revenues and increase costs to the Partnership to the extent not covered by
insurance. Notwithstanding the foregoing, the General Partner believes
that it has adequate insurance coverage to preclude any material adverse
impact from known claims.
Markets
The availability of a ready market for the Partnership's oil and gas
production and revenues generated from sales of production depends on
numerous factors beyond its control, including the cost and availability of
alternative fuels, the level of consumer demand, the extent of other
domestic production of oil and gas, the extent of importation of foreign
oil and gas, the costs of and proximity of pipelines and other
transportation facilities, regulation by state and federal authorities, and
the costs of complying with applicable environmental regulations. Prices
for oil and gas have proven volatile in recent years. Due to all of the
above stated factors, management is unable to predict future prices.
Regulation
Federal Regulation
Various aspects of the Partnership's natural gas operations are
affected by regulations of the Federal Energy Regulatory Commission
("FERC") under authority of the Natural Gas Act of 1938 ("NGA") and the
Natural Gas Policy Act of 1978 ("NGPA"). The provisions of these acts are
complex. However, pursuant to certain FERC rules and recent legislation,
most gas was deregulated on January 1, 1993. Additionally, the interstate
natural gas pipeline industry is undergoing a substantial restructuring by
the FERC. The impact of price decontrol and the FERC restructuring on the
Partnership is uncertain, but at present would appear not to cause a
material adverse effect on the business of the Partnership.
State Regulation
Most states in which the Partnership owns oil and gas properties have
statutes and regulations governing a number of environmental and
conservation matters, including the unitization or pooling of oil and gas
properties and maximum rates of production from oil and gas wells. Such
statutes and regulations may limit the rate at which oil and gas could
otherwise be produced from the Partnership properties. State regulatory
authorities have also established rules and regulations requiring permits
for drilling operations, drilling bonds and reports concerning operations.
Some states have enacted statutes prescribing ceiling prices for gas sold
within the state.
In 1992, the Texas Railroad Commission ("TRC") adopted a significant
revision to the current system of natural gas production in Texas. The
previous system required each pipeline system to estimate the demand for
gas each month and take from its suppliers on a pro rata basis. The new
rule assigns allowable production of natural gas to wells on an annual
basis rather than a monthly basis. In addition, the determination of
market demand is made by the TRC rather than the pipelines. The impact of
these new regulations on the Partnership has been and is expected to be
minimal.
Environmental Regulation
The Partnership's oil and gas exploration and production operations
are subject to regulation by the United States Environmental Protection
Agency (the "EPA") and the regulatory bodies in each state in which it is
doing business. The Partnership's oil and gas exploration, development and
production operations are subject to numerous environmental programs, some
of which include solid and hazardous waste management, water protection,
air emission controls, and situs controls affecting wetlands, coastal
operations, and antiquities. New programs and changes in existing programs
are anticipated, some of which include naturally occurring radioactive
materials ("NORM"), oil and gas exploration and production waste
management, and underground injection of waste materials. The Partnership
is not a party to any enforcement proceedings at this time.
Federal Income Tax Legislation
The Partnership pays no income taxes. Instead, all items of income
and loss flow through directly to the partners to be included in their
individual returns. Certain limitations on the deductibility of losses
attributable to an investment in the Partnership under the passive loss
rules will apply to the Limited Partners which are individuals, estates,
trusts, closely held corporations and personal service corporations. In
general, losses from activities in which an investor does not materially
participate (characterized as passive activities), such as a Limited
Partner's interest in the Partnership, are only deductible to the extent of
income from such passive activities.
The Revenue Act of 1987 classifies certain "publicly traded"
partnerships as corporations for federal income tax purposes. The General
Partner believes that the Partnership should not be considered a publicly
traded partnership under such provisions, although no assurance of this
result can be given. In the event the Partnership were classified as a
publicly traded partnership under such provisions, it should qualify for an
exemption from corporate classification to the extent that 90% of its gross
income is derived from the exploration, production and development of oil
and natural gas.
Each Limited Partner should consult with his tax advisor as to the
effect of the federal income tax laws on his investment in the Partnership.
Additional Legislation
No prediction can be made as to what additional legislation may be
proposed, if any, affecting the competitive status of an oil and gas
producer, restricting the prices at which a producer may sell its oil and
gas, imposing new taxes on revenues attributable to oil and gas production,
or affecting the market demand for oil and gas; nor can it be predicted
which proposals, including those currently under consideration, if any,
might be enacted or become effective.
Employees
The Partnership has no employees. Management of the Partnership,
including legal, accounting, technical and operational support, is provided
by the General Partner.
ITEM 2 - Properties
General
The Partnership's interests in its properties are in the form of
various ownership interests in oil and gas leases. On certain properties,
the size of interest owned by the Partnership will change after the
investment in the prospect or well is recovered. The Partnership's
properties may be subject to liens, operating agreements, minor
encumbrances, easements and restrictions.
Acreage
As of December 31, 1995, the Partnership held oil and natural gas
leases as follows:
<TABLE>
<CAPTION>
Acreage Developed
Gross Net
<S> <C> <C>
Texas 6,771 2,692
</TABLE>
Production
The following table summarizes for the periods indicated the
Partnership's (i) net oil and gas production, (ii) the average sales price
received per barrel ("bbl") of crude oil and per thousand cubic feet
("mcf") of natural gas, and (iii) the composite production cost per
equivalent bbl of oil and gas ("BOE") produced. Gas has been converted on
the basis of 6 mcf equals 1 bbl. Liquid gas plant products (derived from
natural gas) have been converted on the basis of 1 bbl of plant products
equals 6 mcf.
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Natural Gas:
Production (mcf) 536,967 688,247 774,684
Average Sales Price per mcf $ 1.51 $ 1.90 $ 1.86
Plant Products:
Production (mcf) 288,577 141,231 453,768
Average Sales Price per mcf $ 1.49 $ 1.06 $ 1.40
Oil:
Production (bbl) 19,809 23,690 27,729
Average Sales Price per bbl $17.37 $15.83 $17.18
Composite Production Cost per BOE $ 2.18 $ 2.61 $ 2.41
</TABLE>
Estimated Oil and Gas Reserve Quantities (Unaudited)
The response to this item is submitted as a separate section in Part IV
of this report under Notes to Financial Statements, Note 8 - Supplemental
Data of Oil and Gas Operations.
Productive Properties
As of December 31, 1995, the Partnership had working interests in
fifteen gross (6.11 net) productive wells, which are all located in the
state of Texas.
Drilling Activity
In 1995, the Partnership participated in the drilling of the R. Montalvo
et al Gas Unit #1, which was plugged and abandoned April 23, 1995. The
cost to the Partnership was $52,220. In 1994, the Partnership participated
in the drilling of the Flores Gas Unit Well No. 2 which cost the
Partnership $562,010 and increased the Partnership reserve base by 17,265
bbls of oil and 513,520 mcf of gas and plant products. The Partnership did
not participate in any drilling activity during 1993.
ITEM 3 - Legal Proceedings
There are no material pending legal proceedings to which the Partnership
is a party nor to which any of its properties are subject.
ITEM 4 - Submission of Matters to a Vote of Security Holders
None.
PART II
ITEM 5 - Market for the Registrant's Common Equity and Related Stockholder
Matters
The number of holders of record of equity securities of the Partnership
as of December 31, 1995, was as follows:
Title of Class Number of Record Holders
Limited Partnership Interests 236
The assignment of interest is subject to certain restrictions.
Because of these restrictions and the absence of a public market for the
interests, a Limited Partner may not readily be able to liquidate his
investment in the Partnership. However, Article VII of the Partnership
Agreement provides a procedure whereby a Limited Partner may present his
Limited Partnership interest to the General Partner for purchase. The
purchase price is based on the Limited Partners' proportionate share of the
sum of (i) two-thirds of the present worth of estimated future net revenues
discounted at the prime rate in effect on the applicable valuation date
plus one percent, (ii) the present value of the estimated salvage value of
all production facilities and tangible assets, and (iii) the net book value
of all other assets and liabilities. (See Part IV of this report under
Notes to Financial Statements, Notes 4 and 5).
ITEM 6 - Selected Financial Data
Selected financial data for each of the five years in the period ended
December 31, 1995 are as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Oil and Gas Sales $1,586,879 $1,830,079 $2,554,918
Production Costs
and Taxes 343,093 422,827 560,785
Oil and Gas Sales, Net of
Production Costs and Taxes 1,243,786 1,407,252 1,994,133
Net Income (Loss) from
Continuing Operations 354,652 (395,988) 1,079,970
Net Income (Loss) per Limited
Partnership unit 145 (546) 422
Total Assets 4,291,030 4,944,051 6,008,869
Short-Term Obligations 16,823 16,800 --
</TABLE>
<PAGE>
Selected Financial Data (continued)
<TABLE>
<CAPTION>
Year Ended December 31,
1992 1991
<S> <C> <C>
Oil and Gas Sales $2,644,431 $2,831,692
Production Costs
and Taxes 514,455 662,217
Oil and Gas Sales, Net of
Production Costs and Taxes 2,129,976 2,169,475
Net Income (Loss) from
Continuing Operations 1,358,335 1,216,136
Net Income (Loss) per Limited
Partnership unit 536 349
Total Assets 6,259,553 6,927,077
Short-Term Obligations 302,500 363,000
</TABLE>
ITEM 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
1995 Compared to 1994
The Partnership's net income for the year ended December 31, 1995 was
$354,652, as compared to a net loss of $395,988 reported for the same
period in 1994. This increase of $750,640 resulted primarily from a
decrease in depreciation, depletion and amortization expense. Interest
income decreased by $14,936 or 53% from 1994 due to a reduction in cash
available for investment subsequent to a third quarter 1995 cash
distribution of $600,000 to the Limited Partners.
Crude oil and natural gas sales for the year ended December 31, 1995
of $1,586,879 decreased $243,200 or 13% compared to the same period in
1994. The decrease was primarily attributable to a decline in oil
production of approximately 3,900 barrels and a decrease of approximately
$0.24 in the average price per equivalent mcf of gas. During 1995, average
crude oil prices increased to $17.37 per bbl, compared with 1994 prices of
$15.83 per bbl, whereas natural gas prices decreased to $1.51 per mcf in
1995 as compared to the 1994 level of $1.90. During 1995, the average
plant product price increased to $1.49 per equivalent mcf, compared with
1994 prices of $1.06 per equivalent mcf. Natural gas production per day of
1,471 mcf in 1995 decreased from 1,886 mcf per day in 1994. Crude oil
production decreased to 54 bbls per day in 1995 as compared to 65 bbls per
day in 1994. Plant products increased to 791 equivalent mcf per day in
1995, compared to 387 equivalent mcf per day in 1994.
Although the Partnership experienced a decline in oil and gas sales,
related production and marketing expenses also declined, creating a
favorable effect on net income. Lease operating expenses decreased by
$102,424 or 29% compared to the same time period in 1994. The decrease in
lease operating expense was mainly the result of lower ad valorem taxes in
1995 of $97,514 as compared to $178,919 in 1994, caused by a lower assessed
(taxable) valuation of the property in 1995. Production tax expense
increased by $22,690 or 33% due to the increase in plant product sales,
which are taxed at a higher rate than oil sales.
Depreciation, depletion and amortization expense decreased by $735,901
or 62% due to an additional expense taken in 1994 as a result of a ceiling
test failure and writedown of the net oil and gas assets by $776,272, which
did not occur in 1995. The Partnership reported marketing deductions of
$245,700 and $433,220 for 1995 and 1994, respectively, a decline of
$187,520 or 43%, the result of declining gas production.
1994 Compared to 1993
The Partnership's net loss for the year ended December 31, 1994 was
$395,988, a substantial decrease from net income of $1,079,970 reported for
the same period in 1993. The decrease of $1,475,958 resulted from a
combination of declining production volumes and prices, as well as
increases in depreciation, depletion, amortization and marketing
deductions, partially offset by decreases in production tax expense and
lease operating expenses. Interest income increased by $8,266 or 41% due
to rising interest rates during 1994.
Crude oil and natural gas sales for the year ended December 31, 1994
of $1,830,079 decreased $724,839 or 28% compared to the same period in
1993. The decrease was primarily attributable to decreases in production
volumes for gas, plant products and oil of 86,437 mcf, 312,537 equivalent
mcf and 4,039 bbls, respectively. During 1994, average crude oil prices
declined to $15.83 per bbl, compared with 1993 prices of $17.18 per bbl,
whereas natural gas prices increased to $1.90 per mcf in 1994 as compared
to the 1993 level of $1.86. During 1994, the average plant product price
decreased to $1.06 per equivalent mcf, compared with 1993 prices of $1.40
per equivalent mcf. Natural gas production per day of 1,886 mcf during
1994 decreased from 2,122 mcf for the same period in 1993. Crude oil
production decreased to 65 bbls per day as compared to 76 bbls per day in
1993. Plant products decreased to 387 equivalent mcf per day in 1994,
compared to 1,243 equivalent mcf per day in 1993.
Net income was affected unfavorably by lower oil and gas revenues, and
higher overall expenses. Lease operating expenses decreased by $18,249 or
5% compared to the same period in 1993. Production tax expense decreased
by $119,709 or 64% due to decreased oil and gas revenues. Depreciation,
depletion and amortization expense increased by $679,338 or 133% due to
declining future net oil and gas reserves per the January 1, 1995 Reserve
Report which resulted in a ceiling test failure and writedown of the net
oil and gas assets to equal the future net revenues. The Partnership
reported marketing deductions of $433,220 and $215,101 for 1994 and 1993,
respectively.
Financial Condition and Liquidity
Cash Flow from Operations
Net cash provided by operating activities was $848,967 in 1995, a
decrease of $6,189 or 1% when compared to 1994. Cash flow from operating
activities in 1994 decreased 46% when compared to 1993, due to decreased
oil and gas revenues.
Capital Resources
Capital additions during 1995 were $53,118 as compared to additions to
property of $562,010 for the same period in 1994. The Partnership has made
no immediate plans for additional exploratory or development capital
programs, except those necessary to maintain well productivity for 1996.
Financing Activities
During 1995, the Partnership distributed to the Limited Partners cash
proceeds of $600,000. For the year ended December 31, 1995, the General
Partner's contributions (allocated share of costs and expenses incurred)
and distributions were $217,728 and $625,424, respectively.
The Partnership's financing requirements for operating expenses and
development capital are currently provided by revenues from its
operations. The Partnership does not consider long-term financing
arrangements, either with the General Partner or other sources, as
necessary at this time.
Financial Condition
While there are no immediate plans for additional exploratory or
developmental capital programs (except those to maintain well
productivity), the Partnership's revenues from its producing operations
currently provide for its operating expenses and capital.
The Partnership cannot predict with any degree of certainty the prices
it will receive in 1996 and future years for its crude oil and natural
gas. The Partnership's financial condition, operating results, and
liquidity will be materially affected by any significant fluctuations in
sales prices for oil and gas production. The Partnership's ability to
internally generate funds for capital expenditures will be similarly
affected.
ITEM 8 - Financial Statements and Supplementary Data
The response to this item is submitted as a separate section in Part
IV of this report.
ITEM 9 - Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
On June 20, 1995, the General Partner's Board of Directors approved a
change in the Registrant's certified independent accountants from Hein +
Associates LLP to Ernst & Young LLP as reported on Form 8-K dated June 21,
1995.
PART III
ITEM 10 - Directors and Executive Officers of the Registrant
The Partnership has no officers or directors. The management of the
General Partner is vested in a Board of Directors consisting of four
members. The following persons currently serve as members of the Board of
Directors and/or principal executive officers:
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Charles C. Gates 74 Chairman of the Board, Director
Thomas J. Gibson 60 Director
Robert L. Kubik 50 President, Director
Richard E. Westerberg 43 Exec. Vice President, Secretary
and Director
Dan R. Taylor 39 Vice President/Controller
Brad Fisher 34 Vice President - Operations
</TABLE>
Charles C. Gates is Chairman of the Board of CODY ENERGY, INC. Mr.
Gates obtained a B.S. in Engineering from Stanford University, an Honorary
Doctorate of Engineering from the Colorado School of Mines and Michigan
Technological University. He also serves as Chairman of the Board and
Chief Executive Officer of The Gates Corporation, the parent company of
CODY ENERGY, INC.
Thomas J. Gibson is a Director of CODY ENERGY, INC. Mr. Gibson
received a Bachelor of Electrical Engineering Degree in 1956, and a Juris
Doctorate Degree from George Washington University Law School in 1963.
After being employed in various positions with The Gates Rubber Company for
over fifteen years, Mr. Gibson was appointed Executive Vice President of
The Gates Corporation, parent of The Gates Rubber Company.
Robert L. Kubik is a Director of CODY ENERGY, INC. Mr. Kubik also
joined the Gates Corporation in 1986 as Assistant General Counsel and
Director of Corporate Real Estate. Qualified as a lawyer, he has 19 years
of oil industry experience with Amerada Hess, Energy Management and Mobil
Oil.
Richard E. Westerberg is a Director, Executive Vice President and
Secretary of CODY ENERGY, INC. For eight years he served as President of
private companies providing services for acquisition, development, and
drilling ventures before joining Cody Resources in 1992.
Dan R. Taylor is Vice President/Controller of CODY ENERGY, INC. Mr.
Taylor received a BBA in Accounting and Information Systems from the
University of Texas in 1984. He is a Certified Public Accountant with over
ten years of professional accounting experience, primarily in the oil and
gas industry.
Brad Fisher was appointed Vice President of Operations for CODY
ENERGY, INC. in 1994. Mr. Fisher received a degree in Petroleum
Engineering from Texas A&M University in 1983 and previously held the
position of Vice President of Engineering and Production for Ultramar Oil
and Gas, Limited.
ITEM 11 - Executive Compensation
The Partnership has no officers or directors.
ITEM 12 - Security Ownership of Certain Beneficial Owners and Management
At December 31, 1995, the General Partner owned 62.9% of the Limited
Partner interests. No Limited Partner owned, of record or beneficially,
more than 5% of the Limited Partnership interests.
The General Partner has a 50% interest in all of the Partnership's oil
and gas revenues and, upon liquidation, a 50% interest in the Partnership's
properties as provided under the terms of the Articles of Limited
Partnership.
As of March 1996, officers and directors of the General Partner owned
none of the Limited Partnership interests in the Partnership.
ITEM 13 - Certain Relationships and Related Transactions
In accordance with the provisions of the Articles of Limited Part-
nership, the Partnership annually reimbursed the General Partner $181,500
in 1995, 1994, and 1993 for indirect administrative and overhead expenses
attributable to the operations of the Partnership. Excluding special costs
(reserve report preparation, tax reporting-related costs, audit costs and
printing costs attendant to Limited Partner reports), which are allocated
99% to the Limited Partners and 1% to the General Partner, general and
administrative expenses are allocated 50% to the Limited Partners and 50%
to the General Partner.
The General Partner acts as operator for all fifteen Partnership
wells.
PART IV
ITEM 14 - Financial Statements, Schedules, Exhibits Filed, and Reports on
Form 8-K
A. Documents Filed
1. Financial Statements
Independent Auditors' Reports
Balance Sheets - December 31, 1995 and 1994
Statements of Operations for the Years Ended December 31, 1995, 1994
and 1993
Statements of Changes in Partners' Capital for the Years Ended
December 31, 1995, 1994 and 1993
Statements of Cash Flows for the Years Ended December 31, 1995, 1994
and 1993
Notes to Financial Statements
2. Exhibits Filed
The following documents are included as exhibits to the Annual
Report on Form 10-K. Those exhibits listed below which are
incorporated by reference herein are indicated as such by the
information supplied in the parenthetical reference thereafter.
4.1 - Limited Partnership Agreement. (Filed as Exhibit 3.1 to
Registration Statement No. 2-66548 and incorporated herein by
reference.)
4.2 - Certificate of Limited Partnership for C&K 1980 Fund-B, Ltd.
filed in Texas. (Filed as Exhibit 3.2 to Registration
Statement No. 2-66548 and incorporated herein by reference.)
4.3 - Form of Subscription Agreement. (Filed as Exhibit 4.2 to
Registration Statement No. 2-66548 and incorporated herein by
reference.)
B. Reports on Form 8-K
On June 21, 1995, the Partnership filed a Form 8-K (Commission
No. 0-10267 and Internal Revenue Service Identification No. 76-
0307698), which was received by the Securities and Exchange
Commission on June 21, 1995 and incorporated herein by
reference, in which it reported a change in the Registrant's
certified independent accountants.
<PAGE>
Report of Independent Auditors
The Partners of C&K 1980 Fund-B, Ltd.:
We have audited the balance sheet of C&K 1980 Fund-B, Ltd. as of December
31, 1995, and the related statements of operations, partners' capital and
cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of C&K 1980 Fund-B, Ltd.
at December 31, 1995, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that C&K
1980 Fund-B, Ltd. will continue as a going concern. As more fully
described in Note 7, the General Partner is currently considering either
transferring its limited partner and general partner interests in the
Partnership, or withdrawing as General Partner of the Partnership or taking
other actions to reduce its responsibilities in the Partnership, which
could lead to the ultimate dissolution of the Partnership. These
conditions raise substantial doubt about the Partnership's ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Ernst & Young LLP
Denver, Colorado
March 8, 1996
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Partners of
C&K 1980 Fund-B, Ltd.:
We have audited the accompanying balance sheet of C&K 1980 Fund-B, Ltd. (a
Texas Limited partnership) as of December 31, 1994 and the related
statements of operations, partners' capital and cash flows for each of the
two years in the period ended December 31, 1994. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of C&K 1980 Fund-B, Ltd.,
as of December 31, 1994 and the results of its operations and its cash
flows for each of the two years in the period ended December 31, 1994 in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that C&K
1980 Fund-B, Ltd. will continue as a going concern. As discussed in Note 7
to the financial statements, the General Partner is currently considering
either transferring its limited partner and general partner interests in
the Partnership, or withdrawing as general partner of the Partnership or
taking other actions to reduce its responsibilities in the Partnership,
which could lead to the ultimate dissolution of the Partnership. These
conditions raise substantial doubt about the Partnership's ability to
continue as a going concern. The accompanying financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
Hein + Associates LLP
Houston, Texas
March 13, 1995
<PAGE>
C&K 1980 FUND-B, LTD.
(A Texas Limited Partnership)
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Current Assets:
Cash $ 261,194 $ 473,041
Receivable from General Partner 210,885 249,548
Total Current Assets 472,079 722,589
Oil and gas properties and equipment,
at cost, using the full cost method
of accounting 22,381,049 22,327,931
Less: Accumulated depreciation,
depletion and amortization (18,562,098) (18,106,469)
3,818,951 4,221,462
Total Assets $ 4,291,030 $ 4,944,051
LIABILITIES AND PARTNERS' CAPITAL
Accrued liabilities $ 16,823 $ 16,800
Contingency (Note 7)
Partners' Capital:
General Partner 1,000,751 1,123,291
Limited Partners 2,391,556 2,816,513
Combining adjustment 881,900 987,447
Total Partners' Capital 4,274,207 4,927,251
Total Liabilities and
Partners' Capital $ 4,291,030 $ 4,944,051
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
<PAGE>
C&K 1980 FUND-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Revenues:
Oil and gas sales $1,586,879 $1,830,079 $ 2,554,918
Interest income 13,454 28,390 20,124
1,600,333 1,858,469 2,575,042
Expenses:
Lease operating 252,483 354,907 373,156
Production tax 90,610 67,920 187,629
Marketing deductions 245,700 433,220 215,101
Depreciation, depletion
and amortization 455,629 1,191,530 512,192
General and administrative 201,259 206,880 206,994
1,245,681 2,254,457 1,495,072
Net income (loss) $ 354,652 $ (395,988) $ 1,079,970
Net income (loss) allocation:
General Partner $ 285,156 $ 301,660 $ 675,957
Limited Partners 175,043 (660,470) 510,650
Combining adjustment (105,547) (37,178) (106,637)
Net income (loss) $ 354,652 $ (395,988) $ 1,079,970
Net income (loss) per limited
partnership unit
(1,210 outstanding) $ 144.66 $ (545.84) $422.02
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
<PAGE>
C&K 1980 FUND-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
<TABLE>
<CAPTION>
Combining
General Limited Adjustment
Partner Partners (Note 3) Total
<S> <C> <C> <C> <C>
Balance at
January 1, 1993 $1,260,508 $3,565,283 $1,131,262 $ 5,957,053
Contributions 284,064 -- -- 284,064
Distributions (1,076,268) (235,950) -- (1,312,218)
Net income (loss) 675,957 510,650 (106,637) 1,079,970
Balance at
December 31, 1993 $1,144,261 $3,839,983 $1,024,625 $ 6,008,869
Contributions 342,066 -- -- 342,066
Distributions (664,696) (363,000) -- (1,027,696)
Net income (loss) 301,660 (660,470) (37,178) (395,988)
Balance at
December 31, 1994 $1,123,291 $2,816,513 $ 987,447 $ 4,927,251
Contributions 217,728 -- -- 217,728
Distributions (625,424) (600,000) -- (1,225,424)
Net income (loss) 285,156 175,043 (105,547) 354,652
Balance at
December 31, 1995 $1,000,751 $2,391,556 $ 881,900 $ 4,274,207
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
<PAGE>
C&K 1980 FUND-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 354,652 $ (395,988) $ 1,079,970
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion
and amortization 455,629 1,191,530 512,192
Changes in operating assets
and liabilities:
Decrease (increase) in receivable
from General Partner 38,663 42,814 (20,962)
Increase in accrued
liabilities 23 16,800 --
Net cash provided by
operating activities 848,967 855,156 1,571,200
Cash flows from investing activities:
Additions to oil and gas
properties and equipment (53,118) (562,010) (13,016)
Net cash used in investing
activities: (53,118) (562,010) (13,016)
Cash flows from financing activities:
Decrease in distribution payable to
Limited Partners -- -- (302,500)
Distributions to Limited Partners (600,000) (363,000) (235,950)
Distributions to General Partner (625,424) (664,696) (1,076,268)
Contributions by General Partner 217,728 342,066 284,064
Net cash used in
financing activities (1,007,696) (685,630) (1,330,654)
Net (decrease) increase in cash (211,847) (392,484) 227,530
Cash at beginning of year 473,041 865,525 637,995
Cash at end of year $ 261,194 $ 473,041 $ 865,525
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
<PAGE>
C&K 1980 FUND-B, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
The C&K 1980 Fund-B, Ltd. (the "Partnership"), a Texas Limited
Partnership, was organized on January 29, 1980, to acquire, explore,
develop and operate onshore oil and gas properties in the United States and
commenced operations on October 15, 1980. Total initial Limited Partner
contributions were $6,050,000 including $100,000 contributed by C&K
Petroleum, Inc. ("C&K"), the initial General Partner. On August 25, 1981,
C&K requested the Limited Partners to pay an additional assessment of
$1,512,500, or 25%, of their initial contributions. Of this amount, C&K
paid $157,500 for thirty-two Limited Partners who declined to pay their
share of the additional assessments.
C&K, after several corporate reorganizations beginning in September of
1984 and ending in December of 1991, was acquired by Ultramar Oil and Gas
Limited ("UOGL"), an indirect wholly-owned subsidiary of LASMO plc.
Effective November 18, 1992 UOGL was sold to Williams-Cody Limited
Liability Company ("WCLLC"), a Wyoming limited liability company owned by
Williams Gas Management Company ("WGMan") and Cody Resources, Inc.
("CRI"). On January 1, 1993, UOGL changed its name to Williams-Cody, Inc.
("Williams-Cody").
Effective May 1, 1993, Cody Company, a wholly owned subsidiary of The
Gates Corporation, purchased the units of WCLLC owned by WGMan. As a
result of this acquisition, the unit holders of WCLLC are Cody Company and
its wholly owned subsidiary, Cody Resources, Inc. Subsequently, effective
May 15, 1993, the name of Williams-Cody, Inc. was changed to CODY ENERGY,
INC. ("CODY"), and the name of Williams-Cody Limited Liability Company was
changed to Gates-Cody Energy Company ("GCEC"), a Limited Liability
Company. CODY is the surviving corporation and, pursuant to the authority
provided in the Partnership Agreement, manages and controls the
Partnership's affairs and is responsible for the activities of the
Partnership.
Basis of Accounting
The accounts of the Partnership are maintained on the accrual basis in
accordance with accounting practices permitted for federal income tax
reporting purposes. In order to present the accompanying financial
statements on the basis of generally accepted accounting principles for
financial reporting purposes, adjustments have been made to account for oil
and gas properties under the full cost method of accounting.
Oil and Gas Properties
The Partnership uses the full cost method of accounting for oil and
gas properties in accordance with rules prescribed by the Securities and
Exchange Commission ("SEC"). Under this method, all costs incurred in
connection with the exploration for and development of oil and gas reserves
are capitalized. Such capitalized costs include lease acquisition,
geological and geophysical work, delay rentals, drilling, completing and
equipping oil and gas wells and other related costs together with costs
applicable to CODY's technical personnel directly engaged in evaluating and
maintaining oil and gas prospects and drilling oil and gas wells.
Maintenance and repairs are charged against income when incurred. Renewals
and betterments which extend the useful life of properties are capitalized.
The capitalized costs of all oil and gas properties are depleted on a
composite units-of-revenue method computed on a future gross revenue
basis. An additional depletion provision is made if the total capitalized
costs of oil and gas properties exceed the "capitalization ceiling"
which is calculated as the present value of future net revenues for
estimated production of the Partnership's proved oil and gas reserves as
furnished by independent petroleum engineers.
Future gross revenues have been estimated using rules prescribed by
the SEC. Under these rules, year-end prices are utilized in determining
future gross revenues.
Net Income (Loss) per Limited Partnership Unit
Net income (loss) per limited partnership unit is computed by
obtaining the Limited Partners net income (loss) (see Statements of Changes
in Partners' Capital) and dividing by the total limited partnership units
outstanding.
Contributions and Distributions
Contributions by the General Partner, as presented in the Statements
of Changes in Partners' Capital, represent amounts paid by the General
Partner for its allocated share of the Partnership's costs and expenses.
Distributions to the General Partner represent amounts collected by the
General Partner for its allocated share of the Partnership's revenues.
Distributions to Limited Partners represent periodic payments of available
cash, as determined in accordance with the terms of the Partnership
Agreement.
Receivable from the General Partner
The receivable from the General Partner consists of the Limited
Partners' share of proceeds from the sales of the Partnership's crude oil
and natural gas, net of related operating and general and administrative
expenses. The General Partner acts as the collection agent for the
Partnership's receivables and remits sales revenues collected in the period
received. The Partnership has no recourse against the General Partner for
amounts deemed uncollectible.
Revenue Recognition
The Partnership recognizes oil and gas revenues for only its ownership
percentage of total production under the entitlement method. Purchase,
sale and transportation of natural gas and crude oil are recognized upon
completion of the sale and when transported volumes are delivered.
Concentration of Credit Risk
Financial instruments which subject the Partnership to concentrations
of credit risk consist principally of trade receivables. The Partnership's
policy is to evaluate, prior to entering agreements, each purchaser's
financial condition. The Partnership sells to purchasers with different
geographic and economic characteristics. Trade receivables, which are
generally uncollateralized, are from oil and gas companies located
throughout the United States.
Use of Estimates
The preparation of the Partnership's financial statements in
conformity with generally accepted accounting principles necessarily
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the balance sheet dates and the reported amounts
of revenues and expenses during the reporting periods. Actual results
could differ from those estimates.
Reclassifications
Certain amounts from prior years have been reclassified to be
consistent with the financial statement presentation for 1995. Such
reclassifications had no effect on net income.
NOTE 2 - SALES TO MAJOR CUSTOMERS
Sales to major customers are summarized in the table below:
<TABLE>
<CAPTION>
Purchasers 1995 1994 1993
Sales % Sales % Sales %
<S> <C> <C> <C> <C> <C> <C>
Coastal Oil & Gas
Corporation -- 0 228,064 12 399,206 16
Valero Hydrocarbons 429,508 27 186,833 10 434,108 17
Williams Gas
Marketing 813,318 51 1,115,469 61 1,146,022 45
Enron Trading and
Transportation
Company 344,053 22 -- 0 -- 0
</TABLE>
Since June 1, 1993, Williams Gas Marketing purchased all of the
Partnership's natural gas production under an agreement that calls for
market responsive prices which are tied to a published index. The
Partnership remains responsible for all costs related to production,
gathering, processing or severance of the gas prior to Delivery Point.
These costs have been recorded as marketing deductions in the financial
statements.
NOTE 3 - ALLOCATION OF PARTNERSHIP REVENUES, COSTS AND EXPENSES
The Partnership Agreement provides that revenues, costs and expenses
shall be allocated to the partners as follows:
<TABLE>
<CAPTION>
Limited General
Partners Partner
<S> <C> <C>
REVENUES
Sales of Production . . . . . . . . . . . . . . . 50% 50%
Sale of Equipment . . . . . . . . . . . . . . . . 50 50
Interest Income . . . . . . . . . . . . . . . . . 99 1
COSTS AND EXPENSES
Organization and Offering Expenses Other than
Sales Commissions . . . . . . . . . . . . . . . 0 100
Leasehold Acquisition Costs . . . . . . . . . . . 0 100
Subsequent Leasehold Acquisition Costs . . . . . 50 50
Intangible Drilling Costs . . . . . . . . . . . . 99 1
Tangible Drilling and Completion Costs Relating
to Commercially Productive Wells . . . . . . . . 0 100
Post-Completion Costs . . . . . . . . . . . . . . 50 50
Operating Costs . . . . . . . . . . . . . . . . . 50 50
Special Costs . . . . . . . . . . . . . . . . . . 99 1
General and Administrative Expenses . . . . . . . 50 50
</TABLE>
The depreciation, depletion and amortization provision is calculated
based on discrete calculations utilizing the Partnership's and the
partners' share of the related capital costs and estimated future net
revenues. For financial statement purposes, each partner's depreciation,
depletion and amortization provision has been increased by the amount that
his share of unamortized costs exceeded the capitalization ceiling.
During 1995 and 1993, no additional provision was necessary for the
Partnership attributable to a ceiling test failure. In 1994, however,
$776,272 in additional depreciation, depletion and amortization was
necessary for the Partnership taken as a whole because the total
capitalized costs of the oil and gas properties exceeded the capitalization
ceiling. The additional provision was allocated $820,387 to the Limited
Partners and $(44,115) as a combining adjustment.
The combining adjustment included in the partners' capital of $881,900
and $987,447 at December 31, 1995 and 1994, respectively, represents the
difference resulting from computing the full cost ceiling test on the
total partnership basis, which is used for financial reporting purposes,
and the limited partners and general partner basis. The adjustment is an
allocation of partners' capital and does not affect net income.
NOTE 4 - PURCHASE OF LIMITED PARTNERS' INTERESTS
The Limited Partners may require the General Partner to purchase up to
ten percent of their interests annually. In addition to the units
purchased by the General Partner for their initial capital contribution, a
total of 702.66 units had been purchased from Limited Partners as of
December 31, 1994. At January 1, 1995, the General Partner calculated a
purchase price of $2,034.46 per unit for Limited Partners who paid the
additional assessment ("assessed Limited Partners") and $1,627.57 per unit
for Limited Partners who had not paid the additional assessment
("nonassessed Limited Partners"). Twenty-four Limited Partners
(representing forty-nine units on which the assessment was paid and two
units on which the assessment was not paid) tendered units. The General
Partner expended $102,943.68 for the purchase of these 51 Limited Partner
units during 1995. At December 31, 1995, the General Partner owned 687.66
assessed Limited Partnership units (20 initial shares and 667.66 purchased
from Limited Partners) and 66 nonassessed Limited Partnership units.
NOTE 5 - SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
The General Partner is reimbursed for administrative and overhead
costs incurred in conducting the business of the Partnership. Such
reimbursements have been the maximum allowed under the terms of the
Partnership Agreement and were $181,500 in 1995, 1994 and 1993.
The Partnership distributed to each Limited Partner their
proportionate share of cash funds credited to their capital account which
was in excess of the amounts necessary to meet such partners share of
existing or future obligations of the Partnership. Total distributions to
Limited Partners in 1995, 1994, and 1993, were $600,000, $363,000 and
$235,950, respectively.
NOTE 6 - INCOME TAXES
Income taxes are not levied at the Partnership level, but rather on
the individual partners; therefore, no provision or liability for federal
and state income taxes has been reflected in the accompanying financial
statements. The tax returns, the qualification of the Partnership as a
partnership for tax purposes, and the amount of the Partnership's income or
loss is subject to examination by federal and state tax authorities. If
such examinations result in changes with respect to the Partnership's
qualifications or in changes in the Partnership's income or loss, the tax
liability of the partners could be changed accordingly.
Set forth below is a reconciliation between net income for financial
and federal income tax reporting purposes for the years ended December 31,
1995, 1994, and 1993.
<TABLE>
<CAPTION>
Year ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Net income (loss) for financial
reporting purposes $354,652 $ (395,988) $1,079,970
Increase (decrease) in taxable net
income resulting from:
Depreciation, depletion and
amortization of oil and gas
properties for financial
reporting purposes not deductible
for income tax purposes 455,629 1,191,530 512,192
Depreciation of oil and gas
properties for income tax purposes
not included as expenses for
financial reporting purposes (25,531) (30,642) (36,929)
Oil and gas exploration and
development costs capitalized for
financial reporting purposes but
deducted for income
tax purposes (53,118) (481,267) (4,577)
Other revenues recognized for income
tax purposes amortized for
financial reporting purposes -- 2,817 --
Net income as reported for federal
income tax purposes $731,632 $ 286,450 $1,550,656
Net income as reported for federal
income tax purposes applicable to
the General Partner $387,714 $ 368,641 $ 764,352
Net income (loss) as reported for
federal income tax purposes
applicable to Limited Partners $343,918 $ (82,191) $ 786,304
</TABLE>
NOTE 7 - CONTINGENCIES
The General Partner is currently considering either transferring its
limited partner and general partner interests in the Partnership,
withdrawing as general partner of the Partnership, or taking other actions
to reduce its responsibilities in the Partnership, which could lead to the
ultimate dissolution of the Partnership. This condition raises substantial
doubt about the Partnership's ability to continue as a going concern. As
long as CODY remains the General Partner of the Partnership, GCEC intends
to, if necessary, advance the funds required by the Partnership in excess
of those generated by operations, through CODY. The accompanying financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
NOTE 8 - SUPPLEMENTAL DATA OF OIL AND GAS OPERATIONS
Costs Incurred in Oil and Gas Property Acquisition, Exploration and
Development Activities
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Property Acquisition Costs $ -- $ -- $ --
Exploration Costs -- -- --
Development Costs 53,118 562,010 13,016
Total Costs $53,118 $562,010 $ 13,016
</TABLE>
<TABLE>
<CAPTION>
Results of Operations from Oil and Gas Producing Activities
Year Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Revenues $1,586,879 $ 1,830,079 $ 2,554,918
Production (lifting) costs (343,093) (422,827) (560,785)
Depreciation, depletion and
amortization (455,629) (1,191,530) (512,192)
Results of operations from oil
and gas producing activities $ 788,157 $ 215,722 $ 1,481,941
Depreciation, depletion and
amortization per dollar of
gross revenues $ 0.29 $ 0.65 $ 0.20
</TABLE>
<TABLE>
<CAPTION>
Capitalized Costs Relating to Oil and Gas Producing Properties
Year Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Proved properties $ 22,381,049 $ 22,327,931 $ 21,765,921
Accumulated depreciation,
depletion and amortization (18,562,098) (18,106,469) (16,914,939)
Net capitalized costs $ 3,818,951 $ 4,221,462 $ 4,850,982
Estimated Oil and Gas Reserve Quantities (Unaudited)
The following is an analysis of the Partnership's interest in net
quantities of proved oil and gas reserves which are all located in onshore
areas of Texas. Quantities are based on estimates of proved reserves
furnished by Ryder Scott Company, independent petroleum engineers, pursuant
to rules set by the Securities and Exchange Commission. Estimates of
proved reserves are inherently imprecise and are even more imprecise for
newly discovered reserves than for reserves with long production
histories. As a result, subsequent development and production of the
Partnership's reserves may result in revisions of such estimates.
Certain information related to the standardized measure of oil and gas
reserves has not been included in the supplemental data on oil and gas
operations. The General Partner has elected the exclusion available to
limited partnerships when such reserve information is provided annually to
the Limited Partners. The supplemental reserve information is provided to
the Limited Partners on an annual basis.
</TABLE>
<TABLE>
<CAPTION>
Total Proved Reserves
Oil Gas
(In BBLS) (In MCF)
<S> <C> <C>
As of December 31, 1992 320,015 10,917,656
Revisions of previous estimates (105,122) 1,598,536
Production (27,729) (1,228,452)
As of December 31, 1993 187,164 11,287,740
Discoveries 17,265 513,520
Revisions of previous estimates 3,673 (2,279,278)
Production (23,690) (829,478)
As of December 31, 1994 184,412 8,692,504
Revisions of previous estimates (47,166) (2,538,129)
Production (19,809) (825,544)
As of December 31, 1995 117,437 5,328,831
</TABLE>
The natural gas volumes (mcf) of 5,328,831 as of December 31, 1995,
disclosed above, include 1,864,320 equivalent mcf related to plant
products.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this Annual Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Dated: March 27, 1996 C&K 1980 Fund-B, Ltd.
(Registrant)
By:/s/ Robert L. Kubik
Robert L. Kubik
President and Director
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons, which include
the Chief Executive Officer, the Chief Financial Officer, the Chief
Accounting Officer and a majority of the Board of Directors, on behalf of
the Registrant and in the capacities and on the date above indicated:
/s/ Robert L. Kubik /s/ Richard E. Westerberg
Robert L. Kubik Richard E. Westerberg
President and Director Exec. Vice President, Secretary &
/s/ Dan R. Taylor /s/ Thomas J. Gibson
Dan R. Taylor Thomas J. Gibson
Vice President/Controller Director
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000319315
<NAME> C&K 1980 FUND-B, LTD.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 261,194
<SECURITIES> 0
<RECEIVABLES> 210,885
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 472,079
<PP&E> 22,381,049
<DEPRECIATION> 18,562,098
<TOTAL-ASSETS> 4,291,030
<CURRENT-LIABILITIES> 16,823
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,274,207
<TOTAL-LIABILITY-AND-EQUITY> 4,291,030
<SALES> 1,586,879
<TOTAL-REVENUES> 1,600,333
<CGS> 0
<TOTAL-COSTS> 1,245,681
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 354,652
<INCOME-TAX> 0
<INCOME-CONTINUING> 354,652
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 354,652
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
