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<PAGE> 01
THIS DOCUMENT IS A COPY OF THE FORM 10-Q FILED ON NOVEMBER 15,1995 PURSUANT
TO RULE 201 TEMPORARY HARDSHIP EXEMTPION.
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended
September 30, 1995 Commission File Number 2-71865
TEXLAND DRILLING PROGRAM-1981
(Name of Registrant)
TEXAS 75-1791491
(State of Organization) (IRS Employer Identification No.)
500 Throckmorton Street, Suite 3402
Fort Worth, Texas 76102
(Address of Executive Offices) Zip Code
Registrant's Telephone Number (817) 336-2751
Securities registered pursuant to Section 12(b) of the Act:
Units of Limited Partnership Interest None
(Title of Class) (Voting Units)
Indicate whether the Registrant (1) has filed all reports required to be
filed by Sec. 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> 02
TEXLAND DRILLING PROGRAM - 1981
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
09/30/95 12/31/94
----------- -----------
<S> <C> <C>
CURRENT ASSETS
CASH $67,684 $44,753
ACCOUNTS RECEIVABLE
TRADE 83,173 103,623
GENERAL PARTNER (NOTE 4) 3,243
----------- -----------
TOTAL CURRENT ASSETS 150,857 151,619
PROPERTY AND EQUIPMENT, AT COST
(SUCCESSFUL EFFORTS METHOD)
INTANGIBLE DEVELOPMENT COSTS 7,558,616 7,533,723
LEASE AND WELL EQUIPMENT 4,342,056 4,310,734
PRODUCING LEASEHOLDS 368,562 368,562
----------- -----------
12,269,234 12,213,019
LESS ACCUMULATED DEPRECIATION AND DEPLETION 8,957,431 8,690,942
----------- -----------
3,311,803 3,522,077
WELLS-IN-PROGRESS
NONPRODUCING LEASEHOLDS 38
----------- -----------
NET PROPERTY AND EQUIPMENT 3,311,841 3,522,077
ORGANIZATIONAL COSTS (NET OF $1,141,028
AMORTIZATION IN 1991 AND 1,069,798 IN 1990)
----------- -----------
$3,462,698 $3,673,696
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE - TRADE $40,658 $51,736
----------- -----------
TOTAL CURRENT LIABILITIES 40,658 51,736
PARTNERS' EQUITY
LIMITED PARTNERS - 2,425 UNITS OUTSTANDING 2,470,726 2,586,043
GENERAL PARTNER 951,314 1,035,917
----------- -----------
TOTAL PARTNERS'EQUITY 3,422,040 3,621,960
----------- -----------
TOTAL LIABILITIES AND PARTNERS'EQUITY $3,462,698 $3,673,696
=========== ===========
SEE ACCOMPANYING NOTES
</TABLE>
<PAGE> 03
TEXLAND DRILLING PROGRAM - 1981
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER SEPTEMBER
1995 1994 1995 1994
-------- ------- -------- ----------
<S> <C> <C> <C> <C>
REVENUES
OIL AND GAS SALES $270,382 $281,000 $841,890 $770,320
INTEREST INCOME 695 187 1,706 524
GAIN ON SALE
-------- -------- -------- ---------
271,077 281,187 843,596 770,844
EXPENSES
FEES TO MANAGING GENERAL PARTNER 16,050 21,000 48,150 63,000
PRODUCTION EXPENSES 108,537 124,805 323,321 397,855
SEVERANCE TAX WITHHOLDING 12,451 13,961 38,727 36,470
DEPRECIATION, DEPLETION AND AMORT. 88,830 132,803 266,489 398,410
OTHER EXPENSES 11,449 2,160 12,339 16,451
-------- -------- -------- ---------
237,317 294,729 689,026 912,186
-------- -------- -------- ---------
NET INCOME (LOSS) $33,760 ($13,542) $154,570 ($141,342)
========= ========= ======== =========
NET INCOME (LOSS) ALLOCATION
LIMITED PARTNERS 5,553 ( 18,950) 54,433 ( 113,119)
GENERAL PARTNER 28,207 5,408 100,137 ( 28,223)
-------- -------- -------- ---------
$33,760 ($13,542) $154,570 ($141,342)
======== ======== ======== =========
NET INCOME (LOSS) PER $5000 LIMITED
PARTNER UNIT (2,425 UNITS O/S) $2 ( $8) $22 ( $47)
======== ======== ======== =========
SEE ACCOMPANYING NOTES
</TABLE>
<PAGE> 04
TEXLAND DRILLING PROGRAM - 1981
(A LIMITED PARTNERSHIP)
STATEMENT OF PARTNERS'EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
LIMITED GENERAL
TOTAL PARTNER PARTNER
------------- ------------- -------------
<S> <C> <C> <C>
BALANCE DECEMBER 31, 1994 $3,621,960 $2,586,043 $1,035,917
PARTNERS' CONTRIBUTIONS 31,360 31,360
PARTNERS' DISTRIBUTIONS ( 385,850) ( 169,750) ( 216,100)
NET INCOME/(LOSS) 154,570 54,433 100,137
------------- ------------- -------------
BALANCE SEPTEMBER 30, 1995 $3,422,040 $2,470,726 $951,314
============= ============= =============
SEE ACCOMPANYING NOTES
</TABLE>
<PAGE> 05
TEXLAND DRILLING PROGRAM - 1981
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME/(LOSS) $154,570 ( $141,342)
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
DEPRECIATION, DEPLETION, AND AMORTIZATION 266,489 398,410
ABANDONED LEASEHOLDS
LOSS ON SALE OF ASSETS
CHANGE IN ACCOUNTS RECEIVABLE 23,693 12,392
CHANGE IN ACCOUNTS PAYABLE ( 11,078) 12,899
----------- -----------
TOTAL ADJUSTMENTS 279,104 423,701
----------- -----------
NET CASH PROVIDED BY OPERATNG ACTIVITIES 433,674 282,359
CASH FLOWS FROM INVESTING ACTIVITIES:
ACQUISITION OF PROPERTY AND EQUIPMENT ( 56,253) ( 39,265)
PROCEEDS FROM SALE OF PROPERTY AND EQUIPMENT
----------- -----------
NET CASH USED BY INVESTING ACTIVITIES ( 56,253) ( 39,265)
CASH FLOWS FROM FINANCING ACTIVITIES:
PARTNERS' CONTRIBUTIONS 31,360 23,212
PARTNERS' DISTRIBUTIONS ( 385,850) ( 251,925)
----------- -----------
NET CASH USED BY FINANCING ACTIVITIES ( 354,490) ( 228,713)
NET INCREASE IN CASH 22,931 14,381
CASH AT BEGINING OF QUARTER 44,753 29,167
----------- -----------
CASH AT END OF QUARTER $67,684 $43,548
=========== ===========
SEE ACCOMPANYING NOTES
</TABLE>
<PAGE> 06
TEXLAND DRILLING PROGRAM-1981
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Partnership was organized as a limited partnership on June 20, 1981 for the
purpose of engaging in oil and gas exploration and production. Texland
Properites-1981, a general partnership, and Texland Petroleum, Inc. are the
General Partners. The Managing General Partner is Texland Petroleum, Inc. The
Partnership's accounting policies are summarized below:
BASIS OF ACCOUNTING - The Partnership follows generally accepted accounting
principles applicable to established enterprises in the extractive industries
under a method which is generally known as the successful method of accounting.
PROPERTY AND EQUIPMENT - Costs incurred for the acquisition of producing and
nonproducing leaseholds are capitalized. Costs of intangible development and
lease and well equipment incurred to drill and equip successful exploratory and
development wells are capitalized. Costs to drill and equip unsuccessful
exploratory wells are charged to operations while costs of unsuccessful
development wells remain capitalized. Costs associated with uncompleted wells
are capitalized as wells-in-progress.
ABANDONED LEASEHOLDS - Costs of nonproducing properties are charged to expense
at such time as they are deemed to be impaired, based upon periodic assessments
of such costs.
DEPLETION- Leasehold costs of producing properties are amortized on the unit of
production method based on proved oil and gas reserves. Intangible development
costs of producing properties are amortized on the unit of production method
based on estimated proved developed oil and gas reserves.
DEPRECIATION - Depreciation of equipment is provided by using the unit of
production method based on estimated proved developed oil and gas reserves.
ORGANIZATION COSTS - These costs are amortized by the straight-line method over
ten years, the life of the Partnership.
FEDERAL INCOME TAX - The Partnership files its federal income tax return on the
accrual basis.
<PAGE> 07
TEXLAND DRILLING PROGRAM-1981
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (Continued)
September 30, 1995
(Unaudited)
2. CONTRIBUTIONS BY GENERAL PARTNER (TEXLAND PROPERTIES-1981)
Under terms of the Partnership Agreement, the General Partner is charged for
certain costs related to drilling and production operations which are required
to be capitalized for federal income tax purposes. These costs are treated as
capital contributions by the General Partner. In addition, Texland Properties-
1981 and Texland Petroleum, Inc. have invested in limited partnership units in
the amount of $95,000 and $30,000 respectively.
3. FEES TO MANAGING GENERAL PARTNER (TEXLAND PETROLEUM, INC.)
In consideration of its management services rendered, the Managing General
Partner is entitled to charge management fees to the Partnership. In addition,
for the three months ended June 30, 1995 and June 30, 1994, the Partnership was
charged $45,055 and $43,754 respectively for technical services, accounting
services, and supervisory services performed by the employees of the Managing
General Partner and such charges are included in intangible development costs,
production expenses and fees to Managing General Partner. These charges are
allocated between the Gen. and Ltd. Partners based upon applicable revenue
and expense sharing rates.
<PAGE> 08
TEXLAND DRILLING PROGRAM-1981
(A Limited Partnership)
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
September 30, 1995
The average price of West Texas Sour, the Partnership's
most common type of crude oil, for the third quarter of 1995
was $15.87 as compared to $15.59 for the third quarter of
1994. The average price per barrel of oil for the nine
months ending September 30,1995 was $16.50 compared to
$14.15 for the comparable nine months of 1994.
These substantial changes in the price of oil, plus normal
expected declines in the rate of production from some of the
Partnerships more mature properties accounts for the
changes in oil and gas revenue for these periods.
An increase in workover costs due to an increase in the
number of wells permanently or temporarily abandoned, due to
low oil prices and low production levels, accounts for the
higher levels of production expense for both the three month
and nine month periods of 1994.
Decreases in depreciation and depletion for the 1995 periods
as compared to the 1994 periods is due to normal expected
declines in production volumes.
The Partnership was formed with cash contributions from the
Limited and General Partners. The General Partner does not
intend to incur any substantial indebtedness and any
developmental drilling which is necessary will be processed
by farmout to the other parties or by reinvestment of
internally generated funds. Therefore, no liquidity
problems are anticipated during the life of the Partnership.
<PAGE> 09
PART II
Items 1 through 6
Omitted - Not applicable to Registrant.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TEXLAND DRILLING PROGRAM-1981
By------- M.E.CHAPMAN
M. E. Chapman, Vice President
of Texland Petroleum, Inc.,
General Partner - Texland
Properties-1981
Date: November 13, 1995
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