FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
{X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1995
OR
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-10269
C&K 1981 FUND-B, LTD.
(Exact name of registrant as specified in its charter)
Texas 76-0307699
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7555 E. Hampden Avenue, Suite 600,
Denver, CO 80231
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 303-695-3600
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
The C&K 1981 Fund-B, Ltd. is a Texas limited partnership.
<PAGE>
INDEX TO FORM 10-Q
C&K 1981 Fund-B, Ltd.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets
September 30, 1995 and December 31, 1994
Statements of Operations
Three months and nine months ended September 30, 1995 and 1994
Statements of Partners' Capital (Deficit)
Nine months ended September 30, 1995 and 1994
Statements of Cash Flows
Nine months ended September 30, 1995 and 1994
Notes to the Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURE
<TABLE>
<CAPTION>
C&K 1981 FUND-B, LTD.
(A Texas Limited Partnership)
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1995 1994
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 69,032 $ 67,353
Total Current Assets 69,032 67,353
Oil and gas properties and equipment,
at cost, using the full cost method
of accounting 22,690,079 22,689,413
Less: Accumulated depletion (22,255,015) (22,206,837)
435,064 482,576
Total Assets $ 504,096 $ 549,929
<CAPTION>
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Current payable to General Partner $ 25,391 $ 45,393
Long-term payable to General Partner 2,023,557 1,823,326
Total Liabilities 2,048,948 1,868,719
Contingency (Note 7)
Partners' deficit (1,544,852) (1,318,790)
Total Liabilities and Partners' Capital $ 504,096 $ 549,929
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
C&K 1981 FUND-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
<S> <C> <C> <C> <C>
1995 1994 1995 1994
Revenues:
Oil and gas sales $ 88,999 $114,238 $ 316,318 $ 378,357
Interest income 564 935 1,678 3,710
89,563 115,173 317,996 382,067
Expenses:
Lease operating expense 24,690 14,767 93,041 63,123
Production tax expense 9,119 12,772 36,372 33,616
Marketing deductions 4,697 9,280 12,547 24,064
Depletion expense 13,549 16,596 48,178 48,613
General and administrative
expense 71,252 83,987 230,870 232,783
Interest expense --
Affiliated 48,597 39,425 141,394 103,030
171,904 176,827 562,402 505,229
Net income (loss) $(82,341) $(61,654) $(244,406) $(123,162)
Net income (loss) per
consenting limited
partnership unit
(2,751 outstanding) $ (5.19) $ 15.02 $ (18.40) $ (6.32)
Net income (loss) per
nonconsenting limited
partnership unit
(982 outstanding) $ (53.83) $ (54.89) $ (161.97) $ (112.75)
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
C&K 1981 FUND-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
Nine months ended September 30, 1994
Non-
Consenting Consenting Combining
General Limited Limited Adjustment
Partner Partners Partners (Note 3) Total
<S> <C> <C> <C> <C> <C>
Balance at
Jan. 1, 1994 $ 199,868 $375,387 $(1,639,611) $ (775) $(1,065,131)
Contributions 164,089 -- -- -- 164,089
Distributions (160,375) -- -- -- (160,375)
Net income
(loss) 4,319 (17,389) (110,723) 631 (123,162)
Balance at
9/30/94 $ 207,901 $357,998 $(1,750,334) $ (144) $(1,184,579)
<CAPTION>
Nine months ended September 30, 1995
Non-
Consenting Consenting Combining
General Limited Limited Adjustment
Partner Partners Partners (Note 3) Total
Balance at
Jan. 1, 1995 $ 203,959 $260,611 $(1,783,222) $(138) $(1,318,790)
Contributions 152,056 -- -- -- 152,056
Distributions (133,712) -- -- -- (133,712)
Net income
(loss) (35,666) (50,609) (159,050) 919 (244,406)
Balance at
9/30/95 $ 186,637 $210,002 $(1,942,272) $ 781 $(1,544,852)
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
C&K 1981 FUND-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
September 30,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $(244,406) $ (123,162)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depletion 48,178 48,613
Net cash provided by (used in)
operating activities (196,228) (74,549)
Cash flows from investing activities:
(Additions) retirements to oil and gas
properties and equipment (666) (161,621)
Cash flows from financing activities:
Increase in payable to General Partner 180,229 148,085
Distributions to General Partner (133,712) (160,375)
Contributions by General Partner 152,056 164,089
Net cash provided by (used in)
financing activities 198,573 151,799
Net increase (decrease) in cash and
cash equivalents 1,679 (84,371)
Cash and cash equivalents at beginning of period 67,353 205,214
Cash and cash equivalents at end of period $ 69,032 $ 120,843
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
<PAGE>
C&K 1981 FUND-B, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Management Representation
These financial statements should be read in the context of the
financial statements and notes thereto filed with the Securities and
Exchange Commission in the Partnership's 1994 annual report on Form 10-K.
In the opinion of management, the accompanying unaudited financial
statements reflect all adjustments, consisting only of normal recurring
items, necessary to present fairly the financial position of the C&K 1981
Fund-B, Ltd. at September 30, 1995, the results of operations for the three
and nine months ended September 30, 1995 and 1994, and the partners'
capital (deficit) and cash flows for the nine months ended September 30,
1995 and 1994. The results of operations for the three months and nine
months ended September 30, 1995 should not necessarily be taken as
indicative of the results of operations that may be expected for the entire
year 1995.
Organization
The C&K 1981 Fund-B, Ltd. (the "Partnership"), a Texas Limited
Partnership, was organized on December 16, 1980, to acquire, explore,
develop and operate onshore oil and gas properties in the United States and
commenced operations on June 1, 1981. Total initial Limited Partner
contributions were $9,332,500 including $100,000 contributed by C&K
Petroleum, Inc. ("C&K"), the initial General Partner. On September 15,
1982, C&K requested the Limited Partners to pay an additional assessment of
25% of their initial contributions. Additional contributions received from
Limited Partners were $2,333,125 with C&K paying the additional assessments
for 209 Limited Partners who declined to pay their share of the additional
assessments ("Nonconsenting Limited Partners"). Nonconsenting Limited
Partners are subject to a penalty in an amount equal to 300% of the
additional assessment paid by the General Partner.
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 Williams Gas
Management Company. 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.
has been changed to CODY ENERGY, INC. ("CODY"), and the name of Williams-
Cody Limited Liability Company has been changed to Gates-Cody Energy
Company, a Limited Liability Company ("GCEC"). 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.
CODY 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. GCEC intends to, if necessary, advance
funds required by the Partnership in excess of those generated by
operations through CODY.
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.
Cash and Cash Equivalents
Cash is invested in a money market savings account.
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 capital-
ized costs of oil and gas properties exceed the "capitalization ceiling"
which is calculated as the present value of future net revenues from
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.
The capitalization ceiling is computed for the first three quarters of
the year by (i) adjusting the previous year-end present value of future net
revenues for the accretion of discount, production, and revisions to
reserve estimates, if any, and (ii) revising the resultant valuation of
future net revenues to incorporate prices and volumes at the financial
statement date.
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 Partners' Capital
(Deficit)) and dividing by the total Limited Partnership units outstanding.
Contributions and Distributions
Contributions by the General Partner, as presented in the Statements of
Partners' Capital (Deficit), 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.
Distributions Payable
There were no distributions payable to the Limited Partners as of
September 30, 1995 or 1994.
Payable to the General Partner
The long-term payable to the General Partner is the Nonconsenting
Limited Partners' obligation to the General Partner for their share of
costs, arising from partnership operations, which are funded entirely by
the General Partner. The current portion of the liability is the amount
estimated to be collectible from the Nonconsenting Limited Partners' net
operating revenues over the current operating cycle (one year) and certain
other amounts due from the Consenting Limited Partners.
NOTE 2 - GAS CONTRACT
Effective January 1, 1993, under a gas purchase agreement ("agreement"),
WGMan began purchasing all of the Partnership's natural gas production.
The agreement is for five years and calls for a market responsive price
which is tied to a published index. WGMan is paid an administrative fee of
$.04 per MMBtu of gas purchased as compensation for administration and
marketing of gas. WGMan also is responsible for administration of third
party gas contracts as outlined in the agreement; however, 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
REVENUES
<S> <C> <C>
Sale 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 depletion 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 depletion provision has been increased by the amount that
its share of unamortized costs exceeded its capitalization ceiling. The
difference between depletion applicable to the partners and the total
applicable to the Partnership is shown as a combining adjustment in the
Statements of Partners' Capital (Deficit) for the nine months ended
September 30, 1995 and 1994. During the nine months ended September 30,
1995 and 1994, the net capitalized costs of the Partnership's oil and gas
properties did not exceed the capitalization ceiling.
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. 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 using a discount rate
equal to 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.
At January 1, 1995, the General Partner calculated a purchase price of
$69.31 per Consenting Limited Partner unit. The purchase price
calculations for the Nonconsenting Limited Partners have not resulted in
positive amounts and, therefore, the General Partner has not offered to
purchase such units during 1995. The ceiling limitation for units tendered
for repurchase is $921,063. Within the prescribed tender period, twenty-
two consenting Limited Partners tendered eighty-five units for a total
repurchase value of $5,891.35.
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 during the nine months ended September 30, 1995 and
1994.
After such time as total contributions from the Limited Partners have
been expended, the General Partner may advance funds to the Limited
Partners for their share of costs and expenses for continuing operations.
Interest was charged to the Limited Partners on such advances at a rate
which approximated 9.6% and 7.4% during the nine months ended September 30,
1995 and 1994, respectively. The General Partner is reimbursed for funds
advanced to the Limited Partners from revenues otherwise allocable to the
Limited Partners.
NOTE 6 - INCOME TAXES
Income taxes are not levied at the Partnership level, but rather on the
individual partners; therefore, no provision for liability for federal and
state income taxes has been reflected in the accompanying financial
statements. 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.
Income tax deductions are allocated according to the manner in which the
related costs were allocated. The Tax Reform Act of 1976 provides that
income tax deductions for depletion must be computed by each partner rather
than by the Partnership. Accordingly, the income tax returns of the
Partnership will not include deductions for depletion since such amounts
are not Partnership deductions.
Under the passive loss rules of the Tax Reform Act of 1986 certain
limitations on the deductibility of losses attributable to an investment in
the Partnership apply to the Limited Partners which are individuals,
estates, trusts, closely held corporations and any 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.
NOTE 7 - CONTINGENCY
The Partnership has a net capital deficiency. As a result of the
deficit capital position of the Nonconsenting Limited Partners, all net
cash flows attributable to the Nonconsenting Limited Partners' share of the
Partnership's operations are presently applied against their indebtedness
for past advances by the General Partner and are not available to fund
Partnership needs. Funds required by the Partnership in excess of those
generated by the operations attributable to different partner interests
will be advanced by the General partner. CODY 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. As long as CODY remains the General Partner
of the Partnership, GCEC intends to continue advancing funds required by
the Partnership in excess of those generated by operations through CODY.
The 1995 financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
NOTE 8 - RECLASSIFICATIONS
Certain amounts from prior years have been reclassified to be consistent
with the financial statement presentation for 1995. Such reclassification
had no effect on net income (loss).
C&K 1981 FUND-B, LTD.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities for the nine months ended
September 30, 1995 was $196,228, as compared to net cash used in operations
of $74,549 for the corresponding period in 1994. This increase was the
result of a decrease in revenues and an increase in operating expenses and
interest expense.
During the nine months ended September 30, 1995, the Partnership
distributed to the General Partner cash proceeds of $133,712. (See Notes 1
and 5 of the Condensed Notes to the Financial Statements). For the nine
months ended September 30, 1995, the General Partner's contributions
(allocated share of costs and expenses incurred) were $152,056.
For the nine months ended September 30, 1995 and 1994, the Partnership
incurred capital expenditures of $666 and $161,621, respectively. The
Partnership has made no immediate plans for additional exploratory or
developmental capital programs except those necessary to maintain well
productivity for 1995.
The Consenting Limited Partners' financing requirements for operating
expenses and capital projects are currently provided by revenues from their
share of the Partnership's operations. The Partnership does not consider
long-term financing arrangements on behalf of the Consenting Limited
Partners, from the General Partner or other sources, as necessary at this
time.
As a result of the deficit capital position of the Nonconsenting Limited
Partners, all net cash flows attributable to the Nonconsenting Limited
Partners' share of the Partnership's operations are presently applied
entirely against their indebtedness for past advances by the General
Partner and are not available to fund Partnership needs. As long as CODY
remains the general partner of the Partnership, GCEC intends to continue
advancing funds, through CODY, required by the Partnership in excess of
those generated by operations.
The Partnership's financial condition and operating results have been
affected by the unsettled energy markets and will continue to be materially
affected by any significant fluctuations in sales prices. The
Partnership's ability to internally generate funds for capital expenditures
and the Nonconsenting Partners' ability to reimburse funds advanced by the
General Partner will be similarly affected. The Partnership cannot predict
the prices it will receive in the remainder of 1995 or in future years for
its crude oil and natural gas.
RESULTS OF OPERATIONS
Three Months Ended September 30, 1995 vs. Three Months Ended September
30, 1994
The Partnership reported a net loss of $82,341 for the three months
ended September 30, 1995 as compared to a net loss of $61,654 reported for
the same period in 1994. The increase was primarily attributable to
declines in oil production and oil and gas prices in 1995.
Crude oil and natural gas sales for the three months ended September 30,
1995 were $88,999, a decrease of $25,239, or 22% compared to the same
period in 1994. Crude oil production decreased to 45 barrels per day,
while natural gas production increased to 194 thousand cubic feet ("mcf")
per day, as compared to 62 barrels and 167 mcf, respectively, in 1994.
During the third quarter of 1995, average sales prices for crude oil
decreased to $15.52 per barrel, while natural gas decreased to $1.38 per
mcf, as compared to $16.57 per barrel and $1.52 per mcf, respectively, for
the same period in 1994. While the addition of the Mestena E-18 well
increased gas production in 1995, equivalent mcf's from the sale of
processed gas plant by-products also contributed to the increased gas
sales. During the first half of 1994, gas was sold at the wellhead rather
than processed due to economic reasons.
Lease operating expense for the three months ended September 30, 1995
increased by $9,923 or 67% compared to the corresponding period in 1994.
Included in lease operating expenses for 1995 are non-recurring workover
costs necessary to maintain production on one well of approximately $3,500.
Production tax expense for the third quarter of 1995 decreased by $3,653 or
29% compared to the same period in 1994. Production taxes decreased in
relation to the decrease in oil and gas sales. Marketing deductions were
4,697 for the three months ended September 30, 1995 as compared to $9,280
for the three months ended September 30, 1994. Depletion expense decreased
by $3,047 or 18% compared to the corresponding period in 1994. General and
administrative expenses for the third quarter of 1995 decreased by $12,735
or 15% compared to the same period in 1994. Interest expense increased by
$9,172 or 23% compared to the corresponding period in 1994. The increase
in interest expense is due to increases in interest rates and in the
payable balance to the General Partner in 1995.
Nine Months Ended September 30, 1995 vs. Nine Months Ended September 30,
1994
The Partnership reported a net loss of $244,406 for the nine months
ended September 30, 1995, as compared to a net loss of $123,162 for the
same period in 1994. The increase was primarily attributable to declines
in oil production and gas prices and an increase in operating expenses and
interest.
Crude oil and natural gas sales for the nine months ended September 30,
1995 were $316,318, a decrease of $62,039, or 16% compared to the same
period in 1994. Crude oil production decreased to 53 barrels per day,
while natural gas production increased to 183 mcf per day, as compared to
68 barrels and 176 mcf, respectively, in 1994. During the first nine
months of 1995, average sales prices for crude oil increased to $16.85 per
barrel, while natural gas decreased to $1.44 per mcf, as compared to $15.45
per barrel and $1.99 per mcf, respectively, for the same period in 1994.
Natural gas production increased slightly due to production from the
Mestena E-18 well, which went on production in May, 1994, and additional
equivalent mcf's from the sale of gas by-products. During the first half
of 1994, gas was sold at the wellhead rather than processed for economic
reasons.
Lease operating expense for the nine months ended September 30, 1995
increased by $29,918 or 47% compared to the corresponding period in 1994.
Included in lease operating expenses for 1995 are non-recurring workover
costs necessary to maintain production on two wells of approximately
$5,500. The increase in lease operating expenses is also a result of
additional operating requirements as the properties mature, irrespective of
production rates. Production tax expense for the first nine months of 1995
increased by $2,756 or 8% compared to the same period in 1994. Production
taxes, which usually follow production trends, were increased slightly due
to a larger percent of the gas produced from Louisiana wells, which are
taxed based on production volumes, not value. Marketing deductions were
$12,547 for the nine months ended September 30, 1995 as compared to $24,064
for the same period in 1994. Depletion expense decreased by $435 or 1%
compared to the corresponding period in 1994. General and administrative
expenses for the nine months ended September 30, 1995 decreased by $1,913
or 1% compared to the same period in 1994. Interest expense increased by
$38,364 or 37% compared to the same period in 1994. The increase in
interest expense is due primarily to the higher interest rate and an
increase in the payable balance in 1995.
PART II - OTHER INFORMATION
C&K 1981 FUND-B, LTD.
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
None.
(b) Reports on Form 8-K:
On June 21, 1995, the Partnership filed a Form 8-K (Commission No.
0-10269 and Internal Revenue Service Identification No. 76-
0307699), 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 certifying
independent accountants.
<PAGE>
SIGNATURE
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.
C&K 1981 Fund-B, LTD.
(Registrant)
By: Dan R. Taylor
Vice President and Controller
CODY ENERGY, INC.
Successor General Partner
DATE: November 13, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-START> JUL-01-1995 JAN-01-1995
<PERIOD-END> SEP-30-1995 SEP-30-1995
<CASH> 69,032 69,032
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 69,032 69,032
<PP&E> 22,690,079 22,690,079
<DEPRECIATION> 22,255,015 22,255,015
<TOTAL-ASSETS> 504,096 504,096
<CURRENT-LIABILITIES> 25,391 25,391
<BONDS> 0 0
<COMMON> 0 0
0 0
0 0
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 504,096 504,096
<SALES> 88,999 316,318
<TOTAL-REVENUES> 89,563 317,996
<CGS> 0 0
<TOTAL-COSTS> 123,307 421,008
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 48,597 141,394
<INCOME-PRETAX> (82,341) (244,406)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (82,341) (244,406)
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
