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 June 30, 1996
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
June 30, 1996 and December 31, 1995
Statements of Operations
Three months and six months ended June 30, 1996 and 1995
Statements of Changes in Partners' Capital (Deficit)
Six months ended June 30, 1996 and 1995
Statements of Cash Flows
Six months ended June 30, 1996 and 1995
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
<PAGE>
C&K 1981 FUND-B, LTD.
(A Texas Limited Partnership)
BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
1996 1995
Current Assets:
Cash $ 70,741 $ 69,600
Total Current Assets 70,741 69,600
Oil and gas properties and equipment,
at cost, using the full cost method
of accounting 22,963,054 22,690,079
Less: Accumulated depreciation,
depletion and amortization (22,325,978) (22,273,310)
637,076 416,769
Total Assets $ 707,817 $ 486,369
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Accrued liabilities $ 5,006 $ 16,823
Long-term payable to General Partner 2,408,220 2,075,630
Total Liabilities 2,413,226 2,092,453
Partners Capital (Deficit):
General Partner 184,417 178,807
Consenting Limited Partners 200,498 206,681
Nonconsenting Limited Partners (2,090,877) (1,992,702)
Combining adjustment 553 1,130
Total Partners Capital (Deficit) (1,705,409) (1,606,084)
Total Liabilities and
Partners' Capital (Deficit) $ 707,817 $ 486,369
The accompanying notes are an integral part of these financial statements.
<PAGE>
C&K 1981 FUND-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended
June 30, June 30,
1996 1995 1996 1995
Revenues:
Oil and gas sales $154,671 $135,927 $290,271 $ 227,319
Interest income 569 730 1,141 1,114
155,240 136,657 291,412 228,433
Expenses:
Lease operating 37,422 37,874 53,324 68,351
Production tax 16,379 18,061 33,824 27,253
Marketing deductions 2,730 4,430 6,351 7,850
Depreciation, depletion and
amortization 34,224 20,694 52,668 34,629
General and administrative 73,884 72,495 144,136 159,618
Interest -- Affiliated 49,409 49,019 97,739 92,797
214,048 202,573 388,042 390,498
Net loss $(58,808) $(65,916) $(96,630) $(162,065)
Net income (loss) allocation:
General Partner $ 1,786 $ (4,624) $ 8,305 $ (20,193)
Consenting Limited Partners (9,315) (8,000) (6,183) (36,340)
Nonconsenting Limited
Partners (50,810) (53,696) (98,175) (106,194)
Combining adjustment (469) 404 (577) 662
Net loss $(58,808) $(65,916) $(96,630) $(162,065)
Net loss per consenting
limited partnership unit
(2,751 outstanding) $ (3.39) $ (2.91) $ (2.25) $ (13.21)
Net loss per nonconsenting
limited partnership unit
(982 outstanding) $ (51.74) $ (54.68) $ (99.97) $ (108.14)
The accompanying notes are an integral part of these financial statements.
<PAGE>
C&K 1981 FUND-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
Six months ended June 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 104,700 -- -- -- 104,700
Distributions (96,124) -- -- -- (96,124)
Net income
(loss) (20,193) (36,340) (106,194) 662 (162,065)
Balance at
June 30, 1995 $192,342 $224,271 $(1,889,416) $ 524 $(1,472,279)
Six months ended June 30, 1996
Non-
Consenting Consenting Combining
General Limited Limited Adjustment
Partner Partners Partners (Note 3) Total
Balance at
Jan. 1, 1996 $178,807 $206,681 $(1,992,702) $ 1,130 $(1,606,084)
Contributions 122,364 -- -- -- 122,364
Distributions (125,059) -- -- -- (125,059)
Net income
(loss) 8,305 (6,183) (98,175) (577) (96,630)
Balance at
June 30, 1996 $184,417 $200,498 $(2,090,877) $ 553 $(1,705,409)
The accompanying notes are an integral part of these financial statements.
<PAGE>
C&K 1981 FUND-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended June 30,
1996 1995
Cash flows from operating activities:
Net loss $ (96,630) $(162,065)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation, depletion and amortization 52,668 34,629
Changes in operating assets and liabilities:
Increase in payable to General Partner 332,590 120,618
(Decrease) increase in accrued liabilities (11,817) 23
Net cash provided by (used in)
operating activities 276,811 (6,795)
Cash flows from investing activities:
Additions to oil and gas
properties and equipment (272,975) (666)
Net cash used in investing activities (272,975) (666)
Cash flows from financing activities:
Distributions to General Partner (125,059) (96,124)
Contributions by General Partner 122,364 104,700
Net cash provided by (used in)
financing activities (2,695) 8,576
Net increase in cash 1,141 1,115
Cash at beginning of period 69,600 67,353
Cash at end of period $ 70,741 $ 68,468
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
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
$2,333,125, or 25% of their initial contributions. Of this amount, C&K
paid $613,750 for 209 Limited Partners who declined to pay their share of
the additional assessment ("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, a Wyoming limited liability company ( WCLLC ), 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
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.
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 (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.
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, net of proceeds from the sales of the Partnership s crude oil and
natural gas, arising from Partnership operations, which are funded
entirely by the General Partner. The current portion, if any, of the
liability includes 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.
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 1996. Such
reclassifications had no effect on net income.
NOTE 2 - GAS CONTRACT
Since January 1, 1993, Williams Gas Marketing has 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:
Limited General
Partners Partner
REVENUES
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
As discussed in Note 1, the General Partner paid $613,750 of the
additional assessment for 209 Limited Partners (the Nonconsenting Limited
Partners) who declined to pay their share of the additional assessment.
Each such Nonconsenting Limited Partner s interest in the costs and
revenues of the Assessment Operations was suspended and accrues to the
benefit of the General Partner until Partnership revenues, less expenses,
related to the production of such revenues attributable to the Assessment
Operations, in an amount equal to 300% ($1,841,250) of the additional
assessment have been credited to the General Partner. As of June 30,
1996, $1,002,983 of revenue in excess of expenses has been allocated to
the General Partner.
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 provision has
been increased by the amount that his share of unamortized costs exceeded
the capitalization ceiling. At June 30, 1996 and 1995, the net
capitalized costs of the Partnership s oil and gas properties did not
exceed the capitalization ceiling.
The combining adjustment included in partners' capital of $553 and
$524 at June 30, 1996 and 1995, respectively, represents the difference
resulting from computing the full cost ceiling test in prior years 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 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. 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.
In addition to the 40 units purchased by the General Partner for its
initial capital contribution, a total of 1,359.50 units had been purchased
from Limited Partners as of December 31, 1995. At January 1, 1996, the
General Partner calculated a purchase price of $124.58 per unit for those
Limited Partners who paid the additional assessment ( Consenting Limited
Partners ). 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 1996. Within the
prescribed tender period, which ended June 30, 1996, forty-one Consenting
Limited Partners tendered one hundred sixteen units for a total repurchase
value of $14,451.28.
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 $139,988 for each of the six months ended
June 30, 1996 and 1995.
During the first six months of 1996 and 1995, the partnership
distributed $125,059 and $96,124, respectively, to the General Partner for
its allocated share of net revenues, and the General Partner contributed
$122,364 and $104,700, respectively, for its share of costs and expenses.
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 9.4% and 9.9% during the six months ended June 30, 1996
and 1995, 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 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.
NOTE 7 - CONTINGENCIES
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 entirely 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.
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. 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 1996 financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
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 provided by operating activities for the six months ended
June 30, 1996 was $276,811, compared to net cash used in operating
activities of $6,795 for the corresponding period in 1995. This change
was primarily the result of an increase in the payable to the General
Partner.
The Partnership has made no immediate plans for additional exploratory
or developmental capital programs in 1996, except those necessary to
maintain well productivity. In this regard, the Partnership spent
approximately $276,000 to sidetrack the existing wellborn of the McIlhenny
#1 in Iberia Parish, Louisiana.
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. Funds
required by the Partnership in excess of those generated by operations
attributable to the different partner interests will be advanced by the
General Partner.
The Partnership cannot predict with any degree of certainty the prices
it will receive in the remainder of 1996 and future years for its crude
oil and natural gas. The Partnership's financial condition, operating
results and liquidity will continue to be materially effected 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.
RESULTS OF OPERATIONS
Three Months Ended June 30, 1996 vs. Three Months Ended June 30, 1995
The Partnership reported a net loss of $58,808 for the three months
ended June 30, 1996, compared to a net loss of $65,916 reported for the
same period in 1995. The decrease in net loss was primarily attributable
to increased oil and gas sales, offset by an increase in depreciation,
depletion and amortization.
Crude oil and natural gas sales for the three months ended June 30,
1996 were $154,671, an increase of $18,744, or 14% compared to the same
period in 1995. Production of crude oil, natural gas and plant products
decreased to 63 barrels, 126 thousand cubic feet ("mcf"), and 50
equivalent mcf, per day, respectively, during the second quarter of 1996,
compared to the 1995 level of 67 barrels, 130 mcf, and 80 equivalent mcf,
respectively. During the second quarter of 1996, average sales prices
increased to $20.69 per barrel for crude oil, $2.31 per mcf for natural
gas, and $2.09 per equivalent mcf for plant products, compared to $17.7
6 per barrel, $1.49 per mcf, and $1.39 per equivalent mcf, respectively,
for the same period in 1995.
Lease operating expense for the three months ended June 30, 1996
decreased $452 or 1% compared to the corresponding period in 1995.
Production tax expense also decreased for the second quarter of 1996, by
$1,682 or 9% compared to the same period in 1995. Although oil and gas
sales revenues increased due to higher sales prices, Louisiana calculates
production taxes based on production volumes, which declined overall.
Marketing deductions were $2,730 for the three months ended June 30, 1996
compared to $4,430 for the three months ended June 30, 1995.
Depreciation, depletion and amortization expense increased by $13,530 or
65% compared to the corresponding period in 1995. The costs associated
with the drilling of the McIlhenny #1-Sidetrack #3 well, along with
additional reserves, were added to the depletion and reserve bases for the
second quarter of 1996, which increased the amount of depreciation,
depletion and amortization expense in 1996. General and administrative
expenses for the second quarter of 1996 increased $1,389 or 2% compared to
the same period in 1995. Interest expense increased by $390 or 1% compared
to the corresponding period in 1995.
Six Months Ended June 30, 1996 vs. Six Months Ended June 30, 1995
The Partnership reported a net loss of $96,630 for the six months
ended June 30, 1996 compared to a net loss of $162,065 reported for the
same period in 1995. The decrease in net loss was primarily attributable
to increased oil and gas sales.
Crude oil and natural gas sales for the six months ended June 30, 1996
were $290,271, an increase of $62,952, or 28% compared to the same period
in 1995. Crude oil production and natural gas production increased to 63
barrels and 120 mcf, respectively, while plant products decreased to 44
equivalent mcf per day during the first half of 1996, compared to the 1995
level of 57 barrels, 115 mcf, and 62 equivalent mcf, respectively. During
the first six months of 1996, average sales prices were $19.61 per barrel
for crude oil, $2.31 per mcf for natural gas, and $1.89 per equivalent mcf
for plant products, compared to $17.38 per barrel, $1.49 per mcf, and
$1.46 per equivalent mcf, respectively, for the same period in 1995.
Lease operating expense for the six months ended June 30, 1996
decreased $15,027 or 22% compared to the corresponding period in 1995.
This decrease is attributable to the plugging of one well in 1995, and
various non-recurring location and environmental charges incurred in
1995. Production tax expense for the first half of 1996 increased by
$6,571 or 24% compared to the same period in 1995, which related primarily
to increased crude oil and natural gas sales. Marketing deductions were
$6,351 for the six months ended June 30, 1996 as compared to $7,850 for the
six months ended June 30, 1995. Depreciation, depletion and amortization
expense increased by $18,039 or 52% compared to the corresponding period in
1995. This increase relates to the completion of the McIlhenny #1-
Sidetrack #3 well in April, 1996, which increased both the depletion base
and total reserves attributable to the Partnership. General and
administrative expenses for the first half of 1996 decreased by $15,482 or
10% compared to the same period in 1995. Interest expense increased
$4,942 or 5% in 1996, as a result of an increase in the payable to the
General Partner since 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
None.
<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: /s/ Dan R. Taylor
Dan R. Taylor
Vice President and Controller
CODY ENERGY, INC.
Successor General Partner
DATE: August 14, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-START> APR-1-1996 JAN-1-1996
<PERIOD-END> JUN-30-1996 JUN-30-1996
<CASH> 70,741 70,741
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 70,741 70,741
<PP&E> 22,963,054 22,963,054
<DEPRECIATION> 22,325,978 22,325,978
<TOTAL-ASSETS> 707,817 707,817
<CURRENT-LIABILITIES> 5,006 5,006
<BONDS> 0 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 707,817 707,817
<SALES> 154,671 290,271
<TOTAL-REVENUES> 155,240 291,412
<CGS> 0 0
<TOTAL-COSTS> 164,639 290,303
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 49,409 97,739
<INCOME-PRETAX> (58,808) (96,630)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (58,808) (96,630)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (58,808) (96,630)
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
