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, 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
September 30, 1996 and December 31, 1995
Statements of Operations
Three months and nine months ended September 30, 1996 and 1995
Statements of Changes in Partners' Capital (Deficit)
Nine months ended September 30, 1996 and 1995
Statements of Cash Flows
Nine months ended September 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
September 30, December 31,
1996 1995
Current Assets:
Cash $ 71,318 $ 69,600
Total Current Assets 71,318 69,600
Oil and gas properties and equipment,
at cost, using the full cost method
of accounting 22,969,394 22,690,079
Less: Accumulated depreciation,
depletion and amortization (22,365,406) (22,273,310)
603,988 416,769
Total Assets $ 675,306 $ 486,369
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Accrued liabilities $ 9,475 $ 16,823
Long-term payable to General Partner 2,437,438 2,075,630
Total Liabilities 2,446,913 2,092,453
Partners Capital (Deficit):
General Partner 174,369 178,807
Consenting Limited Partners 198,838 206,681
Nonconsenting Limited Partners (2,144,920) (1,992,702)
Combining adjustment 106 1,130
Total Partners Capital (Deficit) (1,771,607) (1,606,084)
Total Liabilities and
Partners' Capital (Deficit) $ 675,306 $ 486,369
[FN]
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 Nine months ended
September 30, September 30,
1996 1995 1996 1995
Revenues:
Oil and gas sales $176,435 $ 88,999 $ 466,706 $ 316,318
Interest income 577 564 1,718 1,678
177,012 89,563 468,424 317,996
Expenses:
Lease operating 24,506 24,690 77,830 93,041
Production tax 19,803 9,119 53,627 36,372
Marketing deductions 2,140 4,697 8,491 12,547
Depreciation, depletion
and amortization 39,428 13,549 92,096 48,178
General and administrative 75,785 71,252 219,921 230,870
Interest -- Affiliated 52,090 48,597 149,829 141,394
Total Expenses 213,752 171,904 601,794 562,402
Net loss $(36,740) $(82,341) $(133,370) $(244,406)
Net income (loss) allocation:
General Partner $ 19,410 $(15,472) $ 27,715 $ (35,666)
Consenting Limited Partner (1,660) (14,269) (7,843) (50,609)
Nonconsenting Limited
Partners (54,043) (52,856) (152,218) (159,050)
Combining adjustment (447) 257 (1,024) 919
Net loss $(36,740) $(82,341) $(133,370) $(244,406)
Net loss per consenting
limited partnership unit
(2,751 outstanding) $ (0.60) $ (5.19) $ (2.85) $ (18.40)
Net loss per nonconsenting
limited partnership unit
(982 outstanding) $ (55.03) $ (53.83) $ (155.01) $ (161.97)
[FN]
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)
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
Sept. 30, 1995 $186,637 $210,002 $(1,942,272) $ 781 $(1,544,852)
Nine months ended September 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 170,158 -- -- -- 170,158
Distributions (202,311) -- -- -- (202,311)
Net income 27,715 (7,843) (152,218) (1,024) (133,370)
(loss)
Balance at
Sept. 30, 1996 $ 174,369 $198,838 $(2,144,920) $ 106 $(1,771,607)
[FN]
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)
Nine months ended
September 30,
1996 1995
Cash flows from operating activities:
Net loss $(133,370) $(244,406)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation, depletion and amortization 92,096 48,178
Changes in operating assets and liabilities:
Increase in payable to General Partner 361,808 --
(Decrease) increase in accrued liabilities (7,348) --
Net cash provided by (used in)
operating activities 313,186 (196,228)
Cash flows from investing activities:
Additions to oil and gas
properties and equipment (279,315) (666)
Net cash used in investing activities (279,315) (666)
Cash flows from financing activities:
Distributions to General Partner (202,311) (133,712)
Contributions by General Partner 170,158 152,056
Net cash provided by (used in)
financing activities (32,153) 198,573
Net increase in cash 1,718 1,679
Cash at beginning of period 69,600 67,353
Cash at end of period $ 71,318 $ 69,032
[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
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 September 30,
1996, $1,004,571 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 $106 and
$781 at September 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 $209,982 for each of the nine months ended
September 30, 1996 and 1995.
During the first nine months of 1996 and 1995, the partnership
distributed $202,311 and $133,712, respectively, to the General Partner for
its allocated share of net revenues, and the General Partner contributed
$170,157 and $152,056, 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 9.6% during the nine months ended September 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.
<PAGE>
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 nine months ended
September 30, 1996 was $313,186, compared to net cash used in operating
activities of $196,228 for the corresponding period in 1995. This change
was primarily the result of the 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 wellbore 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 September 30, 1996 vs. Three Months Ended September
30, 1995
The Partnership reported a net loss of $36,740 for the three months
ended September 30, 1996, compared to a net loss of $82,341 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 September
30, 1996 were $176,435, an increase of $87,436, or 98% compared to the same
period in 1995. Production of crude oil increased to 75 barrels, while
natural gas and plant products production decreased to 108 thousand cubic
feet ("mcf"), and 37 equivalent mcf per day, respectively, during the third
quarter of 1996, compared to the 1995 level of 45 barrels, 151 mcf, and 43
equivalent mcf, respectively. During the third quarter of 1996, average
sales prices increased to $21.52 per barrel for crude oil, $2.20 per mcf
for natural gas, and $1.82 per equivalent mcf for plant products, compared
to $15.52 per barrel, $1.41 per mcf, and $1.27 per equivalent mcf,
respectively, for the same period in 1995.
Lease operating expense for the three months ended September 30, 1996
decreased $184 or 1% compared to the corresponding period in 1995.
Production tax expense increased for the third quarter of 1996 by $10,684
or 117% compared to the same period in 1995. This increase is due to the
higher crude oil production. Marketing deductions were $2,140 for the
three months ended September 30, 1996 compared to $4,697 for the three
months ended September 30, 1995. Depreciation, depletion and amortization
expense increased by $25,879 or 191% compared to the corresponding period
in 1995 due 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 third quarter of 1996 increased $4,533 or 6% compared to the same
period in 1995. Interest expense increased by $3,493 or 7% compared to the
corresponding period in 1995.
Nine Months Ended September 30, 1996 vs. Nine Months Ended September 30,
1995
The Partnership reported a net loss of $133,370 for the nine months
ended September 30, 1996 compared to a net loss of $244,406 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 nine months ended September
30, 1996 were $466,706, an increase of $150,388, or 48% compared to the
same period in 1995. Crude oil production increased to 67 barrels while
natural gas production and plant products production decreased to 116 mcf
and 42 equivalent mcf, respectively, per day during the first nine months
of 1996, compared to the 1995 level of 53 barrels, 127 mcf, and 56
equivalent mcf, respectively. During the first nine months of 1996,
average sales prices were $20.33 per barrel for crude oil, $2.27 per mcf
for natural gas, and $1.87 per equivalent mcf for plant products, compared
to $16.85 per barrel, $1.46 per mcf, and $1.41 per equivalent mcf,
respectively, for the same period in 1995.
Lease operating expense for the nine months ended September 30, 1996
decreased $77,830 or 16% 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 nine months of 1996 increased by
$17,255 or 47% compared to the same period in 1995, which related primarily
to increased crude oil and natural gas sales. Marketing deductions were
$8,491 for the nine months ended September 30, 1996 as compared to $12,547
for the nine months ended September 30, 1995. Depreciation, depletion and
amortization expense increased by $43,918 or 91% 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 nine months of 1996 decreased by
$10,949 or 5% compared to the same period in 1995. Interest expense
increased $8,435 or 6% in 1996, as a result of an increase in the payable
to the General Partner since 1995.
<PAGE>
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 - Finance
CODY ENERGY, INC.
Successor General Partner
DATE: November 13, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-START> JUL-1-1996 JAN-1-1996
<PERIOD-END> SEP-1-1996 SEP-1-1996
<CASH> 71,318 71,318
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 71,318 71,318
<PP&E> 22,969,394 22,969,394
<DEPRECIATION> 22,365,406 22,365,406
<TOTAL-ASSETS> 675,306 675,306
<CURRENT-LIABILITIES> 9,475 9,475
<BONDS> 0 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 675,306 675,306
<SALES> 176,435 466,706
<TOTAL-REVENUES> 177,012 468,424
<CGS> 0 0
<TOTAL-COSTS> 161,662 451,965
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 52,090 149,829
<INCOME-PRETAX> (36,740) (133,370)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (36,740) (133,370)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (36,740) (133,370)
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
