UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
MARK ONE
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
___ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-11313
-----------------------
MAY DRILLING PARTNERSHIP 1983-2
MAY LIMITED PARTNERSHIP 1983-2
(Exact name of registrant as specified in its charter)
------------------------
TEXAS 75-1915688
(State or other jurisdiction of 75-1915682
incorporation or organization) (I.R.S. Employer
Identification Number)
4582 SOUTH ULSTER STREET PARKWAY
SUITE 1700
DENVER, COLORADO 80237
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 850-7373
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. Yes X No ___
MAY DRILLING PARTNERSHIP 1983-2
BALANCE SHEETS
(In thousands)
September 30, December 31,
1995 1994
------------- -------------
(Unaudited)
ASSETS
Investment in
May Limited Partnership 1983-2 $466 $475
=== ===
PARTNERS' CAPITAL
Partners' Capital $466 $475
=== ===
NOTE: The statements of operations and cash flows for May Drilling
Partnership 1983-2 are not presented because such information is
equal to the limited partner's share of such activity as presented
in the May Limited Partnership 1983-2 financial statements. The
May Drilling Partnership carries its investment in May Limited
Partnership 1983-2 on the equity method. The May Limited
Partnership 1983-2 financial statements should be read in
conjunction with these balance sheets.
MAY LIMITED PARTNERSHIP 1983-2
BALANCE SHEETS
(In thousands)
September 30, December 31,
1995 1994
---------- ----------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 188 $ 169
Accrued oil and gas sales 83 90
Due from affiliate 23 19
------- -------
Total 294 278
------- -------
OIL AND GAS PROPERTIES, using the
full cost method of accounting 16,579 16,545
Less - Accumulated depletion (15,941) (15,861)
------- -------
Net oil and gas properties 638 684
------- -------
TOTAL ASSETS $ 932 $ 962
======= =======
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES
Accounts payable and accrued
liabilities $ 24 $ 35
------- -------
Total 24 35
------- -------
PARTNERS' CAPITAL
General Partner 442 452
Limited Partner 466 475
------- -------
Total 908 927
------- -------
TOTAL LIABILITIES AND PARTNERS'
CAPITAL $ 932 $ 962
======= =======
MAY LIMITED PARTNERSHIP 1983-2
STATEMENT OF OPERATIONS
(Unaudited)
(In thousands, except for unit information)
For the Three Months Ended
--------------------------
September 30, September 30,
1995 1994
------ ------
REVENUES
Oil revenue $ 20 $ 19
Gas revenue 108 93
Interest income 2 3
------- -------
Total 130 115
------- -------
COSTS AND EXPENSES
Lease operating 39 31
General and administrative 24 25
Depletion 27 25
Professional services and other 2 6
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Total 92 87
------- -------
NET INCOME $ 38 $ 28
======= =======
ALLOCATION OF NET INCOME:
General Partner $ 21 $ 16
======= =======
Limited Partner $ 17 $ 12
======= =======
Per initial $1,000 limited $ 1.61 $ 1.14
partner investment ======= =======
Weighted average initial $1,000
limited partner investment
units outstanding 10,557 10,557
======= =======
MAY LIMITED PARTNERSHIP 1983-2
STATEMENT OF OPERATIONS
(Unaudited)
(In thousands, except for unit information)
For the Nine Months Ended
-------------------------
September 30, September 30,
1995 1994
------ ------
REVENUES
Oil revenue $ 62 $ 60
Gas revenue 329 451
Interest income 6 11
------- -------
Total 397 522
------- -------
COSTS AND EXPENSES
Lease operating 105 94
General and administrative 71 78
Depletion 80 84
Professional services and other 7 22
-------- -------
Total 263 278
------- -------
NET INCOME $ 134 $ 244
======= =======
ALLOCATION OF NET INCOME:
General Partner $ 74 $ 120
======= =======
Limited Partner $ 60 $ 124
======= =======
Per initial $1,000 limited $ 5.68 $ 11.75
partner investment ======= =======
Weighted average initial $1,000
limited partner investment
units outstanding 10,557 10,557
======= =======
MAY LIMITED PARTNERSHIP 1983-2
STATEMENTS OF CASH FLOW
(Unaudited)
(In thousands)
For the Nine Months Ended
-------------------------
September 30, September 30,
1995 1994
------ ------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 134 $ 244
Adjustment to reconcile net income
to net cash provided by
operating activities:
Depletion 80 84
------- -------
Cash from operations before working
capital changes 214 328
Changes in assets and liabilities
provided (used) cash:
Accrued oil and gas sales 7 99
Due from affiliate (4) 312
Accounts payable and accrued
liabilities (11) (294)
------- -------
Net cash provided by operating
activities 206 445
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties (34) (5)
Proceeds from property sales 15
------- -------
Net cash provided by (used in)
investing activities (34) 10
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners (153) (857)
------- -------
Net cash used in financing activities (153) (857)
------- -------
Net decrease in cash and cash
equivalents 19 (402)
CASH AND CASH EQUIVALENTS:
Balance, beginning of period 169 520
------- -------
Balance, end of period $ 188 $ 118
======= =======
The accompanying notes are an integral part
of the financial statements.
MAY LIMITED PARTNERSHIP 1983-2
NOTE TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - GENERAL
The financial statements presented are those of May Limited Partnership 1983-2
(the "Partnership"). The interim financial data are unaudited; however, in the
opinion of the general partner, the interim data include all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the results for the interim periods. These financial statements
should be read in conjunction with the financial statements and notes thereto
included in the Partnership's December 31, 1994 Annual Report on Form 10-K.
NOTE 2 - LEGAL
In June 1995, an additional lawsuit was filed against the Partnership in the
15th Judicial District Court, Lafayette Parish, Louisiana, Docket No. 952601-
3B, styled Lamson Petroleum Corporation v. Hallwood Petroleum, Inc. et al. The
plaintiffs in the lawsuit claim that they have an additional valid lease
covering streets and roads in the units of the A. L. Boudreaux #1 well, G. S.
Boudreaux #1 well, Mary Guilbeau #1 well and Duhon #1 well and are entitled to a
portion of the production from the wells. The Partnership has not yet
determined the amount of its interest in the properties which is at issue. At
this time, the Partnership believes that the difference between the amount
already in escrow as a result of the litigation and the amount of any liability
that may result upon resolution of this matter will not be material.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
LIQUIDITY AND CAPITAL RESOURCES
The Partnership generated $206,000 of cash flow from operating activities during
the nine months ended September 30, 1995 and made distributions of $153,000. A
distribution payable to partners of record as of September 30, 1995 was declared
in October 1995. The distribution amount is $112,000, payable $65,000 to May
Drilling Partnership 1983-2 partners and $47,000 to the general partner. Future
distributions are dependent on future prices for the Partnership's production
and the production level of the Partnership's remaining oil and gas reserves.
RESULTS OF OPERATIONS
THIRD QUARTER 1995 COMPARED TO THE THIRD QUARTER 1994
OIL REVENUE
Oil revenue increased $1,000 in the third quarter of 1995 as compared to the
corresponding period in 1994 as the result of an increase in production
partially offset by a decrease in the average oil price. Oil production
increased 10% primarily due to an increase in state allowable production limits.
The average oil price decreased from $17.36 per barrel in 1994 to $17.12 per
barrel in 1995.
GAS REVENUE
Gas revenue increased $15,000 during the third quarter of 1995 as compared to
the corresponding period in 1994 as the result of an increase in production
partially offset by a decrease in price. Gas production increased 10% primarily
due to an increase in state allowable production limits. The average gas price
decreased from $1.91 per mcf in 1994 to $1.57 per mcf in 1995.
INTEREST INCOME
Interest income decreased $1,000 during the third quarter of 1995 as compared
with the third quarter of 1994 as a result of a lower average cash balance.
LEASE OPERATING EXPENSE
Lease operating expense increased $8,000 for the third quarter of 1995 as
compared to the corresponding period in 1994 primarily due to increased
production taxes resulting from the 14% increase in oil and gas revenue.
GENERAL AND ADMINISTRATIVE EXPENSE
General and administrative expense decreased $1,000 during the third quarter of
1995 as compared to the third quarter of 1994 due to a decrease in the
allocation of overhead from the general partner.
DEPLETION EXPENSE
Depletion expense increased $2,000 during the third quarter of 1995 as compared
with the third quarter of 1994 as a result of a higher depletion rate due to
increased production as previously discussed.
NINE MONTHS ENDED SEPTEMBER 30, 1995 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER
30, 1994
The comparisons for the nine months ended September 30, 1995 and the nine months
ended September 30, 1994 are consistent with those discussed in the third
quarter 1995 compared to the third quarter 1994 except for the following:
OIL REVENUE
Oil revenue increased $2,000 during the first nine months of 1995 as compared
with the same period in 1994. The increase is comprised of an increase in the
average oil price from $15.81 per barrel in 1994 to $17.74 per barrel in 1995,
partially offset by an 8% decrease in production primarily due to normal
production declines.
GAS REVENUE
Gas revenue decreased $122,000 during the first nine months of 1995 as compared
with the same period during 1994. The decrease is comprised of a decrease in
gas prices from $2.21 per mcf in 1994 to $1.67 per mcf in 1995 combined with a
3% decrease in production primarily due to normal production declines partially
offset by increased state allowable production limits.
DEPLETION EXPENSE
Depletion expense decreased $4,000 during the first nine months of 1995 as
compared to the corresponding period in 1994 due to a lower depletion rate
resulting from the production declines previously discussed.
PROFESSIONAL SERVICES AND OTHER
Professional services and other expense decreased $15,000 during the first nine
months of 1995 as compared with the same period in 1994 due to the timing of
payments for professional services.
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
Reference is made to Item 8 - Note 3 of Form 10-K for the year ended
December 31, 1994 and Item 1 - Note 2 of this Form 10-Q.
ITEM 2 - CHANGES IN SECURITIES
None.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5 - OTHER INFORMATION
None.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
None.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Partnerships have duly caused this report to be signed on their behalf by the
undersigned, thereunto duly authorized.
MAY DRILLING PARTNERSHIP 1983-2
MAY LIMITED PARTNERSHIP 1983-2
BY: EDP OPERATING, LTD.,
GENERAL PARTNER
BY: HALLWOOD G. P., INC.,
GENERAL PARTNER
Date: November 2, 1995 By: /s/Robert S. Pfeiffer
---------------------------
Robert S. Pfeiffer, Vice President
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements and is qualified in its entirety by reference to such Form
10-Q.
</LEGEND>
<CIK> 0000711309
<NAME> MAY DRILLING PARTNERSHIP 1983-2
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 188
<SECURITIES> 0
<RECEIVABLES> 106
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 294
<PP&E> 16,579
<DEPRECIATION> (15,941)
<TOTAL-ASSETS> 932
<CURRENT-LIABILITIES> 24
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 908
<TOTAL-LIABILITY-AND-EQUITY> 932
<SALES> 391
<TOTAL-REVENUES> 397
<CGS> 0
<TOTAL-COSTS> 263
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 134
<INCOME-TAX> 0
<INCOME-CONTINUING> 134
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 134
<EPS-PRIMARY> 5.68
<EPS-DILUTED> 0
</TABLE>
