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 June 30, 1997
|_| 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)
75-1915688
Texas 75-1915682
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) 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 |_|
Page 1 of 10
<PAGE>
<TABLE>
<CAPTION>
MAY DRILLING PARTNERSHIP 1983-2
BALANCE SHEETS
(Unaudited)
(In thousands)
June 30, December 31,
1997 1996
---- ------------
ASSETS
Investment in
<S> <C> <C>
May Limited Partnership 1983-2 $376 $397
=== ===
PARTNERS' CAPITAL
Partners' Capital $376 $397
=== ====
<FN>
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.
</FN>
<FN>
The accompanying note is an integral part
of the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MAY LIMITED PARTNERSHIP 1983-2
BALANCE SHEETS
(Unaudited)
(In thousands)
June 30, December 31,
1997 1996
---- ----
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $ 194 $157
Accrued oil and gas sales 81 161
Due from affiliate 28
--- ----
Total 303 318
--- ---
OIL AND GAS PROPERTIES,
using the full cost method
of accounting 16,647 16,618
Less accumulated depletion (16,113) (16,072)
-------- -------
Net oil and gas
properties 534 546
--- ---
TOTAL ASSETS $ 837 $ 864
=== ===
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES
Accounts payable and accrued
liabilities $ 17 $ 22
Due to affiliate 5
----- ------
Total 17 27
---- ----
PARTNERS' CAPITAL
General partner 444 440
Limited partner 376 397
--- ---
Total 820 837
--- ---
TOTAL LIABILITIES AND
PARTNERS' CAPITAL $ 837 $ 864
=== ===
<FN>
The accompanying note is an integral part
of the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MAY LIMITED PARTNERSHIP 1983-2
STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except for unit information)
For the Three Months
Ended June 30,
1997 1996
---- ----
REVENUES
<S> <C> <C>
Oil revenue $ 15 $ 29
Gas revenue 125 213
Interest 3 2
---- ---
Total 143 244
--- ---
COSTS AND EXPENSES
Lease operating 19 26
General and administrative 16 25
Depletion 21 29
Professional services and other 3 3
Litigation settlement 2
---- ----
Total 59 85
-- ----
NET INCOME $ 84 $ 159
===== =====
ALLOCATION OF NET
INCOME:
General Partner $ 39 $ 74
== ==
Limited Partner $ 45 $ 85
=== ==
Per initial $1,000 limited
partner investment $4.26 $ 8.05
==== ====
Weighted average initial
$1,000 limited partner
investment units outstanding 10,557 10,557
====== ======
<FN>
The accompanying note is an integral part
of the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MAY LIMITED PARTNERSHIP 1983-2
STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except for unit information)
For the Six Months Ended
June 30,
1997 1996
---- ----
REVENUES
<S> <C> <C>
Oil revenue $ 39 $ 55
Gas revenue 325 457
Interest 5 4
---- ---
Total 369 516
---- ---
COSTS AND EXPENSES
Lease operating 40 53
General and administrative 37 50
Depletion 41 55
Professional services and other 8 5
Litigation settlement 2
---- ---
Total 126 165
--- ---
NET INCOME $243 $ 351
===== ======
ALLOCATION OF NET
INCOME:
General Partner $ 113 $ 159
=== ===
Limited Partner $ 130 $ 192
=== ===
Per initial $1,000 limited
partner investment $ 12.31 $ 18.19
===== =====
Weighted average initial
$1,000 limited partner investment
units outstanding 10,557 10,557
======= ======
<FN>
The accompanying note is an integral part
of the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MAY LIMITED PARTNERSHIP 1983-2
STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
For the Six Months Ended
June 30,
1997 1996
----- ----
OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 243 $ 351
Adjustment to reconcile net
income to net cash provided by
operating activities:
Depletion 41 55
-- --
Cash from operations before
working capital changes 284 406
Changes in assets and liabilities
provided (used) cash:
Accrued oil and gas sales 80 (2)
Due from affiliate (28) (34)
Accounts payable and accrued
liabilities (5) (14)
Due to affiliate (5)
Net cash provided by
operating activities 326 356
--- ---
INVESTING ACTIVITIES:
Additions to oil and gas
properties (29) (3)
---- ---
FINANCING ACTIVITIES:
Distributions to partners (260) (329)
---- -----
NET INCREASE IN CASH
AND CASH EQUIVALENTS 37 24
CASH AND CASH EQUIVALENTS:
Balance, beginning of period 157 148
--- ---
Balance, end of period $ 194 $ 172
=== ===
<FN>
The accompanying note is an integral part
of the financial statements.
</FN>
</TABLE>
<PAGE>
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, 1996 Annual Report on Form 10-K.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
Liquidity and Capital Resources
The Partnership generated $326,000 of cash flow from operating activities during
the six months ended June 30, 1997 and $260,000 was distributed to partners. A
distribution payable to partners of record as of June 30, 1997 was declared in
July 1997. The distribution amount is $123,000, payable $71,000 to May Drilling
Partnership 1983-2 partners and $52,000 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
Second Quarter 1997 Compared to Second Quarter 1996
Oil Revenue
Oil revenue decreased $14,000 in the second quarter of 1997 as compared to the
corresponding period in 1996 as the result of a decrease in oil production
combined with a decrease in the average oil price. The average oil price
decreased from $20.84 per barrel in 1996 to $18.92 per barrel in 1997. Oil
production decreased 40% due to the temporary shut-in of two wells during May
and June of 1997 while workover procedures were performed.
Gas Revenue
Gas revenue decreased $88,000 during the second quarter of 1997 as compared to
the corresponding period in 1996 as the result of a decrease in production
combined with a decrease in price. Gas production decreased 29% due to the
temporary shut-in of two wells during May and June of 1997 while workover
procedures were performed. The average gas price decreased from $2.58 per mcf in
1996 to $2.14 per mcf in 1997.
Interest
Interest income increased $1,000 during the second quarter of 1997 as
compared with the second quarter of 1996 due to a higher average cash balance
during 1997.
<PAGE>
Lease Operating
Lease operating expense decreased $7,000 for the second quarter of 1997 as
compared to the corresponding period in 1996 primarily due to a decrease in
production taxes resulting from the decreased oil and gas production discussed
above.
General and Administrative
General and administrative expense decreased $9,000 during the second quarter of
1997 as compared to the second quarter of 1996 due to a decrease in the
allocation of overhead from the general partner.
Depletion
Depletion expense decreased $8,000 during the second quarter of 1997 as compared
with the second quarter of 1996 as a result of a lower depletion rate during
1997 due to the decrease in oil and gas production discussed above.
Six Months Ended June 30, 1997 Compared to the Six Months Ended June 30, 1996
The comparisons for the six months ended June 30, 1997 and the six months ended
June 30, 1996 are consistent with those discussed in the second quarter 1997
compared to the second quarter of 1996 except for the following:
Oil Revenue
Oil revenue decreased $16,000 during the first six months of 1997 as compared to
the corresponding period in 1996 primarily due to a decrease in production,
partially offset by an increase in the average oil price. The average oil price
increased from $20.14 per barrel in 1996 to $21.01 per barrel in 1997. Oil
production decreased 31% due to the temporary shut-in of two wells during May
and June of 1997 while workover procedures were performed.
Gas Revenue
Gas revenue decreased $132,000 during the first six months of 1997 as compared
to the corresponding period in 1996 primarily as the result of a decrease in
production combined with a decrease in price. Gas production decreased 23% due
to the temporary shut-in of two wells during May and June of 1997 while workover
procedures were performed. The average gas price decreased from $2.88 per mcf in
1996 to $2.67 per mcf in 1997.
Professional Services and Other
Professional services and other expense increased $3,000 during the first six
months of 1997 as compared with the first six months of 1996 primarily due to
the timing of these expenses.
Litigation Settlement
Litigation settlement expense during the six months ended June 30, 1996
represents the expense incurred to settle a property related lawsuit.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
Reference is made to Item 8 - Note 4 of Form 10-K for the year
ended December 31, 1996.
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.
<PAGE>
-10-
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: HEPGP LTD.,
General Partner
By: HALLWOOD G. P.,
INC.,
General Partner
Date: August 11, 1997 By: 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 Form 10-Q
for the quarter ended June 30, 1997 for May Drilling Partnership 1983-2 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> 6-mos
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-END> Jun-30-1997
<CASH> 194
<SECURITIES> 0
<RECEIVABLES> 109
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 303
<PP&E> 16,647
<DEPRECIATION> 16,113
<TOTAL-ASSETS> 837
<CURRENT-LIABILITIES> 17
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 820
<TOTAL-LIABILITY-AND-EQUITY> 837
<SALES> 364
<TOTAL-REVENUES> 369
<CGS> 0
<TOTAL-COSTS> 126
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 243
<INCOME-TAX> 0
<INCOME-CONTINUING> 243
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 243
<EPS-PRIMARY> 12.31
<EPS-DILUTED> 12.31
</TABLE>
