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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, 1996
|_| TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-11311
MAY DRILLING PARTNERSHIP 1983-1
MAY LIMITED PARTNERSHIP 1983-1
(Exact name of registrant as specified in its charter)
75-1896224
Texas 75-1896223
(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 1983-1
BALANCE SHEETS
(Unaudited)
(In thousands)
September 30, December 31,
1996 1995
ASSETS
<S> <C> <C>
Investment in
May Limited Partnership 1983-1 $ 224 $207
==== ===
PARTNERS' CAPITAL
Partners' Capital $224 $207
=== ===
<FN>
NOTE: The statements of operations and cash flows for May Drilling
Partnership 1983-1 are not presented because such information is equal
to the limited partner's share of such activity as presented in the May
Limited Partnership 1983-1 financial statements. The May Drilling
Partnership carries its investment in May Limited Partnership 1983-1 on
the equity method. The May Limited Partnership 1983-1 financial
statements should be read in conjunction with these balance sheets.
</FN>
<FN>
The accompanying notes are an integral
part of the financial statements.
</FN>
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
MAY LIMITED PARTNERSHIP 1983-1
BALANCE SHEETS
(Unaudited)
(In thousands)
September 30, December 31,
1996 1995
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $ 179 $ 115
Accrued oil and gas sales 38 52
Due from affiliate 27 8
-------- ---------
Total 244 175
------- -------
OIL AND GAS PROPERTIES, using the
full cost method of accounting 7,295 7,287
Less - Accumulated depletion (7,055) (7,022)
------ ------
Net oil and gas properties 240 265
------- -------
TOTAL ASSETS $ 484 $ 440
======= =======
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 19 $ 20
-------- --------
Total 19 20
-------- --------
PARTNERS' CAPITAL
General partner 241 213
Limited partner 224 207
------- -------
Total 465 420
------- -------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 484 $ 440
======= =======
<FN>
The accompanying notes are an integral
part of the financial statements.
</FN>
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
MAY LIMITED PARTNERSHIP 1983-1
STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except for unit information)
For the Three Months Ended
September 30,
1996 1995
REVENUES
<S> <C> <C>
Oil revenue $ 9 $ 7
Gas revenue 66 39
Interest income 1 1
--------- ---------
Total 76 47
-------- --------
COSTS AND EXPENSES
Lease operating 11 15
General and administrative 10 18
Depletion 10 11
Professional services and other 2 2
--------- ---------
Total 33 46
-------- --------
NET INCOME $ 43 $ 1
======== =========
ALLOCATION OF NET INCOME:
General Partner $ 20 $ 3
======== =========
Limited Partner $ 23 $ (2)
======== =========
Per initial $1,000 limited
partner investment $ 4.88 $ (.42)
======= =======
Weighted average initial $1,000
limited partner investment units
outstanding 4,713 4,713
====== ======
<FN>
The accompanying notes are an integral
part of the financial statements.
</FN>
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
MAY LIMITED PARTNERSHIP 1983-1
STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except for unit information)
For the Nine Months Ended
September 30,
---------------------------------
1996 1995
--------------- --------
REVENUES
<S> <C> <C>
Oil revenue $ 29 $ 21
Gas revenue 233 124
Interest income 3 3
--------- ---------
Total 265 148
------- -------
COSTS AND EXPENSES
Lease operating 31 38
General and administrative 48 56
Depletion 33 35
Professional services and other 6 6
Litigation settlement 1
---------
Total 119 135
------- -------
NET INCOME $ 146 $ 13
======= ========
ALLOCATION OF NET INCOME:
General Partner $ 71 $ 15
======== ========
Limited Partner $ 75 $ (2)
======== =========
Per initial $1,000 limited
partner investment $ 15.91 $ (.42)
====== =======
Weighted average initial $1,000
limited partner investment units
outstanding 4,713 4,713
====== ======
<FN>
The accompanying notes are an integral
part of the financial statements.
</FN>
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
MAY LIMITED PARTNERSHIP 1983-1
STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
For the Nine Months Ended
September 30,
1996 1995
OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 146 $ 13
Adjustment to reconcile net income to net cash provided by operating
activities:
Depletion 33 35
------- -------
Cash from operations before working
capital changes 179 48
Changes in assets and liabilities provided (used) cash:
Accrued oil and gas sales 14 1
Due from affiliate (19) (4)
Accounts payable and accrued liabilities (1) (6)
Payable to affiliate (2)
--------- --------
Net cash provided by operating activities 173 37
------ -------
INVESTING ACTIVITIES:
Additions to oil and gas properties (8) (15)
-------- -------
Net cash used in investing activities (8) (15)
-------- -------
FINANCING ACTIVITIES:
Distributions to partners (101) (18)
------ -------
Net cash used in financing activities (101) (18)
------ -------
NET INCREASE IN CASH AND CASH
EQUIVALENTS 64 4
CASH AND CASH EQUIVALENTS:
Balance, beginning of period 115 96
------ -------
Balance, end of period $ 179 $ 100
====== ======
<FN>
The accompanying notes are an integral
part of the financial statements.
</FN>
</TABLE>
-6-
<PAGE>
MAY LIMITED PARTNERSHIP 1983-1
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - GENERAL
The financial statements presented are those of May Limited Partnership 1983-1
(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, 1995 Annual Report on Form 10-K.
NOTE 2 - LEGAL
In June 1996, the Partnership and the other parties to the lawsuits styled
Lamson Petroleum Corporation v. Hallwood Petroleum, Inc. et al. settled the
lawsuits. The plaintiffs in the lawsuits claimed they had valid leases covering
streets and roads in the units of the A. L. Boudreaux #1 well, G. S. Boudreaux
#1 well, Paul Castille #1 well, Evangeline Shrine Club #1 well and Duhon #1
well, which represented approximately 3% to 4% of the Partnership's interest in
these properties, and they were entitled to a portion of the production from the
wells dating from February 1990. In the settlement, the Partnership and the
plaintiffs agreed to cross-convey interests in certain leases to one another,
and the Partnership agreed to pay the plaintiffs $25,000. The Partnership has
not recognized revenue attributable to the contested leases since January 1993.
These revenues, totaling $24,000, had been placed in escrow pending the
resolution of the lawsuits. The excess of the cash paid over the escrowed
amounts, is reflected as litigation settlement expense in the accompanying
financial statements. The cross-conveyance of the interests in the leases will
result in a decrease in the Partnership's reserves of $15,000 in future net
revenues, discounted at 10%.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
Liquidity and Capital Resources
The Partnership generated $173,000 of cash flow from operating activities and
made distributions of $101,000 during the nine months ended September 30, 1996.
A distribution was declared in October 1996. The distribution amount is
$107,000, payable $62,000 to May Drilling Partnership 1983-1 partners and
$45,000 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 1996 Compared to Third Quarter 1995
Oil Revenue
Oil revenue increased $2,000 during the third quarter of 1996 as compared with
the same period during 1995 primarily due to an increase in the average oil
price from $17.12 per barrel in 1995 to $23.78 per barrel in 1996, partially
offset by a decrease in production. Oil production decreased 2% primarily due to
normal production declines.
-7-
<PAGE>
Gas Revenue
Gas revenue increased $27,000 during the third quarter of 1996 as compared to
the corresponding period in 1995 primarily as the result of an increase in the
average gas price from $1.60 per mcf in 1995 to $2.64 mcf in 1996. Gas
production increased approximately 3% in the third quarter of 1996 as compared
with the third quarter of 1995 primarily due to increased state allowable
production limits.
Lease Operating
Lease operating expense decreased $4,000 during the third quarter of 1996 as
compared with the third quarter of 1995 primarily due to decreases in operating
expenses resulting from cost savings measures implemented during 1995.
General and Administrative
General and administrative expenses decreased $8,000 during the third quarter of
1996 as compared with the same period in 1995 due to a decrease in the
allocation of overhead from the general partner.
Depletion
Depletion expense decreased $1,000 during the third quarter of 1996 as compared
to the corresponding period in 1995 as a result of lower capitalized costs
during 1996 as compared with 1995.
Nine Months Ended September 30, 1996 Compared to the Nine Months Ended
September 30, 1995
The comparisons for the nine months ended September 30, 1996 and the nine months
ended September 30, 1995 are consistent with those discussed in the third
quarter 1996 compared to the third quarter of 1995 except for the following:
Oil Revenue
Oil revenue increased $8,000 during the first nine months of 1996 as compared to
the corresponding period in 1995. The increase is comprised of a 12% increase in
production combined with an increase in oil prices from $17.74 per barrel in
1995 to $21.07 per barrel in 1996. The increase in production is due to
increased state allowable production limits.
Gas Revenue
Gas revenue increased $109,000 during the first nine months of 1996 as compared
with the same period during 1995. The increase is comprised of a 12% increase in
gas production combined with an increase in gas prices from $1.69 per mcf in
1995 to $2.86 per mcf in 1996. The increase in production is due to increased
state allowable production limits.
Litigation Settlement
Litigation settlement expense represents the settlement of the Lamson lawsuit
which is further described in Item 1 - Note 2 of this Form 10-Q.
-8-
<PAGE>
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, 1995 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.
-9-
<PAGE>
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 1983-1
MAY LIMITED PARTNERSHIP 1983-1
By: EDP OPERATING, LTD.,
General Partner
By: HALLWOOD G. P., INC.,
General Partner
Date: November 4, 1996 By:
Robert S. Pfeiffer, Vice President
(Principal Accounting Officer)
-10-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Form 10-Q
for the quarter ended September 30,1996 for May Limited Partnership 1983-1 and
is qualified in its entirety by reference to such Form 10-Q.
</LEGEND>
<CIK> 0000725650
<NAME> May Limited Partnership 1983-1
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 179
<SECURITIES> 0
<RECEIVABLES> 65
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 244
<PP&E> 7,295
<DEPRECIATION> 7,055
<TOTAL-ASSETS> 484
<CURRENT-LIABILITIES> 19
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 484
<SALES> 262
<TOTAL-REVENUES> 265
<CGS> 0
<TOTAL-COSTS> 119
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 146
<INCOME-TAX> 0
<INCOME-CONTINUING> 146
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 146
<EPS-PRIMARY> 15.91
<EPS-DILUTED> 15.91
</TABLE>
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