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Previous: PIONEERING MANAGEMENT CORP /ADV, SC 13G, 1996-11-07 |
Next: ACORN VENTURE CAPITAL CORP, 10QSB, 1996-11-07 |
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 0-11313
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)
September 30, December 31,
1996 1995
ASSETS
Investment in
<S> <C> <C>
May Limited Partnership 1983-2 $455 $462
=== ===
PARTNERS' CAPITAL
Partners' Capital $455 $462
=== ===
<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 notes are an integral
part of the financial statements.
</FN>
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
MAY LIMITED PARTNERSHIP 1983-2
BALANCE SHEETS
(Unaudited)
(In thousands)
September 30, December 31,
1996 1995
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $ 223 $ 148
Accrued oil and gas sales 106 144
Due from affiliate 84 36
--------- ---------
Total 413 328
-------- --------
OIL AND GAS PROPERTIES, using the
full cost method of accounting 16,603 16,582
Less - Accumulated depletion (16,053) (15,972)
------- ------
Net oil and gas properties 550 610
-------- --------
TOTAL ASSETS $ 963 $ 938
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 32 $ 27
--------- ---------
Total 32 27
--------- ---------
PARTNERS' CAPITAL
General partner 476 449
Limited partner 455 462
-------- --------
Total 931 911
-------- --------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 963 $ 938
======== ========
<FN>
The accompanying notes are an integral
part of the financial statements.
</FN>
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
MAY LIMITED PARTNERSHIP 1983-2
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 $ 27 $ 20
Gas revenue 187 108
Interest income 2 2
---------- ----------
Total 216 130
-------- --------
COSTS AND EXPENSES
Lease operating 29 39
General and administrative 17 24
Depletion 26 27
Professional services and other 2 2
---------- ----------
Total 74 92
--------- ---------
NET INCOME $ 142 $ 38
======== =========
ALLOCATION OF NET INCOME:
General Partner $ 65 $ 21
========= =========
Limited Partner $ 77 $ 17
========= =========
Per initial $1,000 limited
partner investment $ 7.29 $ 1.61
======== ========
Weighted average initial $1,000
limited partner investment units
outstanding 10,557 10,557
====== ======
<FN>
The accompanying notes are an integral
part of the financial statements.
</FN>
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
MAY LIMITED PARTNERSHIP 1983-2
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 $ 82 $ 62
Gas revenue 644 329
Interest income 6 6
---------- ----------
Total 732 397
-------- --------
COSTS AND EXPENSES
Lease operating 82 105
General and administrative 67 71
Depletion 81 80
Professional services and other 7 7
Litigation settlement 2
----------
Total 239 263
-------- --------
NET INCOME $ 493 $ 134
======== =========
ALLOCATION OF NET INCOME:
General Partner $ 224 $ 74
======== =========
Limited Partner $ 269 $ 60
======== =========
Per initial $1,000 limited
partner investment $ 25.48 $ 5.68
======= ========
Weighted average initial $1,000
limited partner investment units
outstanding 10,557 10,557
====== ======
<FN>
The accompanying notes are an integral
</FN>
</TABLE>
part of the financial statements.
-5-
<PAGE>
<TABLE>
<CAPTION>
MAY LIMITED PARTNERSHIP 1983-2
STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
For the Nine Months Ended
September 30,
1996 1995
OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 493 $ 134
Adjustment to reconcile net income to
net cash provided by operating
activities:
Depletion 81 80
-------- -------
Cash from operations before
working capital changes 574 214
Changes in assets and liabilities provided (used) cash:
Accrued oil and gas sales 38 7
Due from affiliate (48) (4)
Accounts payable and accrued liabilities 5 (11)
--------- -------
Net cash provided by operating
activities 569 206
------- ------
INVESTING ACTIVITIES:
Additions to oil and gas properties (21) (34)
-------- -------
Net cash used in investing activities (21) (34)
-------- -------
FINANCING ACTIVITIES:
Distributions to partners (473) (153)
------- ------
Net cash used in financing activities (473) (153)
------- ------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 75 19
CASH AND CASH EQUIVALENTS:
Balance, beginning of period 148 169
------- ------
Balance, end of period $ 223 $ 188
======= ======
<FN>
The accompanying notes are an integral
part of the financial statements.
</FN>
</TABLE>
-6-
<PAGE>
MAY LIMITED PARTNERSHIP 1983-2
NOTES 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, 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 $67,000. The Partnership has
not recognized revenue attributable to the contested leases since January 1993.
These revenues, totaling $65,000, 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 $40,000 in future net
revenues, discounted at 10%.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATION
--------------------
Liquidity and Capital Resources
The Partnership generated $569,000 of cash flow from operating activities during
the nine months ended September 30, 1996 and made distributions of $473,000. A
distribution payable to partners of record as of September 30, 1996 was declared
in October 1996. The distribution amount is $209,000, payable $121,000 to May
Drilling Partnership 1983-2 partners and $88,000 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 $7,000 in the third quarter of 1996 as compared to the
corresponding period in 1995 as the result of an increase in the average oil
price partially offset by a decrease in oil production. The average oil price
increased from $17.12 per barrel in 1995 to $23.69 per barrel in 1996. Oil
production decreased 2% primarily due to normal production declines.
-7-
<PAGE>
Gas Revenue
Gas revenue increased $79,000 during the third quarter of 1996 as compared to
the corresponding period in 1995 as the result of an increase in production
combined with an increase in price. Gas production increased 6% primarily due to
an increase in state allowable production limits. The average gas price
increased from $1.57 per mcf in 1995 to $2.56 per mcf in 1996.
Lease Operating
Lease operating expense decreased $10,000 for the third quarter of 1996 as
compared to the corresponding period in 1995 primarily due to a decrease in
operating expenses resulting from cost savings measures implemented during 1995.
General and Administrative
General and administrative expense decreased $7,000 during the third quarter of
1996 as compared to the third quarter of 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
with the third quarter of 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 1995 except for the following:
Oil Revenue
Oil revenue increased $20,000 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 $21.20 per barrel in 1996. The increase in production is due to
increased state allowable production limits.
Gas Revenue
Gas revenue increased $315,000 during the first nine months of 1996 as compared
with the same period during 1995. The increase is comprised of a 17% increase in
gas production combined with an increase in gas prices from $1.67 per mcf in
1995 to $2.78 per mcf in 1996. The increase in production is due to increased
state allowable production limits.
Depletion
Depletion expense increased $1,000 during the first nine months of 1996 as
compared with the first nine months of 1995. The increase is due to a higher
depletion rate resulting from the increase in production discussed above.
Litigation Settlement
Litigation settlement expense represents the settlement of the Lamson lawsuit
which is further discussed in Item 1 - Note 2 of the 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 1983-2
MAY LIMITED PARTNERSHIP 1983-2
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 1983-3 and
is qualified in its entirety by reference to such Form 10-Q.
</LEGEND>
<CIK> 0000735552
<NAME> May Limited Partnership 1983-2
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 223
<SECURITIES> 0
<RECEIVABLES> 190
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 413
<PP&E> 16,603
<DEPRECIATION> 16,053
<TOTAL-ASSETS> 963
<CURRENT-LIABILITIES> 32
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 931
<TOTAL-LIABILITY-AND-EQUITY> 963
<SALES> 726
<TOTAL-REVENUES> 732
<CGS> 0
<TOTAL-COSTS> 239
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 493
<INCOME-TAX> 0
<INCOME-CONTINUING> 493
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 493
<EPS-PRIMARY> 25.48
<EPS-DILUTED> 25.48
</TABLE>
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