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 MARCH 31, 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
<TABLE>
<CAPTION>
MAY DRILLING PARTNERSHIP 1983-2
BALANCE SHEETS
(In thousands)
March 31, December 31,
1996 1995
(Unaudited)
<S> <C> <C>
ASSETS
Investment in
May Limited Partnership 1983-2 $518 $462
=== ===
PARTNERS' CAPITAL
Partners' Capital $518 $462
=== ===
<F1>
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.
</TABLE>
<TABLE>
<CAPTION>
MAY LIMITED PARTNERSHIP 1983-2
BALANCE SHEETS
(In thousands)
March 31, December 31,
1996 1995
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 202 $ 148
Accrued oil and gas sales 170 144
Due from affiliate 80 36
------ ------
Total 452 328
------ ------
OIL AND GAS PROPERTIES, using the
full cost method of accounting 16,584 16,582
Less - Accumulated depletion (15,998) (15,972)
-------- --------
Net oil and gas properties 586 610
------ ------
TOTAL ASSETS $ 1,038 $ 938
====== ======
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES
Accounts payable and accrued
liabilities $ 21 $ 27
------ ------
Total 21 27
------ ------
PARTNERS' CAPITAL
General partner 499 449
Limited partner 518 462
------ ------
Total 1,017 911
------ ------
TOTAL LIABILITIES AND PARTNERS'
CAPITAL $ 1,038 $ 938
====== ======
</TABLE>
<TABLE>
<CAPTION>
MAY LIMITED PARTNERSHIP 1983-2
STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except for unit information)
For the Three Months
Ended March 31,
1996 1995
<S> <C> <C>
REVENUES
Oil revenue $ 26 $ 21
Gas revenue 244 114
Interest income 2 2
------ ------
Total 272 137
------ ------
COSTS AND EXPENSES
Lease operating 27 29
General and administrative 25 23
Depletion 26 28
Professional services and other 2 2
------ ------
Total 80 82
------ ------
NET INCOME $ 192 $ 55
====== ======
ALLOCATION OF NET INCOME:
General Partner $ 85 $ 31
====== ======
Limited Partner $ 107 $ 24
====== ======
Per initial $1,000 limited
partner investment $ 10.14 $ 2.27
====== ======
Weighted average initial $1,000
limited partner investment units
outstanding 10,557 10,557
====== ======
</TABLE>
<TABLE>
<CAPTION>
MAY LIMITED PARTNERSHIP 1983-2
STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
For the Three Months
Ended March 31,
1996 1995
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 192 $ 55
Adjustment to reconcile net
income to net cash provided by
operating activities:
Depletion 26 28
------ -------
Cash from operations before
working capital changes 218 83
Changes in assets and liabilities
provided (used) cash:
Accrued oil and gas sales (26) 15
Due from affiliate (44) (5)
Accounts payable and accrued
liabilities (6) (16)
------ ------
Net cash provided by operating
activities 142 77
------ ------
INVESTING ACTIVITIES:
Additions to oil and gas
properties (2) (19)
------ -------
Net cash used in investing
activities (2) (19)
------ ------
FINANCING ACTIVITIES:
Distributions to partners (86) (35)
------ ------
Net cash used in financing
activities (86) (35)
------ ------
NET INCREASE IN CASH AND CASH
EQUIVALENTS 54 23
CASH AND CASH EQUIVALENTS:
Balance, beginning of period 148 169
------ ------
Balance, end of period $ 202 $ 192
====== ======
</TABLE>
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 1993 and June 1995, a total of 15 lawsuits were filed against the
Partnership in the 15th Judicial District Court, Lafayette Parish, Louisiana,
Docket Nos. 93-2332-F through 93-2345-F and 952601-3B, each 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, Paul
Castille #1 well, Mary Guilbeau #1 well, Evangeline Shrine Club #1 well and
Duhon #1 well, which represent approximately 3% to 4% of the limited
partnership's interest in these properties and are entitled to a portion of the
production from the wells since February 1990. The limited partnership has not
recognized revenue attributable to the contested leases since January 1993.
These revenues, totalling approximately $61,000 at March 31, 1996, have been
placed in escrow pending resolution of the lawsuits. 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 $142,000 of cash flow from operating activities during
the three months ended March 31, 1996 and made distributions of $86,000. A
distribution payable to partners of record as of March 31, 1996 was declared in
April 1996. The distribution amount is $243,000, payable $141,000 to May
Drilling Partnership 1983-2 partners and $102,000 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
FIRST QUARTER 1996 COMPARED TO FIRST QUARTER 1995
OIL REVENUE
Oil revenue increased $5,000 in the first quarter of 1996 as compared to the
corresponding period in 1995 as the result of an increase in production combined
with an increase in the average oil price. Oil production increased 16%
primarily due to an increase in state allowable production limits. The average
oil price increased from $17.63 per barrel in 1995 to $19.44 per barrel in 1996.
GAS REVENUE
Gas revenue increased $130,000 during the first 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 10% primarily due
to an increase in state allowable production limits. The average gas price
increased from $1.65 per mcf in 1995 to $3.20 per mcf in 1996.
LEASE OPERATING
Lease operating expense decreased $2,000 for the first quarter of 1996 as
compared to the corresponding period in 1995 primarily due to a decrease in ad
valorem tax expense.
GENERAL AND ADMINISTRATIVE
General and administrative expense increased $2,000 during the first quarter of
1996 as compared to the first quarter of 1995 due to an increase in the
allocation of overhead from the general partner.
DEPLETION
Depletion expense decreased $2,000 during the first quarter of 1996 as compared
with the first quarter of 1995 as a result of lower capitalized costs during
1996 as compared with 1995.
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.
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: May 3, 1996 By: /s/Robert S. Pfeiffer
Robert S. Pfeiffer,
Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Form 10-Q
for the quarter ended March 31, 1996 for May Limited Partnership 1983-2 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 202
<SECURITIES> 0
<RECEIVABLES> 250
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 452
<PP&E> 16,584
<DEPRECIATION> 15,998
<TOTAL-ASSETS> 1,038
<CURRENT-LIABILITIES> 21
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,017
<TOTAL-LIABILITY-AND-EQUITY> 1,038
<SALES> 270
<TOTAL-REVENUES> 272
<CGS> 0
<TOTAL-COSTS> 80
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 192
<INCOME-TAX> 0
<INCOME-CONTINUING> 192
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 192
<EPS-PRIMARY> 10.14
<EPS-DILUTED> 10.14
</TABLE>
