<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/x/ Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1995, or
/ / Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from _________ to _________
Commission File No. 2-81398B
PARKER & PARSLEY 83-B, LTD.
(Exact name of Registrant as specified in its charter)
Texas 75-1907245
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
303 West Wall, Suite 101
Midland, Texas 79701
(Address of principal executive offices) (Zip code)
Registrant's Telephone Number, including area code: (915)683-4768
Not applicable
(Former name, former address and former fiscal year,
if changed since last report)
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 13 pages.
There are no exhibits.
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PARKER & PARSLEY 83-B, LTD.
(A Texas Limited Partnership)
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
BALANCE SHEETS
March 31, December 31,
1995 1994
----------- ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including
interest bearing deposits of
$154,584 at March 31 and $159,815
at December 31 $ 154,834 $ 160,065
Accounts receivable - oil and gas sales 204,175 191,818
---------- ----------
Total current assets 359,009 351,883
Oil and gas properties - at cost, based
on the successful efforts accounting
method 21,860,549 21,858,131
Accumulated depletion (14,666,597) (14,501,231)
---------- ----------
Net oil and gas properties 7,193,952 7,356,900
---------- ----------
$ 7,552,961 $ 7,708,783
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 81,428 $ 60,643
Partners' capital:
Limited partners (23,370 interests) 6,673,886 6,829,253
General partners 797,647 818,887
---------- ----------
7,471,533 7,648,140
---------- ----------
$ 7,552,961 $ 7,708,783
========== ==========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these statements.
2
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PARKER & PARSLEY 83-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
March 31,
1995 1994
---------- ----------
Revenues:
Oil and gas sales $ 468,955 $ 432,037
Interest income 2,594 1,002
Salvage income from equipment disposal 21,121 -
--------- ---------
Total revenues 492,670 433,039
Costs and expenses:
Production costs 277,577 267,082
General and administrative expenses 14,063 16,198
Depletion 165,366 215,466
Abandoned property costs 12,611 -
--------- ---------
Total costs and expenses 469,617 498,746
--------- ---------
Net income (loss) $ 23,053 $ (65,707)
========= =========
Allocation of net income (loss):
General partners $ 29,689 $ 16,632
========= =========
Limited partners $ (6,636) $ (82,339)
========= =========
Net loss per limited partnership
interest $ (.28) $ (3.52)
========= =========
Distributions per limited partnership
interest $ 6.36 $ 5.80
========= =========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these statements.
3
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PARKER & PARSLEY 83-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
(Unaudited)
General Limited
partners partners Total
----------- ----------- -----------
Balance at January 1, 1994 $ 904,243 $ 7,549,449 $ 8,453,692
Distributions (38,339) (135,546) (173,885)
Net income (loss) 16,632 (82,339) (65,707)
---------- ---------- ----------
Balance at March 31, 1994 $ 882,536 $ 7,331,564 $ 8,214,100
========== ========== ==========
Balance at January 1, 1995 $ 818,887 $ 6,829,253 $ 7,648,140
Distributions (50,929) (148,731) (199,660)
Net income (loss) 29,689 (6,636) 23,053
---------- ---------- ----------
Balance at March 31, 1995 $ 797,647 $ 6,673,886 $ 7,471,533
========== ========== ==========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these statements.
4
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PARKER & PARSLEY 83-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended
March 31,
1995 1994
---------- ----------
Cash flows from operating activities:
Net income (loss) $ 23,053 $ (65,707)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depletion 165,366 215,466
Salvage income from equipment disposals (21,121) -
Changes in assets and liabilities:
Increase in accounts receivable (12,357) (12,014)
Increase in accounts payable 20,785 8,224
--------- ---------
Net cash provided by operating activities 175,726 145,969
Cash flows from investing activities:
Additions to oil and gas properties (2,418) (2,681)
Proceeds from equipment disposals 21,121 -
--------- ---------
Net cash provided by (used in) investing
activities 18,703 (2,681)
Cash flows from financing activities:
Cash distributions to partners (199,660) (173,885)
--------- ---------
Net decrease in cash and cash
equivalents (5,231) (30,597)
Cash and cash equivalents at beginning
of period 160,065 125,409
--------- ---------
Cash and cash equivalents at end of period $ 154,834 $ 94,812
========= =========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these statements.
5
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PARKER & PARSLEY 83-B, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1995
(Unaudited)
NOTE 1.
In the opinion of management, the unaudited financial statements as of
March 31, 1995 of Parker & Parsley 83-B, Ltd. (the "Registrant") include
all adjustments and accruals consisting only of normal recurring accrual
adjustments which are necessary for a fair presentation of the results
for the interim period. However, the results of operations for the
three months ended March 31, 1995 are not necessarily indicative of the
results for the full year ending December 31, 1995.
The financial statements should be read in conjunction with the
financial statements and the notes thereto contained in the Registrant's
Report on Form 10-K for the year ended December 31, 1994, as filed with
the Securities and Exchange Commission, a copy of which is available
upon request by writing to Steven L. Beal, Senior Vice President, 303
West Wall, Suite 101, Midland, Texas 79701.
NOTE 2.
On May 25, 1993, a final settlement agreement was negotiated, drafted
and finally executed, ending litigation which had begun on September 5,
1989, when the Registrant filed suit along with other parties against
Dresser Industries, Inc.; Titan Services, Inc.; BJ-Titan Services
Company; BJ-Hughes Holding Company; Hughes Tool Company; Baker Hughes
Production Tools, Inc.; and Baker Hughes Incorporated alleging that the
defendants had intentionally failed to provide the materials and
services ordered and paid for by the Registrant and other parties in
connection with the fracturing and acidizing of 523 wells, and then
fraudulently concealed the shorting practice from the managing general
partner, Parker & Parsley Development L.P. ("PPDLP") (see Item 2). The
May 25, 1993 settlement agreement called for a payment of $115 million
in cash by the defendants. The managing general partner received the
funds, deducted incurred legal expenses, accrued interest, determined
the general partner's portion of the funds and calculated any inter-
partnership allocations. A distribution of $91,000,000 was made to the
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working interest owners, including the Registrant, on July 30, 1993.
The limited partners received their distribution in 1993 of $11,250,167,
or $481.39 per limited partnership interest.
On May 3, 1993, Jack N. Price, the attorney who represented Gary G.
"Zeke" Lancaster in the Federal Court lawsuit, filed suit in State Court
in Beaumont against all of the plaintiff partnerships, including the
Registrant and others, alleging his entitlement to 12% of the settlement
proceeds. Price's lawsuit claim for approximately $13.8 million is
predicated on a purported contract entered into with Southmark
Corporation in August 1988, in which he allegedly binds the Registrant
and the other defendants, as well as Southmark. Although PPDLP believes
the lawsuit is without merit and intends to vigorously defend it, PPDLP
is holding in reserve approximately 12.5% of the total settlement
pending final resolution of the litigation by the court. Upon payment
of the costs associated with the Price litigation, and assuming a
successful defense, a second distribution will be made consisting of the
balance of the settlement funds, including any accrued interest.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Registrant was formed September 27, 1983. The general partners of
the Registrant at December 31, 1994 were Parker & Parsley Development
Company ("PPDC") and P&P Employees 83-B, Ltd. ("EMPL"), a Texas limited
partnership whose general partner was PPDC, and 1,523 limited partners.
On January 1, 1995, PPDLP, a Texas limited partnership, became the
managing general partner of the Registrant and EMPL, by acquiring the
rights and assuming the obligations of PPDC. PPDC was merged into PPDLP
on January 1, 1995. PPDLP's co-general partner is EMPL. PPDLP acquired
PPDC's rights and obligations as managing general partner of the
Registrant in connection with the merger of PPDC, P&P Producing, Inc.
and Spraberry Development Corporation into MidPar L.P., which survived
the merger with a change of name to PPDLP. The sole general partner of
PPDLP is Parker & Parsley Petroleum USA, Inc. PPDLP has the power and
authority to manage, control and administer all Registrant affairs. The
limited partners contributed $23,370,000 representing 23,370 interests
($1,000 per interest).
Since its formation, the Registrant invested $23,478,098 in various
prospects that were drilled in Texas. At March 31, 1995, the Registrant
had 47 producing oil and gas wells; three wells were sold in 1994 and
nine wells were plugged and abandoned due to unprofitable operations; one
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in 1985, one in 1987, two in 1989, one in 1990, two in 1991, one in 1993
and one in 1995. The Registrant received interests in eight additional
wells in 1993 due to the Registrant's back-in after payout provisions.
Results of Operations
Revenues:
The Registrant's oil and gas revenues increased to $468,955 from
$432,037 for the three months ended March 31, 1995 and 1994,
respectively, an increase of 9%. The increase in revenues resulted from
increases in the average prices received per barrel of oil and mcf of
gas, offset by a 14% decrease in barrels of oil produced and sold and a
3% decrease in mcf of gas produced and sold. For the three months ended
March 31, 1995, 20,252 barrels of oil were sold compared to 23,516 for
the same period in 1994, a decrease of 3,264 barrels. For the three
months ended March 31, 1995, 62,202 mcf of gas were sold compared to
64,313 for the same period in 1994, a decrease of 2,111 mcf. The volume
decreases are primarily due to the decline characteristics of the
Registrant's oil and gas wells. Because of these characteristics,
management expects a certain amount of decline in production to continue
in the future until the Registrant's economically recoverable reserves
are fully depleted.
The average price received per barrel of oil increased 28% from $13.44
for the three months ended March 31, 1994 to $17.24 for the same period
in 1995 while the average price received per mcf of gas increased 7%
from $1.80 for the three months ended March 31, 1994 to $1.93 for the
same period in 1995. The market price for oil and gas has been
extremely volatile in the past decade, and management expects a certain
amount of volatility to continue in the foreseeable future. The
Registrant may therefore sell its future oil and gas production at
average prices lower or higher than that received during the three
months ended March 31, 1995.
Salvage income of $21,121 for the three months ended March 31, 1995 was
derived from equipment credits received on one fully depleted well.
There was no salvage income received for the same period in 1994.
Costs and Expenses:
Total costs and expenses decreased to $469,617 for the three months
ended March 31, 1995 as compared to $498,746 for the same period in
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1994, a decrease of $29,129, or 6%. This decrease was due to declines
in depletion and general and administrative expenses ("G&A"), offset by
increases in production costs and abandoned property costs.
Production costs were $277,577 for the three months ended March 31, 1995
and $267,082 for the same period in 1994 resulting in a $10,495
increase, or 4%. The increase was due to additional well repair and
maintenance costs incurred in an effort to stimulate production and an
increase in production taxes resulting from the increase in oil and gas
revenue, offset by a decrease in ad valorem taxes.
G&A's components are independent accounting and engineering fees,
computer services, postage and managing general partner personnel costs.
During this period, G&A decreased 13% from $16,198 for the three months
ended March 31, 1994 to $14,063 for the same period in 1995.
Depletion was $165,366 for the three months ended March 31, 1995
compared to $215,466 for the same period in 1994. This represented a
decrease in depletion of $50,100, or 23%. Depletion was computed
property-by-property utilizing the unit-of-production method based upon
the dominant mineral produced, generally oil. Oil production decreased
3,264 barrels for the three months ended March 31, 1995 from the same
period in 1994, while oil reserves of barrels were revised downward by
48,576 barrels, or 4%.
On May 25, 1993, a final settlement agreement was negotiated, drafted
and finally executed, ending litigation which had begun on September 5,
1989, when the Registrant filed suit along with other parties against
Dresser Industries, Inc.; Titan Services, Inc.; BJ-Titan Services
Company; BJ-Hughes Holding Company; Hughes Tool Company; Baker Hughes
Production Tools, Inc.; and Baker Hughes Incorporated alleging that the
defendants had intentionally failed to provide the materials and
services ordered and paid for by the Registrant and other parties in
connection with the fracturing and acidizing of 523 wells, and then
fraudulently concealed the shorting practice from the managing general
partner. The May 25, 1993 settlement agreement called for a payment of
$115 million in cash by the defendants. The managing general partner
received the funds, deducted incurred legal expenses, accrued interest,
determined the general partner's portion of the funds and calculated any
inter-partnership allocations. A distribution of $91,000,000 was made
to the working interest owners, including the Registrant, on July 30,
1993. The limited partners received their distribution in 1993 of
$11,250,167, or $481.39 per limited partnership interest.
9
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On May 3, 1993, Jack N. Price, the attorney who represented Gary G.
"Zeke" Lancaster in the Federal Court lawsuit, filed suit in State Court
in Beaumont against all of the plaintiff partnerships, including the
Registrant and others, alleging his entitlement to 12% of the settlement
proceeds. Price's lawsuit claim for approximately $13.8 million is
predicated on a purported contract entered into with Southmark
Corporation in August 1988, in which he allegedly binds the Registrant
and the other defendants, as well as Southmark. Although PPDLP believes
the lawsuit is without merit and intends to vigorously defend it, PPDLP
is holding in reserve approximately 12.5% of the total settlement
pending final resolution of the litigation by the court. Upon payment
of the costs associated with the Price litigation, and assuming a
successful defense, a second distribution will be made consisting of the
balance of the settlement funds, including any accrued interest.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities:
Net cash provided by operating activities increased to $175,726 during
the three months ended March 31, 1995, a 20% increase from the same
period in 1994. This increase was due to an increase in oil and gas
sales and a decline in G&A, offset by increases in production costs and
abandoned property costs. The increase in oil and gas sales was due to
increases in the average prices received per barrel of oil and mcf of
gas, offset by decreases in barrels of oil and mcf of gas produced and
sold. The decline in G&A was the result of less allocated expense by
the managing general partner. The increase in production costs was
attributable to additional well repair and maintenance costs.
Abandoned property costs increased during the three months ended March
31, 1995 due to an absence of abandonment activity for the same period
in 1994.
Net Cash Provided by (Used in) Investing Activities:
The Registrant's principal investing activities for the three months
ended March 31, 1995 was for repair and maintenance activity on various
oil and gas properties.
Proceeds of $21,121 were received during the three months ended March
31, 1995 from equipment credits received on one fully depleted well.
10
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Net Cash Used in Financing Activities:
For the three months ended March 31, 1995, cash was sufficient for
distributions to the partners of $199,660 of which $148,731 was
distributed to the limited partners and $50,929 to the general partners.
For the same period ended March 31, 1994, cash was sufficient for
distributions to the partners of $173,885 of which $135,546 was
distributed to the limited partners and $38,339 to the general partners.
It is expected that future net cash provided by operating activities
will be sufficient for any capital expenditures and any distributions.
As the production from the properties declines, distributions are also
expected to decrease.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On May 25, 1993, a final settlement agreement was negotiated, drafted
and finally executed, ending litigation which had begun on September 5,
1989, when the Registrant filed suit along with other parties against
Dresser Industries, Inc.; Titan Services, Inc.; BJ-Titan Services
Company; BJ-Hughes Holding Company; Hughes Tool Company; Baker Hughes
Production Tools, Inc.; and Baker Hughes Incorporated alleging that the
defendants had intentionally failed to provide the materials and
services ordered and paid for by the Registrant and other parties in
connection with the fracturing and acidizing of 523 wells, and then
fraudulently concealed the shorting practice from the managing general
partner. The May 25, 1993 settlement agreement called for a payment of
$115 million in cash by the defendants. The managing general partner
received the funds, deducted incurred legal expenses, accrued interest,
determined the general partner's portion of the funds and calculated any
inter-partnership allocations. A distribution of $91,000,000 was made
to the working interest owners, including the Registrant, on July 30,
1993. The limited partners received their distribution in 1993 of
$11,250,167, or $481.39 per limited partnership interest.
On May 3, 1993, Jack N. Price, the attorney who represented Gary G.
"Zeke" Lancaster in the Federal Court lawsuit, filed suit in State Court
in Beaumont against all of the plaintiff partnerships, including the
Registrant and others, alleging his entitlement to 12% of the settlement
proceeds. Price's lawsuit claim for approximately $13.8 million is
predicated on a purported contract entered into with Southmark
Corporation in August 1988, in which he allegedly binds the Registrant
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and the other defendants, as well as Southmark. Although PPDLP believes
the lawsuit is without merit and intends to vigorously defend it, PPDLP
is holding in reserve approximately 12.5% of the total settlement
pending final resolution of the litigation by the court. Upon payment
of the costs associated with the Price litigation, and assuming a
successful defense, a second distribution will be made consisting of the
balance of the settlement funds, including any accrued interest.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - none
(b) Reports on Form 8-K - none
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PARKER & PARSLEY 83-B, LTD.
(A Texas Limited Partnership)
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PARKER & PARSLEY 83-B, LTD.
Dated: May 12, 1995 By: Parker & Parsley Development L.P.,
Managing General Partner
By: Parker & Parsley Petroleum USA, Inc.
("PPUSA"), General Partner
By: /s/ Steven L. Beal
--------------------------------------
Steven L. Beal, Senior Vice
President - Finance and
Chief Financial Officer
of PPUSA
13
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<ARTICLE> 5
<CIK> 0000743457
<NAME> 83BL
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 154,834
<SECURITIES> 0
<RECEIVABLES> 204,175
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 359,009
<PP&E> 21,860,549
<DEPRECIATION> 14,666,597
<TOTAL-ASSETS> 7,552,961
<CURRENT-LIABILITIES> 81,428
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 7,471,533
<TOTAL-LIABILITY-AND-EQUITY> 7,552,961
<SALES> 468,955
<TOTAL-REVENUES> 492,670
<CGS> 0
<TOTAL-COSTS> 469,617
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 23,053
<INCOME-TAX> 0
<INCOME-CONTINUING> 23,053
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 23,053
<EPS-PRIMARY> (0.28)
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</TABLE>
