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 June 30, 1997
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 12 pages.
Exhibit index on page 11.
<PAGE>
PARKER & PARSLEY 83-B, LTD.
TABLE OF CONTENTS
Page
----
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of June 30, 1997 and
December 31, 1996 .................................. 3
Statements of Operations for the three and six
months ended June 30, 1997 and 1996.................... 4
Statement of Partners' Capital for the six months
ended June 30, 1997.................................... 5
Statements of Cash Flows for the six months
ended June 30, 1997 and 1996........................... 6
Notes to Financial Statements............................ 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................... 7
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K......................... 11
27. Financial Data Schedule
Signatures............................................... 12
2
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PARKER & PARSLEY 83-B, LTD.
(A Texas Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
June 30, December 31,
1997 1996
----------- ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $295,257 at June 30
and $228,437 at December 31 $ 295,757 $ 228,937
Accounts receivable - oil and gas sales 213,137 349,015
----------- -----------
Total current assets 508,894 577,952
----------- -----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 19,510,009 19,519,571
Accumulated depletion (14,746,328) (14,559,884)
----------- -----------
Net oil and gas properties 4,763,681 4,959,687
----------- -----------
$ 5,272,575 $ 5,537,639
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 62,968 $ 48,087
Partners' capital:
General partners 585,516 629,059
Limited partners (23,370 interests) 4,624,091 4,860,493
----------- -----------
5,209,607 5,489,552
----------- -----------
$ 5,272,575 $ 5,537,639
=========== ===========
The financial information included as of June 30, 1997 has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these
financial statements.
3
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PARKER & PARSLEY 83-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended
June 30, June 30,
---------------------- -----------------------
1997 1996 1997 1996
--------- ---------- ---------- ----------
Revenues:
Oil and gas $ 462,893 $ 564,254 $1,032,956 $1,085,131
Interest 4,519 3,577 8,414 6,467
Salvage income from
equipment disposals 16,500 32,121 16,500 48,582
Litigation settlement - 1,392,304 - 1,392,304
-------- --------- --------- ---------
483,912 1,992,256 1,057,870 2,532,484
-------- --------- --------- ---------
Costs and expenses:
Oil and gas production 238,907 228,545 514,487 491,843
General and administrative 14,880 19,220 33,766 35,096
Depletion 91,264 99,278 186,444 202,584
Abandoned property - 23,533 - 23,533
-------- --------- --------- ---------
345,051 370,576 734,697 753,056
-------- --------- --------- ---------
Net income $ 138,861 $1,621,680 $ 323,173 $1,779,428
======== ========= ========= =========
Allocation of net income:
General partners $ 46,178 $ 369,465 $ 106,979 $ 421,991
======== ========= ========= =========
Limited partners $ 92,683 $1,252,215 $ 216,194 $1,357,437
======== ========= ========= =========
Net income per limited
partnership interest $ 3.96 $ 53.58 $ 9.25 $ 58.08
======== ========= ========= =========
Distributions per limited
partnership interest $ 9.00 $ 55.43 $ 19.37 $ 62.43
======== ========= ========= =========
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
financial statements.
4
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PARKER & PARSLEY 83-B, LTD.
(A Texas Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
General Limited
partners partners Total
---------- ---------- ----------
Balance at January 1, 1997 $ 629,059 $4,860,493 $5,489,552
Distributions (150,522) (452,596) (603,118)
Net income 106,979 216,194 323,173
--------- --------- ---------
Balance at June 30, 1997 $ 585,516 $4,624,091 $5,209,607
========= ========= =========
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
financial statements.
5
<PAGE>
PARKER & PARSLEY 83-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended
June 30,
-------------------------
1997 1996
---------- -----------
Cash flows from operating activities:
Net income $ 323,173 $ 1,779,428
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 186,444 202,584
Salvage income from equipment disposals on
abandoned properties (16,500) (48,582)
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 135,878 (38,538)
Increase (decrease) in accounts payable 14,881 (34,455)
--------- ----------
Net cash provided by operating activities 643,876 1,860,437
--------- ----------
Cash flows from investing activities:
Deletions of oil and gas properties 9,562 7,591
Proceeds from equipment salvage on abandoned
properties 16,500 48,582
--------- ----------
Net cash provided by investing activities 26,062 56,173
--------- ----------
Cash flows from financing activities:
Cash distributions to partners (603,118) (1,886,613)
--------- ----------
Net increase in cash and cash equivalents 66,820 29,997
Cash and cash equivalents at beginning of period 228,937 244,107
--------- ----------
Cash and cash equivalents at end of period $ 295,757 $ 274,104
========= ==========
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
financial statements.
6
<PAGE>
PARKER & PARSLEY 83-B, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
(Unaudited)
Note 1. Basis of presentation
In the opinion of management, the unaudited financial statements of Parker &
Parsley 83-B, Ltd. (the "Partnership") as of June 30, 1997 and for the three and
six months ended June 30, 1997 and 1996 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. These interim results
are not necessarily indicative of results for a full year. Certain
reclassifications have been made to the June 30, 1996 financial statements to
conform to the June 30, 1997 financial statements.
Certain information and footnote disclosure normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted in this Form 10-Q pursuant to the rules and
regulations of the Securities and Exchange Commission. The financial statements
should be read in conjunction with the financial statements and the notes
thereto contained in the Partnership's Report on Form 10-K for the year ended
December 31, 1996, as filed with the Securities and Exchange Commission, a copy
of which is available upon request by writing to Rich Dealy, Controller, 303
West Wall, Suite 101, Midland, Texas 79701.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (1)
Results of Operations
Six months ended June 30, 1997 compared with six months ended
June 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 5% to $1,032,956 from
$1,085,131 for the six months ended June 30, 1997 as compared to the six months
ended June 30, 1996. The decrease in revenues resulted from a 13% decrease in
mcf of gas produced and sold, a 7% decrease in barrels of oil produced and sold,
and a slight decline in the average price received per barrel of oil, offset by
an increase in the average price received per mcf of gas. For the six months
ended June 30, 1997, 35,130 barrels of oil were sold compared to 37,973 for the
same period in 1996, a decrease of 2,843 barrels. For the six months ended June
30, 1997, 118,613 mcf of gas were sold compared to 136,101 for the same period
in 1996, a decrease of 17,488 mcf. The decreases in production volumes were
primarily due to the decline characteristics of the Partnership's oil and gas
7
<PAGE>
properties. Because of these characteristics, management expects a certain
amount of decline in production to continue in the future until the
Partnership's economically recoverable reserves are fully depleted.
The average price received per barrel of oil decreased slightly from $20.63 for
the six months ended June 30, 1996 to $20.42 for the same period in 1997, while
the average price received per mcf of gas increased 20% from $2.22 during the
six months ended June 30, 1996 to $2.66 in 1997. 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
Partnership may therefore sell its future oil and gas production at average
prices lower or higher than that received during the six months ended June 30,
1997.
Salvage income of $16,500 and $48,582 for the six months ended June 30, 1997 and
June 30, 1996, respectively, was derived from the disposal of equipment on wells
plugged and abandoned in prior years. Expenses incurred during 1996 to plug and
abandon two uneconomical wells totaled $23,533.
On April 29, 1996, Southmark Corporation, the managing general partner and the
Partnership entered into a final $7.4 million settlement agreement with Jack N.
Price resolving all outstanding litigation between the parties. As a result, all
of the pending lawsuits and judgments have been dismissed, the supersedeas bond
released, and the Reserve released as collateral. On June 28, 1996, a final
distribution was made to the working interest owners of $1,392,304, which
included $1,094,360, or $46.83 per limited partnership interest, to the
Partnership and its partners.
Costs and Expenses:
Total costs and expenses decreased to $734,697 for the six months ended June 30,
1997 as compared to $753,056 for the same period in 1996, a decrease of $18,359.
This decrease resulted from declines in abandoned property costs, depletion and
general and administrative expenses ("G&A"), offset by an increase in production
costs.
Production costs were $514,487 for the six months ended June 30, 1997 and
$491,843 for the same period in 1996 resulting in a $22,644 increase, or 5%. The
increase was due to additional workover expenses incurred in an effort to
stimulate well production.
G&A's components are independent accounting and engineering fees and managing
general partner personnel and operating costs. During this period, G&A
decreased, in aggregate, 4% from $35,096 for the six months ended June 30, 1996
to $33,766 for the same period in 1997.
Depletion was $186,444 for the six months ended June 30, 1997 compared to
$202,584 for the same period in 1996. This represented a decrease in depletion
of $16,140, or 8%.
8
<PAGE>
Three months ended June 30, 1997 compared with three months ended
June 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 18% to $462,893 from $564,254
for the three months ended June 30, 1997 as compared to the three months ended
June 30, 1996. The decrease in revenues resulted from a 14% decline in mcf of
gas produced and sold, a 7% decline in barrels of oil produced and sold and a
lower average price received per barrel of oil, offset by an increase in the
average price received per mcf of gas. For the three months ended June 30, 1997,
17,338 barrels of oil were sold compared to 18,628 for the same period in 1996,
a decrease of 1,290 barrels. For the three months ended June 30, 1997, 58,029
mcf of gas were sold compared to 67,703 for the same period in 1996, a decrease
of 9,674 mcf. The production volume decreases were primarily due to the decline
characteristics of the Partnership's oil and gas properties.
The average price received per barrel of oil decreased $3.32, or 15%, from
$22.17 for the three months ended June 30, 1996 to $18.85 for the three months
ended June 30, 1997, while the average price received per mcf of gas increased
5% from $2.23 during the three months ended June 30, 1996 to $2.35 for the same
period in 1997.
Salvage income of $16,500 and $32,121 for the three months ended June 30, 1997
and June 30, 1996, respectively, was derived from the disposal of equipment on
wells plugged and abandoned in a prior year. Expenses incurred during 1996 to
plug and abandon two uneconomical wells totaled $23,533.
On April 29, 1996, Southmark Corporation, the managing general partner and the
Partnership entered into a final $7.4 million settlement agreement with Jack N.
Price resolving all outstanding litigation between the parties. As a result, all
of the pending lawsuits and judgments have been dismissed, the supersedeas bond
released, and the Reserve released as collateral. On June 28, 1996, a final
distribution was made to the working interest owners of $1,392,304, which
included $1,094,360, or $46.83 per limited partnership interest, to the
Partnership and its partners.
Costs and Expenses:
Total costs and expenses decreased to $345,051 for the three months ended June
30, 1997 as compared to $370,576 for the same period in 1996, a decrease of
$25,525, or 7%. This decrease resulted from declines in abandoned property
costs, depletion and G&A, offset by an increase in production costs.
Production costs were $238,907 for the three months ended June 30, 1997 and
$228,545 for the same period in 1996 resulting in a $10,362 increase, or 5%. The
increase was due to additional workover expenses incurred in an effort to
stimulate well production, offset by declines in well repair and maintenance
costs and production taxes.
9
<PAGE>
G&A's components are independent accounting and engineering fees and managing
general partner personnel and operating costs. During this period, G&A
decreased, in aggregate, 23% from $19,220 for the three months ended June 30,
1996 to $14,880 for the same period in 1997.
Depletion was $91,264 for the three months ended June 30, 1997 compared to
$99,278 for the same period in 1996. This represented a decrease in depletion of
$8,014, or 8%.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased $1,216,561 during the six
months ended June 30, 1997 from the same period ended June 30, 1996. This
decrease was due to proceeds received from the litigation settlement during 1996
as discussed in Item 2, offset by an increase in oil and gas sales receipts and
a decline in production costs paid.
Net Cash Provided by Investing Activities
The Partnership's investing activities during the six months ended June 30, 1997
and 1996 included proceeds from the disposal of oil and gas equipment on active
properties.
Proceeds of $16,500 and $48,582 were received during the six months ended June
30, 1997 and 1996, respectively, from the sale of equipment from properties
abandoned in prior years.
Net Cash Used in Financing Activities
Cash was sufficient for the six months ended June 30, 1997 to cover
distributions to the partners of $603,118 of which $150,522 was distributed to
the general partners and $452,596 to the limited partners. For the same period
ended June 30, 1996, cash was sufficient for distributions to the partners of
$1,886,613 of which $427,681 was distributed to the general partners and
$1,458,932 to the limited partners. Cash distributions to the partners of
$1,886,613 for the six months ended June 30, 1996 included $297,944 to the
general partners and $1,094,360 to the limited partners, resulting from proceeds
received in the litigation settlement as discussed in Item 2.
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.
- --------------
(1) "Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations" contains forward looking statements that involve
risks and uncertainties. Accordingly, no assurances can be given that the
actual events and results will not be materially different than the
anticipated results described in the forward looking statements.
10
<PAGE>
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K - none
11
<PAGE>
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.
By: Parker & Parsley Development L.P.,
Managing General Partner
By: Parker & Parsley Petroleum USA, Inc.
("PPUSA"), General Partner
Dated: August 13, 1997 By: /s/ Rich Dealy
--------------------------------
Rich Dealy, Controller of PPUSA
12
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000743457
<NAME> 83B.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 295,757
<SECURITIES> 0
<RECEIVABLES> 213,137
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 508,894
<PP&E> 19,510,009
<DEPRECIATION> 14,746,328
<TOTAL-ASSETS> 5,272,575
<CURRENT-LIABILITIES> 62,968
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,209,607
<TOTAL-LIABILITY-AND-EQUITY> 5,272,575
<SALES> 1,032,956
<TOTAL-REVENUES> 1,057,870
<CGS> 0
<TOTAL-COSTS> 734,697
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 323,173
<INCOME-TAX> 0
<INCOME-CONTINUING> 323,173
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 323,173
<EPS-PRIMARY> 9.25
<EPS-DILUTED> 0
</TABLE>
