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 September 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.
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PARKER & PARSLEY 83-B, LTD.
TABLE OF CONTENTS
Page
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of September 30, 1997 and
December 31, 1996 ........................................ 3
Statements of Operations for the three and nine
months ended September 30, 1997 and 1996..................... 4
Statement of Partners' Capital for the nine months
ended September 30, 1997..................................... 5
Statements of Cash Flows for the nine months ended
September 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
September 30, December 31,
1997 1996
------------- -------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $261,317 at September 30
and $228,437 at December 31 $ 261,817 $ 228,937
Accounts receivable - oil and gas sales 208,060 349,015
----------- -----------
Total current assets 469,877 577,952
----------- -----------
Oil and gas properties - at cost, based on the
successful efforts accounting method
Accumulated depletion 19,520,734 19,519,571
(14,834,136) (14,559,884)
----------- -----------
Net oil and gas properties 4,686,598 4,959,687
----------- -----------
$ 5,156,475 $ 5,537,639
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 68,755 $ 48,087
Partners' capital:
General partners 568,339 629,059
Limited partners (23,370 interests) 4,519,381 4,860,493
----------- -----------
5,087,720 5,489,552
----------- -----------
$ 5,156,475 $ 5,537,639
=========== ===========
The financial information included as of September 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
<PAGE>
PARKER & PARSLEY 83-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
---------------------- ----------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
Revenues:
Oil and gas $ 411,409 $ 511,155 $1,444,365 $1,596,286
Interest 4,175 4,314 12,589 10,781
Litigation settlement - - - 1,392,304
Gain on disposition of assets 15,884 18,597 32,384 67,179
-------- -------- --------- ---------
431,468 534,066 1,489,338 3,066,550
-------- -------- --------- ---------
Costs and expenses:
Oil and gas production 235,796 239,457 750,283 731,300
General and administrative 13,903 16,613 47,669 51,709
Depletion 87,808 78,379 274,252 280,963
Abandoned property 2,639 10,417 2,639 33,950
-------- -------- --------- ---------
340,146 344,866 1,074,843 1,097,922
-------- -------- --------- ---------
Net income $ 91,322 $ 189,200 $ 414,495 $1,968,628
======== ======== ========= =========
Allocation of net income:
General partners $ 34,405 $ 58,149 $ 141,384 $ 480,140
======== ======== ========= =========
Limited partners $ 56,917 $ 131,051 $ 273,111 $1,488,488
======== ======== ========= =========
Net income per limited
partnership interest $ 2.44 $ 5.61 $ 11.69 $ 63.69
======== ======== ========= =========
Distributions per limited
partnership interest $ 6.91 $ 8.20 $ 26.28 $ 70.63
======== ======== ========= =========
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 (202,104) (614,223) (816,327)
Net income 141,384 273,111 414,495
----------- ---------- -----------
Balance at September 30, 1997 $ 568,339 $ 4,519,381 $ 5,087,720
=========== =========== ===========
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
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PARKER & PARSLEY 83-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
September 30,
-------------------------
1997 1996
----------- ------------
Cash flows from operating activities:
Net income $ 414,495 $ 1,968,628
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 274,252 280,963
Gain on disposition of assets (32,384) (67,179)
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 140,955 (22,207)
Increase (decrease) in accounts payable 20,668 (23,011)
---------- ----------
Net cash provided by operating activities 817,986 2,137,194
---------- ----------
Cash flows from investing activities:
Additions to oil and gas properties (1,163) (1,433)
Proceeds from disposition of assets 32,384 67,179
---------- ----------
Net cash provided by investing activities 31,221 65,746
---------- ----------
Cash flows from financing activities:
Cash distributions to partners (816,327) (2,146,908)
---------- ----------
Net increase in cash and cash equivalents 32,880 56,032
Cash and cash equivalents at beginning of period 228,937 244,107
---------- ----------
Cash and cash equivalents at end of period $ 261,817 $ 300,139
=========== ==========
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
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PARKER & PARSLEY 83-B, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 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 September 30, 1997 and for the
three and nine months ended September 30, 1997 and 1996 include all adjustments
and accruals consisting only of normal recurring accrual adjustment 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 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, Vice President and
Controller, 303 West Wall, Suite 101, Midland, Texas 79701.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (1)
As of August 8, 1997, Pioneer Natural Resources USA, Inc. ("Pioneer USA") became
the managing general partner of the Partnership, joining the existing general
partner, P&P Employees 83-B, Ltd. ("EMPL"), a Texas limited partnership whose
general partner is Pioneer USA, and 23,370 limited partners as of March 8, 1997.
Prior to August 8, 1997, the Partnership's managing general partner and the
general partner of EMPL was Parker & Parsley Development L.P. ("PPDLP"), a
wholly-owned subsidiary of Parker & Parsley Petroleum Company ("Parker &
Parsley"). On August 7, 1997, Parker & Parsley and Mesa Inc. received
shareholder approval to merge and create Pioneer Natural Resources Company
("Pioneer"). On August 8, 1997, PPDLP was merged with and into Pioneer USA, a
wholly-owned subsidiary of Pioneer, resulting in Pioneer USA becoming the
managing general partner of the Partnership and the general partner of EMPL as
PPDLP's successor by merger. For a more complete description of the Parker &
Parsley and Mesa Inc. merger, see Pioneer's Registration Statement on Form S-4
as filed with the Securities & Exchange Commission.
Results of Operations
Nine months ended September 30, 1997 compared with nine months ended
September 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 10% to $1,444,365 from
$1,596,286 for the nine months ended September 30, 1997 as compared to the nine
7
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months ended September 30, 1996. The decrease was a result of declines in
barrels of oil and mcf of gas 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 nine months ended September 30, 1997, 50,567 barrels of
oil were sold compared to 55,394 for the same period in 1996, a decrease of
4,827 barrels, or 9%. For the nine months ended September 30, 1997, 180,227 mcf
of gas were sold compared to 201,191 for the same period in 1996, a decrease of
20,964 mcf, or 10%. The production volume decreases were due to the decline
characteristics of the Partnership's oil and gas properties. 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 $1.16, or 6%, from $20.98
for the nine months ended September 30, 1996 to $19.82 for the same period in
1997, while the average price received per mcf of gas increased 13% from $2.16
for the nine months ended September 30, 1996 to $2.45 for the same period 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 nine
months ended September 30, 1997.
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.
Gain on disposition of assets was comprised of a gain on abandoned properties of
$32,384 and $50,718 attributable to proceeds received from equipment credits on
two fully depleted wells, abandoned during the nine months ended September 30,
1997 and September 30, 1996, respectively, and salvage income of $16,461 for the
nine months ended September 30, 1996, that was derived from the disposal of
equipment on wells plugged and abandoned in prior years. Expenses incurred
during the nine months ended September 30, 1997 and 1996 to plug and abandon two
wells were $2,639 and $33,950, respectively.
Costs and Expenses:
Total costs and expenses decreased to $1,074,843 for the nine months ended
September 30, 1997 as compared to $1,097,922 for the same period in 1996, a
decrease of $23,079. This decrease was due to declines in abandoned property
costs, depletion, and general and administrative expenses ("G&A"), offset by an
increase in production costs.
Production costs were $750,283 for the nine months ended September 30, 1997 and
$731,300 for the same period in 1996 resulting in an $18,983 increase, or 3%.
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, 8% from $51,709 for the nine months ended September 30,
1996 to $47,669 for the same period in 1997.
8
<PAGE>
Depletion was $274,252 for the nine months ended September 30, 1997 compared to
$280,963 for the same period in 1996, representing a decrease of $6,711. The
decrease was due to the decline in oil production of 4,827 barrels for the nine
months ended September 30, 1997 as compared with same period in 1996, offset by
a decrease in oil reserves in 1997 due to lower commodity prices.
Three months ended September 30, 1997 compared with three months ended September
30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 20% to $411,409 from $511,155
for the three months ended September 30, 1997 as compared to the three months
ended September 30, 1996. The decrease was a result of a lower average price
received per barrel of oil and declines in barrels of oil and mcf of gas
produced and sold, offset by an increase in the average price received per mcf
of gas. For the three months ended September 30, 1997, 15,437 barrels of oil
were sold compared to 17,421 for the same period in 1996, a decrease of 1,984
barrels or 11%. For the three months ended September 30, 1997, 61,614 mcf of gas
were sold compared to 65,090 for the same period in 1996, a decrease of 3,476
mcf, or 5%. 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 $3.33, or 15%, from
$21.76 for the three months ended September 30, 1996 to $18.43 for the same
period in 1997, while the average price received per mcf of gas increased
slightly from $2.03 for the three months ended September 30, 1996 to $2.06 for
the same period in 1997.
Gain on disposition of assets was comprised of a gain on abandoned properties of
$15,884 attributable to proceeds received from equipment credits on two fully
depleted wells, abandoned during the three months ended September 30, 1997.
During the same period in 1996, a gain of $18,597 on abandoned properties
resulted from proceeds received from equipment credits on one fully depleted
property. Expenses incurred during three months ended September 30, 1997 and
1996 to plug and abandon two uneconomical wells were $2,639 and $10,417,
respectively.
Costs and Expenses:
Total costs and expenses decreased to $340,146 for the three months ended
September 30, 1997 as compared to $344,866 for the same period in 1996, a
decrease of $4,720. This decrease was due to declines in abandoned property
costs, production costs, and G&A, offset by an increase in depletion.
Production costs were $235,796 for the three months ended September 30, 1997 and
$239,457 for the same period in 1996 resulting in a $3,661 decrease. The
decrease was due to lower production taxes.
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, 16% from $16,613 for the three months ended September
30, 1996 to $13,903 for the same period in 1997.
9
<PAGE>
Depletion was $87,808 for the three months ended September 30, 1997 compared to
$78,379 for the same period in 1996, representing an increase of $9,429, or 12%,
partially attributable to a decrease in oil reserves in the third quarter of
1997 as a result of lower commodity prices.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased $1,319,208 during the nine
months ended September 30, 1997 from the same period ended September 30, 1996.
This decrease was primarily due to the receipt of proceeds from the litigation
settlement received in 1996 as discussed in Item 2, offset by an increase in oil
and gas sales receipts and a decrease in production costs paid.
Net Cash Provided by Investing Activities
The Partnership's investing activities during for the nine months ended
September 30, 1997 and 1996 included expenditures related to equipment
replacement on various oil and gas properties.
Proceeds of $32,384 and $67,179 received during the nine months ended September
30, 1997 and 1996, respectively, were from the salvage of equipment on wells
abandoned during 1996.
Net Cash Used in Financing Activities
Cash was sufficient for the nine months ended September 30, 1997 to cover
distributions to the partners of $816,327 of which $202,104 was distributed to
the general partners and $614,223 to the limited partners. For the same period
ended September 30, 1996, cash was sufficient for distributions to the partners
of $2,146,908 of which $496,323 was distributed to the general partners and
$1,650,585 to the limited partners. Cash distributions to the partners of
$2,146,980 for the nine months ended September 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
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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: Pioneer Natural Resources USA, Inc.,
Managing General Partner
Dated: November 10, 1996 By: /s/ Rich Dealy
------------------------------------
Rich Dealy, Vice President and
Controller
12
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<NAME> 83B.TXT
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 261,817
<SECURITIES> 0
<RECEIVABLES> 208,060
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 469,877
<PP&E> 19,520,734
<DEPRECIATION> 14,834,136
<TOTAL-ASSETS> 5,156,475
<CURRENT-LIABILITIES> 68,755
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,087,720
<TOTAL-LIABILITY-AND-EQUITY> 5,156,475
<SALES> 1,444,365
<TOTAL-REVENUES> 1,489,338
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<INCOME-PRETAX> 414,495
<INCOME-TAX> 0
<INCOME-CONTINUING> 414,495
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 414,495
<EPS-PRIMARY> 11.69
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