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, 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. 2-99079B
PARKER & PARSLEY 85-B, LTD.
(Exact name of Registrant as specified in its charter)
Texas 75-2075492
(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 10 pages.
-There are no exhibits-
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PARKER & PARSLEY 85-B, LTD.
TABLE OF CONTENTS
Page
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of March 31, 1997 and
December 31, 1996......................................... 3
Statements of Operations for the three months
ended March 31, 1997 and 1996............................. 4
Statement of Partners' Capital for the three months
ended March 31, 1997...................................... 5
Statements of Cash Flows for the three months
ended March 31, 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............................ 9
27. Financial Data Schedule
Signatures.................................................. 10
2
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PARKER & PARSLEY 85-B, LTD.
(A Texas Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
March 31, December 31,
1997 1996
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $97,055 at March 31
and $59,099 at December 31 $ 97,230 $ 77,190
Accounts receivable - oil and gas sales 81,687 94,494
---------- ----------
Total current assets 178,917 171,684
---------- ----------
Oil and gas properties - at cost, based on the
on the successful efforts accounting method 5,299,759 5,299,608
Accumulated depletion (3,669,802) (3,639,795)
---------- ----------
Net oil and gas properties 1,629,957 1,659,813
---------- ----------
$ 1,808,874 $ 1,831,497
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 29,886 $ 14,174
Partners' capital:
Managing general partner 18,139 18,522
Limited partners (7,988 interests) 1,760,849 1,798,801
---------- ----------
1,778,988 1,817,323
---------- ----------
$ 1,808,874 $ 1,831,497
========== ==========
The financial information included as of March 31, 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 85-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
March 31,
-------------------------
1997 1996
--------- ----------
Revenues:
Oil and gas $ 146,856 $ 130,902
Interest 1,210 949
-------- --------
148,066 131,851
-------- --------
Costs and expenses:
Oil and gas production 59,198 65,206
General and administrative 4,406 3,927
Depletion 30,007 33,636
-------- --------
93,611 102,769
-------- --------
Net income $ 54,455 $ 29,082
======== ========
Allocation of net income:
Managing general partner $ 545 $ 291
======== ========
Limited partners $ 53,910 $ 28,791
======== ========
Net income per limited partnership interest $ 6.75 $ 3.60
======== ========
Distributions per limited partnership interest $ 11.50 $ 6.50
======== ========
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 85-B, LTD.
(A Texas Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
--------- ----------- -----------
Balance at January 1, 1997 $ 18,522 $ 1,798,801 $ 1,817,323
Distributions (928) (91,862) (92,790)
Net income 545 53,910 54,455
-------- ---------- ----------
Balance at March 31, 1997 $ 18,139 $ 1,760,849 $ 1,778,988
======== ========== ==========
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 85-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended
March 31,
------------------------
1997 1996
---------- ----------
Cash flows from operating activities:
Net income $ 54,455 $ 29,082
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 30,007 33,636
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 12,807 (24,893)
Increase (decrease) in accounts payable 15,712 (2,747)
--------- ---------
Net cash provided by operating activities 112,981 35,078
--------- ---------
Cash flows from investing activities:
Additions to oil and gas equipment (151) (21)
Cash flows from financing activities:
Cash distributions to partners (92,790) (52,446)
--------- ---------
Net increase (decrease) in cash and cash equivalents 20,040 (17,389)
Cash and cash equivalents at beginning of period 77,190 77,485
--------- ---------
Cash and cash equivalents at end of period $ 97,230 $ 60,096
========= =========
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 85-B, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
(Unaudited)
Note 1. Organization and nature of operations
Parker & Parsley 85-B, L.P. (the "Partnership") is a limited partnership
organized in 1985 under the laws of the State of Texas.
The Partnership engages primarily in oil and gas development and production in
Texas and is not involved in any industry segment other than oil and gas.
Note 2. Basis of presentation
In the opinion of management, the unaudited financial statements as of March 31,
1997 of the Partnership 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, these interim results are not
necessarily indicative of results for a full year.
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
Steven L. Beal, Senior Vice President, 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
Revenues:
The Partnership's oil and gas revenues increased to $146,856 from $130,902 for
the three months ended March 31, 1997 and 1996, respectively, an increase of
$15,954, or 12%. The increase in revenues resulted from higher average prices
received per barrel of oil and mcf of gas, offset by a 7% decrease in barrels of
oil produced and sold and a 4% decrease in mcf of gas produced and sold. For the
three months ended March 31, 1997, 4,466 barrels of oil were sold compared to
4,788 for the same period in 1996, a decrease of 322 barrels. For the three
months ended March 31, 1997, 16,651 mcf of gas were sold compared to 17,341 for
the same period in 1996, a decrease of 690 mcf. The decreases in production
volumes were primarily due to the decline characteristics of the Partnership's
oil and gas 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.
7
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The average price received per barrel of oil increased $2.94, or 15%, from
$19.33 for the three months ended March 31, 1996 to $22.27 for the same period
in 1997, while the average price received per mcf of gas increased 29% from
$2.21 during the three months ended March 31, 1996 to $2.85 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 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 three
months ended March 31, 1997.
Costs and Expenses:
Total costs and expenses decreased to $93,611 for the three months ended March
31, 1997 as compared to $102,769 for the same period in 1996, a decrease of
$9,158, or 9%. This decrease was due to declines in production costs and
depletion, offset by an increase in general and administrative expenses ("G&A").
Production costs were $59,198 for the three months ended March 31, 1997 and
$65,206 for the same period in 1996, a decrease of $6,008, or 9%. The decrease
was principally due to less well repair and maintenance costs for the three
months ended March 31, 1997, compared to the same period in 1996.
G&A's components are independent accounting and engineering fees and managing
general partner personnel and operating costs. During this period, G&A
increased, in aggregate, 12% from $3,927 for the three months ended March 31,
1996 to $4,406 for the same period in 1997. The Partnership agreement limits G&A
to 3% of gross oil and gas revenues.
Depletion was $30,007 for the three months ended March 31, 1997 compared to
$33,636 for the same period in 1996. This represented a decrease in depletion of
$3,629, or 11%. This decrease was primarily attributable to a decline in oil
production of 322 barrels for the three months ended March 31, 1997, compared
to the same period in 1996.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $77,903 during the three
months ended March 31, 1997 from the same period in 1996. This increase was due
to an increase in oil and gas sales receipts and a decrease in production cost
expenditures.
Net Cash Used in Investing Activities
The Partnership's investing activities for the three months ended March 31, 1997
and 1996 were related to the addition of oil and gas equipment on active
properties.
8
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Net Cash Used in Financing Activities
Cash was sufficient for the three months ended March 31, 1997 to cover
distributions to the partners of $92,790 of which $91,862 was distributed to the
limited partners and $928 to the managing general partner. For the same period
ended March 31, 1996, cash was sufficient for distributions to the partners of
$52,446 of which $51,922 was distributed to the limited partners and $524 to the
managing general partner.
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.
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
9
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PARKER & PARSLEY 85-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 85-B, LTD.
By: Parker & Parsley Development L.P.,
Managing General Partner
By: Parker & Parsley Petroleum USA, Inc.
("PPUSA"), General Partner
Dated: May 8, 1997 By: /s/ Steven L. Beal
--------------------------------------
Steven L. Beal, Senior Vice President
and Chief Financial Officer of PPUSA
10
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<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 97,230
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<RECEIVABLES> 81,687
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<INCOME-CONTINUING> 54,455
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