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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission file numbers: 0-16907
0-16908
PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-1
PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-2
- --------------------------------------------------------------------------------
(Exact name of registrants as specified in their charters)
72-1081782
Delaware 72-1098039
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Nos.)
One Seaport Plaza, New York, N.Y. 10292-1016
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrants' telephone number, including area code: (212) 214-1016
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of each exchange
Title of each Class: on which registered:
- --------------------- ----------------------
None None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Name of each exchange
Title of each Class: on which registered:
- --------------------- ----------------------
Depositary Units None
Indicate by check mark whether the Registrants (1) have 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
Registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. Yes _CK_ No __
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrants' knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. _CK_
DOCUMENTS INCORPORATED BY REFERENCE
Amended and Restated Agreements of Limited Partnership included as part of
the Registration Statement filed with the Securities and Exchange Commission
pursuant to Rule 424(b) under the Securities Act of 1933 is incorporated by
reference into Part IV of this Annual Report on Form 10-K
Index to exhibits can be found on pages 33 through 37.
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PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-1
PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-2
(in process of liquidation)
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I PAGE
------
<S> <C> <C>
Item 1 Business......................................................................... 3
Item 2 Properties....................................................................... 3
Item 3 Legal Proceedings................................................................ 3
Item 4 Submission of Matters to a Vote of Unit Holders.................................. 4
PART II
Item 5 Market for the Partnerships' Depositary Units and Related Unit Holder Matters.... 4
Item 6 Selected Financial Data.......................................................... 5
Item 7 Management's Discussion and Analysis of Financial Condition and Results of
Operations..................................................................... 6
Item 8 Financial Statements and Supplementary Data...................................... 9
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure..................................................................... 30
PART III
Item 10 Directors and Executive Officers of the Registrants.............................. 31
Item 11 Executive Compensation........................................................... 32
Item 12 Security Ownership of Certain Beneficial Owners and Management................... 32
Item 13 Certain Relationships and Related Transactions................................... 32
PART IV
Item 14 Exhibits, Financial Statement Schedules, and Reports on Form 8-K
Financial Statements and Financial Statement Schedules........................... 33
Exhibits......................................................................... 33
Reports on Form 8-K.............................................................. 37
SIGNATURES.................................................................................. 38
</TABLE>
2
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PART I
Item 1. Business
General
Prudential-Bache Energy Growth Fund, L. P. G-1 and Prudential-Bache Energy
Growth Fund, L.P. G-2, (``G-1 Partnership'' and ``G-2 Partnership,''
respectively, and collectively referred to hereafter as the ``Partnerships''),
were organized under the laws of the state of Delaware by their ``General
Partners,'' Prudential-Bache Properties, Inc. (``PBP'') and Graham Energy, Ltd.
(``GEL'') and a limited partner, the ``Depositary,'' to offer ``Depositary
Units'' (Depositary Units represent the assignment of substantially all of the
attributes of limited partner interests). The Depositary is the sole limited
partner in the Partnerships and serves in such capacity on behalf of the ``Unit
Holders'' (Unit Holders are investors who subscribed for and purchased
Depositary Units). PBP and GEL are both subsidiaries of Prudential Securities
Group Inc. (``PSGI''). Prudential Securities Incorporated (``PSI'') is also a
wholly-owned subsidiary of PSGI.
The Partnerships were formed with the primary objective of making investments
in oil and gas related entities and assets. The Partnerships' investments were
all made during a period of what was then believed to be temporarily depressed
conditions in the oil and gas industry, in an attempt to take advantage of these
conditions and realize returns and appreciation on these investments in the
event of a substantial increase in oil and gas prices and related industry
activities. In July 1994, the General Partners solicited the consents of the
Unit Holders of each of the Partnerships to the adoption by each Partnership of
a Plan of Dissolution and Liquidation (the ``Plan''). Consent Solicitation
Statements, dated June 24, 1994, with respect to the proposal to adopt the Plan
for each Partnership were mailed to Unit Holders on July 5, 1994. Supplements to
the Consent Solicitation Statements, dated August 23, 1994, were mailed to Unit
Holders on August 25, 1994.
In accordance with the procedures described in the Consent Solicitation
Statements, the General Partners accepted consent forms from Unit Holders which
were postmarked on or before August 31, 1994. As of September 8, 1994, the
General Partners had received consent forms from Unit Holders owning a majority
of the outstanding Depositary Units in each of the Partnerships. Of the consent
forms received by the General Partners, Depositary Units representing 60% and
62% of the outstanding Depositary Units for G-1 and G-2 Partnerships,
respectively, voted to consent to the Plan and approve the liquidation of the
Partnerships. Accordingly, the Partnerships adopted the Plan and were dissolved
effective as of August 31, 1994. In accordance with the terms of the Plan, the
General Partners, acting as liquidating agents, commenced the liquidation of the
Partnerships' remaining assets and liabilities. Since that date, the General
Partners have sold all of the investments of each of the Partnerships.
The Partnerships' ability to make further distributions will depend upon the
amounts required to pay costs to be incurred in connection with certain
litigation surrounding the operations of investments previously owned by the
Partnerships as well as general and administrative and other costs to be
incurred in connection with the liquidation and termination of the Partnerships
and any other liabilities which may arise prior to the Partnerships'
termination.
Employees
The Partnerships have no officers, directors or employees. The business of
the Partnerships is being conducted by the General Partners, as liquidating
agents, pursuant to the terms of the Plan. See Notes 1 and 3 of Item 8 Financial
Statements and Supplementary Data for further information.
Item 2. Properties
G-1 and G-2 Partnerships acquired interests in producing oil and gas wells
through foreclosures and as incidental parts of other investments. The
Partnerships sold substantially all of their interests in oil and gas properties
during the year ended December 31, 1993 and the remainder during 1994. See Note
7 of Item 8 Financial Statements and Supplementary Data for further discussion.
Item 3. Legal Proceedings
This information is incorporated by reference to Note 8 of Item 8 Financial
Statements and Supplementary Data.
3
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Item 4. Submission of Matters to a Vote of Unit Holders
There were no matters which were submitted to Unit Holders during the quarter
ended December 31, 1995. However, in July 1994, Consent Solicitation Statements
were sent to all Unit Holders. See Item 1 for further information.
PART II
Item 5. Market for the Partnerships' Depositary Units and Related Unit Holder
Matters
Market Information
Depositary Units were originally sold for a price of $1,000 (subject to
volume discounts, which did not affect the net proceeds to the Partnerships, for
subscriptions of $250,000 or more). Depositary Units are not traded on any
exchange. There is no immediate public or organized trading market for the
Depositary Units. PBP has become aware of certain transfers of Depositary Units
between Unit Holders and third parties; however, these transfers have been
limited and sporadic. The dissolution of the Partnerships following the adoption
of the Plan has likely limited further the ability to transfer Units. The number
of Unit Holders as of March 14, 1996 are shown below:
<TABLE>
<S> <C>
G-1 Partnership 6,943
G-2 Partnership 11,375
</TABLE>
Distributions
The Partnerships have historically made distributions to Unit Holders out of
available cash. Since the adoption of the Plan, the General Partners have sold
all of the Partnerships' investments and have made cash distributions to the
Unit Holders primarily with the proceeds generated therefrom, after retaining
certain amounts for the estimated costs of satisfying claims of the
Partnerships.
The Partnerships' ability to make further distributions will depend upon the
amounts required to pay costs to be incurred in connection with certain
litigation surrounding the operations of investments previously owned by the
Partnerships as well as general and administrative and other costs to be
incurred in connection with the liquidation and termination of the Partnerships
and any other liabilities which may arise prior to the Partnerships'
termination. The following is a summary of cash distributions (all of which
represent a return of capital) paid during the years ended December 31, 1995 and
1994 (in thousands):
<TABLE>
<CAPTION>
1995 1994
-------------------- --------------------
Unit General Unit General
Holders Partners Holders Partners
------- -------- ------- --------
<S> <C> <C> <C> <C>
G-1 Partnership $ 4,479 $791 $ 4,273 $ 754
G-2 Partnership 2,072 367 7,090 1,251
</TABLE>
See Item 6 Selected Financial Data for Unit Holders' distributions on a per
Depositary Unit basis.
4
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Item 6. Selected Financial Data
The following data for the Partnerships in thousands (except Depositary Unit
and per Depositary Unit amounts) should be read in conjunction with the
Financial Statements of the Partnerships and the notes thereto appearing in Item
8 Financial Statements and Supplementary Data. (For financial reporting
purposes, although the Partnerships adopted the liquidation basis of accounting
effective September 1, 1994, the Partnerships continued to show Statements of
Operations through September 30, 1994, as the results of operations for
September 1994 were not material).
<TABLE>
<CAPTION>
G-1 Partnership
--------------------------------------------
1994 1993 1992 1991
---------- ------- ------- --------
(9 months)
<S> <C> <C> <C> <C>
For the years ended December 31, 1991, 1992 and 1993 and
the nine month period ended September 30, 1994:
Total revenues $ 2,953 $ 4,590 $ 5,078 $ 5,534
---------- ------- ------- --------
---------- ------- ------- --------
Provision for asset valuations $ -- $ 8,067 $ 1,500 $ 6,325
---------- ------- ------- --------
---------- ------- ------- --------
Net income (loss) from operations $ 65 $(8,814) $(2,668) $ (8,791)
---------- ------- ------- --------
---------- ------- ------- --------
Allocation of net income (loss) from operations:
Limited Partner (on behalf of Unit Holders) $ (649) $(8,953) $(2,907) $ (9,187)
---------- ------- ------- --------
---------- ------- ------- --------
General Partners $ 714 $ 139 $ 239 $ 396
---------- ------- ------- --------
---------- ------- ------- --------
Unit Holders' net loss per Depositary Unit $ (7.21) $(99.48) $(32.30) $(102.08)
---------- ------- ------- --------
---------- ------- ------- --------
For the years ended December 31:
Unit Holders' cash distributions per Depositary Unit $ 47.48 $ 8.75 $ 15.01 $ 24.98
---------- ------- ------- --------
---------- ------- ------- --------
At December 31:
Total assets $ 10,729 $11,794 $21,111 $ 24,985
---------- ------- ------- --------
---------- ------- ------- --------
Number of Depositary Units outstanding 90,000 90,000 90,000 90,000
---------- ------- ------- --------
---------- ------- ------- --------
</TABLE>
<TABLE>
<CAPTION>
G-2 Partnership
-------------------------------------------
1994 1993 1992 1991
---------- ------- ------- -------
(9 months)
<S> <C> <C> <C> <C>
For the years ended December 31, 1991, 1992 and 1993 and
the nine month period ended September 30, 1994:
Total revenues $ 1,745 $ 6,084 $ 6,091 $ 6,403
---------- ------- ------- -------
---------- ------- ------- -------
Provision for asset valuations $ -- $ 5,534 $ -- $ 4,874
---------- ------- ------- -------
---------- ------- ------- -------
Net income (loss) from operations $ (54) $(3,286) $ 1,357 $(4,292)
---------- ------- ------- -------
---------- ------- ------- -------
Allocation of net income (loss) from operations:
Limited Partner (on behalf of Unit Holders) $ (1,253) $(4,098) $(2,606) $(5,751)
---------- ------- ------- -------
---------- ------- ------- -------
General Partners $ 1,199 $ 812 $ 3,963 $ 1,459
---------- ------- ------- -------
---------- ------- ------- -------
Unit Holders' net loss Per Depositary Unit $ (10.59) $(34.64) $(22.03) $(48.62)
---------- ------- ------- -------
---------- ------- ------- -------
For the years ended December 31:
Unit Holders' cash distributions per Depositary Unit $ 59.94 $ 38.91 $189.85 $ 69.92
---------- ------- ------- -------
---------- ------- ------- -------
At December 31:
Total assets $ 7,339 $12,659 $20,890 $46,559
---------- ------- ------- -------
---------- ------- ------- -------
Long-term debt, including current maturities $ -- $ -- $ -- $ 258
---------- ------- ------- -------
---------- ------- ------- -------
Number of Depositary Units outstanding 118,290 118,290 118,290 118,290
---------- ------- ------- -------
---------- ------- ------- -------
</TABLE>
5
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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
General
As a result of the approval of the Plan, the Partnerships were dissolved
effective as of August 31, 1994. In accordance with the terms of the Plan, the
General Partners, acting as liquidating agents, are proceeding with the winding
up of the Partnerships' business and affairs through the liquidation of their
assets and liabilities. Since the adoption by both Partnerships of the Plan, the
Partnerships have sold all of their respective investments. Effective September
1, 1994, the Partnerships adopted the liquidation basis of accounting, whereby
assets are presented at their estimated net realizable values and liabilities at
their estimated settlement amounts. For financial reporting purposes, the
Partnerships continued to present operating results in the Statements of
Operations through September 30, 1994, as the results of operations for
September 1994 were not material. Significant adjustments to previously recorded
asset and liability amounts required as a result of this change in basis of
accounting are discussed in Notes 4, 5 and 7 to the financial statements
included in Item 8. Financial Statements and Supplementary Data. The
Partnerships also recorded accruals as of December 31, 1995 for the estimated
costs expected to be incurred to liquidate the Partnerships including $299,000
and $402,000 for G-1 Partnership and G-2 Partnership, respectively, recorded
during the year ended December 31, 1995. These estimated costs (excluding
litigation costs) include charges by the General Partners and their affiliates
during the year ended December 31, 1995 for the reimbursement of indirect
general and administrative costs expected to be incurred through June 30, 1996.
The General Partners are unable to predict the exact time the final liquidation
will take place because of the outstanding litigation discussed in Note 8 of
Item 8 Financial Statements and Supplementary Data; however, the Partnerships
will distribute any remaining cash upon final liquidation. No estimate of final
litigation costs is included because the General Partners are unable to estimate
such costs at the present time. The final liquidating distribution will not take
place until the final litigation costs are paid.
Liquidity and Capital Resources
The net asset positions as of December 31, 1995 and 1994 for G-1 and G-2
Partnerships are shown below (in thousands).
<TABLE>
<CAPTION>
12/31/95 12/31/94
-------- --------
<S> <C> <C>
G-1 Partnership $4,497 $9,730
G-2 Partnership 4,111 6,774
</TABLE>
All of the Partnerships' net assets at December 31, 1995 and 1994 were
attributable to cash and cash equivalents which was generated primarily from the
sale of investments as discussed below. The decreases in the Partnerships'
December 31, 1995 net asset positions from their levels at December 31, 1994 was
primarily attributable to the amounts distributed to the Unit Holders in
February and April 1995.
Cash Distributions
The Partnerships have historically paid cash distributions out of available
cash during the month following each quarter. Since the adoption of the Plan,
the Partnerships have paid distributions to the partners from cash generated
primarily from the sale of their remaining investments. In February 1995, G-1
Partnership made a special distribution in connection with the sale of its AES
Deepwater coke-fired co-generation facility investment. In April 1995, G-2
Partnership made a special distribution in connection with the sale of its
interests in its preferred stock of Walter International Inc. and its common
stock of J. Ray McDermott, S.A. See Results of Operations below for a discussion
of the Partnerships' sales of these investments as well as the sales of their
interests in the Mesa Pipeline and related gas processing plant, G-1
Partnership's Mid Plains natural gas gathering facility and G-2 Partnership's
interests in Hall Houston Offshore, Inc. and Roberts & Bunch Offshore, Inc.
6
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The following table summarizes cash distributions to Unit Holders for G-1 and
G-2 Partnerships (in thousands).
<TABLE>
<CAPTION>
Special
Unit Holders' Distributions Distributions Distributions
Quarterly Paid-in from Inception from Inception as
Distributions February 1995 through a percentage of
Partnership January 1995 and April 1995 April 1995 Invested Capital
<S> <C> <C> <C> <C>
- ------------ --------------------- -------------- ----------------- -------------------
G-1 $ 227 $4,252 $39,324 44%
G-2 298 1,774 89,150 75
</TABLE>
The Partnerships' ability to make further distributions will depend upon the
amounts required to pay costs to be incurred in connection with certain
litigation surrounding the operations of investments previously owned by the
Partnerships as well as general and administrative and other costs to be
incurred in connection with the liquidation and termination of the Partnerships
and any other liabilities which may arise prior to the Partnerships'
termination. These estimated costs (excluding final litigation costs) are
reflected in the Partnerships' statements of net assets as of December 31, 1995
and includes charges by the General Partners and their affiliates during the
year ended December 31, 1995 for the reimbursement of indirect general and
administrative costs expected to be incurred through June 30, 1996. The General
Partners are unable to predict the exact time the final liquidation will take
place because of the outstanding litigation discussed in Note 8 of Item 8
Financial Statements and Supplementary Data; however, the Partnerships will
distribute any remaining cash upon final liquidation. No estimate of final
litigation costs is included because the General Partners are unable to estimate
such costs at the present time. The final liquidating distribution will not take
place until the final litigation costs are paid.
Results of Operations
As discussed previously herein, the Partnerships are in process of
liquidation and have sold all of their remaining investments. In accordance with
the liquidation basis of accounting adopted by the Partnerships, no results of
operations are presented for the year ended December 31, 1995. During the nine
months ended September 30, 1994, G-1 Partnership recorded net income of $980,000
and G-2 Partnership incurred a net loss of $406,000. For the year ended December
31, 1993, G-1 and G-2 Partnerships incurred net losses of $8,814,000 and
$3,286,000, respectively. These nine month results were primarily due to the
adoption of the liquidation basis of accounting, whereby assets are presented at
their estimated net realizable values and liabilities, at their estimated
settlement amounts. Losses incurred in 1993 by the Partnerships were the result
of asset valuation impairment provisions which adversely affected net income.
See Notes 5, 6 and 7 to Item 8 Financial Statements and Supplementary Data for a
further discussion of the asset valuation impairment provisions as well as the
sales of investments described below.
On February 27, 1995, G-2 Partnership sold its interest in the Preferred
Stock of Walter International, Inc. (``Walter'') for $907,000. In connection
with this sale, the aggregate cumulative dividends in arrears totaling
approximately $560,000 owed by Walter to G-2 Partnership as of December 31, 1994
were forgiven. However, since G-2 Partnership had not recognized these dividends
as income, no adjustment to the financial statements was necessary to reflect
this forgiveness. Since the investment in Walter had previously been
written-down to zero during 1993, G-2 Partnership revalued its investment in
Walter at the selling price in its statement of net assets, as of December 31,
1994, in accordance with the liquidation basis of accounting.
Beginning February 16, 1995, G-2 Partnership began selling its shares of JRM
stock until March 15, 1995, when G-2 Partnership completed the sale of all of
its JRM shares. G-2 Partnership sold a total of 182,547 shares of JRM stock,
including 18,813 shares acquired in January 1995 through the exercise of certain
warrants costing $384,000, for an aggregate amount of approximately $3,936,000.
The change in the estimated liquidation value on the sale of the JRM stock of
approximately $3,128,000 represents the proceeds realized from the sale of these
shares, less the adjusted cost basis per share sold. The carrying value of the
shares (excluding the 18,813 shares) was $3,686,000 as of December 31, 1994.
On January 20, 1995, G-1 Partnership sold its interest in the AES Deepwater
coke-fired co-generation facility for a net sales price of $6,470,000. In
accordance with the liquidation basis of accounting, G-1
7
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Partnership revalued this investment at its selling price, as of December 31,
1994. As a result of this sale, G-1 Partnership has no capital investments
remaining as of December 31, 1995.
In October 1994, G-1 and G-2 Partnerships sold their interests in the Mesa
Pipeline and related gas processing plant for a net amount of approximately
$893,000 and $1,618,000, respectively. G-1 and G-2 Partnerships realized a gain
on the sale of their interests in Mesa Pipeline of approximately $43,000 and
$74,000, respectively. As a result of the sale, G-1 and G-2 Partnerships'
consolidated subsidiary, Mesa Pipeline Company of Louisiana, had no remaining
assets and was therefore liquidated. Accordingly, G-1 and G-2 Partnerships
recorded a gain on the disposal of their investment in this subsidiary of
approximately $6,000 and $12,000, respectively.
In September 1994, G-1 Partnership sold its interest in its Mid Plains
natural gas gathering facility for $2,801,000 and realized a gain on the sale of
$1,397,000.
In March 1994, G-2 Partnership sold its remaining interests in an offshore
production facility and related equipment that was leased to Roberts & Bunch
Resources, Inc. (``Roberts & Bunch'') and a group of associated working interest
owners for sales proceeds of $24,000.
In February 1994, G-2 Partnership sold its interest in four production
platforms and related equipment that were leased to Hall-Houston Offshore, Inc.
together with the leases of this equipment. Under the terms of the sale, G-2
Partnership received $200,000 in sales proceeds and was relieved of its salvage
and removal obligations with respect to this equipment. The proceeds received by
this Partnership from its sale were paid in four quarterly installments at the
end of each quarter during 1994.
During the year ended December 31, 1993, the G-1 and G-2 Partnerships
recorded asset valuation impairment provisions as a result of revising their
estimates of fair market values while exploring alternatives for selling the
Partnership's remaining investments. G-1 and G-2 Partnerships recorded
impairment provisions on their capital investments of $2,470,000 and $800,000,
respectively. G-1 and G-2 Partnerships also recorded asset valuation impairment
provisions on their oil and gas properties and pipeline and gas gathering and
processing facilities of $5,597,000 and $4,664,000, respectively. During the
same period, G-2 Partnership recorded an asset valuation impairment provision on
its direct financing leases of $70,000.
In December 1993, G-1 Partnership sold its participation in a secured term
loan to WellTech, Inc., an oil field service company, together with certain
shares of common stock and warrants issued by WellTech, Inc. for an aggregate of
$3,650,000. This investment was sold for an amount equal to its adjusted book
value, and accordingly, the Partnership did not realize a gain or loss on the
sale of this investment.
In December 1993, G-2 Partnership sold a portion of its interests in offshore
production facilities and related equipment leased to Roberts & Bunch Offshore,
Inc. and a group of associated working interest owners. In connection with the
sale of this structure, the Partnership also assigned to the buyers all of their
rights under the lease of that structure. Under the terms of the sale of this
structure, the Partnership was relieved of its salvage and removal obligations
with respect to this structure.
In October 1993, Ensco Marine Company (``Ensco'') prepaid the remaining
balance of its Senior Secured Note. G-2 Partnership had a 65% interest in this
investment. The Note was originally issued with detachable warrants for 2.5
million shares of Ensco common stock. The total proceeds received by the
Partnership was approximately $5,558,000 consisting of $5,293,000 of principal,
$159,000 of accrued interest and $106,000 for the sale of the warrants. The
proceeds received by the Partnership for the purchase of the warrants were
reflected as a gain on the sale of investments in the financial statements.
In October 1993, G-1 and G-2 Partnerships sold their interest in certain oil
and gas properties located in Grand and Uintah Counties, Utah. Under the terms
of the sale, G-1 and G-2 Partnerships received approximately $819,000 and
$1,484,000, respectively. G-1 and G-2 Partnerships experienced losses on the
sale in the amounts of $1,035,000 and $1,914,000, respectively, which were
reflected as asset valuation impairments during the year ended December 31,
1993.
In May 1993, G-2 Partnership sold 218,800 shares of Offshore Pipeline, Inc.
(``OPI'') common stock for a net sales price of approximately $13.23 per share.
The Partnership's cost basis in the OPI stock was approximately $2.60 per share.
After this sale, G-2 Partnership owned 163,734 shares of outstanding OPI common
stock. The gain on this sale was reflected in G-2 Partnership's financial
statements for the year ended December 31, 1993 as a gain on the sale of
investments in the amount of $2,326,000.
8
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Item 8. Financial Statements and Supplementary Data Index to Financial
Statements
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Reports of Independent Public Accountants 10
Prudential-Bache Energy Growth Fund, L.P. G-1:
Statements of Net Assets (in process of liquidation) as of December 31, 1995 and 1994 12
Statements of Changes in Net Assets (in process of liquidation) for the period from
October 1, 1994 to December 31, 1995 13
Consolidated Statements of Operations (going concern basis) for the nine months ended
September 30, 1994 and for the year ended December 31, 1993 14
Consolidated Statements of Changes in Partners' Capital (going concern basis) for the
nine months ended September 30, 1994 and for the year ended December 31, 1993 15
Consolidated Statements of Cash Flows (going concern basis) for the nine months ended
September 30, 1994 and for the year ended December 31, 1993 16
Prudential-Bache Energy Growth Fund, L.P. G-2:
Statements of Net Assets (in process of liquidation) as of December 31, 1995 and 1994 17
Statements of Changes in Net Assets (in process of liquidation) for the period from
October 1, 1994 to December 31, 1995 18
Consolidated Statements of Operations (going concern basis) for the nine months ended
September 30, 1994 and for the year ended December 31, 1993 19
Consolidated Statements of Changes in Partners' Capital (going concern basis) for the
nine months ended September 30, 1994 and for the year ended December 31, 1993 20
Consolidated Statements of Cash Flows (going concern basis) for the nine months ended
September 30, 1994 and for the year ended December 31, 1993 21
</TABLE>
9
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PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-1
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Prudential-Bache Energy Growth Fund, L.P. G-1:
We have audited the accompanying statement of net assets in process of
liquidation of Prudential-Bache Energy Growth Fund, L.P. G-1 as of December 31,
1995 and 1994 and the related statement of changes in net assets for the period
from October 1, 1994 to December 31, 1995. In addition, we have audited the
accompanying consolidated statements of operations, partners' capital, and cash
flows for the nine month period ended September 30, 1994 and for the year ended
December 31, 1993. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As described in Note 1 to the financial statements, the Limited Partners of
the Partnership approved a plan of liquidation on September 1, 1994, and the
Partnership commenced liquidation shortly thereafter. As a result, the
Partnership has changed its basis of accounting for periods subsequent to the
approval of the plan of liquidation, from the going-concern basis to the
liquidation basis. Accordingly, the carrying values of the remaining assets as
of December 31, 1995 and 1994 are presented at estimated realizable values and
all liabilities are presented at estimated settlement amounts.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets in process of liquidation of
Prudential-Bache Energy Growth Fund, L.P. G-1 as of December 31, 1995 and 1994,
the changes in its net assets for the period from October 1, 1994 to December
31, 1995 and the results of its operations and its cash flows for the nine month
period ended September 30, 1994, and the year ended December 31, 1993 in
conformity with generally accepted accounting principles applied on the basis
described in the preceding paragraph.
New Orleans, Louisiana
January 10, 1996
10
<PAGE>
<PAGE>
PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-2
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Prudential-Bache Energy Growth Fund, L.P. G-2:
We have audited the accompanying statement of net assets in process of
liquidation of Prudential-Bache Energy Growth Fund, L.P. G-2 as of December 31,
1995 and 1994, and the related statement of changes in net assets for the period
from October 1, 1994 to December 31, 1995. In addition, we have audited the
accompanying consolidated statements of operations, partners' capital, and cash
flows for the nine month period ended September 30, 1994 and for the year ended
December 31, 1993. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As described in Note 1 to the financial statements, the Limited Partners of
the Partnership approved a plan of liquidation on September 1, 1994, and the
Partnership commenced liquidation shortly thereafter. As a result, the
Partnership has changed its basis of accounting for periods subsequent to the
approval of the plan of liquidation, from the going-concern basis to the
liquidation basis. Accordingly, the carrying values of the remaining assets as
of December 31, 1995 and 1994 are presented at estimated realizable values and
all liabilities are presented at estimated settlement amounts.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets in process of liquidation of
Prudential-Bache Energy Growth Fund, L.P. G-2 and subsidiary as of December 31,
1995 and 1994, the changes in its net assets for the period from October 1, 1994
to December 31, 1995 and the results of its operations and its cash flows for
the nine month period ended September 30, 1994 and the year ended December 31,
1993, in conformity with generally accepted accounting principles applied on the
basis described in the preceding paragraph.
New Orleans, Louisiana
January 10, 1996
11
<PAGE>
<PAGE>
PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-1
STATEMENTS OF NET ASSETS
(in process of liquidation)
(In thousands, except depositary unit amounts)
<TABLE>
<CAPTION>
December 31, December 31,
1995 1994
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
Assets
Cash and cash equivalents $ 4,760 $ 4,259
Interest receivable 15 --
Capital investments -- 6,470
------------ ------------
Total assets 4,775 10,729
------------ ------------
Liabilities
Estimated liquidation costs 224 487
Due to affiliates 54 96
Accrued expenses -- 416
------------ ------------
Total liabilities 278 999
------------ ------------
Contingencies
Net assets $ 4,497 $ 9,730
------------ ------------
------------ ------------
Total depositary units authorized and outstanding 90,000 90,000
------------ ------------
------------ ------------
- -------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements
</TABLE>
12
<PAGE>
<PAGE>
PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-1 AND SUBSIDIARY
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM OCTOBER 1, 1994 TO DECEMBER 31, 1995
(in process of liquidation)
(in thousands, except per depositary unit amounts)
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------------
Net assets in liquidation, October 1, 1994 $ 6,662
Changes in estimated liquidation values of assets and liabilities 3,335
Cash distributions:
Limited Partner (on behalf of Unit Holders) (227)
General Partners (40)
-------
Net assets in liquidation, December 31, 1994 9,730
Changes in estimated liquidation values of assets and liabilities 37
Cash distributions:
Limited Partner (on behalf of Unit Holders) (4,479)
General Partners (791)
-------
Net assets in liquidation, December 31, 1995 $ 4,497
-------
-------
Limited Partner distributions per $1,000 depositary unit paid during the period from October 1,
1994 to December 31, 1994 and during the year ended December 31, 1995 were $2.52 and $49.77,
respectively.
- -------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements
</TABLE>
13
<PAGE>
PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-1 AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND
FOR THE YEAR ENDED DECEMBER 31, 1993
(going concern basis)
(In thousands, except per depositary unit amounts)
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
- --------------------------------------------------------------------------------------------------
REVENUES:
Income from capital investments, net $ 52 $ 82
Sales of oil and gas 14 10
Natural gas gathering sales 2,691 4,248
Compression and transportation fees 154 165
Interest income from temporary cash investments 42 85
------ -------
2,953 4,590
------ -------
EXPENSES:
Natural gas purchases 1,100 1,970
Lease and pipeline operating costs 1,305 2,117
General and administrative 334 498
Depreciation, depletion and amortization 149 752
Provision for asset valuations -- 8,067
------ -------
2,888 13,404
------ -------
Net income (loss) from operations 65 (8,814)
Liquidating activities:
Natural gas gathering facilities (Note 7) 1,440 --
Liquidation costs (525) --
------ -------
NET INCOME (LOSS) $ 980 $(8,814)
------ -------
------ -------
ALLOCATION OF NET INCOME (LOSS):
Limited Partner (on behalf of Unit Holders) $ 266 $(8,953)
General Partners 714 139
------ -------
$ 980 $(8,814)
------ -------
------ -------
UNIT HOLDERS' NET INCOME (LOSS) PER DEPOSITARY UNIT $ 2.95 $(99.48)
------ -------
------ -------
- --------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated statements
</TABLE>
14
<PAGE>
<PAGE>
PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-1 AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND
FOR THE YEAR ENDED DECEMBER 31, 1993
(going concern basis)
(In thousands, except per depositary unit amounts)
<TABLE>
<CAPTION>
Limited Partner
(on behalf of General
Unit Holders) Partners Total
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Partners' capital, December 31, 1992 $20,182 $-- $20,182
Net income (loss) (8,953) 139 (8,814)
Cash distributions (787) (139) (926)
--------------- -------- -------
Partners' capital, December 31, 1993 10,442 -- 10,442
Net income 266 714 980
Cash distributions (4,046) (714) (4,760)
--------------- -------- -------
Net assets, September 30, 1994 $ 6,662 $-- $ 6,662
--------------- -------- -------
--------------- -------- -------
Limited Partner distributions per $1,000 depositary unit paid during the year ended December 31, 1993
and during the nine months ended September 30, 1994 were $8.75 and $44.96, respectively.
- -----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated statements
</TABLE>
15
<PAGE>
PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-1 AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND
FOR THE YEAR ENDED DECEMBER 31, 1993
(going concern basis)
(In thousands)
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) from operations $ 65 $(8,814)
Adjustments to reconcile net income (loss) from operations to net cash provided
by operating activities:
Depreciation, depletion and amortization 149 752
Provision for asset valuations -- 8,067
(Increase) decrease in accounts receivable 646 (75)
Increase (decrease) in accounts payable and accrued liabilities (822) 423
------- -------
Net cash provided by operating activities 38 353
------- -------
CASH FLOWS FROM LIQUIDATING ACTIVITIES:
Net income from liquidating activities 915 --
Gain on sale of natural gas gathering facilities (1,440) --
Increase in accrued liquidation costs 525 --
------- -------
Net cash provided by liquidating activities -- --
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Loan principal reductions, cost recoveries and proceeds from sales of investments 3,068 4,064
Reductions in property, plant and equipment, net -- 810
------- -------
Net cash provided by investing activities 3,068 4,874
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to partners (4,760) (926)
------- -------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (1,654) 4,301
------- -------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 5,293 992
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,639 $ 5,293
------- -------
------- -------
- --------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated statements
</TABLE>
16
<PAGE>
<PAGE>
PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-2
STATEMENTS OF NET ASSETS
(in process of liquidation)
(In thousands, except depositary unit amounts)
<TABLE>
<CAPTION>
December 31, December 31,
1995 1994
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------
Assets
Cash and cash equivalents $ 4,492 $ 2,746
Interest receivable 9 --
Capital investments -- 4,593
------------ ------------
Total assets 4,501 7,339
------------ ------------
Liabilities
Estimated liquidation costs 340 418
Due to affiliates 50 147
------------ ------------
Total liabilities 390 565
------------ ------------
Contingencies
Net assets $ 4,111 $ 6,774
------------ ------------
------------ ------------
Total depositary units authorized and outstanding 118,290 118,290
------------ ------------
------------ ------------
- ------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements
</TABLE>
17
<PAGE>
<PAGE>
PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-2 AND SUBSIDIARY
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM OCTOBER 1, 1994 TO DECEMBER 31, 1995
(in process of liquidation)
(in thousands, except per depositary unit amounts)
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------
Net assets in liquidation, October 1, 1994 $5,848
Changes in estimated liquidation values of assets and liabilities 1,276
Cash distributions:
Limited Partner (on behalf of Unit Holders) (300)
General Partners (50)
------
Net assets in liquidation, December 31, 1994 6,774
Changes in estimated liquidation value of assets and liabilities (224)
Cash distributions:
Limited Partner (on behalf of Unit Holders) (2,072)
General Partners (367)
------
Net assets in liquidation, December 31, 1995 $4,111
------
------
Limited Partner distributions per $1,000 depository unit paid during the period from October 1, 1994
to December 31, 1994 and during the year ended December 31, 1995 were $2.52 and $17.52,
respectively.
- ------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements
</TABLE>
18
<PAGE>
PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-2 AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND
FOR THE YEAR ENDED DECEMBER 31, 1993
(going concern basis)
(In thousands, except per depositary unit amounts)
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------
REVENUES:
Income from capital investments, net $ 13 $ 568
Natural gas gathering sales 1,280 2,243
Compression and transportation fees 278 298
Leasing income from oil and gas production facilities -- 205
Gain on sale of investments -- 2,431
Gain on sale of leases 105 --
Interest income from temporary cash investments 69 339
------- -------
1,745 6,084
------- -------
EXPENSES:
Natural gas purchases 945 2,042
Lease and pipeline operating costs 435 812
General and administrative 351 792
Depreciation, depletion and amortization 68 190
Provision for asset valuations -- 5,534
------- -------
1,799 9,370
------- -------
Net loss from operations (54) (3,286)
Liquidating activities:
Natural gas gathering facilities (Note 7) 74 --
Liquidation costs (426) --
------- -------
NET LOSS $ (406) $(3,286)
------- -------
------- -------
ALLOCATION OF NET LOSS
Limited Partner (on behalf of Unit Holders) $(1,605) $(4,098)
General Partners 1,199 812
------- -------
$ (406) $(3,286)
------- -------
------- -------
UNIT HOLDERS' NET LOSS PER DEPOSITARY UNIT $(13.57) $(34.64)
------- -------
------- -------
- --------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated statements.
</TABLE>
19
<PAGE>
<PAGE>
PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-2 AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND
FOR THE YEAR ENDED DECEMBER 31, 1993
(going concern basis)
(In thousands, except per depositary unit amounts)
<TABLE>
<CAPTION>
Limited Partner Unrealized
(on behalf of General Gain on
Unit Holders) Partners Investments Total
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------
Partners' capital, December 31, 1992 $ 20,011 $ -- $-- $20,011
Net income (loss) (4,098) 812 -- (3,286)
Cash distributions (4,603) (812 ) -- (5,415)
---------------- -------- ----------- -------
Partners' capital, December 31, 1993 11,310 -- -- 11,310
Net income (loss) (1,605) 1,199 -- (406)
Unrealized gain on investments in equity
securities -- -- 2,935 2,935
Cash distributions (6,792) (1,199 ) -- (7,991)
---------------- -------- ----------- -------
Net assets, September 30, 1994 $ 2,913 $ -- $ 2,935 $ 5,848
---------------- -------- ----------- -------
---------------- -------- ----------- -------
Limited Partner distributions per $1,000 depositary unit paid during the year ended December 31, 1993 and
during the nine months ended September 30, 1994 were $38.91 and $57.42, respectively.
- -----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated statements
</TABLE>
20
<PAGE>
<PAGE>
PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-2 AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND
FOR THE YEAR ENDED DECEMBER 31, 1993
(going concern basis)
(In thousands)
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss from operations $ (54) $(3,286)
Adjustments to reconcile net loss from operations to net cash (used in) provided
by operating activities:
Gains on sale of leases and investments (105) (2,431)
Depreciation, depletion and amortization 68 190
Provision for asset valuations -- 5,534
(Increase) decrease in accounts receivable 580 (21)
Increase (decrease) in accounts payable and accrued liabilities (959) 492
Other (14) (31)
------- -------
Net cash (used in) provided by operating activities (484) 447
------- -------
CASH FLOWS FROM LIQUIDATING ACTIVITIES:
Net loss from liquidating activities (352) --
Gain on sale of natural gas gathering facility (74) --
Increase in accrued liquidation costs 426 --
------- -------
Net cash provided by liquidating activities -- --
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Loan principal reductions, cost recoveries and proceeds from
sales of investments -- 9,736
Reductions in property, plant and equipment, net -- 1,484
Collections of direct financing leases receivable 132 192
------- -------
Net cash provided by investing activities 132 11,412
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to partners (7,991) (5,415)
------- -------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (8,343) 6,444
------- -------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 9,723 3,279
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,380 $ 9,723
------- -------
------- -------
- --------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated statements
</TABLE>
21
<PAGE>
<PAGE>
PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-1
PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-2
(in process of liquidation)
NOTES TO FINANCIAL STATEMENTS
(1) Description of organization
Prudential-Bache Energy Growth Fund, L.P. G-1 (``G-1 Partnership'') and
Prudential-Bache Energy Growth Fund, L.P. G-2 (``G-2 Partnership''),
collectively referred to herein as the ``Partnerships,'' were organized under
the laws of the state of Delaware by their General Partners, Prudential-Bache
Properties, Inc. (``PBP'') and Graham Energy, Ltd. (``GEL''), and a limited
partner (the ``Depositary'') to offer ``Depositary Units,'' representing the
assignment of substantially all of the attributes of limited partner interests.
The Depositary is the sole limited partner in the Partnerships and serves in
such capacity on behalf of ``Unit Holders'' who purchased Depositary Units. PBP
and GEL are both subsidiaries of Prudential Securities Group Inc. (``PSGI'').
Prudential Securities Incorporated (``PSI'') is also a wholly-owned subsidiary
of PSGI. GEL has contracted out certain of its functions, including certain
administrative functions, to certain companies affiliated with GEL.
In accordance with the terms of the Amended and Restated Agreements of
Limited Partnership (the ``Agreements'') of the Partnerships, the General
Partners were not required to make any initial capital contributions to the
Partnerships. All costs of organizing and syndicating the Partnerships and all
investment costs were paid out of the Unit Holders' capital contributions. All
items of income, expense, profits, losses, gains and distributable cash are
allocated 85% to the Unit Holders and 15% to the General Partners. However,
pursuant to the terms of the Agreements, a special reallocation of profits is
made in order to allow the General Partners' share of profits to be equal to
their share of distributable cash, thus keeping their capital account at a zero
balance at all times.
Plan of liquidation
In June 1994, the General Partners distributed to the Unit Holders a Consent
Solicitation Statement for consideration and voting upon a Plan of Dissolution
and Liquidation (``the Plan''). Consent Solicitation Statements were filed on
behalf of each of the Partnerships with the Securities and Exchange Commission
on June 24, 1994 and were mailed to Unit Holders on July 5, 1994. Supplements to
the Consent Solicitation Statements, dated August 23, 1994, were filed with the
Securities and Exchange Commission and were mailed to Unit Holders on August 25,
1994.
In accordance with the procedures described in the Consent Solicitation
Statements, the General Partners accepted consent forms from Unit Holders which
were postmarked on or before August 31, 1994. As of September 8, 1994, the
General Partners had received consent forms from Unit Holders owning a majority
of the outstanding Depositary Units in each of the Partnerships. Of the consent
forms received by the General Partners, Depositary Units representing 60% and
62% of the total outstanding Depositary Units for G-1 and G-2 Partnerships,
respectively, voted to consent to the Plan and approve the liquidation of the
Partnerships. Accordingly, the Partnerships' adopted the Plan and were dissolved
effective August 31, 1994. In accordance with the terms of the Plan, the General
Partners, acting as liquidating agents, are proceeding with the liquidation and
termination of the Partnerships. Since that date, the General Partners have sold
all of the investments of each Partnership.
The Partnerships' ability to make further distributions will depend upon the
amounts required to pay costs to be incurred in connection with certain
litigation surrounding the operations of investments previously owned by the
Partnerships as well as general and administrative and other costs to be
incurred in connection with the liquidation and termination of the Partnerships
and any other liabilities which may arise prior to the Partnerships'
termination. These estimated costs (excluding final litigation costs) are
reflected in the Partnerships' statements of net assets as of December 31, 1995
and include charges by the General Partners and their affiliates during the year
ended December 31, 1995 for the reimbursement of indirect general and
administrative costs expected to be incurred through June 30, 1996. The General
Partners are unable to predict the exact time the final liquidation will take
place because of the outstanding litigation discussed in Note 8; however, the
Partnerships will distribute any remaining cash upon final liquidation. No
estimate of final litigation costs is included because the General Partners are
unable to estimate such costs at the present time. The final liquidating
distribution will not take place until the final litigation costs are paid.
22
<PAGE>
<PAGE>
(2) Summary of Significant Accounting Policies
Liquidation basis accounting policies
As a result of the liquidation discussed in Note 1, the Partnerships changed
to the liquidation basis of accounting from a going-concern basis effective
September 1, 1994. For financial reporting purposes, the Partnerships continued
to present operating results in the Consolidated Statements of Operations
through September 30, 1994, as the results of operations for September 1994 were
not material. The statements of net assets at December 31, 1995 and 1994 and the
changes in net assets for the period from October 1, 1994 to December 31, 1995
were prepared on a liquidation basis of accounting. The liquidation basis of
accounting requires that assets be reflected at their net realizable values and
liabilities be stated at their estimated settlement amounts. No significant
adjustments to previously recorded asset and liability amounts were required as
a result of the change in basis of accounting, except for the adjustments
discussed in Notes 4, 5 and 7.
Certain reclassifications have been made to prior year balances to conform
with the current year's financial statement presentation.
Going-concern basis accounting policies
The consolidated statements of operations, statements of partners' capital
and statements of cash flows of G-1 and G-2 Partnerships for the nine months
ended September 30, 1994 and for the year ended December 31, 1993 have been
consolidated with their indirect subsidiary, Mesa Pipeline Company (``Mesa
Pipeline''), which was owned 35.55% by G-1 Partnership and 64.45% by G-2
Partnership. All of the assets of Mesa Pipeline were sold October 5, 1994 (as
more fully discussed in Note 7). The account balances as of December 31, 1994
and the results of Mesa Pipeline's operations for the nine month period ended
September 30, 1994 and for the year ended December 31, 1993 have been
proportionately consolidated into G-1 and G-2 Partnerships' financial
statements.
Income from capital investments was based on the amount of unrecovered costs
or principal balance and expected rates of return. Certain of G-1 Partnership's
investments were on either a cash income recognition basis such that income was
recognized only when cash was received or a cost recovery basis where all cash
proceeds were applied to recovery of principal with no income recognition until
the principal balance was paid in full, if ever.
Investments and related investment fees and transaction costs were funded by
the capital contributions of the Unit Holders and were initially valued at cost.
These capitalized costs were reduced by amortization of certain costs
representing fees and transaction costs and by amounts which were identified as
principal paid on underlying debt instruments. See Notes 5, 6 and 7 for a
summarization of the Partnerships' investment activities.
The carrying value of each capital investment held was assessed quarterly
based upon the historical performance of the investment, the underlying value of
assets securing the investment and the future earnings potential of the entity
involved. A loss was recognized, if any, to the extent the carrying value
exceeded the assessed value of the investment.
Property acquired through foreclosure was stated at the lower of the recorded
amount of the loan for which the foreclosed property served as collateral or the
then current appraised value. When a reduction of the carrying value to the
appraised value was required at the time of foreclosure, the difference was
included in a provision for asset valuations.
Unit Holders' net income (loss) per $1,000 Depositary Unit for G-1 and G-2
Partnerships is based upon 90,000 and 118,290 Depositary Units outstanding,
respectively.
Cash and cash equivalents
Cash and cash equivalents include amounts invested in United States Treasury
bills, certificates of deposit and money market funds with original maturities
of generally three months or less.
Investments
The Partnerships' equity securities that have readily determinable fair
values are classified as available-for-sale securities. These securities are
measured at fair value in the statements of net assets and unrealized gains and
losses are reported as a separate component of partners' capital. Equity
securities traded on a national securities exchange are valued at the last
reported sales price on the primary exchange on which they are traded. Equity
securities which are not readily marketable are accounted for under the cost
method.
23
<PAGE>
<PAGE>
At December 31, 1994, G-2 Partnership's investment in Walter International,
Inc. was valued at its February 1995 sales price as more fully discussed in Note
5.
(3) Income taxes
Federal and state income tax statutes provide that partnerships pay no income
tax. Qualification of the Partnerships as such for income tax purposes, the
income tax returns and the amounts of taxable income or loss reported to
partners are subject to examination by taxing authorities.
(4) Related party transactions
The Agreements provide for certain charges of PBP, GEL and their affiliates
to be paid by the Partnerships. The following is a summary of charges by PBP and
its affiliates for the years ended December 31, 1995, 1994 and 1993 for the
reimbursement of indirect general and administrative costs (in thousands):
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
G-1 Partnership $121 $103 $ 52
G-2 Partnership 194 174 79
</TABLE>
The following is a summary of charges by GEL and its affiliates during the
years ended December 31, 1995, 1994 and 1993 for the reimbursement of indirect
general and administrative costs (in thousands):
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
G-1 Partnership $ 15 $ 22 $183
G-2 Partnership 15 41 281
</TABLE>
The Partnerships have recorded an accrual as of December 31, 1995 for the
estimated costs expected to be incurred to liquidate the Partnerships as
discussed in Note 1. Included in these liquidation cost estimates are amounts
expected to be charged by the General Partners during the anticipated remaining
liquidation period. The actual charges to be incurred by the Partnerships may
differ from the amounts accrued as of December 31, 1995. The amounts expected to
be charged by PBP to G-1 and G-2 Partnerships for reimbursement of indirect
general and administrative costs during the anticipated remaining liquidation
period are $96,000 and $175,000, respectively. The amount expected to be charged
by GEL to each of G-1 and G-2 Partnerships for reimbursement of indirect general
and administrative costs is $1,000 during the anticipated remaining liquidation
period.
As of December 31, 1995 PSI owned 1,153 and 1,667 Depositary Units in G-1 and
G-2 Partnerships, respectively. Certain former officers of affiliates of GEL
served as directors of Offshore Pipelines, Inc. (See Note 5.)
(5) Capital investments
Capital investments of the Partnerships consisted of loans to and equity
positions in entities engaged in oil and gas related activities collateralized
by oil and gas related assets. During the first quarter of 1995, the
Partnerships completed the liquidation of their remaining capital investments
pursuant to the Plan. The table below summarizes the book balances of these
investments at December 31, 1995 and 1994. The table is followed by a discussion
of these investments (amounts in thousands).
<TABLE>
<CAPTION>
Capital Investment
Book Balances
---------------------
<S> <C> <C>
G-1 G-2
------- -------
Group of investments purchased from a national bank $ 6,947 $ --
Offshore Pipelines, Inc. (equity) -- 3,686
Walter International, Inc. -- 1,707
------- -------
Subtotal 6,947 5,393
Asset valuation provision (477) (800)
------- -------
Balance at December 31, 1994 6,470 4,593
Sales of capital investments (6,470) (4,593)
------- -------
Balance at December 31, 1995 $ -- $ --
------- -------
------- -------
</TABLE>
24
<PAGE>
<PAGE>
During the year ended December 31, 1993, the G-1 and G-2 Partnerships
recorded asset valuation impairment provisions as a result of revising their
estimates of fair values while exploring alternatives for selling the
Partnerships' remaining investments. G-1 Partnership recorded impairment
provisions of $2,470,000 on its capital investments and G-2 Partnership recorded
a $800,000 impairment provision for its Walter International, Inc. investment.
Investments purchased from a national bank
During March, 1987, G-1 Partnership purchased a group of investments
(eighteen in total) from a national bank for a net purchase price of
approximately $53 million. These investments consisted primarily of loans and
participations in loans made by the bank to oil and gas entities and
acquisitions of equity positions in certain of those and other entities. As of
December 31, 1994, one investment in this group, a coke-fired co-generation
facility owned by AES Deepwater, Inc. (the ``AES Investment''), accounted for
all of the carrying value of G-1 Partnership's investments in loans.
In December 1993, G-1 Partnership sold its participation in a secured term
loan to WellTech, Inc., an oil field service company, together with certain
shares of common stock and warrants issued by WellTech, Inc. for an aggregate of
$3,650,000. This investment was sold for an amount equal to its adjusted book
value, and accordingly, the Partnership did not realize a gain or loss on the
sale of this investment.
On January 20, 1995, G-1 Partnership sold its interest in the AES Investment
for a net sales price of $6,470,000. In accordance with the liquidation basis of
accounting, G-1 Partnership revalued this investment at its selling price as of
December 31, 1994. As a result of this sale, G-1 Partnership has no capital
investments remaining as of December 31, 1995.
Offshore Pipelines, Inc.
Beginning in April, 1988, G-2 Partnership, Prudential-Bache Energy Growth
Fund, L.P. G-3 and Prudential-Bache Energy Growth Fund, L.P. G-4 entered into
several transactions with Offshore Pipelines, Inc. (``OPI''), an offshore marine
construction firm whose principal lines of business are the laying and burying
of marine pipeline systems and the fabrication and installation of attendant
production facilities. As a result, G-2 Partnership became the owner of
approximately 382,534 shares of common stock of OPI and warrants to purchase
18,813 additional shares. In May 1993, G-2 Partnership sold 218,800 shares
resulting in a gain on sale of investment in the amount of $2,326,000. As of
December 31, 1994, G-2 Partnership owned 163,734 shares of OPI's outstanding
common stock with a carrying value of approximately $3,686,000.
On January 24, 1995, G-2 Partnership exercised its warrants to purchase
additional OPI shares. As a result of acquiring these additional OPI shares, G-2
Partnership owned a total of 182,547 OPI shares.
On January 30, 1995, OPI announced that its shareholders had approved the
proposed merger of OPI with and into a wholly-owned unit of J. Ray McDermott,
S.A. (``JRM''), a majority-owned unit of McDermott International, Inc. The JRM
stock is traded on the New York Stock Exchange under the symbol (``JRM'').
Pursuant to the merger agreement, G-2 Partnership received one share of JRM
stock in exchange for each share of OPI stock that it owned and a cash payment
in conjunction with the exchange of $.51 per share or approximately $93,000.
Beginning February 16, 1995, pursuant to the Plan, G-2 Partnership began
selling its shares in JRM until March 15, 1995, when G-2 Partnership completed
the sale of all of its JRM shares for an aggregate amount of approximately
$3,936,000. The change in the estimated liquidation value on the sale of the JRM
stock was approximately $3,128,000.
Walter International, Inc.
In December, 1989, G-2 Partnership entered into a transaction with Walter
International, Inc. (``Walter''), an independent oil and gas exploration company
that specializes in searching for and developing oil and gas reserves in foreign
regions. The transaction involved 14% Senior Cumulative Preferred Stock (the
``Preferred Stock'') with detachable warrants to purchase 9,000 shares (9%) of
Walter's authorized common stock to fund a portion of Walter's exploration and
development costs. On February 27, 1995, G-2 Partnership sold its interest in
the Preferred Stock for $907,000. Since the investment in Walter had previously
been written-down to zero during 1993, G-2 Partnership revalued its investment
in Walter at the selling price in its statement of net assets, as of December
31, 1994, in accordance with the liquidation basis of accounting.
25
<PAGE>
<PAGE>
Maple Gulf Coast Properties Corporation
On October 14, 1993, G-1 and G-2 Partnerships sold their interests in certain
producing oil and gas properties located in Grand and Uintah Counties, Utah.
Under the terms of the sale, G-1 and G-2 Partnerships received approximately
$819,000 and $1,484,000, respectively. G-1 and G-2 Partnerships experienced
losses on the sale in the amounts of $1,035,000 and $1,914,000, respectively.
The losses were reflected as asset valuation adjustments during the year ended
December 31, 1993.
Ensco Marine Company
In March, 1988, G-2 Partnership entered into a transaction with Ensco Marine
Company (``Ensco Marine''), whose primary activity is the oil field marine
transportation business. The transaction involved a $26 million Senior Secured
Note (the ``Note'') executed by Ensco Marine for the purchase and refurbishing
of 14 oil field supply vessels and for working capital purposes.
In October, 1993, Ensco Marine prepaid the remaining balance of its Senior
Secured Note. The total proceeds received by the Partnership was approximately
$5,558,000 which consisted of $5,293,000 of principal, $159,000 of accrued
interest and $106,000 for the detachable stock warrants.
The proceeds received by the Partnership for the purchase of the detachable
stock warrants was reflected as a gain on the sale of investment for the year
ended December 31, 1993.
(6) Direct financing leases
The leases discussed below were primarily accounted for as direct financing
leases. Unearned income was recognized over the primary lease terms of the
individual leases in such a manner as to produce a constant periodic rate of
return on the net investment in these leases in accordance with the interest
method. The carrying value of the production facilities leases were reduced by
certain deferred leasing fee income for financial statement presentation
purposes.
The six production facilities leases in these transactions had primary lease
terms of from three to five years and varying residual lease terms. Payments
under these leases were due periodically in equal installments over the primary
lease terms. Performance under these leases was collateralized by first
mortgages on all of the oil and gas reserves serviced by the production
facilities.
Hall-Houston Offshore, Inc.
In February 1994, G-2 Partnership sold its interest in four production
platforms and related equipment located on certain offshore lease blocks in the
U.S. Gulf of Mexico together with the leases of this equipment. Under the terms
of the sale of this investment, G-2 Partnership received $200,000 in sales
proceeds (based on, among other things, the oil and gas production generated
from the wells associated with this equipment) and were relieved of their
salvage and removal obligations with respect to this equipment.
At December 31, 1993, G-2 Partnership reserved $305,000 in an escrow account
and had recorded a corresponding liability in the financial statements for the
purpose of funding the estimated cost of dismantling the oil and gas production
facilities leased to Hall-Houston at the end of the respective production
facilities lease terms. Pursuant to the February 1994 sales agreement discussed
above, the escrowed amounts were paid to the purchaser of the four production
platforms and related equipment. The interest accrued on these escrowed funds
was retained in 1993 by the Partnership.
Roberts & Bunch Offshore, Inc.
In December 1993, G-2 Partnership sold its interests in one of its two
offshore production facilities and related equipment leased to Roberts & Bunch
Offshore, Inc. and a group of associated working interest owners. The sales
proceeds received by G-2 Partnership was $13,500. In connection with this sale,
the Partnership turned over to the buyers escrowed funds held for the future
dismantlement of the platforms. As a result of this sale, the Partnership
assigned to the buyers all of their rights under the lease of this structure
and, accordingly, were relieved of their salvage and removal obligations with
respect to this structure, the cost of which was estimated to exceed the amounts
escrowed by the Partnership with respect to this liability.
26
<PAGE>
<PAGE>
In March 1994, G-2 Partnership sold its interests in its remaining offshore
facility and related equipment for $24,000. Also in connection with this sale,
G-2 Partnership incurred platform dismantlement costs of $51,750. These costs
were netted against the proceeds from the sale of these leases for a net loss
recognized on the disposal of this lease.
(7) Property, Plant and Equipment
The following summarizes the changes in property, plant and equipment for G-1
and G-2 Partnerships during the years ended December 31, 1993 and 1994 (in
thousands):
<TABLE>
<CAPTION>
G-1 Partnership
----------------------------------------------------
<S> <C> <C> <C> <C>
Natural Gas
Oil and Gas Properties Gathering Facilities
----------------------- ------------------------
Accumulated Accumulated
Cost DD&A* Cost DD&A*
------- ----------- -------- -----------
Balance, December 31, 1992 $ 6,195 $ 4,145 $ 11,822 $ 4,441
Reclassification 132 -- -- --
Additions -- -- 9 --
Sale of property (5,672) (4,853) -- --
Asset valuation provision -- 1,311 -- 4,286
Depreciation, depletion and amortization -- 52 -- 700
------- ----------- -------- -----------
Balance, December 31, 1993 655 655 11,831 9,427
------- ----------- -------- -----------
Write-off of fully depreciated assets (655) (655) -- --
Adjustments to reflect change to liquidating
basis -- -- 43 --
Depreciation, depletion and amortization -- -- -- 149
Sale of natural gas gathering facilities -- -- (11,874) (9,576)
------- ----------- -------- -----------
Balance, December 31, 1994 $ -- $ -- $ -- $ --
------- ----------- -------- -----------
------- ----------- -------- -----------
</TABLE>
<TABLE>
<CAPTION>
G-2 Partnership
-----------------------------------------------------
<S> <C> <C> <C> <C>
Natural Gas
Oil and Gas Properties Gathering Facilities
------------------------ ------------------------
Accumulated Accumulated
Cost DD&A* Cost DD&A*
-------- ----------- -------- -----------
Balance, December 31, 1992 $ 10,296 $ 6,803 $ 6,132 $ 1,676
Sale of property (10,296) (8,812) -- --
Asset valuation provision -- 1,914 -- 2,750
Depreciation, depletion and amortization -- 95 -- 95
-------- ----------- -------- -----------
Balance, December 31, 1993 -- -- 6,132 4,521
-------- ----------- -------- -----------
Adjustments to reflect change to liquidation
basis -- -- 74 --
Depreciation, depletion and amortization -- -- -- 68
Sale of natural gas gathering facilities -- -- (6,206) (4,589)
-------- ----------- -------- -----------
Balance, December 31, 1994 $ -- $ -- $ -- $ --
-------- ----------- -------- -----------
-------- ----------- -------- -----------
*DD&A is an abbreviation for depreciation, depletion and amortization.
</TABLE>
Depreciation, depletion and amortization expense per equivalent unit of
production (an equivalent unit is equal to one barrel of oil or condensate or
six Mcf of gas) for the years ended December 31, 1994 and 1993 are shown in the
following table.
<TABLE>
<CAPTION>
1994 1993
------ -----
<S> <C> <C>
G-1 Partnership $ -- $1.52
G-2 Partnership -- 1.59
</TABLE>
Due to updated estimates of fair market value obtained while exploring
alternatives for selling the Partnerships' remaining investments, G-1 and G-2
Partnerships recorded downward adjustments to the carrying values of their oil
and gas properties for the year ended December 31, 1993 in the amounts of
27
<PAGE>
<PAGE>
$1,311,000 and $1,914,000, respectively. Revised fair market value estimates of
the natural gas gathering facilities resulted in similar downward adjustments in
the amounts of $4,286,000 and $2,750,000 for G-1 and G-2 Partnerships,
respectively. The reductions in carrying values were made through an increase in
accumulated depreciation, depletion and amortization of the oil and gas
properties and natural gas gathering facilities.
During September 1994, G-1 Partnership sold its natural gas processing plant
(the ``Mid Plains Plant'') for $2,801,000. As a result of this sale, G-1
Partnership realized a gain of $1,397,000. During October 1994, G-1 and G-2
Partnerships sold their interests in their remaining natural gas gathering
facilities and related equipment (``Mesa Pipeline'') for approximately $893,000
and $1,618,000, respectively. G-1 and G-2 Partnerships each experienced a gain
on the sale of Mesa Pipeline in the amounts of $43,000 and $74,000,
respectively.
As a result of the sale of Mesa Pipeline in October 1994, G-1 and G-2
Partnerships' consolidated subsidiary, Mesa Pipeline Company of Louisiana, had
no remaining assets and was therefore liquidated. Accordingly, G-1 and G-2
Partnerships recorded a gain on the disposal of their investment in this
subsidiary of approximately $6,000 and $12,000, respectively.
(8) Legal Proceedings
The Partnerships and their General Partners and/or certain affiliates have
been named co-defendants in a number of lawsuits arising out of the offer and
sale of the Partnerships' and certain affiliated partnerships' Depositary Units
or Partnership Units. These proceedings allege violations of the federal
securities laws and similar violations under certain state laws and involve
claims by investors that material misrepresentations and omissions of material
facts were made in connection with the offer and sale of Depositary Units or
Partnership Units. Mismanagement of funds is also alleged in certain suits.
These proceedings seek monetary damages or, alternatively, a return of the
amount of the original investment, plus interest, costs and attorneys' fees. A
number of the proceedings also seek exemplary damages. In a number of these
actions, discovery has commenced. The Partnerships and their General Partners
also have been named as defendants in two derivative suits. In addition, the
General Partners and their affiliates have also been the subject of several
state and federal administrative actions and investigations.
a. Growth Fund Suits Pending in Texas State Court
(i) James W. Gibbons, et al. v. Graham Energy, Ltd., Graham Securities
Corp., Graham Resources, Inc., Graham Depositary Company II, Prudential
Securities, Inc., Prudential-Bache Properties, Inc., Prudential Insurance
Company of America, and certain individuals, No. 91-040456-A in the District
Court of Harris County, Texas, 190th Judicial District.
This suit is on behalf of those plaintiffs originally party to a prior
Growth Fund suit who declined to participate in the settlement between all
defendants and the majority of plaintiffs in the prior case. The Gibbons
action was created by an August 21, 1992 order entered by the court in the
prior suit severing the claims of the non-settling plaintiffs. The Gibbons
plaintiffs, all alleged investors in G-2 Partnership, seek compensatory and
punitive damages, plus damages equalling not more than two times the amount
of each plaintiff's actual damages, together with costs, interest and
attorneys' fees for the defendants' alleged wrongdoing in connection with the
offer and sale of Depositary Units in G-2 Partnership as well as for the
alleged mismanagement of G-2 Partnership. Plaintiffs allege violation of
common law and state law. There has been no significant activity in the suit
since entry of the severance order. The defendants intend to defend the
action vigorously.
(ii) Robert I. Kaminsky, et al. v. Graham Energy, Ltd., Graham Securities
Corp., Graham Resources, Inc., Graham Depositary Company II, Prudential
Securities, Inc., Prudential-Bache Properties, Inc., Prudential Insurance
Company of America, and certain individuals, No. 90-01796, in the District
Court of Harris County, Texas, 55th Judicial District. Filed on or about
April 24, 1991.
Plaintiffs, all alleged investors in G-2 Partnership, commenced suit
seeking compensatory and punitive damages, plus damage equalling not more
than two times the amount of each plaintiff's actual damages, together with
costs, interest and attorneys' fees for the defendants' alleged wrongdoing in
connection with the offer and sale of Depositary Units in G-2 Partnership as
well as for the alleged mismanagement of G-2 Partnership. Plaintiffs alleged
violation of common law and state law.
28
<PAGE>
<PAGE>
In June of 1992, definitive settlement agreements were executed by all
defendants and the majority of plaintiffs in Kaminsky. Pursuant to those
agreements, a Corrected Final Judgment dismissing the settling plaintiffs'
claims was entered on or about September 24, 1992. A motion to sever the
claims of the non-settling plaintiffs remains pending. There has been no
further significant activity in the suit. The defendants intend to defend the
action vigorously.
(iii) Rowell F. Lawson, et al. v. Prudential Securities, Inc., Prudential
Insurance Company of America, Prudential-Bache Properties, Inc.,
Prudential-Bache Energy Growth Fund, L.P. G-1, Prudential-Bache Energy Growth
Fund, L.P. G-2, Prudential-Bache Energy Growth Fund, L.P. G-3,
Prudential-Bache Energy Growth Fund, L.P. G-4, Graham Energy Ltd., Graham
Securities Corp., Graham Resources, Inc., Graham Depositary Company II, and
certain individuals, No. 94-16852, in the District Court of Harris County,
Texas, 164th Judicial District. The plaintiffs allege fraud, breach of
fiduciary duty, negligence and state statutory claims in connection with the
offer, sale and management of the Growth Funds. The plaintiffs seek
compensatory, punitive and treble damages, together with costs, interest and
attorneys' fees. A Memorandum of Understanding providing for the settlement
of the Lawson case, as well as a number of other cases, was executed by
counsel for the parties on December 28, 1994. In excess of eighty percent
(80%) of the plaintiffs have executed releases and their claims have been
dismissed. The remaining plaintiffs have not executed releases because, among
other reasons: (1) they opposed the settlement, (2) they could not be
located, (3) the plaintiffs' claims could not be verified, or (4) the
plaintiffs had already settled their claims in other litigation. The
plaintiffs who did not execute releases may pursue their claims further. If
necessary, the defendants intend to defend the action vigorously.
b. Growth Fund Derivative Suit Pending in New Jersey State Court
Gary Starr, Cathy and David Lipton v. Graham Energy, Ltd., Graham
Depositary Company II, Graham Securities Corp., Prudential-Bache Properties,
Inc., Prudential Securities Group, Inc., Prudential Securities Inc.,
Prudential Life Insurance Company of America, certain individuals,
Prudential-Bache Energy Growth Fund, L.P. G-1 and Prudential-Bache Energy
Growth Fund, L.P. G-2, MID-L-1165-92 in the Superior Court of New Jersey,
Middlesex County. Filed February 3, 1992.
This is a derivative action brought on behalf of Prudential-Bache Energy
Growth Funds, L.P. G-1 and G-2. G-1 and G-2 Partnerships are named as nominal
defendants only. The complaint alleges breach of fiduciary duty and fraud in
the management and marketing of investments in G-1 and G-2 Partnerships.
Plaintiffs seek compensatory and punitive damages, costs and attorneys' fees.
In January of 1993, counsel for the parties in Starr executed a Memorandum
of Understanding providing for settlement of the case. Notice was sent
October 7, 1994 to Unit Holders describing the action and the terms of the
proposed settlement. The hearing on the final approval of the settlement was
held on November 9, 1994. In an opinion dated May 10, 1995, the New Jersey
Superior Court approved the settlement and awarded certain attorneys' fees
and expenses. On August 1, 1995, the Court issued a further opinion dealing
with certain matters relating to attorneys' fees, and on September 20, 1996 a
Consent Order and Final Judgment dismissing the action was filed. Certain
attorneys then filed Notices of Appeal relating only to the issue of
attorneys' fees. Such notices of Appeal were thereafter withdrawn, and the
Consent Order and Final Judgment became final on December 27, 1995. On or
about March 1, 1996, the Settlement was implemented.
c. Growth Fund Derivative Suits Pending in Delaware State Court
In re Prudential-Bache Energy Growth Fund Litigation, Consolidated Civil
Action No. 13677, in the Court of Chancery of the State of Delaware in and
for New Castle County.
This action consolidates Abrahamson et al. v. Graham Energy, Ltd. et al.,
Civil Action No. 13677, and Elman v. Graham Energy, Ltd., et al., Civil
Action No. 13899. These cases are purported derivative actions brought on
behalf of G-1, G-2, G-3 and G-4 Partnerships against the Partnerships, PSGI,
PBP and a number of other defendants. The complaints allege breach of
fiduciary duty and corporate waste, breach of contract, and a claim for
aiding and abetting against affiliates of the General Partners. The suits
seek, among other things, unspecified damages, liquidation of assets or
appointment of a Receiver, costs and attorneys' fees. The General Partners
and PSGI believe that they have meritorious defenses to the complaints and
moved to dismiss complaints in the Abrahamson case prior to consolidation.
They intend to vigorously defend themselves in the consolidated action.
29
<PAGE>
<PAGE>
d. New York Multidistrict Litigation, MDL 1005
By order of the Judicial Panel on Multidistrict Litigation dated April 14,
1994, a number of purported class actions then pending in various federal
courts, were transferred to a single judge of the United States District
Court for the Southern District of New York and consolidated for pretrial
proceedings under the caption In re Prudential Securities Incorporated
Limited Partnerships Litigation (MDL Docket 1005). On June 8, 1994,
plaintiffs in the transferred cases filed a complaint that consolidated the
previously filed complaints and named as defendants, among others, GEL, PSI,
certain of their present and former employees and PBP. The Partnerships are
not named as defendants in the consolidated complaint, but the names of the
Partnerships are listed as being among the limited partnerships at issue in
the case.
On August 9, 1995 GEL, PBP, PSI and other Prudential defendants entered
into a Stipulation and Agreement of Partial Compromise and Settlement with
legal counsel representing plaintiffs in the actions consolidated for
pretrial proceedings pursuant to orders of the Judicial Panel on
Multidistrict Litigation under the caption In re Prudential Securities
Incorporated Limited Partnership Litigation (MDL Docket No. 1005). The United
Stated District Court for the Southern District of New York preliminarily
approved the settlement agreement by order dated August 29, 1995 and,
following a hearing held November 17, 1995, found that the agreement was
fair, reasonable, adequate and in the best interests of the plaintiff class.
The court gave final approval to the settlement, certified a class of
purchasers of specific limited partnerships, including G-1 and G-2
Partnerships, released all settled claims by members of the class against GEL
and the PSI settling defendants and permanently barred and enjoined class
members from instituting, commencing or prosecuting any settled claim against
the released parties. The full amount due under the settlement agreement has
been paid by PSI.
e. Other Actions Involving Prudential-Bache Energy Growth Fund Partnerships
(i) G-1 and G-2 Partnerships and GEL were parties to an action entitled
Plains Resources Inc. v. Northstar Gas Co., Inc., Northstar Resources, Inc.,
Prudential-Bache Energy Growth Fund, L.P. G-1, Prudential-Bache Energy Growth
Fund, L.P. G-2, Prudential-Bache Properties, Inc., Graham Energy, Ltd., Mesa
Pipeline Co., Natural Gas Clearinghouse, Inc., NGC Energy Resources Limited
Partnership, NGC Energy, Inc. and certain individuals filed in the 125th
Judicial District Court, Harris County, Texas on November 15, 1994. This suit
was dismissed without prejudice on February 14, 1996.
(ii) Richard Barnes, et al. v. Graham Energy, Ltd., Graham Resources,
Inc., Graham Securities, Inc., Graham Depository Company II, Prudential
Securities, Inc., Prudential-Bache Properties, Inc., Prudential-Bache Energy
Growth Fund, L.P. G-1, Prudential-Bache Energy Growth Fund, L.P. G-2,
Northstar Gas Company, Inc., Northstar Resources, Inc., and Kenneth M.
McKinney, No. 95-43321 in the District Court of Harris County, Texas, filed
on or about August 31, 1995. Plaintiffs, all claiming to be investors in G-1
Partnership and/or G-2 Partnership, commenced a class action lawsuit seeking
compensatory and punitive damages and attorney's fees for the defendants'
alleged wrongdoing in connection with breaches of the Definitive Stipulation
and Agreement of Compromise and Settlement dated June 30, 1992 (``Class 1
Plaintiffs''), and breaches of fiduciary duty, negligence, and mismanagement
with respect to the sale of Partnership properties by G-1 and G-2 to
Northstar Gas Company, Inc.(``Class 2 Plaintiffs'') A resolution of the
claims asserted by the Class 1 Plaintiffs has been reached and implemented.
An Order dismissing those claims will be presented to the Court for entry
forthwith. The parties are in discussions with respect to the settlement
and/or voluntary dismissal of claims asserted by the Class 2 Plaintiffs. No
discovery has yet been taken in the case. There is no assurance that the
claims asserted by the Class 2 Plaintiffs will be settled or dismissed, and
if no such resolution is accomplished, the defendants will defend the action
vigorously.
In addition to the litigation described above, there are a number of
actions pending in various state and federal courts and/or arbitrations
pending before various arbitration tribunals relating to the Partnerships
brought by individual investors or groups of investors. These actions
generally name PSI, Prudential-Bache Properties, Inc., Graham Resources,
Inc., Graham Royalty, Ltd., and/or related entities, along with certain
current and former employees of these entities. The defendants intend to
defend each of these cases vigorously.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
30
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<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrants
The Partnerships have no directors or officers. The business of the
Partnerships is managed by the directors, officers and employees of PBP, GEL and
their affiliates, as General Partners.
The General Partners' directors and executive officers and any persons
holding more than ten percent of the Partnerships' Units are required to report
their initial ownership of such Units and any subsequent changes in that
ownership to the Securities and Exchange Commission on Forms 3, 4 and 5. Such
executive officers, directors and persons who own greater than ten percent of
the Partnerships' Units are required by Securities and Exchange Commission
regulations to furnish the Partnership with copies of all Forms 3, 4 or 5 they
file. All of these filing requirements were satisfied on a timely basis. In
making these disclosures, the Partnership has relied solely on written
representations of the General Partners' directors and executive officers and
persons who own greater than ten percent of the Partnerships' Units, if any, or
copies of the reports they have filed with the Securities and Exchange
Commission during and with respect to its most recent fiscal year.
The following information as of March 1, 1996, is provided with respect to
each director and executive officer of PBP and GEL.
PRUDENTIAL-BACHE PROPERTIES, INC.
<TABLE>
<CAPTION>
Name Title
- ---------------------------- ----------------------------------------------------
<S> <C>
Thomas F. Lynch, III President, Chief Executive Officer, Chairman of the
Board of Directors and Director
Barbara J. Brooks Vice President - Finance and Chief Financial Officer
Frank W. Giordano Director
Nathalie P. Maio Director
</TABLE>
GRAHAM ENERGY, LTD.
<TABLE>
<CAPTION>
Name Title
- ---------------------------- ----------------------------------------------------
<S> <C>
Russell L. Allen President (Principal Executive Officer,
Principal Financial Officer)
Thomas F. Lynch, III Secretary and Director
Frank W. Giordano Director
Nathalie P. Maio Director
</TABLE>
THOMAS F. LYNCH, III, age 37, is the President, Chief Executive Officer,
Chairman of the Board of Directors and a Director of PBP. He is a Senior Vice
President of Prudential Securities Incorporated (``PSI''), an affiliate of PBP.
Mr. Lynch also serves in various capacities for other affiliated companies. Mr.
Lynch joined PSI in November 1989.
BARBARA J. BROOKS, age 47, is the Vice President-Finance and Chief Financial
Officer of PBP. She is a Senior Vice President of PSI. Ms. Brooks also serves in
various capacities for other affiliated companies. She has held several
positions within PSI since 1983. Ms. Brooks is a certified public accountant.
FRANK W. GIORDANO, age 53, is a Director of PBP. He is a Senior Vice
President of PSI and an Executive Vice President and General Counsel of
Prudential Mutual Fund Management Inc., an affiliate of PSI. Mr. Giordano also
serves in various capacities for other affiliated companies, including as
Director of GEL. He has been with PSI since July 1967.
NATHALIE P. MAIO, age 45, is a Director of PBP. She is a Senior Vice
President and Deputy General Counsel of PSI and supervises non-litigation legal
work for PSI, including all of the PSI Law Department's corporate and
marketing-review activity. She joined PSI's Law Department in 1983; presently,
she also serves in various capacities for other affiliated companies, including
as Director of GEL.
RUSSELL L. ALLEN, age 51, is the President of BraeLoch Holdings Inc. and its
affiliated companies. He has held these positions since May 20, 1994, according
to the terms of a consulting agreement with Prudential Securities Group Inc.
Previously, he provided management consulting services to BraeLoch
31
<PAGE>
<PAGE>
Holdings Inc. Prior to becoming a management consultant, Mr. Allen was a
financial executive in the oil and gas industry. He is a certified public
accountant.
Thomas F. Lynch, III replaced James M. Kelso as President, Chief Executive
Officer, Chairman of the Board of Directors and Director of PBP effective June
30, 1995. Thomas F. Lynch, III replaced James M. Kelso as Secretary and Director
of GEL effective August 8, 1995.
There are no family relationships among any of the foregoing directors or
executive officers. All of the foregoing executive officers and directors have
indefinite terms.
Item 11. Executive Compensation
The Partnership does not pay or accrue any fees, salaries or any other form
of compensation to directors and officers of the General Partners for their
services. Certain executive officers and directors of the General Partners
receive compensation from affiliates of the General Partners, not from the
Partnership, for services performed for various affiliated entities, which may
include services performed for the Partnership; however, the General Partners
believe that any compensation attributable to services performed for the
Partnership is immaterial. See Item 13 Certain Relationships and Related
Transactions for information regarding compensation to the General Partners.
Item 12. Security Ownership of Certain Beneficial Owners and Management
As of March 14, 1996, no director or executive officer of either of the
General Partners owns directly or beneficially any interest in the voting
securities of the General Partner.
As of March 14, 1996, no director or executive officer of either of the
General Partners owns directly or beneficially any of the Units issued by the
Partnership.
As of March 14, 1996, no limited partner beneficially owns more than five
percent (5%) of the outstanding Units issued by the Partnership.
Item 13. Certain Relationships and Related Transactions
The Partnerships reimbursed PBP and GEL during 1995 for indirect general and
administrative costs incurred on their behalf. See Note 4 to the financial
statements contained in Part II, Item 8 Financial Statements and Supplementary
Data for a discussion of these charges. It is expected that similar charges will
be made by PBP and GEL in 1996 for reimbursement of indirect general and
administrative costs. However, as the Partnerships are in process of
liquidation, the amounts expected to be incurred during 1996 have been estimated
and accrued as of December 31, 1995. The actual charges to be incurred by the
Partnerships may differ from those amounts accrued as of December 31, 1995.
32
<PAGE>
<PAGE>
PART IV
<TABLE>
<S> <C> <C> <C> <C>
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) 1. Financial Statements and Independent Auditors' Report for each
Partnership--
Report of Independent Public Accountants
Statements of Net Assets (in process of liquidation), December 31, 1995
and 1994
Consolidated Statements of Changes in Net Assets (in process of
liquidation) for the period October 1, 1994 to December 31, 1995
Consolidated Statements of Operations (going concern basis) for the nine
months ended September 30, 1994 and for the year ended December 31, 1993
Consolidated Statements of Changes in Partners' Capital (going concern
basis) for the nine months ended September 30, 1994 and for the year ended
December 31, 1993
Consolidated Statements of Cash Flows (going concern basis) for the nine
months ended September 30, 1994 and for the year ended December 31, 1993
Notes to Financial Statements
2. Financial Statement Schedules:
All other schedules have been omitted because they are not applicable the
required information is shown in the financial statements and notes
thereto.
3. Exhibits:
Exhibit 4(a): Amended and Restated Certificate of Limited Partnership of
Prudential-Bache Energy Growth Fund, L.P. G-1 (filed as
Exhibit 4 (b) to Quarterly Report on Form 10-Q for the
three months ended June 30, 1987 for G-1 Partnership, and
incorporated herein by reference).
Exhibit 4(b): Amended and Restated Agreement of Limited Partnership of
Prudential-Bache Energy Growth Fund, L.P. G-1 (filed as
Exhibit 4(a) to Annual Report on form 10-K for the year
ended December 31, 1986 for G-1 Partnership, and
incorporated herein by reference).
Exhibit 4(c): Certificate of Limited Partnership of Prudential-Bache
Energy Growth Fund, L.P. G-2(filed as Exhibit 4(a) to
Quarterly Report on Form 10-Q for the three months ended
June 30, 1987 for G-2 Partnership, and incorporated herein
by reference).
Exhibit 4(d): Amended and Restated Agreement of Limited Partnership of
Prudential-Bache Energy Growth Fund, L.P. G-2 (filed as
Exhibit 4(b) to Quarterly Report on Form 10-Q for the
three months ended June 30, 1987 for G-2 Partnership, and
incorporated herein by reference).
Exhibit 10(a): Assignment and Purchase of Interests in Notes, Liens,
Security Interests and Other Assets executed as of March
16, 1987, effective as of January 1, 1987, among First
City National Bank of Houston and First City Energy
Finance Company as Assignor, and Prudential-Bache Energy
Growth Fund, L.P. G-1 as Assignee, including exhibits
thereto (filed as Exhibit 10(a) to Annual Report on Form
10-K for the year ended December 31, 1986 for G-1
Partnership, and incorporated herein by reference).
</TABLE>
33
<PAGE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Exhibit 10(b): Credit Agreement dated August 25, 1987 between Maple Gulf
Coast Properties Corporation (``Maple'') as Borrower, and
Prudential-Bache Energy Growth Fund, L.P. G-2 as Lender,
including attachments thereto, providing for the sale by
BHP Petroleum Company, Inc. and the purchase by Maple of
certain oil and gas properties (filed as Exhibit 10(b) to
Quarterly Report on Form 10-Q for the three months ended
September 30, 1987 for G-2 Partnership, and incorporated
herein by reference).
Exhibit 10(c): Participation Agreement dated August 25, 1987 between
Prudential-Bache Energy Growth Fund, L.P. G-2 as Seller,
and Prudential-Bache Energy Growth Fund, L.P. G-1 as
Purchaser, providing for the respective Partnerships'
participation in the BHP Petroleum Company, Inc. sale
(filed as Exhibit 10(c) to Quarterly Report on Form 10-Q
for the three months ended September 30, 1987 for G-1
Partnership and G-2 Partnership, and incorporated herein
by reference).
Exhibit 10(d): Credit Agreement dated August 25, 1987 between Maple Gulf
Coast Properties Corporation (``Maple'') as Borrower, and
Prudential-Bache Energy Growth Fund, L.P. G-2 as Lender,
including attachments thereto, providing for the sale by
Collet Oil Ventures, Inc. (``Collet'') and the purchase by
Maple of all of the capital stock of Collet (filed as
Exhibit 10(d) to Quarterly Report on Form 10-Q for the
three months ended September 30, 1987 for G-2 Partnership,
and incorporated herein by reference).
Exhibit 10(e): Participation Agreement, dated August 25, 1987 between
Prudential-Bache Energy Growth Fund, L.P. G-2 as Seller
and Prudential-Bache Energy Growth Fund, L.P. G-1 as
Purchaser, providing for the respective Partnerships'
participation in the Collet Oil Ventures, Inc. stock
purchase (filed as Exhibit 10(e) to Quarterly Report on
Form 10-Q for the three months ended September 30, 1987
for G-1 Partnership and G-2 Partnership, and incorporated
herein by reference).
Exhibit 10(f): Stock Purchase Agreement dated August 1, 1987 for the sale
and purchase of Mesa Pipeline Company stock between the
Birch Corporation as Seller, Prudential-Bache Energy
Growth Fund, L.P. G-1 and Prudential-Bache Energy Growth
Fund, L.P. G-2 as Buyers, and the Maple Corporation as
Guarantor, including exhibits thereto (filed as Exhibit
10(f) to Quarterly Report on Form 10-Q for the three
months ended September 30, 1987 for G-1 Partnership and
G-2 Partnership, and incorporated herein by reference).
Exhibit 10(g): Stock Purchase Agreement dated November 10, 1987 for the
sale and purchase of Series A Gas Indexed Convertible
Preferred Stock of Maple Gulf Coast Properties Corporation
(``Maple'') between Maple as Seller, and Prudential-Bache
Energy Growth Fund, L.P. G-1 and Prudential-Bache Energy
Growth Fund, L.P. G-2 as Buyers, including exhibits
thereto (filed as Exhibit 10(g) to Annual Report on Form
10-K for the year ended December 31, 1987 for G-1
Partnership and G-2 Partnership, and incorporated herein
by reference).
</TABLE>
34
<PAGE>
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<TABLE>
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Exhibit 10(h): Credit Agreement dated November 10, 1987 between Maple
Gulf Coast Properties Corporation (``Maple'') as Borrower,
and Prudential-Bache Energy Growth Fund, L.P. G-2 as
Lender, including attachments thereto, providing for the
purchase by Maple of all of the capital stock of Utah
Reserves, Inc. (filed as Exhibit 10(h) to Annual Report on
Form 10-K for the year ended December 31, 1987 for G-2
Partnership, and incorporated herein by reference).
Exhibit 10(i): Participation Agreement dated November 10, 1987 between
Prudential-Bache Energy Growth Fund, L.P. G-2 as Seller
and Prudential-Bache Energy Growth Fund, L.P. G-1 as
Purchaser, providing for the respective Partnerships'
participation in the transaction between Maple Gulf Coast
Properties Corporation and Utah Reserves, Inc. (filed as
Exhibit 10(i) to Annual Report on Form 10-K for the year
ended December 31, 1987 for G-2 Partnership, and
incorporated herein by reference).
Exhibit 10(j): Credit Agreement dated January 26, 1988 between OXOCO,
Inc. and subsidiaries (``OXOCO'') collectively as
Borrowers, and Prudential-Bache Energy Growth Fund, L.P.
G-2 as Lender, including exhibits thereto, providing for
the refinancing of OXOCO's existing bank debt (filed as
Item 7, Exhibit A to report on Schedule 13D dated February
16, 1988 for G-2 Partnership (CUSIP No. 692066301), and
incorporated herein by reference).
Exhibit 10(k): Purchase Agreement dated March 28, 1988 between Energy
Service Company, Inc. and ENSCO Marine Company (``EN-
SCO'') collectively as Borrowers, and G-2 Partnership and
Prudential-Bache Energy Growth Fund, L.P. G-3,
collectively as Lenders, providing for the financing of
the purchase of oil field supply vessels (filed as Exhibit
10(k) to Quarterly Report on Form 10-Q for the three
months ended March 31, 1988, for G-2 Partnership and
incorporated herein by reference).
Exhibit 10(l): Credit Agreement dated as of June 30, 1988 among American
National Petroleum Company as Borrower, Coquina Oil
Corporation, Pecos Pipeline & Producing Company, Hawthorne
Oil & Gas Corporation and Prudential-Bache Energy Growth
Fund, L.P. G-2 as Lender, providing for the assumption of
OXOCO Inc.'s existing indebtedness and the loan of
additional funds to Borrower (filed as Exhibit 10(l) to
Quarterly Report on Form 10-Q for the three months ended
September 30, 1988, for G-2 Partnership, and incorporated
herein by reference).
Exhibit 10(m): Master Lease Agreement dated September 28, 1988 by and
among Prudential-Bache Energy Growth Fund, L.P. G-2,
Prudential-Bache Energy Growth Fund, L.P. G-3 and Pruden-
tial-Bache Energy Growth Fund, L.P. G-4, collectively, as
Lessors and Hall-Houston Offshore and an affiliate
thereof, collectively as Lessees, for the lease of certain
oil and gas production facilities (filed as Exhibit 10(m)
to Quarterly Report on Form 10-Q for the three months
ended September 30, 1988, for G-2 Partnership and
incorporated herein by reference).
</TABLE>
35
<PAGE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Exhibit 10(n): Amended and Restated Purchase Agreement dated October 19,
1988 between Offshore Pipelines, Inc. as Borrower, and
Prudential-Bache Energy Growth Fund, L.P. G-2,
Prudential-Bache Energy Growth Fund, L.P. G-3 and
Prudential-Bache Energy Growth Fund, L.P. G-4,
collectively as Lenders, providing for the consolidation
of previously extended financing for the purchase of
offshore construction/pipelaying barges, the purchase of
tugboats and for working capital (filed as Exhibit 10(n)
to Quarterly Report on Form 10-Q for the three months
ended September 30, 1988, for G-2 Partnership and
incorporated herein by reference).
Exhibit 10(o): Purchase Agreement dated October 28, 1988 by and among
Lamamco Drilling Company, as Borrower and Prudential-Bache
Energy Growth Fund, L.P. G-2, Prudential-Bache Energy
Growth Fund, L.P. G-3 and Prudential-Bache Energy Growth
Fund, L.P. G-4, collectively as Purchasers, providing for
the financing of the purchase of interests in certain oil
and gas properties (filed as Exhibit 10(o) to Quarterly
Report on Form 10-Q for the three months ended September
30, 1988 for G-2 Partnership and incorporated herein by
reference).
Exhibit 10(p): Purchase Agreement dated January 18, 1989 between Hal-
l-Houston Offshore as Borrower, and Prudential-Bache
Energy Growth Fund, L.P. G-2 Prudential-Bache Energy
Growth Fund, L.P. G-3 and Prudential-Bache Energy Growth
Fund, L.P. G-4, collectively as Purchasers, providing for
the financing of developmental drilling activities, debt
refinancing and for working capital (filed as Exhibit
10(p) to Annual Report on Form 10-K for the year ended
December 31, 1988 for G-2 Partnership and incorporated
herein by reference).
Exhibit 10(q): First Amendment to Purchase Agreement dated as of February
15, 1989 by and among Lamamco Drilling Company, as Borrow-
er and Prudential-Bache Energy Growth Fund, L.P. G-2,
Prudential-Bache Energy Growth Fund, L.P. G-3 and
Prudential-Bache Energy Growth Fund, L.P. G-4,
collectively as Purchasers, providing for the financing of
the purchase of interests in certain oil and properties
(filed as Exhibit 10(q) to Annual Report on Form 10-K for
the year ended December 31, 1988 for G-2 Partnership and
incorporated herein by reference).
Exhibit 10(r): Form of Agreement dated March 1, 1989 by and among Pruden-
tial-Bache Energy Growth Fund, L.P. G-1, Prudential-Bache
Energy Growth Fund, L.P. G-2, and Mesa Pipeline Company of
Louisiana, collectively as Purchasers, and The Maple
Corporation, Maple Gulf Coast Properties Corporation,
Collet Oil Ventures, Inc., Utah Reserves, Inc., Arapahoe
Operating Company, The Birch Corporation and Arapahoe
Financial Service Company (filed as Exhibit 10(r) to
Annual Report on Form 10-K for the year ended December 31,
1988 for G-2 Partnership and incorporated herein by
reference).
</TABLE>
36
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Exhibit 10(s): Master Lease Agreement dated October 26, 1989, by and
among Kentucky Offshore, Inc., Wind Ridge Energy Corp.,
Cliffs Oil and Gas Company, Badger Oil and Gas Co., Inc.,
Shank Land Company, Ltd., Flash Gas and Oil Southwest,
Inc., Solomon Corporation, Cord Energy Resources, Inc.,
The Reidy Limited Partnership, Chateau Oil and Gas, Inc.,
Jay S. Stevens, III and Vickie M. Stevens and Roberts &
Bunch Offshore, Inc., collectively as lessees and
Prudential-Bache Energy Growth Fund, L.P. G-2,
Prudential-Bache Energy Growth Fund, L.P. G-3 and
Prudential-Bache Energy Growth Fund, L.P. G-4 collectively
as lessors, providing for the lease of certain oil and gas
production facilities (filed as Exhibit 10(s) to Quarterly
Report on Form 10-Q for the three months ended September
30, 1989 for G-2 Partnership and incorporated herein by
reference).
Exhibit 10(t): First Amendment to Amended and Restated Purchase Agree-
ment dated as of May 17, 1989, by and among Offshore Pipe-
lines, Inc., as Borrower and Prudential-Bache Energy
Growth Fund, L.P. G-2, Prudential-Bache Energy Growth
Fund, L.P. G-3 and Prudential-Bache Energy Growth Fund,
L.P. G-4, collectively referred as Lenders, providing for
the termination of the previously extended Revolving
Credit Facility and the issuance of additional Senior
Secured Notes (filed as Exhibit 10(t) to Annual Report on
Form 10-K for the year ended December 31, 1989 for G-2
Partnership and incorporated herein by reference).
Exhibit 10(u): Second Amendment to Amended and Restated Purchase Agree-
ment dated as of November 21, 1989, by and among Offshore
Pipelines, Inc., as Borrower and Prudential-Bache Energy
Growth Fund, L.P. G-2, Prudential-Bache Energy Growth
Fund, L.P. G-3 and Prudential-Bache Energy Growth Fund,
L.P. G-4, collectively referred as Lenders, providing for
the issuance of Senior Secured Notes as an enhancement of
previous investments (filed as Exhibit 10(u) to Annual
Report on Form 10-K for the year ended December 31, 1989
for G-2 Partnership and incorporated herein by reference).
Exhibit 10(v): Purchase Agreement dated as of December 15, 1989, between
Walter International, Inc., as Issuer and Prudential-Bache
Energy Growth Fund, L.P. G-2, Prudential-Bache Energy
Growth Fund, L.P. G-3 and Prudential-Bache Energy Growth
Fund, L.P. G-4, collectively as Purchasers, providing for
the issuance of 14% Senior Cumulative Preferred Stock with
Common Stock Purchase warrants (filed as Exhibit 10(t) to
Annual Report on Form 10-K for the year ended December 31,
1989 for G-2 Partnership and incorporated herein by
reference).
Exhibit 10(x): Second Amended and Restated Purchase Agreement dated as of
August 17, 1990, by and among OPI International, Inc., as
Borrower and Prudential-Bache Energy Growth Fund, L.P.
G-2, Prudential-Bache Energy Growth Fund, L.P. G-3 and
Prudential-Bache Energy Growth Fund, L.P. G-4,
collectively as Lenders, providing for the restructing of
the previous Offshore Pipelines, Inc. indebtedness (filed
as Exhibit 10(u) to Quarterly Report on Form 10-Q for the
quarter ended September 30, 1994 for G-2 Partnership and
incorporated herein by reference).
Exhibit 27: Financial Data Schedule (filed herewith)
(b) Reports on Form 8-K--None
</TABLE>
37
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrants have duly caused this report to be signed
on their behalf by the undersigned, thereunto duly authorized.
Prudential-Bache Energy Growth Fund, L.P. G-1
Prudential-Bache Energy Growth Fund, L.P. G-2
<TABLE>
<S> <C>
By: Prudential-Bache Properties, Inc. By: Graham Energy, Ltd.,
General Partner General Partner
By: /s/ Barbara J. Brooks
By: /s/ Russell L. Allen
----------------------------------------- ------------------------------
Barbara J. Brooks, Vice President - (Principal Executive Officer)
Finance and Chief Financial Officer Russell L. Allen, President
Date: March 29, 1996 Date: March 29, 1996
</TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrants and in the capacities and on the dates indicated.
By: Prudential-Bache Properties, Inc.
General Partner
By: /s/ Thomas F. Lynch, III March 29, 1996
----------------------------------------
Thomas F. Lynch, III
President, Chief Executive Officer,
Chairman of the Board of Directors
and Director
By: /s/ Barbara J. Brooks March 29, 1996
----------------------------------------
Barbara J. Brooks
Vice President-Finance and Chief
Financial Officer
By: /s/ Frank W. Giordano March 29, 1996
----------------------------------------
Frank W. Giordano
Director
By: /s/ Nathalie P. Maio March 29, 1996
----------------------------------------
Nathalie P. Maio
Director
By: Graham Energy, Ltd.,
General Partner
By: /s/ Russell L. Allen March 29, 1996
----------------------------------------
Russell L. Allen
President (Principal Executive Officer,
Principal Financial Officer)
38
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial
information extracted from the financial
statements for P-B ENERGY GROWTH FUND, L.P. G-1
and is qualified in its entirety by reference
to such financial statements
</LEGEND>
<RESTATED>
<CIK> 0000801580
<NAME> P-B ENERGY GROWTH FUND, L.P. G-1
<MULTIPLIER> 1,000
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-1-1995
<PERIOD-END> Dec-31-1995
<PERIOD-TYPE> 12-Mos
<CASH> 4,760
<SECURITIES> 0
<RECEIVABLES> 15
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,775
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,775
<CURRENT-LIABILITIES> 278
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,497
<TOTAL-LIABILITY-AND-EQUITY> 4,775
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial
information extracted from the financial
statements for P-B ENERGY GROWTH FUND, L.P. G-2
and is qualified in its entirety by reference
to such financial statements
</LEGEND>
<RESTATED>
<CIK> 0000801582
<NAME> P-B ENERGY GROWTH FUND, L.P. G-2
<MULTIPLIER> 1,000
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-1-1995
<PERIOD-END> Dec-31-1995
<PERIOD-TYPE> 12-Mos
<CASH> 4,492
<SECURITIES> 0
<RECEIVABLES> 9
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,501
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,501
<CURRENT-LIABILITIES> 390
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,111
<TOTAL-LIABILITY-AND-EQUITY> 4,501
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
