<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/x/ Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1995, or
/ / Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from _________ to _________
Commission File No. 33-11193-2
PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
(Exact name of Registrant as specified in its charter)
Texas 75-2205943
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
303 West Wall, Suite 101
Midland, Texas 79701
(Address of principal executive offices) (Zip code)
Registrant's Telephone Number, including area code: (915)683-4768
Not applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes /x/ No / /
Page 1 of 10 pages.
There are no exhibits.
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PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
(A Texas Limited Partnership)
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
BALANCE SHEETS
March 31, December 31,
1995 1994
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, all interest
bearing deposits $ 79,452 $ 36,910
Accounts receivable - affiliate 88,338 82,820
---------- ----------
Total current assets 167,790 119,730
Oil and gas properties - at cost, based
on the successful efforts accounting
method 4,892,259 4,902,973
Accumulated depletion (2,900,594) (2,864,181)
---------- ----------
Net oil and gas properties 1,991,665 2,038,792
---------- ----------
$ 2,159,455 $ 2,158,522
========== ==========
PARTNERS' CAPITAL
Partners' capital:
Limited partners (12,191 interests) $ 2,138,175 $ 2,136,837
Managing general partner 21,280 21,685
---------- ----------
$ 2,159,455 $ 2,158,522
========== ==========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these statements.
2
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PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
March 31,
1995 1994
---------- ----------
Revenues:
Oil and gas sales $ 237,284 $ 194,010
Interest income 875 864
Salvage income from equipment disposals 569 789
---------- ----------
Total revenues 238,728 195,663
Costs and expenses:
Production costs 124,818 147,898
General and administrative expenses 7,118 5,820
Depletion 41,836 48,474
Abandoned property costs 3,044 -
Loss on abandoned properties 5,145 -
---------- ----------
Total costs and expenses 181,961 202,192
---------- ----------
Net income (loss) $ 56,767 $ (6,529)
========== =========
Allocation of net income (loss):
Managing general partner $ 568 $ (65)
========== =========
Limited partners $ 56,199 $ (6,464)
========== =========
Net income (loss) per limited
partnership interest $ 4.61 $ (.53)
========== =========
Distributions per limited partnership
interest $ 4.50 $ 5.37
========== =========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these statements.
3
<PAGE> 4
PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
----------- ----------- -----------
Balance at January 1, 1994 $ 25,476 $ 2,568,649 $ 2,594,125
Distributions (259) (65,416) (65,675)
Net loss (65) (6,464) (6,529)
---------- ---------- ----------
Balance at March 31, 1994 $ 25,152 $ 2,496,769 $ 2,521,921
========== ========== ==========
Balance at January 1, 1995 $ 21,685 $ 2,136,837 $ 2,158,522
Distributions (973) (54,861) (55,834)
Net income 568 56,199 56,767
---------- ---------- ----------
Balance at March 31, 1995 $ 21,280 $ 2,138,175 $ 2,159,455
========== ========== ==========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these statements.
4
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PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended
March 31,
1995 1994
---------- ----------
Cash flows from operating activities:
Net income (loss) $ 56,767 $ (6,529)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Salvage income from equipment disposals (569) -
Loss on abandoned properties 5,145 -
Depletion 41,836 48,474
Changes in assets:
(Increase) decrease in accounts
receivable 19,230 (16,865)
--------- ---------
Net cash provided by operating
activities 122,409 25,080
Cash flows from investing activities:
(Additions) deletions to oil and gas
properties (24,033) 162
Cash flows from financing activities:
Cash distributions to partners (55,834) (65,675)
--------- ---------
Net increase (decrease) in cash and
cash equivalents 42,542 (40,433)
Cash and cash equivalents at beginning
of period 36,910 176,807
--------- ---------
Cash and cash equivalents at end of period $ 79,452 $ 136,374
========= =========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these statements.
5
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PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1995
(Unaudited)
NOTE 1.
In the opinion of management, the unaudited financial statements as of
March 31, 1995 of Parker & Parsley Producing Properties 87-B, Ltd. (the
"Registrant") include all adjustments and accruals consisting only of
normal recurring accrual adjustments which are necessary for a fair
presentation of the results for the interim period. However, the
results of operations for the three months ended March 31, 1995 are not
necessarily indicative of the results for the full year ending December
31, 1995.
The financial statements should be read in conjunction with the
financial statements and the notes thereto contained in the Registrant's
Report on Form 10-K for the year ended December 31, 1994, as filed with
the Securities and Exchange Commission, a copy of which is available
upon request by writing to Steven L. Beal, Senior Vice President, 303
West Wall, Suite 101, Midland, Texas 79701.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Registrant was formed December 28, 1987. The managing general
partner of the Registrant at December 31, 1994 was Parker & Parsley
Development Company ("PPDC"), which was merged into Parker & Parsley
Development, L.P. ("PPDLP") on January 1, 1995. On January 1, 1995,
PPDLP, a Texas limited partnership, became the sole managing general
partner of the Registrant, by acquiring the rights and assuming the
obligations of PPDC. PPDLP acquired PPDC's rights and obligations as
managing general partner of the Registrant in connection with the
merger of PPDC, P&P Producing, Inc. and Spraberry Development
Corporation into MidPar L.P., which survived the merger with a change of
name to PPDLP. PPDLP has the power and authority to manage, control and
administer all Program and Registrant affairs. The limited partners
contributed $6,095,500 representing 12,191 interests ($500 per interest)
sold to a total of 573 limited partners.
6
<PAGE> 7
Since its formation, the Registrant has invested $5,253,094 in various
producing oil and gas prospects purchased in Texas. At March 31, 1995,
the Registrant had completed seven purchases of producing properties.
These acquisitions involved the purchase of working interests in 54
properties. Sixteen uneconomical wells have been abandoned; one well in
1989, two wells in 1991, two wells in 1992, six wells in 1993, three
wells in 1994 and two wells in 1995. The Registrant also participated
in the drilling of two oil and gas wells during 1988 which were
completed as producers. Additionally, the Registrant purchased 15
overriding royalty interests effective January 1, 1990. Since January
1, 1991, two development wells have been drilled which resulted in two
additional overriding royalty interests to the Registrant. All the
properties are operated by the managing general partner.
Results of Operations
Revenues:
The Registrant's oil and gas revenues increased to $237,284 from
$194,010 for the three months ended March 31, 1995 and 1994,
respectively, an increase of 22%. The increase resulted from a 5%
increase in barrels of oil produced and sold and an increase in the
average price received per barrel of oil, offset by a 6% decline in mcf
of gas produced and sold and a decrease in the average price received
per mcf of gas. For the three months ended March 31, 1995, 11,188
barrels of oil were sold compared to 10,676 for the same period in 1994,
an increase of 512 barrels. For the three months ended March 31, 1995,
25,727 mcf were sold compared to 27,387 for the same period in 1994, a
decrease of 1,660 mcf. These decreases were primarily due to the
decline characteristics of the Registrant's oil and gas properties.
Because of these characteristics, management expects a certain amount of
decline in production in the future until the Registrant's economically
recoverable reserves are fully depleted.
The average price received per barrel of oil increased $3.74 from $13.40
for the three months ended March 31, 1994 to $17.14 for the same period
in 1995. The average price received per mcf of gas decreased from $1.86
during the three months ended March 31, 1994 to $1.77 in 1995. The
market price for oil and gas has been extremely volatile in the past
decade, and management expects a certain amount of volatility to
continue in the foreseeable future. The Registrant may therefore sell
its future oil and gas production at average prices lower or higher than
that received during the three months ended March 31, 1995.
7
<PAGE> 8
Costs and Expenses:
Total costs and expenses decreased to $181,961 for the three months
ended March 31, 1995 as compared to $202,192 for the same period in
1994, a decrease of $20,231, or 10%. This decrease was the result of
declines in production costs and depletion, offset by increases in
general and administrative expenses ("G&A"), plug and abandonment
expense and the loss on abandoned properties.
Production costs were $124,818 for the three months ended March 31, 1995
and $147,898 for the same period in 1994 resulting in a $23,080
decrease, or 16%. The decrease was primarily attributable to a 15%
reduction in well repair and maintenance costs and a decline in ad
valorem taxes.
G&A's components are independent accounting and engineering fees,
computer services, postage and managing general partner personnel costs.
During this period, G&A increased, in aggregate, 22% from $5,820 for the
three months ended March 31, 1994 to $7,118 for the same period in 1995.
Salvage income received from equipment disposals of $569 and $789 during
the three months ended March 31, 1995 and 1994, respectively, was
derived from equipment credits received on wells that were plugged and
abandoned in prior years. A loss on abandoned property of $5,145 was
recognized during the three months ended March 31, 1995. This loss was
the result of $789 in proceeds received from equipment salvage on two
abandoned wells, less the loss to write-off remaining capitalized costs
of $5,934. There were no abandonments for the same period in 1994.
Expenses of $3,044 were incurred to plug and abandon two uneconomical
properties during the three months ended March 31, 1995, compared to an
absence of abandonment activity for the same period in 1994.
Depletion was $41,836 for the three months ended March 31, 1995 compared
to $48,474 for the same period in 1994. This represented a decrease in
depletion of $6,638, or 14%. Depletion was computed property-by-property
utilizing the unit-of-production method based upon the dominant
mineral produced, generally oil. Oil production decreased 512 barrels
for the three months ended March 31, 1995 from the same period in 1994,
while oil reserves of barrels were revised downward by 12,824 barrels,
or 2%.
8
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Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased to $122,409 during
the three months ended March 31, 1995, a $97,239 increase from the same
period ended March 31, 1994. This increase was primarily the result of
an increase in oil and gas revenues and declines in production costs and
G&A, offset by an increase in abandoned property costs. The increase in
revenues was due to an increase in barrels of oil produced and sold, in
addition to higher average prices received per barrel of oil. The
decrease in production costs resulted from less well repair and
maintenance costs. G&A increased due to additional allocated expenses
by the managing general partner.
Net Cash Used in Investing Activities
The Registrant's principal investing activities during the three months
ended March 31, 1995 were for repair and maintenance activity on various
oil and gas properties.
Net Cash Used in Financing Activities
Cash was sufficient for the three months ended March 31, 1995 to cover
distributions to the partners of $55,834 of which $54,861 was
distributed to the limited partners and $973 to the managing general
partner. For the same period ended March 31, 1994, cash was sufficient
for distributions to the partners of $65,675 of which $65,416 was
distributed to the limited partners and $259 to the managing general
partner.
It is expected that future net cash provided by operating activities
will be sufficient for any capital expenditures and any distributions.
As the production from the properties declines, distributions are also
expected to decrease.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - none
(b) Reports on Form 8-K - none
9
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PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
(A Texas Limited Partnership)
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
By: Parker & Parsley Development L.P.,
Managing General Partner
By: Parker & Parsley Petroleum USA, Inc.
("PPUSA"), General Partner
Dated: May 12, 1995 By: /s/ Steven L. Beal
--------------------------------------
Steven L. Beal, Senior Vice
President - Finance and
Chief Financial Officer
of PPUSA
10
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<ARTICLE> 5
<CIK> 0000809017
<NAME> P87B
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 79,452
<SECURITIES> 0
<RECEIVABLES> 88,338
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 167,790
<PP&E> 4,892,259
<DEPRECIATION> 2,900,594
<TOTAL-ASSETS> 2,159,455
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2,159,455
<TOTAL-LIABILITY-AND-EQUITY> 2,159,455
<SALES> 237,284
<TOTAL-REVENUES> 238,728
<CGS> 0
<TOTAL-COSTS> 181,961
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 56,767
<INCOME-TAX> 0
<INCOME-CONTINUING> 56,767
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 56,767
<EPS-PRIMARY> 4.61
<EPS-DILUTED> 0
</TABLE>
