UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
/ x / Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 1997
or
/ / Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from _______ to _______
Commission File No. 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, L.P.
TABLE OF CONTENTS
Page
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of March 31, 1997 and
December 31, 1996...................................... 3
Statements of Operations for the three months
ended March 31, 1997 and 1996.......................... 4
Statement of Partners' Capital for the three months
ended March 31, 1997................................... 5
Statements of Cash Flows for the three months
ended March 31, 1997 and 1996.......................... 6
Notes to Financial Statements............................ 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................... 7
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K......................... 9
27. Financial Data Schedule
Signatures............................................... 10
2
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PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
(A Texas Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
March 31, December 31,
1997 1996
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including
interest bearing deposits of $111,708
at March 31 and $63,551 at December 31 $ 111,991 $ 63,834
Accounts receivable - affiliate 97,587 159,893
---------- ----------
Total current assets 209,578 223,727
---------- ----------
Oil and gas properties - at cost, based on
the successful efforts accounting method 4,883,318 4,896,213
Accumulated depletion (3,328,311) (3,296,326)
---------- ----------
Net oil and gas properties 1,555,007 1,599,887
---------- ----------
$ 1,764,585 $ 1,823,614
========== ==========
PARTNERS' CAPITAL
Partners' capital:
Managing general partner $ 17,264 $ 17,711
Limited partners (12,191 interests) 1,747,321 1,805,903
---------- ----------
$ 1,764,585 $ 1,823,614
========== ==========
The financial information included as of March 31, 1997 has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
3
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PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
March 31,
-------------------------
1997 1996
---------- ----------
Revenues:
Oil and gas $ 251,706 $ 219,100
Interest 1,247 1,410
Salvage income from equipment disposals - 948
--------- ---------
252,953 221,458
--------- ---------
Costs and expenses:
Oil and gas production 111,612 148,694
General and administrative 7,500 6,552
Depletion 31,985 30,629
Abandoned property costs 7,101 -
--------- ---------
158,198 185,875
--------- ---------
Net income $ 94,755 $ 35,583
========= =========
Allocation of net income:
Managing general partner $ 947 $ 356
========= =========
Limited partners $ 93,808 $ 35,227
========= =========
Net income per limited partnership interest $ 7.69 $ 2.89
========= =========
Distributions per limited partnership interest $ 12.50 $ 8.50
========= =========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
4
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PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
(A Texas Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
--------- ---------- -----------
Balance at January 1, 1997 $ 17,711 $1,805,903 $ 1,823,614
Distributions (1,394) (152,390) (153,784)
Net income 947 93,808 94,755
-------- --------- ----------
Balance at March 31, 1997 $ 17,264 $1,747,321 $ 1,764,585
======== ========= ==========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
5
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PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended
March 31,
------------------------
1997 1996
---------- ----------
Cash flows from operating activities:
Net income $ 94,755 $ 35,583
Adjustments to reconcile net income to net cash
provided by operating activities:
Depletion 31,985 30,629
Salvage income from equipment disposals - (948)
Changes in assets:
(Increase) decrease in accounts receivable 62,386 (40,087)
--------- ---------
Net cash provided by operating activities 189,126 25,177
--------- ---------
Cash flows from investing activities:
(Additions to) deletions of oil and gas properties 12,815 (10,781)
Proceeds from salvage income on equipment disposals - 1,102
--------- ---------
Net cash provided by (used in) investing
activities 12,815 (9,679)
--------- ---------
Cash flows from financing activities:
Cash distributions to partners (153,784) (104,399)
--------- ---------
Net increase (decrease) in cash and cash equivalents 48,157 (88,901)
Cash and cash equivalents at beginning of period 63,834 135,981
--------- ---------
Cash and cash equivalents at end of period $ 111,991 $ 47,080
========= =========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
(Unaudited)
Note 1. Organization and nature of operations
Parker & Parsley Producing Properties 87-B, Ltd. (the "Partnership") is a
limited partnership organized in 1987 under the laws of the State of Texas.
The Partnership engages primarily in oil and gas production in Texas and is not
involved in any industry segment other than oil and gas.
Note 2. Basis of presentation
In the opinion of management, the unaudited financial statements as of March 31,
1997 of the Partnership include all adjustments and accruals consisting only of
normal recurring accrual adjustments which are necessary for a fair presentation
of the results for the interim period. However, these interim results are not
necessarily indicative of results for a full year.
The financial statements should be read in conjunction with the financial
statements and the notes thereto contained in the Partnership's Report on Form
10-K for the year ended December 31, 1996, as filed with the Securities and
Exchange Commission, a copy of which is available upon request by writing to
Steven L. Beal, Senior Vice President, 303 West Wall, Suite 101, Midland, Texas
79701.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (1)
Results of Operations
Revenues:
The Partnership's oil and gas revenues increased to $251,706 from $219,100 for
the three months ended March 31, 1997 and 1996, respectively, an increase of
15%. The increase resulted from an 8% increase in mcf of gas produced and sold
and higher average prices received per barrel of oil and mcf of gas, offset by a
14% decline in barrels of oil produced and sold. For the three months ended
March 31, 1997, 7,497 barrels of oil were sold compared to 8,682 for the same
period in 1996, a decrease of 1,185 barrels. For the three months ended March
31, 1997, 28,299 mcf of gas were sold compared to 26,086 for the same period in
1996, an increase of 2,213 mcf. The decrease in barrels of oil produced and sold
was primarily due to the decline characteristics of the Partnership's oil and
gas properties. The increase in mcf of gas produced and sold was the result of
7
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operational changes on several wells. Management expects a certain amount of
decline in production in the future until the Partnership's economically
recoverable reserves are fully depleted.
The average price received per barrel of oil increased $2.33, or 12%, from
$19.04 for the three months ended March 31, 1996 to $21.37 for the same period
in 1997. The average price received per mcf of gas increased 57% from $2.06
during the three months ended March 31, 1996 to $3.23 for the same period in
1997. The market price for oil and gas has been extremely volatile in the past
decade, and management expects a certain amount of volatility to continue in the
foreseeable future. The Partnership may therefore sell its future oil and gas
production at average prices lower or higher than that received during the three
months ended March 31, 1997.
Salvage income received from equipment disposals of $948 during the three months
ended March 31, 1996, was derived from equipment credits received on wells that
were plugged and abandoned in prior years.
Costs and Expenses:
Total costs and expenses decreased to $158,198 for the three months ended March
31, 1997 as compared to $185,875 for the same period in 1996, a decrease of
$27,677, or 15%. This decrease was the result of a decline in production costs,
offset by increases in general and administrative expenses ("G&A"), depletion
and abandoned property costs.
Production costs were $111,612 for the three months ended March 31, 1997 and
$148,694 for the same period in 1996 resulting in a $37,082 decrease, or 25%.
The decrease was primarily attributable to declines in workover expense and well
repair and maintenance costs.
G&A's components are independent accounting and engineering fees and managing
general partner personnel and operating costs. During this period, G&A
increased, in aggregate, 14% from $6,552 for the three months ended March 31,
1996 to $7,500 for the same period in 1997.
Depletion was $31,985 for the three months ended March 31, 1997 compared to
$30,629 for the same period in 1996. This represented an increase in depletion
of $1,356, or 4%. The increase was primarily due to a downward revision of oil
and gas reserves, offset by a decline in oil production of 1,185 barrels for the
three months ended March 31, 1997 from the same period in 1996.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $163,949 during the three
months ended March 31, 1997 from the same period in 1996. This increase was the
result of an increase in oil and gas sales receipts and a decline in
expenditures for production costs.
8
<PAGE>
Net Cash Provided by (Used in) Investing Activities
The Partnership's principal investing activities during the three months ended
March 31, 1997 and 1996 were related to the addition or disposal of oil and gas
equipment on active properties.
Proceeds from salvage income of $1,102 were received during the three months
ended March 31, 1996 from the disposal of oil and gas equipment on properties
abandoned in prior years.
Net Cash Used in Financing Activities
Cash was sufficient for the three months ended March 31, 1997 to cover
distributions to the partners of $153,784 of which $152,390 was distributed to
the limited partners and $1,394 to the managing general partner. For the same
period ended March 31, 1996, cash was sufficient for distributions to the
partners of $104,399 of which $103,623 was distributed to the limited partners
and $776 to the managing general partner.
It is expected that future net cash provided by operating activities will be
sufficient for any capital expenditures and any distributions. As the production
from the properties declines, distributions are also expected to decrease.
- ---------------
(1) "Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations" contains forward looking statements that
involve risks and uncertainties. Accordingly, no assurances can be
given that the actual events and results will not be materially
different than the anticipated results described in the forward
looking statements.
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K - none
9
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PARKER & PARSLEY 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 13, 1997 By: /s/ Steven L. Beal
--------------------
Steven L. Beal, Senior Vice President
and Chief Financial Officer of PPUSA
10
<PAGE>
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 111,991
<SECURITIES> 0
<RECEIVABLES> 97,587
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 209,578
<PP&E> 4,883,318
<DEPRECIATION> 3,328,311
<TOTAL-ASSETS> 1,764,585
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<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,764,585
<TOTAL-LIABILITY-AND-EQUITY> 1,764,585
<SALES> 251,706
<TOTAL-REVENUES> 252,953
<CGS> 0
<TOTAL-COSTS> 158,198
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 94,755
<INCOME-TAX> 0
<INCOME-CONTINUING> 94,755
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 94,755
<EPS-PRIMARY> 7.69
<EPS-DILUTED> 0
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