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 June 30, 1997
or
/ / Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from _______ to _______
Commission File No. 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 11 pages.
Exhibit index on page 10.
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
TABLE OF CONTENTS
Page
----
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of June 30, 1997 and
December 31, 1996 .................................... 3
Statements of Operations for the three and six
months ended June 30, 1997 and 1996...................... 4
Statement of Partners' Capital for the six months
ended June 30, 1997...................................... 5
Statements of Cash Flows for the six months ended
June 30, 1997 and 1996................................... 6
Notes to Financial Statements.............................. 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...................... 7
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K........................... 10
27. Financial Data Schedule
Signatures................................................. 11
2
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
(A Texas Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
June 30, December 31,
1997 1996
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $84,445 at June 30
and $63,551 at December 31 $ 84,669 $ 63,834
Accounts receivable - affiliate 98,718 159,893
---------- ----------
Total current assets 183,387 223,727
---------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 4,826,070 4,896,213
Accumulated depletion (3,338,364) (3,296,326)
---------- ----------
Net oil and gas properties 1,487,706 1,599,887
---------- ----------
$ 1,671,093 $ 1,823,614
========== ==========
PARTNERS' CAPITAL
Partners' capital:
Managing general partner $ 16,292 $ 17,711
Limited partners (12,191 interests) 1,654,801 1,805,903
---------- ----------
$ 1,671,093 $ 1,823,614
========== ==========
The financial information included as of June 30, 1997 has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these
financial statements.
3
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
1997 1996 1997 1996
--------- --------- --------- ---------
Revenues:
Oil and gas $ 199,079 $ 229,700 $ 450,785 $ 448,800
Interest 1,798 380 3,045 1,790
Salvage income from equipment
disposal - 39 - 987
-------- -------- -------- --------
200,877 230,119 453,830 451,577
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 102,834 108,515 214,446 257,209
General and administrative 6,023 6,912 13,523 13,464
Depletion 35,597 26,139 67,582 56,768
Abandoned property 23,129 1,376 30,230 1,376
Loss on abandoned property 529 2,579 529 2,579
-------- -------- -------- --------
168,112 145,521 326,310 331,396
-------- -------- -------- --------
Net income $ 32,765 $ 84,598 $ 127,520 $ 120,181
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 328 $ 846 $ 1,275 $ 1,202
======== ======== ======== ========
Limited partners $ 32,437 $ 83,752 $ 126,245 $ 118,979
======== ======== ======== ========
Net income per limited
partnership interest $ 2.67 $ 6.87 $ 10.36 $ 9.76
======== ======== ======== ========
Distributions per limited
partnership interest $ 10.25 $ 7.24 $ 22.75 $ 15.74
======== ======== ======== ========
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
<PAGE>
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 (2,694) (277,347) (280,041)
Net income 1,275 126,245 127,520
-------- --------- ---------
Balance at June 30, 1997 $ 16,292 $1,654,801 $1,671,093
======== ========= =========
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
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended
June 30,
------------------------
1997 1996
---------- ----------
Cash flows from operating activities:
Net income $ 127,520 $ 120,181
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 67,582 56,768
Salvage income from equipment disposal - (987)
Loss on abandoned property 529 2,579
Changes in assets:
(Increase) decrease in accounts receivable 61,175 (38,769)
--------- ---------
Net cash provided by operating activities 256,806 139,772
--------- ---------
Cash flows from investing activities:
(Additions to) deletions of oil and gas equipment 14,693 (12,785)
Proceeds from salvage income on equipment disposal - 2,092
Proceeds from equipment salvage on abandoned
property 29,377 -
--------- ---------
Net cash provided by (used in) investing
activities 44,070 (10,693)
--------- ---------
Cash flows from financing activities:
Cash distributions to partners (280,041) (193,796)
--------- ---------
Net increase (decrease) in cash and cash equivalents 20,835 (64,717)
Cash and cash equivalents at beginning of period 63,834 135,981
--------- ---------
Cash and cash equivalents at end of period $ 84,669 $ 71,264
========= =========
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
June 30, 1997
(Unaudited)
Note 1. Basis of presentation
In the opinion of management, the unaudited financial statements of Parker &
Parsley Producing Properties 87-B, Ltd. (the "Partnership") as of June 30, 1997
and for the three and six months ended June 30, 1997 and 1996 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. These interim results are not necessarily indicative of results for a
full year.
Certain information and footnote disclosure normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted in this Form 10-Q pursuant to the rules and
regulations of the Securities and Exchange Commission. The financial statements
should be read in conjunction with the financial statements and the notes
thereto contained in the Partnership's Report on Form 10-K for the year ended
December 31, 1996, as filed with the Securities and Exchange Commission, a copy
of which is available upon request by writing to Rich Dealy, Controller, 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
Six months ended June 30, 1997 compared with six months ended
June 30, 1996
Revenues:
The Partnership's oil and gas revenues increased slightly to $450,785 from
$448,800 for the six months ended June 30, 1997 as compared to the six months
ended June 30, 1996. The increase in revenues was the result of a 19% increase
in the mcf of gas produced and sold and a higher average price received per mcf
of gas, offset by a 15% decline in barrels of oil produced and sold and a
decline in the average price received per barrel of oil. For the six months
ended June 30, 1997, 14,686 barrels of oil were sold compared to 17,243 for the
same period in 1996, a decrease of 2,557 barrels. For the six months ended June
30, 1997, 54,483 mcf of gas were sold compared to 45,843 for the same period in
1996, an increase of 8,640 mcf. The decrease in oil production volumes was due
7
<PAGE>
to the decline characteristics of the Partnership's properties. The increase in
gas production volumes was due to 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 decreased 3% from $20.45 for the
six months ended June 30, 1996 to $19.92 for the same period in 1997. The
average price received per mcf of gas increased 38% to $2.90 for the six months
ended June 30, 1997 compared to $2.10 for the same period in 1996. 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 six months ended
June 30, 1997.
Salvage income received from equipment disposals of $987 for the six months
ended June 30, 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 $326,310 for the six months ended June 30,
1997 as compared to $331,396 for the same period in 1996, a decrease of $5,086.
This decrease was due to reductions in production costs and loss on
abandonments, offset by increases in abandoned property costs, depletion, and
general and administrative expenses ("G&A").
Production costs were $214,446 for the six months ended June 30, 1997 and
$257,209 for the same period in 1996, resulting in a $42,763 decrease, or 17%.
The decrease was primarily attributable to declines in workover expenses 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
slightly, from $13,464 for the six months ended June 30, 1996, to $13,523 for
the same period in 1997. The Partnership agreement limits G&A to 3% of gross oil
and gas revenues.
Depletion was $67,582 for the six months ended June 30, 1997 compared to $56,768
for the same period in 1996. This represented an increase in depletion of
$10,814, or 19%, primarily attributable to a decline in oil reserves during 1997
as a result of lower commodity prices.
A loss on abandonment of $529 during the six months ended June 30, 1997 resulted
from the abandonment of one oil and gas well. During the six months ended June
30, 1996, a loss on abandoned properties of $2,579 was attributable to the
abandonment of one saltwater disposal well. Abandoned property expenses incurred
during the six months ended June 30, 1997 totaled $30,230, as compared to
$1,376, for the same period in 1996.
8
<PAGE>
Three months ended June 30, 1997 compared with three months ended
June 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 13% to $199,079 from $229,700
for the three months ended June 30, 1997 as compared to the three months ended
June 30, 1996. The decrease in revenues resulted from a 16% decrease in barrels
of oil produced and sold and a decline in the average price received per barrel
of oil, offset by a 33% increase in mcf of gas produced and sold and a higher
average price received per mcf of gas. For the three months ended June 30, 1997,
7,189 barrels of oil were sold compared to 8,562 for the same period in 1996, a
decrease of 1,373 barrels. For the three months ended June 30, 1997, 26,184 mcf
of gas were sold compared to 19,757 for the same period in 1996, an increase of
6,427 mcf. The decrease in oil production volumes was due to the decline
characteristics of the Partnership's oil and gas properties. The increase in gas
production volumes was due to operational changes on several wells.
The average price received per barrel of oil decreased $3.46, or 16%, from
$21.88 for the three months ended June 30, 1996 to $18.42 for the same period in
1997, while the average price received per mcf of gas increased 19% from $2.15
during the three months ended June 30, 1996 to $2.55 in 1997.
Costs and Expenses:
Total costs and expenses increased to $168,112 for the three months ended June
30, 1997 as compared to $145,521 for the same period in 1996, an increase of
$22,591, or 16%. This increase was due to increases in abandoned property costs
and depletion, offset by declines in production costs, loss on abandoned
property and G&A.
Production costs were $102,834 for the three months ended June 30, 1997 and
$108,515 for the same period in 1996, resulting in a $5,681 decrease, or 5%. The
decrease was the result of reductions in 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
decreased, in aggregate, 13% from $6,912 for the three months ended June 30,
1996 to $6,023 for the same period in 1997.
Depletion was $35,597 for the three months ended June 30, 1997 compared to
$26,139 for the same period in 1996. This represented an increase in depletion
of $9,458, or 36%, primarily attributable to a decline in oil reserves during
1997 as a result of lower commodity prices.
A loss on abandonment of $529 during the three months ended June 30, 1997
resulted from the abandonment of one oil and gas well. During the three months
ended June 30, 1996, a loss on abandoned properties of $2,579 was attributable
to the abandonment of one saltwater disposal well. Abandoned property expenses
incurred during the three months ended June 30, 1997 totaled $23,129, as
compared to $1,376 for the same period in 1996.
9
<PAGE>
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $117,034 during the six
months ended June 30, 1997 from the same period in 1996. This increase was the
result of a decline in production costs paid and an increase in oil and gas
sales receipts, offset by additional abandoned property expenses.
Net Cash Provided by (Used in) Investing Activities
The Partnership's principal investing activities during the six months ended
June 30, 1997 and 1996 were related to the additions or disposal of oil and gas
equipment on active properties.
Proceeds from equipment salvage on the abandonment of one well of $29,377 were
received for the six months ending June 30, 1997. Proceeds from salvage income
of $2,092 from the sale of oil and gas equipment on properties abandoned in
prior years, were received during the six months ended June 30, 1996.
Net Cash Used in Financing Activities
Cash was sufficient for the six months ended June 30, 1997 to cover
distributions to the partners of $280,041 of which $2,694 was distributed to the
managing general partner and $277,347 to the limited partners. For the same
period ended June 30, 1996, cash was sufficient for distributions to the
partners of $193,796 of which $1,896 was distributed to the managing general
partner and $191,900 to the limited partners.
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
10
<PAGE>
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: August 13, 1997 By: /s/ Rich Dealy
----------------------------------
Rich Dealy, Controller of PPUSA
11
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000809017
<NAME> 87BPP.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 84,669
<SECURITIES> 0
<RECEIVABLES> 98,718
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 183,387
<PP&E> 4,826,070
<DEPRECIATION> 3,338,364
<TOTAL-ASSETS> 1,671,093
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,671,093
<TOTAL-LIABILITY-AND-EQUITY> 1,671,093
<SALES> 450,785
<TOTAL-REVENUES> 453,830
<CGS> 0
<TOTAL-COSTS> 326,310
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 127,520
<INCOME-TAX> 0
<INCOME-CONTINUING> 127,520
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 127,520
<EPS-PRIMARY> 10.36
<EPS-DILUTED> 0
</TABLE>
