UNITED STATES 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 (Fee Required)
For the fiscal year ended December 31, 1996
or
/ / Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 (No Fee Required)
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
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Limited partnership interests ($500 per unit)
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 / /
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 Registrant's 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. / x /
No market currently exists for the limited partnership interests of the
Registrant. Based on original purchase price the aggregate market value of
limited partnership interests owned by non-affiliates of the Registrant is
$5,997,500.
As of March 8, 1997, the number of outstanding limited partnership interests was
12,191. The following documents are incorporated by reference into the indicated
parts of this Annual Report on Form 10-K: None
Page 1 of 28 pages.
-Exhibit index on page 28-
<PAGE>
Parts I and II of this Report contain 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. See "Item 1. Business" for a
description of various factors that could materially affect the ability of the
Partnership to achieve the anticipated results described in the forward looking
statements.
PART I
ITEM 1. Business
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
managing general partner is Parker & Parsley Development L.P. ("PPDLP"). PPDLP's
general partner is Parker & Parsley Petroleum USA, Inc. ("PPUSA").
A Registration Statement, as amended, filed pursuant to the Securities Act of
1933, registering limited partnership interests aggregating $30,000,000 in a
series of Texas limited partnerships formed under the Parker & Parsley Producing
Properties Program-I, was declared effective by the Securities and Exchange
Commission on February 20, 1987. On December 28, 1987, the offering of limited
partnership interests in the Partnership, the second partnership formed under
such statement, was closed, with interests aggregating $6,095,500 being sold to
573 subscribers.
The Partnership's primary business plan and objectives are to purchase producing
oil and gas properties and distribute the cash flow from operations to its
partners. The Partnership is not involved in any industry segment other than oil
and gas. See "Item 6. Selected Financial Data" and "Item 8. Financial Statements
and Supplementary Data" of this report for a summary of the Partnership's
revenue, income and identifiable assets.
The principal markets during 1996 for the oil produced by the Partnership were
refineries and oil transmission companies that have facilities near the
Partnership's oil producing properties. The principal markets for the
Partnership's gas were companies that have pipelines located near the
Partnership's gas producing properties. Of the Partnership's total oil and gas
revenues for 1996, approximately 61%, 11%, 10% and 10% were attributable to
sales made to Genesis Crude Oil, L.P., Phillips Petroleum Company, Western Gas
Resources, Inc. and GPM Gas Corporation, respectively.
The Partnership's revenues, profitability, cash flow and future rate of growth
are highly dependent on the prevailing prices of oil and gas, which are affected
by numerous factors beyond the Partnership's control. Oil and gas prices
historically have been very volatile. A substantial or extended decline in the
prices of oil or gas could have a material adverse effect on the Partnership's
revenues, profitability and cash flow and could, under certain circumstances,
result in a reduction in the carrying value of the Partnership's oil and gas
properties.
2
<PAGE>
Because of the demand for oil and gas, the Partnership does not believe that the
termination of the sales of its products to any one customer would have a
material adverse impact on its operations. The loss of a particular customer for
gas may have an effect if that particular customer has the only gas pipeline
located in the areas of the Partnership's gas producing properties. The
Partnership believes, however, that the effect would be temporary, until
alternative arrangements could be made.
Federal and state regulation of oil and gas operations generally includes the
fixing of maximum prices for regulated categories of natural gas, the imposition
of maximum allowable production rates, the taxation of income and other items
and the protection of the environment. Although the Partnership believes that
its business operations do not impair environmental quality and that its costs
of complying with any applicable environmental regulations are not currently
significant, the Partnership cannot predict what, if any, effect these
environmental regulations may have on its current or future operations.
The Partnership does not have any employees of its own. PPUSA employs 659
persons, many of whom dedicated a part of their time to the conduct of the
Partnership's business during the period for which this report is filed. The
Partnership's managing general partner, PPDLP through PPUSA, supplies all
management functions.
Numerous uncertainties exist in estimating quantities of proved reserves and
future net revenues therefrom. The estimates of proved reserves and related
future net revenues set forth in this report are based on various assumptions,
which may ultimately prove to be inaccurate. Therefore, such estimates should
not be construed as estimates of the current market value of the Partnership's
proved reserves.
No material part of the Partnership's business is seasonal and the Partnership
conducts no foreign operations.
ITEM 2. Properties
The Partnership's properties consist primarily of leasehold interests in
properties on which oil and gas wells are located. Such property interests are
often subject to landowner royalties, overriding royalties and other oil and gas
leasehold interests.
The Partnership completed seven purchases of producing properties. These
acquisitions involved the purchase of working interests in 54 properties of
which all are operated by the managing general partner. The Partnership also
participated in the drilling of two oil and gas wells during 1988 which were
completed as producers. Additionally, the Partnership purchased 15 overriding
royalty interests effective January 1, 1990 and two additional overriding
royalty interests during 1991. Several uneconomical wells have been abandoned in
prior years, including three wells in 1994, three wells in 1995 and one well in
1996. At December 31, 1996, the Partnership had 47 producing oil and gas wells.
3
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For information relating to the Partnership's estimated proved oil and gas
reserves at December 31, 1996, 1995 and 1994 and changes in such quantities for
the years then ended, see Note 7 of Notes to Financial Statements included in
"Item 8. Financial Statements and Supplementary Data" below. Such reserves have
been estimated by the engineering staff of PPUSA with a review by an independent
petroleum consultant.
ITEM 3. Legal Proceedings
The Partnership is not aware of any material legal proceedings (other than
routine litigation in the ordinary course of the Partnership's business) to
which it is a party or to which its property is subject.
ITEM 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during the fourth
quarter of 1996.
4
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PART II
ITEM 5. Market for Partnership's Common Equity and Related Stockholder
Matters
At March 8, 1997, the Partnership had 12,191 outstanding limited partnership
interests held of record by 569 subscribers. There is no established public
trading market for the limited partnership interests. Under the limited
partnership agreement, PPDLP has made certain commitments to purchase
partnership interests at a computed value.
Revenues which, in the sole judgement of the managing general partner, are not
required to meet the Partnership's obligations are distributed to the partners
at least quarterly in accordance with the limited partnership agreement. During
the years ended December 31, 1996 and 1995, $433,825 and $353,613, respectively,
of such revenue-related distributions were made to the limited partners.
ITEM 6. Selected Financial Data
The following table sets forth selected financial data for the years ended
December 31:
<TABLE>
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Operating results:
Oil and gas sales $ 980,232 $ 921,034 $ 907,637 $1,045,994 $1,242,244
========= ========= ========= ========= =========
Impairment of oil and
gas properties $ 42,277 $ 104,960 $ - $ - $ -
========= ========= ========= ========= =========
Net income (loss) $ 303,380 $ 157,736 $ (166,914) $ (112,198) $ (31,728)
========= ========= ========= ========= =========
Allocation of net
income (loss):
Managing general
partner $ 3,034 $ 1,578 $ (1,669) $ (1,122) $ 49
========= ========= ========= ========= =========
Limited partners $ 300,346 $ 156,158 $ (165,245) $ (111,076) $ (31,777)
========= ========= ========= ========= =========
Limited partners' net
income (loss) per
limited partnership
interest $ 24.64 $ 12.81 $ (13.55) $ (9.11) $ (2.61)
========= ========= ========= ========= =========
Limited partners' cash
distributions per
limited partnership
interest $ 35.59 $ 29.01 $ 21.87 $ 39.35 $ 52.16
========= ========= ========= ========= =========
At year end:
Total assets $1,823,614 $1,958,507 $2,158,522 $2,594,125 $3,190,822
========= ========= ========= ========= =========
</TABLE>
5
<PAGE>
ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
1996 compared to 1995
Results of operations
The Partnership's 1996 oil and gas revenues increased to $980,232 from $921,034
in 1995. The increase in revenues was the net result of increases in the average
price received per barrel of oil and mcf of gas produced and sold, offset by a
19% decline in barrels of oil produced and sold and a 16% decline in mcf of gas
produced and sold. In 1996, 35,151 barrels of oil were sold compared to 43,188
in 1995, a decrease of 8,037 barrels. In 1996, 90,750 mcf of gas were sold
compared to 108,168 in 1995, a decrease of 17,418 mcf. Because of the decline
characteristics of the Partnership's oil and gas properties, management expects
a certain amount of decline in production to continue in the future until the
Partnership's economically recoverable reserves are fully depleted.
The average price received per barrel of oil increased $4.54, or 27%, from
$17.11 in 1995 to $21.65 in 1996, while the average price received per mcf of
gas increased 44% from $1.68 in 1995 to $2.42 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 in 1996.
Salvage income received from equipment disposals of $481 and $1,660 during 1996
and 1995, respectively, was derived from the sale of equipment on wells that
were plugged and abandoned in prior years.
Total costs and expenses decreased in 1996 to $681,742 as compared to $771,512
in 1995, a decrease of $89,770, or 12%. The decrease was attributable to
declines in production costs, abandoned property costs, loss on abandoned
properties, impairment of oil and gas properties and depletion.
Production costs were $457,850 in 1996 and $471,114 in 1995, resulting in a
$13,264 decrease, or 3%. The decrease was the net result of a reduction in well
repair and maintenance costs, offset by an increase in workover expense incurred
in an effort to stimulate well production.
A loss of $1,643 on abandoned properties was recognized during 1996, resulting
from the write-off of remaining capitalized well costs of $2,473 on one oil and
gas well and one saltwater disposal well, offset by proceeds of $830 received
from equipment salvage. In 1995, a loss on abandoned properties of $4,769
resulted from the write-off of remaining capitalized well costs of $5,934,
offset by $1,165 in proceeds received on two abandoned oil and gas wells.
Expenses incurred to plug and abandon these properties decreased from $8,153 in
1995 to $1,735 in 1996.
6
<PAGE>
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, 16%, from $27,631 in 1995 to $31,991 in
1996. The Partnership paid the managing general partner $24,530 in 1996 and
$23,322 in 1995 for G&A incurred on behalf of the Partnership. G&A is allocated,
in part, to the Partnership by the managing general partner. Such allocated
expenses are determined by the managing general partner based upon its judgement
of the level of activity of the Partnership relative to the managing general
partner's activities and other entities it manages. The method of allocation has
varied in certain years and may do so again depending on the activities of the
managed entities.
The Partnership adopted Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of" ("SFAS 121") effective as of October 1, 1995 (see Notes 2 and 3
of Notes to Financial Statements included in "Item 8. Financial Statements and
Supplementary Data"). As a result of the review and evaluation of its long-lived
assets for impairment, the Partnership recognized non-cash charges of $42,277
and $104,960 related to its oil and gas properties during 1996 and 1995,
respectively.
Depletion was $146,246 in 1996 compared to $154,885 in 1995, a decrease of
$8,639, or 6%. This decrease was primarily attributable to a reduction in the
Partnership's net depletable basis from charges taken in accordance with SFAS
121 and a reduction in oil production of 8,037 barrels during 1996 as compared
to 1995.
1995 compared to 1994
The Partnership's 1995 oil and gas revenues increased to $921,034 from $907,637
in 1994. The increase in revenues was the net result of an increase in the
average price received per barrel of oil produced and sold, offset by a slight
decline in barrels of oil produced and sold, a 6% decline in mcf of gas produced
and sold and a decrease in the average price received per mcf of gas. In 1995,
43,188 barrels of oil were sold compared to 43,656 in 1994, a decrease of 468
barrels. In 1995, 108,168 mcf of gas were sold compared to 115,012 in 1994, a
decrease of 6,844 mcf.
The average price received per barrel of oil increased $1.21, or 8%, from $15.90
in 1994 to $17.11 in 1995, while the average price received per mcf of gas
decreased from $1.86 in 1994 to $1.68 in 1995.
Salvage income received from equipment disposals of $1,660 during 1995 was
derived from proceeds received from the sale of equipment on wells that were
plugged and abandoned in prior years, as compared to $7,747 in equipment
proceeds received on prior year abandonments during 1994.
Total costs and expenses decreased in 1995 to $771,512 as compared to $1,087,200
in 1994, a decrease of $315,688, or 29%. The decrease was attributable to
declines in production costs, abandoned property costs and depletion, offset by
increases in loss on abandoned properties, G&A and the impairment of oil and gas
properties.
7
<PAGE>
Production costs were $471,114 in 1995 and $556,124 in 1994, resulting in an
$85,010 decrease, or 15%. The decrease was the result of a reduction in well
repair and maintenance costs.
A loss on abandoned property of $4,769 was recognized during 1995. This loss
resulted from the write-off of remaining capitalized well costs of $5,934 on two
abandoned wells, offset by the receipt of $1,165 in proceeds from equipment
salvage. During 1994, a gain of $12,493 resulted from proceeds received from
equipment salvage on two fully depleted abandoned wells. Expenses incurred to
plug and abandon these properties decreased from $22,674 in 1994 to $8,153 in
1995.
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, from $27,229 in 1994 to $27,631 in 1995.
The Partnership paid the managing general partner $23,322 in 1995 and $19,388 in
1994 for G&A incurred on behalf of the Partnership.
The Partnership adopted SFAS 121 effective as of October 1, 1995 (see Notes 2
and 3 of Notes to Financial Statements included in "Item 8. Financial Statements
and Supplementary Data"). As a result of the review and evaluation of its
long-lived assets for impairment, the Partnership recognized a non-cash charge
of $104,960 related to its oil and gas properties during the fourth quarter of
1995.
Depletion was $154,885 in 1995 compared to $493,666 in 1994, a decrease of
$338,781, or 69%. This decrease was the result of several properties being fully
depleted in 1994. These properties reached their economic limit due to the
downward revision of oil reserves during 1994. Oil production decreased 468
barrels in 1995 from 1994, while oil reserves of barrels were revised upward by
83,282 barrels, or 19%.
Impact of inflation and changing prices on sales and net income
Inflation impacts the fixed overhead rate charges of the lease operating
expenses for the Partnership. During 1994, the annual change in the index of
average weekly earnings of crude petroleum and gas production workers issued by
the U.S. Department of Labor, Bureau of Labor Statistics increased by 4.8%. The
1995 annual change in average weekly earnings increased by 4.4%. The 1996 index
(effective April 1, 1996) increased 4.1%. The impact of inflation for other
lease operating expenses is small due to the current economic condition of the
oil industry.
The oil and gas industry experienced volatility during the past decade because
of the fluctuation of the supply of most fossil fuels relative to the demand for
such products and other uncertainties in the world energy markets causing
significant fluctuations in oil and gas prices. During 1996, the price per
barrel for oil production similar to the Partnership's ranged from approximately
$18.00 to $25.00. For February 1997, the average price for the Partnership's oil
was approximately $22.00.
8
<PAGE>
Prices for natural gas are subject to ordinary seasonal fluctuations, and this
volatility of natural gas prices may result in production being curtailed and,
in some cases, wells being completely shut-in.
Liquidity and capital resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased $97,606 during the year
ended December 31, 1996 from the year ended December 31, 1995, resulting from
additional production costs paid, offset by a slight increase in oil and gas
sales receipts.
Net Cash Used in Investing Activities
The Partnership's investing activities during 1996 and 1995 were primarily for
expenditures related to equipment replacement on various oil and gas properties.
Proceeds from salvage income of $830 from the disposal of oil and gas equipment
on properties abandoned in prior years were received during 1996, compared to
$5,713 received on prior year abandonments during 1995. Proceeds of $1,580 and
$1,155 were received from the sale of equipment on properties abandoned during
1996 and 1995, respectively.
Net Cash Used in Financing Activities
Cash was sufficient in 1996 for distributions to the partners of $438,273 of
which $433,825 was distributed to the limited partners and $4,448 to the
managing general partner. In 1995, cash was sufficient for distributions to the
partners of $357,751 of which $353,613 was distributed to the limited partners
and $4,138 to the managing general partner.
It is expected that future net cash provided by operations will be sufficient
for any capital expenditures and any distributions. As the production from the
properties declines, distributions are also expected to decrease.
ITEM 8. Financial Statements and Supplementary Data
The Partnership's audited financial statements are included elsewhere herein.
ITEM 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
None.
9
<PAGE>
PART III
ITEM 10. Directors and Executive Officers of the Partnership
The Partnership does not have any officers or directors. Under the limited
partnership agreement, the Partnership's managing general partner, PPDLP, is
granted the exclusive right and full authority to manage, control and administer
the Partnership's business. PPUSA, the sole general partner of PPDLP, is a
wholly-owned subsidiary of Parker & Parsley Petroleum Company (the "Company"), a
publicly-traded corporation on the New York Stock Exchange.
Set forth below are the names, ages and positions of the directors and executive
officers of PPUSA. Directors of PPUSA are elected to serve until the next annual
meeting of stockholders or until their successors are elected and qualified.
Age at
December 31,
Name 1996 Position
---- ------------ --------
Scott D. Sheffield 44 President, Chairman of the Board,
Chief Executive Officer and
Director
Timothy A. Leach 37 Executive Vice President and Director
Steven L. Beal 37 Senior Vice President, Chief Financial
Officer and Director
Mark L. Withrow 49 Senior Vice President, Secretary and
Director
David A. Chroback 41 Senior Vice President and Director
Scott D. Sheffield. Mr. Sheffield, a graduate of The University of
Texas with a Bachelor of Science degree in Petroleum Engineering, has been the
President and a Director of the Company since May 1990 and has been the Chairman
of the Board and Chief Executive Officer since October 1990. Mr. Sheffield
joined the Company as a petroleum engineer in 1979. Mr. Sheffield served as Vice
President - Engineering of the Company from September 1981 until April 1985 when
he was elected President and a Director of the Company. In March 1989, Mr.
Sheffield was elected Chairman of the Board and Chief Executive Officer of the
Company. On January 1, 1995, Mr. Sheffield resigned as President and Chief
Executive Officer of PPUSA, but remained Chairman of the Board and a Director of
PPUSA. On January 1, 1996, Mr. Sheffield reassumed the positions of President
and Chief Executive Officer of PPUSA. Before joining the Company, Mr. Sheffield
was principally occupied for more than three years as a production and reservoir
engineer for Amoco Production Company.
10
<PAGE>
Timothy A. Leach. Mr. Leach, a graduate of Texas A&M University with a
Bachelor of Science degree in Petroleum Engineering and the University of Texas
of the Permian Basin with a Master of Business Administration degree, was
elected Executive Vice President - Engineering of the Company on March 21, 1995.
Mr. Leach had been serving as Senior Vice President - Engineering since March
1993 and served as Vice President - Engineering of the Company from October 1990
to March 1993. Mr. Leach was elected Executive Vice President and Director of
PPUSA on December 1, 1995. He had joined the Company as Vice President -
Engineering in September 1989. Prior to joining the Company, Mr. Leach was
employed as Senior Vice President and Director of First City Texas - Midland,
N.A.
Steven L. Beal. Mr. Beal, a graduate of the University of Texas with a
Bachelor of Business Administration degree in Accounting and a certified public
accountant, was elected Senior Vice President - Finance of the Company in
January 1995 and Chief Financial Officer of the Company on March 21, 1995. Mr.
Beal was elected Senior Vice President and Chief Financial Officer of PPUSA on
January 1, 1995 and was elected a Director of PPUSA on January 2, 1996. He
served as Treasurer of PPUSA from January 1, 1995 to June 12, 1996. Mr. Beal
joined the Company as Treasurer in March 1988 and was elected Vice President -
Finance in October 1991. Prior to joining the Company, Mr. Beal was employed as
an audit manager for Price Waterhouse.
Mark L. Withrow. Mr. Withrow, a graduate of Abilene Christian
University with a Bachelor of Science degree in Accounting and Texas Tech
University with a Juris Doctorate degree, was Vice President - General Counsel
of the Company from February 1991 to January 1995, when he was appointed Senior
Vice President - General Counsel, and has been the Company's Secretary since
August 1992. On January 1, 1995, Mr. Withrow was elected Senior Vice President
and Secretary of PPUSA and was elected a Director of PPUSA on January 2, 1996.
Mr. Withrow joined the Company in January 1991. Prior to joining the Company,
Mr. Withrow was the managing partner of the law firm of Turpin, Smith, Dyer,
Saxe & MacDonald, Midland, Texas.
David A. Chroback. Mr. Chroback, a graduate of Hanover College with a
Bachelor of Science degree in Geology, and a graduate of Southern Illinois
University at Carbondale with a Master of Science degree in Geology, was elected
Senior Vice President of the Company and PPUSA on October 7, 1996. On January 2,
1996, Mr. Chroback was elected Director of PPUSA. He had served as Vice
President - Geology of the Company since February 1993. Mr. Chroback has been
the Geological Manager since June 1992, and prior to that has been a Senior
Geologist with the Company since January 1988. Before joining the Company, he
was a project geologist with Indian Wells Oil Company. Mr. Chroback was
previously employed by Amoco Production Company as a petroleum geologist from
1980 through 1984.
ITEM 11. Executive Compensation
The Partnership does not have any directors or officers. Management of the
Partnership is vested in PPDLP, the managing general partner. The Partnership
participates in oil and gas activities through an income tax partnership (the
"Program") pursuant to the Program agreement. Under the limited partnership
11
<PAGE>
agreement, PPDLP pays 1% of the Partnership's acquisition, drilling and
completion costs and 1% of its operating and general and administrative
expenses. In return, PPDLP is allocated 1% of the Partnership's revenues. See
Notes 6 and 9 of Notes to Financial Statements included in "Item 8. Financial
Statements and Supplementary Data" below for information regarding fees and
reimbursements paid to the managing general partner or its affiliates by the
Partnership.
The Partnership does not directly pay any salaries of the executive officers of
PPUSA, but does pay a portion of PPUSA's general and administrative expenses of
which these salaries are a part. See Note 6 of Notes to Financial Statements
included in "Item 8. Financial Statements and Supplementary Data" below.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
(a) Beneficial owners of more than five percent
The Partnership is not aware of any person who beneficially owns 5% or more of
the outstanding limited partnership interests of the Partnership. PPDLP owned
196 limited partner interests at January 1, 1996.
(b) Security ownership of management
The Partnership does not have any officers or directors. The managing general
partner of the Partnership, PPDLP, has the exclusive right and full authority to
manage, control and administer the Partnership's business. Under the limited
partnership agreement, limited partners holding a majority of the outstanding
limited partnership interests have the right to take certain actions, including
the removal of the managing general partner or any other general partner. The
Partnership is not aware of any current arrangement or activity which may lead
to such removal. The Partnership is not aware of any officer or director of
PPUSA who beneficially owns limited partnership interests in the Partnership.
ITEM 13. Certain Relationships and Related Transactions
Transactions with the managing general partner or its affiliates
Pursuant to the limited partnership agreement, the Partnership had the following
related party transactions with the managing general partner or its affiliates
during the years ended December 31:
12
<PAGE>
1996 1995 1994
-------- -------- --------
Payment of lease operating and supervision
charges in accordance with standard
industry operating agreements $169,025 $153,156 $178,054
Reimbursement of general and
administrative expenses $ 24,530 $ 23,322 $ 19,388
Purchase of oil and gas properties and
related equipment, at predecessor cost $ 8,804 $ - $ -
Receipt of proceeds for the salvage
value of retired oil and gas equipment $ - $ 6,498 $ 18,684
Under the limited partnership agreement, the managing general partner pays 1% of
the Partnership's acquisition, drilling and completion costs and 1% of its
operating and general and administrative expenses. In return, it is allocated 1%
of the Partnership's revenues. Also, see Notes 6 and 9 of Notes to Financial
Statements included in "Item 8. Financial Statements and Supplementary Data"
below, regarding the Partnership's participation with the managing general
partner in oil and gas activities of the Program.
13
<PAGE>
PART IV
ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) 1. Financial statements
The following are filed as part of this annual report:
Independent Auditors' Report
Balance sheets as of December 31, 1996 and 1995
Statements of operations for the years ended December 31, 1996, 1995
and 1994
Statements of partners' capital for the years ended December 31,
1996, 1995 and 1994
Statements of cash flows for the years ended December 31, 1996, 1995
and 1994
Notes to financial statements
2. Financial statement schedules
All financial statement schedules have been omitted since the required
information is in the financial statements or notes thereto, or is not
applicable nor required.
(b) Reports on Form 8-K
None.
(c) Exhibits
The exhibits listed on the accompanying index to exhibits are filed or
incorporated by reference as part of this annual report.
14
<PAGE>
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.
Dated: March 27, 1997 By: Parker & Parsley Development L.P.,
Managing General Partner
By: Parker & Parsley Petroleum USA, Inc.
("PPUSA"), General Partner
By: /s/ Scott D. Sheffield
------------------------------
Scott D. Sheffield, President
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
Registrant and in the capacities and on the date indicated.
/s/ Scott D. Sheffield President, Chairman of the Board, March 27, 1997
- ----------------------- Chief Executive Officer and
Scott D. Sheffield Director of PPUSA
/s/ Timothy A. Leach Executive Vice President and March 27, 1997
- ----------------------- Director of PPUSA
Timothy A. Leach
/s/ Steven L. Beal Senior Vice President, Chief March 27, 1997
- ----------------------- Financial Officer and Director
Steven L. Beal of PPUSA
/s/ Mark L. Withrow Senior Vice President, Secretary March 27, 1997
- ----------------------- and Director of PPUSA
Mark L. Withrow
/s/ David A. Chroback Senior Vice President and March 27, 1997
- ----------------------- Director of PPUSA
David A. Chroback
15
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
Parker & Parsley Producing Properties 87-B, Ltd.
(A Texas Limited Partnership):
We have audited the financial statements of Parker & Parsley Producing
Properties 87-B, Ltd. as listed in the accompanying index under Item 14(a).
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.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Parker & Parsley Producing
Properties 87-B, Ltd. as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for each of the years in the three-year period
ended December 31, 1996, in conformity with generally accepted accounting
principles.
As discussed in Notes 2 and 3 to the financial statements, the Partnership
adopted the provisions of the Financial Accounting Standards Board's Statement
of Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" in 1995.
KPMG Peat Marwick LLP
Midland, Texas
March 21, 1997
16
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
(A Texas Limited Partnership)
BALANCE SHEETS
December 31
1996 1995
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents, including
interest bearing deposits of $63,551
in 1996 and $135,981 in 1995 $ 63,834 $ 135,981
Accounts receivable - affiliate 159,893 43,366
---------- ----------
Total current assets 223,727 179,347
---------- ----------
Oil and gas properties - at cost, based on
the successful efforts accounting method 4,896,213 4,897,763
Accumulated depletion (3,296,326) (3,118,603)
---------- ----------
Net oil and gas properties 1,599,887 1,779,160
---------- ----------
$ 1,823,614 $ 1,958,507
========== ==========
PARTNERS' CAPITAL
Partners' capital:
Limited partners (12,191 interests) $ 1,805,903 $ 1,939,382
Managing general partner 17,711 19,125
---------- ----------
$ 1,823,614 $ 1,958,507
========== ==========
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
For the years ended December 31
1996 1995 1994
--------- --------- ----------
Revenues:
Oil and gas $ 980,232 $ 921,034 $ 907,637
Interest 4,409 6,554 4,902
Salvage income from equipment
disposals 481 1,660 7,747
-------- -------- ---------
985,122 929,248 920,286
-------- -------- ---------
Costs and expenses:
Oil and gas production 457,850 471,114 556,124
Abandoned property 1,735 8,153 22,674
(Gain) loss on abandoned
properties 1,643 4,769 (12,493)
General and administrative 31,991 27,631 27,229
Impairment of oil and gas
properties 42,277 104,960 -
Depletion 146,246 154,885 493,666
-------- -------- ---------
681,742 771,512 1,087,200
-------- -------- ---------
Net income (loss) $ 303,380 $ 157,736 $ (166,914)
======== ======== =========
Allocation of net income (loss):
Managing general partner $ 3,034 $ 1,578 $ (1,669)
======== ======== =========
Limited partners $ 300,346 $ 156,158 $ (165,245)
======== ======== =========
Net income (loss) per limited
partnership interest $ 24.64 $ 12.81 $ (13.55)
======== ======== =========
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
Managing
general Limited
partner partners Total
--------- ---------- ----------
Partners' capital at January 1, 1994 $ 25,476 $2,568,649 $2,594,125
Distributions (2,122) (266,567) (268,689)
Net loss (1,669) (165,245) (166,914)
-------- --------- ---------
Partners' capital at December 31, 1994 21,685 2,136,837 2,158,522
Distributions (4,138) (353,613) (357,751)
Net income 1,578 156,158 157,736
-------- --------- ---------
Partners' capital at December 31, 1995 19,125 1,939,382 1,958,507
Distributions (4,448) (433,825) (438,273)
Net income 3,034 300,346 303,380
-------- --------- ---------
Partners' capital at December 31, 1996 $ 17,711 $1,805,903 $1,823,614
======== ========= =========
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
For the years ended December 31
1996 1995 1994
--------- --------- ----------
Cash flows from operating activities:
Net income (loss) $ 303,380 $ 157,736 $ (166,914)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
(Gain) loss on abandoned properties 1,643 4,769 (12,493)
Salvage income from equipment
disposals (481) (1,660) (7,747)
Impairment of oil and gas properties 42,277 104,960 -
Depletion 146,246 154,885 493,666
Changes in assets:
(Increase) decrease in accounts
receivable (114,291) 55,690 (70,901)
-------- -------- ---------
Net cash provided by operating
activities 378,774 476,380 235,611
-------- -------- ---------
Cash flows from investing activities:
Additions to oil and gas equipment (15,058) (26,426) (121,915)
Proceeds from salvage income on
equipment disposals 830 5,713 7,747
Proceeds from equipment salvage on
abandoned properties 1,580 1,155 7,349
-------- -------- ---------
Net cash used in investing
activities (12,648) (19,558) (106,819)
-------- -------- ---------
Cash flows from financing activities:
Cash distributions to partners (438,273) (357,751) (268,689)
-------- -------- ---------
Net increase (decrease) in cash and cash
equivalents (72,147) 99,071 (139,897)
Cash and cash equivalents at beginning
of year 135,981 36,910 176,807
-------- -------- ---------
Cash and cash equivalents at end of year $ 63,834 $ 135,981 $ 36,910
======== ======== =========
The accompanying notes are an integral part of these financial statements.
20
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
December 31, 1996, 1995 and 1994
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. Summary of significant accounting policies
A summary of the significant accounting policies consistently applied in
the preparation of the accompanying financial statements follows:
Impairment of long-lived assets - Commencing in 1995, in accordance with
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of"
("SFAS 121"), the Partnership reviews its long-lived assets to be held and used
on an individual property basis, including oil and gas properties accounted for
under the successful efforts method of accounting, whenever events or
circumstances indicate that the carrying value of those assets may not be
recoverable. An impairment loss is indicated if the sum of the expected future
cash flows is less than the carrying amount of the assets. In this circumstance,
the Partnership recognizes an impairment loss for the amount by which the
carrying amount of the asset exceeds the fair value of the asset.
The Partnership accounts for long-lived assets to be disposed of at the
lower of their carrying amount or fair value less costs to sell once management
has committed to a plan to dispose of the assets.
Prior to the adoption of SFAS 121 in the fourth quarter of 1995, the
Partnership's aggregate oil and gas properties were stated at cost not in excess
of total estimated future net revenues and the estimated fair value of oil and
gas assets not being depleted.
Oil and gas properties - The Partnership utilizes the successful efforts
method of accounting for its oil and gas properties and equipment. Under this
method, all costs associated with productive wells and nonproductive development
wells are capitalized while nonproductive exploration costs are expensed.
Capitalized costs relating to proved properties are depleted using the
unit-of-production method on a property-by-property basis based on proved oil
(dominant mineral) reserves as determined by the engineering staff of Parker &
Parsley Petroleum USA, Inc. ("PPUSA"), the sole general partner of Parker &
Parsley Development L.P. ("PPDLP"), the Partnership's managing general partner,
and reviewed by independent petroleum consultants. The carrying amounts of
properties sold or otherwise disposed of and the related allowances for
21
<PAGE>
depletion are eliminated from the accounts and any gain or loss is included in
operations.
Use of estimates in the preparation of financial statements - Preparation
of the accompanying financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reporting amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Net income (loss) per limited partnership interest - The net income
(loss) per limited partnership interest is calculated by using the number of
outstanding limited partnership interests.
Income taxes - A Federal income tax provision (credit) has not been
included in the financial statements as the income (loss) of the Partnership is
included in the individual Federal income tax returns of the respective
partners.
Statements of cash flows - For purposes of reporting cash flows, cash and
cash equivalents include depository accounts held by banks.
General and administrative expenses - General and administrative expenses
are allocated in part to the Partnership by the managing general partner or its
affiliates. Such allocated expenses are determined by the managing general
partner based upon its judgement of the level of activity of the Partnership
relative to the managing general partner's activities and other entities it
manages. The method of allocation has varied in certain years and may do so
again depending on the activities of the managed entities.
Reclassification - Certain reclassifications have been made to the 1995
and 1994 financial statements to conform to the 1996 financial statement
presentations.
Environmental - The Partnership is subject to extensive federal, state
and local environmental laws and regulations. These laws, which are constantly
changing, regulate the discharge of materials into the environment and may
require the Partnership to remove or mitigate the environmental effects of the
disposal or release of petroleum or chemical substances at various sites.
Environmental expenditures are expensed or capitalized depending on their future
economic benefit. Expenditures that relate to an existing condition caused by
past operations and that have no future economic benefits are expensed.
Liabilities for expenditures of a noncapital nature are recorded when
environmental assessment and/or remediation is probable, and the costs can be
reasonably estimated.
Note 3. Impairment of long-lived assets
The Partnership adopted SFAS 121 effective October 1, 1995. In order to
determine whether an impairment had occurred, the Partnership estimated the
expected future cash flows of its oil and gas properties and compared such
future cash flows to the carrying amount of the oil and gas properties to
22
<PAGE>
determine if the carrying amount was recoverable. For those oil and gas
properties for which the carrying amount exceeded the estimated future cash
flows, an impairment was determined to exist; therefore, the Partnership
adjusted the carrying amount of those oil and gas properties to their fair value
as determined by discounting their expected future cash flows at a discount rate
commensurate with the risks involved in the industry. As a result of the review
and evaluation of its long-lived assets for impairment, the Partnership
recognized non-cash charges of $42,277 and $104,960 related to its oil and gas
properties during 1996 and 1995, respectively.
Note 4. Income taxes
The financial statement basis of the Partnership's net assets and
liabilities was $655,008 less than the tax basis at December 31, 1996.
The following is a reconciliation of net income (loss) per statements of
operations with the net income (loss) per Federal income tax returns for the
years ended December 31:
1996 1995 1994
-------- -------- ---------
Net income (loss) per statements of operations $303,380 $157,736 $(166,914)
Intangible development costs capitalized for
financial reporting purposes and expensed
for tax reporting purposes - (623) (110,435)
Depletion and depreciation provisions for tax
reporting purposes (over) under amounts for
financial reporting purposes 8,961 (23,603) 241,597
Impairment of oil and gas properties for
financial reporting purposes 42,277 104,960 -
Abandoned property costs for tax reporting
purposes (over) under amounts for financial
reporting purposes - - (13,094)
Other, net 4,125 535 4,631
------- ------- --------
Net income (loss) per Federal
income tax returns $358,743 $239,005 $ (44,215)
======= ======= ========
Note 5. Oil and gas producing activities
The following is a summary of the costs incurred, whether capitalized or
expensed, related to the Partnership's oil and gas producing activities for the
years ended December 31:
1996 1995 1994
---------- ---------- ----------
Property acquisition costs $ 12,738 $ 10,852 $ 21,844
========= ========= =========
Development costs $ (589) $ 623 $ 127,068
========= ========= =========
23
<PAGE>
Capitalized oil and gas properties consist of the following:
1996 1995 1994
----------- ----------- ----------
Proved properties:
Property acquisition costs $ 3,353,791 $ 3,354,752 $ 3,360,585
Completed wells and equipment 1,542,422 1,543,011 1,542,388
---------- ---------- ----------
4,896,213 4,897,763 4,902,973
Accumulated depletion (3,296,326) (3,118,603) (2,864,181)
---------- ---------- ----------
Net capitalized costs $ 1,599,887 $ 1,779,160 $ 2,038,792
========== ========== ==========
During 1996 and 1995, respectively, the Partnership recognized non-cash
charges against oil and gas properties of $42,277 and $104,960 in accordance
with SFAS 121. See Note 3.
Note 6. Related party transactions
Pursuant to the limited partnership agreement, the Partnership had the
following related party transactions with the managing general partner or its
affiliates during the years ended December 31:
1996 1995 1994
-------- -------- --------
Payment of lease operating and
supervision charges in accordance
with standard industry operating
agreements $169,025 $153,156 $178,054
Reimbursement of general and
administrative expenses $ 24,530 $ 23,322 $ 19,388
Purchase of oil and gas properties and
related equipment, at predecessor cost $ 8,804 $ - $ -
Receipt of proceeds for the salvage
value of retired oil and gas
equipment $ - $ 6,498 $ 18,684
The Partnership participates in oil and gas activities through an income
tax partnership (the "Program") pursuant to the Program agreement. PPDLP, P&P
Producing Properties 87-B Employees ("EMPL") and the Partnership are parties to
the Program agreement. EMPL is a general partnership organized for the benefit
of certain employees of PPUSA.
24
<PAGE>
The costs and revenues of the Program are allocated to PPDLP, EMPL and
the Partnership as follows:
PPDLP (1)
and EMPL Partnership
--------- -----------
Revenues:
Revenues from oil and gas production,
proceeds from sales of producing
properties and all other revenues:
Before payout 4.040405% 95.959595%
After payout 19.191920% 80.808080%
Costs and expenses:
Property acquisition costs, operating
costs, general and administrative
expenses and other costs:
Before payout 4.040405% 95.959595%
After payout 19.191920% 80.808080%
(1) Excludes PPDLP's 1% general partner ownership which is allocated at the
Partnership level and 196 limited partner interests owned by PPDLP.
Note 7. Oil and gas information (unaudited)
The following table presents information relating to the Partnership's
estimated proved oil and gas reserves at December 31, 1996, 1995 and 1994 and
changes in such quantities during the years then ended. All of the Partnership's
reserves are proved and located within the United States. The Partnership's
reserves are based on an evaluation prepared by the engineering staff of PPUSA
and reviewed by an independent petroleum consultant, using criteria established
by the Securities and Exchange Commission. Reserve value information is
available to limited partners pursuant to the Partnership agreement and,
therefore, is not presented.
Oil (bbls) Gas (mcf)
---------- ---------
Net proved reserves at January 1, 1994 537,844 1,680,521
Revisions (55,250) (62,621)
Production (43,656) (115,012)
-------- ---------
Net proved reserves at December 31, 1994 438,938 1,502,888
Revisions 83,282 411,623
Production (43,188) (108,168)
-------- ---------
Net proved reserves at December 31, 1995 479,032 1,806,343
Revisions (35,780) (140,224)
Production (35,151) (90,750)
-------- ---------
Net proved reserves at December 31, 1996 408,101 1,575,369
======== =========
25
<PAGE>
The estimated present value of future net revenues of proved reserves,
calculated using December 31, 1996 prices of $24.79 per barrel of oil and $3.74
per mcf of gas, discounted at 10% was approximately $3,926,000 and undiscounted
was $7,847,000 at December 31, 1996.
The Partnership emphasizes that reserve estimates are inherently
imprecise and, accordingly, the estimates are expected to change as future
information becomes available.
Note 8. Major customers
The following table reflects the major customers of the Partnership's oil
and gas sales (a major customer is defined as a customer whose sales exceed 10%
of total sales) during the years ended December 31:
1996 1995 1994
------ ------ ------
Genesis Crude Oil, L.P. 61% 66% 62%
Phillips Petroleum Company 11% - -
GPM Gas Corporation 10% - 15%
Western Gas Resources, Inc. 10% - 10%
The above customers represent 74% of total accounts receivable at
December 31, 1996.
PPDLP is party to a long-term agreement pursuant to which PPDLP and
affiliates are to sell to Basis Petroleum, Inc. (formerly Phibro Energy, Inc.)
substantially all crude oil (including condensate) which any of such entities
have the right to market from time to time. On September 23, 1996, PPDLP and
Basis Petroleum, Inc. entered into an agreement that supersedes the prior crude
oil purchase agreement between the parties and provides for adjusted terms
effective December 1, 1995. On November 25, 1996, the Company consented to the
assignment of the agreement to Genesis Crude Oil, L.P. ("Genesis"), a limited
partnership formed by Basis Petroleum, Inc. and Howell Corporation. The price to
be paid by Genesis for oil purchased under the agreement ("Genesis Agreement")
is to be competitive with prices paid by other substantial purchasers in the
same areas who are significant competitors of Genesis. The price to be paid for
oil purchased under the Genesis Agreement includes a market-related bonus that
may vary from month to month based upon spot oil prices at various commodity
trade points. The term of the Genesis Agreement is through June 30, 1998, and it
may continue thereafter subject to termination rights afforded each party.
Salomon, Inc., the parent company of Basis Petroleum, Inc. and a subordinated
limited partner in Genesis, secures the payment obligations under the Genesis
Agreement with a $25 million payment guarantee.
Note 9. Organization and operations
The Partnership was organized December 28, 1987 as a limited partnership
under the Texas Uniform Limited Partnership Act for the purpose of acquiring
producing properties. The following is a brief summary of the more significant
provisions of the limited partnership agreement:
26
<PAGE>
Managing general partner - The managing general partner of the
Partnership is PPDLP. PPDLP has a has the power and authority to manage,
control and administer all Partnership affairs. Under the limited
partnership agreement, the managing general partner pays 1% of the
Partnership's acquisition, drilling and completion costs and 1% of its
operating and general and administrative expenses. In return, it is
allocated 1% of the Partnership's revenues.
Limited partner liability - The maximum amount of liability of any
limited partner is the total contributions of such partner plus his share
of any undistributed profits.
Initial capital contributions - The limited partners entered into
subscription agreements for aggregate capital contributions of
$6,095,500. PPDLP is required to contribute amounts equal to 1% of
initial Partnership capital less commission and offering expenses
allocated to the limited partners and to contribute amounts necessary to
pay costs and expenses allocated to it under the Partnership agreement to
the extent its share of revenues does not cover such costs.
27
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
INDEX TO EXHIBITS
The following documents are incorporated by reference in response to Item
14(c):
Exhibit No. Description Page
----------- ----------- ----
4(a) Agreement of Limited Partnership of -
Parker & Parsley Producing Properties
87-B, Ltd.
4(b) Form of Subscription Agreement and -
Power of Attorney
4(c) Specimen Certificate of Limited Partnership -
Interest
10(a) Operating Agreement -
10(b) Exploration and Development Program -
Agreement
28
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000809017
<NAME> 87BP.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 63,834
<SECURITIES> 0
<RECEIVABLES> 159,893
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 223,727
<PP&E> 4,896,213
<DEPRECIATION> 3,296,326
<TOTAL-ASSETS> 1,823,614
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,823,614
<TOTAL-LIABILITY-AND-EQUITY> 1,823,614
<SALES> 980,232
<TOTAL-REVENUES> 985,122
<CGS> 0
<TOTAL-COSTS> 681,742
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 303,380
<INCOME-TAX> 0
<INCOME-CONTINUING> 303,380
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 303,380
<EPS-PRIMARY> 24.64
<EPS-DILUTED> 0
</TABLE>
