UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2000
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)
1400 Williams Square West, 5205 N. O'Connor Blvd., Irving, Texas 75039
---------------------------------------------------------------- ---------
(Address of principal executive offices) (Zip code)
Registrant's Telephone Number, including area code : (972) 444-9001
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 / /
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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, 2000 and
December 31, 1999....................................... 3
Statements of Operations for the three and six
months ended June 30, 2000 and 1999...................... 4
Statement of Partners' Capital for the six months
ended June 30, 2000...................................... 5
Statements of Cash Flows for the six months ended
June 30, 2000 and 1999................................... 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
27.1 Financial Data Schedule
Signatures................................................. 11
2
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PARKER & PARSLEY PRODUCING PROPERTIES 87-B, LTD.
(A Texas Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
<TABLE>
BALANCE SHEETS
June 30, December 31,
2000 1999
------------ -----------
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash $ 52,343 $ 21,724
Accounts receivable - oil and gas sales 147,129 164,577
---------- ----------
Total current assets 199,472 186,301
---------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 4,831,941 4,837,591
Accumulated depletion (4,150,171) (4,131,342)
---------- ----------
Net oil and gas properties 681,770 706,249
---------- ----------
$ 881,242 $ 892,550
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 22,277 $ 23,066
Partners' capital:
Managing general partner 8,849 8,954
Limited partners (12,191 interests) 850,116 860,530
---------- ----------
858,965 869,484
---------- ----------
$ 881,242 $ 892,550
========== ==========
</TABLE>
The financial information included as of June 30, 2000 has been prepared by
the managing general partner 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)
<TABLE>
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Oil and gas $ 205,745 $ 144,544 $ 469,537 $ 243,058
Interest 1,465 557 2,536 966
Gain (loss) on disposition
of assets - (61) 8,294 14,551
-------- -------- -------- --------
207,210 145,040 480,367 258,575
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 82,693 86,306 192,129 172,633
General and administrative 6,172 4,337 14,086 7,292
Depletion 8,103 15,267 18,829 54,871
Abandoned property - 2,974 - 14,613
-------- -------- -------- --------
96,968 108,884 225,044 249,409
-------- -------- -------- --------
Net income $ 110,242 $ 36,156 $ 255,323 $ 9,166
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 1,102 $ 362 $ 2,553 $ 92
======== ======== ======== ========
Limited partners $ 109,140 $ 35,794 $ 252,770 $ 9,074
======== ======== ======== ========
Net income per limited
partnership interest $ 8.95 $ 2.93 $ 20.73 $ .74
======== ======== ======== ========
</TABLE>
The financial information included herein has been prepared by
the managing general partner 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)
<TABLE>
Managing
general Limited
partner partners Total
--------- ---------- -----------
<S> <C> <C> <C>
Balance at January 1, 2000 $ 8,954 $ 860,530 $ 869,484
Distributions (2,658) (263,184) (265,842)
Net income 2,553 252,770 255,323
-------- --------- ---------
Balance at June 30, 2000 $ 8,849 $ 850,116 $ 858,965
======== ========= ==========
</TABLE>
The financial information included herein has been prepared by
the managing general partner 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)
<TABLE>
Six months ended
June 30,
-----------------------
2000 1999
---------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 255,323 $ 9,166
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 18,829 54,871
Gain on disposition of assets (8,294) (14,551)
Changes in assets and liabilities:
Accounts receivable 17,448 (25,940)
Accounts payable (789) 28,318
--------- --------
Net cash provided by operating activities 282,517 51,864
--------- --------
Cash flows from investing activities:
Additions to oil and gas equipment - (1,349)
Proceeds from asset dispositions 13,944 16,179
--------- --------
Net cash provided by investing activities 13,944 14,830
--------- --------
Cash flows used in financing activities:
Cash distributions to partners (265,842) (30,873)
--------- --------
Net increase in cash 30,619 35,821
Cash at beginning of period 21,724 9,859
--------- --------
Cash at end of period $ 52,343 $ 45,680
========= ========
</TABLE>
The financial information included herein has been prepared by
the managing general partner 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, 2000
(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 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 of the
Partnership as of June 30, 2000 and for the three and six months ended June 30,
2000 and 1999 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 reclassifications may have been
made to the June 30, 1999 financial statements to conform to the June 30, 2000
financial statement presentations.
Certain information and footnote disclosures 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, 1999, as filed with the Securities and Exchange Commission, a copy
of which is available upon request by writing to Rich Dealy, Vice President and
Chief Accounting Officer, 5205 North O'Connor Boulevard, 1400 Williams Square
West, Irving, Texas 75039-3746.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (1)
Results of Operations
Six months ended June 30, 2000 compared with six months ended
June 30, 1999
Revenues:
The Partnership's oil and gas revenues increased 93% to $469,537 for the six
months ended June 30, 2000 as compared to $243,058 for the same period in 1999.
The increase in revenues resulted from higher average prices received, offset by
a decline in production. For the six months ended June 30, 2000, 11,962 barrels
7
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of oil, 5,429 barrels of natural gas liquids ("NGLs") and 26,130 mcf of gas were
sold, or 21,746 barrel of oil equivalents ("BOEs"). For the six months ended
June 30, 1999, 12,583 barrels of oil, 5,365 barrels of NGLs and 24,988 mcf of
gas were sold, or 22,113 BOEs. Of the decrease, 1,717 BOEs are attributable to
the fact that on April 1, 2000 the Partnership's revenue and operating expense
allocation reverted to 80.808081% from 95.959595% pursuant to the Program
agreement governing the Partnership which provides for a reversionary interest
of 80.808081% once cumulative distributions equal initial partners' capital
("Reversionary Interest"). This is offset by a production increase of 1,350
BOEs.
The average price received per barrel of oil increased $14.69, or 111%, from
$13.27 for the six months ended June 30, 1999 to $27.96 for the same period in
2000. The average price received per barrel of NGLs increased $7.10, or 92%,
from $7.72 during the six months ended June 30, 1999 to $14.82 for the same
period in 2000. The average price received per mcf of gas increased 50% to $2.09
for the six months ended June 30, 2000 compared to $1.39 for the same period in
1999. 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, 2000.
The volatility of commodity prices has had, and continues to have, a significant
impact on the Partnership's revenues and operating cash flow and could result in
additional decreases to the carrying value of the Partnership's oil and gas
properties.
Gain on disposition of assets of $8,294 and $14,551 was recognized during the
six months ended June 30, 2000 and 1999, respectively. The gain recognized
during both periods was due to equipment credits received on fully depleted
wells.
Costs and Expenses:
Total costs and expenses decreased to $225,044 for the six months ended June 30,
2000 as compared to $249,409 for the same period in 1999, a decrease of $24,365,
or 10%. This decrease was due to reductions in depletion and abandoned property
costs, offset by increases in production costs and general and administrative
expenses ("G&A").
Production costs were $192,129 for the six months ended June 30, 2000 and
$172,633 for the same period in 1999, resulting in a $19,496 increase, or 11%. A
20% increase in production costs resulted from higher production taxes due to
higher oil and gas prices and additional well maintenance costs incurred to
stimulate well production, offset by a 9% decline in lease operating costs and
production taxes attributable to the Reversionary Interest occurring.
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, 93% from $7,292 for the six months ended June 30, 1999,
to $14,086 for the same period in 2000 primarily due to a higher allocation of
the managing general partners' G&A being allocated (limited to 3% of oil and gas
revenues) as a result of increased oil and gas revenues.
8
<PAGE>
Depletion was $18,829 for the six months ended June 30, 2000 compared to $54,871
for the same period in 1999, a decrease of $36,042, or 66%. This decrease was
the result of an increase in proved reserves during the period ended June 30,
2000 due to higher commodity prices and a decrease in oil production of 621
barrels for the six months ended June 30, 2000 compared to the same period in
1999.
Abandoned property costs of $14,613 incurred during the six months ended June
30, 1999 were related to wells plugged and abandoned during 1998.
Three months ended June 30, 2000 compared with three months ended June 30, 1999
Revenues:
The Partnership's oil and gas revenues increased 42% to $205,745 for the three
months ended June 30, 2000 as compared to $144,544 for the same period in 1999.
The increase in revenues resulted from higher average prices received, offset by
a decrease in production. For the three months ended June 30, 2000, 4,955
barrels of oil, 2,418 barrels of NGLs and 11,575 mcf of gas were sold, or 9,302
BOEs. For the three months ended June 30, 1999, 6,442 barrels of oil, 3,296
barrels of NGLs and 13,609 mcf of gas were sold, or 12,006 BOEs. Of the
decrease, 1,717 BOEs are attributable to the Reversionary Interest occurring.
The average price received per barrel of oil increased $14.05, or 97%, from
$14.49 for the three months ended June 30, 1999 to $28.54 for the same period in
2000. The average price received per barrel of NGLs increased $5.62, or 62%,
from $9.06 during the three months ended June 30, 1999 to $14.68 for the same
period in 2000. The average price received per mcf of gas increased 59% from
$1.57 during the three months ended June 30, 1999 to $2.49 in 2000.
Costs and Expenses:
Total costs and expenses decreased to $96,968 for the three months ended June
30, 2000 as compared to $108,884 for the same period in 1999, a decrease of
$11,916, or 11%. This decrease was due to declines in depletion, production
costs and abandoned property costs, offset by an increase in G&A.
Production costs were $82,693 for the three months ended June 30, 2000 and
$86,306 for the same period in 1999, resulting in a $3,613 decrease, or 4%. The
decrease was the result of an 18% decline in lease operating expenses and
production taxes attributable to the Reversionary Interest occurring, offset by
a 14% increase in production taxes due to higher oil and gas prices and
additional well maintenance costs incurred to stimulate well production.
During this period, G&A increased, in aggregate, 42% from $4,337 for the three
months ended June 30, 1999 to $6,172 for the same period in 2000 primarily due
to a higher allocation of the managing general partners' G&A being allocated
(limited to 3% of oil and gas revenues) as a result of increased oil and gas
revenues.
9
<PAGE>
Depletion was $8,103 for the three months ended June 30, 2000 compared to
$15,267 for the same period in 1999, a decrease of $7,164, or 47%. This decrease
was attributable to an increase in proved reserves during the period ended June
30, 2000 as a result of higher commodity prices and a decrease in oil production
of 1,487 barrels for the three months ended June 30, 2000 compared to the same
period in 1999.
Abandoned property costs of $2,974 incurred during the three months ended June
30, 1999 were related to wells plugged and abandoned during 1998.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $230,653 during the six
months ended June 30, 2000 from the same period in 1999. This increase was the
result of an increase in oil and gas sales receipts of $271,437 and a decline in
abandoned property costs paid of $14,613, offset by increases in operating costs
paid of $47,334 and G&A expenses paid of $8,063.
Net Cash Provided by Investing Activities
The Partnership's principal investing activities during the six months ended
June 30, 1999 were related to expenditures for upgrades of oil and gas equipment
on active properties.
Proceeds from asset dispositions of $13,944 and $16,179 were received for the
six months ending June 30, 2000 and 1999, respectively. The proceeds received
during both periods were primarily from equipment credits on fully depleted
wells.
Net Cash Used in Financing Activities
For the six months ended June 30, 2000, cash distributions to the partners were
$265,842, of which $2,658 was distributed to the managing general partner and
$263,184 to the limited partners. For the same period ended June 30, 1999, cash
distributions to the partners were $30,873, of which $457 was distributed to the
managing general partner and $30,416 to the limited partners.
---------------
(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
27.1 Financial Data Schedule
(b) Reports on Form 8-K - none
10
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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: Pioneer Natural Resources USA, Inc.,
Managing General Partner
Dated: August 11, 2000 By: /s/ Rich Dealy
---------------------------------
Rich Dealy, Vice President and
Chief Accounting Officer
11
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