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 September 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 September 30, 2000 and
December 31, 1999..................................... 3
Statements of Operations for the three and nine
months ended September 30, 2000 and 1999............... 4
Statement of Partners' Capital for the nine months
ended September 30, 2000............................... 5
Statements of Cash Flows for the nine months ended
September 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
<CAPTION>
September 30, December 31,
2000 1999
------------ ------------
Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash $ 19,811 $ 21,724
Accounts receivable - oil and gas sales 201,577 164,577
----------- -----------
Total current assets 221,388 186,301
----------- -----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 4,829,203 4,837,591
Accumulated depletion (4,157,885) (4,131,342)
----------- -----------
Net oil and gas properties 671,318 706,249
----------- -----------
$ 892,706 $ 892,550
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 33,374 $ 23,066
Partners' capital:
Managing general partner 8,853 8,954
Limited partners (12,191 interests) 850,479 860,530
----------- -----------
859,332 869,484
----------- -----------
$ 892,706 $ 892,550
=========== ===========
</TABLE>
The financial information included as of September 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>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
--------------------- ---------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Oil and gas $ 252,587 $ 178,142 $ 722,124 $ 421,200
Interest 2,184 891 4,720 1,857
Gain (loss) on disposition of assets - (1,473) 8,294 13,078
-------- -------- -------- --------
254,771 177,560 735,138 436,135
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 71,685 72,543 263,814 245,176
General and administrative 7,578 5,344 21,664 12,636
Depletion 10,453 11,322 29,282 66,193
Abandoned property - - - 14,613
-------- -------- -------- --------
89,716 89,209 314,760 338,618
-------- -------- -------- --------
Net income $ 165,055 $ 88,351 $ 420,378 $ 97,517
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 1,651 $ 883 $ 4,204 $ 975
======== ======== ======== ========
Limited partners $ 163,404 $ 87,468 $ 416,174 $ 96,542
======== ======== ======== ========
Net income per limited
partnership interest $ 13.41 $ 7.18 $ 34.14 $ 7.92
======== ======== ======== ========
</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>
<CAPTION>
Managing
general Limited
partner partners Total
---------- ---------- ----------
<S> <C> <C> <C>
Balance at January 1, 2000 $ 8,954 $ 860,530 $ 869,484
Distributions (4,305) (426,225) (430,530)
Net income 4,204 416,174 420,378
-------- --------- ---------
Balance at September 30, 2000 $ 8,853 $ 850,479 $ 859,332
======== ========= =========
</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>
<CAPTION>
Nine months ended
September 30,
-------------------------
2000 1999
---------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 420,378 $ 97,517
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 29,282 66,193
Gain on disposition of assets (8,294) (13,078)
Changes in assets and liabilities:
Accounts receivable (37,000) (49,677)
Accounts payable 10,308 30,872
--------- ---------
Net cash provided by operating activities 414,674 131,827
--------- ---------
Cash flows from investing activities:
Additions to oil and gas equipment - (7,543)
Proceeds from asset dispositions 13,943 16,179
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Net cash provided by investing activities 13,943 8,636
--------- ---------
Cash flows used in financing activities:
Cash distributions to partners (430,530) (85,926)
--------- ---------
Net increase (decrease) in cash (1,913) 54,537
Cash at beginning of period 21,724 9,859
--------- ---------
Cash at end of period $ 19,811 $ 64,396
========= =========
</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
September 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 for the
Partnership as of September 30, 2000 and for the three and nine months ended
September 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 September 30, 1999 financial statements to conform to
the September 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
Nine months ended September 30, 2000 compared with nine months ended September
30, 1999
Revenues:
The Partnership's oil and gas revenues increased 71% to $722,124 for the nine
months ended September 30, 2000 as compared to $421,200 for the same period in
1999. The increase in revenues resulted from higher average prices received,
7
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offset by a decrease in production. For the nine months ended September 30,
2000, 17,798 barrels of oil, 7,883 barrels of natural gas liquids ("NGLs") and
37,119 mcf of gas were sold, or 31,868 barrel of oil equivalents ("BOEs"). For
the nine months ended September 30, 1999, 18,851 barrels of oil, 8,062 barrels
of NGLs and 36,042 mcf of gas were sold, or 32,920 BOEs. Of the decrease, 3,615
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 2,563 BOEs.
The average price received per barrel of oil increased $12.88, or 83%, from
$15.61 for the nine months ended September 30, 1999 to $28.49 for the same
period in 2000. The average price received per barrel of NGLs increased $6.86,
or 77%, from $8.94 during the nine months ended September 30, 1999 to $15.80 for
the same period in 2000. The average price received per mcf of gas increased 61%
from $1.52 during the nine months ended September 30, 1999 to $2.44 for the same
period in 2000. 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 nine months ended September 30, 2000.
Gains on disposition of assets of $8,294 and $13,078 were recognized during the
nine months ended September 30, 2000 and 1999, respectively. The gain recognized
during 2000 was due to equipment credits received on one well. The gain
recognized during the period in 1999 was comprised of $14,551 due to equipment
credits received on two wells, offset by a $1,473 loss on a well plugged and
abandoned during the current period.
Costs and Expenses:
Total costs and expenses decreased to $314,760 for the nine months ended
September 30, 2000 as compared to $338,618 for the same period in 1999, a
decrease of $23,858, or 7%. This decrease was due to declines in depletion and
abandoned property costs, offset by increases in production costs and general
and administrative expenses ("G&A").
Production costs were $263,814 for the nine months ended September 30, 2000 and
$245,176 for the same period in 1999, resulting in an $18,638 increase, or 8%. A
20% increase in production costs resulted from higher production taxes due to
higher oil and gas prices and additional well maintenance costs of incurred to
stimulate well production, offset by a 12% 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, 71% from $12,636 for the nine months ended September
30, 1999 to $21,664 for the same period in 2000 primarily due to a higher
allocation of the managing general partner's G&A being allocated (limited to 3%
of oil and gas revenues) as a result of increased oil and gas revenues.
Depletion was $29,282 for the nine months ended September 30, 2000 compared to
$66,193 for the same period in 1999, representing a decrease in depletion of
$36,911, or 56%. This decrease was the result of an increase in proved reserves
8
<PAGE>
due to higher commodity prices and a decline in oil production of 1,053 barrels
when compared to the respective information for the same period in 1999.
Abandoned property costs of $14,613 incurred during the nine months ended
September 30, 1999 were related to wells plugged and abandoned during the
current period.
Three months ended September 30, 2000 compared with three months ended September
30, 1999
Revenues:
The Partnership's oil and gas revenues increased 42% to $252,587 for the three
months ended September 30, 2000 as compared to $178,142 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 September 30,
2000, 5,836 barrels of oil, 2,454 barrels of NGLs and 10,989 mcf of gas were
sold, or 10,122 BOEs. For the three months ended September 30, 1999, 6,268
barrels of oil, 2,697 barrels of NGLs and 11,054 mcf of gas were sold, or 10,807
BOEs. Of the decrease, 1,899 BOEs are attributable to the Reversionary Interest
occurring. This is offset by a production increase of 1,214 BOEs.
The average price received per barrel of oil increased $9.28, or 46% from $20.30
for the three months ended September 30, 1999 to $29.58 for the same period in
2000. The average price received per barrel of NGLs increased $6.61, or 58%,
from $11.37 during the three months ended September 30, 1999 to $17.98 for the
same period in 2000. The average price received per mcf of gas increased 78%
from $1.83 during the three months ended September 30, 1999 to $3.26 for the
same period in 2000.
Loss on disposition of assets of $1,473 recognized during the three months ended
September 30, 1999 resulted from the abandonment of one well during the current
period.
Costs and Expenses:
Total costs and expenses increased to $89,716 for the three months ended
September 30, 2000 as compared to $89,209 for the same period in 1999, an
increase of $507. This increase was due to an increase in G&A, offset by
declines in depletion and production costs.
Production costs were $71,685 for the three months ended September 30, 2000 and
$72,543 for the same period in 1999, resulting in an $858 decrease, or 1%. The
decrease was the result of a 21% decline in lease operating expenses and
production taxes attributable to the Revisionary Interest occurring, offset by a
20% increase in production taxes associated with 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 $5,344 for the three
months ended September 30, 1999 to $7,578 for the same period in 2000 primarily
due to a higher allocation of the managing general partner's 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 $10,453 for the three months ended September 30, 2000 compared to
$11,322 for the same period in 1999, representing a decrease in depletion of
$869, or 8%. This decrease was attributable to an increase in proved reserves as
a result of higher commodity prices and a decrease in oil production of 432
barrels when compared to the respective information for the same period in 1999.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $282,847 during the nine
months ended September 30, 2000 from the same period ended September 30, 1999.
This increase was due to an increase in oil and gas sales receipts of $316,464
and a $14,613 decline in abandoned property costs paid, offset by increases of
$37,148 in production costs paid and $11,082 in G&A expenses paid.
Net Cash Provided by Investing Activities
The Partnership's investing activities during the nine months ended September
30, 1999 were related to upgrades of equipment on various active oil and gas
properties.
Proceeds from disposition of assets of $13,943 and $16,179 were recognized for
the nine months ended September 30, 2000 and 1999, respectively. The proceeds
recognized during the periods in 2000 and 1999 were from equipment credits.
Net Cash Used in Financing Activities
For the nine months ended September 30, 2000, cash distributions to the partners
were $430,530, of which $4,305 was distributed to the managing general partner
and $426,225 to the limited partners. For the same period ended September 30,
1999, cash distributions to the partners were $85,926 of which $798 was
distributed to the managing general partner and $85,128 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: November 9, 2000 By: /s/ Rich Dealy
------------------------------------
Rich Dealy, Vice President and
Chief Accounting Officer
11
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