UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
/x/ Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 1996, or
/ / Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from _______ to _______
Commission File No. 33-12244-02
PARKER & PARSLEY 87-B, LTD.
(Exact name of Registrant as specified in its charter)
Texas 75-2185706
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
303 West Wall, Suite 101,
Midland, Texas 79701
(Address of principal executive offices) (Zip code)
Registrant's Telephone Number, including area code: (915)683-4768
Not applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes /x/ No / /
Page 1 of 16 pages.
There are no exhibits.
<PAGE>
PARKER & PARSLEY 87-B, LTD.
(A Texas Limited Partnership)
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
BALANCE SHEETS
June 30, December 31,
1996 1995
------------ ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including
interest bearing deposits of $572,325
at June 30 and $184,717 at December 31 $ 572,525 $ 186,643
Accounts receivable - oil and gas sales 166,482 164,219
----------- -----------
Total current assets 739,007 350,862
Oil and gas properties - at cost, based
on the successful efforts accounting
method 13,655,471 15,255,391
Accumulated depletion (9,103,119) (10,152,372)
----------- -----------
Net oil and gas properties 4,552,352 5,103,019
----------- -----------
$ 5,291,359 $ 5,453,881
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 106,822 $ 82,627
Accounts payable - other 29,895 -
----------- -----------
Total current liabilities 136,717 82,627
Partners' capital:
Limited partners (20,089 interests) 5,097,470 5,317,608
Managing general partner 57,172 53,646
----------- -----------
5,154,642 5,371,254
----------- -----------
$ 5,291,359 $ 5,453,881
=========== ===========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
PARKER & PARSLEY 87-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended
June 30, June 30,
1996 1995 1996 1995
---------- ---------- ---------- ----------
Revenues:
Oil and gas sales $ 427,918 $ 405,757 $ 841,564 $ 838,524
Interest income 3,152 2,990 5,810 5,295
Litigation settlement 590,715 - 590,715 -
Salvage income from
equipment disposals 403 - 13,523 -
--------- --------- --------- ---------
Total revenues 1,022,188 408,747 1,451,612 843,819
Costs and expenses:
Production costs 168,582 176,748 356,152 386,718
General and adminis-
trative expenses 14,318 12,541 26,727 25,524
Depletion 87,330 148,730 196,836 316,232
Abandoned property
costs - - 6,202 -
Loss on sale of assets 55,993 351 55,993 351
--------- --------- --------- ---------
Total costs and
expenses 326,223 338,370 641,910 728,825
--------- --------- --------- ---------
Net income $ 695,965 $ 70,377 $ 809,702 $ 114,994
========= ========= ========= =========
Allocation of net
income:
Managing general
partner $ 6,959 $ 704 $ 8,097 $ 1,150
========= ========= ========= =========
Limited partners $ 689,006 $ 69,673 $ 801,605 $ 113,844
========= ========= ========= =========
Net income per limited
partnership interest $ 34.30 $ 3.47 $ 39.90 $ 5.67
========= ========= ========= =========
Distributions per limited
partnership interest $ 40.90 $ 9.55 $ 50.86 $ 19.28
========= ========= ========= =========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
PARKER & PARSLEY 87-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
----------- ----------- -----------
Balance at January 1, 1995 $ 72,216 $ 7,153,753 $ 7,225,969
Distributions (3,913) (387,289) (391,202)
Net income 1,150 113,844 114,994
---------- ---------- ----------
Balance at June 30, 1995 $ 69,453 $ 6,880,308 $ 6,949,761
========== ========== ==========
Balance at January 1, 1996 $ 53,646 $ 5,317,608 $ 5,371,254
Distributions (4,571) (1,021,743) (1,026,314)
Net income 8,097 801,605 809,702
---------- ---------- ----------
Balance at June 30, 1996 $ 57,172 $ 5,097,470 $ 5,154,642
========== ========== ==========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
PARKER & PARSLEY 87-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended
June 30,
1996 1995
---------- ----------
Cash flows from operating activities:
Net income $ 809,702 $ 114,994
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 196,836 316,232
Salvage income from equipment disposals (13,523) -
Loss on sale of assets 55,993 351
Changes in assets and liabilities:
Increase in accounts receivable (2,263) (9,199)
Increase in accounts payable 63,532 33,096
--------- ---------
Net cash provided by operating
activities 1,110,277 455,474
Cash flows from investing activities:
Additions to oil and gas properties (30,185) (9,585)
Proceeds from salvage income on
equipment disposals 13,523 -
Proceeds from sale of assets 318,581 -
--------- ---------
Net cash provided by (used in)
investing activities 301,919 (9,585)
Cash flows from financing activities:
Cash distributions to partners (1,026,314) (391,202)
--------- ---------
Net increase in cash and cash equivalents 385,882 54,687
Cash and cash equivalents at beginning
of period 186,643 131,056
--------- ---------
Cash and cash equivalents at end of period $ 572,525 $ 185,743
========= =========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
PARKER & PARSLEY 87-B, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
NOTE 1.
Parker & Parsley 87-B, Ltd. (the "Registrant") is a limited partnership
organized in 1987 under the laws of the State of Texas.
The Registrant engages primarily in oil and gas development and production in
Texas and Colorado and is not involved in any industry segment other than oil
and gas.
NOTE 2.
In the opinion of management, the Registrant's unaudited financial statements as
of June 30, 1996 include all adjustments and accruals consisting only of normal
recurring accrual adjustments which are necessary for a fair presentation of the
results for the interim period. However, these interim results are not
necessarily indicative of results for a full year.
The financial statements should be read in conjunction with the financial
statements and the notes thereto contained in the Registrant's Report on Form
10-K for the year ended December 31, 1995, as filed with the Securities and
Exchange Commission, a copy of which is available upon request by writing to
Steven L. Beal, Senior Vice President, 303 West Wall, Suite 101, Midland, Texas
79701.
NOTE 3.
On May 25, 1993, a final settlement agreement was negotiated, drafted and
finally executed, ending litigation which had begun on September 5, 1989, when
the Registrant filed suit along with other parties against Dresser Industries,
Inc.; Titan Services, Inc.; BJ-Titan Services Company; BJ- Hughes Holding
Company; Hughes Tool Company; Baker Hughes Production Tools, Inc.; and Baker
Hughes Incorporated alleging that the defendants had intentionally failed to
provide the materials and services ordered and paid for by the Registrant and
other parties in connection with the fracturing and acidizing of 523 wells, and
then fraudulently concealed the shorting practice from Parker & Parsley
Development L.P. ("PPDLP"). The May 25, 1993 settlement agreement called for a
payment of $115 million in cash by the defendants, and Southmark, the
6
<PAGE>
Registrant, and the other plaintiffs indemnified the defendants against the
claims of Jack N. Price. The managing general partner received the funds,
deducted incurred legal expenses, accrued interest, determined the general
partner's portion of the funds and calculated any inter-partnership allocations.
On May 3, 1993, Jack N. Price, the attorney who represented Gary G. "Zeke"
Lancaster in the Federal Court lawsuit, filed suit in State Court in Beaumont
against all of the plaintiff partnerships, including the Registrant and others,
alleging his entitlement to 12% of the settlement proceeds. Price's lawsuit
claim for approximately $13.8 million is predicated on a purported contract
entered into with Southmark Corporation in August 1988 in which he allegedly
binds the Registrant and the other defendants, as well as Southmark. Although
PPDLP believes the lawsuit was without merit and has vigorously defended it,
PPDLP has held in reserve approximately 12.5% of the total settlement (the
"Reserve") pending final resolution of the litigation.
A distribution of $91,000,000 was made to the working interest owners, including
the Registrant, on July 30, 1993. The limited partners received their
distribution of $5,741,966, or $285.83 per limited partnership interest, in
September 1993. The allocation of the lawsuit settlement amount was based on the
original verdict entered on October 26, 1990. The allocation to the working
interest owners in each well (including the Registrant) was based on a ratio of
the relative amount of damages due to overcharges for services and materials
("Materials") and damages for loss of past and future production ("Production"),
each as determined in that initial judgment. Within the Registrant, damages for
Materials were allocated between the partners based on their original sharing
percentages for costs of acquiring and/or drilling of wells. Similarly, damages
related to Production were allocated to the partners in the Registrant based on
their respective share of revenues from the subject wells.
As a condition of the purchase by Parker & Parsley Petroleum Company of Parker &
Parsley Development Company ("PPDC"), which was merged into PPDLP on January 1,
1995, from its former parent in May 1989, PPDC's interest in the lawsuit and
subsequent settlement was retained by the former parent. Consequently, all of
PPDC's share of the settlement related to its separately held interests in the
wells and its partnership interests in the sponsored partnerships (except that
portion allocable to interests acquired by PPDC after May 1989) was paid to the
former parent.
On September 20, 1995, the Beaumont trial judge entered a summary judgment
against Southmark for the $13,790,000 contingent fee sought by Price, together
with prejudgment interest, and also awarded Price an additional $5,498,525 in
attorneys' fees. On January 22, 1996, the trial judge entered an interlocutory
7
<PAGE>
summary judgment against Dresser Industries and Baker Hughes for an amount to be
determined. Pursuant to their indemnity obligations, the Registrant, Southmark,
PPDLP and other original plaintiffs vigorously protected the rights of both
Dresser and Baker Hughes. Southmark vigorously pursued its appeal of the
judgment, and posted a supersedeas bond using the Reserve as collateral. On
April 29, 1996, all of the parties, including the Registrant and Southmark,
entered into a $7.4 million settlement with Price which fully and finally
resolves all of the litigation and disputes between the parties, including the
Registrant's indemnity obligations to Dresser and Baker Hughes.
Pursuant to the settlement agreement, all of the pending lawsuits and judgments
have been dismissed, the supersedeas bond released, and the Reserve released as
collateral. The managing general partner conducted an accounting of income and
expenses among the parties, and, on June 28, 1996, made a final $9.3 million
distribution to the working interest owners, including the Registrant and its
partners, resulting in a distribution of $584,808 to the limited partners, or
$29.11 per limited partnership interest. The distribution was allocated to the
limited partners using the same methodology as the original $91 million
distribution in 1993.
NOTE 4.
A loss of $55,993 from the sale of six oil and gas wells and four saltwater
disposal wells to Costilla Energy, L.L.C. during the six months ended June 30,
1996 resulted from the write-off of remaining capitalized well costs of
$374,574, less proceeds received of $318,581.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (1)
Results of Operations
Six months ended June 30, 1996 compared with six months ended June 30, 1995
Revenues:
The Registrant's oil and gas revenues increased to $841,564 from $838,524 for
the six months ended June 30, 1996 and 1995, respectively, an increase of
$3,040. The increase in revenues resulted from higher average prices received
per barrel of oil and mcf of gas, offset by a 16% decrease in barrels of oil
produced and sold and a 20% decrease in mcf of gas produced and sold. For the
six months ended June 30, 1996, 30,131 barrels of oil were sold compared to
35,720 for the same period in 1995, a decrease of 5,589 barrels. Of the
8
<PAGE>
decrease, 1,657 barrels or 5%, was attributable to the sale of six oil and gas
wells during the six months ended June 30, 1996, while the remaining decrease of
3,932 barrels, or 11%, was due to the decline characteristics of the
Registrant's oil and gas properties. For the six months ended June 30, 1996,
102,081 mcf of gas were sold compared to 127,348 for the same period in 1995, a
decrease of 25,267 mcf. The sale of six oil and gas wells had only a slight
effect on the decrease in mcf of gas. Management expects a certain amount of
decline in production to continue in the future until the Registrant's
economically recoverable reserves are fully depleted.
The average price received per barrel of oil increased $2.90, or 17%, from
$17.53 for the six months ended June 30, 1995 to $20.43 for the same period in
1996 while the average price received per mcf of gas increased 33% from $1.67
during the six months ended June 30, 1995 to $2.21 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 Registrant 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,
1996.
Salvage income of $13,523, received during the six months ended June 30, 1996,
was derived from equipment credits received on one well abandoned in a prior
year.
Costs and Expenses:
Total costs and expenses decreased to $641,910 for the six months ended June 30,
1996 as compared to $728,825 for the same period in 1995, a decrease of $86,915,
or 12%. This decrease was due to declines in production costs and depletion,
offset by increases in general and administrative expenses ("G&A"), abandoned
property costs and loss on sale of assets.
Production costs were $356,152 for the six months ended June 30, 1996 and
$386,718 for the same period in 1995 resulting in a $30,566 decrease, or 8%.
This decrease was primarily the result of less well repair and maintenance
expenses and a decline in ad valorem taxes.
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, 5% from $25,524 for the six months ended
June 30, 1995 to $26,727 for the same period in 1996.
9
<PAGE>
A loss of $55,993 from the sale of six oil and gas wells and four saltwater
disposal wells during the six months ended June 30, 1996 resulted from the
write-off of remaining capitalized well costs of $374,574, less proceeds
received of $318,581. During the same period in 1995, a loss of $351 from the
sale of one fully depleted well was the result of the reimbursement of net
revenues received after the effective date of sale.
Abandoned property costs totaled $6,202 during the six months ended June 30,
1996. These costs were incurred on one well plugged and abandoned during 1995.
There was no abandonment expense incurred for the same period in 1995.
Depletion was $196,836 for the six months ended June 30, 1996 compared to
$316,232 for the same period in 1995. This represented a decrease in depletion
of $119,396, or 38%, primarily attributable to the adoption of the provisions of
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of"
("FAS 121") effective the fourth quarter of 1995 and the reduction of net
depletable basis resulting from the charge taken upon such adoption. In
addition, of the decrease, $43,554, or 14%, was attributable to the sale of six
oil and gas wells during the six months ended June 30, 1996. Depletion was
computed property-by-property utilizing the unit-of-production method based upon
the dominant mineral produced, generally oil. Oil production decreased 5,589
barrels for the six months ended June 30, 1996 from the same period in 1995,
while oil reserves of barrels were revised downward by 12,813 barrels.
On May 25, 1993, a final settlement agreement was negotiated, drafted and
finally executed, ending litigation which had begun on September 5, 1989, when
the Registrant filed suit along with other parties against Dresser Industries,
Inc.; Titan Services, Inc.; BJ-Titan Services Company; BJ- Hughes Holding
Company; Hughes Tool Company; Baker Hughes Production Tools, Inc.; and Baker
Hughes Incorporated alleging that the defendants had intentionally failed to
provide the materials and services ordered and paid for by the Registrant and
other parties in connection with the fracturing and acidizing of 523 wells, and
then fraudulently concealed the shorting practice from PPDLP. The May 25, 1993
settlement agreement called for a payment of $115 million in cash by the
defendants, and Southmark, the Registrant, and the other plaintiffs indemnified
the defendants against the claims of Jack N. Price. The managing general partner
received the funds, deducted incurred legal expenses, accrued interest,
determined the general partner's portion of the funds and calculated any
inter-partnership allocations.
10
<PAGE>
On May 3, 1993, Jack N. Price, the attorney who represented Gary G. "Zeke"
Lancaster in the Federal Court lawsuit, filed suit in State Court in Beaumont
against all of the plaintiff partnerships, including the Registrant and others,
alleging his entitlement to 12% of the settlement proceeds. Price's lawsuit
claim for approximately $13.8 million is predicated on a purported contract
entered into with Southmark Corporation in August 1988 in which he allegedly
binds the Registrant and the other defendants, as well as Southmark. Although
PPDLP believes the lawsuit was without merit and has vigorously defended it,
PPDLP has held in reserve approximately 12.5% of the total settlement (the
"Reserve") pending final resolution of the litigation.
A distribution of $91,000,000 was made to the working interest owners, including
the Registrant, on July 30, 1993. The limited partners received their
distribution of $5,741,966, or $285.83 per limited partnership interest, in
September 1993. The allocation of the lawsuit settlement amount was based on the
original verdict entered on October 26, 1990. The allocation to the working
interest owners in each well (including the Registrant) was based on a ratio of
the relative amount of damages due to overcharges for services and materials
("Materials") and damages for loss of past and future production ("Production"),
each as determined in that initial judgment. Within the Registrant, damages for
Materials were allocated between the partners based on their original sharing
percentages for costs of acquiring and/or drilling of wells. Similarly, damages
related to Production were allocated to the partners in the Registrant based on
their respective share of revenues from the subject wells.
As a condition of the purchase by Parker & Parsley Petroleum Company of PPDC,
which was merged into PPDLP on January 1, 1995, from its former parent in May
1989, PPDC's interest in the lawsuit and subsequent settlement was retained by
the former parent. Consequently, all of PPDC's share of the settlement related
to its separately held interests in the wells and its partnership interests in
the sponsored partnerships (except that portion allocable to interests acquired
by PPDC after May 1989) was paid to the former parent.
On September 20, 1995, the Beaumont trial judge entered a summary judgment
against Southmark for the $13,790,000 contingent fee sought by Price, together
with prejudgment interest, and also awarded Price an additional $5,498,525 in
attorneys' fees. On January 22, 1996, the trial judge entered an interlocutory
summary judgment against Dresser Industries and Baker Hughes for an amount to be
determined. Pursuant to their indemnity obligations, the Registrant, Southmark,
PPDLP and other original plaintiffs vigorously protected the rights of both
Dresser and Baker Hughes. Southmark vigorously pursued its appeal of the
judgment, and posted a supersedeas bond using the Reserve as collateral. On
11
<PAGE>
April 29, 1996, all of the parties, including the Registrant and Southmark,
entered into a $7.4 million settlement with Price which fully and finally
resolves all of the litigation and disputes between the parties, including the
Registrant's indemnity obligations to Dresser and Baker Hughes.
Pursuant to the settlement agreement, all of the pending lawsuits and judgments
have been dismissed, the supersedeas bond released, and the Reserve released as
collateral. The managing general partner conducted an accounting of income and
expenses among the parties, and, on June 28, 1996, made a final $9.3 million
distribution to the working interest owners, including the Registrant and its
partners, resulting in a distribution of $584,808 to the limited partners, or
$29.11 per limited partnership interest. The distribution was allocated to the
limited partners using the same methodology as the original $91 million
distribution in 1993.
Three months ended June 30, 1996 compared with three months ended June 30, 1995
Revenues:
The Registrant's oil and gas revenues increased to $427,918 from $405,757 for
the three months ended June 30, 1996 and 1995, respectively, an increase of
$22,161, or 5%. The increase in revenues resulted from higher average prices
received per barrel of oil and mcf of gas, offset by a 15% decrease in barrels
of oil produced and sold and a 24% decrease in mcf of gas produced and sold. For
the three months ended June 30, 1996, 14,305 barrels of oil were sold compared
to 16,835 for the same period in 1995, a decrease of 2,530 barrels. Of the
decrease, 1,198 barrels or 7%, was attributable to the sale of six oil and gas
wells during the three months ended June 30, 1996, while the remaining decrease
of 1,332 barrels, or 8%, was due to the decline characteristics of the
Registrant's oil and gas properties. For the three months ended June 30, 1996,
50,229 mcf of gas were sold compared to 66,040 for the same period in 1995, a
decrease of 15,811 mcf. Of the decrease, 1,725 mcf or 3%, was attributable to
the sale of six oil and gas wells during the three months ended June 30, 1996,
while the remaining decrease of $14,086 mcf, or 21%, was due to the decline
characteristics of the Registrant's oil and gas properties.
The average price received per barrel of oil increased $3.98, or 22%, from
$18.00 during the three months ended June 30, 1995 to $21.98 for the same period
in 1996, while the average price received per mcf of gas increased 46% from
$1.55 during the three months ended June 30, 1995 to $2.26 in 1996.
12
<PAGE>
Salvage income of $403, received during the three months ended June 30, 1996,
was derived from equipment credits received on one well abandoned in a prior
year.
Costs and Expenses:
Total costs and expenses decreased to $326,223 for the three months ended June
30, 1996 as compared to $338,370 for the same period in 1995, a decrease of
$12,147, or 4%. This decrease was due to declines in production costs and
depletion, offset by increases in G&A and loss on sale of assets.
Production costs were $168,582 for the three months ended June 30, 1996 and
$176,748 for the same period in 1995 resulting in a $8,166 decrease, or 5%. This
decrease was primarily the result of less well repair and maintenance expenses
and a decline in ad valorem taxes.
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, 14%, from $12,541 for the three months
ended June 30, 1995 to $14,318 for the same period in 1996.
Depletion was $87,330 for the three months ended June 30, 1996 compared to
$148,730 for the same period in 1995. This represented a decrease in depletion
of $61,400, or 41%, partially attributable to the adoption of FAS 121 the fourth
quarter of 1995, as discussed previously. In addition, $43,554, or 31%, was
attributable to the sale of six oil and gas wells during the three months ended
June 30, 1996. Oil production decreased 2,530 barrels for the three months ended
June 30, 1996 from the same period in 1995.
A loss of $55,993 from the sale of six oil and gas wells and four saltwater
disposal wells during the three months ended June 30, 1996 resulted from the
write-off of remaining capitalized well costs of $374,574, less proceeds
received of $318,581. During the same period in 1995, a loss of $351 from the
sale of one fully depleted well was the result of the reimbursement of net
revenues received after the effective date of sale.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $654,803 during the six
months ended June 30, 1996 from the same period ended June 30, 1995. This
increase was primarily due to the receipt of litigation proceeds, an increase in
13
<PAGE>
oil and gas sales receipts and a decrease in production costs paid, offset by an
increase in abandoned property costs.
Net Cash Provided by (Used in) Investing Activities
The Registrant's investing activities during the six months ended June 30, 1996
and 1995, respectively, included $30,185 and $9,585 for expenditures related to
equipment replacement on various oil and gas properties.
Proceeds from salvage income of $13,523 were received from the sale of equipment
on one property abandoned in a prior year.
Proceeds of $318,581 were received during the six months ended June 30, 1996
from the sale of six oil and gas wells and four saltwater disposal wells.
Net Cash Used in Financing Activities
Cash was sufficient for the six months ended June 30, 1996 to cover
distributions to the partners of $1,026,314 of which $1,021,743 was distributed
to the limited partners and $4,571 to the managing general partner. For the same
period ended June 30, 1995, cash was sufficient for distributions to the
partners of $391,202 of which $387,289 was distributed to the limited partners
and $3,913 to the managing general partner.
Cash distributions to the partners of $1,026,314 for the six months ended June
30, 1996 included $584,808 to the limited partners and $5,907 to the managing
general partner, resulting from proceeds received in the litigation settlement
as discussed in Note 3.
It is expected that future net cash provided by operating activities will be
sufficient for any capital expenditures and any distributions. As the production
from the properties declines, distributions are also expected to decrease.
- ---------------
(1) "Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations" contains forward looking statements that involve
risks and uncertainties. Accordingly, no assurances can be given that the
actual events and results will not be materially different than the
anticipated results described in the forward looking statements.
14
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Registrant is party to material litigation which is described in Note 3 of
Notes to Financial Statements above.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - none
(b) Reports on Form 8-K - none
15
<PAGE>
PARKER & PARSLEY 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 87-B, LTD.
By: Parker & Parsley Development L.P.,
Managing General Partner
By: Parker & Parsley Petroleum USA, Inc.
("PPUSA"), General Partner
Dated: August 8, 1996 By: /s/ Steven L. Beal
---------------------------------------
Steven L. Beal, Senior Vice
President and Chief Financial
Officer of PPUSA
16
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000811000
<NAME> 87B.TXT
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 572,525
<SECURITIES> 0
<RECEIVABLES> 166,482
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 739,007
<PP&E> 13,655,471
<DEPRECIATION> 9,103,119
<TOTAL-ASSETS> 5,291,359
<CURRENT-LIABILITIES> 136,717
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,154,642
<TOTAL-LIABILITY-AND-EQUITY> 5,291,359
<SALES> 841,564
<TOTAL-REVENUES> 1,451,612
<CGS> 0
<TOTAL-COSTS> 641,910
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 809,702
<INCOME-TAX> 0
<INCOME-CONTINUING> 809,702
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 809,702
<EPS-PRIMARY> 39.90
<EPS-DILUTED> 0
</TABLE>
