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 March 31, 1997
or
/ / Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from _______ to _______
Commission File No. 33-12244-02
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 10 pages.
-There are no exhibits-
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PARKER & PARSLEY 87-B, LTD.
TABLE OF CONTENTS
Page
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of March 31, 1997 and
December 31, 1996....................................... 3
Statements of Operations for the three months
ended March 31, 1997 and 1996........................... 4
Statement of Partners' Capital for the three months
ended March 31, 1997.................................... 5
Statements of Cash Flows for the three months
ended March 31, 1997 and 1996........................... 6
Notes to Financial Statements............................. 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...................... 7
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K....................... 9
27. Financial Data Schedule
Signatures............................................. 10
2
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PARKER & PARSLEY 87-B, LTD.
(A Texas Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
March 31, December 31,
1997 1996
---------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $147,135 at March 31
and $275,996 at December 31 $ 147,336 $ 276,197
Accounts receivable:
Oil and gas sales 172,124 234,487
Affiliate 96,845 -
----------- -----------
Total current assets 416,305 510,684
----------- -----------
Oil and gas properties - at cost, based on the
successful efforts accounting method $ 13,660,666 $ 13,660,524
Accumulated depletion (9,337,655) (9,256,719)
----------- -----------
Net oil and gas properties 4,323,011 4,403,805
----------- -----------
$ 4,739,316 $ 4,914,489
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 34,085 $ 114,235
Partners' capital:
Managing general partner 46,986 47,937
Limited partners (20,089 interests) 4,658,245 4,752,317
----------- -----------
4,705,231 4,800,254
----------- -----------
$ 4,739,316 $ 4,914,489
=========== ===========
The financial information included as of March 31, 1997 has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
3
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PARKER & PARSLEY 87-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
March 31,
-------------------------
1997 1996
-------- ---------
Revenues:
Oil and gas $ 400,745 $ 413,646
Interest 3,539 2,658
Salvage income from equipment disposals - 13,120
-------- ---------
404,284 429,424
-------- ---------
Costs and expenses:
Oil and gas production 170,833 187,570
General and administrative 11,965 12,409
Depletion 80,936 109,506
Abandoned property - 6,202
-------- ---------
263,734 315,687
-------- ---------
Net income $ 140,550 $ 113,737
======== =========
Allocation of net income:
Managing general partner $ 1,405 $ 1,138
======== =========
Limited partners $ 139,145 $ 112,599
======== =========
Net income per limited partnership interest $ 6.93 $ 5.60
======== =========
Distributions per limited partnership interest $ 11.61 $ 9.96
========= =========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of thesefinancial statements.
4
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PARKER & PARSLEY 87-B, LTD.
(A Texas Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
-------- ---------- -----------
Balance at January 1, 1997 $ 47,937 $ 4,752,317 $ 4,800,254
Distributions (2,356) (233,217) (235,573)
Net income 1,405 139,145 140,550
-------- ---------- ----------
Balance at March 31, 1997 $ 46,986 $ 4,658,245 $ 4,705,231
======== ========== ===========
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
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PARKER & PARSLEY 87-B, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended
March 31,
---------------------
1997 1996
-------- --------
Cash flows from operating activities:
Net income $ 140,550 $ 113,737
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 80,936 109,506
Salvage income from equipment disposals - (13,120)
Changes in assets and liabilities:
Increase in accounts receivable (34,482) (7,421)
Increase (decrease) in accounts payable (79,895) 25,460
-------- --------
Net cash provided by operating activities 107,109 228,162
-------- --------
Cash flows from investing activities:
Additions to oil and gas properties (397) (9,706)
Proceeds from salvage income on equipment disposals - 13,120
-------- --------
Net cash provided by (used in)
investing activities (397) 3,414
-------- --------
Cash flows from financing activities:
Cash distributions to partners (235,573) (202,339)
-------- --------
Net increase (decrease) in cash and cash equivalents (128,861) 29,237
Cash and cash equivalents at beginning of period 276,197 186,643
-------- --------
Cash and cash equivalents at end of period $ 147,336 $ 215,880
======== ========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
6
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PARKER & PARSLEY 87-B, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
(Unaudited)
Note 1. Organization and nature of operations
Parker & Parsley 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 development and 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 as of March 31,
1997 of the Partnership 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 Partnership's Report on Form
10-K for the year ended December 31, 1996, as filed with the Securities and
Exchange Commission, a copy of which is available upon request by writing to
Steven L. Beal, Senior Vice President, 303 West Wall, Suite 101, Midland, Texas
79701.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (1)
Results of Operations
Revenues:
The Partnership's oil and gas revenues decreased to $400,745 from $413,646 for
the three months ended March 31, 1997 and 1996, respectively, a decrease of 3%.
The decrease in revenues resulted from an 18% decline in barrels of oil produced
and sold and a 21% decline in mcf of gas produced and sold, offset by higher
average prices received per barrel of oil and mcf of gas. For the three months
ended March 31, 1997, 12,928 barrels of oil were sold compared to 15,826 for the
same period in 1996, a decrease of 2,898 barrels. Of the decrease, 1,915
barrels, or 12%, was attributable to the sale of nine oil and gas wells during
1996. The remaining decrease of 983 barrels, or 6%, was due to the decline
characteristics of the Partnership's oil and gas properties. For the three
months ended March 31, 1997, 40,951 mcf of gas were sold compared to 51,852 for
the same period in 1996, a decrease of 10,901 mcf. Of the decrease, 3,007 mcf,
or 6%, was attributable to the sale of nine oil and gas wells during 1996. The
7
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remaining decrease of 7,894 mcf, or 15%, was due to the decline characteristics
of the Partnership's oil and gas properties. Because of these characteristics,
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 $2.69, or 14%, from
$19.02 for the three months ended March 31, 1996 to $21.71 for the same period
in 1997, while the average price received per mcf of gas increased 35% from
$2.17 during the three months ended March 31, 1996 to $2.93 for the same period
in 1997. 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
three months ended March 31, 1997.
During the three months ended March 31, 1996, $13,120 in salvage income was
derived from equipment credits received from the disposal of oil and gas
equipment on one well abandoned in a prior year.
Costs and Expenses:
Total costs and expenses decreased to $263,734 for the three months ended March
31, 1997 as compared to $315,687 for the same period in 1996, a decrease of
$51,953, or 16%. This decrease was due to declines in production costs,
depletion, general and administrative expenses ("G&A"), and abandoned property
costs.
Production costs were $170,833 for the three months ended March 31, 1997 and
$187,570 for the same period in 1996, resulting in a $16,737 decrease, or 9%. Of
the decrease, $18,368, or 10%, was attributable to the sale of nine oil and gas
wells and four saltwater disposal wells during 1996. The decrease was offset by
an increase of $1,631 in well repair and maintenance costs.
G&A's components are independent accounting and engineering fees and managing
general partner personnel and operating costs. During this period, G&A
decreased, in aggregate, 4% from $12,409 for the three months ended March 31,
1996 to $11,965 for the same period in 1997. The Partnership agreement limits
G&A to 3% of gross oil and gas revenues.
Depletion was $80,936 for the three months ended March 31, 1997 compared to
$109,506 for the same period in 1996. This represents a decrease in depletion of
$28,570, or 26%, primarily attributable to the following factors: (i) a decline
in oil production of 2,898 barrels for the three months ended March 31, 1997
compared to the same period in 1996, (ii) an upward revision of oil and gas
reserves, and (iii) the sale of nine oil and gas wells and four saltwater
disposal wells in 1996.
Abandoned property costs totaled $6,202 during the three months ended March 31,
1996. These costs were incurred on one well plugged and abandoned during a
previous year.
8
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Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased $121,053 during the three
months ended March 31, 1997 from the same period in 1996. This decrease was
primarily attributable to an increase in expenditures for production costs paid,
offset by an increase in oil and gas sales receipts.
Net Cash Provided by (Used in) Investing Activities
The Partnership's principle investing activities for the three months ended
March 31, 1997 and 1996 were related to the addition to oil and gas equipment on
active properties.
Proceeds from salvage income of $13,120 were received during the three months
ended March 31, 1996 from the sale of oil and gas equipment on a well abandoned
in a prior year.
Net Cash Used in Financing Activities
Cash was sufficient for the three months ended March 31, 1997 to cover
distributions to the partners of $235,573 of which $233,217 was distributed to
the limited partners and $2,356 to the managing general partner. For the same
period ended March 31, 1996, cash was sufficient for distributions to the
partners of $202,339 of which $200,103 was distributed to the limited partners
and $2,236 to the managing general partner.
It is expected that future net cash provided by operating activities will be
sufficient for any capital expenditures and any distributions. As the production
from the properties declines, distributions are also expected to decrease.
- ---------------
(1) "Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations" contains forward looking statements that
involve risks and uncertainties. Accordingly, no assurances can be
given that the actual events and results will not be materially
different than the anticipated results described in the forward looking
statements.
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K - none
9
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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: May 13, 1997 By: /s/ Steven L. Beal
-------------------------------------
Steven L. Beal, Senior Vice President
and Chief Financial Officer of PPUSA
10
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 147,336
<SECURITIES> 0
<RECEIVABLES> 268,969
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 416,305
<PP&E> 13,660,666
<DEPRECIATION> 9,337,655
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0
0
<COMMON> 0
<OTHER-SE> 4,705,231
<TOTAL-LIABILITY-AND-EQUITY> 4,739,316
<SALES> 400,745
<TOTAL-REVENUES> 404,284
<CGS> 0
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<INCOME-PRETAX> 140,550
<INCOME-TAX> 0
<INCOME-CONTINUING> 140,550
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 140,550
<EPS-PRIMARY> 6.93
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