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, 1995
or
/ / Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 (No Fee Required)
Commission File No. 33-26097-02
PARKER & PARSLEY 89-B, L.P.
(Exact name of Registrant as specified in its charter)
Delaware 75-2301810
(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 ($1,000 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
$6,887,000.
As of March 8, 1996, the number of outstanding limited partnership interests was
6,949. The following documents are incorporated by reference into the indicated
parts of this Annual Report on Form 10-K: None
Page 1 of 27 pages.
-Exhibit index on page 27-
<PAGE>
PART I
ITEM 1. Business
Parker & Parsley 89-B, L.P. (the "Registrant") is a limited partnership
organized in 1989 under the laws of the State of Delaware. The managing general
partner is Parker & Parsley Development L.P. ("PPDLP"). PPDLP's general partner
is Parker & Parsley Petroleum USA, Inc. ("PPUSA"). The managing general partner
during the year ended December 31, 1994 was Parker & Parsley Development Company
("PPDC"). PPDC was merged into PPDLP on January 1, 1995. See Item 12 (c).
A Registration Statement, as amended, filed pursuant to the Securities Act of
1933, registering limited partnership interests aggregating $70,000,000 in a
series of Delaware limited partnerships formed under the Parker & Parsley 89
Development Drilling Program, was declared effective by the Securities and
Exchange Commission on August 1, 1989. On December 30, 1989, the offering of
limited partnership interests in the Registrant, the second partnership formed
under such registration statement, was closed, with interests aggregating
$6,949,000 being sold to 463 subscribers.
The Registrant engages primarily in oil and gas development and production and
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 Registrant's revenue, income and
identifiable assets.
The principal markets during 1995 for the oil produced by the Registrant were
refineries and oil transmission companies that have facilities near the
Registrant's oil producing properties. The principal markets for the
Registrant's gas were companies that have pipelines located near the
Registrant's gas producing properties. Of the Registrant's oil and gas revenues
for 1995, approximately 71% and 17% were attributable to sales made to Phibro
Energy, Inc. and Western Gas Resources, Inc., respectively.
Because of the demand for oil and gas, the Registrant 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 Registrant's gas producing properties. The
Registrant 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 Registrant 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 Registrant cannot predict what, if any, effect these
environmental regulations may have on its current or future operations.
2
<PAGE>
The Registrant does not have any employees of its own. PPUSA employs 623
persons, many of whom dedicated a part of their time to the conduct of the
Registrant's business during the period for which this report is filed. The
Registrant's managing general partner, PPDLP through PPUSA, supplies all
management functions.
No material part of the Registrant's business is seasonal and the Registrant
conducts no foreign operations.
ITEM 2. Properties
The Registrant'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.
Fractional working interests in developmental oil and gas prospects located
primarily in the Spraberry Trend area of West Texas were acquired by the
Registrant, resulting in the Registrant's participation in the drilling of 33
oil and gas wells. At December 31, 1995, all 33 wells were producing.
For information relating to the Registrant's estimated proved oil and gas
reserves at December 31, 1995, 1994 and 1993 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 Registrant is not aware of any material legal proceedings (other than
routine litigation in the ordinary course of the Registrant's business) to which
it is a party or to which its properties are 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 1995.
3
<PAGE>
PART II
ITEM 5. Market for Registrant's Common Equity and Related Stockholder Matters
At March 8, 1996, the Registrant had 6,949 outstanding limited partnership
interests held of record by 484 subscribers. There is no established public
trading market for the limited partner ship 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 Registrant's obligations will be distributed to the
partners at least quarterly in accordance with the limited partnership
agreement. During the years ended December 31, 1995 and 1994, $357,097 and
$390,929, 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:
1995 1994 1993 1992 1991
------------ --------- ------------ -------- ----------
Operating results:
Oil and gas sales $ 757,200 $ 800,036 $1,000,000 $1,320,882 $1,722,186
========= ========= ========= ========= =========
Impairment of oil and
gas properties $ 592,226 $ - $ 196,977 $ - $ -
========= ========= ========= ========= =========
Net income (loss) $ (517,723) $ 127,067 $ (19,251) $ 276,294 $ 425,200
========= ========= ========= ========= =========
Allocation of net
income (loss):
Managing general
partner $ (5,177) $ 1,348 $ (115) $ 2,840 $ 4,329
========= ========= ========= ========= =========
Limited partners $ (512,546) $ 125,719 $ (19,136) $ 273,454 $ 420,871
========= ========= ========= ========= =========
Limited partners' net
income (loss) per
limited partnership
interest $ (73.76) $ 18.09 $ (2.75) $ 39.35 $ 60.57
========= ========= ========= ========= =========
Limited partners' cash
distributions per
limited partnership
interest $ 51.39 $ 56.26 $ 81.80 $ 104.91 $ 170.77
========= ========= ========= ========= =========
At year end:
Total assets $2,565,848 $3,410,361 $3,684,023 $4,283,817 $4,764,553
========= ========= ========= ========= =========
4
<PAGE>
ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of operations
1995 compared to 1994
The Registrant's 1995 oil and gas revenues decreased to $757,200 from $800,036
in 1994, a decrease of 5%. The decrease in revenues resulted from a 12% decline
in barrels of oil produced and sold, a 5% decline in mcf of gas produced and
sold and a decrease in the average price received per mcf of gas, offset by an
increase in the average price received per barrel of oil. In 1995, 32,613
barrels of oil were sold compared to 36,948 in 1994, a decrease of 4,335
barrels. In 1995, 115,912 mcf of gas were sold compared to 122,176 in 1994, a
decrease of 6,264 mcf. The decrease in production volumes was primarily due to
the decline characteristics of the properties. Management expects a certain
amount of decline in production to continue in the future until the Registrant's
economically recoverable reserves are fully depleted.(1)
The average price received per barrel of oil increased $1.28, or 8%, from $15.92
in 1994 to $17.20 in 1995, while the average price received per mcf of gas
decreased from $1.73 in 1994 to $1.69 in 1995. 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.(1) The Registrant
may therefore sell its future oil and gas production at average prices lower or
higher than that received in 1995.(1)
Total costs and expenses increased in 1995 to $1,280,372 as compared to $676,682
in 1994, an increase of $603,690, or 89%. The increase was primarily due to the
impairment of oil and gas properties, in addition to increases in production
costs and depletion, offset by decreases in general and administrative expenses
("G&A") and amortization of organization costs.
Production costs were $375,083 in 1995 and $364,724 in 1994, resulting in a
$10,359 increase, or 3%. This increase was attributable to additional well
repair and maintenance costs and workover expense incurred in an effort to
stimulate well production.
G&A's components are independent accounting and engineering fees, computer
services, postage and managing general partner personnel costs. During this
period, G&A decreased, in aggregate, 7%, from $29,057 in 1994 to $27,045 in
1995. The Registrant paid the managing general partner $22,254 in 1995 and
$23,258 in 1994 for G&A incurred on behalf of the Registrant. G&A is allocated,
in part, to the Registrant by the managing general partner. The Partnership
agreement limits allocated G&A to 3% of the gross oil and gas revenues. Such
allocated expenses are determined by the managing general partner based upon its
judgement of the level of activity of the Registrant 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.(1)
5
<PAGE>
Depletion was $286,018 in 1995 compared to $275,184 in 1994. This represented an
increase of $10,834, or 4%. Depletion was computed property-by-property
utilizing the unit-of-production method based upon the dominant mineral
produced, generally oil. Oil production decreased 4,335 barrels in 1995 from
1994, while oil reserves were revised downward by 2,428 barrels.
Effective for the fourth quarter of 1995 the Registrant 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") which
requires that long-lived assets held and used by an entity, including oil and
gas properties accounted for under the successful efforts method of accounting,
be reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. In performing the
review of recoverability, the entity should estimate the future cash flows
expected to result from the use of the asset and its eventual disposition. If
the sum of the expected future cash flows is less than the carrying amount of
the assets, an impairment is recognized based on the asset's fair value as
determined for oil and gas properties by discounting their expected future cash
flows at a discount rate commensurate with the risks involved in the industry.
As a result of the natural gas price environment and the Registrant's
expectation of future cash flows from its oil and gas properties at the time of
review, the Registrant recognized a non-cash charge of $592,226 associated with
the adoption of SFAS 121.
1994 compared to 1993
The Registrant's 1994 oil and gas revenues decreased to $800,036 from $1,000,000
in 1993, a decrease of 20%. The decrease in revenues resulted from a 15% decline
in barrels of oil produced and sold and decreases in the average price received
per barrel of oil and mcf of gas, offset by a slight increase in mcf of gas
produced and sold. In 1994, 36,948 barrels of oil were sold compared to 43,697
in 1993, a decrease of 6,749 barrels. In 1994, 122,176 mcf of gas were sold
compared to 119,867 in 1993, an increase of 2,309 mcf. This increase was the
result of operational changes on several wells. The decrease in oil production
volumes was primarily due to the decline characteristics of the properties.
The average price received per barrel of oil decreased $1.31 from $17.23 in 1993
to $15.92 in 1994, while the average price received per mcf of gas decreased
from $2.06 in 1993 to $1.73 in 1994.
Total costs and expenses decreased in 1994 to $676,682 as compared to $1,021,982
in 1993, a decrease of $345,300, or 34%. The decrease was due to reductions in
production costs, depletion and the impairment of oil and gas properties during
1993, offset by a slight increase in G&A.
Production costs were $364,724 in 1994 and $467,037 in 1993, resulting in a
$102,313 decrease, or 22%. This decrease was attributable to declines in well
repair and maintenance costs, workover expense and production taxes.
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, from $28,840 in 1993 to $29,057 in 1994.
The Registrant paid the managing general partner $23,258 in 1994 and $23,827 in
1993 for G&A incurred on behalf of the Registrant.
Depletion was $275,184 in 1994 compared to $321,411 in 1993. This represented a
decrease of $46,227, or 14%. Oil production decreased 6,749 barrels in 1994 from
1993, while oil reserves were revised downward by 85,970 barrels, or 16%.
The Registrant charged $196,977 of its investment in oil and gas properties to
operations in 1993 through an additional provision for depletion. The provision
resulted from the impairment of net capitalized costs which exceeded future net
revenues from proved oil and gas reserves based on prices and costs in effect at
December 31, 1993.
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 Registrant. During 1993, 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 Statistics, decreased by 1.1%. The 1994
annual change in the index of average weekly earnings increased by 4.8%. The
1995 index (effective April 1, 1995) increased 4.4%. 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. Since December 31, 1994, prices
for oil production have fluctuated throughout the year. The price per barrel for
oil production similar to the Registrant's ranged from approximately $16.00 to
$19.00. For February 1996, the average price for the Registrant's oil was
approximately $18.00.
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.(1)
Liquidity and capital resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased to $395,346 during the year
ended December 31, 1995, a 3% decline from the year ended December 31, 1994. The
decline was due to a reduction in oil and gas sales and an increase in
production costs, offset by a decline in G&A. The decrease in oil and gas sales
resulted from a decline in barrels of oil and mcf of gas produced and sold and a
decrease in the average price received per mcf of gas. The increase in
production costs was due to additional well repair, maintenance and workover
7
<PAGE>
costs during 1995. G&A declined as a result of less allocated expense by the
managing general partner in 1995.
Net Cash Used in Investing Activities
The Registrant's principal investing activities during 1995 was for repair and
maintenance activity on various oil and gas properties.
Net Cash Used in Financing Activities
Cash was sufficient in 1995 for distributions to the partners of $360,706 of
which $357,097 was distributed to the limited partners and $3,609 to the
managing general partner. Cash was sufficient in 1994 for distributions to the
partners of $394,878 of which $390,929 was distributed to the limited partners
and $3,949 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.(1) As the production from
the properties declines, distributions are also expected to decrease.(1)
- ---------------
(1) This statement is a forward looking statement that involves 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 statement.
ITEM 8. Financial Statements and Supplementary Data
The Registrant's audited financial statements are included elsewhere herein.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
8
<PAGE>
PART III
ITEM 10. Directors and Executive Officers of the Registrant
The Registrant does not have any officers or directors. Under the limited
partnership agreement, the Registrant's managing general partner, PPDLP, is
granted the exclusive right and full authority to manage, control and administer
the Registrant'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 1995 Position
Scott D. Sheffield 43 Chairman of the Board and Director
James D. Moring (a) 59 President, Chief Executive Officer and
Director
Timothy A. Leach 36 Executive Vice President and Director
Steven L. Beal 36 Senior Vice President, Treasurer and
Chief Financial Officer
Mark L. Withrow 48 Senior Vice President and Secretary
- ---------------
(a) Mr. Moring retired from the Company and subsidiaries effective January 1,
1996. Mr. Sheffield assumed the positions of President and Chief Executive
Officer of PPUSA effective January 1, 1996.
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 PPDC, the principal operating subsidiary of the Company, as a petroleum
engineer in 1979. Mr. Sheffield served as Vice President - Engineering of PPDC
from September 1981 until April 1985 when he was elected President and a
Director of PPDC. In March 1989, Mr. Sheffield was elected Chairman of the Board
and Chief Executive Officer of PPDC. 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
PPDC, Mr. Sheffield was principally occupied for more than three years as a
production and reservoir engineer for Amoco Production Company.
9
<PAGE>
James D. Moring. Mr. Moring, a graduate of Texas Tech University with a
Bachelor of Science degree in Petroleum Engineering has been a Director of the
Company since October 1990 and was Senior Vice President - Operations of the
Company from October 1990 until May 1993, when he was appointed Executive Vice
President - Operations. Mr. Moring has been principally occupied since July 1982
as the supervisor of the drilling, completion, and production operations of PPDC
and its affiliates and has served as an officer of PPDC since January 1983. Mr.
Moring has been Senior Vice President - Operations and a Director of PPDC since
June 1989 and in May 1993, Mr. Moring was appointed Executive Vice President -
Operations. Mr. Moring was elected President and Director and appointed Chief
Executive Officer of PPUSA on January 1, 1995. Effective January 1, 1996, Mr.
Moring retired from the Company and subsidiaries. In the five years before
joining PPDC, Mr. Moring was employed as a Division Operations Manager with
Moran Exploration, Inc. and its predecessor.
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 of PPUSA on December
1, 1995. He had joined PPDC as Vice President - Engineering in September 1989.
Prior to joining PPDC, 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. On
January 1, 1995, Mr. Beal was elected Senior Vice President, Treasurer and Chief
Financial Officer of PPUSA. Mr. Beal has been the Company's Chief Accounting
Officer since November 1992 and been the Company's Treasurer since October 1990.
Mr. Beal joined PPDC as Treasurer in March 1988 and was elected Vice President -
Finance in October 1991. Prior to joining PPDC, Mr. Beal was employed as an
audit manager of Price Waterhouse.
Mark L. Withrow. Mr. Withrow, a graduate of Abilene Christian University
with 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. Mr. Withrow joined PPDC in January 1991. Prior to joining PPDC , Mr.
Withrow was the managing partner of the law firm of Turpin, Smith, Dyer, Saxe &
MacDonald, Midland, Texas.
ITEM 11. Executive Compensation
The Registrant does not have any directors or officers. Management of the
Registrant is vested in PPDLP, the managing general partner. The Registrant
10
<PAGE>
participates in oil and gas activities through an income tax partnership (the
"Program") pursuant to the Program agreement. Under the Program agreement, PPDLP
and P&P Employees 89-B Conv., L.P. ("EMPL") pay approximately 10% of the
Registrant's acquisition, drilling and completion costs and approximately 15%
during the first three years and approximately 20% after three years of its
operating and general and administrative expenses. In return, they are allocated
approximately 15% during the first three years and approximately 20% after three
years of the Registrant'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 Registrant.
PPUSA's current executive officers and other employees are general partners of
EMPL which serves as a co-general partner of the Program. Under this
arrangement, EMPL pays approximately 2-1/2% of the Registrant's acquisition,
drilling and completion costs and approximately 3.75% during the first three
years and approximately 5% after three years of its operating and general and
administrative expenses. In return, EMPL is allocated approximately 3.75% during
the first three years and approximately 5% after three years of the Registrant's
revenues. EMPL does not receive any fees or reimbursements from the Registrant.
The Registrant 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 Registrant is not aware of any person who beneficially owns 5% or more of
the outstanding limited partnership interests of the Registrant. PPDLP owned 62
limited partner interests at January 1, 1996.
(b) Security ownership of management
The Registrant does not have any officers or directors. The managing general
partner of the Registrant, PPDLP, has the exclusive right and full authority to
manage, control and administer the Registrant'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
Registrant is not aware of any current arrangement or activity which may lead to
such removal. The Registrant is not aware of any officer or director of PPUSA
who beneficially owns limited partnership interests in the Registrant.
(c) Changes in control
On January 1, 1995, PPDLP, a Texas limited partnership, became the sole managing
general partner of Parker & Parsley 89-B, L.P., as a result of the merger into
11
<PAGE>
it of PPDC, a Delaware corporation, and an affiliate of PPDLP and the Company,
which previously served as the managing general partner of the Registrant. PPDLP
has, therefore, succeeded to all of the rights and obligations of PPDC and will
manage and conduct the property, business and affairs of the Registrant,
including the development drilling program in which the Registrant participates.
ITEM 13. Certain Relationships and Related Transactions
Transactions with the managing general partner or its affiliates
Pursuant to the limited partnership agreement, the Registrant had the following
related party transactions with the managing general partner or its affiliates
during the years ended December 31:
1995 1994 1993
--------- --------- ---------
Payment of lease operating and supervision
charges in accordance with standard
industry operating agreements $ 130,316 $ 127,084 $ 136,148
Reimbursement of general and
administrative expenses $ 22,254 $ 23,258 $ 23,827
Purchase of oil and gas properties and
related equipment, at predecessor cost $ 2,423 $ 2,750 $ 9,367
Under the limited partnership agreement, the managing general partner pays 1% of
the Registrant's acquisition, drilling and completion costs and 1% of its
operating and general and administrative expenses. In return, it is allocated 1%
of the Registrant'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 Registrant's participation with the managing general
partner in oil and gas activities of the Program.
12
<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, 1995 and 1994
Statements of operations for the years ended December 31, 1995,
1994 and 1993
Statements of partners' capital for the years ended December 31,
1995, 1994 and 1993
Statements of cash flows for the years ended December 31, 1995,
1994 and 1993
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.
13
<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 89-B, L.P.
Dated: March 29, 1996 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 29, 1996
- ------------------------- Chief Executive Officer and
Scott D. Sheffield Director of PPUSA
/s/ Timothy A. Leach Executive Vice President March 29, 1996
- ------------------------- and Director of PPUSA
Timothy A. Leach
/s/ Steven L. Beal Senior Vice President, March 29, 1996
- ------------------------- Treasurer and Chief
Steven L. Beal Financial Officer of PPUSA
/s/ Mark L. Withrow Senior Vice President and March 29, 1996
- ------------------------- Secretary of PPUSA
Mark L. Withrow
14
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
Parker & Parsley 89-B, L.P.
(A Delaware Limited Partnership):
We have audited the financial statements of Parker & Parsley 89-B, L.P. 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 89-B, L.P. as
of December 31, 1995 and 1994, and the results of its operations and its cash
flows for each of the years in the three-year period ended December 31, 1995, in
conformity with generally accepted accounting principles.
As discussed in Notes 2 and 3 to the financial statements, the Partnership
changed its method of accounting for the impairment of long-lived assets and for
long-lived assets to be disposed of in 1995 to adopt 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."
KPMG Peat Marwick LLP
Midland, Texas
March 8, 1996
15
<PAGE>
PARKER & PARSLEY 89-B, L.P.
(A Delaware Limited Partnership)
BALANCE SHEETS
December 31
1995 1994
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $98,911 in 1995 and
$68,049 in 1994 $ 98,944 $ 68,082
Accounts receivable - oil and gas sales 75,959 76,868
---------- ----------
Total current assets 174,903 144,950
Oil and gas properties - at cost, based on
the successful efforts accounting method 5,813,260 5,809,482
Accumulated depletion (3,422,315) (2,544,071)
---------- ----------
Net oil and gas properties 2,390,945 3,265,411
---------- ----------
$ 2,565,848 $ 3,410,361
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 53,955 $ 20,039
Partners' capital:
Limited partners (6,949 interests) 2,486,533 3,356,176
Managing general partner 25,360 34,146
---------- ----------
2,511,893 3,390,322
---------- ----------
$ 2,565,848 $ 3,410,361
========== ==========
The accompanying notes are an integral part of these statements.
16
<PAGE>
PARKER & PARSLEY 89-B, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
For the years ended December 31
1995 1994 1993
---------- ---------- ----------
Revenues:
Oil and gas sales $ 757,200 $ 800,036 $1,000,000
Interest income 5,449 3,713 2,731
--------- --------- ---------
Total revenues 762,649 803,749 1,002,731
Costs and expenses:
Production costs 375,083 364,724 467,037
General and administrative expenses 27,045 29,057 28,840
Depletion 286,018 275,184 321,411
Impairment of oil and gas properties 592,226 - 196,977
Amortization of organization costs - 7,717 7,717
--------- --------- ---------
Total costs and expenses 1,280,372 676,682 1,021,982
--------- --------- ---------
Net income (loss) $ (517,723) $ 127,067 $ (19,251)
========= ========= =========
Allocation of net income (loss):
Managing general partner $ (5,177) $ 1,348 $ (115)
========= ========= =========
Limited partners $ (512,546) $ 125,719 $ (19,136)
========= ========= =========
Net income (loss) per limited
partnership interest $ (73.76) $ 18.09 $ (2.75)
========= ========= =========
The accompanying notes are an integral part of these statements.
17
<PAGE>
PARKER & PARSLEY 89-B, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
Managing
general Limited
partner partners Total
--------- ---------- ----------
Partners' capital at January 1, 1993 $ 42,604 $4,208,950 $4,251,554
Distributions (5,742) (568,428) (574,170)
Net loss (115) (19,136) (19,251)
-------- --------- ---------
Partners' capital at December 31, 1993 36,747 3,621,386 3,658,133
Distributions (3,949) (390,929) (394,878)
Net income 1,348 125,719 127,067
-------- --------- ---------
Partners' capital at December 31, 1994 34,146 3,356,176 3,390,322
Distributions (3,609) (357,097) (360,706)
Net loss (5,177) (512,546) (517,723)
-------- --------- ---------
Partners' capital at December 31, 1995 $ 25,360 $2,486,533 $2,511,893
======== ========= =========
The accompanying notes are an integral part of these statements.
18
<PAGE>
PARKER & PARSLEY 89-B, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
For the years ended December 31
1995 1994 1993
--------- --------- ---------
Cash flows from operating activities:
Net income (loss) $(517,723) $ 127,067 $ (19,251)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depletion and amortization 286,018 282,901 329,128
Impairment of oil and gas properties 592,226 - 196,977
Changes in assets and liabilities:
Decrease in accounts receivable 909 3,844 44,060
Increase (decrease) in accounts
payable 33,916 (5,851) (3,911)
-------- -------- --------
Net cash provided by operating
activities 395,346 407,961 547,003
Cash flows from investing activities:
Additions to oil and gas properties (3,778) (2,750) (14,507)
Cash flows from financing activities:
Cash distributions to partners (360,706) (394,878) (574,170)
-------- -------- --------
Net increase (decrease) in cash and cash
equivalents 30,862 10,333 (41,674)
Cash and cash equivalents at beginning
of year 68,082 57,749 99,423
-------- -------- --------
Cash and cash equivalents at end of year $ 98,944 $ 68,082 $ 57,749
======== ======== ========
The accompanying notes are an integral part of these statements.
19
<PAGE>
PARKER & PARSLEY 89-B, L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
December 31, 1995, 1994 and 1993
Note 1. Organization and nature of operations
Parker & Parsley 89-B, L.P. (the "Partnership") is a limited partnership
organized in 1989 under the laws of the State of Delaware.
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. 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 - Effective for the fourth quarter of 1995
the Partnership adopted 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 ("SFAS 121"). Consequently, the Partnership
reviews its long-lived assets to be held and used, 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 value 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.
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
depletion are eliminated from the accounts and any gain or loss is included in
operations.
20
<PAGE>
Prior to the adoption of SFAS 121 in the fourth quarter, 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.
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.
Organization costs - Organization costs are capitalized and amortized on
the straight-line method over 60 months.
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 has not been included in the
financial statements as the income 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.
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 for the fourth quarter of 1995.
SFAS 121 requires that long-lived assets held and used by an entity, including
oil and gas properties accounted for under the successful efforts method of
21
<PAGE>
accounting, be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Long-lived assets to be disposed of are to be accounted for at the
lower of carrying amount or fair value less cost to sell when management has
committed to a plan to dispose of the assets. All companies, including
successful efforts oil and gas companies, are required to adopt SFAS 121 for
fiscal years beginning after December 15, 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 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, the
Partnership recognized a non-cash charge of $592,226 related to its oil and gas
properties during the fourth quarter of 1995.
As of December 31, 1995, management had not committed to sell any
Partnership assets.
Note 4. Income taxes
The financial statement basis of the Partnership's net assets and
liabilities was $1,313,531 greater than the tax basis at December 31, 1995.
The following is a reconciliation of net income (loss) per statements of
operations with the net income per Federal income tax returns for the years
ended December 31:
1995 1994 1993
---------- ---------- ----------
Net income (loss) per statements
of operations $ (517,723) $ 127,067 $ (19,251)
Depletion and depreciation provisions
for tax reporting purposes (over)
under amounts deducted for financial
reporting purposes 56,211 44,646 (1,447)
Impairment of oil and gas properties
for financial reporting purposes 592,226 - 196,977
Salvage income 2,743 93 453
--------- --------- ---------
Net income per Federal
income tax returns $ 133,457 $ 171,806 $ 176,732
========= ========= =========
22
<PAGE>
Note 5. Oil and gas producing activities
The following is a summary of the net costs incurred, whether capitalized
or expensed, related to the Partnership's oil and gas producing activities for
the years ended December 31:
1995 1994 1993
---------- ---------- ----------
Development costs $ 3,778 $ 2,750 $ 12,045
========= ========= =========
Capitalized oil and gas properties consist of the following:
1995 1994 1993
----------- ----------- -----------
Proved properties:
Property acquisition costs $ 188,868 $ 188,868 $ 188,868
Completed wells and equipment 5,624,392 5,620,614 5,617,864
---------- ---------- ----------
5,813,260 5,809,482 5,806,732
Accumulated depletion (3,422,315) (2,544,071) (2,268,887)
---------- ---------- ----------
Net capitalized costs $ 2,390,945 $ 3,265,411 $ 3,537,845
========== ========== ==========
The Partnership charged $196,977 of its investment in oil and gas
properties to operations in 1993 through an additonal provision for depletion.
The provision resulted from the impairment of net capitalized costs which
exceeded future net revenues from proved oil and gas reserves based on prices
and costs in effect at December 31, 1993. During 1995, the Partnership
recognized a non-cash charge against oil and gas properties of $592,226
associated with the adoption of 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:
1995 1994 1993
--------- --------- ---------
Payment of lease operating and
supervision charges in accordance
with standard industry operating
agreements $ 130,316 $ 127,084 $ 136,148
Reimbursement of general and
administrative expenses $ 22,254 $ 23,258 $ 23,827
Purchase of oil and gas properties
and related equipment, at
predecessor cost $ 2,423 $ 2,750 $ 9,367
23
<PAGE>
The Partnership participates in oil and gas activities through an income
tax partnership (the "Program") pursuant to the Program agreement. PPDLP, P&P
Employees 89-B Conv., L.P. ("EMPL") (the "Entities"), Parker & Parsley 89-B
Conv., L.P. and the Partnership (the "Partner ships") are parties to the Program
agreement. EMPL is a limited partnership organized for the benefit of certain
employees of PPUSA.
The costs and revenues of the Program are allocated to the Entities and the
Partnerships as follows:
Entities (1) Partnerships (2)
------------ ----------------
Revenues:
Proceeds from disposition of depreciable
and depletable properties -
First three years 14.141414% 85.858586%
After first three years 19.191919% 80.808081%
All other revenues -
First three years 14.141414% 85.858586%
After first three years 19.191919% 80.808081%
Costs and expenses:
Lease acquisition costs, drilling and
completion costs and all other costs 9.090909% 90.909091%
Operating costs, reporting and legal
expenses and general and administrative
expenses -
First three years 14.141414% 85.858586%
After first three years 19.191919% 80.808081%
(1) Excludes PPDLP's 1% general partner ownership which is allocated at the
Partnership level and 62 limited partner interests owned by PPDLP.
(2) The allocation between the Partnership and Parker & Parsley 89-B Conv.,
L.P. is 52.421545% and 47.578455%, respectively.
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, 1995, 1994 and 1993 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.
24
<PAGE>
Oil (bbls) Gas (mcf)
---------- ----------
Net proved reserves at January 1, 1993 669,207 2,201,004
Revisions of estimates at January 1, 1993 (71,900) (93,988)
Production (43,697) (119,867)
---------- ----------
Net proved reserves at December 31, 1993 553,610 1,987,149
Revisions of estimates at December 31, 1993 (85,970) (374,694)
Production (36,948) (122,176)
---------- ----------
Net proved reserves at December 31, 1994 430,692 1,490,279
Revisions of estimates at December 31, 1994 (2,428) 151,409
Production (32,613) (115,912)
---------- ----------
Net proved reserves at December 31, 1995 395,651 1,525,776
========== ==========
The estimated present value of future net revenues of proved reserves,
calculated using December 31, 1995 prices of $19.38 per barrel of oil and $1.88
per mcf of gas, discounted at 10% was approximately $2,316,000 and undiscounted
was $4,499,000 at December 31, 1995.
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 during the years ended December 31:
1995 1994 1993
---- ---- ----
Phibro Energy, Inc. 71% 70% 70%
Western Gas Resources, Inc. 17% 12% 11%
GPM Gas Corporation - 14% -
PPDLP is party to a long-term agreement pursuant to which PPDLP and
affiliates are to sell to Phibro Energy, Inc. ("Phibro") substantially all crude
oil (including condensate) which any of such entities has the right to market
from time to time. On December 29, 1995, PPDLP and Phibro entered into a
Memorandum of Agreement ("Phibro MOA") that cancels the prior crude oil purchase
agreement between the parties and provides for adjusted terms effective December
1, 1995. The price to be paid for oil purchased under the Phibro MOA is to be
competitive with prices paid by other substantial purchasers in the same area
who are significant competitors of Phibro. The price to be paid for oil
purchased under the Phibro MOA also 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 Phibro MOA is through June 30, 1998, and it may continue
thereafter subject to termination rights afforded each party. Although Phibro
was required to post a $16 million letter of credit in connection with purchases
25
<PAGE>
under the prior agreement, it is anticipated that this security requirement will
be replaced by a $25 million payment guarantee by Phibro's parent company,
Salomon Inc. Accounts receivable-oil and gas sales included $42,816 due from
Phibro at December 31, 1995.
Note 9. Organization and operations
The Partnership was organized December 30, 1989 as a limited partnership
under the Delaware Act for the purpose of acquiring and developing oil and gas
properties. The following is a brief summary of the more significant provisions
of the limited partnership agreement:
Managing general partner - On January 1, 1995, PPDLP, a Texas limited
partnership, became the sole managing general partner of the Partnership
as a result of the merger into it of Parker & Parsley Development
Company ("PPDC"), a Delaware corporation, and an affiliate of PPDLP and
the Company, and which previously served as the managing general partner
of the Partnership. PPDLP has, therefore, succeeded to all of the rights
and obligations of PPDC and will manage and conduct the property,
business and affairs of the Partnership, including the development
drilling program in which the Partnership participates. The managing
general partner has the power and authority to manage, control and
administer all Program and 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
$6,949,000. The managing general partner 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.
26
<PAGE>
PARKER & PARSLEY 89-B, L.P.
INDEX TO EXHIBITS
The following documents are incorporated by reference in response to Item
14(c):
Exhibit No. Description Page
3(a) Amended and Restated Certificate -
and Agreement of Limited Partnership
of Parker & Parsley 89-B, L.P.
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
27
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000844606
<NAME> 89BLP.TXT
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 98,944
<SECURITIES> 0
<RECEIVABLES> 75,959
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 174,903
<PP&E> 5,813,260
<DEPRECIATION> 3,422,315
<TOTAL-ASSETS> 2,565,848
<CURRENT-LIABILITIES> 53,955
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,511,893
<TOTAL-LIABILITY-AND-EQUITY> 2,565,848
<SALES> 757,200
<TOTAL-REVENUES> 762,649
<CGS> 0
<TOTAL-COSTS> 1,280,372
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (517,723)
<INCOME-TAX> 0
<INCOME-CONTINUING> (517,723)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (517,723)
<EPS-PRIMARY> (73.76)
<EPS-DILUTED> 0
</TABLE>
