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 September 30, 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. 33-26097-07
PARKER & PARSLEY 90-B, L.P.
(Exact name of Registrant as specified in its charter)
Delaware 75-2329287
(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 11 pages.
Exhibit index on page 10.
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PARKER & PARSLEY 90-B, L.P.
TABLE OF CONTENTS
Page
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of September 30, 1997 and
December 31, 1996 .................................... 3
Statements of Operations for the three and nine
months ended September 30, 1997 and 1996................. 4
Statement of Partners' Capital for the nine months
ended September 30, 1997................................. 5
Statements of Cash Flows for the nine months ended
September 30, 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........................... 10
27. Financial Data Schedule
Signatures................................................. 11
2
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PARKER & PARSLEY 90-B, L.P.
(A Delaware Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
September 30, December 31,
1997 1996
------------ -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $285,314 at September
30 and $332,819 at December 31 $ 285,564 $ 333,006
Accounts receivable - oil and gas sales 309,589 564,298
----------- -----------
Total current assets 595,153 897,304
----------- -----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 25,977,896 25,934,794
Accumulated depletion (18,087,554) (17,601,394)
----------- -----------
Net oil and gas properties 7,890,342 8,333,400
----------- -----------
$ 8,485,495 $ 9,230,704
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 118,916 $ 68,524
Partners' capital:
Managing general partner 83,670 91,626
Limited partners (32,264 interests) 8,282,909 9,070,554
----------- -----------
8,366,579 9,162,180
----------- -----------
$ 8,485,495 $ 9,230,704
=========== ===========
The financial information included as of September 30, 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 90-B, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
--------------------- -----------------------
1997 1996 1997 1996
--------- --------- ---------- ----------
Revenues:
Oil and gas $ 657,599 $ 856,112 $2,253,811 $2,581,343
Interest 5,523 5,898 18,158 14,559
Gain on disposition of assets - 540 - 5,928
-------- -------- --------- ---------
663,122 862,550 2,271,969 2,601,830
-------- -------- --------- ---------
Costs and expenses:
Oil and gas production 402,333 341,736 1,101,953 1,054,746
General and administrative 22,175 27,320 73,212 82,130
Depletion 152,982 164,954 486,160 525,838
-------- -------- --------- ---------
577,490 534,010 1,661,325 1,662,714
-------- -------- --------- ---------
Net income $ 85,632 $ 328,540 $ 610,644 $ 939,116
======== ======== ========= =========
Allocation of net income:
Managing general partner $ 856 $ 3,285 $ 6,106 $ 9,391
======== ======== ========= =========
Limited partners $ 84,776 $ 325,255 $ 604,538 $ 929,725
======== ======== ========= =========
Net income per limited
partnership interest $ 2.63 $ 10.08 $ 18.74 $ 28.82
======== ======== ========= =========
Distributions per limited
partnership interest $ 9.38 $ 14.45 $ 43.15 $ 39.25
======== ======== ========= =========
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
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PARKER & PARSLEY 90-B, L.P.
(A Delaware Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
--------- ----------- -----------
Balance at January 1, 1997 $ 91,626 $ 9,070,554 $ 9,162,180
Distributions (14,062) (1,392,183) (1,406,245)
Net income 6,106 604,538 610,644
-------- ---------- ----------
Balance at September 30, 1997 $ 83,670 $ 8,282,909 $ 8,366,579
======== ========== ==========
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 90-B, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
September 30,
-------------------------
1997 1996
----------- -----------
Cash flows from operating activities:
Net income $ 610,644 $ 939,116
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 486,160 525,838
Gain on disposition of assets - (5,928)
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 254,709 (33,432)
Increase (decrease) in accounts payable 50,392 (35,508)
---------- ----------
Net cash provided by operating activities 1,401,905 1,390,086
---------- ----------
Cash flows from investing activities:
Additions to oil and gas properties (43,102) (13,792)
Proceeds from disposition of assets - 7,945
---------- ----------
Net cash used in investing activities (43,102) (5,847)
---------- ----------
Cash flows from financing activities:
Cash distributions to partners (1,406,245) (1,279,280)
---------- ----------
Net increase (decrease) in cash and cash equivalents (47,442) 104,959
Cash and cash equivalents at beginning of period 333,006 289,053
---------- ----------
Cash and cash equivalents at end of period $ 285,564 $ 394,012
========== ==========
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
<PAGE>
PARKER & PARSLEY 90-B, L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
(Unaudited)
Note 1. Basis of presentation
In the opinion of management, the unaudited financial statements of Parker &
Parsley 90-B, L.P. (the "Partnership") as of September 30, 1997 and for the
three and nine months ended September 30, 1997 and 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. These
interim results are not necessarily indicative of results for a full year.
Certain reclassifications have been made to prior period financial statements to
conform to the 1997 financial presentations.
Certain information and footnote disclosure normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted in this Form 10-Q pursuant to the rules and
regulations of the Securities and Exchange Commission. The financial statements
should be read in conjunction with the financial statements and the notes
thereto contained in the Partnership's Report on Form 10-K for the year ended
December 31, 1996, as filed with the Securities and Exchange Commission, a copy
of which is available upon request by writing to Rich Dealy, Vice President and
Controller, 303 West Wall, Suite 101, Midland, Texas 79701.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (1)
As of August 8, 1997, Pioneer Natural Resources USA, Inc. ("Pioneer USA") became
the general partner of the Partnership. Prior to August 8, 1997, the
Partnership's general partner was Parker & Parsley Development L.P. ("PPDLP"), a
wholly-owned subsidiary of Parker & Parsley Petroleum Company ("Parker &
Parsley"). On August 7, 1997, Parker & Parsley and Mesa Inc. received
shareholder approval to merge and create Pioneer Natural Resources Company
("Pioneer"). On August 8, 1997, PPDLP was merged with and into Pioneer USA, a
wholly-owned subsidiary of Pioneer, resulting in Pioneer USA becoming the
general partner of the Partnership as PPDLP's successor by merger. For a more
complete description of the Parker & Parsley and Mesa Inc. merger, see Pioneer's
Registration Statement on Form S-4 as filed with the Securities and Exchange
Commission.
Results of Operations
Nine months ended September 30, 1997 compared with nine months ended
September 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 13% to $2,253,811 from
$2,581,343 for the nine months ended September 30, 1997 as compared to the nine
months ended September 30, 1996. The decrease in revenues resulted from declines
in barrels of oil and mcf of gas produced and sold and a decrease in the average
7
<PAGE>
price received per barrel of oil, offset by an increase in the average price
received per mcf of gas. For the nine months ended September 30, 1997, 85,640
barrels of oil were sold compared to 95,365 for the same period in 1996, a
decrease of 9,725 barrels, or 10%. For the nine months ended September 30, 1997,
242,645 mcf of gas were sold compared to 269,367 for the same period in 1996, a
decrease of 26,722 mcf, or 10%. The decreases in production volumes were due to
the decline characteristics of the Partnership's oil and gas properties.
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 decreased $1.06, or 5%, from $20.81
for the nine months ended September 30, 1996 to $19.75 for the same period in
1997, while the average price received per mcf of gas increased from $2.22 for
the nine months ended September 30, 1996 to $2.32 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 nine
months ended September 30, 1997
Gain on disposition of assets of $5,928 received during the nine months ended
September 30, 1996 was attributable to credits received of $7,945 from the
disposal of oil and gas equipment on one well that was plugged and abandoned in
a prior year, offset by a loss on an abandoned property of $2,017 resulting from
the write-off of remaining capitalized well costs on one saltwater disposal
well.
Costs and Expenses:
Total costs and expenses decreased to $1,661,325 for the nine months ended
September 30, 1997 as compared to $1,662,714 for the same period in 1996, a
decrease of $1,389. The decrease was due to declines in depletion and general
and administrative expenses ("G&A"), offset by an increase in production costs.
Production costs were $1,101,953 for the nine months ended September 30, 1997
and $1,054,746 for the same period in 1996, resulting in a $47,207 increase, or
4%. The increase was the result of additional well maintenance and workover
costs incurred in an effort to stimulate well production.
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, 11% from $82,130 for the nine months ended September
30, 1996 to $73,212 for the same period in 1997.
Depletion was $486,160 for the nine months ended September 30, 1997 compared to
$525,838 for the same period in 1996, representing a decrease of $39,678, or 8%.
Three months ended September 30, 1997 compared with three months ended September
30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 23% to $657,599 from $856,112
for the three months ended September 30, 1997 as compared to the three months
ended September 30, 1996. The decrease in revenues resulted from a decline in
the average price received per barrel of oil and declines in barrels of oil and
8
<PAGE>
mcf of gas produced and sold. For the three months ended September 30, 1997,
26,596 barrels of oil were sold compared to 30,765 for the same period in 1996,
a decrease of 4,169 barrels, or 14%. For the three months ended September 30,
1997, 81,497 mcf of gas were sold compared to 93,680 for the same period in
1996, a decrease of 12,183 mcf, or 13%. The decreases were due to the decline
characteristics of the Partnership's oil and gas properties.
The average price received per barrel of oil decreased $3.22, or 15%, from
$21.53 during the three months ended September 30, 1996 to $18.31 in 1997, while
the average price received per mcf of gas increased from $2.07 during the three
months ended September 30, 1996 to $2.09 in 1997.
Gain on disposition of assets of $540, received during the three months ended
September 30, 1996, was attributable to credits received from the disposal of
oil and gas equipment on one well that was plugged and abandoned in a prior
year.
Costs and Expenses:
Total costs and expenses increased to $577,490 for the three months ended
September 30, 1997 as compared to $534,010 for the same period in 1996, an
increase of $43,480, or 8%. This increase was due to higher production costs,
offset by decreases in depletion and G&A.
Production costs were $402,333 for the three months ended September 30, 1997 and
$341,736 for the same period in 1996 resulting in a $60,597 increase, or 18%.
The increase was the result of additional workover and well maintenance costs
incurred in an effort to stimulate well production.
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, 19%, from $27,320 for the three months ended September
30, 1996 to $22,175 for the same period in 1997.
Depletion was $152,982 for the three months ended September 30, 1997 compared to
$164,954 for the same period in 1996, representing a decrease of $11,972, or 7%,
primarily attributable to a decline in oil production of 4,169 barrels, offset
by a decrease in oil and gas reserves during the third quarter of 1997 as a
result of lower commodity prices.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $11,819 during the nine
months ended September 30, 1997 from the same period ended September 30, 1996.
This increase was due to a decrease in production costs paid, offset by a
decrease in oil and gas sales receipts.
Net Cash Used in Investing Activities
The Partnership's investing activities during the nine months ended September
30, 1997 and 1996 included expenditures related to equipment replacement on
various oil and gas properties.
Proceeds of $7,945 were received during the nine months ended September 30, 1996
from the sale of oil and gas equipment on one well abandoned in a prior year.
9
<PAGE>
Net Cash Used in Financing Activities
Cash was sufficient for the nine months ended September 30, 1997 to cover
distributions to the partners of $1,406,245 of which $14,062 was distributed to
the managing general partner and $1,392,183 to the limited partners. For the
same period ended September 30, 1996, cash was sufficient for distributions to
the partners of $1,279,280 of which $12,781 was distributed to the managing
general partner and $1,266,499 to the limited partners.
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
10
<PAGE>
PARKER & PARSLEY 90-B, L.P.
(A Delaware 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 90-B, L.P.
By: Pioneer Natural Resources USA, Inc.,
Managing General Partner
Dated: November 7, 1997 By: /s/ Rich Dealy
----------------------------------
Rich Dealy, Vice President and
Controller
11
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000844618
<NAME> 90B
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 285,564
<SECURITIES> 0
<RECEIVABLES> 309,589
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 595,153
<PP&E> 25,977,896
<DEPRECIATION> 18,087,554
<TOTAL-ASSETS> 8,485,495
<CURRENT-LIABILITIES> 118,916
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 8,366,579
<TOTAL-LIABILITY-AND-EQUITY> 8,485,495
<SALES> 2,253,811
<TOTAL-REVENUES> 2,271,969
<CGS> 0
<TOTAL-COSTS> 1,661,325
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 610,644
<INCOME-TAX> 0
<INCOME-CONTINUING> 610,644
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 610,644
<EPS-PRIMARY> 18.74
<EPS-DILUTED> 0
</TABLE>
