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. 33-26097-08
PARKER & PARSLEY 90-B CONV., L.P.
(Exact name of Registrant as specified in its charter)
Delaware 75-2329284
(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.
-There are no exhibits-
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PARKER & PARSLEY 90-B CONV., L.P.
(A Delaware 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 $127,441 at June 30
and $104,683 at December 31 $ 127,611 $ 104,953
Accounts receivable - oil and gas sales 128,955 112,651
---------- ----------
Total current assets 256,566 217,604
Oil and gas properties - at cost, based on the
successful efforts accounting method 9,562,594 9,571,882
Accumulated depletion (6,340,812) (6,208,665)
---------- ----------
Net oil and gas properties 3,221,782 3,363,217
---------- ----------
$ 3,478,348 $ 3,580,821
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 42,709 $ 72,585
Partners' capital:
Limited partners (11,897 interests) 3,401,283 3,473,154
Managing general partner 34,356 35,082
---------- ----------
3,435,639 3,508,236
---------- ----------
$ 3,478,348 $ 3,580,821
========== ==========
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 90-B CONV., L.P.
(A Delaware 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 $333,760 $297,445 $636,169 $609,224
Interest income 1,781 1,788 3,157 3,225
Salvage income from equipment
disposals - - 2,730 -
------- ------- ------- -------
Total revenues 335,541 299,233 642,056 612,449
Costs and expenses:
Production costs 129,333 132,625 262,914 276,646
General and administrative expenses 11,139 8,924 20,211 19,195
Depletion 64,963 72,495 133,142 148,958
(Gain) loss on abandoned property 744 (3,000) 744 (3,000)
Abandoned property costs - 2,085 - 2,085
Amortization of organization costs - 1,253 - 2,508
------- ------- ------- -------
Total costs and expenses 206,179 214,382 417,011 446,392
------- ------- ------- -------
Net income $129,362 $ 84,851 $225,045 $166,057
======= ======= ======= =======
Allocation of net income:
Managing general partner $ 1,293 $ 861 $ 2,250 $ 1,686
======= ======= ======= =======
Limited partners $128,069 $ 83,990 $222,795 $164,371
======= ======= ======= =======
Net income per limited
partnership interest $ 10.77 $ 7.06 $ 18.73 $ 13.82
======= ======= ======= =======
Distributions per limited
partnership interest $ 13.60 $ 13.11 $ 24.77 $ 26.52
======= ======= ======= =======
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 90-B CONV., L.P.
(A Delaware Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
---------- ---------- ----------
Balance at January 1, 1995 $ 39,099 $3,874,618 $3,913,717
Distributions (3,188) (315,544) (318,732)
Net income 1,686 164,371 166,057
--------- --------- ---------
Balance at June 30, 1995 $ 37,597 $3,723,445 $3,761,042
========= ========= =========
Balance at January 1, 1996 $ 35,082 $3,473,154 $3,508,236
Distributions (2,976) (294,666) (297,642)
Net income 2,250 222,795 225,045
--------- --------- ---------
Balance at June 30, 1996 $ 34,356 $3,401,283 $3,435,639
========= ========= =========
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 90-B CONV., L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended
June 30,
1996 1995
--------- ---------
Cash flows from operating activities:
Net income $ 225,045 $ 166,057
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion and amortization 133,142 151,466
Salvage income from equipment disposals (2,730) -
(Gain) loss on abandoned property 744 (3,000)
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (16,304) 3,860
Increase (decrease) in accounts payable (19,220) 21,019
-------- --------
Net cash provided by operating activities 320,677 339,402
Cash flows from investing activities:
Additions to oil and gas properties (3,107) (3,690)
Proceeds from salvage income on equipment
disposals 2,730 -
Proceeds from equipment salvage on abandoned
property - 1,051
-------- --------
Net cash used in investing activities (377) (2,639)
Cash flows from financing activities:
Cash distributions to partners (297,642) (318,732)
-------- --------
Net increase in cash and cash equivalents 22,658 18,031
Cash and cash equivalents at beginning of period 104,953 65,099
-------- --------
Cash and cash equivalents at end of period $ 127,611 $ 83,130
======== ========
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 90-B CONV., L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
NOTE 1.
Parker & Parsley 90-B Conv., L.P. (the "Registrant") is a limited partnership
organized in 1990 under the laws of the State of Texas and was converted to a
Delaware limited partnership on August 1, 1991.
The Registrant 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.
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.
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 $636,169 from $609,224 for
the six months ended June 30, 1996 and 1995, respectively, an increase of 4%.
The increase in revenues resulted from a 16% increase in the average price
received per barrel of oil and a 29% increase in the average price received per
mcf of gas, offset by a 13% decline in barrels of oil produced and sold and an
11% decline in mcf of gas produced and sold. For the six months ended June 30,
1996, 23,819 barrels of oil were sold compared to 27,263 for the same period in
1995, a decrease of 3,444 barrels. For the six months ended June 30, 1996,
64,776 mcf of gas were sold compared to 72,741 for the same period in 1995, a
6
<PAGE>
decrease of 7,965 mcf. The decrease in production volumes was primarily due to
the decline characteristics of the Registrant's oil and gas 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.
The average price received per barrel of oil increased $2.88 from $17.59 for the
six months ended June 30, 1995 to $20.47 for the same period in 1996 while the
average price received per mcf of gas increased from $1.78 for the six months
ended June 30, 1995 to $2.29 for the same period 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 totaling $2,730 was received during the six months ended June 30,
1996, 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 decreased to $417,011 for the six months ended June 30,
1996 as compared to $446,392 for the same period in 1995, a decrease of $29,381,
or 7%. The decrease was due to declines in production costs, depletion,
abandoned property costs and amortization of organization costs, offset by
increases in general and administrative expenses ("G&A) and loss on abandoned
property.
Production costs were $262,914 for the six months ended June 30, 1996 and
$276,646 for the same period in 1995, resulting in a $13,732 decrease, or 5%.
The decrease was the result of less well repair and maintenance costs, offset by
an increase in workover costs 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 increased, in aggregate, 5% from $19,195 for the six months ended
June 30, 1995 to $20,211 for the same period in 1996.
Depletion was $133,142 for the six months ended June 30, 1996 compared to
$148,958 for the same period in 1995. This represented a decrease in depletion
of $15,816, or 11%, 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. Depletion
was computed property-by-property utilizing the unit-of-production method based
upon the dominant mineral produced, generally oil. Oil production decreased
3,444 barrels for the six months ended June 30, 1996 from the same period in
1995, while oil reserves of barrels were revised downward by 78,777 barrels, or
11%.
7
<PAGE>
A loss on abandoned property of $744 was recognized during the six months ended
June 30, 1996. This loss resulted from the abandonment of a saltwater disposal
well. A gain on abandoned property of $3,000 was recognized during the six
months ended June 30, 1995. This gain was the result of proceeds received from
equipment salvage on one fully depleted abandoned property. Abandoned property
costs of $2,085 were incurred on one well abandoned during the six months ended
June 30, 1995. There were no abandoned property costs for the same period in
1996.
Three months ended June 30, 1996 compared with three months ended
June 30, 1995
Revenues:
The Registrant's oil and gas revenues increased to $333,760 from $297,445 for
the three months ended June 30, 1996 and 1995, respectively, an increase of 12%.
The increase in revenues resulted from a 22% increase in the average price
received per barrel of oil and a 45% increase in the average price received per
mcf of gas, offset by a 12% decline in barrels of oil produced and sold and an
8% decline in mcf of gas produced and sold. For the three months ended June 30,
1996, 11,689 barrels of oil were sold compared to 13,293 for the same period in
1995, a decrease of 1,604 barrels. For the three months ended June 30, 1996,
33,041 mcf of gas were sold compared to 35,928 for the same period in 1995, a
decrease of 2,887 mcf. The decrease in production volumes was due to the decline
characteristics of the Registrant's oil and gas properties.
The average price received per barrel of oil increased $3.93 from $18.02 for the
three months ended June 30, 1995 to $21.95 for the same period in 1996 while the
average price received per mcf of gas increased from $1.61 during the three
months ended June 30, 1995 to $2.34 for the same period in 1996.
Costs and Expenses:
Total costs and expenses decreased to $206,179 for the three months ended June
30, 1996 as compared to $214,382 for the same period in 1995, a decrease of
$8,203, or 4%. This decrease was due to declines in production costs, depletion,
amortization of organization costs and abandoned property costs, offset by
increases in G&A and loss on abandoned property.
Production costs were $129,333 for the three months ended June 30, 1996 and
$132,625 for the same period in 1995 resulting in a $3,292 decrease, or 2%. The
decrease was the result of less well repair and maintenance costs, offset by an
increase in workover costs 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 increased, in aggregate, 25% from $8,924 for the three months ended
June 30, 1995 to $11,139 for the same period in 1996.
Depletion was $64,963 for the three months ended June 30, 1996 compared to
$72,495 for the same period in 1995. This represented a decrease in depletion of
$7,532, or 10%, primarily attributable to the adoption of FAS 121 the fourth
8
<PAGE>
quarter of 1995, as discussed previously. Oil production decreased 1,604 barrels
for the three months ended June 30, 1996 from the same period in 1995.
A loss on abandoned property of $744 was recognized during the three months
ended June 30, 1996. This loss resulted from the abandonment of a saltwater
disposal well. A gain on abandoned property of $3,000 was recognized during the
three months ended June 30, 1995. This gain was the result of proceeds received
from equipment salvage on one fully depleted abandoned property. Abandoned
property costs of $2,085 were incurred on one well abandoned during the three
months ended June 30, 1995. There were no abandoned property costs for the same
period in 1996.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased during the six months ended
June 30, 1996 $18,725 from the same period ended June 30, 1995. This decrease
was primarily due to an increase in production costs paid, offset by an increase
in oil and gas sales.
Net Cash Used in Investing Activities
The Registrant's principal investing activities for the six months ended June
30, 1996 and 1995 included expenditures related to equipment replacement on
various oil and gas properties.
Proceeds of $2,730 were received during the six months ended June 30, 1996 from
the sale of oil and gas equipment on one well abandoned in a prior year.
Proceeds of $1,051 were received from the salvage of equipment on one well
abandoned during the six months ended June 30, 1995.
Net Cash Used in Financing Activities
Cash was sufficient for the six months ended June 30, 1996 to cover
distributions to the partners of $297,642 of which $294,666 was distributed to
the limited partners and $2,976 to the managing general partner. For the same
period ended June 30, 1995, cash was sufficient for distributions to the
partners of $318,732 of which $315,544 was distributed to the limited partners
and $3,188 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.
9
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - none
(b) Form 8-K - none
10
<PAGE>
PARKER & PARSLEY 90-B CONV., 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 CONV., L.P.
By: Parker & Parsley Development L.P.,
Managing General Partner
By: Parker & Parsley Petroleum USA, Inc.
("PPUSA"), General Partner
Dated: August 12, 1996 By: /s/ Steven L. Beal
----------------------------------------
Steven L. Beal, Senior Vice President
and Chief Financial Officer of PPUSA
11
<PAGE>
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<ARTICLE> 5
<CIK> 0000882343
<NAME> 90BC.TXT
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 127,611
<SECURITIES> 0
<RECEIVABLES> 128,955
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 256,566
<PP&E> 9,562,594
<DEPRECIATION> 6,340,812
<TOTAL-ASSETS> 3,478,348
<CURRENT-LIABILITIES> 42,709
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,435,639
<TOTAL-LIABILITY-AND-EQUITY> 3,478,348
<SALES> 636,169
<TOTAL-REVENUES> 642,056
<CGS> 0
<TOTAL-COSTS> 417,011
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 225,045
<INCOME-TAX> 0
<INCOME-CONTINUING> 225,045
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 225,045
<EPS-PRIMARY> 18.73
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