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. 33-26097-08
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.
Exhibit index on page 10.
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PARKER & PARSLEY 90-B CONV., 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 CONV., 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 $103,298 at September
30 and $121,219 at December 31 $ 103,585 $ 123,797
Accounts receivable - oil and gas sales 114,154 205,562
----------- ----------
Total current assets 217,739 329,359
----------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 9,579,066 9,563,173
Accumulated depletion (6,668,922) (6,489,600)
----------- ----------
Net oil and gas properties 2,910,144 3,073,573
----------- ----------
$ 3,127,883 $ 3,402,932
=========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 43,740 $ 25,296
Partners' capital:
Managing general partner 30,841 33,776
Limited partners (11,897 interests) 3,053,302 3,343,860
----------- ----------
3,084,143 3,377,636
----------- ----------
$ 3,127,883 $ 3,402,932
=========== ==========
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 CONV., 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 $ 242,483 $ 315,670 $ 831,064 $ 951,839
Interest 2,014 2,158 6,636 5,315
Gain on disposition of assets - 200 - 2,186
-------- -------- -------- --------
244,497 318,028 837,700 959,340
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 148,353 126,020 406,338 388,934
General and administrative 8,177 10,073 26,996 30,284
Depletion 56,381 60,875 179,322 194,017
-------- -------- -------- --------
212,911 196,968 612,656 613,235
-------- -------- -------- --------
Net income $ 31,586 $ 121,060 $ 225,044 $ 346,105
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 315 $ 1,211 $ 2,250 $ 3,461
======== ======== ======== ========
Limited partners $ 31,271 $ 119,849 $ 222,794 $ 342,644
======== ======== ======== ========
Net income per limited
partnership interest $ 2.63 $ 10.07 $ 18.73 $ 28.80
======== ======== ======== ========
Distributions per limited
partnership interest $ 9.38 $ 14.45 $ 43.15 $ 39.22
======== ======== ======== ========
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 CONV., L.P.
(A Delaware Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
-------- ---------- ----------
Balance at January 1, 1997 $ 33,776 $3,343,860 $3,377,636
Distributions (5,185) (513,352) (518,537)
Net income 2,250 222,794 225,044
------- --------- ---------
Balance at September 30, 1997 $ 30,841 $3,053,302 $3,084,143
======= ========= =========
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 CONV., 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 $ 225,044 $ 346,105
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 179,322 194,017
Gain on disposition of assets - (2,186)
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 91,408 (12,316)
Increase (decrease) in accounts payable 18,444 (13,384)
--------- ---------
Net cash provided by operating activities 514,218 512,236
--------- ---------
Cash flows from investing activities:
Additions to oil and gas properties (15,893) (5,086)
Proceeds from disposition of assets - 2,930
--------- ---------
Net cash used in investing activities (15,893) (2,156)
--------- ---------
Cash flows from financing activities:
Cash distributions to partners (518,537) (471,278)
--------- ---------
Net increase (decrease) in cash and cash equivalents (20,212) 38,802
Cash and cash equivalents at beginning of period 123,797 104,953
--------- ---------
Cash and cash equivalents at end of period $ 103,585 $ 143,755
========= =========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
6
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PARKER & PARSLEY 90-B CONV., 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 Conv., 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 results 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 $831,064 from $951,839
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
7
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barrels of oil and mcf of gas produced and sold and a decrease in the average
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, 31,575
barrels of oil were sold compared to 35,167 for the same period in 1996, a
decrease of 3,592 barrels, or 10%. For the nine months ended September 30, 1997,
89,474 mcf of gas were sold compared to 99,322 mcf for the same period in 1996,
a decrease of 9,848 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 $1.05, or 5%, from $20.81
for the nine months ended September 30, 1996 to $19.76 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 $2,186 received during the nine months ended
September 30, 1996 was attributable to credits received of $2,930 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 $744 resulting from
the write-off of remaining capitalized well costs on one saltwater disposal
well.
Costs and Expenses:
Total costs and expenses decreased to $612,656 for the nine months ended
September 30, 1997 as compared to $613,235 for the same period in 1996, a
decrease of $579. The decrease was due to declines in depletion and general and
administrative expenses ("G&A"), offset by increases in production costs.
Production costs were $406,338 for the nine months ended September 30, 1997 and
$388,934 for the same period in 1996, resulting in a $17,404 increase, or 4%.
The increase was the result of higher 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 $30,284 for the nine months ended September
30, 1996 to $26,996 for the same period in 1997.
Depletion was $179,322 for the nine months ended September 30, 1997 compared to
$194,017 for the same period in 1996, representing a decrease of $14,695, 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 $242,483 from $315,670
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,
9,805 barrels of oil were sold compared to 11,348 for the same period in 1996, a
decrease of 1,543 barrels, or 14%. For the three months ended September 30,
1997, 30,045 mcf of gas were sold compared to 34,546 for the same period in
1996, a decrease of 4,501 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 $3.20, or 15%, from
$21.52 during the three months ended September 30, 1996 to $18.32 for the same
period 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 for the same
period in 1997.
Gain on disposition of assets of $200, 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 $212,911 for the three months ended
September 30, 1997 as compared to $196,968 for the same period in 1996, an
increase of $15,943, or 8%. This increase was due to higher production costs,
offset by decreases in depletion & G&A.
Production costs were $148,353 for the three months ended September 30, 1997 and
$126,020 for the same period in 1996, resulting in a $22,333 increase, or 18%.
The increase was the result of higher 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 $10,073 for the three months ended September
30, 1996 to $8,177 for the same period in 1997.
Depletion was $56,381 for the three months ended September 30, 1997 compared to
$60,875 for the same period in 1996, representing a decrease of $4,494, or 7%,
primarily attributable to a decline in oil production of 1,543 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 $1,982 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 $2,930 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, 1996 to cover
distributions to the partners of $518,537 of which $5,185 was distributed to the
managing general partner and $513,352 to the limited partners. For the same
period ended September 30, 1996, cash was sufficient for distributions to the
partners of $471,278 of which $4,713 was distributed to the managing general
partner and $466,565 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 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: Pioneer Natural Resources USA, Inc.,
Managing General Partner
Dated: November 10, 1997 By: /s/ Rich Dealy
---------------------------------
Rich Dealy, Vice President and
Controller
11
<PAGE>
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<ARTICLE> 5
<CIK> 0000882343
<NAME> 90BC
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 103,585
<SECURITIES> 0
<RECEIVABLES> 114,154
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 217,739
<PP&E> 9,579,066
<DEPRECIATION> 6,668,922
<TOTAL-ASSETS> 3,127,883
<CURRENT-LIABILITIES> 43,740
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,084,143
<TOTAL-LIABILITY-AND-EQUITY> 3,127,883
<SALES> 831,064
<TOTAL-REVENUES> 837,700
<CGS> 0
<TOTAL-COSTS> 612,656
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 225,044
<INCOME-TAX> 0
<INCOME-CONTINUING> 225,044
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 225,044
<EPS-PRIMARY> 18.73
<EPS-DILUTED> 0
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