UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1999
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)
1400 Williams Square West, 5205 N. O'Connor Blvd., Irving, Texas 75039
- ---------------------------------------------------------------- ----------
(Address of principal executive offices) (Zip code)
Registrant's Telephone Number, including area code: (972) 444-9001
303 West Wall, Suite 101, Midland, Texas 79701
(Former name, former address and former fiscal year, if changed
since last report)
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
$11,817,000.
As of March 8, 2000, the number of outstanding limited partnership interests was
11,897.
The following documents are incorporated by reference into the indicated parts
of this Annual Report on Form 10-K: None
<PAGE>
Parts I and II of this Report contain 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. See "Item 1. Business" for a
description of various factors that could materially affect the ability of the
Partnership to achieve the anticipated results described in the forward looking
statements.
PART I
ITEM 1. Business
Parker & Parsley 90-B Conv., L.P. (the "Partnership") was organized in 1990 as a
general partnership under the laws of the State of Texas. The Partnership
converted to a Delaware limited partnership on August 1, 1991. As of August 8,
1997, Pioneer Natural Resources USA, Inc. ("Pioneer USA") became the managing
general partner of the Partnership. Prior to August 8, 1997, the Partnership's
managing 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. ("Mesa") 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
managing general partner of the Partnership as PPDLP's successor by merger.
A Registration Statement, as amended, filed pursuant to the Securities Act of
1933, registering general partnership interests aggregating $30,000,000 in a
series of Texas general partnerships formed under the Parker & Parsley 89-90
Development Drilling Program, was declared effective by the Securities and
Exchange Commission on August 1, 1989. On October 5, 1990, the offering of
general partnership interests in the Partnership, the fourth partnership formed
under such statement, was closed, with interests aggregating $11,897,000 being
sold to 668 subscribers.
The Partnership engages 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" for a summary of the Partnership's oil and gas sales, net income
and identifiable assets.
The principal markets during 1999 for the oil produced by the Partnership were
refineries and oil transmission companies that have facilities near the
Partnership's oil producing properties. During 1999, Pioneer USA marketed the
Partnership's gas to a variety of purchasers, none of which accounted for 10% or
more of the Partnership's oil and gas revenues. Of the Partnership's total oil
and gas revenues for 1999, approximately 46% and 11% were attributable to sales
made to Plains All American Inc. and TEPPCO Crude Oil LLC, respectively. Pioneer
USA is of the opinion that the loss of any one purchaser would not have an
adverse effect on its ability to sell its oil and gas production or natural gas
products.
The Partnership's revenues, profitability, cash flow and future rate of growth
are highly dependent on the prevailing prices of oil and gas, which are affected
by numerous factors beyond the Partnership's control. Oil and gas prices
historically have been very volatile. A substantial or extended decline in the
prices of oil or gas could have a material adverse effect on the Partnership's
revenues, profitability and cash flow and could, under certain circumstances,
result in a reduction in the carrying value of the Partnership's oil and gas
properties.
2
<PAGE>
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 Partnership 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 Partnership cannot predict what, if any, effect these
environmental regulations may have on its current or future operations.
The Partnership does not have any employees of its own. Pioneer USA employs 687
persons, many of whom dedicated a part of their time to the conduct of the
Partnership's business during the period for which this report is filed. Pioneer
USA supplies all management functions.
Numerous uncertainties exist in estimating quantities of proved reserves and
future net revenues therefrom. The estimates of proved reserves and related
future net revenues set forth in this report are based on various assumptions,
which may ultimately prove to be inaccurate. Therefore, such estimates should
not be construed as estimates of the current market value of the Partnership's
proved reserves.
No material part of the Partnership's business is seasonal and the Partnership
conducts no foreign operations.
ITEM 2. Properties
The Partnership's properties consist 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
Partnership, resulting in the Partnership's participation in the drilling of 104
oil and gas wells. One well has been plugged and abandoned. At December 31,
1999, the Partnership had 103 producing oil and gas wells.
For information relating to the Partnership's estimated proved oil and gas
reserves at December 31, 1999, 1998 and 1997 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 Pioneer USA with a review by
Williamson Petroleum Consultants, Inc., an independent petroleum consultant.
ITEM 3. Legal Proceedings
The Partnership from time to time is a party to various legal proceedings
incidental to its business involving claims in oil and gas leases or interests,
other claims for damages in amounts not in excess of 10% of its current assets
and other matters, none of which Pioneer USA believes to be material to the
Partnership.
3
<PAGE>
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 1999.
4
<PAGE>
PART II
ITEM 5. Market for Partnership's Common Equity and Related Stockholder
Matters
At March 8, 2000, the Partnership had 11,897 outstanding limited partnership
interests held of record by 666 subscribers. There is no established public
trading market for the limited partnership interests. Under the limited
partnership agreement, Pioneer USA 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 Partnership's obligations are distributed to the partners
at least quarterly in accordance with the limited partnership agreement. During
the years ended December 31, 1999 and 1998, $271,636 and $281,505, 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:
<TABLE>
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Operating results:
Oil and gas sales $ 907,791 $ 764,787 $1,118,628 $1,382,265 $1,160,419
========= ========= ========= ========= =========
Impairment of oil
and gas properties $ 88,497 $ 275,430 $ 328,594 $ 22,474 $ 115,434
========= ========= ========= ========= =========
Net income (loss) $ 164,414 $ (373,956) $ (55,191) $ 544,919 $ 181,451
========= ========= ========= ========= =========
Allocation of net
income (loss):
Managing
general partner $ 1,644 $ (3,740) $ (552) $ 5,449 $ 1,852
========= ========= ========= ========= =========
Limited partners $ 162,770 $ (370,216) $ (54,639) $ 539,470 $ 179,599
========= ========= ========= ========= =========
Limited partners' net
income (loss) per
limited partnership
interest $ 13.68 $ (31.12) $ (4.59) $ 45.35 $ 15.10
========= ========= ========= ========= =========
Limited partners' cash
distributions per
limited partnership
interest $ 22.83 $ 23.66 $ 52.38 $ 56.21 $ 48.84
========= ========= ========= ========= =========
At year end:
Identifiable assets $1,949,209 $2,057,408 $2,727,510 $3,402,932 $3,580,821
========= ========= ========= ========= =========
</TABLE>
5
<PAGE>
ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
1999 compared to 1998
The Partnership's 1999 oil and gas revenues increased 19% to $907,791 from
$764,787 in 1998. The increase in revenues resulted from higher average prices
received, offset by a decline in production. In 1999, 36,383 barrels of oil,
17,481 barrels of natural gas liquids ("NGLs") and 70,803 mcf of gas were sold,
or 65,665 barrel of oil equivalents ("BOEs"). In 1998, 41,140 barrels of oil,
17,403 barrels of NGLs and 73,460 mcf of gas were sold, or 70,786 BOEs. Due to
the decline characteristics of the Partnership's oil and gas properties,
management expects a certain amount of decline in production in the future until
the Partnership's economically recoverable reserves are fully depleted.
The average price received per barrel of oil increased $4.11, or 31%, from
$13.12 in 1998 to $17.23 in 1999. The average price received per barrel of NGLs
increased $2.89, or 44%, from $6.60 in 1998 to $9.49 in 1999. The average price
received per mcf of gas increased 8% from $1.50 in 1998 to $1.62 in 1999. 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 in 1999.
The volatility of commodity prices has had, and continues to have, a significant
impact on the Partnership's revenues and operating cash flow and could result in
additional decreases to the carrying value of the Partnership's oil and gas
properties.
Gain on disposition of assets of $1,669 for 1998 was attributable to credits
received from the disposal of oil and gas equipment on a fully depleted well and
on one well that was plugged and abandoned in a prior year.
Total costs and expenses decreased to $749,072 in 1999 as compared to $1,147,349
in 1998, a decrease of $398,277, or 35%. The decrease was due to declines in the
impairment of oil and gas properties, depletion and production costs, offset by
an increase in general and administrative expenses ("G&A").
Production costs were $478,183 in 1999 and $517,526 in 1998, resulting in a
$39,343 decrease, or 8%. The decrease was due to declines in well maintenance
costs, ad valorem taxes and workover costs, offset by an increase in production
taxes due to increased oil and gas sales.
G&A's components are independent accounting and engineering fees and managing
general partner personnel and operating costs. During this period, G&A
increased, in aggregate, 31% from $26,722 in 1998 to $35,038 in 1999. The
Partnership paid the managing general partner $27,181 in 1999 and $22,923 in
1998 for G&A incurred on behalf of the Partnership. G&A is allocated, in part,
to the Partnership by the managing general partner. Allocated expenses are
determined by the managing general partner based upon the level of activity of
the Partnership relative to the non-partnership activities of the managing
general partner. The method of allocation has been consistent over the past
6
<PAGE>
several years with certain modifications incorporated to reflect changes in
Pioneer USA's overall business activities.
In accordance with 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"), the managing general partner reviews the
Partnership's oil and gas properties for impairment whenever events or
circumstances indicate a decline in the recoverability of the carrying value of
the Partnership's assets may have occurred. As a result of the review and
evaluation of its long-lived assets for impairment, the Partnership recognized
non-cash charges of $88,497 and $275,430 related to its oil and gas properties
during 1999 and 1998, respectively.
Depletion was $147,354 in 1999 compared to $327,671 in 1998. This represented a
decrease of $180,317, or 55%. The decrease was primarily the result of a
combination of factors that included an increase in proved reserves during 1999
due to higher commodity prices, a reduction in the Partnership's net depletable
basis from charges taken in accordance with SFAS 121 during the fourth quarter
of 1998 and a decline in oil production of 4,757 barrels for the period ended
December 31, 1999 compared to the same period in 1998.
1998 compared to 1997
The Partnership's 1998 oil and gas revenues decreased 32% to $764,787 from
$1,118,628 in 1997. The decrease in revenues resulted from lower average prices
received. In 1998, 41,140 barrels of oil, 17,403 barrels of NGLs and 73,460 mcf
of gas were sold, or 70,786 BOEs. In 1997, 42,270 barrels of oil, 6,929 barrels
of NGLs and 100,068 mcf of gas were sold, or 65,877 BOEs.
Consistent with the managing general partner, the Partnership has historically
accounted for processed natural gas production as wellhead production on a wet
gas basis. Effective September 30, 1997, as a result of the merger with Mesa,
the managing general partner accounts for processed natural gas production in
two components: natural gas liquids and dry residue gas. As a result of the
change in the managing general partner's policy, the Partnership now accounts
for processed natural gas production as processed natural gas liquids and dry
residue gas. Consequently, separate product volumes will not be comparable for
periods prior to September 30, 1997. Also, prices for gas products will not be
comparable as the price per mcf for natural gas for the year ended December 31,
1998 is the price received for dry residue gas and the price per mcf for natural
gas produced prior to October 1997 was presented as a price for wet gas (i.e.,
natural gas liquids combined with dry residue gas).
The average price received per barrel of oil decreased $6.33, or 33%, from
$19.45 in 1997 to $13.12 in 1998. The average price received per barrel of NGLs
decreased $3.78, or 36%, from $10.38 in 1997 to $6.60 in 1998. The average price
received per mcf of gas decreased 33% from $2.24 in 1997 to $1.50 in 1998.
Gain on disposition of assets of $1,669 for 1998 was attributable to credits
received from the disposal of oil and gas equipment on a fully depleted well and
on one well that was plugged and abandoned in a prior year.
7
<PAGE>
Total costs and expenses decreased to $1,147,349 in 1998 as compared to
$1,182,470 in 1997, a decrease of $35,121, or 3%. The decrease was due to
declines in the impairment of oil and gas properties, production costs and G&A,
offset by an increase in depletion.
Production costs were $517,526 in 1998 and $534,097 in 1997, resulting in a
$16,571 decrease, or 3%. The decrease was due to lower production taxes due to
decreased oil and gas sales and declines in workover costs and ad valorem taxes,
offset by an increase in well maintenance costs incurred to stimulate well
production.
During this period, G&A decreased, in aggregate, 29% from $37,876 in 1997 to
$26,722 in 1998. The Partnership paid the managing general partner $22,923 in
1998 and $33,218 in 1997 for G&A incurred on behalf of the Partnership.
The Partnership recognized non-cash SFAS 121 charges of $275,430 and $328,594
related to its oil and gas properties during 1998 and 1997, respectively.
Depletion was $327,671 in 1998 compared to $281,903 in 1997. This represented an
increase of $45,768, or 16%. The increase was primarily the result of a
combination of factors that included a decline in proved reserves during 1998
due to lower commodity prices, offset by a reduction in the Partnership's net
depletable basis from charges taken in accordance with SFAS 121 during the
fourth quarter of 1997 and a decline in oil production of 1,130 barrels for the
period ended December 31, 1998 compared to the same period in 1997.
Impact of inflation and changing prices on sales and net income
Inflation generally does not impact revenues in the oil and gas industry.
However, inflation generally does impact expenses, the most significant for the
Partnership is lease operating expenses.
The petroleum industry has been characterized by volatile oil, NGL and natural
gas commodity prices and relatively stable supplier costs during the three years
ended December 31, 1999. During 1997 and 1998, weather patterns, regional
economic recessions and political matters combined to cause worldwide crude oil
supplies to exceed demand. As a result, crude oil prices declined substantially
from the price levels of 1996. Also during 1997 and 1998, but to a lesser
extent, market prices for natural gas declined. During 1999, the price per
barrel for oil production similar to the Partnership's ranged from approximately
$11.00 to $24.00. The decrease in crude oil exports during 1999 by members of
the Organization of Petroleum Exporting Countries ("OPEC") and other crude oil
exporting nations has resulted in higher Partnership revenues and operating cash
flow as compared to 1998.
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.
8
<PAGE>
Liquidity and capital resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $83,787 during the year
ended December 31, 1999 from 1998. The increase was primarily attributable to
reductions in operating costs paid of $45,549 that have resulted from the
managing general partner's cost containment measures and an increase of $39,196
in oil and gas sales receipts, partially offset by an increase in G&A expenses
paid of $958.
Net Cash Used in Investing Activities
The Partnership's principal investing activities during 1999 and 1998 included
expenditures related to equipment upgrades on active oil and gas properties.
Proceeds from dispositions of assets of $1,669 were recognized in 1998 from the
sale of oil and gas equipment on one fully depleted well and one well abandoned
in a prior year.
Net Cash Used in Financing Activities
In 1999, cash distributions to the partners were $274,380, of which $2,744 was
distributed to the managing general partner and $271,636 to the limited
partners. In 1998, cash distributions to the partners were $284,348, of which
$2,843 was distributed to the managing general partner and $281,505 to the
limited partners.
Since the first quarter of 1999, world crude oil prices have increased,
primarily as a result of decreases in crude oil supplies made available by OPEC
and other crude oil exporting nations. During the period from the third quarter
of 1997 through the first quarter of 1999, there was a significant declining
trend in world oil prices and, to a lesser extent, natural gas prices. During
the first quarter of 1999, OPEC and certain other crude oil exporting nations
announced reductions in their planned export volumes. These announcements,
together with the enactment of announced reductions in export volumes, have had
a positive impact on world crude oil prices. No assurances can be given that the
reductions in export volumes or the positive trend in oil and gas commodity
prices can be sustained for an extended period of time.
Proposal to acquire partnerships
On September 8, 1999, Pioneer USA filed a preliminary proxy statement with the
SEC proposing an agreement and plan of merger to the limited partners of 25
publicly-held Parker & Parsley limited partnerships. The preliminary proxy
statement is non-binding and is subject to, among other things, consideration of
offers from third parties to purchase any partnership or its assets, the
majority approval of the limited partners in each partnership and the resolution
of SEC review comments. Pioneer is continuing to evaluate the feasibility of the
proposed agreement and plan of merger; however, the current commodity price
outlook has diminished the likelihood that the proposed agreement and plan of
merger will be consummated.
9
<PAGE>
Year 2000 project readiness
As the year 2000 was approaching, the inability of some computer programs and
embedded technologies to distinguish between "1900" and "2000" gave rise to the
"Year 2000" problem. Such computer programs and related technology were at risk
to fail outright or communicate inaccurate data, if not remediated or replaced.
With the proliferation of electronic data interchange, the Year 2000 problem
represented a significant exposure to the entire global community, the full
extent of which could not be accurately assessed prior to the year 2000.
In proactive response to the Year 2000 problem, the managing general partner
established a "Year 2000" project that assessed, to the extent possible, the
Partnership's and the managing general partner's internal Year 2000 problem;
took remedial actions necessary to minimize the Year 2000 risk exposure to the
managing general partner and significant third parties with whom it has data
interchange; and, tested the managing general partner's systems and processes
once remedial actions were taken. The managing general partner contracted with
IBM Global Services to perform the assessment and remedial phases of its Year
2000 project. The managing general partner's total costs related to the Year
2000 problem were $2.5 million.
The managing general partner has closely monitored its information and
non-information technology systems since the beginning of 2000 and has
identified no significant Year 2000 failures or problems. The managing general
partner will continue to monitor Year 2000 risks and issues. There can be no
assurances that unforeseen problems will not be encountered in the future.
10
<PAGE>
ITEM 8. Financial Statements and Supplementary Data
Index to Financial Statements
Page
Financial Statements of Parker & Parsley 90-B Conv., L.P.:
Independent Auditors' Report - Ernst & Young LLP............... 12
Independent Auditors' Report - KPMG LLP........................ 13
Balance Sheets as of December 31, 1999 and 1998................ 14
Statements of Operations for the Years Ended December 31,
1999, 1998 and 1997.......................................... 15
Statements of Partners' Capital for the Years Ended
December 31, 1999, 1998 and 1997............................. 16
Statements of Cash Flows for the Years Ended December 31,
1999, 1998 and 1997.......................................... 17
Notes to Financial Statements.................................. 18
11
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
Parker & Parsley 90-B Conv., L.P.
(A Delaware Limited Partnership):
We have audited the balance sheets of Parker & Parsley 90-B Conv., L.P. as of
December 31, 1999 and 1998, and the related statements of operations, partners'
capital and cash flows for the years then ended. 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 auditing standards generally accepted
in the United States. 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 90-B Conv.,
L.P. as of December 31, 1999 and 1998, and the results of its operations and its
cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States.
Ernst & Young LLP
Dallas, Texas
March 10, 2000
12
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
Parker & Parsley 90-B Conv., L.P.
(A Delaware Limited Partnership):
We have audited the statement of operations, partners' capital and cash flows of
Parker & Parsley 90-B Conv., L.P. for the year ended December 31, 1997. 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 audit.
We conducted our audit 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above presents fairly, in
all material respects, the results of operations and cash flows of Parker &
Parsley 90-B Conv., L.P. for the year ended December 31, 1997, in conformity
with generally accepted accounting principles.
KPMG LLP
Midland, Texas
March 20, 1998
13
<PAGE>
PARKER & PARSLEY 90-B CONV., L.P.
(A Delaware Limited Partnership)
BALANCE SHEETS
December 31
1999 1998
----------- -----------
ASSETS
Current assets:
Cash $ 132,031 $ 76,330
Accounts receivable - oil and gas sales 143,411 83,807
---------- ----------
Total current assets 275,442 160,137
---------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 9,612,816 9,600,469
Accumulated depletion (7,939,049) (7,703,198)
---------- ----------
Net oil and gas properties 1,673,767 1,897,271
---------- ----------
$ 1,949,209 $ 2,057,408
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 24,507 $ 22,740
Partners' capital:
Managing general partner 19,246 20,346
Limited partners (11,897 interests) 1,905,456 2,014,322
---------- ----------
1,924,702 2,034,668
---------- ----------
$ 1,949,209 $ 2,057,408
========== ==========
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
PARKER & PARSLEY 90-B CONV., L.P.
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
For the years ended December 31
1999 1998 1997
--------- ---------- ----------
Revenues:
Oil and gas $ 907,791 $ 764,787 $1,118,628
Interest 5,695 6,937 8,651
Gain on disposition of assets - 1,669 -
-------- --------- ---------
913,486 773,393 1,127,279
-------- --------- ---------
Costs and expenses:
Oil and gas production 478,183 517,526 534,097
General and administrative 35,038 26,722 37,876
Impairment of oil and gas properties 88,497 275,430 328,594
Depletion 147,354 327,671 281,903
-------- --------- ---------
749,072 1,147,349 1,182,470
-------- --------- ---------
Net income (loss) $ 164,414 $ (373,956) $ (55,191)
======== ========= =========
Allocation of net income (loss):
Managing general partner $ 1,644 $ (3,740) $ (552)
======== ========= =========
Limited partners $ 162,770 $ (370,216) $ (54,639)
======== ========= =========
Net income (loss) per limited
partnership interest $ 13.68 $ (31.12) $ (4.59)
======== ========= =========
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
PARKER & PARSLEY 90-B CONV., L.P.
(A Delaware Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
Managing
general Limited
partner partners Total
----------- ---------- ----------
Partners' capital at January 1, 1997 $ 33,776 $3,343,860 $3,377,636
Distributions (6,295) (623,178) (629,473)
Net loss (552) (54,639) (55,191)
---------- --------- ---------
Partners' capital at December 31, 1997 26,929 2,666,043 2,692,972
Distributions (2,843) (281,505) (284,348)
Net loss (3,740) (370,216) (373,956)
---------- --------- ---------
Partners' capital at December 31, 1998 20,346 2,014,322 2,034,668
Distributions (2,744) (271,636) (274,380)
Net income 1,644 162,770 164,414
---------- --------- ---------
Partners' capital at December 31, 1999 $ 19,246 $1,905,456 $1,924,702
========== ========= =========
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
PARKER & PARSLEY 90-B CONV., L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
For the years ended December 31
1999 1998 1997
--------- --------- ---------
Cash flows from operating activities:
Net income (loss) $ 164,414 $(373,956) $ (55,191)
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Impairment of oil and gas properties 88,497 275,430 328,594
Depletion 147,354 327,671 281,903
Gain on disposition of assets - (1,669) -
Changes in assets and liabilities:
Accounts receivable (59,604) 42,963 78,792
Accounts payable 1,767 (11,798) 9,242
-------- -------- --------
Net cash provided by operating
activities 342,428 258,641 643,340
-------- -------- --------
Cash flows from investing activities:
Additions to oil and gas properties (12,347) (18,344) (18,952)
Proceeds from disposition of assets - 1,669 -
-------- -------- --------
Net cash used in investing
activities (12,347) (16,675) (18,952)
-------- -------- --------
Cash flows used in financing activities:
Cash distributions to partners (274,380) (284,348) (629,473)
-------- -------- --------
Net increase (decrease) in cash 55,701 (42,382) (5,085)
Cash at beginning of year 76,330 118,712 123,797
-------- -------- --------
Cash at end of year $ 132,031 $ 76,330 $ 118,712
======== ======== ========
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
PARKER & PARSLEY 90-B CONV., L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999, 1998 and 1997
Note 1. Organization and nature of operations
Parker & Parsley 90-B Conv., L.P. (the "Partnership") was organized as a
general partnership in 1990 under the laws of the State of Texas and was
converted to a Delaware limited partnership on August 1, 1991. As of August 8,
1997, Pioneer Natural Resources USA, Inc. ("Pioneer USA") became the managing
general partner of the Partnership. Prior to August 8, 1997, the Partnership's
managing 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
managing general partner of the Partnership as PPDLP's successor by merger.
The Partnership engages 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:
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 Pioneer USA, 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.
Impairment of long-lived assets - In accordance with 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"), the
Partnership reviews its long-lived assets to be held and used on an individual
property basis, 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
amount of the asset exceeds the estimated fair value of the asset.
18
<PAGE>
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.
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
includes 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. Allocated expenses are determined by the managing general partner
based upon the level of activity of the Partnership relative to the
non-partnership activities of the managing general partner. The method of
allocation has been consistent over the past several years with certain
modifications incorporated to reflect changes in Pioneer USA's overall business
activities.
Reclassifications - Certain reclassifications may have been made to the
1998 and 1997 financial statements to conform to the 1999 financial statement
presentations.
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. Such liabilities are generally undiscounted unless the
timing of cash payments for the liability or component are fixed or reliably
determinable. No such liabilities have been accrued as of December 31, 1999.
Revenue recognition - The Partnership uses the entitlements method of
accounting for crude oil and natural gas revenues.
Note 3. Impairment of long-lived assets
In accordance with SFAS 121, the Partnership reviews its proved oil and
gas properties for impairment whenever events and circumstances indicate a
decline in the recoverability of the carrying value of the Partnership's oil and
gas properties. The Partnership has estimated the expected future cash flows of
19
<PAGE>
its oil and gas properties as of December 31, 1999, 1998 and 1997, based on
proved reserves, and compared such estimated future cash flows to the respective
carrying amount of the oil and gas properties to determine if the carrying
amounts were likely to be recoverable. For those proved 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 non-cash impairment provisions of $88,497, $275,430 and
$328,594 related to its proved oil and gas properties during 1999, 1998 and
1997, respectively.
Note 4. Income taxes
The financial statement basis of the Partnership's net assets and
liabilities was $353,741 greater than the tax basis at December 31, 1999.
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:
1999 1998 1997
--------- --------- ---------
Net income (loss) per statements of
operations $ 164,414 $(373,956) $ (55,191)
Depletion and depreciation provisions
for tax reporting purposes (greater
than) less than amounts for
financial reporting purposes 132,570 175,500 (73,043)
Impairment of oil and gas properties
for financial reporting purposes 88,497 275,430 328,594
Other, net (4,660) 3,987 (508)
-------- -------- --------
Net income per Federal
income tax returns $ 380,821 $ 80,961 $ 199,852
======== ======== ========
Note 5. Oil and gas producing activities
The following is a summary of the costs incurred, whether capitalized or
expensed, related to the Partnership's oil and gas producing activities for the
years ended December 31:
1999 1998 1997
---------- ---------- ----------
Development costs $ 12,347 $ 18,344 $ 18,939
========= ========= =========
Capitalized oil and gas properties consist of the following:
1999 1998
----------- -----------
Proved properties:
Property acquisition costs $ 369,498 $ 369,498
Completed wells and equipment 9,243,318 9,230,971
---------- ----------
9,612,816 9,600,469
Accumulated depletion (7,939,049) (7,703,198)
---------- ----------
Net capitalized costs $ 1,673,767 $ 1,897,271
========== ==========
20
<PAGE>
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:
1999 1998 1997
--------- --------- ---------
Payment of lease operating and supervision
charges in accordance with standard
industry operating agreements $ 214,306 $ 209,549 $ 217,885
Reimbursement of general and
administrative expenses $ 27,181 $ 22,923 $ 33,218
The Partnership participates in oil and gas activities through an income
tax partnership (the "Program") pursuant to the Program agreement. Pioneer USA,
P&P Employees 90-B Conv., L.P. ("EMPL") (the "Entities"), Parker & Parsley 90-B,
L.P. and the Partnership (the "Partnerships") are parties to the Program
agreement. EMPL is a limited partnership organized for the benefit of certain
employees of Pioneer USA.
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 Pioneer USA's 1% general partner ownership which is allocated
at the Partnership level and 80 limited partner interests owned by
Pioneer USA.
(2) The allocation between the Partnership and Parker & Parsley 90-B, L.P.
is 26.94006% and 73.05994%, 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, 1999, 1998 and 1997 and
changes in such quantities during the years then ended. Due to a change in the
accounting policy of the managing general partner in 1997, the Partnership began
accounting for processed natural gas production in two components: processed
natural gas liquids ("NGLs") and dry residue gas. NGLs are reflected in "Oil and
NGLs" in the table below. All of the Partnership's reserves are proved developed
and located within the United States.
21
<PAGE>
The Partnership's reserves are based on an evaluation prepared by the
engineering staff of Pioneer USA and reviewed by Williamson Petroleum
Consultants, Inc., 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.
Oil and NGLs Gas
(bbls) (mcf)
------------ ----------
Net proved reserves at January 1, 1997 697,926 2,165,968
Revisions 266,203 (1,201,254)
Production (49,199) (100,068)
----------- ----------
Net proved reserves at December 31, 1997 914,930 864,646
Revisions (446,456) (190,771)
Production (58,543) (73,460)
----------- ----------
Net proved reserves at December 31, 1998 409,931 600,415
Revisions 435,645 666,249
Production (53,864) (70,803)
----------- ----------
Net proved reserves at December 31, 1999 791,712 1,195,861
=========== ==========
As of December 31, 1999, the estimated present value of future net
revenues of proved reserves, calculated using December 31, 1999 prices of $25.36
per barrel of oil, $15.92 per barrel of NGLs and $1.71 per mcf of gas,
discounted at 10% was approximately $4,384,000 and undiscounted was $8,549,000.
Numerous uncertainties exist in estimating quantities of proved reserves
and future net revenues therefrom. The estimates of proved reserves and related
future net revenues set forth in this report are based on various assumptions,
which may ultimately prove to be inaccurate. Therefore, such estimates should
not be construed as estimates of the current market value of the Partnership's
proved reserves. 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 (a major customer is defined as a customer whose sales exceed 10%
of total sales) during the years ended December 31:
1999 1998 1997
-------- -------- --------
Plains All American Inc. 46% - -
TEPPCO Crude Oil LLC 11% - -
Genesis Crude Oil, L.P. - 58% 61%
Western Gas Resources, Inc. 5% 21% 18%
At December 31, 1999, the amounts receivable from Plains All American
Inc. and TEPPCO Crude Oil LLC were $51,716 and $12,495, respectively, which are
included in the caption "Accounts receivable - oil and gas sales" in the
accompanying Balance Sheet.
22
<PAGE>
Pioneer USA is of the opinion that the loss of any one purchaser would
not have an adverse effect on the ability of the Partnership to sell its oil and
gas production or natural gas products.
Note 9. Organization and operations
The Partnership was organized October 5, 1990 as a general partnership
under the Texas Uniform General Partnership Act for the purpose of acquiring and
developing oil and gas properties. The Partnership converted to a Delaware
limited partnership on August 1, 1991. The managing general partner received an
opinion of legal counsel to the effect that such conversion will not result in
material adverse tax consequences to the Partnership. The following is a brief
summary of the more significant provisions of the Partnership agreement:
Managing general partner - The managing general partner of the
Partnership is Pioneer USA. Pioneer USA has the power and authority to
manage, control and administer all Program and Partnership affairs. As
managing general partner and operator of the Partnership's properties,
all production expenses are incurred by Pioneer USA and billed to the
Partnership and a portion of revenue is initially received by Pioneer USA
prior to being paid to the Partnership. Under the 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 partners entered into subscription
agreements for aggregate capital contributions of $11,897,000. The
managing general partner is required to contribute amounts equal to 1% of
initial Partnership capital less commission and organization and offering
costs 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.
ITEM 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
None.
23
<PAGE>
PART III
ITEM 10. Directors and Executive Officers of the Partnership
The Partnership does not have any officers or directors. Under the limited
partnership agreement, the Partnership's managing general partner, Pioneer USA,
is granted the exclusive right and full authority to manage, control and
administer the Partnership's business.
Set forth below are the names, ages and positions of the directors and executive
officers of Pioneer USA. Directors of Pioneer USA are elected to serve until the
next annual meeting of stockholders or until their successors are elected and
qualified. During June 1999, Mr. Lon C. Kile resigned as an officer of Pioneer
USA. During January 2000, Mr. M. Garrett Smith also resigned his position as
Director and Chief Financial Officer of Pioneer USA. Mr. Timothy L. Dove assumed
the responsibility of Chief Financial Officer of Pioneer USA after Mr. Smith's
resignation.
Age at
December 31,
Name 1999 Position
- --------------------- ------------ ------------------------------------
Scott D. Sheffield 47 President
Timothy L. Dove 43 Executive Vice President, Chief
Financial Officer and Director
Dennis E. Fagerstone 50 Executive Vice President and Director
Mark L. Withrow 52 Executive Vice President, General
Counsel and Director
Rich Dealy 33 Vice President and Chief Accounting
Officer
Scott D. Sheffield. Mr. Sheffield is a graduate of The University of
Texas with a B.S. in Petroleum Engineering. Since August 1997, he has served as
President, Chief Executive Officer and a director of Pioneer and President of
Pioneer USA. Mr. Sheffield assumed the position of Chairman of the Board of
Pioneer in August 1999. He served as a director of Pioneer USA from August 1997
until his resignation from the board in June 1999. Mr. Sheffield was the
President and a director of Parker & Parsley from May 1990 until August 1997 and
was the Chairman of the Board and Chief Executive Officer of Parker & Parsley
from October 1990 until August 1997. He was the sole director of Parker &
Parsley from May 1990 until October 1990. Mr. Sheffield joined Parker & Parsley
Development Company ("PPDC"), a predecessor of Parker & Parsley, as a petroleum
engineer in 1979. He served as Vice President - Engineering of PPDC from
September 1981 until April 1985 when he was elected President and a director. In
March 1989, Mr. Sheffield was elected Chairman of the Board and Chief Executive
Officer of PPDC. Before joining PPDC's predecessor, Mr. Sheffield was employed
as a production and reservoir engineer for Amoco Production Company.
24
<PAGE>
Timothy L. Dove. Mr. Dove earned a B.S. in Mechanical Engineering from
Massachusetts Institute of Technology in 1979 and received his M.B.A. in 1981
from the University of Chicago. He became Executive Vice President - Business
Development of Pioneer and Pioneer USA in August 1997 and was also appointed a
director of Pioneer USA in August 1997. Mr. Dove assumed the position of Chief
Financial Officer of Pioneer and Pioneer USA effective February 1, 2000. Mr.
Dove joined Parker & Parsley in May 1994 as Vice President - International and
was promoted to Senior Vice President - Business Development in October 1996, in
which position he served until August 1997. Prior to joining Parker & Parsley,
Mr. Dove was employed with Diamond Shamrock Corp., and its successor, Maxus
Energy Corp, in various capacities in international exploration and production,
marketing, refining and marketing and planning and development.
Dennis E. Fagerstone. Mr. Fagerstone, a graduate of the Colorado School
of Mines with a B.S. in Petroleum Engineering, became an Executive Vice
President of Pioneer and Pioneer USA in August 1997. He was also appointed a
director of Pioneer USA in August 1997. He served as Executive Vice President
and Chief Operating Officer of Mesa from March 1, 1997 until August 1997. From
October 1996 to February 1997, Mr. Fagerstone served as Senior Vice President
and Chief Operating Officer of Mesa and from May 1991 to October 1996, he served
as Vice President - Exploration and Production of Mesa. From June 1988 to May
1991, Mr. Fagerstone served as Vice President - Operations of Mesa.
Mark L. Withrow. Mr. Withrow, a graduate of Abilene Christian University
with a B. S. in Accounting and Texas Tech University with a Juris Doctorate
degree, became Executive Vice President, General Counsel and Secretary of
Pioneer and Pioneer USA in August 1997. He was also appointed a director of
Pioneer USA in August 1997. Mr. Withrow was Vice President - General Counsel of
Parker & Parsley from January 1991, when he joined Parker & Parsley, to January
1995, when he was appointed Senior Vice President - General Counsel. He was
Parker & Parsley's Secretary from August 1992 until August 1997. Prior to
joining Parker & Parsley, Mr. Withrow was the managing partner of the law firm
of Turpin, Smith, Dyer, Saxe & MacDonald, Midland, Texas.
Rich Dealy. Mr. Dealy is a graduate of Eastern New Mexico University with
a B.B.A. in Accounting and Finance and is a Certified Public Accountant. He
became Vice President and Chief Accounting Officer of Pioneer and Pioneer USA in
February 1998. Mr. Dealy served as Controller of Pioneer USA from August 1997 to
February 1998. He served as Controller of Parker & Parsley from August 1995 to
August 1997. Mr. Dealy joined Parker & Parsley as an Accounting Manager in July,
1992. He was previously employed with KPMG Peat Marwick as an Audit Senior, in
charge of Parker & Parsley's audit.
ITEM 11. Executive Compensation
The Partnership does not have any directors or officers. Management of the
Partnership is vested in Pioneer USA, the managing general partner. The
Partnership participates in oil and gas activities through an income tax
partnership (the "Program") pursuant to the Program agreement. Under the Program
agreement, Pioneer USA and P&P Employees 90-B Conv., L.P. ("EMPL") pay approxi
mately 10% of the Program'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 Program's revenues. See Notes 6 and 9 of Notes to
25
<PAGE>
Financial Statements included in "Item 8. Financial Statements and Supplementary
Data" for information regarding fees and reimbursements paid to the managing
general partner or its affiliates by the Partnership.
Pioneer USA'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 2.5% of the Program'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 Program's
revenues. EMPL does not receive any fees or reimbursements from the Partnership.
The Partnership does not directly pay any salaries of the executive officers of
Pioneer USA, but does pay a portion of Pioneer USA'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".
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
(a) Beneficial owners of more than five percent
The Partnership is not aware of any person who beneficially owns 5% or more of
the outstanding limited partnership interests of the Partnership. Pioneer USA
owned 80 limited partnership interests at January 1, 2000.
(b) Security ownership of management
The Partnership does not have any officers or directors. The managing general
partner of the Partnership, Pioneer USA, has the exclusive right and full
authority to manage, control and administer the Partnership'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 Partnership is not aware of any current arrangement or
activity which may lead to such removal. The Partnership is not aware of any
officer or director of Pioneer USA who beneficially owns limited partnership
interests in the Partnership.
ITEM 13. Certain Relationships and Related Transactions
Transactions with the managing general partner or its affiliates
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:
26
<PAGE>
1999 1998 1997
--------- --------- ---------
Payment of lease operating and
supervision charges in accordance
with standard industry operating
agreements $ 214,306 $ 209,549 $ 217,885
Reimbursement of general and
administrative expenses $ 27,181 $ 22,923 $ 33,218
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. Also, see Notes 6 and 9 of Notes to Financial
Statements included in "Item 8. Financial Statements and Supplementary Data",
regarding the Partnership's participation with the managing general partner in
oil and gas activities of the Program.
27
<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 - Ernst & Young LLP
Independent Auditors' Report - KPMG LLP
Balance sheets as of December 31, 1999 and 1998
Statements of operations for the years ended December 31, 1999,
1998 and 1997
Statements of partners' capital for the years ended December 31,
1999, 1998 and 1997
Statements of cash flows for the years ended December 31, 1999,
1998 and 1997
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.
28
<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 90-B CONV., L.P.
Dated: March 27, 2000 By: Pioneer Natural Resources USA, Inc.
Managing 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 of Pioneer USA March 27, 2000
- ------------------------
Scott D. Sheffield
/s/ Timothy L. Dove Executive Vice President, Chief March 27, 2000
- ------------------------ Financial Officer and Director of
Timothy L. Dove Pioneer USA
/s/ Dennis E. Fagerstone Executive Vice President and March 27, 2000
- ------------------------ Director of Pioneer USA
Dennis E. Fagerstone
/s/ Mark L. Withrow Executive Vice President, General March 27, 2000
- ------------------------ Counsel and Director of Pioneer USA
Mark L. Withrow
/s/ Rich Dealy Vice President and Chief Accounting March 27, 2000
- ------------------------ Officer of Pioneer USA
Rich Dealy
29
<PAGE>
PARKER & PARSLEY 90-B CONV., L.P.
INDEX TO EXHIBITS
The following documents are incorporated by reference in response to Item
14(c):
Exhibit No. Description Page
3(a) Form of Agreement of Limited Partnership -
of Parker & Parsley 90-B Conv., L.P.
incorporated by reference to Exhibit A of
the Post-Effective Amendment No. 1 of
the Partnership's Registration Statement
on Form S-1 (Registration No. 33-26097)
4(b) Form of Limited Partner Subscription Agree- -
ment incorporated by reference to Exhibit C
of the Post-Effective Amendment No. 1 of
the Partnership's Registration Statement on
Form S-1 (Registration No. 33-26097)
4(b) Form of General Partner Subscription Agreement -
incorporated by reference to Exhibit D of the
Post-Effective Amendment No. 1 of the Part-
nership's Registration Statement on Form S-1
(Registration No. 33-26097)
4(b) Power of Attorney incorporated by reference to -
Exhibit B of Amendment No. 1 of the Partner-
ship's Registration Statement on Form S-1
(Registration No. 33-26097)
4(c) Specimen Certificate of Limited Partnership -
Interest incorporated by reference to
Exhibit 4c of the Partnership's Registration
Statement on Form S-1 (Registration No.
33-26097)
10(b) Form of Development Drilling Program -
Agreement incorporated by reference to Exhibit
B of the Post-Effective Amendment No. 1 of
the Partnership's Registration Statement on
Form S-1 (Registration No. 33-26097)
27.1* Financial Data Schedule
*Filed herewith
30
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000882343
<NAME> 90BC
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 132,031
<SECURITIES> 0
<RECEIVABLES> 143,411
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 275,442
<PP&E> 9,612,816
<DEPRECIATION> 7,939,049
<TOTAL-ASSETS> 1,949,209
<CURRENT-LIABILITIES> 24,507
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,924,702
<TOTAL-LIABILITY-AND-EQUITY> 1,949,209
<SALES> 907,791
<TOTAL-REVENUES> 913,486
<CGS> 0
<TOTAL-COSTS> 749,072
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 164,414
<INCOME-TAX> 0
<INCOME-CONTINUING> 164,414
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 164,414
<EPS-BASIC> 13.68
<EPS-DILUTED> 0
</TABLE>
