<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
(Fee Required)
FOR THE YEAR ENDED DECEMBER 31, 1995
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. 033-90480
MEWBOURNE ENERGY PARTNERS 95-B, L.P.
Delaware 75-2616657
- --------------------------------------- -------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3901 SOUTH BROADWAY, TYLER, TEXAS 75701
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (903) 561-2900
-----------------------------
Securities registered pursuant to Section 12(b) of the Act: NONE
---------------------
Securities registered pursuant to Section 12(g) of the act:
LIMITED AND GENERAL PARTNERSHIP INTEREST $1,000 PER INTEREST
- --------------------------------------------------------------------------------
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. [X] Yes [ ] No
No market currently exists for the limited and general partnership interest of
the registrant. Based on original purchase price the aggregate market value of
limited and general partnership interest owned by non-affiliates of the
registrant is $2,011,000.00.
The following documents are incorporated by reference into the indicated parts
of this Annual Report on Form 10-K: Part of the information called for by Part
IV of the Annual Report on Form 10-K is incorporated by reference from the
Registrant's Registration Statement on Form S-1, File No. 33-90480
1
<PAGE> 2
PART I
ITEM 1. BUSINESS
Mewbourne Energy Partners 95-B, L.P. (the "Registrant") is a limited
partnership organized under the laws of the State of Delaware in 1995. Its
managing general partner is Mewbourne Development Corporation, a Delaware
corporation ("MD").
A Registration Statement filed pursuant to the Securities Act of 1933, as
amended, registering limited partnership interests aggregating $11,000,000 and
$33,000,000 in general partnership interests in a series of Delaware limited
partnerships formed under Mewbourne Energy 95-96 Drilling Programs, was
declared effective by the Securities and Exchange Commission on June 23, 1995.
On December 29, 1995, the offering of limited and general partnership interests
in the Registrant, the second partnership formed under such statement, was
closed, with interests aggregating $2,011,000 being sold to 111 subscribers of
which $1,771,000 were sold to 101 subscribers as general partner interests and
$240,000 were sold to 10 subscribers as limited partner interests.
The Registrant engages primarily in oil and gas development and production and
is not involved in any other industry segment . See the selected financial
data in Item 6 and the financial statements in Item 8 of this report for a
summary of the Registrant's revenue, income and identifiable assets.
The Registrant has acquired interests in oil and gas prospects for the purpose
of development drilling. At December 31, 1995, 6 wells were committed to be
drilled.
The sale of crude oil and natural gas produced by the Registrant will be
affected by a number of factors which are beyond the Registrant's control.
These factors include the price of crude oil and natural gas, the fluctuating
supply of and demand for these products, competitive fuels, refining,
transportation, extensive federal and state regulations governing the
production and sale of crude oil and natural gas, and other competitive
conditions. It is impossible to predict with any certainty the future effect
of these factors on the Registrant.
The Registrant does not have long-term contracts with purchasers of its crude
oil or natural gas. The market for crude oil is such that the Registrant
anticipates it will be able to sell all the crude oil it can produce. Natural
gas will be sold to local distribution companies, gas marketers and end users
on the spot market. The spot market reflects immediate sales of natural gas
without long-term contractual commitments. The future market condition for
natural gas cannot be predicted with any certainty,
2
<PAGE> 3
and the Registrant may experience delays in marketing natural gas production
and fluctuations in natural gas prices.
Many aspects of the Registrant's activities are highly competitive including,
but not limited to, the acquisition of suitable drilling prospects and the
procurement of drilling and related oil field equipment, and are subject to
governmental regulation, both at Federal and state levels. The Registrant's
ability to compete depends on its financial resources and on the managing
general partner's staff and facilities, none of which are significant in
comparison with those of the oil and gas exploration, development and
production industry as a whole. Federal and state regulation of oil and gas
operations generally includes drilling and spacing of wells on producing
acreage, the imposition of maximum allowable production rates, the taxation of
income and other items, and the protection of the environment.
The Registrant does not have any employees of its own. MD is responsible for
all management functions. Mewbourne Oil Company ("MOC"), a wholly-owned
subsidiary of Mewbourne Holdings, Inc., which is also the parent of the
Registrant's managing general partner, has been appointed Program Manager and
is responsible for activities in accordance with a Drilling Program Agreement
entered into by the Registrant, MD and MOC. At March 28, 1996, MOC employed
100 persons, many of whom dedicated a part of their time to the conduct of the
Registrant's business during the period for which this report is filed.
The production of oil and gas is not considered subject to seasonal factors
although the Registrant's natural gas sales will tend to increase during the
winter months. Order backlog is not pertinent to the Registrant's business.
3
<PAGE> 4
ITEM 2. PROPERTIES
The Registrant's properties consist primarily of leasehold interests in
properties on which oil and gas wells-in- progress 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 Anadarko Basin of Western Oklahoma and the Texas Panhandle
were acquired by the Registrant, resulting in the Registrant's participation in
the drilling of 6 oil and gas wells. At December 31, 1995, 6 wells were
committed to the drilling and completion process.
ITEM 3. LEGAL PROCEEDINGS
The Registrant is not aware of any pending legal proceedings to which it is a
party or to which its properties are subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during the fourth quarter
of the year ended December 31, 1995 covered by this report.
4
<PAGE> 5
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
At March 28, 1996, the Registrant had 2,011 outstanding limited and general
partnership interests held of record by 111 subscribers. There is no
established public or organized trading market for the limited and general
partnership interests.
Revenues which, in the sole judgement of the managing general partner, are not
required to meet the Registrant's obligations will be distributed to the
partners at least quarterly in accordance with Registrant's Partnership
Agreement. During the period ended December 31, 1995, no distributions had
been made to the limited and general partners.
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected financial data for the period from
December 29, 1995 (date of inception) through December 31, 1995:
<TABLE>
<S> <C>
Operating results:
- ------------------
Oil and gas sales $ -0-
Net loss ($ 881)
Allocation of net loss:
Managing general partner ($ 8)
Limited and general partners ($ 873)
Net loss per limited and general
partner interest ($ .43)
Limited and general partners'
cash distributions per interest $ -0-
At year end:
- ------------
Cash $ 865,941
Non-Cash assets 1,502,694
----------
Total Assets $2,368,635
==========
Note payable, affiliate $ 191,045
</TABLE>
5
<PAGE> 6
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
General
Mewbourne Energy Partners 95-B, L.P. (the "Registrant") was organized as a
Delaware limited partnership on October 11, 1995. The offering of limited and
general partner interests began June 23, 1995 as part of a shelf offering
registered under the name Mewbourne Energy 95-96 Drilling Programs. The
offering of limited and general partner interests in the Registrant concluded
December 29, 1995, with total investor partner contributions of $2,011,000.
The Managing General Partner made a contribution to the capital of the
Registrant at the conclusion of the offering period in an amount equal to 1% of
its net capital contributions. The Managing General Partner contribution was
$20,313.
The Registrant was formed to engage primarily in the business of drilling
development wells, to produce and market crude oil and natural gas produced
from such properties, to distribute any net proceeds from operations to the
general and limited partners and to the extent necessary, acquire leases which
contain drilling prospects. The economic life of the Registrant depends on the
period over which the Registrant's oil and gas reserves are economically
recoverable.
Results of Operations
Because the Registrant was formed during the period covered by this report, no
trend analysis based on yearly changes in liquidity, capital resources or
results of operations is available.
The net loss of $881 realized by the Registrant during the period from December
29, 1995 (date of inception) through December 31, 1995, was attributable to
administrative and general expenses. At December 31, 1995, 6 wells were
committed to the drilling and completion process. The Registrant's oil and gas
revenues should increase during 1996 as wells are completed and oil and gas
production is sold. The Registrant expects that drilling and completion cost
will increase during 1996 and that production cost and depletion provisions
will increase.
6
<PAGE> 7
Liquidity and capital resources
Net cash and cash equivalents increased by $865,941 during the period from
December 29, 1995 (date of inception) through December 31, 1995. In 1995,
approximately $1,174,543 of the net initial partners' capital was used for
drilling and completion cost and for lease acquisition cost. Capital
requirements in the future are expected to be paid with the initial partner's
capital. Management believes that funds are sufficient to complete the 6 wells
for which funds have been committed. Under certain circumstances, as provided
in the Registrant's Partnership Agreement, the Registrant may use revenues
and/or borrow monies to fund additional capital requirements.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The required financial statements of the Registrant are contained in a separate
section of this report beginning with page 14 following the signature
attestation. See "Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K".
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
7
<PAGE> 8
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Registrant does not have any officers or directors. Under the
Registrant's Partnership Agreement, the Registrant's managing general partner,
MD, is granted the exclusive right and full authority to manage, control and
administer the Registrant's business. MD is a wholly-owned subsidiary of
Mewbourne Holdings, Inc.
Set forth below are the names, ages and positions of the directors and
executive officers of MD, the Registrant's managing general partner. Directors
of MD are elected to serve until the next annual meeting of stockholders or
until their successors are elected and qualified.
<TABLE>
<CAPTION>
Age as
December 31,
Name 1995 Position
- ---- ---- --------
<S> <C> <C>
Curtis W. Mewbourne 60 President and Director
J. Roe Buckley 33 Treasurer and Chief
Financial Officer
Michael F. Shepard 49 Secretary and General
Counsel
Dorothy M. Cuenod 35 Assistant Secretary
and Director
Ruth M. Buckley 34 Assistant Secretary
and Director
Julie M. Greene 32 Assistant Secretary
and Director
</TABLE>
8
<PAGE> 9
CURTIS W. MEWBOURNE, age 60, formed Mewbourne Holdings in 1965 and
serves as Chairman of the Board and President of Mewbourne Holdings, MOC and
MD. He has operated as an independent oil and gas producer for the past 30
years. Mr. Mewbourne received a Bachelor of Science Degree in Petroleum
Engineering from the University of Oklahoma in 1957. Mr. Mewbourne is the
father of Dorothy M. Cuenod, Ruth M. Buckley, and Julie M. Greene and the
father-in-law of J. Roe Buckley.
J. ROE BUCKLEY, age 33, joined Mewbourne Holdings in July, 1990 and
serves a Treasurer and Chief Financial Officer of both MD and MOC. Mr. Buckley
was employed by MBank Dallas from 1985-1990 where he served as a commercial
loan officer. He received a Bachelor of Arts in Economics from Sewanee in
1984. Mr. Buckley is the son-in-law of Curtis W. Mewbourne and is married to
Ruth M. Buckley. He is also the brother-in-law of Dorothy M. Cuenod and Julie
M. Greene.
MICHAEL F. SHEPARD, age 49, joined MOC in 1986 and serves as Secretary
and General Counsel of MD. He has practiced law exclusively in the oil and gas
industry since 1979 and formerly was counsel with Parker Drilling Company and
its Perry Gas subsidiary for seven years. Mr. Shepard holds the Juris Doctor
degree from the University of Tulsa where he received the National Energy Law
and Policy Institute award as the outstanding graduate in the Energy Law
curriculum. He received the B.A. degree, magna cum laude, from the University
of Massachusetts in 1976. Mr. Shepard is a member of the bar in Texas and
Oklahoma.
DOROTHY MEWBOURNE CUENOD, age 35, received a B.A. Degree in Art
History from The University of Texas and a Masters of Business Administration
Degree from Southern Methodist University. Since 1984 she has served as a
Director and Assistant Secretary of both MD and MOC. Ms. Cuenod is the
daughter of Curtis W. Mewbourne and is the sister of Ruth M. Buckley and Julie
M. Greene. She is also the sister-in-law of J. Roe Buckley.
RUTH MEWBOURNE BUCKLEY, age 34, received a Bachelor of Science Degrees
in both Engineering and Geology from Vanderbilt University. Since 1987 she has
served as a Director and Assistant Secretary of both MD and MOC. Ms. Buckley
is the daughter of Curtis W. Mewbourne and is the sister of Dorothy M. Cuenod
and Julie M. Greene. She is also the wife of J. Roe Buckley.
JULIE MEWBOURNE GREENE, age 32, received a B.A. in Business
Administration from the University of Oklahoma. Since 1988 she has served as a
Director and Assistant Secretary of both MD and MOC. Prior to that time she
was employed by Rauscher, Pierce, Refsnes, Inc. Ms. Greene is the daughter of
Curtis W. Mewbourne and is the sister of Dorothy M. Cuenod and Ruth M.
Buckley. She is also the sister-in-law of J. Roe Buckley.
9
<PAGE> 10
ITEM 11. EXECUTIVE COMPENSATION
The Registrant does not have any directors or officers. Management of the
Registrant is vested in the managing general partner. None of the officers or
directors of MD or MOC will receive remuneration directly from the Registrant,
but will continue to be compensated by their present employers. The Registrant
will reimburse MD and MOC and affiliates thereof for certain costs of overhead
falling within the definition of Administrative Costs, including without
limitation, salaries of the officers and employees of MD and MOC; provided that
no portion of the salaries of the directors or of the executive officer of MOC
or MD may be reimbursed as Administrative Costs.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Beneficial owners of more than five percent
<TABLE>
<CAPTION>
Name of Amount & Nature Percent
Beneficial of Beneficial of
Title of Class Owner Owner Class
- -------------- ------- ----- -----
<S> <C> <C> <C>
Limited and Robert W. Heller 200 General 9.85%
General Partner- 10992 Mt. Curve Rd. Partnership
ship Interest Eden Prairie, MN 55347 Interests
</TABLE>
The owner listed above is an unaffiliated investor with full voting rights.
(b) Security ownership of management
The Registrant does not have any officers or directors. The managing general
partner of the Registrant, MD, has the exclusive right and full authority to
manage, control and administer the Registrant's business. Under the
Registrant's Partnership Agreement, limited and general partners holding a
majority of the outstanding limited and general partnership interests have the
right to take certain actions, including the removal of the managing general
partner. The Registrant is not aware of any current arrangement or activity
which may lead to such removal.
10
<PAGE> 11
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with MD and its affiliates
Pursuant to the Registrant's Partnership Agreement, the Registrant had the
following related party transactions with MD and its affiliates during the
period December 29, 1995 (date of inception) through December 31, 1995:
<TABLE>
<S> <C>
Payment of lease operating
and supervision charges in
accordance with standard
industry operating agreements $ 6,821
</TABLE>
In 1995, the Registrant was charged by MD for reimbursement of organization
cost of equal to 1% of initial partnership contributions.
Under the Registrant's Partnership Agreement, the managing general partner pays
1% of Registrant's acquisition, drilling and completion costs and 1% of its
operating and general and administrative expenses. In return, it is allocated
1% of the Registrant's revenues.
The Registrant participates in oil and gas activities through a drilling
program created by the Drilling Program Agreement (the "Program"). Pursuant to
the Program, MD pays approximately 2% of the Program's acquisition, drilling
and completion costs and approximately 12% of its operating and general and
administrative expenses. The Registrant pays the remainder of the costs and
expenses of the Program. In return, MD is allocated approximately 12% of the
Program's revenues.
11
<PAGE> 12
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:
Report of Independent Accountants
Balance sheet as of December 31, 1995
Statement of loss for the period from
December 29, 1995 (date of inception)
through December 31, 1995
Statement of changes in partners' capital for the
period from December 29, 1995 (date of inception)
through December 31, 1995
Statement of cash flows for the period from
December 29, 1995 (date of inception)
through December 31, 1995
Notes to financial statements
2. Financial statement schedules
None.
All required information is in the financial statements or the
notes thereto, or is not applicable or required.
3. Exhibits
The exhibits listed on the accompanying index are filed or
incorporated by reference as part of this annual report.
(b) Reports on Form 8-K
None.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereto duly authorized.
MEWBOURNE ENERGY PARTNERS 95-B, L.P.
By: Mewbourne Development
Corporation Managing General
Partner
By: /s/ Curtis W. Mewbourne
-----------------------------
Curtis W. Mewbourne
President and Director
(Principal Executive Officer)
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.
<TABLE>
<S> <C> <C>
/s/ Curtis W. Mewbourne President/Director March 28, 1996
- ----------------------------
Curtis W. Mewbourne
/s/ J. Roe Buckley Treasurer/Chief March 28, 1996
- ---------------------------- Financial Officer
J. Roe Buckley
/s/ Dorothy M. Cuenod Director March 28, 1996
- ----------------------------
Dorothy M. Cuenod
/s/ Ruth M. Buckley Director March 28, 1996
- ----------------------------
Ruth M. Buckley
/s/ Julie M. Greene Director March 28, 1996
- ----------------------------
Julie M. Greene
</TABLE>
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES
PURSUANT TO SECTION 12 OF THE ACT
No annual report or proxy material has been sent to the Registrants security
holders.
13
<PAGE> 14
MEWBOURNE ENERGY PARTNERS 95-B, L.P.
FINANCIAL STATEMENTS
WITH REPORT OF INDEPENDENT ACCOUNTANTS
FOR THE PERIOD DECEMBER 29, 1995 (COMMENCEMENT
OF OPERATIONS) THROUGH DECEMBER 31, 1995
14
<PAGE> 15
REPORT OF INDEPENDENT ACCOUNTANTS
To The Partners of Mewbourne Energy Partners 95-B, L.P. and
the Board of Directors of Mewbourne Development Corporation:
We have audited the accompanying balance sheet of Mewbourne Energy Partners
95-B, L.P. as of December 31, 1995, and the related statements of loss, changes
in partners' capital and cash flows for the period December 29, 1995
(commencement of operations) through December 31, 1995. These financial
statements are the responsibility of 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 present fairly, in
all material respects, the financial position of Mewbourne Energy Partners
95-B, L.P. as of December 29, 1995 (commencement of operations) through
December 31, 1995, in conformity with generally accepted accounting principles.
/s/ COOPERS & LYBRAND L.L.P.
Dallas, Texas
March 1, 1996
15
<PAGE> 16
MEWBOURNE ENERGY PARTNERS 95-B, L.P.
BALANCE SHEET
DECEMBER 31, 1995
<TABLE>
<S> <C> <C>
ASSETS
Cash $ 865,941
-----------
Accounts receivable, partners 220,313
-----------
Oil and gas properties at cost--full-cost method 1,262,271
Less accumulated depreciation, depletion and amortization -
-----------
Organization costs, net 20,110
-----------
Total assets $ 2,368,635
===========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable, affiliate $ 318,093
-----------
Note payable, affiliate 191,045
-----------
Partners' capital:
Limited and general partners 1,840,901
Managing general partner 18,596
-----------
Total partners' capital
1,859,497
-----------
Total liabilities and partners' capital $ 2,368,635
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE> 17
MEWBOURNE ENERGY PARTNERS 95-B, L.P.
STATEMENT OF LOSS
FOR THE PERIOD DECEMBER 29, 1995 (COMMENCEMENT
OF OPERATIONS) THROUGH DECEMBER 31, 1995
<TABLE>
<S> <C>
Revenues $ -
-----------
Expenses:
Administrative and general 728
Interest expense $ 153
-----------
$ 881
-----------
Net loss $ (881)
===========
Allocation of net loss:
Managing general partner $ (8)
-----------
Limited and general partners $ (873)
-----------
Net loss per limited and general partner interest $ (.43)
(2,011 outstanding) ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE> 18
MEWBOURNE ENERGY PARTNERS 95-B, L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE PERIOD DECEMBER 29, 1995 (COMMENCEMENT
OF OPERATIONS) THROUGH DECEMBER 31, 1995
<TABLE>
<CAPTION>
Limited and Managing
General General
Partners Partner Total
----------- --------- -----------
<S> <C> <C> <C>
Capital contributions $ 2,011,000 $ 20,313 $ 2,031,313
----------- ----------- -----------
Offering costs
$ (169,226) $ (1,709) $ (170,935)
----------- ----------- -----------
$ (873) $ (8) $ (881)
Net loss ----------- ----------- -----------
Partners' capital, end of period $ 1,840,901 $ 18,596 $ 1,859,497
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE> 19
MEWBOURNE ENERGY PARTNERS 95-B, L.P.
STATEMENT OF CASH FLOWS
FOR THE PERIOD DECEMBER 29, 1995 (COMMENCEMENT
OF OPERATIONS) THROUGH DECEMBER 31, 1995
<TABLE>
<S> <C>
Cash flows from operating activities: $ (881)
Net loss -----------
Adjustment to reconcile net loss to net cash used in
operating activities:
Changes in operating assets and liabilities:
Increase in organization costs (20,110)
Increase in accounts payable, affiliate $ 1,459
-----------
Net cash used in operating activities $ (19,532)
-----------
Cash flows from investing activities:
Purchase of oil and gas properties $ (945,637)
-----------
Net cash used in investing activities $ (945,637)
===========
Cash flows from financing activities:
Capital contributions from partners $ 1,811,000
Proceeds from issuance of note payable, affiliate 191,045
Offering costs (170,935)
-----------
Net cash provided by financing activites 1,831,110
-----------
Cash at end of period $ 865,941
===========
Supplemental schedule of noncash investing activity:
Purchases of oil and gas properties included in $ 316,634
accounts payable, affiliate at December 31, 1995 -----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
19
<PAGE> 20
MEWBOURNE ENERGY PARTNERS 95-B, L.P.
NOTES OF FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------
ACCOUNTING FOR OIL AND GAS PRODUCING ACTIVITIES
-----------------------------------------------
Mewbourne Energy Partners 95-B, L.P., a Delaware limited partnership
engaged primarily in oil and gas development and production in Texas,
Oklahoma and New Mexico, follows the full-cost method of accounting for
its oil and gas activities. Under the full-cost method, all productive
and nonproductive costs incurred in the acquisition, exploration and
development of oil and gas properties are capitalized. Depreciation,
depletion and amortization of oil and gas properties subject to
amortization is computed on the units-of-production method based on the
proved reserves underlying the oil and gas properties. At December 31,
1995, no capitalized costs were subject to amortization. Gains and
losses on the sale or other disposition of properties are not
recognized unless such adjustments would significantly alter the
relationship between capitalized costs and the proved oil and gas
reserves. Capitalized costs are subject to a semi-annual ceiling test
that limits such costs to the aggregate of the present value of future
net cash flows of proved reserves and the lower of cost or fair value
of unproved properties.
The preparation of 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 reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
ORGANIZATION COSTS
------------------
Organization costs are capitalized and amortized on the straight-line
method over 60 months.
CASH
----
The partnership maintains all its cash in one financial institution.
ACCOUNTS RECEIVABLE, PARTNERS
-----------------------------
At December 31, 1995, $220,313 of capital contributions were held in
escrow. This amount was received by the partnership in January 1996.
20
<PAGE> 21
MEWBOURNE ENERGY PARTNERS 95-B, L.P.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
INCOME TAXES
------------
The partnership is treated as a partnership for income tax purposes
and, as a result, income of the partnership is reported on the tax
returns of the partners and no recognition is given to income taxes in
the financial statements.
2. ORGANIZATION AND RELATED PARTY TRANSACTIONS:
-------------------------------------------
The partnership's operations commenced on December 29, 1995. Mewbourne
Development Corporation (MD) is managing general partner and Mewbourne
Oil Company (MOC) is operator of oil and gas properties owned by the
partnership. Substantially all transactions are with MD and MOC.
MD pays 1% of all costs of the partnership and receives 1% of all
revenue. The limited and general partners pay all other costs and
receive all other revenue.
Reimbursement to MOC for supervision and other operating charges
totaled $6,821 for the period December 29, 1995 (commencement of
operations) through December 31, 1995. Services and oeprator charges
are billed in accordance with the program and partnership agreements.
MD, on behalf of the partnership, incurred organization and offering
costs of $20,110 and $170,935, respectively. As of December 31, 1995
these amounts had been reimbursed to MD with proceeds from a note
payable to Mewbourne Financial Corporation (MFC), an affiliate of MD.
The note payable to MFC bears interest at 9.75% and is payable in
twenty equal quarterly installments of principal and interest
commencing March 29, 1996. The carrying value of the note payable
approximates fair value at December 31, 1995.
In addition, MD can charge the partnership up to 5.5% of initial
partners' capital in management fees. In accordance with the
partnership agreement, management fees can only be reimbursed to MD
with funds which would otherwise be available for distribution. There
had been no reimbursements for management fees as of December 31, 1995.
21
<PAGE> 22
MEWBOURNE ENERGY PARTNERS 95-B, L.P.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
In general, during any particular calendar year the total amount of
administrative expenses allocated to the partnership shall not exceed
the greater of (a) 3.5% of the partnership's gross revenue from the
sale of oil and natural gas production during each year (calculated
without any deduction for operating costs or other costs and expenses)
or (b) the sum of $50,000 plus .25% of the capital contributions of
limited and general partners.
The partnership participates in oil and gas activities through an
income tax partnership (the Program). The partnership and MD are
parties to the Program agreement. The costs and revenues of the
Program are allocated to MD and the partnership as follows:
<TABLE>
<CAPTION>
MD(1) Partnership
--------- -------------
<S> <C> <C>
Revenues:
Proceeds from disposition of depreciable
and depletable properties 12.121213% 87.878787%
All other revenues 12.121213% 87.878787%
Costs and expenses:
Lease acquisition costs and drilling and
and completion costs 2.020202% 97.979798%
Operating costs, reporting and legal
expenses, general and administrative
expenses and all other costs 12.121213% 87.878787%
</TABLE>
(1) Excludes MD's one percent (1%) general partner ownership which is
allocated at the partnership level.
The partnership's financial statements reflect its respective
proportionate interest in the Program.
3. RECONCILIATION OF NET LOSS PER STATEMENT OF LOSS WITH NET LOSS PER
------------------------------------------------------------------
FEDERAL INCOME TAX RETURN:
-------------------------
The following is a reconciliation of net loss per statement of loss
with the net loss per federal income tax return for the period December
29, 1995 (commencement of operations) through December 31, 1995:
<TABLE>
<S> <C>
Net loss per statement of loss $ (881)
Intangible development costs capitalized for financial
reporting purposes and expensed for tax reporting purposes (754,763)
---------
Net loss per federal income tax return before tentative
tax depletion $(755,644)
=========
</TABLE>
At December 31, 1995, the partnership's financial reporting bases of
its assets and liabilities exceeded the tax bases of its assets and
liabilities by $754,763.
22
<PAGE> 23
MEWBOURNE ENERGY PARTNERS 95-B, L.P.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. PRELIMINARY OIL AND GAS INFORMATION (UNAUDITED):
-----------------------------------------------
All of the wells drilled, or to be drilled, by the partnership have
been, or will be, completed subsequent to December 31, 1995.
Sufficient information is not yet available from well tests or from
initial production to accurately present numerical unaudited reserve
information.
5. IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:
---------------------------------------------------
In March 1995, the Financial Accounting Standards Board issued
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 for fiscal years beginning after
December 15, 1995. This statement establishes accounting standards for
the impairment of long-lived assets, certain identifiable intangibles
and goodwill related to those assets to be held and used and for
long-lived assets and certain identifiable intangibles to be disposed
of. The partnership plans to adopt FAS 121 during the fiscal year
ended December 31, 1996. Management does not expect the statement to
have a material impact on the financial statements of the partnership.
23
<PAGE> 24
MEWBOURNE ENERGY PARTNERS 95-B, L.P.
INDEX TO EXHIBITS
The following documents are incorporated by reference in response to Item
14(a)3.
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------------------------------
<S> <C>
3.1 Form of Certificate of Limited Partnership
(filed as Exhibit 3.1 to Registration
Statement on Form S-1, File No. 33-90480
and incorporate herein by reference)
3.2 Form of Certificate of Amendment of the
Certificate of Limited Partnership
(filed as Exhibit 3.2 to Registration
Statement on Form S-1, File No. 33-90480
and incorporated herein by reference)
4.1 Form of Agreement of Partnership
(filed as Exhibit 4.1 to Registration
Statement on Form S-1, File No. 33-90480
and incorporated herein by reference)
4.1.2 First Amendment to Agreement of
Partnership (filed herewith)
10.1 Form of Drilling Program Agreement
(filed as Exhibit 10.1 to Registration
Statement on Form S-1, File No. 33-90480
and incorporated herein by reference)
10.5 Form of Operating Agreement
(filed as Exhibit 10.1 to Registration
Statement on Form S-1, File No. 33-90480
and incorporated herein by reference)
27 Financial Data Schedule (filed herewith)
</TABLE>
<PAGE> 1
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
---------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
AMENDMENT OF "MEWBOURNE ENERGY PARTNERS 95-B, L.P.", FILED IN THIS OFFICE ON
THE TWENTY-NINTH DAY OF DECEMBER, A.D. 1995, AT 4:30 O'CLOCK P.M.
[SEAL] /s/ EDWARD J. FREEL
-----------------------------------
Edward J. Freel, Secretary of State
2251741 8100 AUTHENTICATION: 7774651
960000276 DATE: 01-02-96
<PAGE> 2
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF LIMITED PARTNERSHIP
OF
MEWBOURNE ENERGY PARTNERS 95-B, L.P
This Certificate of Amendment to Certificate of Limited Partnership of
MEWBOURNE ENERGY PARTNERS 95-B, L.P. (the "Partnership") is being executed and
filed by the undersigned general partners under the Delaware Revised Uniform
Limited Partnership Act.
ARTICLE ONE
-----------
The name of the Partnership is MEWBOURNE ENERGY PARTNERS 95-B, L.P.
ARTICLE TWO
-----------
Article Four of the Certificate of Limited Partnership of the
Partnership is hereby amended in it entirety to read as follows:
The name and business address of the managing general partner
of the Partnership are Mewbourne Development Corporation, 3901 S.
Broadway, Tyler, Texas 75701. The names of the investor general
partners admitted to the Partnership are set forth on Exhibit A hereto.
The business address of the investor general partners is 3901 S.
Broadway, Tyler, Texas 75701.
IN WITNESS WHEREOF, the undersigned, the managing general partner by
and through a duly authorized officer thereof and the attorney-in-fact for each
of the investor general partners set forth on Exhibit A, have executed this
Certificate of Amendment to Certificate of Limited Partnership on this 29th day
of December, 1995.
MEWBOURNE DEVELOPMENT CORPORATION acting for itself
and as attorney-in fact for each of the investor
general partners as set forth on Exhibit A
By: /s/ J. ROE BUCKLEY
-------------------------------
J. Roe Buckley, Treasurer
<PAGE> 3
EXHIBIT A
MEWBOURNE ENERGY PARTNERS 95-B, L.P.
LIST OF GENERAL PARTNERS
Billy J. Adams
Shirley A. Amidon
Duane A. & Carol L. Anderson
Larry D. & Lena M. Anson
U.G. & June Cooke Berry
Bonin/McChesney Revocable Intervivos Trust Dated 8/10/87
Adelyn I. Bonin, Trustee
Rodney Brown
Joseph M. & Sally F. Bucci
Charles L. Calcaterra III Revocable Trust Dated 4/7/95
Charles L. Calcaterra III, Trustee
Esther Calcaterra Revocable Living Trust Dated 3/11/92
Esther Calcaterra, Trustee
Richard W. Carrington, Jr.
Marc D. Chalet, M.D.
David P. & Chris W. Cahvoustic
William B. Cobb
Conrad Family Trust Dated 8/28/95
William D. & Eloise D. Conrad, Trustees
A-1
<PAGE> 4
Clara B. Cook Revocable Trust Dated 4/17/91
Clara B. Cook, Trustee
Cook Family Trust JAD 5/1/86
Arthur G. & Virgina R. Cook, Co-Trustees
Cotterill Family Trust
Carl H. or Ollie G. Cotterill, Trustees
James E. Damron
Cynthia P. Daniels
Paul R. Davis
Pieter Denhartog
Ray E. Deuel, Jr.
Paul S. Docktor
Donald J. Dorr
Dr. Dalton Drennan
Duco, L.C.
Andrew C. & Kelly T. Ellis
Don Esch
Robey W. Estes
Janet J. Ettus Trust U/A Dated 2/8/93
Janet J. Ettus, Trustee
Thomas C. Fisher, III
Betty & John Foor
Frankel Family Trust Date 9/16/88
Philip & Rosalyn Frankel, Trustees
A-2
<PAGE> 5
Stephen J. Fukayama
John H. & Sue Gibbert
Ewing C. Green & Jane P. Gannaway
David L. & Diane M. Grubbs
George E. & Judy L. Guttschalk
Kenneth A. & Adeline R. Hansen
Robert W. Heller
Frederick & Julie A. Hull
Michael A. Hoover
Margaret L. Humphreys
Hunter Trust UAD 7/20/90
Rodney E. & Nan C. Hunter, Trustees
C. Russell & Anita D. Johnson
Jasmat N. Kansagra, M.D. & Niramala J. Kansagra
David K. Kennedy
Robert E. Kennedy
Clayton Frank & Darlene L. Kern
William H. Klemme
Thomas Michael & Anne L. Knasel
WIlliam L. Kraus, III
Jay S. Krowicki
Dallas K. Larsen
A-3
<PAGE> 6
Sterling Lee Long
Chester M. & Renee Y. Lozowski
Brian T. & Gayle H. Marlowe
Craig E. & Cathleen A. Marsh
McChesney/Bonin Revocable Intervivos Trust Dated 8/10/87
Mary L. McChesney, Trustee
McGee Living Trust Dated 1/21/92
Clarence B. & Elsie A. McGee, Trustees, or successor Trustee
Ralph W. Minard Living Trust Dated 7/16/93
Arje Nachman
Thomas S. & Cheryl Namiki
Lynn D. Olson
Janet W. Osterink Trust, a Restated Trust 5/10/95
Janet W. Osterink, Trustee
The Patterson Family Trust Dated 10/23/95
Robert & Mary Jane Patterson, Trustees
John L. & Nancy G. Pearson
Robert D. Perry
O.J. Peterson, III
Paul J. Petrovich Residual Trust
James F. Hargreaves & Carl H. Vulcan, Trustees
Clifton M. & Mattie J. Pollock
Norbert R. Reel
George B. & Barbara H. Reid
A-4
<PAGE> 7
Rich Family Trust U/A/D/ 8/10/95
Kevin R. or Beth S. Rich, Trustees
Jeannette A. Richards Family Trust Dated 7/11/89
Jeannette A. Richards, Trustee or Successor Trustee
Bernard E. & Marilyn D. Rodell
Norman R. Roobol
Madie B. Sanders
Maurcie M. Schneider
Ther Schorr Family Trust Dated 4/14/88
Frances F. Schorr, Trustee
Donald E. & Karen B. Schultheis
James R. Simkovsky
James C. Smith, Jr.
Freddie Joe Smith Trust UTA 7/26/94
Freddie Joe Smith, Trustee
Spargur Family Trust Dated 2/25/87
Donald W. & Carolyn J. Spargur, Trustees
R. Curtis & Anne V. Steele
Richard A. & Cathryn L. Swier Family Trust Dated 7/23/81
Richard A. & Cathryn L. Swier, Trustees
James A. & Eunice Z. Thompson Estate Trust
Janet A. & Eunice Z. Thompson, Trustees
Harold D. & Cynthia J. Threadgill
Keith I. & Aimee A. Tonaki
George P. Tsilfides
A-5
<PAGE> 8
Anthony M. & Bonnie L. Van Ess
James E. Vaux, Jr.
WIlliam R. Wallace
Robert E. & Diane F. Wamhoff
Nancy O. Way
Estate of Carl Weiland
Barbara Waldman, Pers. Rep.
Mary Flauraus Revocable Living Trust Dated 2/1/94
Mary M. Wurtz, Trustee
Dennis P. Yarnell
Ernest M. & Kathleen M. Young
A-6
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-29-1995
<PERIOD-END> DEC-31-1995
<CASH> 865,941
<SECURITIES> 0
<RECEIVABLES> 220,313
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,086,254
<PP&E> 1,262,271
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,368,635
<CURRENT-LIABILITIES> 509,138
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 1,859,497
<TOTAL-LIABILITY-AND-EQUITY> 2,368,635
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 728
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 153
<INCOME-PRETAX> (881)
<INCOME-TAX> 0
<INCOME-CONTINUING> (881)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (881)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
