10-Q 1 m0190cc.txt P&P 90-CC MARCH 2001 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2001 Commission File No. 33-26097-10 PARKER & PARSLEY 90-C CONV., L.P. (Exact name of Registrant as specified in its charter) Delaware 75-2347264 ---------------------------------- --------------------- (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 Not applicable (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes / x / No / / PARKER & PARSLEY 90-C CONV., L.P. TABLE OF CONTENTS Page Part I. Financial Information Item 1. Financial Statements Balance Sheets as of March 31, 2001 and December 31, 2000..................................... 3 Statements of Operations for the three months ended March 31, 2001 and 2000.......................... 4 Statement of Partners' Capital for the three months ended March 31, 2001................................... 5 Statements of Cash Flows for the three months ended March 31, 2001 and 2000.......................... 6 Notes to Financial Statements............................ 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.................... 7 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K......................... 9 Signatures............................................... 10 2 PARKER & PARSLEY 90-C CONV., L.P. (A Delaware Limited Partnership) Part I. Financial Information Item 1. Financial Statements BALANCE SHEETS March 31, December 31, 2001 2000 ----------- ----------- (Unaudited) ASSETS Current assets: Cash $ 94,712 $ 106,593 Accounts receivable - oil and gas sales 108,558 119,396 ---------- ---------- Total current assets 203,270 225,989 ---------- ---------- Oil and gas properties - at cost, based on the successful efforts accounting method 5,800,209 5,798,493 Accumulated depletion (5,014,101) (5,000,618) ---------- ---------- Net oil and gas properties 786,108 797,875 ---------- ---------- $ 989,378 $ 1,023,864 ========== ========== LIABILITIES AND PARTNERS' CAPITAL Current liabilities: Accounts payable: Affiliate $ 17,547 $ 14,074 Other 7,812 - ---------- ---------- 25,359 14,074 ---------- ---------- Partners' capital: Managing general partner 9,609 10,067 Limited partners (7,531 interests) 954,410 999,723 ---------- ---------- 964,019 1,009,790 ---------- ---------- $ 989,378 $ 1,023,864 ========== ========== The financial information included as of March 31, 2001 has been prepared by the managing general partner without audit by independent public accountants. The accompanying notes are an integral part of these financial statements.

3 PARKER & PARSLEY 90-C CONV., L.P. (A Delaware Limited Partnership) STATEMENTS OF OPERATIONS (Unaudited) Three months ended March 31, ------------------------- 2001 2000 ---------- ---------- Revenues: Oil and gas $ 230,925 $ 193,711 Interest 1,788 1,497 --------- --------- 232,713 195,208 --------- --------- Costs and expenses: Oil and gas production 95,640 83,711 General and administrative 8,175 5,934 Depletion 13,483 13,742 --------- --------- 117,298 103,387 --------- --------- Net income $ 115,415 $ 91,821 ========= ========= Allocation of net income: Managing general partner $ 1,154 $ 918 ========= ========= Limited partners $ 114,261 $ 90,903 ========= ========= Net income per limited partnership interest $ 15.17 $ 12.07 ========= ========= The financial information included herein has been prepared by the managing general partner without audit by independent public accountants. The accompanying notes are an integral part of these financial statements.

4 PARKER & PARSLEY 90-C CONV., L.P. (A Delaware Limited Partnership) STATEMENT OF PARTNERS' CAPITAL (Unaudited) Managing general Limited partner partners Total ---------- ---------- ---------- Balance at January 1, 2001 $ 10,067 $ 999,723 $1,009,790 Distributions (1,612) (159,574) (161,186) Net income 1,154 114,261 115,415 --------- --------- --------- Balance at March 31, 2001 $ 9,609 $ 954,410 $ 964,019 ========= ========= ========= The financial information included herein has been prepared by the managing general partner without audit by independent public accountants. The accompanying notes are an integral part of these financial statements.

5 PARKER & PARSLEY 90-C CONV., L.P. (A Delaware Limited Partnership) STATEMENTS OF CASH FLOWS (Unaudited) Three months ended March 31, ------------------------ 2001 2000 ---------- ---------- Cash flows from operating activities: Net income $ 115,415 $ 91,821 Adjustments to reconcile net income to net cash provided by operating activities: Depletion 13,483 13,742 Changes in assets and liabilities: Accounts receivable 10,838 3,534 Accounts payable 11,285 2,095 --------- --------- Net cash provided by operating activities 151,021 111,192 --------- --------- Cash flows used in investing activities: Additions to oil and gas properties (1,716) (6,883) Cash flows used in financing activities: Cash distributions to partners (161,186) (103,576) --------- --------- Net increase (decrease) in cash (11,881) 733 Cash at beginning of period 106,593 107,295 --------- --------- Cash at end of period $ 94,712 $ 108,028 ========= ========= The financial information included herein has been prepared by the managing general partner without audit by independent public accountants. The accompanying notes are an integral part of these financial statements.

6 PARKER & PARSLEY 90-C CONV., L.P. (A Delaware Limited Partnership) NOTES TO FINANCIAL STATEMENTS March 31, 2001 (Unaudited) Note 1. Organization and nature of operations Parker & Parsley 90-C 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. 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. Basis of presentation In the opinion of management, the unaudited financial statements of the Partnership as of March 31, 2001 include all adjustments and accruals consisting only of normal recurring accrual adjustments which are necessary for a fair presentation of the results for the interim period. These interim results are not necessarily indicative of results for a full year. Certain reclassifications may have been made to the March 31, 2000 financial statements to conform to the March 31, 2001 financial statement presentations. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements should be read in conjunction with the financial statements and the notes thereto contained in the Partnership's Report on Form 10-K for the year ended December 31, 2000, as filed with the Securities and Exchange Commission, a copy of which is available upon request by writing to Rich Dealy, Vice President and Chief Accounting Officer, 5205 North O'Connor Boulevard, 1400 Williams Square West, Irving, Texas 75039-3746. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations(1) Results of Operations Revenues: The Partnership's oil and gas revenues increased 19% to $230,925 for the three months ended March 31, 2001 as compared to $193,711 for the same period in 2000. The increase in revenues resulted from higher average prices received, offset by a decline in production. For the three months ended March 31, 2001, 5,811 barrels of oil, 859 barrels of natural gas liquids ("NGLs") and 8,151 mcf of gas were sold, or 8,029 barrel of oil equivalents ("BOEs"). For the three months ended March 31, 2000, 5,802 barrels of oil, 1,943 barrels of NGLs and 6,434 mcf of gas were sold, or 8,817 BOEs. 7 The average price received per barrel of oil increased $.92, or 3%, from $27.16 for the three months ended March 31, 2000 to $28.08 for the same period in 2001. The average price received per barrel of NGLs increased $6.00, or 46%, from $12.95 for the three months ended March 31, 2000 to $18.95 for the same period in 2001. The average price received per mcf of gas increased 270% from $1.71 during the three months ended March 31, 2000 to $6.33 for the same period in 2001. The market price for oil and gas has been extremely volatile in the past decade, and management expects a certain amount of volatility to continue in the foreseeable future. The Partnership may therefore sell its future oil and gas production at average prices lower or higher than that received during the three months ended March 31, 2001. Costs and Expenses: Total costs and expenses increased to $117,298 for the three months ended March 31, 2001 as compared to $103,387 for the same period in 2000, an increase of $13,911, or 13%. This increase was primarily due increases in production costs and general and administrative expenses ("G&A"), offset by a decline in depletion. Production costs were $95,640 for the three months ended March 31, 2001 and $83,711 for the same period in 2000, resulting in an increase of $11,929, or 14%. The increase was primarily due to additional well maintenance costs incurred to stimulate well production and higher production taxes associated with higher oil and gas revenues. G&A's components are independent accounting and engineering fees and managing general partner personnel and administrative costs. During this period, G&A increased 38% from $5,934 for the three months ended March 31, 2000 to $8,175 for the same period in 2001 primarily due to a higher percentage of the managing general partner's G&A being allocated (limited to 3% of oil and gas revenues) as a result of increased oil and gas revenues and an increase in the accrual for tax preparation fees. Depletion was $13,483 for the three months ended March 31, 2001 as compared to $13,742 for the same period in 2000, a decrease of $259, or 2%. This decrease was primarily due to positive revisions to proved reserves on one well during the three months ended March 31, 2001. Liquidity and Capital Resources Net Cash Provided by Operating Activities Net cash provided by operating activities increased $39,829 during the three months ended March 31, 2001 from the same period in 2000. The increase was primarily attributable to an increase of $37,505 in oil and gas sales receipts and a reduction in working capital of $16,494, offset by increases in production costs of $11,929 and G&A expenses of $2,241. The increase in oil and gas receipts resulted from the increase in commodity prices during 2001 which contributed an additional $46,902 to oil and gas receipts, offset by $9,397 resulting from the decline in production during 2001 as compared to the same period in 2000. The increase in production costs was primarily due to additional well maintenance costs incurred to stimulate well production and increased production taxes associated with higher oil and gas prices. The increase in G&A 8 was primarily due to a higher percentage of the managing general partner's G&A being allocated (limited to 3% of oil and gas revenues) as a result of increased oil and gas revenues and an increase in the accrual for tax preparation fees. Net Cash Used in Investing Activities The Partnership's principal investing activities during the three months ended March 31, 2001 and 2000 related to expenditures for upgrades of oil and gas equipment on active properties. Net Cash Used in Financing Activities For the three months ended March 31, 2001, cash distributions to the partners were $161,186, of which $1,612 was distributed to the managing general partner and $159,574 to the limited partners. For the same period ended March 31, 2000, cash distributions to the partners were $103,576, of which $1,036 was distributed to the managing general partner and $102,540 to the limited partners. Proposal to acquire partnerships On April 17, 2001, Pioneer Natural Resources Company ("Pioneer") filed a preliminary proxy statement/prospectus with the Securities and Exchange Commission proposing an agreement and plan of merger among Pioneer, Pioneer Natural Resources USA, Inc. ("Pioneer USA"), a wholly- owned subsidiary of Pioneer, and the limited partners of 46 Parker & Parsley limited partnerships. Each partnership that approves the agreement and plan of merger and the other related merger proposals will merge with and into Pioneer USA, and the partnership interests of each such partnership will be converted into the right to receive cash and Pioneer common stock. Pioneer USA is the sole or managing general partner of the partnerships. The Partnership is one of the 46 Parker & Parsley limited partnerships being requested to approve the agreement and plan of merger. The preliminary proxy statement/prospectus 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 partnership interests in each partnership and the resolution of Securities and Exchange Commission review comments. No solicitation will be made using preliminary materials. --------------- (1) "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" contains forward looking statements that involve risks and uncertainties. Accordingly, no assurances can be given that the actual events and results will not be materially different than the anticipated results described in the forward looking statements. Part II. Other Information Item 6. Exhibits and Reports on Form 8-K (a) Exhibits - none (b) Reports on Form 8-K - none. 9 PARKER & PARSLEY 90-C CONV., L.P. (A Delaware Limited Partnership) S I G N A T U R E S Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PARKER & PARSLEY 90-C CONV., L.P. By: Pioneer Natural Resources USA, Inc. Managing General Partner Dated: May 11, 2001 By: /s/ Rich Dealy ----------------------------------- Rich Dealy, Vice President and Chief Accounting Officer 10

PARKER & PARSLEY 90-C CONV LP 10-Q