ITEM 1. BUSINESS.
General
PDC 1992-C Limited Partnership ("the Partnership") is a limited partnership formed on November 6, 1992 pursuant to the West Virginia Uniform Limited Partnership Act. Petroleum Development Corporation ("PDC") serves as Managing General Partner of the Partnership.
Since the commencement of operations on November 6, 1992, the Partnership has been engaged in onshore, domestic gas exploration exclusively in West Virginia. A total of 12 limited partners contributed initial capital of $235,000; a total of 519 additional general partners contributed initial capital of $6,153,897; and PDC (Managing General Partner) contributed $603,396 in capital as a participant in accordance with contribution provisions of the Limited Partnership Agreement (the Agreement).
Under the terms of the Agreement, the allocation of revenues is as follows:
Allocation of Revenues Additional General and Limited Partners 80%
Managing General Partner 20%
Operating and direct costs are allocated and charged to the additional general and limited partners and the Managing General Partner in the same percentages as revenues are allocated. Leasehold, drilling and completion costs, and equipment costs are borne 90% by the additional general and limited partners and 10% by the Managing General Partner.
Employees
The Partnership has no employees, however, PDC has approximately 72 employees which include a staff of geologists, petroleum engineers, landmen and accounting personnel who administer all of the partnership's operations.
Plan of Operations
The Partnership participated in the drilling of 29 gross wells and will continue to operate and produce its 26 gross productive wells. The Partnership does not have unexpended initial capital and no additional drilling activity is planned.
See Item 2
ITEM 2. PROPERTIES.
Drilling Activity
The following table sets forth the results of drilling activity from November 6, 1992 (date of inception) to March 15, 1997, of the Partnership which was conducted in the Continental United States.
The Partnership has not participated in any exploratory wells. No additional drilling activity is planned.
Productive Wells
The following table summarizes the Partnership's total gross and net interests in productive wells at March 15, 1997.
A "productive well" is a well producing, or capable of producing, oil and gas in commercial quantities. For purposes of the above table, a "gross well" is one in which the Partnership has a working interest and a "net well" is a gross well multiplied by the Partnership's working interest to which it is entitled under its drilling agreement.
Title to Properties
The Partnership's interests in producing acreage are in the form of assigned direct interests in leases. Such properties are subject to customary royalty interests generally contracted for in connection with the acquisition of properties, and could be subject to liens incident to operating agreements, liens for current taxes and other burdens. The Partnership believes that none of these burdens materially interfere with the use of such properties in the operation of the Partnership's business.
As is customary in the oil and gas industry, little or no investigation of title is made at the time of acquisition of undeveloped properties (other than a preliminary review of local mineral records). Investigations are generally made, including in most cases receiving a title opinion of legal counsel, before commencement of drilling operations. A thorough examination of title has been made with respect to all of the Partnership's producing properties and the Partnership believes that it has generally satisfactory title to such properties.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS.
The Managing General partner as driller/operator is not party to any legal action that would materially affect the Managing General Partner's or Partnership's operations or financial statements.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
One matter was submitted to a vote of the security holders of the Partnership during the year 1995. The partners voted to amend the partnership agreement with regard to the "engineering reports prepared by the qualified independent petroleum engineer" by deleting the word "independent." No other matters have been submitted to a vote for the period November 6, 1992 (date of inception) to December 31, 1996.
PART II
ITEM 5.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND SECURITY HOLDER MATTERS.
At December 31, 1996, PDC 1992-C Limited Partnership had one Managing General Partner, 12 Limited Partners who fully paid for 11.75 units at $20,000 per unit of limited partnership interests and a total of 519 Additional General Partners who fully paid for 307.695 units at $20,000 per unit of additional general partnership interests. No established public trading market exists for the interests.
Limited and additional general partnership interests are transferable, however no assignee of an interest in the Partnership can become a substituted partner without the written consent of the transferor and the Managing General Partner.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA.
The selected financial data presented below has been derived from audited financial statements of the Partnership appearing elsewhere herein.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Liquidity and Capital Resources
The Partnership was funded with initial Limited and Additional General Partner contributions of $6,388,897 and the Managing General Partner contributed $603,396 in accordance with the Agreement. Offering, organization and legal costs of $798,612 were incurred leaving available capital of $6,193,681 for Partnership activities.
The Partnership began exploration and development activities subsequent to the funding of the Partnership and completed well drilling activities by December 31, 1993. Twenty-nine wells have been drilled, of which twenty-six have been completed as producing wells. No additional wells will be drilled.
The Partnership had net working capital at December 31, 1996 of $220,808.
Operations are expected to be conducted with available funds and revenues generated from oil and gas activities. No bank borrowings are anticipated.
Results of Operations
1996 Compared to 1995
Oil and gas sales increased 55.4% in 1996 compared to 1995 due to higher average sales prices offset in part by lower sales volumes. Cash distributions to the partners increased from $544,688 in 1995 to $799,476 in 1996 due to the above reasons.
1995 Compared to 1994
The Partnership's natural gas sales decreased 27.5% in 1995 compared to 1994 due to decreased sales volumes and lower average sales prices.
The Partnership's revenues from natural gas sales will be affected by changes in prices. Natural gas prices are subject to general market conditions which drive the pricing changes.
The principal effects of inflation upon the Partnership relate to the costs required to drill, complete and operate oil and gas wells. The Partnership expects these costs to remain somewhat stable over the next year.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:
The response to this Item is set forth herein in a separate section of this Report, beginning on Page.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
NONE.
Part III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.
The Partnership has no directors or executive officers. The partnership is managed by Petroleum Development Corporation (the Managing General Partner). Petroleum Development Corporation's common stock is traded in the NASDAQ National Market and Form 10-K for 1996 has been filed with the Securities and Exchange Commission.
ITEM 11.
ITEM 11. MANAGEMENT REMUNERATIONS AND TRANSACTIONS.
NON-APPLICABLE.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
NON-APPLICABLE.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Pursuant to the authorization contained in the Limited Partnership Agreement, PDC receives fees for services rendered and reimbursement of certain expenses from the Partnership. The following table presents compensation or reimbursements by the Partnership to PDC or other related parties during the years ended December 31,:
1996 1995 1994 Operator's charges $243,031 189,637 266,098 Tax return preparation 3,620 3,620 3,630 Direct administrative cost 1,532 2,511 1,439
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) (1) Financial Statements See Index to Financial Statements on
(2) Financial Statement Schedules
See Index to Financial Statements on page. All financial statement schedules are omitted because they are not required, inapplicable, or the information is included in the Financial Statements or Notes thereto.
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, thereunto duly authorized.
PDC 1992-C Limited Partnership By its Managing General Partner Petroleum Development Corporation
By/s/ James N. Ryan
James N. Ryan, Chairman
March 26, 1997
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 dates indicated:
Signature Title Date
/s/ James N. Ryan Chairman, Chief Executive James N. Ryan Officer and Director March 26, 1997
/s/ Steven R. Williams President and Director Steven R. Williams March 26, 1997
/s/ Dale G. Rettinger Executive Vice President, Dale G. Rettinger Treasurer and Director March 26, 1997 (principal financial and accounting officer)
/s/ Roger J. Morgan Secretary and Director Roger J. Morgan March 26, 1997
PDC 1992-C LIMITED PARTNERSHIP (A West Virginia Limited Partnership)
Financial Statements for Annual Report on Form 10-K to Securities and Exchange Commission
Years Ended December 31, 1996, 1995 and 1994 (With Independent Auditors' Report Thereon)
PDC 1992-C LIMITED PARTNERSHIP (A West Virginia Limited Partnership)
Independent Auditors' Report Balance Sheets - December 31, 1996 and 1995 Statements of Operations - Years Ended December 31, 1996, 1995 and 1994 Statements of Partners' Equity - Years Ended December 31, 1996, 1995 and 1994 Statements of Cash Flows - Years Ended December 31, 1996, 1995 and 1994 Notes to Financial Statements
All financial statement schedules have been omitted because they are not applicable or not required or for the reason that the required information is shown in the financial statements or notes thereto.
Independent Auditors' Report
To the Partners PDC 1992-C Limited Partnership:
We have audited the financial statements of PDC 1992-C Limited Partnership (a West Virginia limited partnership) as listed in the accompanying index. 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 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 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 PDC 1992-C Limited Partnership as of December 31, 1996 and 1995, and the results of its operations and its cash flows for each of the years in the three year period ended December 31, 1996, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Pittsburgh, Pennsylvania March 20, 1997
PDC 1992-C LIMITED PARTNERSHIP (A West Virginia Limited Partnership)
Balance Sheets
December 31, 1996 and 1995
See accompanying notes to financial statements.
PDC 1992-C LIMITED PARTNERSHIP (A West Virginia Limited Partnership)
Statements of Operations
Years ended December 31, 1996, 1995 and 1994
See accompanying notes to financial statements.
PDC 1992-C LIMITED PARTNERSHIP (A West Virginia Limited Partnership)
Statements of Partners' Equity
Years ended December 31, 1996, 1995 and 1994
See accompanying notes to financial statements.
PDC 1992-C LIMITED PARTNERSHIP (A West Virginia Limited Partnership)
Statements of Cash Flows
Years ended December 31, 1996, 1995 and 1994