CONFORMED COPY

 

 

 

 

	QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

	OF THE SECURITIES EXCHANGE ACT OF 1934

	UNITED STATES

	SECURITIES AND EXCHANGE COMMISSION

	Washington, D.C. 20549

	FORM 10-Q

	
	[X] Quarterly Report Pursuant to Section 13 or 15(d) of 

	the Securities and Exchange Act of 1934

	For the period ended June 30, 1999

	or

	[ ] Transition Report Pursuant to Section 13 of 15(d) of 

	the Securities and Exchange Act of  1934

	For the transition period from  to 
 

	
	Commission file number 033-63635-04

	I.R.S. Employer Identification Number 55-0751154

	PDC 1996-D LIMITED PARTNERSHIP

	(A West Virginia Limited Partnership)

	103 East Main Street

	Bridgeport, WV 26330

	Telephone: (304) 842-6256

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 registrantwas required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes     XX       No    
 

	PDC 1996-D LIMITED PARTNERSHIP

	(A West Virginia Limited Partnership)

 

	INDEX
 

 

PART I - FINANCIAL INFORMATION	Page No.
	Item 1.  Financial Statements

		Balance Sheets - June 30, 1999 and December 31, 1998		1

		Statements of Operations - 

		 Three and Six Months Ended June 30, 1999 and 1998		2

		Statement of Partners' Equity -

		 Six Months Ended June 30, 1999 		3

		Statements of Cash Flows-

		 Six Months Ended June 30, 1999 and 1998		4

		Notes to Financial Statements		5

	Item 2.	Management's Discussion and Analysis of Financial 

		Condition and Results of Operations		6

PART II	OTHER INFORMATION

	Item 1.	Legal Proceedings		8

	Item 6.	Exhibits and Reports on Form 8-K		8

 

 

 

 

 

 

 

 

 

 

 

 

 

	PDC 1996-D LIMITED PARTNERSHIP

	(A West Virginia Limited Partnership)

	Balance Sheets

	June 30, 1999 and December 31, 1998

 

 

 

 

	Assets
			1999    	1998
			                                (Unaudited)

Current assets:

	Cash                          	$      119 	     $    6,712

	Accounts receivable - oil and gas revenues	  167,141 	   225,131
	  	Total current assets	167,260 	231,843

Oil and gas properties, successful 

 efforts method	 8,810,568 	 8,810,568

      Less accumulated depreciation, 

	     depletion, and amortization	2,714,830 	2,503,192
			6,095,738 	6,307,376
			$6,262,998 	$6,539,219
 

Current Liabilities and Partners' Equity
Current liabilities:

      Accrued expenses                     	$   25,643 	$   47,071	

		Total current liabilities	25,643 	47,071

 

Partners' Equity	       6,237,355 	6,492,148
			$6,262,998 	 $6,539,219
See accompanying notes to financial statements.

 

 

 

 

 

 

 

	-1-

 

	PDC 1996-D LIMITED PARTNERSHIP

	(A West Virginia Limited Partnership)

	Statements of Operations

	Three Months and Six Months ended June 30, 1999 and 1998

	(Unaudited)

 

 

   	Three Months Ended 	Six Months Ended   

 	        June 30,      	       June 30,       
				  1999   	  1998  	   1999  	  1998  
 

Revenues:

	Sales of oil and gas	$246,307	$410,914	$479,406	$903,067

	Interest income	  1,144	   -   	  2,532	  2,004
				247,451	410,914	481,938	905,071
Expenses:

	Lifting costs	102,236	107,723	226,943	205,316

	Direct administrative cost	42	25	49	81

	Depreciation, depletion and

	 amortization	106,632	255,279	211,638	543,466
				208,910	363,027	438,630	748,863
		Net income 	$ 38,541	$ 47,887	$ 43,308	$156,208
		Net income per limited and

		 additional general partner unit	$    40	$    50	$   45	$   163
 

See accompanying notes to financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	-2-

 

	PDC 1996-D LIMITED PARTNERSHIP

	(A West Virginia Limited Partnership)

	Statement of Partners' Equity

	Six months ended June 30, 1999

	(Unaudited)

 

 

 

 

		Limited and     		 

		additional      	 Managing        	

		general partners	 general partner 	  Total  
Balance, December 31, 1998	$5,193,718 	  $1,298,430 	  $6,492,148 

Net income	               34,647 	       8,661 	      43,308 

Distributions to partners	  (260,233)	  (37,868)	 (298,101)

	Balance, June 30, 1999	$4,968,132 	 $1,269,223 	 $6,237,355

 

See accompanying notes to financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	-3-

 

	PDC 1996-D LIMITED PARTNERSHIP

	(A West Virginia Limited Partnership)

	Statements of Cash Flows

	Six months ended June 30, 1999 and 1998

	(Unaudited)

			1999  	 1998

Cash flows from operating activities:

	Net income	$  43,308 	 156,208 

	Adjustments to reconcile net 

	 income to net cash provided 

	 by operating activities:

	    Depreciation, depletion,

	       and amortization	 211,638 	543,466 

	    Changes in operating assets

	       and liabilities:

	    Decrease in accounts

		 receivable - oil and gas revenues	57,990 	143,197 

	    Increase in due from PDC	-    	(3,667)

	    Decrease in accrued expenses	 (21,428)	 (2,446)

	        Net cash provided from 

		operating activities	291,508 	836,758 

Cash flows from financing activities:

	Distributions to partners	 (298,101)	 (838,503)

		Net cash used by 

		financing activities	 (298,101)	 (838,503)

Net change in cash	(6,593)	(1,745)

Cash at beginning of period	    6,712 	    2,756

Cash at end of period	$      119 	     1,011

 

See accompanying notes to financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

		-4-

 

	PDC 1996-D LIMITED PARTNERSHIP

	(A West Virginia Limited Partnership)

	Notes to Financial Statements 

	(Unaudited)

 

 

1.	Accounting Policies

	Reference is hereby made to the Partnership's Annual Report on Form 10-K for 1998, which contains a summary of significant accounting policies followed by the Partnership in the preparation of its financial statements.  Thesepolicies were also followed in preparing the quarterly report included herein. 

2.	Basis of Presentation
	The Management of the Partnership believes that all adjustments (consisting of only normal recurring accruals) necessary to a fair statement of the results of such periods have been made.  The results of operations for the sixmonths ended June 30, 1999 are not necessarily indicative of the results to be expected for the full year. 

3.	Oil and Gas Properties
	The Partnership follows the successful efforts method of accounting for the cost of exploring for and developing oil and gas reserves.  Under this method, costs of development wells, including equipment and intangible drilling costsrelated to both producing wells and developmental dry holes, and successful exploratory wells are capitalized and amortized on an annual basis to operations by the units-of-production method using estimated proved developed reserves determined at year endby an independent petroleum engineer.  If a determination is made that an exploratory well has not discovered economically producible reserves, then its costs are expensed as dry hole costs.  

 

 

 

 

 

 

 

 

 

 

 

 

 

	-5-

 

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations
	Liquidity and Capital Resources
		The Partnership was funded on December 31, 1996 with initial Limited and Additional General Partner contributions of $15,301,726 and the Managing General Partner contributed $3,328,126 in accordance with the Agreement.Syndication and management fee costs of $1,989,224 were incurred leaving available capital of $16,640,628 for Partnership activities.

		The Partnership began exploration and development activities subsequent to the funding of the Partnership and completed well drilling activities by March 31, 1997.  Eighty-five wells have been drilled, of which eighty have beencompleted as producing wells.

		Operations will be conducted with available funds and revenues generated from oil and gas activities.  No bank borrowings are anticipated.  

		The Partnership had net working capital at June 30, 1999 of $141,617.

		The Partnership's revenues from oil and gas will be affected by changes in prices.  As a result of changes in federal regulations, gas prices are highly dependent on the balance between supply and demand.  The Partnership's gassales prices are subject to increase and decrease based on various market sensitive indices.  

	Results of Operations
	Three Months Ended June 30, 1999 Compared with 1998
		Natural gas sales decreased approximately 40.1% during the second quarter of 1999 compared with the same period in 1998 due to lower sales volumes and average sale price.  While the Partnership experienced a modest net income,depreciation, depletion and amortization is a non-cash expense and therefore the Partnership distributed $108,759 to the partners during the second quarter of 1999.

	Six Months Ended June 30, 1999 Compared with 1998
		Natural gas sales decreased approximately 46.9% during the first six months of 1999 compared with the same period in 1998 primarily due to lower sales volumes and average sales price.  While the Partnership experienced a modestnet income, depreciation, depletion and amortization is a non-cash expense and therefore the Partnership distributed $298,101 to the partners during the first six months of 1999.

	-6-

 

	Year 2000 Issue
	State of Readiness
		The Year 2000 Issue is the risk that computer programs using two-digit data fields will fail to properly recognize the year 2000, with the result being business interruption due to computer system failures by PDC's software orhardware or that of government entities, service providers and vendors.  PDC, who administers all aspects of the Partnership, has assessed the extent of the Year 2000 Issues affecting PDC and the Partnership.  PDC believes that the new computer systemincluding operating software installed during 1998 along with modifications made by PDC's computer technicians have addressed the dating system flaw inherent in most operating systems.  PDC has completed a remediation plan and believes it is currentlyfully Year 2000 compliant.

		PDC has initiated formal communications with its significant suppliers and service providers to determine the extent to which PDC may be vulnerable to their failure to correct their own Year 2000 issues.  It is expected thatfull identification will be completed by September 30, 1999.  To the extent that responses to Year 2000 readiness are unsatisfactory, PDC intends to take appropriate action, including identifying alternative suppliers and service providers who havedemonstrated Year 2000 readiness.

	Cost of Readiness
		PDC does not currently expect to charge the Partnership for any portion of PDC's cost to become Year 2000 compliant.

	Risks of Year 2000 Issues
		PDC presently believes the Year 2000 Issue will not present a materially adverse risk to PDC's or the Partnership's future results of operations, liquidity, and capital resources.  However, if the level of the timely complianceby key suppliers or service providers is not sufficient, the Year 2000 Issue could have a material impact on PDC's or the Partnership's operations including, but not limited to, increased operating costs, loss of customers or suppliers, loss of accountingfunctions, including well revenue distributions, or other significant disruptions to PDC's or the Partnership's business.

	Contingency Plan
		PDC has a contingency plan, and will implement it on any system that remains non-compliant at December 31, 1999, if any.

 

 

 

 

	-7-

 

	CONFORMED COPY

	PART II - OTHER INFORMATION 

 

Item 1.	Legal Proceedings
		None.

Item 6.  Exhibits and Reports on Form 8-K
		(a) None.

		(b) No reports on Form 8-K have been filed during the quarter ended

			June 30, 1999.

 

 

	SIGNATURES

     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.

 

				PDC 1996-D Limited Partnership 				

				        (Registrant)

 				By its Managing General Partner

				Petroleum Development Corporation

				         

 

 

Date:  August 9, 1999	  /s/ Steven R. Williams        
				      Steven R. Williams

				         President

 

Date:  August 9, 1999	  /s/ Dale G. Rettinger         
  				      Dale G. Rettinger

				   Executive Vice President

				       and Treasurer

	

 

 

 

 

 

 

	-8-