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 fiscal year ended December 31, 1996

                                       or
   /   /        Transition Report Pursuant to Section 13 or 15(d)
            of the Securities Exchange Act of 1934 (No Fee Required)
                         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)

303 West Wall, Suite 101, Midland, Texas                         79701
(Address of principal executive offices)                       (Zip code)

       Registrant's Telephone Number, including area code : (915) 683-4768
        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, 1997, 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 1 of 28 pages.
                           -Exhibit index on page 28-


<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.  The managing
general partner is Parker & Parsley Development L.P. ("PPDLP").  PPDLP's general
partner is Parker & Parsley Petroleum USA, Inc. ("PPUSA").

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 primarily 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" and "Item 8. Financial  Statements and  Supplementary
Data" of this report for a summary of the  Partnership's  operating  information
and identifiable assets.

The principal  markets during 1996 for the oil produced by the Partnership  were
refineries  and  oil  transmission  companies  that  have  facilities  near  the
Partnership's   oil  producing   properties.   The  principal  markets  for  the
Partnership's   gas  were  companies  that  have  pipelines   located  near  the
Partnership's gas producing  properties.  Of the Partnership's total oil and gas
revenues for 1996,  approximately 63% and 13% were attributable to sales made to
Genesis Crude Oil, L.P. and Western Gas Resources, Inc., respectively.

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.

Because of the demand for oil and gas, the Partnership does not believe that the
termination  of the  sales of its  products  to any one  customer  would  have a

                                        2

<PAGE>



material adverse impact on its operations. The loss of a particular customer for
gas may have an effect if that  particular  customer  has the only gas  pipeline
located  in  the  areas  of  the Partnership's  gas  producing  properties.  The
Partnership  believes,  however,  that  the  effect  would be  temporary,  until
alternative arrangements could be made.

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.  PPUSA  employs  659
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.  The
Partnership's  managing  general  partner,  PPDLP  through  PPUSA,  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  primarily  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  was  plugged  and  abandoned  in  1995  due to
uneconomical operations. At December 31, 1996, 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, 1996,  1995 and 1994 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 PPUSA with a review by an independent
petroleum consultant.

                                        3

<PAGE>



ITEM 3.     Legal Proceedings

The  Partnership  is not aware of any  material  legal  proceedings  (other than
routine  litigation  in the ordinary  course of the  Partnership's  business) to
which it is a party or to which its properties are subject.

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 1996.


                                        4

<PAGE>



                                     PART II

ITEM 5.     Market for Partnership's Common Equity and Related Stockholder
              Matters

At March 8, 1997, the Partnership  had 11,897  outstanding  limited  partnership
interests  held of record by 662  subscribers.  There is no  established  public
trading  market  for the  limited  partner  ship  interests.  Under the  limited
partnership   agreement,   PPDLP  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, 1996 and 1995, $668,764 and $581,063, 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>
                             1996         1995         1994          1993         1992
                          ----------   ----------   ----------   -----------   ----------
<S>                       <C>          <C>          <C>          <C>           <C>
Operating results:
 Oil and gas sales        $1,382,265   $1,160,419   $1,266,515   $ 1,663,146   $2,239,991
                           =========    =========    =========    ==========    =========
 Impairment of oil
   and gas properties     $   22,474   $  115,434   $      -     $ 2,190,788   $      -
                           =========    =========    =========    ==========    =========
 Net income (loss)        $  544,919   $  181,451   $  229,524   $(2,072,130)  $  264,066
                           =========    =========    =========    ==========    =========
 Allocation of net
   income (loss):
    Managing
     general partner      $    5,449   $    1,852   $    2,345   $   (20,671)  $    2,691
                           =========    =========    =========    ==========    =========
    Limited partners      $  539,470   $  179,599   $  227,179   $(2,051,459)  $  261,375
                           =========    =========    =========    ==========    =========
 Limited partners' net
   income (loss) per
   limited partnership
   interest               $    45.35   $    15.10   $    19.10   $   (172.43)  $    21.97
                           =========    =========    =========    ==========    =========
 Limited partners' cash
   distributions per
   limited partnership
   interest               $    56.21   $    48.84   $    53.88   $     82.95   $   116.82
                           =========    =========    =========    ==========    =========
At year end:
 Total assets             $3,402,932   $3,580,821   $3,947,513   $ 4,376,462   $7,462,470
                           =========    =========    =========    ==========    =========
</TABLE>
                                        5

<PAGE>



ITEM 7.     Management's Discussion and Analysis of Financial Condition and
              Results of Operations

Results of Operations

1996 compared to 1995

The  Partnership's  1996  oil and gas  revenues  increased  to  $1,382,265  from
$1,160,419 in 1995, a 19% increase. The increase in revenues resulted from a 27%
increase in the average  price  received per barrel of oil and a 46% increase in
the average price received per mcf of gas,  offset by a 9% decline in barrels of
oil  produced  and sold and a 10% decline in mcf of gas  produced  and sold.  In
1996,  48,188 barrels of oil were sold compared to 52,777 in 1995, a decrease of
4,589  barrels.  In 1996,  130,387  mcf of gas were sold  compared to 145,346 in
1995, a decrease of 14,959 mcf. The  decrease in  production  volumes was due to
the  decline  characteristics  of the  Partnership's  oil  and  gas  properties.
Management  expects a certain amount of decline in production to continue in the
future  until the  Partnership's  economically  recoverable  reserves  are fully
depleted.

The average price received per barrel of oil increased $4.58 from $17.17 in 1995
to $21.75 in 1996,  while the average  price  received per mcf of gas  increased
from $1.75 in 1995 to $2.56 in 1996.  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 1996.

Salvage income totaling $3,145 was received during 1996, attributable to credits
received from the disposal of oil and gas equipment on one well that was plugged
and  abandoned in a prior year and to credits  received from the disposal of oil
and gas equipment on five fully depleted wells.

A gain on sale of property of $858 was recognized during 1995. This gain was the
result of proceeds  received from the sale of mineral  rights on an  undeveloped
property.

Total costs and  expenses  decreased to $848,356 in 1996 as compared to $986,725
in 1995,  a decrease of  $138,369,  or 14%.  The decrease was due to declines in
production costs, depletion, abandoned property costs, impairment of oil and gas
properties  and  amortization  of  organization  costs,  offset by  increases in
general and administrative expenses ("G&A") and loss on abandoned property.

Production  costs were  $523,763 in 1996 and  $525,281 in 1995,  resulting  in a
$1,518 decrease. The decrease was due to less well repair and maintenance costs,
offset by an increase in workover  costs incurred in an effort to stimulate well
production.

G&A's  components are  independent  accounting and  engineering  fees,  computer
services,  postage and managing  general partner  personnel  costs.  During this
period, G&A increased, in aggregate, 3% from $40,597 in 1995 to $41,920 in 1996.
The Partnership paid the managing general partner $37,351 in 1996 and $34,548 in

                                        6

<PAGE>



1995 for G&A incurred on behalf of the Partnership.  G&A is allocated,  in part,
to the Partnership by the managing general partner.  Such allocated expenses are
determined by the managing general partner based upon its judgement of the level
of  activity  of the  Partnership  relative to the  managing  general  partner's
activities and other entities it manages. The method of allocation has varied in
certain  years and may do so again  depending on the  activities  of the managed
entities.

The Partnership  adopted  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")  effective as of October 1, 1995 (see Notes 2 and 3
of Notes to Financial  Statements included in "Item 8. Financial  Statements and
Supplementary Data"). As a result of the review and evaluation of its long-lived
assets for impairment,  the Partnership  recognized  non-cash charges of $22,474
and  $115,434  related  to its oil and gas  properties  during  1996  and  1995,
respectively.

Depletion was $259,455 in 1996 compared to $302,390 in 1995. This  represented a
decrease of $42,935 or 14%.  The  decrease  was  primarily  attributable  to the
following  factors:  (i) a reduction in the  Partnership's  net depletable basis
from  charges  taken in  accordance  with  SFAS  121,  (ii) a  reduction  in oil
production of 4,589 barrels in 1996 from 1995,  and (iii) an increase in oil and
gas reserves during 1996 as a result of higher commodity prices.

A loss on  abandoned  property of $744 was  recognized  during  1996.  This loss
resulted  from  the  write-off  of  remaining  capitalized  well  costs  on  the
abandonment  of one  saltwater  disposal  well. A gain on abandoned  property of
$3,305 was recognized during 1995. This gain was the result of proceeds received
from  equipment  salvage on one fully  depleted  abandoned  property.  Abandoned
property costs of $2,572 were incurred on one well during 1995.

1995 compared to 1994

The  Partnership's  1995  oil and gas  revenues  decreased  to  $1,160,419  from
$1,266,515 in 1994, an 8% decrease.  The decline in revenues resulted from a 13%
decrease  in barrels of oil  produced  and sold,  a 15%  decrease  in mcf of gas
produced  and sold and a 2% decrease in the average  price  received  per mcf of
gas,  offset by an 8% increase in the average price  received per barrel of oil.
In 1995,  52,777 barrels of oil were sold compared to 60,320 in 1994, a decrease
of 7,543 barrels.  Of the decrease,  857 barrels, or 2%, was attributable to the
fact that on April 1, 1994,  the  Partnership's  revenue and  operating  expense
allocation pursuant to the Program (as defined in Item 11) agreement reverted to
80.808081% from  85.858586%.  The additional  decrease of 11%, or 6,686 barrels,
was  due  to the  decline  characteristics  of the  Partnership's  oil  and  gas
properties. In 1995, 145,346 mcf of gas were sold compared to 171,931 in 1994, a
decrease of 26,585 mcf. Of the decrease,  2,321 mcf, or 1%, was  attributable to
the  fact  that  the  revenue  and  operating  expense  allocation  reverted  to
80.808081% from 85.858586%, as discussed previously.  The additional decrease of
24,264 mcf, or 14%, was due to the decline  characteristics of the Partnership's
oil and gas properties.

The average price received per barrel of oil increased $1.29 from $15.88 in 1994
to $17.17 in 1995,  while the average  price  received per mcf of gas  decreased
from $1.79 in 1994 to $1.75 in 1995.
                                        7

<PAGE>



A gain on sale of property of $858 was recognized during 1995. This gain was the
result of proceeds  received from the sale of mineral  rights on an  undeveloped
property.

Total costs and expenses decreased to $986,725 in 1995 as compared to $1,042,195
in 1994,  a decrease of  $55,470,  or 5%. The  decrease  was due to a decline in
production costs, depletion and amortization of organization costs, offset by an
increase  in G&A,  gain on  abandoned  property,  abandoned  property  costs and
impairment of oil and gas properties.

Production  costs were  $525,281 in 1995 and  $596,974 in 1994,  resulting  in a
$71,693 decrease,  or 12%. Of the decrease, 2% was attributable to the fact that
on April 1, 1994, the  Partnership's  revenue and operating  expense  allocation
pursuant to the Program  agreement  reverted to 80.808081% from 85.858586%.  The
additional decrease of 10% was due to less well repair, maintenance and workover
costs and a decline in production taxes and ad valorem taxes.

G&A's  components are  independent  accounting and  engineering  fees,  computer
services,  postage and managing  general partner  personnel  costs.  During this
period, G&A increased, in aggregate, 3% from $39,451 in 1994 to $40,597 in 1995.
The Partnership paid the managing general partner $34,548 in 1995 and $32,303 in
1994 for G&A incurred on behalf of the Partnership.

The  Partnership  adopted SFAS 121  effective as of October 1, 1995 (see Notes 2
and 3 of Notes to Financial Statements included in "Item 8. Financial Statements
and  Supplementary  Data").  As a result of the  review  and  evaluation  of its
long-lived assets for impairment,  the Partnership  recognized a non-cash charge
of $115,434  related to its oil and gas properties  during the fourth quarter of
1995.

Depletion was $302,390 in 1995 compared to $400,754 in 1994. This  represented a
decrease of $98,364 or 25%. Oil production  decreased 7,543 barrels in 1995 from
1994, while oil reserves of barrels were revised downward by 78,777 barrels,  or
11%.

A gain on abandoned property of $3,305 was recognized during 1995. This gain was
the result of proceeds  received from  equipment  salvage on one fully  depleted
abandoned property.  Abandoned property costs of $2,572 were incurred on the one
well abandoned in 1995. There was no abandonment activity during 1994.

Impact of inflation and changing prices on sales and net income

Inflation  impacts  the fixed  overhead  rate  charges  of the  lease  operating
expenses for the  Partnership.  During 1994,  the annual  change in the index of
average weekly earnings of crude petroleum and gas production  workers issued by
the U.S. Department of Labor, Bureau of Labor Statistics  increased by 4.8%. The
1995 annual change in average weekly earnings  increased by 4.4%. The 1996 index
(effective  April 1, 1996)  increased  4.1%.  The impact of inflation  for other
lease operating  expenses is small due to the current economic  condition of the
oil industry.

The oil and gas industry  experienced  volatility during the past decade because
of the fluctuation of the supply of most fossil fuels relative to the demand for

                                        8

<PAGE>



such  products  and other  uncertainties  in the world  energy  markets  causing
significant  fluctuations  in oil and gas  prices.  During  1996,  the price per
barrel for oil production similar to the Partnership's ranged from approximately
$18.00 to $25.00. For February 1997, the average price for the Partnership's oil
was approximately $22.00.

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.

Liquidity and capital resources

Net Cash Provided by Operating Activities

Net cash  provided by operating  activities  increased  $64,633  during the year
ended  December 31, 1996 from the year ended December 31, 1995. The increase was
due to an  increase in oil and gas sales,  offset by an  increase in  production
costs paid.

Net Cash Used in Investing Activities

The  Partnership's  principal  investing  activities  during  1996 and 1995 were
related to the addition of oil and gas equipment on active properties.

Proceeds of $3,145 were  received  from the sale of oil and gas equipment on one
well  abandoned  in a prior  year.  Proceeds of $3,305  were  received  from the
salvage of equipment on one well abandoned in 1995.

Proceeds of $858 were  received  during 1995 from the sale of mineral  rights on
one undeveloped property.

Net Cash Used in Financing Activities

Cash was  sufficient  in 1996 for  distributions  to the partners of $675,519 of
which  $668,764  was  distributed  to the  limited  partners  and  $6,755 to the
managing general partner.  In 1995, cash was sufficient for distributions to the
partners of $586,932 of which $581,063 was  distributed to the limited  partners
and $5,869 to the managing general partner.

It is expected that future net cash  provided by  operations  will be sufficient
for any capital  expenditures and any distributions.  As the production from the
properties declines, distributions are also expected to decrease.

ITEM 8.     Financial Statements and Supplementary Data

The Partnership's audited financial statements are included elsewhere herein.

ITEM 9.     Changes in and Disagreements with Accountants on Accounting
              and Financial Disclosure

None.
                                        9

<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,  PPDLP, is
granted the exclusive right and full authority to manage, control and administer
the  Partnership's  business.  PPUSA,  the sole general  partner of PPDLP,  is a
wholly-owned subsidiary of Parker & Parsley Petroleum Company (the "Company"), a
publicly-traded corporation on the New York Stock Exchange.

Set forth below are the names, ages and positions of the directors and executive
officers of PPUSA. Directors of PPUSA are elected to serve until the next annual
meeting of stockholders or until their successors are elected and qualified.

                           Age at
                        December 31,
        Name                1996                        Position
        ----            ------------                    --------
Scott D. Sheffield           44           President, Chairman of the Board,
                                            Chief Executive Officer and
                                            Director

Timothy A. Leach             37           Executive Vice President and Director

Steven L. Beal               37           Senior Vice President, Chief Financial
                                            Officer and Director

Mark L. Withrow              49           Senior Vice President, Secretary and
                                            Director

David A. Chroback            41           Senior Vice President and Director

         Scott D. Sheffield.   Mr.  Sheffield,  a graduate  of The University of
Texas with a Bachelor of Science degree in Petroleum  Engineering,  has been the
President and a Director of the Company since May 1990 and has been the Chairman
of the Board and Chief  Executive  Officer  since October  1990.  Mr.  Sheffield
joined the Company as a petroleum engineer in 1979. Mr. Sheffield served as Vice
President - Engineering of the Company from September 1981 until April 1985 when
he was elected  President  and a Director  of the  Company.  In March 1989,  Mr.
Sheffield was elected  Chairman of the Board and Chief Executive  Officer of the
Company.  On January 1, 1995,  Mr.  Sheffield  resigned as  President  and Chief
Executive Officer of PPUSA, but remained Chairman of the Board and a Director of
PPUSA.  On January 1, 1996, Mr.  Sheffield  reassumed the positions of President
and Chief Executive Officer of PPUSA. Before joining the Company,  Mr. Sheffield
was principally occupied for more than three years as a production and reservoir
engineer for Amoco Production Company.

                                       10

<PAGE>



         Timothy A. Leach.  Mr. Leach, a graduate of Texas A&M University with a
Bachelor of Science degree in Petroleum  Engineering and the University of Texas
of the  Permian  Basin  with a Master of  Business  Administration  degree,  was
elected Executive Vice President - Engineering of the Company on March 21, 1995.
Mr. Leach had been serving as Senior Vice President Engineering since March 1993
and served as Vice  President - Engineering  of the Company from October 1990 to
March 1993. Mr. Leach was elected Executive Vice President and Director of PPUSA
on December 1, 1995.  He had joined the Company as Vice  President - Engineering
in  September  1989.  Prior to joining the  Company,  Mr.  Leach was employed as
Senior Vice President and Director of First City Texas - Midland, N.A.

         Steven L. Beal.  Mr. Beal, a graduate of the University of Texas with a
Bachelor of Business  Administration degree in Accounting and a certified public
accountant,  was  elected  Senior  Vice  President  - Finance of the  Company in
January 1995 and Chief  Financial  Officer of the Company on March 21, 1995. Mr.
Beal was elected Senior Vice President and Chief  Financial  Officer of PPUSA on
January  1, 1995 and was  elected a Director  of PPUSA on  January  2, 1996.  He
served as Treasurer  of PPUSA from  January 1, 1995 to June 12,  1996.  Mr. Beal
joined the Company as Treasurer  in March 1988 and was elected Vice  President -
Finance in October 1991. Prior to joining the Company,  Mr. Beal was employed as
an audit manager for Price Waterhouse.

         Mark  L.  Withrow.   Mr.  Withrow,  a  graduate  of  Abilene  Christian
University  with a  Bachelor  of  Science  degree in  Accounting  and Texas Tech
University with a Juris Doctorate  degree,  was Vice President - General Counsel
of the Company from February 1991 to January 1995, when he was appointed  Senior
Vice President - General  Counsel,  and has been the Company's  Secretary  since
August 1992. On January 1, 1995,  Mr.  Withrow was elected Senior Vice President
and  Secretary  of PPUSA and was elected a Director of PPUSA on January 2, 1996.
Mr.  Withrow  joined the Company in January 1991.  Prior to joining the Company,
Mr.  Withrow was the managing  partner of the law firm of Turpin,  Smith,  Dyer,
Saxe & MacDonald, Midland, Texas.

         David A. Chroback.  Mr. Chroback,  a graduate of Hanover College with a
Bachelor  of Science  degree in Geology,  and a graduate  of  Southern  Illinois
University at Carbondale with a Master of Science degree in Geology, was elected
Senior Vice President of the Company and PPUSA on October 7, 1996. On January 2,
1996,  Mr.  Chroback  was  elected  Director  of  PPUSA.  He had  served as Vice
President - Geology of the Company since February  1993.  Mr.  Chroback has been
the  Geological  Manager  since June  1992,  and prior to that has been a Senior
Geologist with the Company since January 1988.  Before  joining the Company,  he
was a  project  geologist  with  Indian  Wells Oil  Company.  Mr.  Chroback  was
previously  employed by Amoco Production  Company as a petroleum  geologist from
1980 through 1984.

ITEM 11.     Executive Compensation

The  Partnership  does not have any  directors  or officers.  Management  of the
Partnership is vested in PPDLP, 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, PPDLP
and Parker & Parsley Employees  90-B Conv.,  L.P. ("EMPL") pay approximately 10%
of   the  Partnership's   acquisition,   drilling  and   completion   costs  and

                                       11

<PAGE>



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 Partnership's  revenues. See Notes 6 and 9 of Notes
to  Financial   Statements  included  in  "Item  8.  Financial   Statements  and
Supplementary Data" below for information regarding fees and reimbursements paid
to the managing general partner or its affiliates by the Partnership.

PPUSA'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 Partnership'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
Partnership'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
PPUSA, but does pay a portion of PPUSA'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" below.

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. PPDLP owned 80
limited partnership interests at January 1, 1997.

(b)      Security ownership of management

The Partnership  does not have any officers or directors.  The managing  general
partner of the Partnership, PPDLP, 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
PPUSA who beneficially owns limited partnership interests in the Partnership.


                                       12

<PAGE>



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:
                                                 1996        1995       1994
                                               ---------   --------   --------

  Payment of lease operating and
    supervision charges in accordance
    with standard industry operating
    agreements                                 $205,705    $196,314   $200,185

  Reimbursement of general and
    administrative expenses                    $ 37,351    $ 34,548   $ 32,303

  Purchase of oil and gas properties
    and related equipment, at
    predecessor cost                           $     -     $  4,863   $  7,669

  Receipt of proceeds for the salvage
    value of retired oil and gas equipment     $  1,895    $    -     $     -

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"
below,  regarding  the  Partnership's  participation  with the managing  general
partner in oil and gas activities of the Program.

                                       13

<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

                Balance sheets as of December 31, 1996 and 1995

                Statements of operations for the years ended December 31, 1996,
                  1995 and 1994

                Statements of partners' capital for the years ended December 31,
                  1996, 1995 and 1994

                Statements of cash flows for the years ended December 31, 1996,
                  1995 and 1994

                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.

                                       14

<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 24, 1997           By:  Parker & Parsley Development L.P.,
                                        Managing General Partner

                                      By:   Parker & Parsley Petroleum USA, Inc.
                                            ("PPUSA"), 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, Chairman of the Board,     March 24, 1997
-----------------------    Chief Executive Officer and
Scott D. Sheffield         Director of PPUSA


/s/ Timothy A. Leach       Executive Vice President and          March 24, 1997
-----------------------    Director of PPUSA
Timothy A. Leach


/s/ Steven L. Beal         Senior Vice President, Chief          March 24, 1997
-----------------------    Financial Officer and Director
Steven L. Beal             of PPUSA


/s/ Mark L. Withrow        Senior Vice President, Secretary      March 24, 1997
-----------------------    and Director of PPUSA
Mark L. Withrow


/s/ David A. Chroback      Senior Vice President and             March 24, 1997
-----------------------    Director of PPUSA
David A. Chroback 

                                       15

<PAGE>




                          INDEPENDENT AUDITORS' REPORT




The Partners
Parker & Parsley 90-B Conv., L.P.
  (A Delaware Limited Partnership):

We have audited the financial statements of Parker & Parsley 90-B Conv., L.P. as
listed in the accompanying  index under Item 14(a).  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 Parker & Parsley 90-B Conv.,
L.P. 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.

As  discussed  in Notes 2 and 3 to the  financial  statements,  the  Partnership
adopted the provisions of the Financial  Accounting  Standards Board's Statement
of Financial  Accounting  Standards No. 121,  "Accounting  for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" in 1995.




                                                  KPMG Peat Marwick LLP


Midland, Texas
March 21, 1997


                                       16

<PAGE>



                        PARKER & PARSLEY 90-B CONV., L.P.
                        (A Delaware Limited Partnership)

                                 BALANCE SHEETS
                                   December 31



                                                      1996            1995
                                                   -----------     -----------
                  ASSETS

Current assets:
  Cash and cash equivalents, including interest
    bearing deposits of $121,219 in 1996 and
    $104,683 in 1995                               $   123,797     $   104,953
  Accounts receivable - oil and gas sales              205,562         112,651
                                                    ----------      ----------
         Total current assets                          329,359         217,604
                                                    ----------      ----------
Oil and gas properties - at cost, based on 
  the successful efforts accounting method           9,563,173       9,571,882
Accumulated depletion                               (6,489,600)     (6,208,665)
                                                    ----------      ----------
         Net oil and gas properties                  3,073,573       3,363,217
                                                    ----------      ----------
                                                   $ 3,402,932     $ 3,580,821
                                                    ==========      ==========
LIABILITIES AND PARTNERS' CAPITAL

Current liabilities:
  Accounts payable - affiliate                     $    25,296     $    72,585

Partners' capital:
  Limited partners (11,897 interests)                3,343,860       3,473,154
  Managing general partner                              33,776          35,082
                                                    ----------      ----------
                                                     3,377,636       3,508,236
                                                    ----------      ----------
                                                   $ 3,402,932     $ 3,580,821
                                                    ==========      ==========


   The accompanying notes are an integral part of these financial statements.

                                       17

<PAGE>



                        PARKER & PARSLEY 90-B CONV., L.P.
                        (A Delaware Limited Partnership)

                            STATEMENTS OF OPERATIONS
                         For the years ended December 31





                                           1996          1995          1994
                                        ----------    ----------    ----------
Revenues:
  Oil and gas                           $1,382,265    $1,160,419    $1,266,515
  Interest                                   7,865         6,899         5,204
  Salvage income from equipment
    disposals                                3,145           -             -
  Gain on sale of property                     -             858           -
                                         ---------     ---------     ---------
                                         1,393,275     1,168,176     1,271,719
                                         ---------     ---------     ---------
Costs and expenses:
  Oil and gas production                   523,763       525,281       596,974
  General and administrative                41,920        40,597        39,451
  Impairment of oil and gas
    properties                              22,474       115,434           -
  Depletion                                259,455       302,390       400,754
  (Gain) loss on abandoned property            744        (3,305)          -
  Abandoned property                           -           2,572           -
  Amortization of organization                 -           3,756         5,016
                                         ---------     ---------     ---------
                                           848,356       986,725     1,042,195
                                         ---------     ---------     ---------
Net income                              $  544,919    $  181,451    $  229,524
                                         =========     =========     =========
Allocation of net income:
  Managing general partner              $    5,449    $    1,852    $    2,345
                                         =========     =========     =========
  Limited partners                      $  539,470    $  179,599    $  227,179
                                         =========     =========     =========
Net income per limited partnership
  interest                              $    45.35    $    15.10    $    19.10
                                         =========     =========     =========

   The accompanying notes are an integral part of these financial statements.

                                       18

<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, 1994      $ 43,228    $4,288,405    $4,331,633

    Distributions                           (6,474)     (640,966)     (647,440)

    Net income                               2,345       227,179       229,524
                                           -------     ---------     ---------

Partners' capital at December 31, 1994      39,099     3,874,618     3,913,717

    Distributions                           (5,869)     (581,063)     (586,932)

    Net income                               1,852       179,599       181,451
                                           -------     ---------     ---------

Partners' capital at December 31, 1995      35,082     3,473,154     3,508,236

    Distributions                           (6,755)     (668,764)     (675,519)

    Net income                               5,449       539,470       544,919
                                           -------     ---------     ---------

Partners' capital at December 31, 1996    $ 33,776    $3,343,860    $3,377,636
                                           =======     =========     =========



   The accompanying notes are an integral part of these financial statements.

                                       19

<PAGE>



                        PARKER & PARSLEY 90-B CONV., L.P.
                        (A Delaware Limited Partnership)

                            STATEMENTS OF CASH FLOWS
                         For the years ended December 31


                                              1996         1995          1994
                                            ---------    ---------    ---------
Cash flows from operating activities:
 Net income                                 $ 544,919    $ 181,451    $ 229,524
 Adjustments to reconcile net income
  to net cash provided by operating
  activities:
   Impairment of oil and gas properties        22,474      115,434          -
   Depletion and amortization                 259,455      306,146      405,770
   (Gain) loss on abandoned property              744       (3,305)         -
   Gain on sale of property                       -           (858)         -
   Salvage income from equipment disposals     (3,145)         -            -
 Changes in assets and liabilities:
   (Increase) decrease in accounts
     receivable                               (92,911)       3,271       15,439
   Increase (decrease) in accounts payable    (36,632)      28,132      (11,033)
                                             --------     --------     --------
         Net cash provided by operating
           activities                         694,904      630,271      639,700
                                             --------     --------     --------
Cash flows from investing activities:
 Additions to oil and gas properties           (3,686)      (7,648)     (12,340)
 Proceeds from salvage income on equipment
  disposals                                     3,145          -            -
 Proceeds from equipment salvage on 
  abandoned property                              -          3,305          -
 Proceeds from sale of property                   -            858          -
                                             --------     --------     --------
         Net cash used in investing
           activities                            (541)      (3,485)     (12,340)
                                             --------     --------     --------
Cash flows from financing activities:
 Cash distributions to partners              (675,519)    (586,932)    (647,440)
                                             --------     --------     --------
Net increase (decrease) in cash and cash
 equivalents                                   18,844       39,854      (20,080)
Cash and cash equivalents at beginning
 of year                                      104,953       65,099       85,179
                                             --------     --------     --------
Cash and cash equivalents at end of year    $ 123,797    $ 104,953    $  65,099
                                             ========     ========     ========

   The accompanying notes are an integral part of these financial statements.

                                       20

<PAGE>



                        PARKER & PARSLEY 90-B CONV., L.P.
                        (A Delaware Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994


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.

       The  Partnership  engages  primarily  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:

       Impairment of long-lived assets - Commencing in 1995,  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 fair value of the asset.

       The Partnership  accounts for long-lived  assets to be disposed of at the
lower of their carrying  amount or fair value less costs to sell once management
has committed to a plan to dispose of the assets.

       Prior to the  adoption  of SFAS 121 in the fourth  quarter  of 1995,  the
Partnership's aggregate oil and gas properties were stated at cost not in excess
of total  estimated  future net revenues and the estimated fair value of oil and
gas assets not being depleted.

       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 Parker &
Parsley  Petroleum  USA, Inc.  ("PPUSA"),  the sole general  partner of Parker &
Parsley Development L.P. ("PPDLP"),  the Partnership's managing general partner,
and reviewed by  independent  petroleum  consultants.  The  carrying  amounts of

                                       21

<PAGE>



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.

       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.

       Organization  costs - Organization costs are capitalized and amortized on
the straight-line method over 60 months.

       Net income per limited partnership  interest - The net income 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 and
cash equivalents include 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.  Such  allocated  expenses are  determined  by the managing  general
partner  based upon its  judgement  of the level of activity of the  Partnership
relative to the managing  general  partner's  activities  and other  entities it
manages.  The method of  allocation  has  varied in certain  years and may do so
again depending on the activities of the managed entities.

       Reclassifications - Certain  reclassifications have been made to the 1995
financial statements to conform to the 1996 financial statement presentation.

       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 environ mental 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.

                                       22

<PAGE>



Note 3.     Impairment of long-lived assets

       The Partnership  adopted SFAS 121 effective  October 1, 1995. In order to
determine  whether an impairment  had occurred,  the  Partnership  estimated the
expected  future  cash flows of its oil and gas  properties  and  compared  such
future  cash  flows to the  carrying  amount  of the oil and gas  properties  to
determine  if the  carrying  amount  was  recoverable.  For  those  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 of the review
and  evaluation  of  its  long-lived  assets  for  impairment,  the  Partnership
recognized  non-cash  charges of $22,474 and $115,434 related to its oil and gas
properties during 1996 and 1995, respectively.

Note 4.     Income taxes

       The  financial  statement  basis  of the  Partnership's  net  assets  and
liabilities was $1,280,111 greater than the tax basis at December 31, 1996.

       The  following  is a  reconciliation  of net  income  per  statements  of
operations  with the net income per  Federal  income tax  returns  for the years
ended December 31:
                                              1996         1995         1994
                                           ---------    ---------    ---------
  Net income per statements of
    operations                             $ 544,919    $ 181,451    $ 229,524
  Intangible development costs
    capitalized for financial reporting
    purposes and expensed for tax
    reporting purposes                           -         (9,033)         -
  Depletion and depreciation provisions
    for tax reporting purposes over
    amounts for financial reporting
    purposes                                (112,161)     (74,568)    (106,765)
  Impairment of oil and gas properties
    for financial reporting purposes          22,474      115,434          -
  Other                                       11,966      (10,290)         800
                                            --------     --------     --------
       Net income per Federal
         income tax returns                $ 467,198    $ 202,994    $ 123,559
                                            ========     ========     ========

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:
                                              1996         1995         1994
                                           ---------    ---------    ---------
     Development costs                     $  10,116    $  17,572    $  12,340
                                            ========     ========     ========

                                       23

<PAGE>



       Capitalized oil and gas properties consist of the following:

                                           1996          1995          1994
                                        -----------   -----------   -----------
   Proved properties:
     Property acquisition costs         $   369,498   $   369,498   $   373,524
     Completed wells and equipment        9,193,675     9,202,384     9,249,463
                                         ----------    ----------    ----------
                                          9,563,173     9,571,882     9,622,987
   Accumulated depletion                 (6,489,600)   (6,208,665)   (5,860,251)
                                         ----------    ----------    ----------

   Net capitalized costs                $ 3,073,573   $ 3,363,217   $ 3,762,736
                                         ==========    ==========    ==========

       During 1996 and 1995,  respectively,  the Partnership recognized non-cash
charges  against oil and  gas properties of $22,474 and  $115,434  in accordance
with SFAS 121. See Note 3.

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:

                                             1996        1995        1994
                                           --------    --------    --------
  Payment of lease operating and
    supervision charges in accordance
    with standard industry operating
    agreements                             $205,705    $196,314    $200,185

  Reimbursement of general and
    administrative expenses                $ 37,351    $ 34,548    $ 32,303

  Purchase of oil and gas properties
    and related equipment, at
    predecessor cost                       $    -      $  4,863    $  7,669

  Receipt of proceeds for the salvage
    value of retired oil and gas
    equipment                              $  1,895    $    -      $    -

     The Partnership  participates  in oil and gas activities  through an income
tax partnership (the "Program")  pursuant to the Program  agreement.  PPDLP, 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 PPUSA.

     The costs and revenues of the Program are allocated to the Entities and the
Partnerships as follows:
                                       24

<PAGE>



                                                 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 PPDLP's 1% general partner ownership which is allocated at the
         Partnership level and 80 limited partner interests owned by PPDLP.

    (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, 1996,  1995 and 1994 and
changes in such quantities during the years then ended. All of the Partnership's
reserves  are proved and located  within the United  States.  The  Partnership's
reserves are based on an evaluation  prepared by the engineering  staff of PPUSA
and reviewed by 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 (bbls)        Gas (mcf)
                                                   ----------        ---------
  Net proved reserves at January 1, 1994             752,672         2,105,726
  Revisions                                           57,188           365,412
  Production                                         (60,320)         (171,931)
                                                     -------          --------
  Net proved reserves at December 31, 1994           749,540         2,299,207
  Revisions                                          (78,777)         (310,010)
  Production                                         (52,777)         (145,346)
                                                     -------          --------
  Net proved reserves at December 31, 1995           617,986         1,843,851
  Revisions                                          128,128           452,504
  Production                                         (48,188)         (130,387)
                                                     -------          --------
  Net proved reserves at December 31, 1996           697,926         2,165,968
                                                     =======         =========
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       The estimated  present  value of future net revenues of proved  reserves,
calculated  using December 31, 1996 prices of $24.75 per barrel of oil and $3.71
per mcf of gas, discounted at 10% was approximately $12,409,000 and undiscounted
was $6,060,000 at December 31, 1996.

       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:

                                             1996      1995      1994
                                            ------    ------    ------
       Genesis Crude Oil, L.P.                63%       65%       63%
       Western Gas Resources, Inc.            13%       10%        -
       GPM Gas Corporation                     -        10%       17%

       The  above  customers  represent  71%  of  total  accounts  receivable at
December 31, 1996.

       PPDLP is party to a  long-term  agreement  pursuant  to which  PPDLP  and
affiliates are to sell to Basis Petroleum,  Inc. (formerly Phibro Energy,  Inc.)
substantially  all crude oil (including  condensate)  which any of such entities
have the right to market from time to time.  On September  23,  1996,  PPDLP and
Basis Petroleum,  Inc. entered into an agreement that supersedes the prior crude
oil purchase  agreement  between the parties and  provides  for  adjusted  terms
effective  December 1, 1995. On November 25, 1996, the Company  consented to the
assignment of the agreement to Genesis  Crude Oil, L.P.  ("Genesis"),  a limited
partnership formed by Basis Petroleum, Inc. and Howell Corporation. The price to
be paid by Genesis for oil purchased under the agreement  ("Genesis  Agreement")
is to be  competitive  with prices paid by other  substantial  purchasers in the
same areas who are significant  competitors of Genesis. The price to be paid for
oil purchased under the Genesis Agreement  includes a market-related  bonus that
may vary from month to month  based  upon spot oil  prices at various  commodity
trade points. The term of the Genesis Agreement is through June 30, 1998, and it
may continue  thereafter  subject to  termination  rights  afforded  each party.
Salomon,  Inc., the parent company of Basis  Petroleum,  Inc. and a subordinated
limited partner in Genesis,  secures the payment  obligations  under the Genesis
Agreement with a $25 million payment guarantee.  Accounts receivable-oil and gas
sales included $109,781 due from Genesis at December 31, 1996.

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

                                       26

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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  PPDLP.  PPDLP has the power  and  authority  to  manage,
       control and administer  all Program and  Partnership  affairs.  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.


                                       27

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                        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)             Amended and Restated Certificate and               -
                     Agreement of General Partnership of
                     Parker & Parsley 90-B GP

    4(b)             Form of Subscription Agreement and                 -
                     Power of Attorney

    4(c)             Specimen Certificate of General                    -
                     Partnership Interest

   10(a)             Operating Agreement                                -

   10(b)             Exploration and Development Program                -
                     Agreement


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