CONFORMED COPY


                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549


  ANNUAL REPORT PURSUANT TO SECTION 13 or 15 (d) OF
  THE SECURITIES EXCHANGE ACT OF 1934
  For the fiscal year ended December 31, 1996    

  Commission File Number  033-63635

  Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange 
  Act of 1934 for the transaction period from                 to               

                       PDC 1996-B LIMITED PARTNERSHIP                          
               (Exact name of registrant as specified in its charter)



    West Virginia                                             55-0750677       
(State or other jurisdiction of                       (I.R.S. Employer 
incorporation or organization)                        Identification No.)



103 East Main Street, Bridgeport, West Virginia  26330       
(Address of principal executive offices)     (zip code)     

Registrant's telephone number, including area code           (304) 842-3597  

                                                           
       SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:  NONE

         SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: 

                   General and Limited Partnership Interests
                               (Title of class)

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 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 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.  [  ]

<PAGE>
                                    PART I

ITEM 1.  BUSINESS.

General

      PDC 1996-B Limited Partnership ("the Partnership") is a limited 
partnership formed on September 9, 1996 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 September 9, 1996, the Partnership
has been engaged in onshore, domestic gas exploration exclusively in the 
northern Appalachian Basin.  A total of 4 limited partners contributed
$60,000; a total of 219 additional general partners contributed initial 
capital of $2,624,707; and PDC (Managing General Partner) contributed 
$583,924 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 80% by the additional general and 
limited partners and 20% 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 fifteen gross wells and
will continue to operate and produce its fifteen gross productive wells.  The
Partnership does not have unexpended initial capital and no additional drilling
activity is planned.

      See Item 2 herein for information concerning the Partnership's gas wells.

Markets for Oil and Gas

      The availability of a market for any oil and gas produced from the
operations of the Partnership will depend upon a number of factors beyond the
control of the Partnership which cannot be accurately predicted.  These factors
include the proximity of the Partnership wells to and the capacity of natural
gas pipelines, the availability and price of competitive fuels, fluctuations in
seasonal supply and demand, and government regulation of supply and demand
created by its pricing and allocation restrictions.  Oversupplies of gas can be
expected to occur from time to time and may result in the Partnership's wells
being shut-in or curtailed.  Increased imports of oil and natural gas have
occurred and are expected to continue.  The effects of such imports could
adversely impact the market for domestic oil and natural gas.

Competition

      The Partnership competes in marketing its gas with numerous companies and
individuals, many of which have financial resources, staffs and facilities
substantially greater than those of the Partnership or Petroleum Development
Corporation. <PAGE>
State Regulations

      State regulatory authorities have established rules and regulations
requiring permits for well operations, reclamation bonds and reports concerning
operations.  States also have statutes and regulations concerning the spacing of
wells, environmental matters, and conservation, and have established regulations
concerning the unitization and pooling of oil and gas properties and maximum
rates of production from oil and gas wells.  The Partnership believes it has
complied in all material respects with applicable state regulations.

Federal Regulations

      Regulation of Liquid Hydrocarbons.  Liquid hydrocarbons (including crude
oil and natural gas liquids) were subject to federal price and allocation
controls until January 1981 when controls were effectively eliminated by
executive order of the President.  As a result, to the extent the Partnership
sells oil produced from its properties, those sales are at unregulated market
prices.

      Although it appears unlikely under present circumstances that controls 
will be reimposed upon liquid hydrocarbons, it is possible Congress may enact
such legislation at a future date.  The impact of such legislation on the 
Partnership would be minimal since the partnership expects to sell only small 
quantities of liquid hydrocarbons, if any.

      Natural Gas Regulation.  Sale of natural gas by the Partnership is subject
to regulation of production, transportation and pricing by governmental
regulatory agencies.  Generally, the regulatory agency in the state where a
producing well is located regulates production activities and, in addition, the
transportation of gas sold intrastate.  The Federal Energy Regulatory Commission
(FERC) regulates the operation and cost of interstate pipeline operators who
transport gas.  Currently the price of gas sold by the Partnership is not
regulated by any state or federal agency.

      The FERC has adopted major changes in certain of its regulations and
continues to make additional changes that will significantly affect future
transportation and marketing of natural gas.

      The Partnership is uncertain how the recent or proposed regulations will
affect the marketing of its gas because it is unable to predict how all
interstate pipelines that receive its gas will respond to such rulemakings.

      Proposed Regulation.  Numerous proposals concerning energy are being
considered by the United States Congress, various state legislatures and
regulatory agencies.  The possible outcome and effect of these proposals cannot
be accurately predicted.

      Environmental and Safety Regulation.  The Partnership believes that it
complies, in all material respects, with all legislation and regulations
affecting its operations in the drilling and production of oil and gas wells and
the discharge of wastes.  To date, compliance with such provisions and
regulations has not had a material effect upon the Partnership's expenditures
for capital equipment, its operations or its competitive position.  The cost
of such compliance is not anticipated to be material in the future.

ITEM 2.  PROPERTIES.

Drilling Activity

      The following table sets forth the results of drilling activity from
September 9, 1996 (date of inception) to  March 15, 1997, of the Partnership
which was conducted in the Continental United States.

                                         Development Wells             
                                 Gross                    Net           
                        Productive  Dry Total   Productive  Dry    Total
Period Ended
 March 15, 1997. . .        15       0   15        13.185    0    13.185<PAGE>
      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.
<TABLE>
<S>                               <S>          <S>           <S>           <S>
                                Productive Gas Wells

Well Name                     County          State        Gross         Net
Thomson Stephenson #66        Clearfield        PA           1           .7775
Tate #27                      Clearfield        PA           1           .9475
Prushnok #1                   Clearfield        PA           1           .9475
Bunner Heirs #2               Barbour           WV           1           .9975
Krick #9                      Clearfield        PA           1           .9475
Herring #1                    Preston           WV           1           .9975
Thomson Stephenson #72        Clearfield        PA           1           .9475
Krick #13                     Clearfield        PA           1           .9475
Jacques #1                    Fayette           PA           1           .9975
Slimmer #318                  Clearfield        PA           1           .7475
McClure #21                   Clearfield        PA           1           .7475
Cardon #141                   Clearfield        PA           1           .7475
Cardon #312                   Clearfield        PA           1           .7475
Cather #1                     Taylor            WV           1           .9975
Mitchell #1                   Clearfield        PA           1           .6900
                                                            15         13.1850
</TABLE>
      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.  LEGAL PROCEEDINGS.

      The Managing General partner as driller/operator a not party to any 
legal action that would materially affect the Managing General Partner's or 
Partnership's operations or financial statements.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

      No matters were submitted to a vote of the security holders of the 
Partnership for the period September 9, 1996 (date of inception) to December
31, 1996.
<PAGE>
                                       PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND SECURITY HOLDER MATTERS.

      At December 31, 1996, PDC 1996-B Limited Partnership had one Managing 
General Partner, 4 Limited Partners who fully paid for 3 units at $20,000 per
unit of limited partnership interests and a total of 219 Additional General
Partners who fully paid for 131.235 units at $20,000 per unit of additional 
general partnership interests.  No established public trading market exists for
the interests.

      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.  SELECTED FINANCIAL DATA.

      The selected financial data presented below has been derived from audited
financial statements of the Partnership appearing elsewhere herein.
<TABLE>
<S>                                                              <S>
                                                          Period from    
                                                        September 9, 1996
                                                      (date of inception)
                                                     to December 31, 1996

Oil and Gas Sales . . . . . . . . . . . . . . . . . . .       $90,359 
Costs and Expenses  . . . . . . . . . . . . . . . . . .       124,143 
Net Loss  . . . . . . . . . . . . . . . . . . . . . . .       (28,154)
Allocation of Income (loss):
      Managing General Partner. . . . . . . . . . . . .         7,793 
      Limited and Additional General Partners . . . . .       (35,947)
      Per Limited and Additional General Partner Unit .          (268)
Total Assets. . . . . . . . . . . . . . . . . . . . . .     2,973,133 

</TABLE>
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 $2,684,707 and the Managing General Partner 
contributed $583,924 in accordance with the Agreement.  Syndication cost and
Management fee of $349,012 were incurred leaving available capital of 
$2,919,619 for Partnership activities.

      The Partnership began exploration and development activities subsequent
to the funding of the Partnership and completed these activities by December
31, 1996.  Fifteen wells have been drilled, all of which have been completed
as producers.

      The Partnership had net working capital at December 31, 1996 of $95,673.

      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

      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.

<PAGE>
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 F-1.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.

         NONE.

                                      Part III

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.  MANAGEMENT REMUNERATIONS AND TRANSACTIONS.

         NON-APPLICABLE.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         NON-APPLICABLE.


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 period ended December 31, 1996.


        Sales of Leases                              $  106,360
        Footage Drilling Contracts, Services,
         Chemicals, Supplies, and Equipment           2,793,258
        Operator's Charges                               10,842
        Syndication cost and management fee             349,012
        Tax return preparation                            2,945
        Direct administrative cost                        1,000

                                       PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

        (a)  (1)  Financial Statements

             See Index to Financial Statements on F-2

             (2)  Financial Statement Schedules

             See Index to Financial Statements on page F-2.  All financial
             statement schedules are omitted because they are not required,
             inapplicable, or the information is included in the Financial 
             Statements or Notes thereto.

             (3)  Exhibits
   
             See Exhibits Index on page E-1
<PAGE>
                                                               CONFORMED COPY



                                    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 1996-B Limited Partnership
                                                By its Managing General Partner
                                                Petroleum Development 
                                                Corporation



                                                By /s/ James N. Ryan         
                                                  James N. Ryan, Chairman



                                                March 24, 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 24, 1997



/s/ Steven R. Williams     President and Director
Steven R. Williams                                             March 24, 1997



/s/ Dale G. Rettinger      Executive Vice President,
Dale G. Rettinger          Treasurer and Director              March 24, 1997
                           (principal financial and
                           accounting officer)



/s/ Roger J. Morgan        Secretary and Director
Roger J. Morgan                                                March 24, 1997

  <PAGE>




















                                   PDC 1996-B LIMITED PARTNERSHIP
                                  (A West Virginia Limited Partnership)

                                   Financial Statements for Annual Report
                                   on Form 10-K to Securities and Exchange
                                   Commission

                                   Period from September 9, 1996 (Date of 
                                   Inception) to December 31, 1996

                                  (With Independent Auditors' Report Thereon)































                                         F-1
<PAGE>
                           PDC 1996-B LIMITED PARTNERSHIP
                        (A West Virginia Limited Partnership)



                            Index to Financial Statements



Independent Auditors' Report                                   F-3
Balance Sheet - December 31, 1996                              F-4
Statement of Operations - Period from September 9, 1996
 (Date of Inception) to December 31, 1996                      F-5
Statement of Partners' Equity - Period from September 9, 1996
 (Date of Inception) to December 31, 1996                      F-6
Statement of Cash Flows - Period from September 9, 1996
 (Date of Inception) to December 31, 1996                      F-7
Notes to Financial Statements                                  F-8




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.





































                                         F-2<PAGE>








                            Independent Auditors' Report



To the Partners
PDC 1996-B  Limited Partnership:

We have audited the financial statements of PDC 1996-B 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 audit.

We conducted our audit in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free
of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audit provides a 
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of PDC 1996-B Limited 
Partnership as of December 31, 1996, and the results of its operations and
its cash flows for the period from September 9, 1996 (date of inception) to 
December 31, 1996, in conformity with generally accepted accounting principles.







                                                        KPMG Peat Marwick LLP



Pittsburgh, Pennsylvania
March 20, 1997













                                         F-3
<PAGE>
                           PDC 1996-B LIMITED PARTNERSHIP
                        (A West Virginia Limited Partnership)

                                    Balance Sheet

                                  December 31, 1996


          Assets

Current assets:
      Cash                                                    $    30,706
      Accounts receivable - oil and gas revenues                   79,517

        Total current assets                                      110,223

Oil and gas properties, successful efforts method
      (Notes 3 and 5):
        Oil and gas properties                                  2,899,619
        Less accumulated depreciation, depletion and
          amortization                                             36,709
                                                                2,862,910

                                                              $ 2,973,133


      Current Liabilities and Partners' Equity

Current liabilities:
      Accrued expenses                                        $     9,474
      Due to Managing General Partner                               5,076
        Total current liabilities                                  14,550

Partners' equity                                                2,958,583


                                                              $ 2,973,133



See accompanying notes to financial statements.





















                                         F-4
<PAGE>
                           PDC 1996-B LIMITED PARTNERSHIP
                        (A West Virginia Limited Partnership)
                                          
                               Statement of Operations

       Period from September 9, 1996 (Date of Inception) to December 31, 1996



Revenues:
      Sales of oil and gas                                      $   90,359 
      Interest income                                                5,630 
                                                                    95,989 

Expenses (note 3):
      Management fee                                                67,118 
      Lifting costs                                                 10,842 
      Independent engineering fee                                    2,000 
      Independent audit fee                                          3,273 
      Franchise taxes                                                  256 
      Direct administrative cost                                     1,000 
      Tax return preparation                                         2,945 
      Depreciation, depletion and amortization                      36,709 

                                                                   124,143 

                    Net loss                                      $(28,154)

                    Net loss per limited and additional 
                      general partner unit                        $   (268)


See accompanying notes to financial statements.





























                                         F-5<PAGE>

                             PDC 1996-B LIMITED PARTNERSHIP
                        (A West Virginia Limited Partnership)

                            Statement of Partners' Equity

       Period from September 9, 1996 (Date of Inception) to December 31, 1996








                             Limited               Managing
                             and additional        general
                             general partners      partner            Total 

Partners' initial capital
  contributions               $ 2,684,707          $  583,924     $3,268,631 
Syndication costs                (281,894)               -          (281,894)
Net income (loss)                 (35,947)             7,793         (28,154)
   Balance, December 31, 1996 $ 2,366,866         $  591,717      $2,958,583 








See accompanying notes to financial statements.




























                                         F-6<PAGE>
                           PDC 1996-B LIMITED PARTNERSHIP
                        (A West Virginia Limited Partnership)

                               Statement of Cash Flows

       Period from September 9, 1996 (Date of Inception) to December 31, 1996



Cash flows from operating activities:
   Net loss                                              $   (28,154)
   Adjustments to reconcile net loss to net cash
     used by operating activities:
      Depreciation, depletion and amortization                36,709 
      Changes in operating assets and liabilities:
        Accounts receivable - oil and gas revenues           (79,517)
        Accrued expenses                                       9,474 
        Due to Managing General Partner                        5,076 
         
      Net cash used by operating activities                  (56,412)

Cash flows from investing activities:
   Expenditures for oil and gas properties                (2,899,619)

      Net cash used by investing activities               (2,899,619)

Cash flows from financing activities:
   Limited and additional general partner contributions    2,684,707 
   Managing General Partner contribution                     583,924 
   Syndication cost paid                                    (281,894)

      Net cash provided from financing activities          2,986,737 

Net increase in cash                                          30,706 
Cash at beginning of period                                      -   
Cash at end of period                                    $    30,706 


See accompanying notes to financial statements.





















                                         F-7
<PAGE>
                           PDC 1996-B LIMITED PARTNERSHIP
                        (A West Virginia Limited Partnership)

                            Notes to Financial Statements

                                  December 31, 1996


(1)  Summary of Significant Accounting Policies

      Partnership Financial Statement Presentation Basis

      The financial statements include only those assets, liabilities and
        results of operations of the partners which relate to the business of
        PDC 1996-B Limited Partnership (the Partnership).  The statements do
        not include any assets, liabilities, revenues or expenses 
        attributable to any of the partners' other activities.

      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 costs related 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 end by an independent petroleum engineer, Wright &
        Company, Inc.  If a determination is made that an exploratory well 
        has not discovered economically producible reserves, then its costs 
        are expensed as dry hole costs.  

      The Partnership assesses impairment of capitalized costs of proved oil 
        and gas properties by comparing net capitalized costs to undiscounted 
        future net cash flows on a field-by-field basis using expected prices.
        Prices utilized for measurement purposes and expected costs are held 
        constant.  If net capitalized costs exceed undiscounted future net
        cash flow, the measurement of impairment is based on estimated fair 
        value which would consider future discounted cash flows.

      Based on the Managing General Partner's experience, management believes
        site restoration, dismantlement and abandonment costs, net of salvage
        to be immaterial in relation to operating costs.  These costs are 
        being expensed when incurred.

      Income Taxes

      Since the taxable income or loss of the Partnership is reported in the 
        separate tax returns of the partners, no provision has been made for
        income taxes on the Partnership's books.

      Under federal income tax laws, regulations and administrative rulings,
        certain types of transactions may be accorded varying interpretations.
        Accordingly, the Partnership's tax return and, consequently, 
        individual tax returns of the partners may be changed to conform to
        the tax treatment resulting from a review by the Internal Revenue 
        Service.

      Use of Estimates

      Management of the Partnership has made a number of estimates and 
        assumptions relating to the reporting of assets and liabilities and 
        revenues and expenses and the disclosure of contingent assets and 
        liabilities to prepare these financial statements in conformity with 
        generally accepted accounting principles.  Actual results could
        differ from those estimates.  Estimates which are particularly
        significant to the financial statements include estimates of
        oil and gas reserves and future cash flows from oil and gas properties.

                                                                  (Continued)
                                         F-8
<PAGE>
                           PDC 1996-B LIMITED PARTNERSHIP
                        (A West Virginia Limited Partnership)

                      Notes to Financial Statements, Continued

(2)  Organization

      The Partnership was organized as a limited partnership on September 9, 
        1996, in accordance with the laws of the State of West Virginia for the
        purpose of engaging in the drilling, completion and operation of oil 
        and gas development and exploratory wells in the Northern Appalachian
        Basin.

      Purchasers of partnership units subscribed to and fully paid for 3 
        units of limited partner interests and 131.235 units of additional 
        general partner interests at $20,000 per unit (Investor Partners). 
        Petroleum Development Corporation has been designated the Managing 
        General Partner of the Partnership.  Although costs, revenues and
        cash distributions allocable to the limited and additional general
        partners are shared pro rata based upon the amount of their
        subscriptions, including the Managing General Partner to the extent 
        of its 20% capital contributions, there are significant differences
        in the federal income tax effects and liability associated with these
        different types of units in the Partnership.

      Upon completion of the drilling phase of the Partnership's wells, all 
        additional general partners units are converted into units of limited
        partner interests and thereafter become limited partners of the
        Partnership.  Limited partners do not have any rights to convert 
        their units into units of additional general partner interests in the
        Partnership.

      In accordance with the terms of the Partnership Agreement (the 
        Agreement), the Managing General Partner manages all activities of 
        the Partnership and acts as the intermediary for substantially all 
        Partnership transactions.

(3)   Transactions with Managing General Partner and Affiliates

      The Partnership's transactions with the Managing General Partner 
        include charges for the following:
                                                           Period from     
                                                         September 9, 1996 
                                                     (date of inception) to
                                                        December 31, 1996  
                                                                           
                Drilling and completion costs               $2,793,258
                Lease acquisitions, at cost                    106,361
                Offering and organization costs
                 (includes reimbursements of
                 commissions and management fee)               349,012
                Lifting costs                                   10,842
                Tax return preparation                           2,945
                Direct administrative cost                       1,000

(4)   Allocation

      The table below summarizes the participation of the Managing General 
        Partner and the Investor Partners, taking account of the Managing 
        General Partner's capital contribution equal to 20% of the Initial
        Operating Capital, in the costs and revenues of the Partnership.








                                                                  (Continued)

                                         F-9
<PAGE>
                           PDC 1996-B LIMITED PARTNERSHIP
                        (A West Virginia Limited Partnership)

                      Notes to Financial Statements, Continued
                                                                       
                                                                Managing
                                                  Investor      General
                                                  Partners      Partner 
    Partnership Costs
Broker-dealer Commissions and Expenses(1). .      100%            0%
Management Fee . . . . . . . . . . . . . . .      100%            0%
Undeveloped Lease Costs. . . . . . . . . . .        0%          100%
Drilling and Completion Costs. . . . . . . .       80%           20%
Tangible Equipment . . . . . . . . . . . . .        0%          100%
Intangible Drilling and Development Costs. .      100%            0%
Operating Costs(2) . . . . . . . . . . . . .       80%           20%
Direct Costs(3). . . . . . . . . . . . . . .       80%           20%
Administrative Costs . . . . . . . . . . . .        0%          100%
    Partnership Revenues

Sale of Oil and Gas Production(4). . . . . .       80%           20%
Sale of Productive Properties(5) . . . . . .       80%           20%
Sale of Equipment  . . . . . . . . . . . . .        0%          100%
Sale of Undeveloped Leases . . . . . . . . .       80%           20%
Interest Income. . . . . . . . . . . . . . .       80%           20%

____________________

  (1) Organization and Offering Costs, net of the Dealer Manager
      commissions, discounts, due diligence expenses, and wholesaling fees
      of the Partnership will be paid by the Managing General Partner and
      not from Partnership funds.  In addition, Organization and Offering
      Costs in excess of 10-1/2% of Subscriptions will be paid by the
      Managing General Partner, without recourse to the Partnership.

  (2) Represents Operating costs incurred after the completion of
      productive wells, including monthly per-well charges paid to the
      Managing General Partner.

  (3) The Managing General Partner will receive monthly reimbursement from
      the Partnership for their direct costs incurred by the Managing
      General Partner on behalf of the Partnership.

  (4) The revenues and expenses to be allocated to the partners are
      subject to a special provision in the partnership agreement, whereby
      the allocable share of revenues and expenses of the Investor
      Partners may be increased and the interest of the Managing General
      Partner may be decreased if certain cash distribution levels are not
      met.  The shifting of the allocable share of revenues and expenses
      to the Investor Partners in the event that certain prescribed cash
      distribution levels are not attained may also serve to shift an
      increased amount of cash distributions to the Investor Partners and
      a decreased amount of cash distributions to the Managing General
      Partner.

  (5) In the event of the sale or other disposition of a productive well,
      a lease upon which such well is situated, or any equipment related
      to any such lease or well, the proceeds from such sale or
      disposition shall be allocated and credited to the Partners as oil 
      and gas revenues are allocated.  The term "proceeds" above does not
      include revenues from a royalty, overriding royalty, lease interest
      reserved, or other promotional consideration received by the 
      Partnership in connection with any sale or disposition, which
      revenues shall be allocated to the Investor Partners and the
      Managing General Partner in the same percentages that oil and gas
      revenues are allocated.

                                                                   (Continued)

                                     F-10
<PAGE>
                        PDC 1996-B LIMITED PARTNERSHIP
                     (A West Virginia Limited Partnership)

                   Notes to Financial Statements, Continued

(5)      Costs Relating to Oil and Gas Activities

         The Partnership is engaged solely in oil and gas activities, all of
            which are located in the continental United States.  Information
            regarding aggregate capitalized costs and results of operations for
            these activities is located in the basic financial statements. 
            Costs capitalized for these activities at December 31, 1996, are as
            follows:

         Lease acquisition costs                                $  106,360
         Intangible development costs                            2,319,695
         Well equipment                                            473,564
                                                                $2,899,619



      The following costs were incurred for the Partnership's oil and gas 
        activities:

                                                             Period from      
                                                           September 9, 1996  
                                                        (date of inception) to
                                                           December 31, 1996  
                Costs capitalized:
                  Property acquisition costs                   $  106,360 
                  Development costs                             2,793,259 
                                                               $2,899,619 
(6)  Income Taxes

      As a result of the differences in the treatment of certain items for
        income tax purposes as opposed to financial reporting purposes,
        primarily depreciation, depletion and amortization of oil and gas
        properties and the recognition of intangible drilling costs as an
        expense or capital item, the income tax basis of oil and gas properties
        differs from the basis used for financial reporting purposes.   At
        December 31, 1996, the income tax basis of the Partnership's oil and gas
        properties was $577,076.

(7)   Supplemental Reserve Information (Unaudited)

      Proved oil and gas reserves of the Partnership have been estimated by an
        independent petroleum engineer, Wright & Company, Inc.  These reserves
        have been prepared in compliance with the Securities and Exchange
        Commission rules based on year end prices.  Since December 31, 1996
        prices have declined to seasonal levels.  A copy of the reserve report
        has been made available to all partners.  All of the partnership's
        reserves are proved developed.  An analysis of the change in estimated
        quantities of proved developed oil and gas reserves is shown below:


                                                                Natural gas
                                                                    (mcf)  

            Proved developed reserves as of
              September 9, 1996 (date of inception)                   -    
            Extensions, discoveries and other
              additions                                          2,406,498 
            Production                                             (29,366)

            Proved developed reserves as of
              December 31, 1996                                  2,377,132 



                                     F-11