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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the year ended
December 31, 2001 Commission File Number 2-71865
- ----------------- ------------------------------
TEXLAND DRILLING PROGRAM-1981
-----------------------------
(Name of Registrant)
TEXAS 75-1791491
----- -----------------------------------
State of Organization) I. R. S. Employer Identification No.
777 Main Street, Suite 3200
Fort Worth, Texas 76102
- ---------------------------------------- ---------
(Address of Executive Offices) Zip Code
Registrant's Telephone Number (817) 336-2751
--------------
Securities registered pursuant to Section 12(b) of the Act:
Units of Limited Partnership Interest None
- ------------------------------------- --------------
(Title of Class) (Voting Units)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 of 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
-
This report contains a total 1 of 19 pages.
1
PART I
Item 1. Business
- -----------------
Texland Drilling Program-1981 (a Limited Partnership) was formed on July 20,
1981 with $12,125,000 in aggregate Limited Partnership subscriptions for the
purpose of engaging in the exploration for oil and gas. Such exploration has
taken place principally in the geological area known as the Texas Permian Basin.
The Partnership's drilling and exploration phase is complete. Development of the
Partnership's properties is also complete; except for possible occasional
developmental drilling which may be undertaken to the extent necessary to insure
the maximum commercial recovery of reserves. In 2001, the Partnership drilled 9
such developmental wells.
The Partnership has no plans to borrow funds or reinvest significant amounts of
oil and gas revenues. To the extent that in-fill development is deemed
advisable, however; such operations will be funded from available cash flow.
See Note 6 of Notes to the Financial Statements on page 17 for information about
major purchasers. Sales to such purchasers are on a competitive basis on
short-term contracts customarily used in the industry. Should sales to these
purchasers become interrupted, management believes alternative purchasers would
be immediately available on similar terms.
The price of oil and gas is affected by world wide supply and demand beyond the
Partnership's control. The average posted price during the past five years for
West Texas Sour (at an assumed gravity of 40 degrees), the primary type of
Partnership oil, is as follows:
1997 $16.86
1998 $ 9.88
1999 $14.46
2000 $25.29
2001 $19.16
From January 1, 2002 to March 18, 2002, oil prices of such oil ranged from a low
of $10.90 to a high of $18.15.
Item 2 - Properties
- -------------------
The Partnership currently has an interest in 258 active gross oil and gas wells,
representing 17.65 net wells. Two of the gross wells and 0.64 of the net wells
are gas wells and the remainder are oil wells.
The Partnership currently has 250 oil wells included in 8 different enhanced
recovery projects operated by Texland Petroleum, Inc. Such enhanced recovery
projects are designed to pressurize the oil bearing reservoirs and increase the
producing rates, property life and overall ultimate recovery of oil.
Item 3 - Legal Proceedings
- --------------------------
None
2
Item 4 - Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
In 2001, majority owners of aggregate Limited Partner Partnership Subscriptions
approved an amendment that extends the term of the Partnership through December
31, 2006.
PART II
Item 5 - Market for Registrant's Common Equity and Related Stockholder Matters
- ------------------------------------------------------------------------------
Omitted. Not applicable.
Item 6 - Selected Financial Data
- --------------------------------
The following table presents selected financial data for each of the past five
years ended December 31, 2001. The data has been derived from the audited
financial statements:
TEXLAND DRILLING PROGRAM - 1981
SELECTED FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31,
-------------------------------
STATEMENT OF OPERATIONS DATA:
- ----------------------------
2001 2000 1999 1998 1997
---------- ---------- ---------- ----------- ----------
Revenues $1,327,968 $1,534,376 $ 995,456 $ 930,669 $1,481,650
Net Income/(Loss):
Limited Partners 184,865 380,922 117,083 (649,141) 111,810
General Partners 254,955 407,435 171,168 (414,113) 198,949
---------- ---------- ---------- ----------- ----------
Net Income/(Loss): $ 439,820 $ 788,357 $ 288,251 $(1,063,254) $ 310,759
========== ========== ========== =========== ==========
Net Income/(Loss) per $5,000
Limited Partner Units (2,425
Units Outstanding) $ 76 $ 157 $ 48 $ (268) $ 46
========== ========== ========== =========== ==========
BALANCE SHEET DATA:
- ------------------
Total Assets $1,457,338 $1,570,122 $1,679,430 $ 1,716,897 $3,124,611
Total Liabilities $ 55,102 $ 48,398 $ 38,017 $ 43,557 $ 46,981
Partners' Equity $1,402,236 $1,521,724 $1,641,413 $ 1,673,340 $3,077,630
PARTNERSHIP CASH DISTRIBUTIONS
- ------------------------------
Limited Partner (per $5,000 unit) $ 108 $ 175 $ 53 $ 85 $ 110
General Partner $ 348,100 $ 490,791 $ 197,900 $ 159,100 $ 430,700
3
Item 7 - Management's Discussion and Analysis of Financial Condition and Results
- --------------------------------------------------------------------------------
of Operations.
- -------------
Financial Results
- -----------------
Oil and gas sales decreased by approximately 11% in 2001 as compared to 2000.
The average price of Partnership oil decreased by approximately 24% in 2001. The
price of gas sold by the Partnership increased by approximately 29% in 2001. Gas
sales represent approximately 20% of 2001 total oil and gas sales. The net
change in oil and gas sales is due primarily to such oil and gas price changes
in 2001.
Oil and gas sales increased by approximately 49% in 2000 as compared to 1999.
The average price of Partnership oil increased by approximately 80% in 2000.
Fees to the managing general partner remained constant over the period 1999
through 2001.
Depreciation, depletion and amortization are calculated on the
units-of-production method. Therefore, changes in these amounts are affected by
upward or downward revisions in future oil and gas reserve estimates. In
addition, such revisions are also caused by changes in current prices of oil and
gas, which correspondingly affect the number of future years that oil and gas
properties will remain economically viable.
Depreciation and depletion for 2001 is $204,153 as compared to $130,877 for
2000. Changes in depreciation and depletion for the period 1999 through 2001,
are due primarily to the effect that changes in oil and gas prices have on the
calculation of estimated future economically recoverable oil and gas reserves.
Production expenses increased by 15% in 2001 as compared to 2000 due to an
increase in workovers. Production expenses increased by 11% in 2000 as compared
to 1999 due to increased production.
Changes in oil prices substantially impact the net income and cash flow of the
Partnership. All oil produced by the Partnership is sold under short term
contracts that are immediately affected by changes in oil prices. Since 1981,
world oil supply and demand conditions have caused prices to rise and decline in
an essentially unpredictable manner. No changes in these circumstances are
foreseen in the immediate future.
Texland Drilling Program-1981 has substantially completed all the exploration
and development on the oil and gas properties in which it has an interest. No
long-term debt will be incurred and no new properties will be acquired.
Therefore, no future liquidity problems are anticipated by the Partnership.
Item 8 - Financial Statements and Supplementary Data:
- ----------------------------------------------------
See Index to Financial Statements on Page 9 of this report.
Item 9 - Changes in and Disagreements with Accountants on Accounting and
- ------------------------------------------------------------------------
Financial Disclosures.
- ---------------------
None.
4
PART III
Item 10. Directors and Executive Officers of the Registrant
- ------------------------------------------------------------
The Partnership has no officers, employees or directors. The background of the
General Partners is as follows:
R. J. Schumacher - Age 73, Vice President and Co-Owner of Texland Petroleum,
- ----------------
Inc. since May, 1967, has been an independent oil operator involved in drilling
and producing operations and the financing of oil and gas prospects, principally
in West Texas, Oklahoma and Arkansas. He has served as an executive officer with
Texland since its incorporation. For more than ten years prior to becoming an
independent oil operator, Mr. Schumacher was the chief financial officer,
contract drilling manager and land supervisor for an independent oil and gas
drilling contractor and operator. Mr. Schumacher is a Certified Public
Accountant. He received a Bachelor of Science in Commerce degree from Texas
Christian University in 1950 and a Master in Professional Accounting degree from
the University of Texas in 1951.
J. N. Namy - Age 63 President and Chief Executive Officer of Texland Petroleum,
- ----------
Inc., was employed by Texland as a geologist in June 1978. From 1967 to 1970 he
was employed by Pan American Petroleum Corp. in the Fort Worth Division. From
1970 to 1978 he taught at Baylor University achieving the rank of Associate
Professor. During this time, he served as a consultant for several independent
petroleum companies working on exploration and development projects in the
Eastern Shelf and the Permian Basin of West Texas and New Mexico, as well as the
southern Rockies of New Mexico and Colorado. He received his Bachelor and Master
degrees from Western Reserve University in Cleveland, Ohio and his Ph. D. degree
from the University of Texas at Austin in 1969. Mr. Namy is a member of the
American Association of Petroleum Geologists, Geological Society of America and
the Society of Economic Paleontologists and Mineralogists.
J. H. Wilkes - Age 46, President and Chief Operating Officer of Texland
- ------------
Petroleum, Inc., was employed by Texland as a reservoir engineer in August 1984.
From 1978 to 1984, he was employed by Sun Exploration and Production Company in
Midland and Abilene, Texas. The first three years he served as a production
engineer and for the remaining three years he served as a reservoir engineer. He
received a Bachelor of Science degree in Petroleum Engineering from Texas A&M
University in 1978. He is a member of the Society of Petroleum Engineers,
A.I.M.E. and is a registered professional engineer in Texas.
Item 11. Executive Compensation
- --------------------------------
See Note 5 of Notes to Financial Statements on page 17 of this report for
information with respect to payments to the Managing General Partner.
5
Item 12. Security Ownership of Certain Beneficial Owners and Management
- ------------------------------------------------------------------------
Omitted. Not applicable to Registrant.
Texland Petroleum, Inc. and Texland Properties-1981 are General Partners of the
Partnership. Texland Petroleum, Inc. is the managing General Partner. Texland
Properties-1981 is a general partnership formed between W. E. Rector, R. J.
Schumacher and Texland Petroleum, Inc. Due to the death of W. E. Rector, the W.
E. Rector interest is now held by the Rector Living Trust.
Item 13. Certain Relationships and Related Transactions
- --------------------------------------------------------
See Notes 4 and 5 of Notes to Financial Statement on page 17 of this report for
information with respect to certain relationships and related transactions.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
- -------------------------------------------------------------------------
(a)1 and (a)2 Financial Statement and Financial Statement Schedules
See Index to Financial Statements on page 9 of this report.
(a)3 Item 601 (Reg. S-K) Exhibits:
None
(b) Reports on Form 8-K:
None
(c) Item 601 (Reg. S-K) Exhibits:
None
(d) Other Financial Statements and Financial Statement Schedules:
Not applicable.
6
SIGNATURE
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.
TEXLAND DRILLING PROGRAM-1981
- -----------------------------
Registrant
By /s/ M. E. Chapman
---------------------------------------
M.E. Chapman, Vice President - Finance
Texland Petroleum, Inc. Date March 27, 2002
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following person on behalf of the registrant and in
the capacities and on the dates indicated.
By /s/ R. J. Schumacher
---------------------------------------
R.J. Schumacher, Vice President
Texland Petroleum, Inc. Date March 27, 2002
By /s/ J. N. Namy
---------------------------------------
J.N. Namy, President & C.E.O.
Texland Petroleum, Inc. Date March 27, 2002
By /s/ J. H. Wilkes
---------------------------------------
J.H. Wilkes, President & C.O.O.
Texland Petroleum, Inc. Date March 27, 2002
7
- --------------------------------------------------------------------------------
Texland Drilling Program-1981, Ltd.
Financial Statements
December 31, 2001
- --------------------------------------------------------------------------------
8
Texland Drilling Program-1981, Ltd.
Table of Contents
- --------------------------------------------------------------------------------
Report of Independent Auditors .............................................. 10
- ------------------------------
Balance Sheets .............................................................. 11
- --------------
Statements of Operations .................................................... 12
- ------------------------
Statements of Partners' Capital ............................................. 13
- -------------------------------
Statements of Cash Flows .................................................... 14
- ------------------------
Notes to Financial Statements ............................................... 15
- -----------------------------
All financial statement schedules have been omitted since the required
information is included in the financial statements or the notes thereto or is
not applicable or not required.
- --------------------------------------------------------------------------------
9
REPORT OF INDEPENDENT AUDITORS
The Partners
Texland Drilling Program-1981, Ltd.
We have audited the balance sheets of Texland Drilling Program-1981, Ltd. as
of December 31, 2001 and 2000, and the related statements of operations,
partners' capital and cash flows for each of the three years in the period
ended December 31, 2001. 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 auditing standards generally
accepted in the United States of America. 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 listed in the accompanying index to
the financial statements present fairly, in all material respects, the
financial position of Texland Drilling Program-1981, Ltd. at December 31,
2001 and 2000, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 2001, in conformity with
accounting principles generally accepted in the United States of America.
Fort Worth, Texas
March 4, 2002
10
Texland Drilling Program-1981, Ltd. (A Limited Partnership)
Balance Sheets
December 31, 2001 and 2000
- --------------------------------------------------------------------------------
2001 2000
------------ ------------
ASSETS
Current Assets
Cash $ 2,599 $ 58,887
Accounts receivable:
Trade 91,976 145,346
Managing general partner 18,844
------------ ------------
113,419 204,233
------------ ------------
Property and Equipment, at Cost Using the
Successful Efforts Method
Intangible development costs 7,244,553 7,107,019
Lease and well equipment 4,202,099 4,170,251
Producing leaseholds 161,495 161,495
------------ ------------
11,608,147 11,438,765
Accumulated depreciation, depletion and amortization (10,264,228) (10,072,876)
------------ ------------
1,343,919 1,365,889
------------ ------------
$ 1,457,338 $ 1,570,122
============ ============
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities
Accounts payable:
Managing general partner $ 55,102 $ 48,398
------------ ------------
Partners' Capital
Limited partners, 2,425 units outstanding 1,241,922 1,318,957
General partners 160,314 202,767
------------ ------------
1,402,236 1,521,724
------------ ------------
$ 1,457,338 $ 1,570,122
============ ============
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
11
Texland Drilling Program-1981, Ltd. (A Limited Partnership)
Statements of Operations
For the Years Ended December 31, 2001, 2000 and 1999
- --------------------------------------------------------------------------------
2001 2000 1999
----------- ----------- ---------
Revenue
Oil and gas sales $ 1,313,969 $ 1,481,720 $ 994,675
Interest income 1,198 2,839 781
Gain on sale of assets 12,801 47,751
Other 2,066
----------- ----------- ---------
1,327,968 1,534,376 995,456
----------- ----------- ---------
Expense
Fees to managing general partner 87,900 87,900 87,900
Production expense 504,158 436,551 393,804
Severance tax 68,780 75,118 49,014
Depreciation, depletion and amortization 204,153 130,877 158,620
Other 23,157 15,573 17,867
----------- ----------- ---------
888,148 746,019 707,205
----------- ----------- ---------
Net Income $ 439,820 $ 788,357 $ 288,251
=========== =========== =========
Allocation of Net Income
Limited partners $ 184,865 $ 380,922 $ 117,083
General partners 254,955 407,435 171,168
----------- ----------- ---------
$ 439,820 $ 788,357 $ 288,251
=========== =========== =========
Net Income per $5,000 Limited
Partner Unit (2,425 Units Outstanding) $ 76 $ 157 $ 48
=========== =========== =========
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
12
Texland Drilling Program-1981, Ltd. (A Limited Partnership)
Statements of Partners' Capital
For the Years Ended December 31, 2001, 2000 and 1999
- --------------------------------------------------------------------------------
Limited General
Partners Partners Total
------------ ------------ --------------
Balance at December 31, 1998 $ 1,371,427 $ 301,913 $ 1,673,340
Partners' distributions (127,312) (197,900) (325,212)
Partners' contributions 5,034 5,034
Net income 117,083 171,168 288,251
------------ ----------- -------------
Balance at December 31, 1999 1,361,198 280,215 1,641,413
Partners' distributions (423,163) (490,791) (913,954)
Partners' contributions 5,908 5,908
Net income 380,922 407,435 788,357
------------ ----------- -------------
Balance at December 31, 2000 1,318,957 202,767 1,521,724
Partners' distributions (261,900) (348,100) (610,000)
Partners' contributions 50,692 50,692
Net income 184,865 254,955 439,820
------------ ----------- -------------
Balance at December 31, 2001 $ 1,241,922 $ 160,314 $ 1,402,236
============ =========== =============
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
13
Texland Drilling Program-1981, Ltd. (A Limited Partnership)
Statements of Cash Flows
For the Years Ended December 31, 2001, 2000 and 1999
- --------------------------------------------------------------------------------
2001 2000 1999
--------- --------- ---------
Cash Flows From Operating Activities
Net income $ 439,820 $ 788,357 $ 288,251
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation, depletion and amortization 204,153 130,877 158,620
Gain on sale of assets (12,801) (47,751)
(Increase) decrease in accounts receivable 34,526 (15,697) (56,496)
Increase (decrease) in accounts payable 6,704 10,381 (5,540)
--------- --------- ---------
Net cash provided by operating activities 672,402 866,167 384,835
--------- --------- ---------
Cash Flows From Investing Activities
Acquisition of property and equipment (182,183) (21,992) (5,894)
Proceeds from sale of assets 12,801 55,687
--------- --------- ---------
Net cash used in investing activities (169,382) 33,695 (5,894)
--------- --------- ---------
Cash Flows From Financing Activities
Partners' contributions 50,692 5,908 5,034
Partners' distributions (610,000) (913,954) (325,212)
--------- --------- ---------
Net cash used in financing activities (559,308) (908,046) (320,178)
--------- --------- ---------
Net Change in Cash (56,288) (8,184) 58,763
Cash - beginning of year 58,887 67,071 8,308
--------- --------- ---------
Cash - End of Year $ 2,599 $ 58,887 $ 67,071
========= ========= =========
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
14
Texland Drilling Program-1981, Ltd. (A Limited Partnership)
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Summary of Significant Accounting Policies
Texland Drilling Program-1981, Ltd. (the "Partnership") was organized as a
limited partnership on July 20, 1981, for the purpose of engaging in oil and gas
exploration and production. Texland Properties-1981, a general partnership, and
Texland Petroleum, Inc. are the general partners. The managing general partner
is Texland Petroleum, Inc. Partnership operations are conducted predominately in
West Texas.
The Partnership shall continue in existence, unless terminated sooner through
the occurrence of a final terminating event as defined by the Partnership
agreement, until December 31, 2006, as extended through approval by the limited
partners owning a majority of aggregate Partnership subscriptions.
The Partnership's accounting policies are summarized below:
Basis of Accounting
The Partnership maintains its financial records on the income tax basis. The
financial statements are presented in accordance with generally accepted
accounting principles. The primary differences in accounting methods are
identified in Note 7.
Use of Estimates
The preparation of financial statements in accordance 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
reported revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Property and Equipment
Costs incurred for the acquisition of producing and nonproducing leaseholds are
capitalized. Costs of intangible development and lease and well equipment
incurred to drill and equip successful exploratory and development wells are
capitalized. Costs to drill and equip unsuccessful exploratory wells are charged
to operations while costs of unsuccessful development wells remain capitalized.
Costs associated with uncompleted wells are capitalized as wells-in-progress.
Nonproducing Leaseholds
Costs of nonproducing properties are charged to expense at such time as they are
deemed to be impaired, based upon periodic assessments of such costs.
Amortization and Depletion
Leasehold costs of producing properties are amortized on the unit-of-production
method based on estimated proved oil and gas reserves. Intangible development
costs of producing properties are amortized on the unit-of-production method
based on estimated proved developed oil and gas reserves.
Depreciation
Depreciation of equipment is provided by the unit-of-production method based on
estimated proved developed oil and gas reserves.
- --------------------------------------------------------------------------------
15
Texland Drilling Program-1981, Ltd. (A Limited Partnership)
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Summary of Significant Accounting Policies (continued)
Income Taxes
No provision for income taxes has been made, since such liability is that of the
Partners rather than that of the Partnership.
Statement of Cash Flows
For purposes of these statements, the Partnership considers cash on deposit and
highly liquid money market funds as cash and cash equivalents.
Allocation of Net Income
Revenues and costs of the Partnership are allocated between the general and
limited partners in accordance with the Partnership agreement.
Fair Values of Financial Instruments
The Partnership's financial instruments consist of cash, accounts receivable and
accounts payable. The carrying amount of each of these financial instruments
reported in the accompanying balance sheets approximate the instruments fair
value.
2. Costs Incurred in Oil and Gas Producing Activities
The following summarizes the Partnership's costs incurred in its oil and gas
activities, all of which were conducted within the United States, for the years
ended December 31:
Lease Acquisition Costs Development Costs
----------------------------- -----------------------------
Expensed Capitalized Expensed Capitalized
------------ --------------- ------------ ---------------
1999 $ 1,084 $ 119 $ 4,810
2000 19 56 21,973
2001 262 187,977
3. Acquisition of Nonproducing Properties
The Partnership acquired working interests in certain oil and gas properties
through assignments from other Texland Drilling Program partnerships. These
acquisitions involved no cost to the Partnership and are subject to retained
nonworking interests by the assignor. Upon payout of these properties, the
assignor has an option to convert the retained nonworking interest to a working
interest.
4. Contributions by General Partners
Under terms of the Partnership agreement, Texland Properties-1981 is charged for
certain costs related to drilling and production operations, which are required
to be capitalized for federal income tax purposes. These costs are treated as
capital contributions. In addition, Texland Properties-1981
- --------------------------------------------------------------------------------
16
Texland Drilling Program-1981, Ltd. (A Limited Partnership)
Notes to Financial Statements
- --------------------------------------------------------------------------------
4. Contributions by General Partners (Continued)
and Texland Petroleum, Inc. have invested in limited partnership units in the
amount of $95,000 and $30,000, respectively. These investments as a limited
partner are reported with other limited partners' capital in the accompanying
financial statements.
5. Payments to Managing General Partner
The Partnership was charged $166,358, $166,127 and $161,107 in 2001, 2000 and
1999, respectively, for technical and accounting services performed by employees
of the managing general partner. These charges are included in intangible
development costs, production expenses and fees to managing general partner.
Supervisory fees charged to the Partnership by the managing general partner for
drilling and operating the partnership wells were $146,869, $134,936 and
$131,552, in 2001, 2000 and 1999, respectively, and are included in intangible
development costs and production expenses.
These charges are allocated between the general and limited partners based upon
applicable revenue and expense sharing rates.
6. Major Purchasers
Purchasers, which accounted for 10% or more of the Partnership's sales, were as
follows:
2001 2000 1999
------------- ------------- -------------
AMOCO Production Company 30% 34% 31%
Phillips Petroleum 45% 51% 47%
Highland Energy Company 24% 14%
------------- ------------- -------------
99% 99% 78%
============= ============= =============
Texland Petroleum, Inc. receives substantially all revenues directly from the
purchasers and subsequently disburses these revenues to interest owners.
Substantially all trade accounts receivable were due from Texland Petroleum,
Inc. at December 31, 2001 and 2000.
- --------------------------------------------------------------------------------
17
Texland Drilling Program-1981, Ltd. (A Limited Partnership)
Notes to Financial Statements
- --------------------------------------------------------------------------------
7. Reconciliation of Book-Tax Reporting Differences
Although the Partnership financial statements are prepared in accordance with
generally accepted accounting principles, its books and records are maintained
on the basis of accounting used for federal income tax purposes.
Limited General
Partners Partners Total
------------ ------------ -------------
Net Income Differences:
Net income for financial reporting
purposes $ 184,865 $ 254,955 $ 439,820
---------- --------- ---------
Expenses for federal income tax purposes
capitalized for financial reporting purposes (137,533) (137,533)
Additional gain on sale of assets for federal
income tax purposes 3,082 2,961 6,043
Excess of depreciation, depletion and
amortization expense for financial
reporting purposes over amounts for
federal income tax purposes 132,802 34,087 166,889
---------- --------- ---------
Additional income for federal income
tax purposes (1,649) 37,048 35,399
---------- --------- ---------
Net income for federal income tax purposes $ 183,216 $ 292,003 $ 475,219
========== ========= =========
- --------------------------------------------------------------------------------
18
Texland Drilling Program-1981, Ltd. (A Limited Partnership)
Notes to Financial Statements
- --------------------------------------------------------------------------------
7. Reconciliation of Book-Tax Reporting Differences (continued)
Limited General
Partners Partners Total
------------ ------------ ------------
Partners' Capital Differences:
Partners' capital at December 31, 2001,
for financial reporting purposes $ 1,241,922 $ 160,314 $ 1,402,236
Additional income (loss) for federal
income tax purposes:
2001 (1,649) 37,048 35,399
2000 71,096 19,652 90,748
1999 96,076 20,149 116,225
1998 773,151 510,714 1,283,865
1997 112,381 132,092 244,473
1996 99,228 74,176 173,404
1995 157,172 120,204 277,376
1994 197,999 107,966 305,965
1993 277,730 214,742 492,472
1992 240,459 100,370 340,829
1991 318,408 152,615 471,023
1990 550,882 160,269 711,151
1989 552,963 120,851 673,814
1988 795,772 (36,000) 759,772
1987 517,630 (3,242) 514,388
1986 332,931 (253,798) 79,133
1985 921,282 (682,039) 239,243
1984 1,276,759 (479,063) 797,696
1983 1,145,881 76,871 1,222,752
1982 (503,533) (134,627) (638,160)
1981 (8,051,462) (125,697) (8,177,159)
Investment tax credit basis reduction not
recognized for financial reporting purposes (39,178) (39,178)
------------ ------------ ------------
Partners' capital December 31, 2001,
for federal income tax purposes $ 1,123,078 $ 254,389 $ 1,377,467
============ ============ ============
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19