Back to GetFilings.com

Table of Contents

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

Form 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)

OF THE SECURITIES EXCHANGE ACT OF 1934

TEXLAND DRILLING PROGRAM-1981, LTD.

(Name of Registrant)

Registrant’s Telephone Number (817) 336-2751

Securities registered pursuant to Section 12(b) of the Act:

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  ¨             

This report contains a total of 10 pages.

Table of Contents

Texland Drilling Program-1981, Ltd.

Index To Financial Statements

Reference Page

2

Table of Contents

Texland Drilling Program—1981, Ltd.

(A Limited Partnership)

Balance Sheets

March 31, 2003 and December 31, 2002

(Unaudited)

See accompanying notes to financial statements.

3

Table of Contents

Texland Drilling Program—1981, Ltd.

(A Limited Partnership)

Statements of Operations

March 31, 2003 and 2002

(Unaudited)

See accompanying notes to financial statements.

4

Table of Contents

Texland Drilling Program—1981, Ltd.

(A Limited Partnership)

Statements of Partners’ Capital

Three Months Ended March 31, 2003

(Unaudited)

See accompanying notes to financial statements.

5

Table of Contents

Texland Drilling Program—1981, Ltd.

(A Limited Partnership)

Statements of Cash Flow

Three Months Ended March 31, 2003 and 2002

(Unaudited)

See accompanying notes to financial statements.

6

Table of Contents

Texland Drilling Program—1981, Ltd.

(A Limited Partnership)

Notes to Financial Statements

March 31, 2003

(Unaudited)

1. Summary Of Significant Accounting Policies

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, L.P. are the General Partners. The Managing General Partner is Texland Petroleum, L.P. The Partnership’s accounting policies are summarized below:

Basis Of Accounting

The Partnership follows generally accepted accounting principles applicable to established enterprises in the extractive industries under a method which is generally known as the successful method of accounting.

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.

Abandoned 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.

Depletion

Leasehold costs of producing properties are amortized on the unit of production method based on 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 using the unit of production method based on estimated proved developed oil and gas reserves.

Organization Costs

These costs are amortized by the straight-line method over ten years, the life of the Partnership.

Federal Income Tax

The Partnership files its federal income tax return on the accrual basis.

2. Contributions By General Partner (Texland Properties-1981)

Under terms of the Partnership Agreement, the General Partner 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 by the General Partner. In addition, Texland Properties-1981 and Texland Petroleum, L.P. have invested in limited partnership units in the amount of $95,000 and $30,000 respectively.

7

Table of Contents

Texland Drilling Program—1981, Ltd.

(A Limited Partnership)

Notes to Financial Statements (Continued)

March 31, 2003

(Unaudited)

3. Fees To Managing General Partner (Texland Petroleum, L.P.)

In consideration of its management services rendered, the Managing General Partner is entitled to charge management fees to the Partnership. In addition, for the three months ended March 31, 2003 and March 31, 2002, the Partnership was charged $42,523 and $41,590 respectively for technical services, accounting services, and supervisory services performed by the employees of the Managing General Partner and such charges are included in intangible development costs, production expenses and fees to Managing General Partner. These charges are allocated between the General and Limited Partners based upon applicable revenue and expense sharing rates.

8

Table of Contents

Texland Drilling Program—1981, Ltd.

(A Limited Partnership)

Management’s Discussion And Analysis Of Financial

Condition And Results Of Operations

March 31, 2003

The Partnership’s approximate average price actually received per barrel of oil for the first quarter of 2003 was $30.60 as compared to $18.60 for the first quarter of 2002. The increased revenue and related severance tax expense result primarily from such increase in average oil and gas prices. Gas sales, which represent 15-20% of total oil and gas sales, also increased significantly for this period. Gas sales are primarily short-term contracts which can vary widely from month to month.

Depreciation, depletion and amortization for the first quarter of 2003 was $32,905 as compared to $43,606 for the first quarter of 2002. Changes in depreciation and depletion for 2002 through 2003, 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.

The Partnership was formed with cash contributions from the Limited and General Partners. Management does not intend to incur any substantial indebtedness and any developmental drilling which is necessary will be processed by farmout to other parties or by reinvestment of internally generated funds. Management, therefore, anticipates no liquidity problems during the life of the Partnership.

9

Table of Contents

Part II

Items 1 through 5

Omitted—Not applicable to Registrant.

Item 6

Signature

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: May 14, 2003

10