-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O+ONu0FJFaZhCUfaHFvvrPfk5kou5UFxLYxseQwkbyAlvUHoLHTDGk57Tu+OfN0L uQkYe1g/eYQK4F8OrZTESg== 0000898733-96-000193.txt : 19960401 0000898733-96-000193.hdr.sgml : 19960401 ACCESSION NUMBER: 0000898733-96-000193 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960329 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRUDENTIAL BACHE ENERGY GROWTH FUND L P G-1 CENTRAL INDEX KEY: 0000801580 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 721081782 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-16907 FILM NUMBER: 96541827 BUSINESS ADDRESS: STREET 1: 114 NORTHPARK BLVD CITY: COVINGTON STATE: LA ZIP: 70433 BUSINESS PHONE: 5048930202 MAIL ADDRESS: STREET 1: 1 SEAPORT PLAZA STREET 2: 1 SEAPORT PLAZA CITY: NEW YORK STATE: NY ZIP: 10292 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRUDENTIAL BACHE ENERGY GROWTH FUND L P G-2 CENTRAL INDEX KEY: 0000801582 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 721098039 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-16908 FILM NUMBER: 96541828 BUSINESS ADDRESS: STREET 1: 114 NORTHPARK BLVD CITY: COVINGTON STATE: LA ZIP: 70433 BUSINESS PHONE: 5048930202 MAIL ADDRESS: STREET 1: 1 SEAPORT PLAZA STREET 2: 1 SEAPORT PLAZA CITY: NEW YORK STATE: NY ZIP: 10292 10-K 1 P-B ENERGY GROWTH FUND, L.P. G-1 & G-2 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 For the fiscal year ended December 31, 1995 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file numbers: 0-16907 0-16908 PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-1 PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-2 - -------------------------------------------------------------------------------- (Exact name of registrants as specified in their charters) 72-1081782 Delaware 72-1098039 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Nos.) One Seaport Plaza, New York, N.Y. 10292-1016 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrants' telephone number, including area code: (212) 214-1016 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: Name of each exchange Title of each Class: on which registered: - --------------------- ---------------------- None None SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: Name of each exchange Title of each Class: on which registered: - --------------------- ---------------------- Depositary Units None Indicate by check mark whether the Registrants (1) have 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 Registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes _CK_ 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 Registrants' 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. _CK_ DOCUMENTS INCORPORATED BY REFERENCE Amended and Restated Agreements of Limited Partnership included as part of the Registration Statement filed with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act of 1933 is incorporated by reference into Part IV of this Annual Report on Form 10-K Index to exhibits can be found on pages 33 through 37. PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-1 PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-2 (in process of liquidation) TABLE OF CONTENTS
PART I PAGE ------ Item 1 Business......................................................................... 3 Item 2 Properties....................................................................... 3 Item 3 Legal Proceedings................................................................ 3 Item 4 Submission of Matters to a Vote of Unit Holders.................................. 4 PART II Item 5 Market for the Partnerships' Depositary Units and Related Unit Holder Matters.... 4 Item 6 Selected Financial Data.......................................................... 5 Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations..................................................................... 6 Item 8 Financial Statements and Supplementary Data...................................... 9 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure..................................................................... 30 PART III Item 10 Directors and Executive Officers of the Registrants.............................. 31 Item 11 Executive Compensation........................................................... 32 Item 12 Security Ownership of Certain Beneficial Owners and Management................... 32 Item 13 Certain Relationships and Related Transactions................................... 32 PART IV Item 14 Exhibits, Financial Statement Schedules, and Reports on Form 8-K Financial Statements and Financial Statement Schedules........................... 33 Exhibits......................................................................... 33 Reports on Form 8-K.............................................................. 37 SIGNATURES.................................................................................. 38
2 PART I Item 1. Business General Prudential-Bache Energy Growth Fund, L. P. G-1 and Prudential-Bache Energy Growth Fund, L.P. G-2, (``G-1 Partnership'' and ``G-2 Partnership,'' respectively, and collectively referred to hereafter as the ``Partnerships''), were organized under the laws of the state of Delaware by their ``General Partners,'' Prudential-Bache Properties, Inc. (``PBP'') and Graham Energy, Ltd. (``GEL'') and a limited partner, the ``Depositary,'' to offer ``Depositary Units'' (Depositary Units represent the assignment of substantially all of the attributes of limited partner interests). The Depositary is the sole limited partner in the Partnerships and serves in such capacity on behalf of the ``Unit Holders'' (Unit Holders are investors who subscribed for and purchased Depositary Units). PBP and GEL are both subsidiaries of Prudential Securities Group Inc. (``PSGI''). Prudential Securities Incorporated (``PSI'') is also a wholly-owned subsidiary of PSGI. The Partnerships were formed with the primary objective of making investments in oil and gas related entities and assets. The Partnerships' investments were all made during a period of what was then believed to be temporarily depressed conditions in the oil and gas industry, in an attempt to take advantage of these conditions and realize returns and appreciation on these investments in the event of a substantial increase in oil and gas prices and related industry activities. In July 1994, the General Partners solicited the consents of the Unit Holders of each of the Partnerships to the adoption by each Partnership of a Plan of Dissolution and Liquidation (the ``Plan''). Consent Solicitation Statements, dated June 24, 1994, with respect to the proposal to adopt the Plan for each Partnership were mailed to Unit Holders on July 5, 1994. Supplements to the Consent Solicitation Statements, dated August 23, 1994, were mailed to Unit Holders on August 25, 1994. In accordance with the procedures described in the Consent Solicitation Statements, the General Partners accepted consent forms from Unit Holders which were postmarked on or before August 31, 1994. As of September 8, 1994, the General Partners had received consent forms from Unit Holders owning a majority of the outstanding Depositary Units in each of the Partnerships. Of the consent forms received by the General Partners, Depositary Units representing 60% and 62% of the outstanding Depositary Units for G-1 and G-2 Partnerships, respectively, voted to consent to the Plan and approve the liquidation of the Partnerships. Accordingly, the Partnerships adopted the Plan and were dissolved effective as of August 31, 1994. In accordance with the terms of the Plan, the General Partners, acting as liquidating agents, commenced the liquidation of the Partnerships' remaining assets and liabilities. Since that date, the General Partners have sold all of the investments of each of the Partnerships. The Partnerships' ability to make further distributions will depend upon the amounts required to pay costs to be incurred in connection with certain litigation surrounding the operations of investments previously owned by the Partnerships as well as general and administrative and other costs to be incurred in connection with the liquidation and termination of the Partnerships and any other liabilities which may arise prior to the Partnerships' termination. Employees The Partnerships have no officers, directors or employees. The business of the Partnerships is being conducted by the General Partners, as liquidating agents, pursuant to the terms of the Plan. See Notes 1 and 3 of Item 8 Financial Statements and Supplementary Data for further information. Item 2. Properties G-1 and G-2 Partnerships acquired interests in producing oil and gas wells through foreclosures and as incidental parts of other investments. The Partnerships sold substantially all of their interests in oil and gas properties during the year ended December 31, 1993 and the remainder during 1994. See Note 7 of Item 8 Financial Statements and Supplementary Data for further discussion. Item 3. Legal Proceedings This information is incorporated by reference to Note 8 of Item 8 Financial Statements and Supplementary Data. 3 Item 4. Submission of Matters to a Vote of Unit Holders There were no matters which were submitted to Unit Holders during the quarter ended December 31, 1995. However, in July 1994, Consent Solicitation Statements were sent to all Unit Holders. See Item 1 for further information. PART II Item 5. Market for the Partnerships' Depositary Units and Related Unit Holder Matters Market Information Depositary Units were originally sold for a price of $1,000 (subject to volume discounts, which did not affect the net proceeds to the Partnerships, for subscriptions of $250,000 or more). Depositary Units are not traded on any exchange. There is no immediate public or organized trading market for the Depositary Units. PBP has become aware of certain transfers of Depositary Units between Unit Holders and third parties; however, these transfers have been limited and sporadic. The dissolution of the Partnerships following the adoption of the Plan has likely limited further the ability to transfer Units. The number of Unit Holders as of March 14, 1996 are shown below: G-1 Partnership 6,943 G-2 Partnership 11,375
Distributions The Partnerships have historically made distributions to Unit Holders out of available cash. Since the adoption of the Plan, the General Partners have sold all of the Partnerships' investments and have made cash distributions to the Unit Holders primarily with the proceeds generated therefrom, after retaining certain amounts for the estimated costs of satisfying claims of the Partnerships. The Partnerships' ability to make further distributions will depend upon the amounts required to pay costs to be incurred in connection with certain litigation surrounding the operations of investments previously owned by the Partnerships as well as general and administrative and other costs to be incurred in connection with the liquidation and termination of the Partnerships and any other liabilities which may arise prior to the Partnerships' termination. The following is a summary of cash distributions (all of which represent a return of capital) paid during the years ended December 31, 1995 and 1994 (in thousands):
1995 1994 -------------------- -------------------- Unit General Unit General Holders Partners Holders Partners ------- -------- ------- -------- G-1 Partnership $ 4,479 $791 $ 4,273 $ 754 G-2 Partnership 2,072 367 7,090 1,251
See Item 6 Selected Financial Data for Unit Holders' distributions on a per Depositary Unit basis. 4 Item 6. Selected Financial Data The following data for the Partnerships in thousands (except Depositary Unit and per Depositary Unit amounts) should be read in conjunction with the Financial Statements of the Partnerships and the notes thereto appearing in Item 8 Financial Statements and Supplementary Data. (For financial reporting purposes, although the Partnerships adopted the liquidation basis of accounting effective September 1, 1994, the Partnerships continued to show Statements of Operations through September 30, 1994, as the results of operations for September 1994 were not material).
G-1 Partnership -------------------------------------------- 1994 1993 1992 1991 ---------- ------- ------- -------- (9 months) For the years ended December 31, 1991, 1992 and 1993 and the nine month period ended September 30, 1994: Total revenues $ 2,953 $ 4,590 $ 5,078 $ 5,534 ---------- ------- ------- -------- ---------- ------- ------- -------- Provision for asset valuations $ -- $ 8,067 $ 1,500 $ 6,325 ---------- ------- ------- -------- ---------- ------- ------- -------- Net income (loss) from operations $ 65 $(8,814) $(2,668) $ (8,791) ---------- ------- ------- -------- ---------- ------- ------- -------- Allocation of net income (loss) from operations: Limited Partner (on behalf of Unit Holders) $ (649) $(8,953) $(2,907) $ (9,187) ---------- ------- ------- -------- ---------- ------- ------- -------- General Partners $ 714 $ 139 $ 239 $ 396 ---------- ------- ------- -------- ---------- ------- ------- -------- Unit Holders' net loss per Depositary Unit $ (7.21) $(99.48) $(32.30) $(102.08) ---------- ------- ------- -------- ---------- ------- ------- -------- For the years ended December 31: Unit Holders' cash distributions per Depositary Unit $ 47.48 $ 8.75 $ 15.01 $ 24.98 ---------- ------- ------- -------- ---------- ------- ------- -------- At December 31: Total assets $ 10,729 $11,794 $21,111 $ 24,985 ---------- ------- ------- -------- ---------- ------- ------- -------- Number of Depositary Units outstanding 90,000 90,000 90,000 90,000 ---------- ------- ------- -------- ---------- ------- ------- --------
G-2 Partnership ------------------------------------------- 1994 1993 1992 1991 ---------- ------- ------- ------- (9 months) For the years ended December 31, 1991, 1992 and 1993 and the nine month period ended September 30, 1994: Total revenues $ 1,745 $ 6,084 $ 6,091 $ 6,403 ---------- ------- ------- ------- ---------- ------- ------- ------- Provision for asset valuations $ -- $ 5,534 $ -- $ 4,874 ---------- ------- ------- ------- ---------- ------- ------- ------- Net income (loss) from operations $ (54) $(3,286) $ 1,357 $(4,292) ---------- ------- ------- ------- ---------- ------- ------- ------- Allocation of net income (loss) from operations: Limited Partner (on behalf of Unit Holders) $ (1,253) $(4,098) $(2,606) $(5,751) ---------- ------- ------- ------- ---------- ------- ------- ------- General Partners $ 1,199 $ 812 $ 3,963 $ 1,459 ---------- ------- ------- ------- ---------- ------- ------- ------- Unit Holders' net loss Per Depositary Unit $ (10.59) $(34.64) $(22.03) $(48.62) ---------- ------- ------- ------- ---------- ------- ------- ------- For the years ended December 31: Unit Holders' cash distributions per Depositary Unit $ 59.94 $ 38.91 $189.85 $ 69.92 ---------- ------- ------- ------- ---------- ------- ------- ------- At December 31: Total assets $ 7,339 $12,659 $20,890 $46,559 ---------- ------- ------- ------- ---------- ------- ------- ------- Long-term debt, including current maturities $ -- $ -- $ -- $ 258 ---------- ------- ------- ------- ---------- ------- ------- ------- Number of Depositary Units outstanding 118,290 118,290 118,290 118,290 ---------- ------- ------- ------- ---------- ------- ------- -------
5 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations General As a result of the approval of the Plan, the Partnerships were dissolved effective as of August 31, 1994. In accordance with the terms of the Plan, the General Partners, acting as liquidating agents, are proceeding with the winding up of the Partnerships' business and affairs through the liquidation of their assets and liabilities. Since the adoption by both Partnerships of the Plan, the Partnerships have sold all of their respective investments. Effective September 1, 1994, the Partnerships adopted the liquidation basis of accounting, whereby assets are presented at their estimated net realizable values and liabilities at their estimated settlement amounts. For financial reporting purposes, the Partnerships continued to present operating results in the Statements of Operations through September 30, 1994, as the results of operations for September 1994 were not material. Significant adjustments to previously recorded asset and liability amounts required as a result of this change in basis of accounting are discussed in Notes 4, 5 and 7 to the financial statements included in Item 8. Financial Statements and Supplementary Data. The Partnerships also recorded accruals as of December 31, 1995 for the estimated costs expected to be incurred to liquidate the Partnerships including $299,000 and $402,000 for G-1 Partnership and G-2 Partnership, respectively, recorded during the year ended December 31, 1995. These estimated costs (excluding litigation costs) include charges by the General Partners and their affiliates during the year ended December 31, 1995 for the reimbursement of indirect general and administrative costs expected to be incurred through June 30, 1996. The General Partners are unable to predict the exact time the final liquidation will take place because of the outstanding litigation discussed in Note 8 of Item 8 Financial Statements and Supplementary Data; however, the Partnerships will distribute any remaining cash upon final liquidation. No estimate of final litigation costs is included because the General Partners are unable to estimate such costs at the present time. The final liquidating distribution will not take place until the final litigation costs are paid. Liquidity and Capital Resources The net asset positions as of December 31, 1995 and 1994 for G-1 and G-2 Partnerships are shown below (in thousands).
12/31/95 12/31/94 -------- -------- G-1 Partnership $4,497 $9,730 G-2 Partnership 4,111 6,774
All of the Partnerships' net assets at December 31, 1995 and 1994 were attributable to cash and cash equivalents which was generated primarily from the sale of investments as discussed below. The decreases in the Partnerships' December 31, 1995 net asset positions from their levels at December 31, 1994 was primarily attributable to the amounts distributed to the Unit Holders in February and April 1995. Cash Distributions The Partnerships have historically paid cash distributions out of available cash during the month following each quarter. Since the adoption of the Plan, the Partnerships have paid distributions to the partners from cash generated primarily from the sale of their remaining investments. In February 1995, G-1 Partnership made a special distribution in connection with the sale of its AES Deepwater coke-fired co-generation facility investment. In April 1995, G-2 Partnership made a special distribution in connection with the sale of its interests in its preferred stock of Walter International Inc. and its common stock of J. Ray McDermott, S.A. See Results of Operations below for a discussion of the Partnerships' sales of these investments as well as the sales of their interests in the Mesa Pipeline and related gas processing plant, G-1 Partnership's Mid Plains natural gas gathering facility and G-2 Partnership's interests in Hall Houston Offshore, Inc. and Roberts & Bunch Offshore, Inc. 6 The following table summarizes cash distributions to Unit Holders for G-1 and G-2 Partnerships (in thousands).
Special Unit Holders' Distributions Distributions Distributions Quarterly Paid-in from Inception from Inception as Distributions February 1995 through a percentage of Partnership January 1995 and April 1995 April 1995 Invested Capital - ------------ --------------------- -------------- ----------------- ------------------- G-1 $ 227 $4,252 $39,324 44% G-2 298 1,774 89,150 75
The Partnerships' ability to make further distributions will depend upon the amounts required to pay costs to be incurred in connection with certain litigation surrounding the operations of investments previously owned by the Partnerships as well as general and administrative and other costs to be incurred in connection with the liquidation and termination of the Partnerships and any other liabilities which may arise prior to the Partnerships' termination. These estimated costs (excluding final litigation costs) are reflected in the Partnerships' statements of net assets as of December 31, 1995 and includes charges by the General Partners and their affiliates during the year ended December 31, 1995 for the reimbursement of indirect general and administrative costs expected to be incurred through June 30, 1996. The General Partners are unable to predict the exact time the final liquidation will take place because of the outstanding litigation discussed in Note 8 of Item 8 Financial Statements and Supplementary Data; however, the Partnerships will distribute any remaining cash upon final liquidation. No estimate of final litigation costs is included because the General Partners are unable to estimate such costs at the present time. The final liquidating distribution will not take place until the final litigation costs are paid. Results of Operations As discussed previously herein, the Partnerships are in process of liquidation and have sold all of their remaining investments. In accordance with the liquidation basis of accounting adopted by the Partnerships, no results of operations are presented for the year ended December 31, 1995. During the nine months ended September 30, 1994, G-1 Partnership recorded net income of $980,000 and G-2 Partnership incurred a net loss of $406,000. For the year ended December 31, 1993, G-1 and G-2 Partnerships incurred net losses of $8,814,000 and $3,286,000, respectively. These nine month results were primarily due to the adoption of the liquidation basis of accounting, whereby assets are presented at their estimated net realizable values and liabilities, at their estimated settlement amounts. Losses incurred in 1993 by the Partnerships were the result of asset valuation impairment provisions which adversely affected net income. See Notes 5, 6 and 7 to Item 8 Financial Statements and Supplementary Data for a further discussion of the asset valuation impairment provisions as well as the sales of investments described below. On February 27, 1995, G-2 Partnership sold its interest in the Preferred Stock of Walter International, Inc. (``Walter'') for $907,000. In connection with this sale, the aggregate cumulative dividends in arrears totaling approximately $560,000 owed by Walter to G-2 Partnership as of December 31, 1994 were forgiven. However, since G-2 Partnership had not recognized these dividends as income, no adjustment to the financial statements was necessary to reflect this forgiveness. Since the investment in Walter had previously been written-down to zero during 1993, G-2 Partnership revalued its investment in Walter at the selling price in its statement of net assets, as of December 31, 1994, in accordance with the liquidation basis of accounting. Beginning February 16, 1995, G-2 Partnership began selling its shares of JRM stock until March 15, 1995, when G-2 Partnership completed the sale of all of its JRM shares. G-2 Partnership sold a total of 182,547 shares of JRM stock, including 18,813 shares acquired in January 1995 through the exercise of certain warrants costing $384,000, for an aggregate amount of approximately $3,936,000. The change in the estimated liquidation value on the sale of the JRM stock of approximately $3,128,000 represents the proceeds realized from the sale of these shares, less the adjusted cost basis per share sold. The carrying value of the shares (excluding the 18,813 shares) was $3,686,000 as of December 31, 1994. On January 20, 1995, G-1 Partnership sold its interest in the AES Deepwater coke-fired co-generation facility for a net sales price of $6,470,000. In accordance with the liquidation basis of accounting, G-1 7 Partnership revalued this investment at its selling price, as of December 31, 1994. As a result of this sale, G-1 Partnership has no capital investments remaining as of December 31, 1995. In October 1994, G-1 and G-2 Partnerships sold their interests in the Mesa Pipeline and related gas processing plant for a net amount of approximately $893,000 and $1,618,000, respectively. G-1 and G-2 Partnerships realized a gain on the sale of their interests in Mesa Pipeline of approximately $43,000 and $74,000, respectively. As a result of the sale, G-1 and G-2 Partnerships' consolidated subsidiary, Mesa Pipeline Company of Louisiana, had no remaining assets and was therefore liquidated. Accordingly, G-1 and G-2 Partnerships recorded a gain on the disposal of their investment in this subsidiary of approximately $6,000 and $12,000, respectively. In September 1994, G-1 Partnership sold its interest in its Mid Plains natural gas gathering facility for $2,801,000 and realized a gain on the sale of $1,397,000. In March 1994, G-2 Partnership sold its remaining interests in an offshore production facility and related equipment that was leased to Roberts & Bunch Resources, Inc. (``Roberts & Bunch'') and a group of associated working interest owners for sales proceeds of $24,000. In February 1994, G-2 Partnership sold its interest in four production platforms and related equipment that were leased to Hall-Houston Offshore, Inc. together with the leases of this equipment. Under the terms of the sale, G-2 Partnership received $200,000 in sales proceeds and was relieved of its salvage and removal obligations with respect to this equipment. The proceeds received by this Partnership from its sale were paid in four quarterly installments at the end of each quarter during 1994. During the year ended December 31, 1993, the G-1 and G-2 Partnerships recorded asset valuation impairment provisions as a result of revising their estimates of fair market values while exploring alternatives for selling the Partnership's remaining investments. G-1 and G-2 Partnerships recorded impairment provisions on their capital investments of $2,470,000 and $800,000, respectively. G-1 and G-2 Partnerships also recorded asset valuation impairment provisions on their oil and gas properties and pipeline and gas gathering and processing facilities of $5,597,000 and $4,664,000, respectively. During the same period, G-2 Partnership recorded an asset valuation impairment provision on its direct financing leases of $70,000. In December 1993, G-1 Partnership sold its participation in a secured term loan to WellTech, Inc., an oil field service company, together with certain shares of common stock and warrants issued by WellTech, Inc. for an aggregate of $3,650,000. This investment was sold for an amount equal to its adjusted book value, and accordingly, the Partnership did not realize a gain or loss on the sale of this investment. In December 1993, G-2 Partnership sold a portion of its interests in offshore production facilities and related equipment leased to Roberts & Bunch Offshore, Inc. and a group of associated working interest owners. In connection with the sale of this structure, the Partnership also assigned to the buyers all of their rights under the lease of that structure. Under the terms of the sale of this structure, the Partnership was relieved of its salvage and removal obligations with respect to this structure. In October 1993, Ensco Marine Company (``Ensco'') prepaid the remaining balance of its Senior Secured Note. G-2 Partnership had a 65% interest in this investment. The Note was originally issued with detachable warrants for 2.5 million shares of Ensco common stock. The total proceeds received by the Partnership was approximately $5,558,000 consisting of $5,293,000 of principal, $159,000 of accrued interest and $106,000 for the sale of the warrants. The proceeds received by the Partnership for the purchase of the warrants were reflected as a gain on the sale of investments in the financial statements. In October 1993, G-1 and G-2 Partnerships sold their interest in certain oil and gas properties located in Grand and Uintah Counties, Utah. Under the terms of the sale, G-1 and G-2 Partnerships received approximately $819,000 and $1,484,000, respectively. G-1 and G-2 Partnerships experienced losses on the sale in the amounts of $1,035,000 and $1,914,000, respectively, which were reflected as asset valuation impairments during the year ended December 31, 1993. In May 1993, G-2 Partnership sold 218,800 shares of Offshore Pipeline, Inc. (``OPI'') common stock for a net sales price of approximately $13.23 per share. The Partnership's cost basis in the OPI stock was approximately $2.60 per share. After this sale, G-2 Partnership owned 163,734 shares of outstanding OPI common stock. The gain on this sale was reflected in G-2 Partnership's financial statements for the year ended December 31, 1993 as a gain on the sale of investments in the amount of $2,326,000. 8 Item 8. Financial Statements and Supplementary Data Index to Financial Statements
PAGE ---- Reports of Independent Public Accountants 10 Prudential-Bache Energy Growth Fund, L.P. G-1: Statements of Net Assets (in process of liquidation) as of December 31, 1995 and 1994 12 Statements of Changes in Net Assets (in process of liquidation) for the period from October 1, 1994 to December 31, 1995 13 Consolidated Statements of Operations (going concern basis) for the nine months ended September 30, 1994 and for the year ended December 31, 1993 14 Consolidated Statements of Changes in Partners' Capital (going concern basis) for the nine months ended September 30, 1994 and for the year ended December 31, 1993 15 Consolidated Statements of Cash Flows (going concern basis) for the nine months ended September 30, 1994 and for the year ended December 31, 1993 16 Prudential-Bache Energy Growth Fund, L.P. G-2: Statements of Net Assets (in process of liquidation) as of December 31, 1995 and 1994 17 Statements of Changes in Net Assets (in process of liquidation) for the period from October 1, 1994 to December 31, 1995 18 Consolidated Statements of Operations (going concern basis) for the nine months ended September 30, 1994 and for the year ended December 31, 1993 19 Consolidated Statements of Changes in Partners' Capital (going concern basis) for the nine months ended September 30, 1994 and for the year ended December 31, 1993 20 Consolidated Statements of Cash Flows (going concern basis) for the nine months ended September 30, 1994 and for the year ended December 31, 1993 21
9 PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-1 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Partners of Prudential-Bache Energy Growth Fund, L.P. G-1: We have audited the accompanying statement of net assets in process of liquidation of Prudential-Bache Energy Growth Fund, L.P. G-1 as of December 31, 1995 and 1994 and the related statement of changes in net assets for the period from October 1, 1994 to December 31, 1995. In addition, we have audited the accompanying consolidated statements of operations, partners' capital, and cash flows for the nine month period ended September 30, 1994 and for the year ended December 31, 1993. 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. As described in Note 1 to the financial statements, the Limited Partners of the Partnership approved a plan of liquidation on September 1, 1994, and the Partnership commenced liquidation shortly thereafter. As a result, the Partnership has changed its basis of accounting for periods subsequent to the approval of the plan of liquidation, from the going-concern basis to the liquidation basis. Accordingly, the carrying values of the remaining assets as of December 31, 1995 and 1994 are presented at estimated realizable values and all liabilities are presented at estimated settlement amounts. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets in process of liquidation of Prudential-Bache Energy Growth Fund, L.P. G-1 as of December 31, 1995 and 1994, the changes in its net assets for the period from October 1, 1994 to December 31, 1995 and the results of its operations and its cash flows for the nine month period ended September 30, 1994, and the year ended December 31, 1993 in conformity with generally accepted accounting principles applied on the basis described in the preceding paragraph. New Orleans, Louisiana January 10, 1996 10 PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-2 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Partners of Prudential-Bache Energy Growth Fund, L.P. G-2: We have audited the accompanying statement of net assets in process of liquidation of Prudential-Bache Energy Growth Fund, L.P. G-2 as of December 31, 1995 and 1994, and the related statement of changes in net assets for the period from October 1, 1994 to December 31, 1995. In addition, we have audited the accompanying consolidated statements of operations, partners' capital, and cash flows for the nine month period ended September 30, 1994 and for the year ended December 31, 1993. 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. As described in Note 1 to the financial statements, the Limited Partners of the Partnership approved a plan of liquidation on September 1, 1994, and the Partnership commenced liquidation shortly thereafter. As a result, the Partnership has changed its basis of accounting for periods subsequent to the approval of the plan of liquidation, from the going-concern basis to the liquidation basis. Accordingly, the carrying values of the remaining assets as of December 31, 1995 and 1994 are presented at estimated realizable values and all liabilities are presented at estimated settlement amounts. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets in process of liquidation of Prudential-Bache Energy Growth Fund, L.P. G-2 and subsidiary as of December 31, 1995 and 1994, the changes in its net assets for the period from October 1, 1994 to December 31, 1995 and the results of its operations and its cash flows for the nine month period ended September 30, 1994 and the year ended December 31, 1993, in conformity with generally accepted accounting principles applied on the basis described in the preceding paragraph. New Orleans, Louisiana January 10, 1996 11 PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-1 STATEMENTS OF NET ASSETS (in process of liquidation) (In thousands, except depositary unit amounts)
December 31, December 31, 1995 1994 - ------------------------------------------------------------------------------------------------- Assets Cash and cash equivalents $ 4,760 $ 4,259 Interest receivable 15 -- Capital investments -- 6,470 ------------ ------------ Total assets 4,775 10,729 ------------ ------------ Liabilities Estimated liquidation costs 224 487 Due to affiliates 54 96 Accrued expenses -- 416 ------------ ------------ Total liabilities 278 999 ------------ ------------ Contingencies Net assets $ 4,497 $ 9,730 ------------ ------------ ------------ ------------ Total depositary units authorized and outstanding 90,000 90,000 ------------ ------------ ------------ ------------ - ------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these statements
12 PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-1 AND SUBSIDIARY STATEMENTS OF CHANGES IN NET ASSETS FOR THE PERIOD FROM OCTOBER 1, 1994 TO DECEMBER 31, 1995 (in process of liquidation) (in thousands, except per depositary unit amounts) - ------------------------------------------------------------------------------------------------- Net assets in liquidation, October 1, 1994 $ 6,662 Changes in estimated liquidation values of assets and liabilities 3,335 Cash distributions: Limited Partner (on behalf of Unit Holders) (227) General Partners (40) ------- Net assets in liquidation, December 31, 1994 9,730 Changes in estimated liquidation values of assets and liabilities 37 Cash distributions: Limited Partner (on behalf of Unit Holders) (4,479) General Partners (791) ------- Net assets in liquidation, December 31, 1995 $ 4,497 ------- ------- Limited Partner distributions per $1,000 depositary unit paid during the period from October 1, 1994 to December 31, 1994 and during the year ended December 31, 1995 were $2.52 and $49.77, respectively. - ------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these statements
13 PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-1 AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND FOR THE YEAR ENDED DECEMBER 31, 1993 (going concern basis) (In thousands, except per depositary unit amounts)
1994 1993 - -------------------------------------------------------------------------------------------------- REVENUES: Income from capital investments, net $ 52 $ 82 Sales of oil and gas 14 10 Natural gas gathering sales 2,691 4,248 Compression and transportation fees 154 165 Interest income from temporary cash investments 42 85 ------ ------- 2,953 4,590 ------ ------- EXPENSES: Natural gas purchases 1,100 1,970 Lease and pipeline operating costs 1,305 2,117 General and administrative 334 498 Depreciation, depletion and amortization 149 752 Provision for asset valuations -- 8,067 ------ ------- 2,888 13,404 ------ ------- Net income (loss) from operations 65 (8,814) Liquidating activities: Natural gas gathering facilities (Note 7) 1,440 -- Liquidation costs (525) -- ------ ------- NET INCOME (LOSS) $ 980 $(8,814) ------ ------- ------ ------- ALLOCATION OF NET INCOME (LOSS): Limited Partner (on behalf of Unit Holders) $ 266 $(8,953) General Partners 714 139 ------ ------- $ 980 $(8,814) ------ ------- ------ ------- UNIT HOLDERS' NET INCOME (LOSS) PER DEPOSITARY UNIT $ 2.95 $(99.48) ------ ------- ------ ------- - -------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these consolidated statements
14 PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-1 AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND FOR THE YEAR ENDED DECEMBER 31, 1993 (going concern basis) (In thousands, except per depositary unit amounts)
Limited Partner (on behalf of General Unit Holders) Partners Total - ----------------------------------------------------------------------------------------------------- Partners' capital, December 31, 1992 $20,182 $-- $20,182 Net income (loss) (8,953) 139 (8,814) Cash distributions (787) (139) (926) --------------- -------- ------- Partners' capital, December 31, 1993 10,442 -- 10,442 Net income 266 714 980 Cash distributions (4,046) (714) (4,760) --------------- -------- ------- Net assets, September 30, 1994 $ 6,662 $-- $ 6,662 --------------- -------- ------- --------------- -------- ------- Limited Partner distributions per $1,000 depositary unit paid during the year ended December 31, 1993 and during the nine months ended September 30, 1994 were $8.75 and $44.96, respectively. - ----------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these consolidated statements
15 PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-1 AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND FOR THE YEAR ENDED DECEMBER 31, 1993 (going concern basis) (In thousands)
1994 1993 - -------------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) from operations $ 65 $(8,814) Adjustments to reconcile net income (loss) from operations to net cash provided by operating activities: Depreciation, depletion and amortization 149 752 Provision for asset valuations -- 8,067 (Increase) decrease in accounts receivable 646 (75) Increase (decrease) in accounts payable and accrued liabilities (822) 423 ------- ------- Net cash provided by operating activities 38 353 ------- ------- CASH FLOWS FROM LIQUIDATING ACTIVITIES: Net income from liquidating activities 915 -- Gain on sale of natural gas gathering facilities (1,440) -- Increase in accrued liquidation costs 525 -- ------- ------- Net cash provided by liquidating activities -- -- ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES: Loan principal reductions, cost recoveries and proceeds from sales of investments 3,068 4,064 Reductions in property, plant and equipment, net -- 810 ------- ------- Net cash provided by investing activities 3,068 4,874 ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions to partners (4,760) (926) ------- ------- (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (1,654) 4,301 ------- ------- CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 5,293 992 ------- ------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,639 $ 5,293 ------- ------- ------- ------- - -------------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these consolidated statements
16 PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-2 STATEMENTS OF NET ASSETS (in process of liquidation) (In thousands, except depositary unit amounts)
December 31, December 31, 1995 1994 - ------------------------------------------------------------------------------------------------------ Assets Cash and cash equivalents $ 4,492 $ 2,746 Interest receivable 9 -- Capital investments -- 4,593 ------------ ------------ Total assets 4,501 7,339 ------------ ------------ Liabilities Estimated liquidation costs 340 418 Due to affiliates 50 147 ------------ ------------ Total liabilities 390 565 ------------ ------------ Contingencies Net assets $ 4,111 $ 6,774 ------------ ------------ ------------ ------------ Total depositary units authorized and outstanding 118,290 118,290 ------------ ------------ ------------ ------------ - ------------------------------------------------------------------------------------------------------ The accompanying notes are an integral part of these statements
17 PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-2 AND SUBSIDIARY STATEMENTS OF CHANGES IN NET ASSETS FOR THE PERIOD FROM OCTOBER 1, 1994 TO DECEMBER 31, 1995 (in process of liquidation) (in thousands, except per depositary unit amounts) - ------------------------------------------------------------------------------------------------------ Net assets in liquidation, October 1, 1994 $5,848 Changes in estimated liquidation values of assets and liabilities 1,276 Cash distributions: Limited Partner (on behalf of Unit Holders) (300) General Partners (50) ------ Net assets in liquidation, December 31, 1994 6,774 Changes in estimated liquidation value of assets and liabilities (224) Cash distributions: Limited Partner (on behalf of Unit Holders) (2,072) General Partners (367) ------ Net assets in liquidation, December 31, 1995 $4,111 ------ ------ Limited Partner distributions per $1,000 depository unit paid during the period from October 1, 1994 to December 31, 1994 and during the year ended December 31, 1995 were $2.52 and $17.52, respectively. - ------------------------------------------------------------------------------------------------------ The accompanying notes are an integral part of these statements
18 PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-2 AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND FOR THE YEAR ENDED DECEMBER 31, 1993 (going concern basis) (In thousands, except per depositary unit amounts)
1994 1993 - -------------------------------------------------------------------------------------------------------- REVENUES: Income from capital investments, net $ 13 $ 568 Natural gas gathering sales 1,280 2,243 Compression and transportation fees 278 298 Leasing income from oil and gas production facilities -- 205 Gain on sale of investments -- 2,431 Gain on sale of leases 105 -- Interest income from temporary cash investments 69 339 ------- ------- 1,745 6,084 ------- ------- EXPENSES: Natural gas purchases 945 2,042 Lease and pipeline operating costs 435 812 General and administrative 351 792 Depreciation, depletion and amortization 68 190 Provision for asset valuations -- 5,534 ------- ------- 1,799 9,370 ------- ------- Net loss from operations (54) (3,286) Liquidating activities: Natural gas gathering facilities (Note 7) 74 -- Liquidation costs (426) -- ------- ------- NET LOSS $ (406) $(3,286) ------- ------- ------- ------- ALLOCATION OF NET LOSS Limited Partner (on behalf of Unit Holders) $(1,605) $(4,098) General Partners 1,199 812 ------- ------- $ (406) $(3,286) ------- ------- ------- ------- UNIT HOLDERS' NET LOSS PER DEPOSITARY UNIT $(13.57) $(34.64) ------- ------- ------- ------- - -------------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these consolidated statements.
19 PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-2 AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND FOR THE YEAR ENDED DECEMBER 31, 1993 (going concern basis) (In thousands, except per depositary unit amounts)
Limited Partner Unrealized (on behalf of General Gain on Unit Holders) Partners Investments Total - ----------------------------------------------------------------------------------------------------------- Partners' capital, December 31, 1992 $ 20,011 $ -- $-- $20,011 Net income (loss) (4,098) 812 -- (3,286) Cash distributions (4,603) (812 ) -- (5,415) ---------------- -------- ----------- ------- Partners' capital, December 31, 1993 11,310 -- -- 11,310 Net income (loss) (1,605) 1,199 -- (406) Unrealized gain on investments in equity securities -- -- 2,935 2,935 Cash distributions (6,792) (1,199 ) -- (7,991) ---------------- -------- ----------- ------- Net assets, September 30, 1994 $ 2,913 $ -- $ 2,935 $ 5,848 ---------------- -------- ----------- ------- ---------------- -------- ----------- ------- Limited Partner distributions per $1,000 depositary unit paid during the year ended December 31, 1993 and during the nine months ended September 30, 1994 were $38.91 and $57.42, respectively. - ----------------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these consolidated statements
20 PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-2 AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND FOR THE YEAR ENDED DECEMBER 31, 1993 (going concern basis) (In thousands)
1994 1993 - -------------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss from operations $ (54) $(3,286) Adjustments to reconcile net loss from operations to net cash (used in) provided by operating activities: Gains on sale of leases and investments (105) (2,431) Depreciation, depletion and amortization 68 190 Provision for asset valuations -- 5,534 (Increase) decrease in accounts receivable 580 (21) Increase (decrease) in accounts payable and accrued liabilities (959) 492 Other (14) (31) ------- ------- Net cash (used in) provided by operating activities (484) 447 ------- ------- CASH FLOWS FROM LIQUIDATING ACTIVITIES: Net loss from liquidating activities (352) -- Gain on sale of natural gas gathering facility (74) -- Increase in accrued liquidation costs 426 -- ------- ------- Net cash provided by liquidating activities -- -- ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES: Loan principal reductions, cost recoveries and proceeds from sales of investments -- 9,736 Reductions in property, plant and equipment, net -- 1,484 Collections of direct financing leases receivable 132 192 ------- ------- Net cash provided by investing activities 132 11,412 ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions to partners (7,991) (5,415) ------- ------- (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (8,343) 6,444 ------- ------- CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 9,723 3,279 ------- ------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,380 $ 9,723 ------- ------- ------- ------- - -------------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these consolidated statements
21 PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-1 PRUDENTIAL-BACHE ENERGY GROWTH FUND, L.P. G-2 (in process of liquidation) NOTES TO FINANCIAL STATEMENTS (1) Description of organization Prudential-Bache Energy Growth Fund, L.P. G-1 (``G-1 Partnership'') and Prudential-Bache Energy Growth Fund, L.P. G-2 (``G-2 Partnership''), collectively referred to herein as the ``Partnerships,'' were organized under the laws of the state of Delaware by their General Partners, Prudential-Bache Properties, Inc. (``PBP'') and Graham Energy, Ltd. (``GEL''), and a limited partner (the ``Depositary'') to offer ``Depositary Units,'' representing the assignment of substantially all of the attributes of limited partner interests. The Depositary is the sole limited partner in the Partnerships and serves in such capacity on behalf of ``Unit Holders'' who purchased Depositary Units. PBP and GEL are both subsidiaries of Prudential Securities Group Inc. (``PSGI''). Prudential Securities Incorporated (``PSI'') is also a wholly-owned subsidiary of PSGI. GEL has contracted out certain of its functions, including certain administrative functions, to certain companies affiliated with GEL. In accordance with the terms of the Amended and Restated Agreements of Limited Partnership (the ``Agreements'') of the Partnerships, the General Partners were not required to make any initial capital contributions to the Partnerships. All costs of organizing and syndicating the Partnerships and all investment costs were paid out of the Unit Holders' capital contributions. All items of income, expense, profits, losses, gains and distributable cash are allocated 85% to the Unit Holders and 15% to the General Partners. However, pursuant to the terms of the Agreements, a special reallocation of profits is made in order to allow the General Partners' share of profits to be equal to their share of distributable cash, thus keeping their capital account at a zero balance at all times. Plan of liquidation In June 1994, the General Partners distributed to the Unit Holders a Consent Solicitation Statement for consideration and voting upon a Plan of Dissolution and Liquidation (``the Plan''). Consent Solicitation Statements were filed on behalf of each of the Partnerships with the Securities and Exchange Commission on June 24, 1994 and were mailed to Unit Holders on July 5, 1994. Supplements to the Consent Solicitation Statements, dated August 23, 1994, were filed with the Securities and Exchange Commission and were mailed to Unit Holders on August 25, 1994. In accordance with the procedures described in the Consent Solicitation Statements, the General Partners accepted consent forms from Unit Holders which were postmarked on or before August 31, 1994. As of September 8, 1994, the General Partners had received consent forms from Unit Holders owning a majority of the outstanding Depositary Units in each of the Partnerships. Of the consent forms received by the General Partners, Depositary Units representing 60% and 62% of the total outstanding Depositary Units for G-1 and G-2 Partnerships, respectively, voted to consent to the Plan and approve the liquidation of the Partnerships. Accordingly, the Partnerships' adopted the Plan and were dissolved effective August 31, 1994. In accordance with the terms of the Plan, the General Partners, acting as liquidating agents, are proceeding with the liquidation and termination of the Partnerships. Since that date, the General Partners have sold all of the investments of each Partnership. The Partnerships' ability to make further distributions will depend upon the amounts required to pay costs to be incurred in connection with certain litigation surrounding the operations of investments previously owned by the Partnerships as well as general and administrative and other costs to be incurred in connection with the liquidation and termination of the Partnerships and any other liabilities which may arise prior to the Partnerships' termination. These estimated costs (excluding final litigation costs) are reflected in the Partnerships' statements of net assets as of December 31, 1995 and include charges by the General Partners and their affiliates during the year ended December 31, 1995 for the reimbursement of indirect general and administrative costs expected to be incurred through June 30, 1996. The General Partners are unable to predict the exact time the final liquidation will take place because of the outstanding litigation discussed in Note 8; however, the Partnerships will distribute any remaining cash upon final liquidation. No estimate of final litigation costs is included because the General Partners are unable to estimate such costs at the present time. The final liquidating distribution will not take place until the final litigation costs are paid. 22 (2) Summary of Significant Accounting Policies Liquidation basis accounting policies As a result of the liquidation discussed in Note 1, the Partnerships changed to the liquidation basis of accounting from a going-concern basis effective September 1, 1994. For financial reporting purposes, the Partnerships continued to present operating results in the Consolidated Statements of Operations through September 30, 1994, as the results of operations for September 1994 were not material. The statements of net assets at December 31, 1995 and 1994 and the changes in net assets for the period from October 1, 1994 to December 31, 1995 were prepared on a liquidation basis of accounting. The liquidation basis of accounting requires that assets be reflected at their net realizable values and liabilities be stated at their estimated settlement amounts. No significant adjustments to previously recorded asset and liability amounts were required as a result of the change in basis of accounting, except for the adjustments discussed in Notes 4, 5 and 7. Certain reclassifications have been made to prior year balances to conform with the current year's financial statement presentation. Going-concern basis accounting policies The consolidated statements of operations, statements of partners' capital and statements of cash flows of G-1 and G-2 Partnerships for the nine months ended September 30, 1994 and for the year ended December 31, 1993 have been consolidated with their indirect subsidiary, Mesa Pipeline Company (``Mesa Pipeline''), which was owned 35.55% by G-1 Partnership and 64.45% by G-2 Partnership. All of the assets of Mesa Pipeline were sold October 5, 1994 (as more fully discussed in Note 7). The account balances as of December 31, 1994 and the results of Mesa Pipeline's operations for the nine month period ended September 30, 1994 and for the year ended December 31, 1993 have been proportionately consolidated into G-1 and G-2 Partnerships' financial statements. Income from capital investments was based on the amount of unrecovered costs or principal balance and expected rates of return. Certain of G-1 Partnership's investments were on either a cash income recognition basis such that income was recognized only when cash was received or a cost recovery basis where all cash proceeds were applied to recovery of principal with no income recognition until the principal balance was paid in full, if ever. Investments and related investment fees and transaction costs were funded by the capital contributions of the Unit Holders and were initially valued at cost. These capitalized costs were reduced by amortization of certain costs representing fees and transaction costs and by amounts which were identified as principal paid on underlying debt instruments. See Notes 5, 6 and 7 for a summarization of the Partnerships' investment activities. The carrying value of each capital investment held was assessed quarterly based upon the historical performance of the investment, the underlying value of assets securing the investment and the future earnings potential of the entity involved. A loss was recognized, if any, to the extent the carrying value exceeded the assessed value of the investment. Property acquired through foreclosure was stated at the lower of the recorded amount of the loan for which the foreclosed property served as collateral or the then current appraised value. When a reduction of the carrying value to the appraised value was required at the time of foreclosure, the difference was included in a provision for asset valuations. Unit Holders' net income (loss) per $1,000 Depositary Unit for G-1 and G-2 Partnerships is based upon 90,000 and 118,290 Depositary Units outstanding, respectively. Cash and cash equivalents Cash and cash equivalents include amounts invested in United States Treasury bills, certificates of deposit and money market funds with original maturities of generally three months or less. Investments The Partnerships' equity securities that have readily determinable fair values are classified as available-for-sale securities. These securities are measured at fair value in the statements of net assets and unrealized gains and losses are reported as a separate component of partners' capital. Equity securities traded on a national securities exchange are valued at the last reported sales price on the primary exchange on which they are traded. Equity securities which are not readily marketable are accounted for under the cost method. 23 At December 31, 1994, G-2 Partnership's investment in Walter International, Inc. was valued at its February 1995 sales price as more fully discussed in Note 5. (3) Income taxes Federal and state income tax statutes provide that partnerships pay no income tax. Qualification of the Partnerships as such for income tax purposes, the income tax returns and the amounts of taxable income or loss reported to partners are subject to examination by taxing authorities. (4) Related party transactions The Agreements provide for certain charges of PBP, GEL and their affiliates to be paid by the Partnerships. The following is a summary of charges by PBP and its affiliates for the years ended December 31, 1995, 1994 and 1993 for the reimbursement of indirect general and administrative costs (in thousands):
1995 1994 1993 ---- ---- ---- G-1 Partnership $121 $103 $ 52 G-2 Partnership 194 174 79
The following is a summary of charges by GEL and its affiliates during the years ended December 31, 1995, 1994 and 1993 for the reimbursement of indirect general and administrative costs (in thousands):
1995 1994 1993 ---- ---- ---- G-1 Partnership $ 15 $ 22 $183 G-2 Partnership 15 41 281
The Partnerships have recorded an accrual as of December 31, 1995 for the estimated costs expected to be incurred to liquidate the Partnerships as discussed in Note 1. Included in these liquidation cost estimates are amounts expected to be charged by the General Partners during the anticipated remaining liquidation period. The actual charges to be incurred by the Partnerships may differ from the amounts accrued as of December 31, 1995. The amounts expected to be charged by PBP to G-1 and G-2 Partnerships for reimbursement of indirect general and administrative costs during the anticipated remaining liquidation period are $96,000 and $175,000, respectively. The amount expected to be charged by GEL to each of G-1 and G-2 Partnerships for reimbursement of indirect general and administrative costs is $1,000 during the anticipated remaining liquidation period. As of December 31, 1995 PSI owned 1,153 and 1,667 Depositary Units in G-1 and G-2 Partnerships, respectively. Certain former officers of affiliates of GEL served as directors of Offshore Pipelines, Inc. (See Note 5.) (5) Capital investments Capital investments of the Partnerships consisted of loans to and equity positions in entities engaged in oil and gas related activities collateralized by oil and gas related assets. During the first quarter of 1995, the Partnerships completed the liquidation of their remaining capital investments pursuant to the Plan. The table below summarizes the book balances of these investments at December 31, 1995 and 1994. The table is followed by a discussion of these investments (amounts in thousands).
Capital Investment Book Balances --------------------- G-1 G-2 ------- ------- Group of investments purchased from a national bank $ 6,947 $ -- Offshore Pipelines, Inc. (equity) -- 3,686 Walter International, Inc. -- 1,707 ------- ------- Subtotal 6,947 5,393 Asset valuation provision (477) (800) ------- ------- Balance at December 31, 1994 6,470 4,593 Sales of capital investments (6,470) (4,593) ------- ------- Balance at December 31, 1995 $ -- $ -- ------- ------- ------- -------
24 During the year ended December 31, 1993, the G-1 and G-2 Partnerships recorded asset valuation impairment provisions as a result of revising their estimates of fair values while exploring alternatives for selling the Partnerships' remaining investments. G-1 Partnership recorded impairment provisions of $2,470,000 on its capital investments and G-2 Partnership recorded a $800,000 impairment provision for its Walter International, Inc. investment. Investments purchased from a national bank During March, 1987, G-1 Partnership purchased a group of investments (eighteen in total) from a national bank for a net purchase price of approximately $53 million. These investments consisted primarily of loans and participations in loans made by the bank to oil and gas entities and acquisitions of equity positions in certain of those and other entities. As of December 31, 1994, one investment in this group, a coke-fired co-generation facility owned by AES Deepwater, Inc. (the ``AES Investment''), accounted for all of the carrying value of G-1 Partnership's investments in loans. In December 1993, G-1 Partnership sold its participation in a secured term loan to WellTech, Inc., an oil field service company, together with certain shares of common stock and warrants issued by WellTech, Inc. for an aggregate of $3,650,000. This investment was sold for an amount equal to its adjusted book value, and accordingly, the Partnership did not realize a gain or loss on the sale of this investment. On January 20, 1995, G-1 Partnership sold its interest in the AES Investment for a net sales price of $6,470,000. In accordance with the liquidation basis of accounting, G-1 Partnership revalued this investment at its selling price as of December 31, 1994. As a result of this sale, G-1 Partnership has no capital investments remaining as of December 31, 1995. Offshore Pipelines, Inc. Beginning in April, 1988, G-2 Partnership, Prudential-Bache Energy Growth Fund, L.P. G-3 and Prudential-Bache Energy Growth Fund, L.P. G-4 entered into several transactions with Offshore Pipelines, Inc. (``OPI''), an offshore marine construction firm whose principal lines of business are the laying and burying of marine pipeline systems and the fabrication and installation of attendant production facilities. As a result, G-2 Partnership became the owner of approximately 382,534 shares of common stock of OPI and warrants to purchase 18,813 additional shares. In May 1993, G-2 Partnership sold 218,800 shares resulting in a gain on sale of investment in the amount of $2,326,000. As of December 31, 1994, G-2 Partnership owned 163,734 shares of OPI's outstanding common stock with a carrying value of approximately $3,686,000. On January 24, 1995, G-2 Partnership exercised its warrants to purchase additional OPI shares. As a result of acquiring these additional OPI shares, G-2 Partnership owned a total of 182,547 OPI shares. On January 30, 1995, OPI announced that its shareholders had approved the proposed merger of OPI with and into a wholly-owned unit of J. Ray McDermott, S.A. (``JRM''), a majority-owned unit of McDermott International, Inc. The JRM stock is traded on the New York Stock Exchange under the symbol (``JRM''). Pursuant to the merger agreement, G-2 Partnership received one share of JRM stock in exchange for each share of OPI stock that it owned and a cash payment in conjunction with the exchange of $.51 per share or approximately $93,000. Beginning February 16, 1995, pursuant to the Plan, G-2 Partnership began selling its shares in JRM until March 15, 1995, when G-2 Partnership completed the sale of all of its JRM shares for an aggregate amount of approximately $3,936,000. The change in the estimated liquidation value on the sale of the JRM stock was approximately $3,128,000. Walter International, Inc. In December, 1989, G-2 Partnership entered into a transaction with Walter International, Inc. (``Walter''), an independent oil and gas exploration company that specializes in searching for and developing oil and gas reserves in foreign regions. The transaction involved 14% Senior Cumulative Preferred Stock (the ``Preferred Stock'') with detachable warrants to purchase 9,000 shares (9%) of Walter's authorized common stock to fund a portion of Walter's exploration and development costs. On February 27, 1995, G-2 Partnership sold its interest in the Preferred Stock for $907,000. Since the investment in Walter had previously been written-down to zero during 1993, G-2 Partnership revalued its investment in Walter at the selling price in its statement of net assets, as of December 31, 1994, in accordance with the liquidation basis of accounting. 25 Maple Gulf Coast Properties Corporation On October 14, 1993, G-1 and G-2 Partnerships sold their interests in certain producing oil and gas properties located in Grand and Uintah Counties, Utah. Under the terms of the sale, G-1 and G-2 Partnerships received approximately $819,000 and $1,484,000, respectively. G-1 and G-2 Partnerships experienced losses on the sale in the amounts of $1,035,000 and $1,914,000, respectively. The losses were reflected as asset valuation adjustments during the year ended December 31, 1993. Ensco Marine Company In March, 1988, G-2 Partnership entered into a transaction with Ensco Marine Company (``Ensco Marine''), whose primary activity is the oil field marine transportation business. The transaction involved a $26 million Senior Secured Note (the ``Note'') executed by Ensco Marine for the purchase and refurbishing of 14 oil field supply vessels and for working capital purposes. In October, 1993, Ensco Marine prepaid the remaining balance of its Senior Secured Note. The total proceeds received by the Partnership was approximately $5,558,000 which consisted of $5,293,000 of principal, $159,000 of accrued interest and $106,000 for the detachable stock warrants. The proceeds received by the Partnership for the purchase of the detachable stock warrants was reflected as a gain on the sale of investment for the year ended December 31, 1993. (6) Direct financing leases The leases discussed below were primarily accounted for as direct financing leases. Unearned income was recognized over the primary lease terms of the individual leases in such a manner as to produce a constant periodic rate of return on the net investment in these leases in accordance with the interest method. The carrying value of the production facilities leases were reduced by certain deferred leasing fee income for financial statement presentation purposes. The six production facilities leases in these transactions had primary lease terms of from three to five years and varying residual lease terms. Payments under these leases were due periodically in equal installments over the primary lease terms. Performance under these leases was collateralized by first mortgages on all of the oil and gas reserves serviced by the production facilities. Hall-Houston Offshore, Inc. In February 1994, G-2 Partnership sold its interest in four production platforms and related equipment located on certain offshore lease blocks in the U.S. Gulf of Mexico together with the leases of this equipment. Under the terms of the sale of this investment, G-2 Partnership received $200,000 in sales proceeds (based on, among other things, the oil and gas production generated from the wells associated with this equipment) and were relieved of their salvage and removal obligations with respect to this equipment. At December 31, 1993, G-2 Partnership reserved $305,000 in an escrow account and had recorded a corresponding liability in the financial statements for the purpose of funding the estimated cost of dismantling the oil and gas production facilities leased to Hall-Houston at the end of the respective production facilities lease terms. Pursuant to the February 1994 sales agreement discussed above, the escrowed amounts were paid to the purchaser of the four production platforms and related equipment. The interest accrued on these escrowed funds was retained in 1993 by the Partnership. Roberts & Bunch Offshore, Inc. In December 1993, G-2 Partnership sold its interests in one of its two offshore production facilities and related equipment leased to Roberts & Bunch Offshore, Inc. and a group of associated working interest owners. The sales proceeds received by G-2 Partnership was $13,500. In connection with this sale, the Partnership turned over to the buyers escrowed funds held for the future dismantlement of the platforms. As a result of this sale, the Partnership assigned to the buyers all of their rights under the lease of this structure and, accordingly, were relieved of their salvage and removal obligations with respect to this structure, the cost of which was estimated to exceed the amounts escrowed by the Partnership with respect to this liability. 26 In March 1994, G-2 Partnership sold its interests in its remaining offshore facility and related equipment for $24,000. Also in connection with this sale, G-2 Partnership incurred platform dismantlement costs of $51,750. These costs were netted against the proceeds from the sale of these leases for a net loss recognized on the disposal of this lease. (7) Property, Plant and Equipment The following summarizes the changes in property, plant and equipment for G-1 and G-2 Partnerships during the years ended December 31, 1993 and 1994 (in thousands):
G-1 Partnership ---------------------------------------------------- Natural Gas Oil and Gas Properties Gathering Facilities ----------------------- ------------------------ Accumulated Accumulated Cost DD&A* Cost DD&A* ------- ----------- -------- ----------- Balance, December 31, 1992 $ 6,195 $ 4,145 $ 11,822 $ 4,441 Reclassification 132 -- -- -- Additions -- -- 9 -- Sale of property (5,672) (4,853) -- -- Asset valuation provision -- 1,311 -- 4,286 Depreciation, depletion and amortization -- 52 -- 700 ------- ----------- -------- ----------- Balance, December 31, 1993 655 655 11,831 9,427 ------- ----------- -------- ----------- Write-off of fully depreciated assets (655) (655) -- -- Adjustments to reflect change to liquidating basis -- -- 43 -- Depreciation, depletion and amortization -- -- -- 149 Sale of natural gas gathering facilities -- -- (11,874) (9,576) ------- ----------- -------- ----------- Balance, December 31, 1994 $ -- $ -- $ -- $ -- ------- ----------- -------- ----------- ------- ----------- -------- -----------
G-2 Partnership ----------------------------------------------------- Natural Gas Oil and Gas Properties Gathering Facilities ------------------------ ------------------------ Accumulated Accumulated Cost DD&A* Cost DD&A* -------- ----------- -------- ----------- Balance, December 31, 1992 $ 10,296 $ 6,803 $ 6,132 $ 1,676 Sale of property (10,296) (8,812) -- -- Asset valuation provision -- 1,914 -- 2,750 Depreciation, depletion and amortization -- 95 -- 95 -------- ----------- -------- ----------- Balance, December 31, 1993 -- -- 6,132 4,521 -------- ----------- -------- ----------- Adjustments to reflect change to liquidation basis -- -- 74 -- Depreciation, depletion and amortization -- -- -- 68 Sale of natural gas gathering facilities -- -- (6,206) (4,589) -------- ----------- -------- ----------- Balance, December 31, 1994 $ -- $ -- $ -- $ -- -------- ----------- -------- ----------- -------- ----------- -------- ----------- *DD&A is an abbreviation for depreciation, depletion and amortization.
Depreciation, depletion and amortization expense per equivalent unit of production (an equivalent unit is equal to one barrel of oil or condensate or six Mcf of gas) for the years ended December 31, 1994 and 1993 are shown in the following table.
1994 1993 ------ ----- G-1 Partnership $ -- $1.52 G-2 Partnership -- 1.59
Due to updated estimates of fair market value obtained while exploring alternatives for selling the Partnerships' remaining investments, G-1 and G-2 Partnerships recorded downward adjustments to the carrying values of their oil and gas properties for the year ended December 31, 1993 in the amounts of 27 $1,311,000 and $1,914,000, respectively. Revised fair market value estimates of the natural gas gathering facilities resulted in similar downward adjustments in the amounts of $4,286,000 and $2,750,000 for G-1 and G-2 Partnerships, respectively. The reductions in carrying values were made through an increase in accumulated depreciation, depletion and amortization of the oil and gas properties and natural gas gathering facilities. During September 1994, G-1 Partnership sold its natural gas processing plant (the ``Mid Plains Plant'') for $2,801,000. As a result of this sale, G-1 Partnership realized a gain of $1,397,000. During October 1994, G-1 and G-2 Partnerships sold their interests in their remaining natural gas gathering facilities and related equipment (``Mesa Pipeline'') for approximately $893,000 and $1,618,000, respectively. G-1 and G-2 Partnerships each experienced a gain on the sale of Mesa Pipeline in the amounts of $43,000 and $74,000, respectively. As a result of the sale of Mesa Pipeline in October 1994, G-1 and G-2 Partnerships' consolidated subsidiary, Mesa Pipeline Company of Louisiana, had no remaining assets and was therefore liquidated. Accordingly, G-1 and G-2 Partnerships recorded a gain on the disposal of their investment in this subsidiary of approximately $6,000 and $12,000, respectively. (8) Legal Proceedings The Partnerships and their General Partners and/or certain affiliates have been named co-defendants in a number of lawsuits arising out of the offer and sale of the Partnerships' and certain affiliated partnerships' Depositary Units or Partnership Units. These proceedings allege violations of the federal securities laws and similar violations under certain state laws and involve claims by investors that material misrepresentations and omissions of material facts were made in connection with the offer and sale of Depositary Units or Partnership Units. Mismanagement of funds is also alleged in certain suits. These proceedings seek monetary damages or, alternatively, a return of the amount of the original investment, plus interest, costs and attorneys' fees. A number of the proceedings also seek exemplary damages. In a number of these actions, discovery has commenced. The Partnerships and their General Partners also have been named as defendants in two derivative suits. In addition, the General Partners and their affiliates have also been the subject of several state and federal administrative actions and investigations. a. Growth Fund Suits Pending in Texas State Court (i) James W. Gibbons, et al. v. Graham Energy, Ltd., Graham Securities Corp., Graham Resources, Inc., Graham Depositary Company II, Prudential Securities, Inc., Prudential-Bache Properties, Inc., Prudential Insurance Company of America, and certain individuals, No. 91-040456-A in the District Court of Harris County, Texas, 190th Judicial District. This suit is on behalf of those plaintiffs originally party to a prior Growth Fund suit who declined to participate in the settlement between all defendants and the majority of plaintiffs in the prior case. The Gibbons action was created by an August 21, 1992 order entered by the court in the prior suit severing the claims of the non-settling plaintiffs. The Gibbons plaintiffs, all alleged investors in G-2 Partnership, seek compensatory and punitive damages, plus damages equalling not more than two times the amount of each plaintiff's actual damages, together with costs, interest and attorneys' fees for the defendants' alleged wrongdoing in connection with the offer and sale of Depositary Units in G-2 Partnership as well as for the alleged mismanagement of G-2 Partnership. Plaintiffs allege violation of common law and state law. There has been no significant activity in the suit since entry of the severance order. The defendants intend to defend the action vigorously. (ii) Robert I. Kaminsky, et al. v. Graham Energy, Ltd., Graham Securities Corp., Graham Resources, Inc., Graham Depositary Company II, Prudential Securities, Inc., Prudential-Bache Properties, Inc., Prudential Insurance Company of America, and certain individuals, No. 90-01796, in the District Court of Harris County, Texas, 55th Judicial District. Filed on or about April 24, 1991. Plaintiffs, all alleged investors in G-2 Partnership, commenced suit seeking compensatory and punitive damages, plus damage equalling not more than two times the amount of each plaintiff's actual damages, together with costs, interest and attorneys' fees for the defendants' alleged wrongdoing in connection with the offer and sale of Depositary Units in G-2 Partnership as well as for the alleged mismanagement of G-2 Partnership. Plaintiffs alleged violation of common law and state law. 28 In June of 1992, definitive settlement agreements were executed by all defendants and the majority of plaintiffs in Kaminsky. Pursuant to those agreements, a Corrected Final Judgment dismissing the settling plaintiffs' claims was entered on or about September 24, 1992. A motion to sever the claims of the non-settling plaintiffs remains pending. There has been no further significant activity in the suit. The defendants intend to defend the action vigorously. (iii) Rowell F. Lawson, et al. v. Prudential Securities, Inc., Prudential Insurance Company of America, Prudential-Bache Properties, Inc., Prudential-Bache Energy Growth Fund, L.P. G-1, Prudential-Bache Energy Growth Fund, L.P. G-2, Prudential-Bache Energy Growth Fund, L.P. G-3, Prudential-Bache Energy Growth Fund, L.P. G-4, Graham Energy Ltd., Graham Securities Corp., Graham Resources, Inc., Graham Depositary Company II, and certain individuals, No. 94-16852, in the District Court of Harris County, Texas, 164th Judicial District. The plaintiffs allege fraud, breach of fiduciary duty, negligence and state statutory claims in connection with the offer, sale and management of the Growth Funds. The plaintiffs seek compensatory, punitive and treble damages, together with costs, interest and attorneys' fees. A Memorandum of Understanding providing for the settlement of the Lawson case, as well as a number of other cases, was executed by counsel for the parties on December 28, 1994. In excess of eighty percent (80%) of the plaintiffs have executed releases and their claims have been dismissed. The remaining plaintiffs have not executed releases because, among other reasons: (1) they opposed the settlement, (2) they could not be located, (3) the plaintiffs' claims could not be verified, or (4) the plaintiffs had already settled their claims in other litigation. The plaintiffs who did not execute releases may pursue their claims further. If necessary, the defendants intend to defend the action vigorously. b. Growth Fund Derivative Suit Pending in New Jersey State Court Gary Starr, Cathy and David Lipton v. Graham Energy, Ltd., Graham Depositary Company II, Graham Securities Corp., Prudential-Bache Properties, Inc., Prudential Securities Group, Inc., Prudential Securities Inc., Prudential Life Insurance Company of America, certain individuals, Prudential-Bache Energy Growth Fund, L.P. G-1 and Prudential-Bache Energy Growth Fund, L.P. G-2, MID-L-1165-92 in the Superior Court of New Jersey, Middlesex County. Filed February 3, 1992. This is a derivative action brought on behalf of Prudential-Bache Energy Growth Funds, L.P. G-1 and G-2. G-1 and G-2 Partnerships are named as nominal defendants only. The complaint alleges breach of fiduciary duty and fraud in the management and marketing of investments in G-1 and G-2 Partnerships. Plaintiffs seek compensatory and punitive damages, costs and attorneys' fees. In January of 1993, counsel for the parties in Starr executed a Memorandum of Understanding providing for settlement of the case. Notice was sent October 7, 1994 to Unit Holders describing the action and the terms of the proposed settlement. The hearing on the final approval of the settlement was held on November 9, 1994. In an opinion dated May 10, 1995, the New Jersey Superior Court approved the settlement and awarded certain attorneys' fees and expenses. On August 1, 1995, the Court issued a further opinion dealing with certain matters relating to attorneys' fees, and on September 20, 1996 a Consent Order and Final Judgment dismissing the action was filed. Certain attorneys then filed Notices of Appeal relating only to the issue of attorneys' fees. Such notices of Appeal were thereafter withdrawn, and the Consent Order and Final Judgment became final on December 27, 1995. On or about March 1, 1996, the Settlement was implemented. c. Growth Fund Derivative Suits Pending in Delaware State Court In re Prudential-Bache Energy Growth Fund Litigation, Consolidated Civil Action No. 13677, in the Court of Chancery of the State of Delaware in and for New Castle County. This action consolidates Abrahamson et al. v. Graham Energy, Ltd. et al., Civil Action No. 13677, and Elman v. Graham Energy, Ltd., et al., Civil Action No. 13899. These cases are purported derivative actions brought on behalf of G-1, G-2, G-3 and G-4 Partnerships against the Partnerships, PSGI, PBP and a number of other defendants. The complaints allege breach of fiduciary duty and corporate waste, breach of contract, and a claim for aiding and abetting against affiliates of the General Partners. The suits seek, among other things, unspecified damages, liquidation of assets or appointment of a Receiver, costs and attorneys' fees. The General Partners and PSGI believe that they have meritorious defenses to the complaints and moved to dismiss complaints in the Abrahamson case prior to consolidation. They intend to vigorously defend themselves in the consolidated action. 29 d. New York Multidistrict Litigation, MDL 1005 By order of the Judicial Panel on Multidistrict Litigation dated April 14, 1994, a number of purported class actions then pending in various federal courts, were transferred to a single judge of the United States District Court for the Southern District of New York and consolidated for pretrial proceedings under the caption In re Prudential Securities Incorporated Limited Partnerships Litigation (MDL Docket 1005). On June 8, 1994, plaintiffs in the transferred cases filed a complaint that consolidated the previously filed complaints and named as defendants, among others, GEL, PSI, certain of their present and former employees and PBP. The Partnerships are not named as defendants in the consolidated complaint, but the names of the Partnerships are listed as being among the limited partnerships at issue in the case. On August 9, 1995 GEL, PBP, PSI and other Prudential defendants entered into a Stipulation and Agreement of Partial Compromise and Settlement with legal counsel representing plaintiffs in the actions consolidated for pretrial proceedings pursuant to orders of the Judicial Panel on Multidistrict Litigation under the caption In re Prudential Securities Incorporated Limited Partnership Litigation (MDL Docket No. 1005). The United Stated District Court for the Southern District of New York preliminarily approved the settlement agreement by order dated August 29, 1995 and, following a hearing held November 17, 1995, found that the agreement was fair, reasonable, adequate and in the best interests of the plaintiff class. The court gave final approval to the settlement, certified a class of purchasers of specific limited partnerships, including G-1 and G-2 Partnerships, released all settled claims by members of the class against GEL and the PSI settling defendants and permanently barred and enjoined class members from instituting, commencing or prosecuting any settled claim against the released parties. The full amount due under the settlement agreement has been paid by PSI. e. Other Actions Involving Prudential-Bache Energy Growth Fund Partnerships (i) G-1 and G-2 Partnerships and GEL were parties to an action entitled Plains Resources Inc. v. Northstar Gas Co., Inc., Northstar Resources, Inc., Prudential-Bache Energy Growth Fund, L.P. G-1, Prudential-Bache Energy Growth Fund, L.P. G-2, Prudential-Bache Properties, Inc., Graham Energy, Ltd., Mesa Pipeline Co., Natural Gas Clearinghouse, Inc., NGC Energy Resources Limited Partnership, NGC Energy, Inc. and certain individuals filed in the 125th Judicial District Court, Harris County, Texas on November 15, 1994. This suit was dismissed without prejudice on February 14, 1996. (ii) Richard Barnes, et al. v. Graham Energy, Ltd., Graham Resources, Inc., Graham Securities, Inc., Graham Depository Company II, Prudential Securities, Inc., Prudential-Bache Properties, Inc., Prudential-Bache Energy Growth Fund, L.P. G-1, Prudential-Bache Energy Growth Fund, L.P. G-2, Northstar Gas Company, Inc., Northstar Resources, Inc., and Kenneth M. McKinney, No. 95-43321 in the District Court of Harris County, Texas, filed on or about August 31, 1995. Plaintiffs, all claiming to be investors in G-1 Partnership and/or G-2 Partnership, commenced a class action lawsuit seeking compensatory and punitive damages and attorney's fees for the defendants' alleged wrongdoing in connection with breaches of the Definitive Stipulation and Agreement of Compromise and Settlement dated June 30, 1992 (``Class 1 Plaintiffs''), and breaches of fiduciary duty, negligence, and mismanagement with respect to the sale of Partnership properties by G-1 and G-2 to Northstar Gas Company, Inc.(``Class 2 Plaintiffs'') A resolution of the claims asserted by the Class 1 Plaintiffs has been reached and implemented. An Order dismissing those claims will be presented to the Court for entry forthwith. The parties are in discussions with respect to the settlement and/or voluntary dismissal of claims asserted by the Class 2 Plaintiffs. No discovery has yet been taken in the case. There is no assurance that the claims asserted by the Class 2 Plaintiffs will be settled or dismissed, and if no such resolution is accomplished, the defendants will defend the action vigorously. In addition to the litigation described above, there are a number of actions pending in various state and federal courts and/or arbitrations pending before various arbitration tribunals relating to the Partnerships brought by individual investors or groups of investors. These actions generally name PSI, Prudential-Bache Properties, Inc., Graham Resources, Inc., Graham Royalty, Ltd., and/or related entities, along with certain current and former employees of these entities. The defendants intend to defend each of these cases vigorously. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None 30 PART III Item 10. Directors and Executive Officers of the Registrants The Partnerships have no directors or officers. The business of the Partnerships is managed by the directors, officers and employees of PBP, GEL and their affiliates, as General Partners. The General Partners' directors and executive officers and any persons holding more than ten percent of the Partnerships' Units are required to report their initial ownership of such Units and any subsequent changes in that ownership to the Securities and Exchange Commission on Forms 3, 4 and 5. Such executive officers, directors and persons who own greater than ten percent of the Partnerships' Units are required by Securities and Exchange Commission regulations to furnish the Partnership with copies of all Forms 3, 4 or 5 they file. All of these filing requirements were satisfied on a timely basis. In making these disclosures, the Partnership has relied solely on written representations of the General Partners' directors and executive officers and persons who own greater than ten percent of the Partnerships' Units, if any, or copies of the reports they have filed with the Securities and Exchange Commission during and with respect to its most recent fiscal year. The following information as of March 1, 1996, is provided with respect to each director and executive officer of PBP and GEL. PRUDENTIAL-BACHE PROPERTIES, INC.
Name Title - ---------------------------- ---------------------------------------------------- Thomas F. Lynch, III President, Chief Executive Officer, Chairman of the Board of Directors and Director Barbara J. Brooks Vice President - Finance and Chief Financial Officer Frank W. Giordano Director Nathalie P. Maio Director
GRAHAM ENERGY, LTD.
Name Title - ---------------------------- ---------------------------------------------------- Russell L. Allen President (Principal Executive Officer, Principal Financial Officer) Thomas F. Lynch, III Secretary and Director Frank W. Giordano Director Nathalie P. Maio Director
THOMAS F. LYNCH, III, age 37, is the President, Chief Executive Officer, Chairman of the Board of Directors and a Director of PBP. He is a Senior Vice President of Prudential Securities Incorporated (``PSI''), an affiliate of PBP. Mr. Lynch also serves in various capacities for other affiliated companies. Mr. Lynch joined PSI in November 1989. BARBARA J. BROOKS, age 47, is the Vice President-Finance and Chief Financial Officer of PBP. She is a Senior Vice President of PSI. Ms. Brooks also serves in various capacities for other affiliated companies. She has held several positions within PSI since 1983. Ms. Brooks is a certified public accountant. FRANK W. GIORDANO, age 53, is a Director of PBP. He is a Senior Vice President of PSI and an Executive Vice President and General Counsel of Prudential Mutual Fund Management Inc., an affiliate of PSI. Mr. Giordano also serves in various capacities for other affiliated companies, including as Director of GEL. He has been with PSI since July 1967. NATHALIE P. MAIO, age 45, is a Director of PBP. She is a Senior Vice President and Deputy General Counsel of PSI and supervises non-litigation legal work for PSI, including all of the PSI Law Department's corporate and marketing-review activity. She joined PSI's Law Department in 1983; presently, she also serves in various capacities for other affiliated companies, including as Director of GEL. RUSSELL L. ALLEN, age 51, is the President of BraeLoch Holdings Inc. and its affiliated companies. He has held these positions since May 20, 1994, according to the terms of a consulting agreement with Prudential Securities Group Inc. Previously, he provided management consulting services to BraeLoch 31 Holdings Inc. Prior to becoming a management consultant, Mr. Allen was a financial executive in the oil and gas industry. He is a certified public accountant. Thomas F. Lynch, III replaced James M. Kelso as President, Chief Executive Officer, Chairman of the Board of Directors and Director of PBP effective June 30, 1995. Thomas F. Lynch, III replaced James M. Kelso as Secretary and Director of GEL effective August 8, 1995. There are no family relationships among any of the foregoing directors or executive officers. All of the foregoing executive officers and directors have indefinite terms. Item 11. Executive Compensation The Partnership does not pay or accrue any fees, salaries or any other form of compensation to directors and officers of the General Partners for their services. Certain executive officers and directors of the General Partners receive compensation from affiliates of the General Partners, not from the Partnership, for services performed for various affiliated entities, which may include services performed for the Partnership; however, the General Partners believe that any compensation attributable to services performed for the Partnership is immaterial. See Item 13 Certain Relationships and Related Transactions for information regarding compensation to the General Partners. Item 12. Security Ownership of Certain Beneficial Owners and Management As of March 14, 1996, no director or executive officer of either of the General Partners owns directly or beneficially any interest in the voting securities of the General Partner. As of March 14, 1996, no director or executive officer of either of the General Partners owns directly or beneficially any of the Units issued by the Partnership. As of March 14, 1996, no limited partner beneficially owns more than five percent (5%) of the outstanding Units issued by the Partnership. Item 13. Certain Relationships and Related Transactions The Partnerships reimbursed PBP and GEL during 1995 for indirect general and administrative costs incurred on their behalf. See Note 4 to the financial statements contained in Part II, Item 8 Financial Statements and Supplementary Data for a discussion of these charges. It is expected that similar charges will be made by PBP and GEL in 1996 for reimbursement of indirect general and administrative costs. However, as the Partnerships are in process of liquidation, the amounts expected to be incurred during 1996 have been estimated and accrued as of December 31, 1995. The actual charges to be incurred by the Partnerships may differ from those amounts accrued as of December 31, 1995. 32 PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K (a) 1. Financial Statements and Independent Auditors' Report for each Partnership-- Report of Independent Public Accountants Statements of Net Assets (in process of liquidation), December 31, 1995 and 1994 Consolidated Statements of Changes in Net Assets (in process of liquidation) for the period October 1, 1994 to December 31, 1995 Consolidated Statements of Operations (going concern basis) for the nine months ended September 30, 1994 and for the year ended December 31, 1993 Consolidated Statements of Changes in Partners' Capital (going concern basis) for the nine months ended September 30, 1994 and for the year ended December 31, 1993 Consolidated Statements of Cash Flows (going concern basis) for the nine months ended September 30, 1994 and for the year ended December 31, 1993 Notes to Financial Statements 2. Financial Statement Schedules: All other schedules have been omitted because they are not applicable the required information is shown in the financial statements and notes thereto. 3. Exhibits: Exhibit 4(a): Amended and Restated Certificate of Limited Partnership of Prudential-Bache Energy Growth Fund, L.P. G-1 (filed as Exhibit 4 (b) to Quarterly Report on Form 10-Q for the three months ended June 30, 1987 for G-1 Partnership, and incorporated herein by reference). Exhibit 4(b): Amended and Restated Agreement of Limited Partnership of Prudential-Bache Energy Growth Fund, L.P. G-1 (filed as Exhibit 4(a) to Annual Report on form 10-K for the year ended December 31, 1986 for G-1 Partnership, and incorporated herein by reference). Exhibit 4(c): Certificate of Limited Partnership of Prudential-Bache Energy Growth Fund, L.P. G-2(filed as Exhibit 4(a) to Quarterly Report on Form 10-Q for the three months ended June 30, 1987 for G-2 Partnership, and incorporated herein by reference). Exhibit 4(d): Amended and Restated Agreement of Limited Partnership of Prudential-Bache Energy Growth Fund, L.P. G-2 (filed as Exhibit 4(b) to Quarterly Report on Form 10-Q for the three months ended June 30, 1987 for G-2 Partnership, and incorporated herein by reference). Exhibit 10(a): Assignment and Purchase of Interests in Notes, Liens, Security Interests and Other Assets executed as of March 16, 1987, effective as of January 1, 1987, among First City National Bank of Houston and First City Energy Finance Company as Assignor, and Prudential-Bache Energy Growth Fund, L.P. G-1 as Assignee, including exhibits thereto (filed as Exhibit 10(a) to Annual Report on Form 10-K for the year ended December 31, 1986 for G-1 Partnership, and incorporated herein by reference).
33 Exhibit 10(b): Credit Agreement dated August 25, 1987 between Maple Gulf Coast Properties Corporation (``Maple'') as Borrower, and Prudential-Bache Energy Growth Fund, L.P. G-2 as Lender, including attachments thereto, providing for the sale by BHP Petroleum Company, Inc. and the purchase by Maple of certain oil and gas properties (filed as Exhibit 10(b) to Quarterly Report on Form 10-Q for the three months ended September 30, 1987 for G-2 Partnership, and incorporated herein by reference). Exhibit 10(c): Participation Agreement dated August 25, 1987 between Prudential-Bache Energy Growth Fund, L.P. G-2 as Seller, and Prudential-Bache Energy Growth Fund, L.P. G-1 as Purchaser, providing for the respective Partnerships' participation in the BHP Petroleum Company, Inc. sale (filed as Exhibit 10(c) to Quarterly Report on Form 10-Q for the three months ended September 30, 1987 for G-1 Partnership and G-2 Partnership, and incorporated herein by reference). Exhibit 10(d): Credit Agreement dated August 25, 1987 between Maple Gulf Coast Properties Corporation (``Maple'') as Borrower, and Prudential-Bache Energy Growth Fund, L.P. G-2 as Lender, including attachments thereto, providing for the sale by Collet Oil Ventures, Inc. (``Collet'') and the purchase by Maple of all of the capital stock of Collet (filed as Exhibit 10(d) to Quarterly Report on Form 10-Q for the three months ended September 30, 1987 for G-2 Partnership, and incorporated herein by reference). Exhibit 10(e): Participation Agreement, dated August 25, 1987 between Prudential-Bache Energy Growth Fund, L.P. G-2 as Seller and Prudential-Bache Energy Growth Fund, L.P. G-1 as Purchaser, providing for the respective Partnerships' participation in the Collet Oil Ventures, Inc. stock purchase (filed as Exhibit 10(e) to Quarterly Report on Form 10-Q for the three months ended September 30, 1987 for G-1 Partnership and G-2 Partnership, and incorporated herein by reference). Exhibit 10(f): Stock Purchase Agreement dated August 1, 1987 for the sale and purchase of Mesa Pipeline Company stock between the Birch Corporation as Seller, Prudential-Bache Energy Growth Fund, L.P. G-1 and Prudential-Bache Energy Growth Fund, L.P. G-2 as Buyers, and the Maple Corporation as Guarantor, including exhibits thereto (filed as Exhibit 10(f) to Quarterly Report on Form 10-Q for the three months ended September 30, 1987 for G-1 Partnership and G-2 Partnership, and incorporated herein by reference). Exhibit 10(g): Stock Purchase Agreement dated November 10, 1987 for the sale and purchase of Series A Gas Indexed Convertible Preferred Stock of Maple Gulf Coast Properties Corporation (``Maple'') between Maple as Seller, and Prudential-Bache Energy Growth Fund, L.P. G-1 and Prudential-Bache Energy Growth Fund, L.P. G-2 as Buyers, including exhibits thereto (filed as Exhibit 10(g) to Annual Report on Form 10-K for the year ended December 31, 1987 for G-1 Partnership and G-2 Partnership, and incorporated herein by reference).
34 Exhibit 10(h): Credit Agreement dated November 10, 1987 between Maple Gulf Coast Properties Corporation (``Maple'') as Borrower, and Prudential-Bache Energy Growth Fund, L.P. G-2 as Lender, including attachments thereto, providing for the purchase by Maple of all of the capital stock of Utah Reserves, Inc. (filed as Exhibit 10(h) to Annual Report on Form 10-K for the year ended December 31, 1987 for G-2 Partnership, and incorporated herein by reference). Exhibit 10(i): Participation Agreement dated November 10, 1987 between Prudential-Bache Energy Growth Fund, L.P. G-2 as Seller and Prudential-Bache Energy Growth Fund, L.P. G-1 as Purchaser, providing for the respective Partnerships' participation in the transaction between Maple Gulf Coast Properties Corporation and Utah Reserves, Inc. (filed as Exhibit 10(i) to Annual Report on Form 10-K for the year ended December 31, 1987 for G-2 Partnership, and incorporated herein by reference). Exhibit 10(j): Credit Agreement dated January 26, 1988 between OXOCO, Inc. and subsidiaries (``OXOCO'') collectively as Borrowers, and Prudential-Bache Energy Growth Fund, L.P. G-2 as Lender, including exhibits thereto, providing for the refinancing of OXOCO's existing bank debt (filed as Item 7, Exhibit A to report on Schedule 13D dated February 16, 1988 for G-2 Partnership (CUSIP No. 692066301), and incorporated herein by reference). Exhibit 10(k): Purchase Agreement dated March 28, 1988 between Energy Service Company, Inc. and ENSCO Marine Company (``EN- SCO'') collectively as Borrowers, and G-2 Partnership and Prudential-Bache Energy Growth Fund, L.P. G-3, collectively as Lenders, providing for the financing of the purchase of oil field supply vessels (filed as Exhibit 10(k) to Quarterly Report on Form 10-Q for the three months ended March 31, 1988, for G-2 Partnership and incorporated herein by reference). Exhibit 10(l): Credit Agreement dated as of June 30, 1988 among American National Petroleum Company as Borrower, Coquina Oil Corporation, Pecos Pipeline & Producing Company, Hawthorne Oil & Gas Corporation and Prudential-Bache Energy Growth Fund, L.P. G-2 as Lender, providing for the assumption of OXOCO Inc.'s existing indebtedness and the loan of additional funds to Borrower (filed as Exhibit 10(l) to Quarterly Report on Form 10-Q for the three months ended September 30, 1988, for G-2 Partnership, and incorporated herein by reference). Exhibit 10(m): Master Lease Agreement dated September 28, 1988 by and among Prudential-Bache Energy Growth Fund, L.P. G-2, Prudential-Bache Energy Growth Fund, L.P. G-3 and Pruden- tial-Bache Energy Growth Fund, L.P. G-4, collectively, as Lessors and Hall-Houston Offshore and an affiliate thereof, collectively as Lessees, for the lease of certain oil and gas production facilities (filed as Exhibit 10(m) to Quarterly Report on Form 10-Q for the three months ended September 30, 1988, for G-2 Partnership and incorporated herein by reference).
35 Exhibit 10(n): Amended and Restated Purchase Agreement dated October 19, 1988 between Offshore Pipelines, Inc. as Borrower, and Prudential-Bache Energy Growth Fund, L.P. G-2, Prudential-Bache Energy Growth Fund, L.P. G-3 and Prudential-Bache Energy Growth Fund, L.P. G-4, collectively as Lenders, providing for the consolidation of previously extended financing for the purchase of offshore construction/pipelaying barges, the purchase of tugboats and for working capital (filed as Exhibit 10(n) to Quarterly Report on Form 10-Q for the three months ended September 30, 1988, for G-2 Partnership and incorporated herein by reference). Exhibit 10(o): Purchase Agreement dated October 28, 1988 by and among Lamamco Drilling Company, as Borrower and Prudential-Bache Energy Growth Fund, L.P. G-2, Prudential-Bache Energy Growth Fund, L.P. G-3 and Prudential-Bache Energy Growth Fund, L.P. G-4, collectively as Purchasers, providing for the financing of the purchase of interests in certain oil and gas properties (filed as Exhibit 10(o) to Quarterly Report on Form 10-Q for the three months ended September 30, 1988 for G-2 Partnership and incorporated herein by reference). Exhibit 10(p): Purchase Agreement dated January 18, 1989 between Hal- l-Houston Offshore as Borrower, and Prudential-Bache Energy Growth Fund, L.P. G-2 Prudential-Bache Energy Growth Fund, L.P. G-3 and Prudential-Bache Energy Growth Fund, L.P. G-4, collectively as Purchasers, providing for the financing of developmental drilling activities, debt refinancing and for working capital (filed as Exhibit 10(p) to Annual Report on Form 10-K for the year ended December 31, 1988 for G-2 Partnership and incorporated herein by reference). Exhibit 10(q): First Amendment to Purchase Agreement dated as of February 15, 1989 by and among Lamamco Drilling Company, as Borrow- er and Prudential-Bache Energy Growth Fund, L.P. G-2, Prudential-Bache Energy Growth Fund, L.P. G-3 and Prudential-Bache Energy Growth Fund, L.P. G-4, collectively as Purchasers, providing for the financing of the purchase of interests in certain oil and properties (filed as Exhibit 10(q) to Annual Report on Form 10-K for the year ended December 31, 1988 for G-2 Partnership and incorporated herein by reference). Exhibit 10(r): Form of Agreement dated March 1, 1989 by and among Pruden- tial-Bache Energy Growth Fund, L.P. G-1, Prudential-Bache Energy Growth Fund, L.P. G-2, and Mesa Pipeline Company of Louisiana, collectively as Purchasers, and The Maple Corporation, Maple Gulf Coast Properties Corporation, Collet Oil Ventures, Inc., Utah Reserves, Inc., Arapahoe Operating Company, The Birch Corporation and Arapahoe Financial Service Company (filed as Exhibit 10(r) to Annual Report on Form 10-K for the year ended December 31, 1988 for G-2 Partnership and incorporated herein by reference).
36 Exhibit 10(s): Master Lease Agreement dated October 26, 1989, by and among Kentucky Offshore, Inc., Wind Ridge Energy Corp., Cliffs Oil and Gas Company, Badger Oil and Gas Co., Inc., Shank Land Company, Ltd., Flash Gas and Oil Southwest, Inc., Solomon Corporation, Cord Energy Resources, Inc., The Reidy Limited Partnership, Chateau Oil and Gas, Inc., Jay S. Stevens, III and Vickie M. Stevens and Roberts & Bunch Offshore, Inc., collectively as lessees and Prudential-Bache Energy Growth Fund, L.P. G-2, Prudential-Bache Energy Growth Fund, L.P. G-3 and Prudential-Bache Energy Growth Fund, L.P. G-4 collectively as lessors, providing for the lease of certain oil and gas production facilities (filed as Exhibit 10(s) to Quarterly Report on Form 10-Q for the three months ended September 30, 1989 for G-2 Partnership and incorporated herein by reference). Exhibit 10(t): First Amendment to Amended and Restated Purchase Agree- ment dated as of May 17, 1989, by and among Offshore Pipe- lines, Inc., as Borrower and Prudential-Bache Energy Growth Fund, L.P. G-2, Prudential-Bache Energy Growth Fund, L.P. G-3 and Prudential-Bache Energy Growth Fund, L.P. G-4, collectively referred as Lenders, providing for the termination of the previously extended Revolving Credit Facility and the issuance of additional Senior Secured Notes (filed as Exhibit 10(t) to Annual Report on Form 10-K for the year ended December 31, 1989 for G-2 Partnership and incorporated herein by reference). Exhibit 10(u): Second Amendment to Amended and Restated Purchase Agree- ment dated as of November 21, 1989, by and among Offshore Pipelines, Inc., as Borrower and Prudential-Bache Energy Growth Fund, L.P. G-2, Prudential-Bache Energy Growth Fund, L.P. G-3 and Prudential-Bache Energy Growth Fund, L.P. G-4, collectively referred as Lenders, providing for the issuance of Senior Secured Notes as an enhancement of previous investments (filed as Exhibit 10(u) to Annual Report on Form 10-K for the year ended December 31, 1989 for G-2 Partnership and incorporated herein by reference). Exhibit 10(v): Purchase Agreement dated as of December 15, 1989, between Walter International, Inc., as Issuer and Prudential-Bache Energy Growth Fund, L.P. G-2, Prudential-Bache Energy Growth Fund, L.P. G-3 and Prudential-Bache Energy Growth Fund, L.P. G-4, collectively as Purchasers, providing for the issuance of 14% Senior Cumulative Preferred Stock with Common Stock Purchase warrants (filed as Exhibit 10(t) to Annual Report on Form 10-K for the year ended December 31, 1989 for G-2 Partnership and incorporated herein by reference). Exhibit 10(x): Second Amended and Restated Purchase Agreement dated as of August 17, 1990, by and among OPI International, Inc., as Borrower and Prudential-Bache Energy Growth Fund, L.P. G-2, Prudential-Bache Energy Growth Fund, L.P. G-3 and Prudential-Bache Energy Growth Fund, L.P. G-4, collectively as Lenders, providing for the restructing of the previous Offshore Pipelines, Inc. indebtedness (filed as Exhibit 10(u) to Quarterly Report on Form 10-Q for the quarter ended September 30, 1994 for G-2 Partnership and incorporated herein by reference). Exhibit 27: Financial Data Schedule (filed herewith) (b) Reports on Form 8-K--None
37 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized. Prudential-Bache Energy Growth Fund, L.P. G-1 Prudential-Bache Energy Growth Fund, L.P. G-2 By: Prudential-Bache Properties, Inc. By: Graham Energy, Ltd., General Partner General Partner By: /s/ Barbara J. Brooks By: /s/ Russell L. Allen ----------------------------------------- ------------------------------ Barbara J. Brooks, Vice President - (Principal Executive Officer) Finance and Chief Financial Officer Russell L. Allen, President Date: March 29, 1996 Date: March 29, 1996
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 Registrants and in the capacities and on the dates indicated. By: Prudential-Bache Properties, Inc. General Partner By: /s/ Thomas F. Lynch, III March 29, 1996 ---------------------------------------- Thomas F. Lynch, III President, Chief Executive Officer, Chairman of the Board of Directors and Director By: /s/ Barbara J. Brooks March 29, 1996 ---------------------------------------- Barbara J. Brooks Vice President-Finance and Chief Financial Officer By: /s/ Frank W. Giordano March 29, 1996 ---------------------------------------- Frank W. Giordano Director By: /s/ Nathalie P. Maio March 29, 1996 ---------------------------------------- Nathalie P. Maio Director By: Graham Energy, Ltd., General Partner By: /s/ Russell L. Allen March 29, 1996 ---------------------------------------- Russell L. Allen President (Principal Executive Officer, Principal Financial Officer) 38 EX-27 2 ART. 5 FDS FOR 4TH QUARTER 10-K
5 The Schedule contains summary financial information extracted from the financial statements for P-B ENERGY GROWTH FUND, L.P. G-1 and is qualified in its entirety by reference to such financial statements 0000801580 P-B ENERGY GROWTH FUND, L.P. G-1 1,000 Dec-31-1995 Jan-1-1995 Dec-31-1995 12-Mos 4,760 0 15 0 0 4,775 0 0 4,775 278 0 0 0 0 4,497 4,775 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
EX-27.1 3 ART. 5 FDS FOR 4TH QUARTER 10-K
5 The Schedule contains summary financial information extracted from the financial statements for P-B ENERGY GROWTH FUND, L.P. G-2 and is qualified in its entirety by reference to such financial statements 0000801582 P-B ENERGY GROWTH FUND, L.P. G-2 1,000 Dec-31-1995 Jan-1-1995 Dec-31-1995 12-Mos 4,492 0 9 0 0 4,501 0 0 4,501 390 0 0 0 0 4,111 4,501 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
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