<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______________ TO ______________
COMMISSION FILE NUMBER 0-9589
APACHE PETROLEUM LIMITED PARTNERSHIP 1980-I
- - - - - - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
MINNESOTA 41-6254238
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
SUITE 100, ONE POST OAK CENTRAL
2000 POST OAK BOULEVARD, HOUSTON, TX 77056-4400
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (713) 296-6000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO --
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PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
APACHE PETROLEUM LIMITED PARTNERSHIP 1980-I
BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1995 1994
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents..................................... $ 148,040 $ 86,274
Oil and gas receivables....................................... 112,759 144,688
------------ ------------
260,799 230,962
------------ ------------
OIL AND GAS PROPERTIES, on the basis of full cost accounting:
Proved properties............................................. 24,683,245 24,615,328
Less -- accumulated depreciation, depletion and
amortization............................................... (20,944,988) (20,241,566)
------------ ------------
3,738,257 4,373,762
------------ ------------
$ 3,999,056 $ 4,604,724
============ ============
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accrued expenses payable...................................... $ 338,195 $ 334,310
Payable to Apache............................................. 106,953 34,866
------------ ------------
445,148 369,176
------------ ------------
DEFERRED CREDITS............................................... 1,026,097 1,026,097
------------ ------------
PARTNERS' CAPITAL:
General partner............................................... 1,822,849 2,311,416
Limited partners (343 equivalent units outstanding)........... 704,962 898,035
------------ ------------
2,527,811 3,209,451
------------ ------------
$ 3,999,056 $ 4,604,724
============ ============
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
2
<PAGE> 3
APACHE PETROLEUM LIMITED PARTNERSHIP 1980-I
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
----------------------
1995 1994
--------- --------
<S> <C> <C>
REVENUES:
Oil and gas sales................................................... $ 230,966 $245,912
Interest and other income........................................... -- 819
--------- --------
230,966 246,731
--------- --------
EXPENSES:
Depreciation, depletion and amortization --
Recurring........................................................ 66,316 84,226
Additional....................................................... 637,106 --
Lease operating..................................................... 107,813 61,859
Production taxes.................................................... 13,936 22,387
Administrative...................................................... 45,290 62,871
--------- --------
870,461 231,343
--------- --------
NET INCOME (LOSS)..................................................... $(639,495) $ 15,388
========= ========
Allocated to:
General partner..................................................... $(463,619) $ 33,942
Limited partners.................................................... (175,876) 3,848
Combining adjustments............................................... -- (22,402)
--------- --------
$(639,495) $ 15,388
========= ========
NET INCOME (LOSS) PER WEIGHTED AVERAGE EQUIVALENT LIMITED PARTNER
UNIT................................................................ $ (513) $ 11
========= ========
WEIGHTED AVERAGE EQUIVALENT LIMITED PARTNER UNITS OUTSTANDING......... 343 343
========= ========
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
3
<PAGE> 4
APACHE PETROLEUM LIMITED PARTNERSHIP 1980-I
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
-----------------------
1995 1994
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)................................................ $(639,495) $ 15,388
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
Depreciation, depletion and amortization...................... 703,422 84,226
Changes in operating assets and liabilities:
Decrease in oil and gas receivables........................... 31,929 42,929
Increase in payable to Apache................................. 72,087 11,380
Increase (decrease) in accrued expenses....................... 3,885 (23,296)
Increase in deferred credits.................................. -- 13
--------- ---------
Net cash provided by operating activities................ 171,828 130,640
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties.............................. (67,917) (25,198)
--------- ---------
Net cash used by investing activities.................... (67,917) (25,198)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions paid to --
General partner, net.......................................... (24,948) (79,154)
Limited partners.............................................. (17,197) (68,580)
--------- ---------
Net cash used by financing activities.................... (42,145) (147,734)
--------- ---------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS................................................. 61,766 (42,292)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR....................... 86,274 119,898
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD........................... $ 148,040 $ 77,606
========= =========
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
4
<PAGE> 5
APACHE PETROLEUM LIMITED PARTNERSHIP 1980-I
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
(UNAUDITED)
<TABLE>
<CAPTION>
GENERAL LIMITED COMBINING
PARTNER PARTNERS ADJUSTMENTS TOTAL
---------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1993...................... $3,103,442 $2,103,175 $ 2,112,578 $7,319,195
Distributions, net............................ (79,154) (68,580) -- (147,734)
Net income (loss)............................. 33,942 3,848 (22,402) 15,388
---------- ---------- ----------- ----------
BALANCE, MARCH 31, 1994......................... $3,058,230 $2,038,443 $ 2,090,176 $7,186,849
========== ========== =========== ==========
BALANCE, DECEMBER 31, 1994...................... $2,311,416 $ 898,035 $ -- $3,209,451
Distributions, net............................ (24,948) (17,197) -- (42,145)
Net income (loss)............................. (463,619) (175,876) -- (639,495)
---------- ---------- ----------- ----------
BALANCE, MARCH 31, 1995......................... $1,822,849 $ 704,962 $ -- $2,527,811
========== ========== =========== ==========
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
5
<PAGE> 6
APACHE PETROLEUM LIMITED PARTNERSHIP 1980-I
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. The financial statements included herein have been prepared by the
Partnership, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission (SEC), and reflect all adjustments which
are, in the opinion of management, necessary to a fair statement of the
results for the interim periods, on a basis consistent with the annual
audited statements. All such adjustments are of a normal, recurring nature.
Certain information, accounting policies, and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been omitted pursuant to such rules and
regulations, although the Partnership believes that the disclosures are
adequate to make the information presented not misleading. These financial
statements should be read in conjunction with the financial statements and
the summary of significant accounting policies and notes thereto included in
the Partnership's latest annual report on Form 10-K.
2. SEC regulations require that capitalized costs of oil and gas properties may
not exceed an amount equal to the present value, discounted at 10 percent, of
the estimated future net revenue to be generated by existing proved reserves.
Should capitalized costs exceed this ceiling, they are reduced through
additional depreciation, depletion and amortization. At the end of the first
quarter of 1995, the Partnership's oil and gas property costs exceeded the
discounted future net revenue by $637,106.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Partnership's liquidity is solely dependent on its net cash flows from
operating activities. During the past two years, the Partnership has not had any
debt service or any other significant demands on its net cash flows except for
drilling of offset wells, recompletions and workovers conducted to enhance
production or correct mechanical problems. Accordingly, the Partnership's net
cash flows in the first quarter of 1995 and 1994 have been used primarily to
make cash distributions to the partners and fund limited capital expenditures.
The net cash provided by operating activities during the first quarter of 1995
increased from the comparable period in 1994 due to a temporary increase in the
Partnership's liabilities. Excluding the impact of working capital accounts, the
Partnership's cash from operating activities declined 36 percent.
Capital expenditures for recompletions and any other future development
drilling activity will be funded by a portion of the cash generated by the
operations of producing properties, or through farmout arrangements at no cost
to the Partnership. Capital expenditures for the twelve months of 1995 are not
expected to be significantly different from amounts incurred in 1994.
Although cash flows from operating activities are expected to be sufficient
to meet the Partnership's foreseeable liquidity needs, future distribution
levels are expected to decrease on an annual basis due to normal production
declines on existing producing properties and limited expenditures to replace
reserves produced. This trend could be mitigated by increases in average oil and
gas prices and recompletion activities. The Partnership is not in a position to
predict the future of oil and gas prices and demands. The Partnership intends to
limit future drilling to those operations designed to prevent drainage from the
Partnership properties caused by adjoining landowner activities.
Based on reserve estimates, the Partnership has identified certain
properties on which remaining gas reserves may not be sufficient to permit
existing gas imbalances to be made up in a normal manner. Monies the Partnership
receives on these properties are being treated as a deferred credit on the
balance sheet. The balance in this deferred account will be reduced when the
settlement of imbalances requires cash payments to under-delivered owners in
these properties or volumes are otherwise recouped by under-produced owners from
other wells in which the Partnership has an interest.
RESULTS OF OPERATIONS
During the first quarter of 1995, the Partnership wrote-down the carrying
value of its oil and gas properties by $637,106, as natural gas prices received
by the Partnership declined approximately 17 percent since December 31, 1994. A
slight decline in reserve estimates offset the impact of improving oil prices.
While gas prices stabilized near the end of the first quarter of 1995, spot
market gas prices have declined approximately 35 percent from their high point
in 1994. The first quarter charge to earnings follows write-downs during the
second, third and fourth quarters of 1994 resulting from lower prices and lower
reserve estimates.
As a result of the current write-down, the Partnership reported a loss for
the first quarter of 1995 totaling $639,495. This compared to net income of
$15,388 in the first quarter of 1994.
First quarter oil and gas sales of $230,966 dropped six percent from a year
ago as lower natural gas prices more than offset the impact of improved oil
prices. The Partnership's average gas price for the first quarter of 1995 of
$1.50 per Mcf was down $.34 per Mcf, or 18 percent, from a year ago. The
Partnership's average oil price of $16.03 per barrel increased $3.71 per barrel
from the comparable period in 1994. As a result of the price fluctuations, oil
accounted for 40 percent of the Partnership's sales in 1995 compared to 30
percent a year ago. Oil volumes, however, represent only 13 percent of the
Partnership's estimated remaining reserves.
Oil and gas production declined approximately three percent and four
percent, respectively, from a year ago due to natural depletion. The
Partnership's oil production during the first quarter of 1995 averaged 65
barrels of oil per day (bopd) compared to 67 bopd during the first quarter of
1994. Gas production declined to 1,017 thousand cubic feet of gas per day (Mcfd)
from 1,054 Mcfd during the comparable period last year.
7
<PAGE> 8
Recurring depreciation, depletion and amortization expense for the first
quarter declined 21 percent from a year ago due to lower oil and gas sales. The
Partnership wrote-down the carrying value of its oil and gas properties by
$637,106 as lower natural gas prices reduced the estimated future net revenue to
be generated by existing proved reserves.
Lease operating expense in the first quarter of this year increased $45,954
from a year ago due to higher workover costs and increased costs on the
Partnership's aging properties. Production taxes for the first quarter of 1995
dropped from the comparable period in 1994 due to the decline in oil and gas
sales.
General and administrative expenses during the first quarter of 1995
declined 28 percent from a year ago due to timing differences. It is expected
that by the end of the year 1995, general and administrative costs will be
approximately equal to such expenses for the twelve months ending 1994.
8
<PAGE> 9
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The information set forth in Note 4 to the financial statements contained
in the registrant's 1994 annual report on Form 10-K, filed March 31, 1995, is
incorporated herein by reference.
On April 27, 1995, the American Arbitration Association (the panel) in
Denver, Colorado, awarded damages jointly to Apache Corporation and Snyder Oil
Company in their proceedings against Koch Hydrocarbons Co. (Koch) under Case
No. 77198 0169 93. The panel also denied any recovery by Koch in its claim
against Apache and Snyder. The Partnership estimates that its share of the
award is approximately $70,000. The determination of the panel is subject to
appeal.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits -- None.
b. Reports filed on Form 8-K -- None.
9
<PAGE> 10
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereto duly authorized.
APACHE PETROLEUM LIMITED
PARTNERSHIP 1980-I
By: Apache Corporation, General
Partner
<TABLE>
<S> <C>
Dated: May 12, 1995 /s/ Mark A. Jackson
-----------------------------------------------
Mark A. Jackson
Vice President, Finance
Dated: May 12, 1995 /s/ R. Kent Samuel
-----------------------------------------------
R. Kent Samuel
Controller and Chief Accounting Officer
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 148,040
<SECURITIES> 0
<RECEIVABLES> 112,759
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 260,799
<PP&E> 24,683,245
<DEPRECIATION> (20,944,988)
<TOTAL-ASSETS> 3,999,056
<CURRENT-LIABILITIES> 445,148
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2,527,811
<TOTAL-LIABILITY-AND-EQUITY> 3,999,056
<SALES> 230,966
<TOTAL-REVENUES> 230,966
<CGS> 825,171
<TOTAL-COSTS> 825,171
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (639,495)
<INCOME-TAX> 0
<INCOME-CONTINUING> (639,495)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (639,495)
<EPS-PRIMARY> (513)
<EPS-DILUTED> (513)
</TABLE>
