SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 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
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APACHE PETROLEUM LIMITED PARTNERSHIP 1980-I
- -----------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Minnesota 41-6254238
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(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
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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
----- -----
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
APACHE PETROLEUM LIMITED PARTNERSHIP 1980-I
BALANCE SHEET
(Unaudited)
<TABLE>
September 30, December 31,
1995 1994
------------ -----------
ASSETS
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 70,923 $ 86,274
Oil and gas receivables 126,402 144,688
----------- -----------
197,325 230,962
----------- -----------
OIL AND GAS PROPERTIES on the basis
of full cost accounting
Proved properties 24,545,607 24,615,328
Less - accumulated depreciation,
depletion and amortization (21,119,827) (20,241,566)
----------- -----------
3,425,780 4,373,762
----------- -----------
$ 3,623,105 $ 4,604,724
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to Apache Corporation $ 10,283 $ 34,866
Accrued expenses payable 87,029 334,310
----------- -----------
97,312 369,176
----------- -----------
DEFERRED CREDITS 1,026,097 1,026,097
----------- -----------
PARTNERS' CAPITAL:
General partner 1,816,011 2,311,416
Limited partners (343 equivalent
units outstanding) 683,685 898,035
----------- -----------
2,499,696 3,209,451
----------- -----------
$ 3,623,105 $ 4,604,724
=========== ===========
</TABLE>
<PAGE>
APACHE PETROLEUM LIMITED PARTNERSHIP 1980-I
STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
For the Quarter For the Nine Months
Ended September 30, Ended September 30,
--------------------------- ---------------------------
1995 1994 1995 1994
------------ ------------ ----------- ------------
REVENUES:
<S> <C> <C> <C> <C>
Oil and gas sales $ 250,131 $ 301,645 $ 771,443 $ 799,997
Interest and other income 948 -- 3,082 1,218
------------ -- -------- ----- ----- -------- -------------
251,079 301,645 774,525 801,215
------------- ------------- ------------- -------------
EXPENSES:
Depreciation, depletion
and amortization -
Recurring 65,193 110,671 203,135 294,748
Additional 38,020 1,448,775 675,126 2,578,353
Lease operating 78,808 73,660 303,913 242,612
Production taxes 25,212 27,612 65,509 72,981
Administrative 45,447 39,479 135,475 130,400
------------- ------------- ------------- -------------
252,680 1,700,197 1,383,158 3,319,094
------------- ------------- ------------- -------------
NET INCOME (LOSS): $ (1,601) $(1,398,552) $ (608,633) $ (2,517,879)
============ = ============= ============= =============
Allocated to:
General partner $ 27,537 $ 57,804 $ (411,481) $ 115,069
Limited partners (29,138) (400,517) (197,152) (764,488)
Combining adjustments -- (1,055,839) -- (1,868,460)
------------- ------------- -------------- -------------
$ (1,601) $ (1,398,552) $ (608,633) $(2,517,879)
============= ============= ============= =============
NET INCOME (LOSS) PER
WEIGHTED AVERAGE EQUIVALENT
LIMITED PARTNER UNIT $ (85) $ (1,168) $ (575) $ (2,229)
============= ============= ============= =============
WEIGHTED AVERAGE
EQUIVALENT LIMITED PARTNER
UNITS OUTSTANDING 343 343 343 343
============= ============= ============= =============
</TABLE>
<PAGE>
APACHE PETROLEUM LIMITED PARTNERSHIP 1980-I
STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
For the Nine Months
Ended September 30,
-------------------------------
1995 1994
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income (loss) $ (608,633) $ (2,517,879)
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation, depletion and amortization 878,261 2,873,101
Changes in operating assets and liabilities:
Decrease in oil and gas receivables 18,286 58,049
Decrease in payable to Apache Corporation (24,583) (4,465)
Decrease in accrued expenses (247,281) (21,805)
Increase in deferred credits -- 13
------------- -------------
Net cash provided by operating activities 16,050 387,014
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties (90,378) (70,812)
Proceeds from sale of oil and gas properties 160,099 --
------------- -------------
Net cash provided (used) by investing activities 69,721 (70,812)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions paid to -
General partner, net (83,924) (284,284)
Limited partners (17,198) (85,775)
------------- -------------
Net cash used by financing activities (101,122) (370,059)
------------- -------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (15,351) (53,857)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 86,274 119,898
------------- -------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 70,923 $ 66,041
============= =============
</TABLE>
<PAGE>
APACHE PETROLEUM LIMITED PARTNERSHIP 1980-I
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
(Unaudited)
<TABLE>
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 (147,230) (85,774) -- (233,004)
Net income (loss) 57,265 (363,971) (812,621) (1,119,327)
----------- ----------- ------------ -----------
BALANCE, September 30, 1994 $ 3,013,477 $ 1,653,430 $ 1,299,957 $ 5,966,864
=========== =========== =========== ===========
BALANCE, December 31, 1994 $ 2,311,416 $ 898,035 $ -- $ 3,209,451
Distributions, net (83,924) (17,198) -- (101,122)
Net income (loss) (411,481) (197,152) -- (608,633)
----------- ------------ ----------- -----------
BALANCE, September 30, 1995 $ 1,816,011 $ 683,685 $ -- $ 2,499,696
=========== =========== =========== ===========
</TABLE>
<PAGE>
APACHE PETROLEUM LIMITED PARTNERSHIP 1980-I
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. The financial statements included herein have been prepared by
the Apache Petroleum Limited Partnership 1980-I (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 financial
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 a ceiling amount equal to the
present value, discounted at 10 percent, of the 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.
During the first nine months of 1995, the Partnership wrote
down the carrying value of its oil and gas properties by
$675,126 due primarily to lower gas prices. The Partnership
recorded write-downs totaling $2,578,353 during the first nine
months of 1994 as a result of lower gas prices and unfavorable
reserve revisions.
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL RESULTS
The Partnership reported a loss of $1,601 for the third quarter of
1995 compared to a loss of $1,398,552 for the same period last
year, which includes the effect of a $1,448,775 write-down to the
carrying value the Partnership's oil and gas properties.
For the first nine months of 1995, the Partnership reported a loss
totaling $608,633 compared to a loss of $2,517,879 for the first
nine months of 1994. During the first nine months of 1995, the
Partnership wrote down its oil and gas properties by $675,126 due
to declines in gas prices. During the first nine months of 1994,
the Partnership recorded write-downs totaling $2,578,353 due to
lower oil and gas prices and unfavorable reserve revisions.
Under SEC rules, entities that follow full cost accounting methods
are required to make quarterly "ceiling test" calculations.
Application of these rules may result in future write-downs unless
oil and gas prices improve.
RESULTS OF OPERATIONS
Volume and price information for the Partnership's oil and gas
production for the third quarter and first nine months of 1995 and
1994, respectively, is summarized in the following table:
<TABLE>
For the Quarter For the Nine Months
Ended September 30, Ended September 30,
--------------- Increase ----------------- -Increase
1995 1994 (Decrease) 1995 1994 (Decrease)
---- ---- --------- ---- ---- ---------
<S> <C> <C> <C> <C> <C> <C>
Gas Volume - Mcf per day 1,084 1,302 (17%) 1,084 1,039 4%
Average Gas Price - per Mcf $ 1.55 $ 1.45 7% $ 1.63 $ 1.69 (4%)
Oil Volume - Barrels per day 59 77 (23%) 62 75 (17%)
Average Oil Price - Per barrel $17.70 $17.22 3% $17.15 $15.18 13%
</TABLE>
Oil and gas sales for the third quarter of 1995 decreased 17
percent from a year ago, falling to $250,131. For the first nine
months of 1995, oil and gas sales decreased four percent to
$771,443. Third quarter sales fell due to lower oil and gas
production, while sales from the first nine months decreased as a
result of lower oil production and a decrease in average realized
gas prices, when compared to 1994.
<PAGE>
Gas sales for the third quarter of 1995 totaled $154,617, down 14
percent from the same period last year. The Partnership's third
quarter gas production of 1,084 Mcfd decreased 17 percent resulting
from natural depletion of the Partnership's aging wells. Gas sales
were negatively affected by $29,967 due to the Partnership's
decrease in production from a year ago. Average realized natural
gas prices increased seven percent from the third quarter of 1994
to $1.55 per Mcf, favorably impacting sales by $5,438.
Gas sales of $480,908 for the first nine months of 1995 were in
line with 1994 sales of $487,188 for the same period. The
Partnership produced 45 Mcfd more during the first nine months of
1995 as compared to the same period in 1994. The four-percent
increase in gas production resulted primarily from other owners of
the Kinney Warren #3-10 making up a portion of their under-
production during the first nine months of 1994. This volume
increase resulted in additional sales of $21,081. The
Partnership's average realized gas price of $1.63 per Mcf during
the first nine months of 1995 was $.06 per Mcf lower than last
year's price of $1.69 per Mcf for the same period. This four-
percent decrease in the price of gas resulted in $27,361 of lower
sales.
Oil sales of $95,514 for the 1995 third quarter were $26,985, or 22
percent, lower than the previous year as a result of lower oil
production. A 23-percent decline in production, primarily
attributable to natural depletion of the Partnership's aging wells
and the impact of property divestitures, negatively impacted sales
by $29,574. A $.48 per barrel increase in the Partnership's
average oil price positively impacted 1995 sales by $2,589, when
compared to 1994.
For the first nine months of 1995, oil sales decreased seven
percent to $290,535 compared to $312,809 for the same period a year
ago. Oil revenues were negatively impacted by a 17-percent decline
in production volumes. This was partially offset by the favorable
impact of a $1.97 per barrel increase in the Partnership's average
realized oil price.
Recurring depreciation, depletion and amortization expense for the
first nine months of 1995 declined 31 percent from a year ago due
primarily to a favorable revision to gas reserves and reductions of
amortizable costs due to write downs in 1994 and 1995. The
Partnership wrote down the carrying value of its oil and gas
properties by $675,126 in 1995, compared to write downs totaling
$2,578,353 recognized during the first nine months of 1994.
Lease operating expense in the first nine months of this year
increased $61,301 due to higher workover costs and increased costs
on the Partnership's aging properties. Workover costs were $18,000
above last years' level. Operating costs also reflect higher
compression costs necessary to sustain or improve production on
certain of the Partnership's properties. General and
administrative expenses during the first nine months of 1995 are
comparable to those incurred in the first nine months of 1994.
<PAGE>
CASH FLOW, 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 recompletions and workovers
conducted to enhance production or correct mechanical problems.
Accordingly, the Partnership's net cash flows in the first nine
months 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 nine months of 1995 decreased from the comparable period
in 1994 due to a decrease in the Partnership's liabilities.
Excluding the impact of working capital accounts, the Partnership's
cash from operating activities declined 24 percent. The reduction
in liabilities includes payments made in connection with the agreed
upon settlement of claims for pollution damage relative to the
Partnership's interest in the Damron #1-10 and Damron #2-15. The
Partnership had accrued costs relative to these claims in 1993 and
1994.
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 the Partnership's producing
properties, or through farmout arrangements at no cost to the
Partnership. Capital expenditures for calendar year 1995 are not
expected to be significantly different from amounts incurred in
1994.
During the third quarter of 1995, the Partnership sold its interest
in 35 wells located in the Rocky Mountain region of the United
States for $160,099. The properties sold were primarily oil wells
with higher operating costs. Due to the properties' distance from
markets, both oil and gas sold at a discount compared to oil and
gas production sold in the Partnership's other areas of interest.
The properties sold constituted 32 percent and one percent of the
Partnership's oil and gas proved reserves, respectively, at year-
end 1994, or approximately five percent of the Partnership's proved
reserves on an energy equivalent basis.
The Partnership made a distribution of $50 per-Unit in March 1995.
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 the Partnership's
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 price of or
demand for oil and gas. The Partnership intends to limit future
drilling to those operations designed to prevent drainage from the
Partnership's properties caused by adjoining landowner activities.
<PAGE>
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.
As a result, 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.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The information set forth in Note 4 to the financial
statements contained in the registrant's annual report on
Form 10-K, for the year ended December 31, 1994 (filed
with the SEC on March 31, 1995), and the information
contained in Part II, Item 1 of the Partnership's
Quarterly Reports on Form 10-Q for the period ended March
31, 1995 (filed with the SEC on May 12, 1995), and for the
period ended June 30, 1995 (filed with the SEC August 14,
1995) are incorporated herein by reference. In the matter
of J.F. Schulte, et.al. v. Apache Corporation, et.al.,
District Court of Beckham County, Oklahoma (No. C-81035),
on July 11, 1995, the Oklahoma Supreme Court ruled in
favor of Apache and other working interest owners,
including the Partnership, reversing the ruling of the
trial court which had awarded to plaintiffs an interest in
certain acreage along with damages, fees and prejudgment
interest in the aggregate amount of $4,325,972 against
Apache and other working interest owners, including the
Partnership. On August 21, 1995, plaintiffs petitioned
the Oklahoma Supreme Court for rehearing. The Partnership
would be obligated with respect to any liability in this
matter in an amount proportional to its 21.75-percent
working interest in the subject property.
A suit is pending against Apache with respect to wells it
operates in the State of Oklahoma, alleging wrongful
deduction of transportation, compression and certain other
assets from royalties payable under certain leases. James
J. Duke, et.al. vs. Apache Corporation, District Court of
Dewey County, Oklahoma (No. CJ-94-32) was filed May 26,
1994. The court granted class certification on September
27, 1995 with respect to claims involving leases
containing gross proceeds provisions. The estimated
amount of the Partnership's liability, in the event that
the plaintiffs are ultimately successful, is approximately
$106,000.
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.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits.
27.1 Financial Data Schedule.
b. Reports filed on Form 8-K - None.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto
duly authorized.
APACHE PETROLEUM LIMITED PARTNERSHIP 1980-I
By: Apache Corporation, General Partner
Dated: November 13,1995 /s/ Mark A. Jackson
-----------------------------------------
Mark A. Jackson
Vice President, Finance
Dated: November 13, 1995 /s/ R. Kent Samuel
-----------------------------------------
R. Kent Samuel
Controller and Chief Accounting Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<CIK> 0000318681
<NAME> ART.5 FDS FOR 3RD QTR 10-Q
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<EXCHANGE-RATE> 1
<CASH> 70,923
<SECURITIES> 0
<RECEIVABLES> 126,402
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 197,325
<PP&E> 24,545,607
<DEPRECIATION> (21,119,827)
<TOTAL-ASSETS> 3,623,105
<CURRENT-LIABILITIES> 97,312
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2,499,696
<TOTAL-LIABILITY-AND-EQUITY> 3,623,105
<SALES> 771,443
<TOTAL-REVENUES> 774,525
<CGS> 1,247,683
<TOTAL-COSTS> 1,247,683
<OTHER-EXPENSES> 135,475
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (608,633)
<INCOME-TAX> 0
<INCOME-CONTINUING> (608,633)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (608,633)
<EPS-PRIMARY> (575)
<EPS-DILUTED> (575)
</TABLE>
