<PAGE> 1
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 June 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
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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
--------------------------------------------------------------------------------
(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
----- -----
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
APACHE PETROLEUM LIMITED PARTNERSHIP 1980-I
BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
------------- ---------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 69,968 $ 86,274
Oil and gas receivables 142,443 144,688
------------- ---------------
212,411 230,962
------------- ---------------
OIL AND GAS PROPERTIES on the basis
of full cost accounting
Proved properties 24,713,475 24,615,328
Less - accumulated depreciation,
depletion and amortization (21,016,614) (20,241,566)
------------- ---------------
3,696,861 4,373,762
------------- ---------------
$ 3,909,272 $ 4,604,724
============= ===============
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to Apache Corporation $ 99,894 $ 34,866
Accrued expenses payable 84,778 334,310
------------- ---------------
184,672 369,176
------------- ---------------
DEFERRED CREDITS 1,026,097 1,026,097
------------- ---------------
PARTNERS' CAPITAL:
General partner 2,002,878 2,311,416
Limited partners (343 equivalent units outstanding) 695,625 898,035
------------- ---------------
2,698,503 3,209,451
------------- ---------------
$ 3,909,272 $ 4,604,724
============= ===============
</TABLE>
The accompanying notes to financial statements
are an integral part of this statement
1
<PAGE> 3
APACHE PETROLEUM LIMITED PARTNERSHIP
1980-I STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Quarter For the Six Months
Ended June 30, Ended June 30,
----------------------------- ----------------------------
1995 1994 1995 1994
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
REVENUES:
Oil and gas sales $ 290,346 $ 252,440 $ 521,312 $ 498,352
Interest and other income 2,134 399 2,134 1,218
------------ ------------ ------------ ------------
292,480 252,839 523,446 499,570
------------ ------------ ------------ ------------
EXPENSES:
Depreciation, depletion and amortization -
Recurring 71,626 99,852 137,942 184,078
Additional - 1,129,577 637,106 1,129,577
Lease operating 117,292 107,093 225,105 168,952
Production taxes 26,361 22,982 40,297 45,369
Administrative 44,738 28,050 90,028 90,921
------------ ------------ ------------ ------------
260,017 1,387,554 1,130,478 1,618,897
------------ ------------ ------------ ------------
NET INCOME (LOSS): $ 32,463 $ (1,134,715) $ (607,032) $ (1,119,327)
============ ============ ============ ============
Allocated to:
General partner $ 24,601 $ 23,323 $ (439,018) $ 57,265
Limited partners 7,862 (367,819) (168,014) (363,971)
Combining adjustments - (790,219) - (812,621)
------------ ------------ ------------ ------------
$ 32,463 $ (1,134,715) $ (607,032) $ (1,119,327)
============ ============ ============ ============
NET INCOME (LOSS) PER WEIGHTED
AVERAGE EQUIVALENT LIMITED
PARTNER UNIT $ 23 $ (1,072) $ (490) $ (1,061)
============ ============ ============ ============
WEIGHTED AVERAGE
EQUIVALENT LIMITED PARTNER
UNITS OUTSTANDING 343 343 343 343
============ ============ ============ ============
</TABLE>
The accompanying notes to financial statements
are an integral part of this statement
2
<PAGE> 4
APACHE PETROLEUM LIMITED PARTNERSHIP
1980-I STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
---------------------------------
1995 1994
-------------- ---------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (607,032) $ (1,119,327)
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation, depletion and amortization 775,048 1,313,655
Changes in operating assets and liabilities:
Decrease in oil and gas receivables 2,245 48,032
Increase in payable to Apache Corporation 65,028 2,553
Decrease in accrued expenses (249,532) (18,909)
Increase in deferred credits -- 13
-------------- --------------
Net cash provided by operating activities (14,243) 226,017
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil & gas properties (98,147) (69,591)
-------------- --------------
Net cash used by investing activities (98,147) (69,591)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
(Distributions) contributions, net -
General partner 130,480 (147,230)
Limited partners (34,396) (85,774)
-------------- --------------
Net cash provided (used) by financing activities 96,084 (233,004)
-------------- --------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (16,306) (76,578)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 86,274 119,898
-------------- --------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 69,968 $ 43,320
============== ==============
</TABLE>
The accompanying notes to financial statements
are an integral part of this statement
3
<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 (147,230) (85,774) -- (233,004)
Net income (loss) 57,265 (363,971) (812,621) (1,119,327)
------------ ------------ -------------- ---------------
BALANCE, June 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 130,480 (34,396) -- 96,084
Net income (loss) (439,018) (168,014) -- (607,032)
------------ ------------ -------------- ---------------
BALANCE, June 30, 1995 $ 2,002,878 $ 695,625 $ -- $ 2,698,503
============ ============ ============== ===============
</TABLE>
The accompanying notes to financial statements
are an integral part of this statement
4
<PAGE> 6
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 an 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 six months of 1995, the Partnership wrote down the carrying value
of its oil and gas properties by $637,106 due to lower gas prices. The
Partnership recorded write-downs totaling $1,129,577 during the first six
months of 1994 as a result of lower gas prices and unfavorable reserve
revisions.
5
<PAGE> 7
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL RESULTS
The Partnership reported net income of $32,463 for the second quarter of 1995
compared to a loss of $1,134,715 for the same period last year, which includes
the effect of a $1,129,577 write-down to the carrying value the Partnership's
oil and gas properties.
For the first six months of 1995, the Partnership reported a loss totaling
$607,032 compared to a loss of $1,119,327 for the first half of 1994. During
the first quarter of 1995, the Partnership wrote down its oil and gas
properties by $637,106 due to declines in gas prices. During the first half of
1994, the Partnership recorded write-downs totaling $1,129,577 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 1995 and 1994 second quarter
and first six months oil and gas production is summarized in the following
tables:
<TABLE>
<CAPTION>
For the Quarter For the Six Months
Ended June 30, Ended June 30,
------------------ Increase ----------------- Increase
1995 1994 (Decrease) 1995 1994 (Decrease)
------ ------ ---------- ------ ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Gas Volume - Mcf per day 1,149 757 52% 1,083 905 20%
Average Gas Price - per Mcf $ 1.81 $ 1.92 (6%) $ 1.66 $ 1.87 (11%)
Oil Volume - Barrels per day 63 82 (23%) 64 75 (15%)
Average Oil Price - Per barrel $17.77 $15.53 14% $ 16.89 $14.10 20%
</TABLE>
Oil and gas sales for the second quarter of 1995 increased 15 percent from a
year ago, rising to $290,346. For the first six months of 1995, oil and gas
sales increased five percent to $521,312. The second quarter and first half
sales benefited from higher gas production and improved oil prices compared to
1994.
Gas sales for the second quarter of 1995 totaled $188,814, up 43 percent from
the same period last year. The Partnership's second quarter gas production of
1,149 Mcfd increased 52 percent as a result of other working interest owners
making up a portion of their under-production from the Kinney Warren #3-10 well
in the second quarter of 1994. Sales were positively affected $68,525 due to
the Partnership's increase in production from a year ago. Average realized
natural gas prices declined six percent from the second quarter of 1994 to
$1.81 per Mcf, negatively impacting sales by $11,918.
Gas sales increased six percent to $326,291 for the first six months of 1995,
compared to $306,959 in 1994. The Partnership produced 178 Mcfd more during
the first half of 1995 as compared to the same period in 1994. The 20-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 second
quarter of 1994. This volume increase resulted in additional sales of $60,565.
The Partnership's average realized gas price of $1.66 per Mcf during the first
half of 1995 was $.21 per
6
<PAGE> 8
Mcf lower than last year's price of $1.87 per Mcf for the same period. This
11-percent drop in the price of gas resulted in $41,233 of lower sales.
Oil sales of $101,531 for the 1995 second quarter were $14,853, or 13 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, negatively impacted sales by $27,617. A $2.24 per
barrel increase in the Partnership's average oil price positively impacted 1995
sales by $12,764, when compared to 1994.
For the first six months of 1995, oil sales increased two percent to $194,822
compared to $190,310 for the same period a year ago. Oil revenues were
negatively impacted by $27,645 due to a 15 percent decline in production
volumes. This was more than offset by the favorable impact of a $2.79 per
barrel increase in the Partnership's average realized oil price.
Recurring depreciation, depletion and amortization expense for the first six
months of 1995 declined 25 percent from a year ago due primarily to a favorable
revision to gas reserves and a lower amortizable cost due to write downs in
1994 and the first quarter of 1995. The Partnership wrote down the carrying
value of its oil and gas properties by $637,106 in 1995, compared to write
downs totaling $1,129,577 recognized during the first six months of 1994.
Lease operating expense in the first half of this year increased $56,153 from a
year ago due to higher workover costs and increased costs on the Partnership's
aging properties. General and administrative expenses during the first six
months of 1995 are comparable to those incurred in the first six months of
1994.
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 six 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 six 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 14 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 wells. 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.
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.
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.
7
<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 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 Report on Form 10-Q
for the period ended March 31, 1995 (filed with the SEC May 12, 1995), is
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. Plaintiffs may elect to petition 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.
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
27.1 Financial Data Schedule
b. Reports filed on Form 8-K - None.
8
<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 thereunto duly authorized.
APACHE PETROLEUM LIMITED PARTNERSHIP 1980-I
By: Apache Corporation, General Partner
Dated: August 14, 1995 /s/ Mark A. Jackson
--------------------------------
Mark A. Jackson
Vice President, Finance
Dated: August 14, 1995 /s/ R. Kent Samuel
--------------------------------
R. Kent Samuel
Controller and Chief Accounting Officer
<PAGE> 11
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
27.1 Financial Data Schedule.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 69,968
<SECURITIES> 0
<RECEIVABLES> 142,443
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 212,411
<PP&E> 24,713,475
<DEPRECIATION> (21,016,614)
<TOTAL-ASSETS> 3,909,272
<CURRENT-LIABILITIES> 184,672
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2,698,503
<TOTAL-LIABILITY-AND-EQUITY> 3,909,272
<SALES> 521,312
<TOTAL-REVENUES> 523,446
<CGS> 1,040,450
<TOTAL-COSTS> 1,040,450
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (607,032)
<INCOME-TAX> 0
<INCOME-CONTINUING> (607,032)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (607,032)
<EPS-PRIMARY> (490)
<EPS-DILUTED> (490)
</TABLE>
