SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
[Mark One]
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [Fee Required]
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 [No Fee Required]
for the transition period from to
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- --------
Commission file number 0-9589
Apache Petroleum Limited Partnership 1980-I
A Minnesota IRS
Employer
Limited Partnership No.
41-6254238
One Post Oak Central
2000 Post Oak Boulevard, Suite 100
Houston, Texas 77056-4400
Telephone Number (713) 296-6000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
PARTNERSHIP UNITS
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
--- ---
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 registrant's 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. X
---
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of Apache Corporation's proxy statement relating to its
1996 annual meeting of shareholders have been incorporated by reference in
Part III hereof.
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TABLE OF CONTENTS
DESCRIPTION
ITEM PAGE
- ---- ----
PART I
1. BUSINESS 2
2. PROPERTIES 4
3. LEGAL PROCEEDINGS 4
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 4
PART II
5. MARKET FOR THE REGISTRANT'S SECURITIES AND RELATED
SECURITY HOLDER MATTERS 5
6. SELECTED FINANCIAL DATA 5
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS 6
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 9
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE 23
PART III
10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT 24
11. EXECUTIVE COMPENSATION 24
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 24
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 24
PART IV
14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K 25
All defined terms under Rule 4-10(a) of Regulation S-X shall have their
statutorily-prescribed meanings when used in this report. Quantities of
natural gas are expressed in this report in terms of thousand cubic feet
(Mcf), million cubic feet (MMcf) or billion cubic feet (Bcf). Oil is
quantified in terms of barrels (bbls), thousands of barrels (Mbbls) and
millions of barrels (MMbbls). Natural gas is compared to oil in terms of
barrels of oil equivalent (boe) or million barrels of oil equivalent
(MMboe). Oil and natural gas liquids are compared with natural gas in
terms of thousand cubic feet equivalent (Mcfe) and million cubic feet
equivalent (MMcfe). One barrel of oil is the energy equivalent of six Mcf
of natural gas. Daily oil and gas production is expressed in terms of
barrels of oil per day (bopd) and thousands of cubic feet of gas per day
(Mcfd), respectively. With respect to information relating to the
Partnership's working interest in wells or acreage, "net" oil and gas
wells or acreage is determined by multiplying gross wells or acreage by
the Partnership's working interest therein. Unless otherwise specified,
all references to wells and acres are gross.
PART I
ITEM 1. BUSINESS
General
Apache Petroleum Limited Partnership 1980-I (the Registrant or the
Partnership) is a limited partnership composed of Apache Corporation
(Apache) as the general partner and purchasers of Partnership units as
limited partners. The Partnership was formed on April 3, 1980, under the
laws of the state of Minnesota.
The Partnership's business is the participation in exploration,
development and production activities on oil and gas leases. The
Partnership's planned drilling operations have been completed and future
drilling activities will generally be caused by adjoining owners'
activities which warrant drilling on the Partnership's acreage. If
drilling opportunities arise, the Partnership expects to finance the
activities through the use of oil and gas revenues or through a farmout to
other parties. The choice will depend on the terms available at that time.
In 1995, capital expenditures were largely directed to maintaining
production from existing properties.
Under the terms of the limited partnership agreement, the limited
partners contribute funds to pay for intangible drilling and completion
costs, delay rentals and certain other costs which are deductible as
expenses for federal income tax reporting purposes. Apache, as the general
partner, contributes funds to pay for leasehold and tangible drilling and
completion equipment, other than production facilities. Post-completion
production facilities costs are borne by the limited partners and the
general partner in the same proportion as the revenue they receive. After
giving effect to the exchange offers discussed in Note (1), "Organization,"
to the Partnership's financial statements included under Item 8 below, the
limited partners and the general partner receive 27 percent and 73 percent,
respectively, of the revenue.
Apache, as general partner, is solely responsible for the conduct of
the Partnership's operations. Apache uses a portion of its staff and
facilities for this purpose and is reimbursed for actual costs paid on
behalf of the Partnership, as well as for a portion of its general,
administrative and overhead costs properly allocable to the Partnership.
Business Development During 1995
During the year ended December 31, 1995, the business of the
Partnership consisted primarily of participating in the production of oil
and gas. Natural gas prices remained volatile in 1995 with the
Partnership's average realized gas price dropping $.19 per Mcf, or 11
percent, from year-end 1994 to March 31, 1995. This price decline,
combined with unfavorable reserve revisions, resulted in the Partnership
recording write-downs in the carrying value of oil and gas properties
totaling $675,126 during the year. Driven by significant increases in spot
prices during the fourth quarter of 1995, the Partnership's average oil and
gas prices for 1995 each rose nine percent from a year ago to $16.68 per
barrel and $1.84 per Mcf, respectively. Management believes that, absent a
comprehensive U.S. energy policy, oil prices will continue to fluctuate in
response to changes in the policies of the Organization of Petroleum
Exporting Countries (OPEC), events in the Middle East and events in certain
non-OPEC countries. Management also believes that gas prices will remain
volatile and may fluctuate due to market perceptions of supply and demand.
During 1995, the Partnership sold its interest in 30 wells located
primarily in the Rocky Mountain region of the United States for $588,201.
The properties sold were primarily oil wells with high 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 31 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.
As discussed in Note (6), "Major Customer Information," to the
Partnership's financial statements under Item 8 below, Natural Gas
Clearinghouse (NGC) purchased, at prevailing index prices, approximately 77
percent of the Partnership's gas production in 1995. In September 1995,
Apache's contract with NGC was terminated and the Partnership found
alternative customers to purchase its gas at prevailing index prices. The
Partnership expects to continue receive index prices, which indices are
based generally on prevailing spot market prices at the relevant delivery
points. The Partnership believes that alternative purchasers and marketing
arrangements exist for the sale of its production and changes in purchasers
would have little or no impact on sales.
The write-down of the carrying value of the Partnership's oil and gas
properties during 1995 (see "Reserve Value Ceiling Test", below) was a non-
cash charge and did not impact the Partnership's short-term ability to make
distributions to its Partners. However, due to declines in product
production which have reduced net cash provided by operating activities,
outstanding gas imbalance obligations and certain short-term and long-term
commitments of the Partnership, distributions to limited partners declined
to $50 per unit in 1995 from $300 per unit in 1994 and $800 per unit in
1993.
As of December 31, 1995, Apache owned 34 percent of the outstanding
limited partnership units. Apache did not purchase any additional
Partnership units during 1995.
Reserve Value Ceiling Test
Oil and gas producers that conduct their financial reporting under the
full cost accounting rules are subject to Securities and Exchange
Commission (SEC) rules that require quarterly "ceiling test" calculations.
This test requires a write-down when the capitalized cost of oil and gas
properties exceeds the present value of proved reserves, plus the lower of
cost or market value for unproved properties. The test is applied at the
end of each fiscal quarter and requires a write-down if the "ceiling" is
exceeded, even if prices decline only for a short period of time. The
Partnership incurred write-downs in the first and third quarters of 1995
totaling $675,126. The write-downs primarily reflected the impact of low
gas prices at the end of each of these periods and significant reserve
revisions. A significant deterioration of oil and gas prices from year-end
levels would likely result in additional write-downs during 1996.
Environmental Matters
The Partnership, as an owner or lessee of interests in oil and gas
properties, is subject to various federal, state and local laws and
regulations relating to the discharge of materials into, and protection of,
the environment. These laws and regulations may, among other things,
impose liability on the lessee under an oil and gas lease for the cost of
pollution clean-up resulting from operations, subject the lessee to
liability for pollution damages, require suspension or cessation of
operations in affected areas and impose restrictions on the injection of
liquids into subsurface aquifers that may contaminate groundwater.
During 1995, the Partnership made payments totaling $280,000 for
environmental remediation.
Except as set forth above, the Partnership does not believe that
compliance with federal, state or local provisions regulating the discharge
of materials into the environment, or otherwise relating to the protection of
the environment, will have a material adverse effect upon its capital
expenditures, earnings or competitive position, but there is no assurance
that changes in or additions to laws or regulations regarding the protection of
the environment will not have such an impact.
Competition
The oil and gas industry is highly competitive. Apache and the
Partnership frequently compete for marketing agreements against companies
with substantially larger financial and other resources than either entity
possesses. Because oil and gas are fungible commodities, the principal
form of competition with respect to product sales is price competition.
Apache and the Partnership strive to maintain the lowest finding and
production costs possible to maximize earnings.
ITEM 2. PROPERTIES
Acreage is held by the Partnership pursuant to leases or similar
contractual relationships through continuing production of oil and gas from
the wells drilled thereon. A summary of the number of producing wells with
proved reserves and gross acreage, as of December 31, 1995, is set forth
below:
<TABLE>
Gas Average % of
------------ WI Remaining Dev. Undev.
County & State Gross Net Percent Reserves Gross Gross
-------------- ----- ---- -------- -------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <S>
Beckham, OK 16 2.2 13.7% 98.4 3,840 --
Wheeler, TX 1 .1 5.2% 1.6 640 --
-- --- ----- ----- ----
17 2.3 100.0 4,480 --
== === ===== ====== ====
</TABLE>
See Note (5), "Oil and Gas Properties," and Note (9), "Supplemental
Oil and Gas Disclosures (Unaudited)," to the Partnership's financial
statements under Item 8 below, for costs incurred in oil and gas property
development and production activities, related reserve information, and
information concerning properties sold during 1995.
Production and Pricing Data
The following table describes, for each of the last three fiscal
years, oil and gas production for the Partnership, average production costs
and average sales prices.
<TABLE>
Production Average Sales Price
---------------- Average -------------------
Year Ended Oil Gas Production Oil Gas
December 31, (Bbls) (Mcf) Cost per Mcfe (per Bbl) (per Mcf)
------------ ------- -------- --------- -------- --------
<C> <C> <C> <C> <C> <C>
1995 16,729 356,231 $ .92 $ 16.68 $ 1.84
1994 26,317 380,390 .76 15.27 1.69
1993 38,835 403,567 .92 16.79 1.90
</TABLE>
ITEM 3. LEGAL PROCEEDINGS
The Registrant is a party in interest to certain litigation. See Note
(4), "Commitments and Contingencies," to the Partnership's financial
statements under Item 8 below, the text of which is incorporated herein by
reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S SECURITIES AND RELATED SECURITY HOLDER
MATTERS
As of December 31, 1995, there were 343 holders of record of the
Partnership units. There is no other class of security outstanding or
authorized. The Partnership's units are not traded on any market.
<TABLE>
1995 1994 1993
--------- --------- ---------
Cash distributions
<S> <C> <C> <C>
to limited partners $ 17,198 $ 102,972 $ 274,438
========= ========= =========
Per limited partner unit $ 50 $ 300 $ 800
========= ========= =========
</TABLE>
It is the Partnership's policy, subject to the availability of funds,
to make quarterly cash distributions. Due to the Partnership"s declining
production, outstanding gas imbalance obligations and certain short-term
and long-term commitments, no cash distributions were made during the last
three quarters of 1995. These cash distributions should not be compared
with dividends paid by corporations on capital stock in that dividends paid
by corporations are taxable as ordinary income while distributions by the
Partnership are generally treated as a return of capital.
ITEM 6. SELECTED FINANCIAL DATA
The following selected financial data for the five years ended
December 31, 1995, should be read in conjunction with the Partnership's
financial statements and related notes included under Item 8 below.
<TABLE>
As of the Year Ended December 31,
--------------------------------------------
1995 1994 1993 1992 1991
------- ------- ------- ------- -------
(In thousands, except per Unit amounts)
<S> <C> <C> <C> <C> <C>
Total assets $ 3,229 $ 4,605 $ 7,935 $ 8,460 $ 9,180
======= = ====== == ===== === ==== ====
Oil and gas sales $ 934 $ 1,061 $ 1,521 $ 1,984 $ 2,570
======== ======== ======== ======== ====
Net income (loss) $ (637) $ (3,647) $ 177 $ 389 $ 824
======= = ====== == ===== === ==== ==
Allocated to:
General partner $ (426) $ (432) $ 253 $ 478 $ 830
Limited partners (211) (1,102) 48 (267) (260)
Combining adjustments -- (2,113) (124) 178 254
-------- -------- -------- -------- --------
$ (637) $ (3,647) $ 177 $ 389 $ 824
======== ======== ======== ======== ========
Net income (loss) per weighted
average equivalent limited
partner unit $ (615) $ (3,213) $ 141 $ (777) $ (759)
======== ======== ======== ======== ========
Cash distributions per
limited partner unit $ 50 $ 300 $ 800 $ 1,000 $ 900
======== ======== ======== ======== ========
</TABLE>
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
DISSOLUTION CONSIDERATIONS
Apache, as General Partner, is considering the dissolution of the
Partnership. This consideration is in view of diminishing oil and gas
production and the related reduction in net cash provided by operating
activities and disproportionately high administrative costs necessary to
maintain the Partnership. Apache is monitoring the Partnership"s average
realized prices and reviewing the potential for reserve additions through
recompletions and workover operations to determine when liquidation of the
program is appropriate.
RESULTS OF OPERATIONS
1995 Compared to 1994
- ---------------------
The Partnership reported a net loss of $637,209 for the year ended
December 31, 1995, compared to a net loss of $3,647,102 for the comparable
period of 1994. Each period was negatively impacted by write-downs of oil
and gas property totaling $675,126 in 1995 and $3,030,150 in 1994.
Under SEC rules, entities that follow full cost accounting methods are
required to make quarterly "ceiling test" calculations. This test requires
a write-down when the capitalized cost of oil and gas properties exceeds
the present value of estimated future net revenues from proved reserves,
discounted at 10 percent, plus the lower of cost or fair market value for
unproved properties. The Partnership incurred write-downs in the first and
third quarters of 1995 totaling $675,126. The write-downs primarily
reflected the impact of lower gas prices at the end of each of these
periods and unfavorable reserve revisions during the year.
The Partnership's revenue from the sale of oil and gas declined from
$1,061,037 during 1994 to $934,105 during 1995. This decline was primarily
attributable to declines in oil and gas production, which were partially
offset by increases in the Partnership's average realized prices.
The Partnership's 1995 oil production declined 36 percent from a year
ago to 46 bopd, while natural gas production decreased six percent to 976
Mcfd in 1995, compared to 1,042 Mcfd in 1994. These declines were due to
the sale of certain oil and gas properties during the second half of 1995
and the natural depletion of the Partnership's aging wells. Oil and
natural gas prices received during 1995 averaged $16.68 per barrel and
$1.84 per Mcf, respectively. This represented a nine percent increase in
both oil and natural gas prices when compared to 1994. Due to oil and gas
price volatility, the Partnership is not in a position to predict whether
1996 average prices will be higher or lower than those received in 1995.
Recurring depreciation, depletion and amortization expense for the
year ended 1995 was less than a year ago due to the write-downs of oil and gas
properties and higher average oil and gas prices.
Lease operating costs totaled $417,912 in 1995, and remained
relatively constant when compared to $411,328 in 1994. Due to the decline in
production rates, costs per equivalent unit of production increased to $.92
per Mcfe in 1995 compared to $.76 per Mcfe in 1994.
Administrative expenses in 1995 of $184,246 were up slightly from
$180,633 in 1994.
Prior Year Comparative Information
- ----------------------------------
Oil and gas sales for 1994 decreased 30 percent from the respective
period in 1993. This decrease was the result of declines in production and
lower product prices. During 1994, oil prices fell nine percent to $15.27
and oil production decreased to 72 bopd, from 106 bopd in 1993, as a result
of the natural depletion of the Partnership's wells. The average realized
price for natural gas decreased 11 percent to $1.69 due to lower spot
market prices in 1994. Reflecting the depletion of reserves, 1994 gas
production fell six percent from 1993.
Depreciation, depletion and amortization as a percent of revenue
increased from 31 percent in 1993 to 35 percent in 1994. Lower oil and gas
prices and unfavorable reserve revisions in 1994 contributed to the
increase in the recurring amortization rate.
Lease operating expense decreased 30 percent to $411,328 in 1994
reflecting fewer wells producing in 1994, primarily oil wells. Oil wells
generally produced at a higher cost than gas wells and, therefore, costs
per equivalent units of production decreased from $.92 per Mcfe in 1993 to
$.76 per Mcfe. Administrative expenses for the Partnership increased less
than one percent during 1994.
LIQUIDITY AND CAPITAL RESOURCES
The Partnership's liquidity is solely dependent upon its net cash
flows from operating activities. During the past three years, the Partnership
has not had any debt service obligations or any other significant demands
on its net cash flows except for recompletion and workovers conducted to
enhance production or correct mechanical problems. Accordingly, the
Partnership's net cash flows have been used primarily to make cash
distributions to the partners and to fund limited developmental drilling
activity. The net cash provided by operating activities during 1995 and
1994 decreased 118 percent and 40 percent, respectively, from the preceding
year, primarily as a result of the production and pricing declines
discussed above. The reduction in cash flow during 1995 also reflects the
Partnership's payment of environmental remediation liabilities accrued in
1994 and 1993.
The Partnership's ratio of current assets to current liabilities at
December 31, 1995 increased to 4.23:1.
Capital expenditures for recompletions and any other future
development drilling activity will be funded by a portion of the cash
generated by operating activities or through farmout arrangements at no
cost to the Partnership. The Partnership's capital expenditures in 1996
are not expected to be significantly different from amounts incurred in 1995.
During 1995, the Partnership sold its interest in 30 wells located
primarily in the Rocky Mountain region of the United States for $588,201.
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 31 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.
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 with production from such properties.
At the end of 1995, the Partnership's estimated liability for gas
imbalances in excess of remaining reserves remained unchanged from 1994.
Since December 31, 1994, no material changes occurred in imbalance volumes
or pricing that the Partnership believes would materially impact the
current estimate, therefore no adjustments were recorded during 1995. The
deferred liability will be reduced when the settlement of imbalances
requires cash payments to under-delivered owners in these properties or
volumes are otherwise recouped by underproduced owners from other
partnership wells.
Reflecting declining revenue, which reduced net cash provided by
operating activities, the gas imbalance obligation and certain short-term
and long-term commitments of the Partnership, cash distributions to limited
partners dropped 83 percent in 1995, declining from $300 per unit in 1994
to $50 per unit in 1995. Distributions to the general partner increased 16
percent in 1995 due to the distribution of its share of proceeds from the
sale of oil and gas properties. Apache may be required to contribute
funds, if necessary, to meet future tangible drilling and completion costs,
production costs, gas imbalance obligations and payments attributable to
other short-term and long-term commitments.
The Registrant is a party in interest to certain litigation relating
to its properties. See Note (4), "Commitments and Contingencies," to the
Registrant's financial statements included under Item 8 below. An adverse
resolution of one or more of these matters could have a material adverse
effect on the Registrant's ability to make future distributions and may
require additional contributions from the general partner. Additionally,
the Registrant may, based on further developments in ongoing litigation,
establish reserves which would reduce the amounts available for
distribution.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
APACHE PETROLEUM LIMITED PARTNERSHIP 1980-I
INDEX TO FINANCIAL STATEMENTS AND SUPPORTING SCHEDULES
Page
Number
------
Report of Independent Public Accountants 10
Balance Sheet as of December 31, 1995 and 1994 11
Statement of Operations for each of the three years in the
period ended December 31, 1995 12
Statement of Cash Flows for each of the three years in
the period ended December 31, 1995 13
Statement of Changes in Partners' Capital for each of the three
years in the period ended December 31, 1995 14
Notes to Financial Statements 15
Schedules -
All financial statement schedules have been omitted because they
are either not required, not applicable or the information required
to be presented is included in the financial statements or related
notes thereto
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
<PAGE>
To the Partners of Apache Petroleum Limited Partnership 1980-I:
We have audited the accompanying balance sheet of Apache Petroleum
Limited Partnership 1980-I (a Minnesota limited partnership) as of December
31, 1995 and 1994, and the related statements of operations, cash flows and
changes in partners' capital for each of the three years in the period
ended December 31, 1995. 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.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Apache
Petroleum Limited Partnership 1980-I as of December 31, 1995 and 1994, and
the results of its operations and its cash flows for each of the three
years in the period ended December 31, 1995, in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Houston, Texas
March 28, 1996
<PAGE>
APACHE PETROLEUM LIMITED PARTNERSHIP 1980-I
BALANCE SHEET
<TABLE>
As of December 31,
-------------------------------
1995 1994
----------- ------------
ASSETS
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 66,040 $ 86,274
Oil and gas receivables 102,652 144,688
Receivable from Apache 102,396 --
----------- -----------
271,088 230,962
---------- -----------
OIL AND GAS PROPERTIES, on the basis
of full cost accounting:
Proved properties 24,098,861 24,615,328
Less: accumulated depreciation,
depletion and amortization (21,140,558) (20,241,566)
--------- -----------
2,958,303 4,373,762
---------- ----------
$ 3,229,391 $ 4,604,724
========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accrued expenses payable $ 64,157 $ 334,310
Payable to Apache -- 34,866
--------- -----------
64,157 369,176
--------- -----------
DEFERRED CREDITS 1,026,097 1,026,097
--------- -----------
COMMITMENTS AND CONTINGENCIES (NOTE 4)
PARTNERS' CAPITAL:
General partner 1,469,091 2,311,416
Limited partners
(343 equivalent units outstanding) 670,046 898,035
--------- -----------
2,139,137 3,209,451
--------- -----------
$ 3,229,391 $ 4,604,724
=========== ===========
</TABLE>
<PAGE>
APACHE PETROLEUM LIMITED PARTNERSHIP 1980-I
STATEMENT OF OPERATIONS
<TABLE>
For the Year Ended December 31,
-----------------------------------------
1995 1994 1993
----------- ----------- -----------
REVENUES:
<S> <C> <C> <C>
Oil and gas sales $ 934,105 $ 1,061,037 $ 1,520,523
Interest and other income -- 1,218 4,459
----------- ----------- -----------
934,105 1,062,255 1,524,982
----------- ----------- -----------
EXPENSES:
Depreciation, depletion
and amortization -
Recurring 223,866 375,107 464,417
Additional 675,126 3,030,150 --
Lease operating 417,912 411,328 585,498
Gas imbalances -- 621,348 --
Production taxes 70,164 90,791 118,284
Administrative 184,246 180,633 179,930
------------ ------------ ------------
1,571,314 4,709,357 1,348,129
------------ ------------ ------------
NET INCOME (LOSS) $ (637,209) $(3,647,102) $ 176,853
============ ============ ===========
Allocated to:
General partner $ (426,418) $ (432,356) $ 252,921
Limited partners (210,791) (1,102,168) 48,267
Combining adjustments -- (2,112,578) (124,335)
------------ ------------ -----------
$ (637,209) $(3,647,102) $ 176,853
=========== =========== ===========
NET INCOME (LOSS) PER WEIGHTED
AVERAGE EQUIVALENT LIMITED
PARTNER UNIT $ (615) $ (3,213) $ 141
=========== ============ ===========
WEIGHTED AVERAGE EQUIVALENT
LIMITED PARTNER UNITS
OUTSTANDING 343 343 343
=========== =========== ===========
</TABLE>
APACHE PETROLEUM LIMITED PARTNERSHIP 1980-I
STATEMENT OF CASH FLOWS
<TABLE>
For the Year Ended December 31,
--------------------------------------
1995 1994 1993
--------- -- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net income (loss) $ (637,209) $ (3,647,102) $ 176,853
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation, depletion and amortization 898,992 3,405,257 464,417
Changes in operating assets and liabilities:
Decrease in oil and gas receivables 42,036 27,359 95,001
(Increase) decrease in net receivable
from Apache (137,262) 22,599 (124)
Increase (decrease) in accrued payables (270,153) 135,744 172,536
Increase in deferred credits -- 621,361 37,022
---------- - --------- -- -----------
Net cash provided by (used in)
operating activities (103,596) 565,218 945,705
---------- - -------- --- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties (71,734) (136,200) (68,279)
Proceeds from sale of oil and gas properties 588,201 -- --
---------- - --------- -- -----------
Net cash provided by (used in)
investing activities 516,467 (136,200) (68,279)
---------- - --------- -- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions paid to -
General partner, net (415,907) (359,670) (636,896)
Limited partners (17,198) (102,972) (274,438)
---------- - ---------- - -----------
Net cash used in financing activities (433,105) (462,642) (911,334)
---------- - -------- --- -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (20,234) (33,624) (33,908)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 86,274 119,898 153,806
---------- - -------- --- -----------
CASH AND CASH EQUIVALENTS, END OF YEAR $ 66,040 $ 86,274 $ 119,898
=========== =========== ===========
</TABLE>
APACHE PETROLEUM LIMITED PARTNERSHIP 1980-I
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
<TABLE>
General Limited Combining
Partner Partners Adjustments Total
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1992 $ 3,487,417 $ 2,329,346 $ 2,236,913 $ 8,053,676
Distributions, net (636,896) (274,438) -- (911,334)
Net income (loss) 252,921 48,267 (124,335) 176,853
----------- ---------- ---------- ----------
BALANCE, DECEMBER 31, 1993 3,103,442 2,103,175 2,112,578 7,319,195
Distributions, net (359,670) (102,972) -- (462,642)
Net (loss) (432,356) (1,102,168) (2,112,578) (3,647,102)
----------- ---------- ---------- ----------
BALANCE, DECEMBER 31, 1994 2,311,416 898,035 -- 3,209,451
Distributions, net (415,907) (17,198) -- (433,105)
Net (loss) (426,418) (210,791) -- (637,209)
----------- ---------- ---------- ----------
BALANCE, DECEMBER 31, 1995 $ 1,469,091 $ 670,046 $ -- $ 2,139,137
=========== ========== ========== ==========
</TABLE>
<PAGE>
APACHE PETROLEUM LIMITED PARTNERSHIP 1980-I
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION
Nature of Operations -
Apache Petroleum Limited Partnership 1980-I (the Partnership)
is a limited partnership composed of Apache Corporation (Apache) as the
general partner and purchasers of Partnership units as limited
partners. Oil and gas operations are conducted by the limited
partnership, which was formed on April 3, 1980, under the laws of the
state of Minnesota.
The Partnership's business is the participation in exploration,
development and production activities on oil and gas leases. The
Partnership's production activities are primarily in Oklahoma, with
approximately 98 percent of the remaining reserves located in this
state. The Partnership's future financial condition and results of
operations will depend upon prices received for its oil and natural
gas production and the costs of acquiring, finding, developing and
producing reserves. A substantial portion of the Partnership's
production is sold under market-sensitive contracts. Prices for oil
and natural gas are subject to fluctuations in response to changes in
supply, market uncertainty and a variety of factors beyond the
Partnership's control. These factors include worldwide political
instability (especially in the Middle East), the foreign supply of oil
and natural gas, the price of foreign imports, the level of consumer
demand, and the price and availability of alternative fuels. With
natural gas accounting for 78 percent of 1995 production and 90
percent of total proved reserves, on an energy equivalent basis, the
Partnership is more affected by fluctuations in natural gas prices
than in oil prices.
Under the terms of the limited partnership agreement, the limited
partners contribute funds to pay for intangible drilling and
completion costs, delay rentals and certain other costs which are
deductible as expenses for federal income tax reporting purposes.
Apache, as the general partner, contributed funds to pay for leasehold
and tangible drilling and completion equipment other than production
facilities. The limited partners received 60 percent of the revenue
and paid 60 percent of the operating expenses and 60 percent of the
cost of production facilities under this agreement. Apache, as
general partner, received 40 percent of the revenue and paid 40
percent of the operating expenses and 40 percent of the cost of
production facilities. The exchange offers discussed below reduced
the limited partners' share of the Partnership's revenue and
production costs from 60 percent to approximately 27 percent. The
operations of the Partnership are performed by Apache pursuant to an
operating agreement.
The terms of the Partnership offering called for a subscription
price of $15,000 per unit of limited partnership interest.
Subscriptions were received for a total of 1,286.7 Partnership units.
Apache, as general partner, contributed cash to the Partnership equal
to one percent of the total contributions to the Partnership and
earned a one percent interest in the limited partners' activities.
The Partnership agreement specifies that one percent of each item of
income, loss, contributions, or distributions is to be allocated to
the general partner; this interest (13 equivalent units) has been
reflected in the limited partners' activities in the accompanying
financial statements. Each unit sold has been assessed the maximum of
25 percent of the subscribed amount, or $3,750, for development of
productive properties.
Capital Contribution -
During 1982, amendments to the Articles of Limited Partnership were
approved which, among other things, provided for the voluntary
contribution of capital by partners to the Partnership up to a
predetermined amount. During 1982 and 1983, partners made
contributions pursuant to this provision, the proceeds of which were
used to reduce Partnership debt. As a result of the capital
contribution, an additional 59 equivalent units were added to the
Partnership.
Exchange Offers -
In March 1983, Apache Petroleum Company (APC) extended an exchange
offer to the partners in this Partnership and all other Apache-managed
partnerships that were formed during or before April 1981. The offer,
which closed March 31, 1983, was accepted by partners owning 831.4
units, representing 61.2 percent of the remaining units in the
Partnership. Accordingly, 61.2 percent of the limited partners'
assets, liabilities and partners' capital were transferred to APC
effective April 1, 1983.
In the fourth quarter of 1985, APC extended another exchange offer
to the remaining partners in this Partnership and most other Apache-
managed partnerships that were formed during or before October 1983.
Apache exchanged all of its Partnership interests, with the exception
of those required to maintain its one percent general partner
interest. The offer, which closed January 10, 1986, was accepted by
partners owning 184.2 units, representing 34.9 percent of the
remaining units in the Partnership. Accordingly, 34.9 percent of the
limited partners' remaining assets, liabilities and partners' capital
were transferred to APC effective January 1, 1986. The financial
statements reflect the 343 aggregate remaining units for 1995, 1994
and 1993.
Repurchase Offers -
In June 1989, Apache concluded an offer to the limited partners to
purchase their units for cash. As a result of this offer and
subsequent purchases, Apache has acquired 108.97 additional
Partnership units for $997,000, bringing Apache's total ownership to
34 percent at December 31, 1995.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Statement Presentation -
The accounts of the Partnership are maintained on a tax basis method
of accounting in accordance with the Articles of Limited Partnership
and methods of reporting allowed for federal income tax purposes.
Financial statements included in reports which the Partnership files
with the Securities and Exchange Commission (SEC) are required to be
prepared in conformity with generally accepted accounting principles.
Accordingly, the accompanying financial statements have been prepared
to reflect memorandum entries to convert from the tax basis to the
accrual basis method in conformity with generally accepted accounting
principles.
Cash and Cash Equivalents -
The Partnership considers all highly liquid debt instruments
purchased with an original maturity of three months or less to be cash
equivalents. These investments are carried at cost which approximates
market.
Oil and Gas Properties -
The Partnership follows the full cost method of accounting,
capitalizing, for financial statement purposes, all exploration and
development costs incurred for the purpose of finding oil and gas
reserves. The amounts capitalized under this method include dry hole
costs, leasehold costs, engineering, geological, exploration,
development and other similar costs. Costs associated with production
and administrative functions are expensed in the period incurred. No
gain or loss is normally recognized on the sale or abandonment of oil
and gas properties.
Capitalized costs of oil and gas properties are amortized on the
future gross revenue method, whereby the provision for depreciation,
depletion and amortization (DD&A) is computed quarterly by dividing
the net cost of oil and gas properties, including estimated future
development costs, by estimated future gross revenue from proved oil
and gas reserves and applying the resulting rate to revenue for the
period.
The Partnership limits the capitalized costs of proved oil and gas
properties, net of accumulated DD&A, to the estimated future net cash
flows from proved oil and gas reserves discounted at ten percent. If
capitalized costs exceed this limit, the excess is charged to DD&A
expense. During 1995, the partnership recorded write-downs totaling
$675,126. 1994 writedowns totaled $3,030,150 and no writedowns were
recorded in 1993.
Per Unit Calculation -
The net income (loss) per weighted average equivalent limited
partner unit is calculated by dividing the aggregate limited partners'
net income (loss) for the period by the number of weighted average
equivalent limited partner units outstanding for that period.
Income Taxes -
The profit or loss of the Partnership for federal income tax
reporting purposes is included in the income tax returns of the
partners. Accordingly, no recognition has been given to income taxes
in the accompanying financial statements.
Sharing Ratios -
Revenue and associated costs are credited to the general and limited
partner interests at 73 percent and 27 percent, respectively, as
defined in the Articles of Limited Partnership and as adjusted to give
effect to the exchange offers.
Receivable from Apache -
Receivable from Apache represents the net result of the limited
partners' revenue, expenditure and capital transactions in the current
month. Cash in this amount will be transferred in the following month
after the Partnership's transactions are processed and the net results
from operations are determined. The balances in the account are non-
interest bearing and unsecured.
Revenue Recognition -
The Partnership uses the sales method of accounting for natural gas
revenues. Under this method, revenues are recognized based on actual
volumes of gas sold to purchasers. The volumes of gas sold may differ
from the volumes to which the Partnership is entitled based on its
interests in the properties. Differences between volumes sold and
volumes based on entitlements create gas imbalances which are
reflected as adjustments to reported gas reserve quantities.
Adjustments for gas imbalances offset approximately 12 percent of the
Partnership's proved gas reserves at December 31, 1995, and 11 percent
at December 31, 1994.
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. At the end of 1995, the
Partnership's estimated liability for gas imbalances in excess of
remaining reserves remained unchanged form 1994. Since December 31,
1994, no material changes occurred in imbalance volumes or pricing
that the Partnership believes would materially impact the current
estimate, therefore no adjustments were recorded during 1995. The
account balance will be reduced when cash payments are made to settle
with under-delivered owners in these properties or volumes are
otherwise recouped by underproduced owners from other Partnership
wells.
During 1994, the Partnership recognized unfavorable reserve
revisions which reduced the estimated volume of gas available to make
up certain existing gas imbalances. Following these revisions, the
Partnership recorded, in 1994, a $621,348 charge to earnings to
increase its estimated liability for gas imbalances.
Maintenance and Repairs -
Maintenance and repairs are charged to expense as incurred.
Recompletions and replacements which improve or extend the life of
existing properties are capitalized.
Use of Estimates -
The preparation of financial statements in conformity with generally
accepting accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates. Significant estimates with regard to these
financial statements include the estimate of proved oil and gas
reserve volumes and the related present value of estimated future net
revenues therefrom (see Supplemental Oil and Gas Disclosures).
(3) COMPENSATION OF THE GENERAL PARTNER AND THE OPERATOR
Apache is reimbursed for the limited partners' share of direct
expenses actually incurred in connection with managing the limited
partnership operations, maintaining the Partnership's book of
accounts, and communicating the results of operations to the
unitholders. Apache also is reimbursed for the limited partners'
share of the general and administrative overhead expenses. During
1995, 1994 and 1993, Apache was reimbursed approximately $51,000,
$48,000 and $50,000, respectively, by the limited partners for these
expenses.
(4) COMMITMENTS AND CONTINGENCIES
A suit is pending against Apache, as the operator of the Mikles #1-
10, Damron #1-10, Kinney Warren #3-10 and Fender #4-10 wells in
Beckham County, Oklahoma. The suit alleges that the pooling order
relating to the wells is void as to a five-acre mineral interest
allegedly owned by the plaintiffs, due to lack of personal notice to
the heirs of Jack McCollum, and that, as a result, they own a working
interest rather than a royalty interest in the wells. The plaintiffs
seek a decree quieting title to their purported working interest, an
accounting for conversion, and damages and interest on late payment of
production proceeds totaling in excess of $500,000. Merle L. McCollum,
et al. v. Apache Corporation, et al., District Court of Beckham
County, Oklahoma (No. C-92-248), was filed December 15, 1992. On June
15, 1994, the court awarded damages of approximately $850,000 to
plaintiffs. Apache appealed the judgement to the Court of Appeals,
Division No. 2 of the State of Oklahoma, which reversed the trial
court's award. The plaintiffs have requested a rehearing. The
Partnership has working interests in the affected wells averaging 21.8
percent and would be obligated for its proportionate share of any
liability in the matter.
A suit is pending against the Partnership and Apache, as the
operator of the Merritt Prospect (including the Mikles #1-10) in
Beckham County, Oklahoma, alleging that the plaintiffs are entitled to
participate in acreage which the defendants earned in the prospect
under certain farmout agreements and acreage contribution agreements
with third parties. J. F. Schulte, et al. v. Apache Corporation, et
al., District Court of Beckham County, Oklahoma (No. C-81035), was
filed in 1981. In their original 1981 complaint, the plaintiffs
allege that, as force pooled working interest owners, they were
entitled to share in the earned acreage. The Oklahoma Supreme Court
ruled that the plaintiffs were not entitled to share in earned acreage
by virtue of the pooling order. The case was remanded to determine if
any mining partnership or other agreement existed by which plaintiffs
could be entitled to share in earned acreage. On April 21, 1993, the
court ruled in the plaintiffs favor and plaintiffs were awarded
damages totaling $1,730,133, attorneys' fees totaling $502,850 and
prejudgment interest totaling $2,092,989. Additionally, the court held
that the plaintiffs were entitled to an interest in 24.364 acres in
Section 10 of the prospect and six sections adjacent to Section 10.
The Partnership and Apache appealed the judgement and 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. On August 21, 1995, plaintiffs petitioned
the Oklahoma Supreme Court for rehearing. Apache is vigorously
opposing the petition for the 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 charges 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. Apache has appealed the issue of class
certification to the Supreme Court of the State of Oklahoma (No.
86434). The proportionate share of the estimated amount of the
plaintiff's claims applicable to the Partnership is $106,000.
The Partnership and Apache intend to defend their interests in the
above cases. However, in the event that one or more of these judgments
are ruled against the Partnership, the Partnership's ability to
continue to make distributions could be materially adversely affected.
The extent to which distributions would be interrupted would depend
on a number of factors which are presently unknown, including the
amount of any judgment ultimately attributable to the Partnership, and
which cannot be predicted.
<PAGE>
(5) OIL AND GAS PROPERTIES
The following table reflects changes in the Partnership's oil and
gas properties for each of the years ended December 31. All costs of
oil and gas properties are currently being amortized.
<TABLE>
Oil and Gas Properties 1995 1994 1993
---------------------- ----------- ----------- -----------
<S> <C> <S> <C>
Balance, beginning of year $ 24,615,328 $ 24,479,128 $ 24,410,849
Costs incurred during the year:
Development -
General partner 62,977 16,654 46,909
Limited partners 8,757 119,546 21,370
Property sale proceeds -
General partner (430,062) -- --
Limited partners (158,139) -- --
----------- ----------- -----------
Balance, end of year $ 24,098,861 $ 24,615,328 $ 24,479,128
=========== =========== ===========
</TABLE>
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 revenues to be generated by existing proved reserves.
The following table reflects changes in the Partnership's
accumulated DD&A for each of the years ended December 31, 1993, 1994
and 1995.
<TABLE>
Accumulated
Depreciation,
Depletion and General Limited Combining
Amortization Partner Partners Adjustments Total
------------ ------------ ------------ ------------ -----------
<C> <C> <C> <C> <C>
December 31, 1992 $ 7,390,564 $ 11,218,241 $ (2,236,913) $ 16,371,892
Provision 214,452 125,630 124,335 464,417
------------ ------------ ------------ ------------
December 31, 1993 7,605,016 11,343,871 (2,112,578) 16,836,309
Provision - recurring 197,479 103,194 74,434 375,107
- additional 56,971 935,035 2,038,144 3,030,150
------------ ------------ ------------ ------------
December 31, 1994 7,859,466 12,382,100 -- 20,241,566
Provision - recurring 162,244 61,622 -- 223,866
- additional 459,023 216,103 -- 675,126
------------ ------------ ------------ ------------
December 31, 1995 $ 8,480,733 $ 12,659,825 $ -- $ 21,140,558
============ ============ ============ ============
</TABLE>
The Partnership's aggregate recurring DD&A provision was 24 percent,
35 percent and 31 percent of oil and gas sales in 1995, 1994 and 1993,
respectively.
In 1994, the cost of the Partnership's oil and gas properties
exceeded the discounted future net revenue of the properties by
$3,030,150. The difference of $2,038,144 between the Partnership's
additional DD&A provision of $3,030,150 and the combined limited and
general partners' additional DD&A provision of $992,006 is shown as a
reduction of partners' capital and is included as part of the overall
combining adjustments on the financial statements.
The limited and general partners combined recurring DD&A provisions
totaled $300,673 in 1994 and $340,082 in 1993, which were less than
the Partnership's DD&A provision each year. The Partnership's DD&A
provision was $375,107 in 1994 and $464,417 in 1993 resulting in
differences of $74,434 and $124,335, respectively. The differences
were shown as a reduction of partner's capital and is included as a
part of the overall combining adjustments on the financial statements.
Divestitures -
During 1995, the Partnership sold its interest in 30 wells located
primarily in the Rocky Mountain region. Proceeds from the sales of
these wells totaled $588,201. Due to the properties' distance from
markets, both oil and gas sold at a discount compared to oil and gas
production sold in the Partnerships' other areas of interest.
The properties sold constituted 31 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 revenues related to the
properties sold accounted for 30 percent and 22 percent of the
Partnership's total oil and gas sales in 1994 and 1995, respectively.
(6) MAJOR CUSTOMER INFORMATION
Revenue received from major third party customers exceeding ten
percent of oil and gas revenue is summarized below. No other third
party customers individually accounted for more than ten percent of
oil and gas revenue.
<TABLE>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Natural Gas Clearinghouse $ 505,000 $ 414,000 $ 557,000
Aquila Energy 195,000 34,000 46,000
Cenex Corporation 106,000 137,000 183,000
</TABLE>
Natural Gas Clearinghouse (NGC) was the principal purchaser of the
Partnership's spot market gas production from April 1990 through
September 30, 1995. On September 30, 1995, the contract with NGC was
terminated and the Partnership found alternative customers to
purchase its gas. NGC purchased approximately 77 percent, 63 percent
and 59 percent of the Partnership's natural gas during 1995, 1994 and
1993, respectively.
The Partnership's revenues are derived principally from
uncollateralized sales to customers in the oil and gas industry;
therefore, customers may be similarly affected by changes in economic
and other conditions within the industry. The Partnership has not
experienced significant credit losses on such sales.
(7) TRANSACTIONS WITH AFFILIATES
The Partnership has historically engaged in farmout transactions in
wells/prospects with other Apache-managed partnerships. In the
opinion of Apache, such transactions, which were based on third-party
offers or trades in the immediate vicinity, were in the best interest
of the Partnership and the other partnerships affected, and were
necessary to achieve the Partnership's and the other partnerships'
objectives.
(8) FINANCIAL INSTRUMENTS
The carrying amount of cash and cash equivalents, oil and gas
receivables and trade liabilities included in the accompanying Balance
Sheet approximated market value at December 31, 1995 and 1994. The
Partnership did not engage in hedging activities during the three year
reporting period ended December 31, 1995.
(9) SUPPLEMENTAL OIL AND GAS DISCLOSURES(UNAUDITED)
Proved oil and gas reserve quantities are based on estimates
prepared by Apache's engineers in accordance with guidelines
established by SEC. The estimates of proved reserve quantities are
subject to review by Ryder Scott Company Petroleum Engineers,
independent petroleum engineers.
There are numerous uncertainties inherent in estimating quantities
of proved reserves and projecting future rates of production and
timing of development expenditures. The following reserve data
represents estimates only and should not be construed as being exact.
<TABLE>
Total Proved Reserves
1995 1994 1993
------------------ ------------------- ------------------
Oil(Bbl) Gas(Mcf) Oil(Bbl) Gas(Mcf) Oil(Bbl) Gas(Mcf)
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Beginning of year 221,230 8,118,968 255,361 9,788,669 350,032 9,772,704
Extensions,
discoveries and
other additions 1,762 92,963 -- -- -- --
Revisions of
previous estimates (12,277) (797,057) (7,814) (1,289,311) (55,836) 419,532
Production (16,729) (356,231) (26,317) (380,390) (38,835) (403,567)
Sale of properties (69,206) (94,316) -- -- -- -
--------- --------- --------- --------- --------- ---------
End of year 124,780 6,964,327 221,230 8,118,968 255,361 9,788,669
========= ========= ========= ========= ========= =========
Proved Developed
----------------
Beginning of year 221,230 8,118,968 255,361 9,788,669 350,032 9,772,704
======== ========= ========= ========= ========= =========
End of year 124,780 6,964,327 221,230 8,118,968 255,361 9,788,669
======== ========= ========= ========= ========= =========
</TABLE>
The Partnership has no long-term supply agreements or equity
investees. All reserves owned by the Partnership are within the
United States.
Future Net Cash Flows -
The following table sets forth unaudited information concerning
future net cash flows for oil and gas reserves. Future revenues are
based on year-end 1995 prices. Operating costs and future development
costs are based on current costs with no escalation. As the
Registrant is a general partnership, and therefore pays no income
taxes, estimated future income tax expenses were omitted. This
information does not purport to present the fair market value of the
Partnership's oil and gas assets, but does present a standardized
disclosure concerning possible future net cash flows that would result
under the assumptions used.
<TABLE>
Discounted Future Net Cash Flows Relating
to Proved Reserves at December 31,
(In thousands) 1995 1994 1993
--------- --------- ---------
<S> <C> <C>
Future cash inflows $ 18,151 $ 16,835 $ 27,948
Future production and development costs (4,111) (3,783) (5,381)
--------- --------- ---------
Net cash flows 14,040 13,052 22,567
10 percent annual discount rate (9,910) (8,678) (13,276)
--------- --------- ---------
Discounted future net cash flows $ 4,130 $ 4,374 $ 9,291
========= ========= =========
</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
All management functions are performed by Apache, as managing
partner. The Registrant itself has no officers or directors.
Information concerning the officers and directors of Apache set forth
under the captions "Information About Nominees for Election as
Directors," "Continuing Directors," "Executive Officers of the
Company," and "Voting Securities and Principal Holders" in the proxy
statement relating to the 1996 annual meeting of shareholders of
Apache (the "Apache Proxy") is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
See Note (3), "Compensation of the General Partner and the
Operator," of the Registrant's financial statements, under Item 8
above, for information regarding compensation of Apache as managing
partner. The information concerning the compensation paid by Apache
to its officers and directors set forth under the captions "Summary
Compensation Table," "Option/SAR Grants Table," "Option/SAR Exercises
and Year-End Value Table," "Employment Contracts and Termination of
Employment and Change-in-Control Arrangements," and "Director
Compensation" in the Apache Proxy is incorporated herein reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
a. None of the limited partners, except Apache, owns more than
five percent of the outstanding units of the Partnership at
December 31, 1995.
b. Apache owns 115 equivalent units (34 percent) of the
Partnership at December 31, 1995. The officers and directors
of Apache own one unit, or less than one percent of the
equivalent units of the Partnership outstanding at December
31, 1995.
ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
<PAGE>
PART IV
ITEM 14.EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
a. (1) Financial Statements - See accompanying index to
financial statements under Item 8 above.
(2) Financial Statement Schedules - See accompanying index
to financial statements under Item 8 above.
(3) Exhibits
3.1 Articles of Limited Partnership of the
Registrant (incorporated by reference to Appendix A to
the Registrant's Prospectus filed with the Commission
pursuant to Rule 424(b), on November 30, 1979,
Commission File No. 2-65621).
3.2 Certificate of Amendment of Certificate of
Limited Partnership of the Registrant, dated January
28, 1986, (incorporated by reference to Exhibit 3.2 to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1990, Commission File No. 0-9589).
27.1 Financial Data Schedule.
99.1 Proxy statement dated March 28, 1996, relating
to the 1996 annual meeting of shareholders of Apache
Corporation (incorporated by reference to the Proxy
Statement of Apache Corporation filed with the
Commission pursuant to Rule 14A, on March 28, 1996,
Commission File No. 1-4300).
- ---------------------
b. Reports filed on Form 8-K.
No reports on Form 8-K were filed during the fiscal quarter
ended December 31, 1995.
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
Date: March 29, 1996 By: /s/ Raymond Plank
---------------------------
- -------------
Raymond Plank,
Chairman and Chief
Executive Officer
POWER OF ATTORNEY
The officers and directors of Apache Corporation, General Partner of
Apache Petroleum Limited Partnership 1980-I, whose signatures appear below,
hereby constitute and appoint Raymond Plank, G. Steven Farris, Z.S.
Kobiashvili and Mark A. Jackson, and each of them (with full power to each
of them to act alone), the true and lawful attorney-in-fact to sign and
execute, on behalf of the undersigned, any amendment(s) to this report and
each of the undersigned does hereby ratify and confirm all that said
attorneys shall do or cause to be done by virtue thereof.
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
registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ Raymond Plank Chairman and Chief Executive
- ------------------------------ Officer (Principal Executive
Raymond Plank Officer) March 29, 1996
/s/ Mark A. Jackson Vice President and Chief
- ------------------------------ Financial Officer (Principal
Mark A. Jackson Financial Officer March 29, 1996
/s/ Thomas L. Mitchell Controller and Chief
- ------------------------------ Accounting Officer (Principal
Thomas L. Mitchell Accounting Officer) March 29, 1996
Signature Title Date
/s/ Frederick M. Bohen Director
- ------------------------------
Frederick M. Bohen March 29, 1996
/s/ Virgil B. Day Director
- ------------------------------
Virgil B. Day March 29, 1996
/s/ G. Steven Farris Director
- ------------------------------
G. Steven Farris March 29, 1996
/s/ Randolph M. Ferlic Director
- -------------------------------
Randolph M. Ferlic March 29, 1996
/s/ Eugene C. Fiedorek Director
- -------------------------------
Eugene C. Fiedorek March 29, 1996
/s/ W. Brooks Fields Director
- -------------------------------
W. Brooks Fields March 29, 1996
/s/ Robert V. Gisselbeck Director
- -------------------------------
Robert V. Gisselbeck March 29, 1996
/s/ Stanley K. Hathaway Director
- -------------------------------
Stanley K. Hathaway March 29, 1996
/s/ John A. Kocur Director
- -------------------------------
John A. Kocur March 29, 1996
/s/ Joseph A. Rice Director
- -------------------------------
Joseph A. Rice March 29, 1996
6
8
The accompanying notes to financial statements are
an integral part of this statement.
13
24
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000318681
<NAME> ART 5. FDS FOR 1995 10-K
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<S> <C>
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0
0
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