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 MARCH 31, 1996
[ ] 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 1-8432
MESA OFFSHORE TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 76-6004065
(STATE OF INCORPORATION (I.R.S. EMPLOYER
OR ORGANIZATION) IDENTIFICATION NO.)
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
CORPORATE TRUST DIVISION
712 MAIN STREET
HOUSTON, TEXAS 77002
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(713) 216-5100
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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 the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
As of May 10, 1996 -- 71,980,216 Units of Beneficial Interest in Mesa
Offshore Trust.
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MESA OFFSHORE TRUST
STATEMENTS OF DISTRIBUTABLE INCOME
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
----------------------------
1996 1995
------------- -------------
Royalty income....................... $ 36,014 $ 1,303,852
Interest income...................... 15,789 24,172
General and administrative expense... (51,803) (81,518)
------------- -------------
Distributable income............ $ -- $ 1,246,506
============= =============
Distributable income per unit... $ -- $ .0173
============= =============
STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS
MARCH 31, DECEMBER 31,
1996 1995
------------- -------------
(UNAUDITED)
ASSETS
Cash and short-term investments...... $ 1,835,590 $ 2,015,016
Interest receivable.................. 6,200 21,275
Net overriding royalty interest in
oil and gas properties............. 380,905,000 380,905,000
Accumulated amortization............. (379,842,595) (379,837,840)
------------- -------------
$ 2,904,195 $ 3,103,451
============= =============
LIABILITIES AND TRUST CORPUS
Reserve for Trust expenses........... $ 1,841,790 $ 2,000,000
Distributions payable................ -- 36,291
Trust corpus (71,980,216 units of
beneficial interest
authorized and outstanding)........ 1,062,405 1,067,160
------------- -------------
$ 2,904,195 $ 3,103,451
============= =============
(The accompanying notes are an integral part of these financial statements.)
1
MESA OFFSHORE TRUST
STATEMENTS OF CHANGES IN TRUST CORPUS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
----------------------------
1996 1995
------------- -------------
Trust corpus, beginning of period.... $ 1,067,160 $ 1,527,797
Distributable income............ -- 1,246,506
Distributions to unitholders.... -- (1,246,506)
Amortization of net overriding
royalty interest............. (4,755) (216,642)
------------- -------------
Trust corpus, end of period.......... $ 1,062,405 $ 1,311,155
============= =============
(The accompanying notes are an integral part of these financial statements.)
2
MESA OFFSHORE TRUST
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 -- TRUST ORGANIZATION
The Mesa Offshore Trust (Trust) was created effective December 1, 1982 when
Mesa Petroleum Co., predecessor to Mesa Limited Partnership, which was
predecessor to MESA Inc., transferred a 99.99% interest in the Mesa Offshore
Royalty Partnership (Partnership) to the Trust. The Partnership was created to
receive and hold a 90% net overriding royalty interest (the Royalty) in ten
producing and nonproducing oil and gas properties located in federal waters
offshore Louisiana and Texas (the Royalty Properties). MESA Inc. owns and
operates its assets through Mesa Operating Co., the operator of the Royalty
Properties. Mesa Operating Co. is also the managing general partner of the
Partnership (the Managing General Partner). As used in this report, the term
Mesa generally refers to the operator of the Royalty Properties, unless
otherwise indicated.
STATUS OF THE TRUST
Mesa has advised the Trust that it is pursuing its planned drilling program
on the South Marsh Island property which includes up to five wells from the
existing "A" platform on the South Marsh Island 155 block during 1996. Mesa has
advised the Trust that no Royalty income will be paid to the Trust until Mesa
recovers all costs related to the South Marsh Island drilling along with any
additional completion costs required if the drilling is successful. In addition,
if payments of Royalty income to the Trust are resumed, distributions to
unitholders may be further delayed to allow the Trust to recover administrative
expenses paid during the period that Royalty income was not paid to the Trust.
The recovery of costs associated with the Matagorda Island and South Marsh
Island drilling programs is expected to cause the cash received by the Trust in
1996 to fall below the termination threshold prescribed in the Indenture;
therefore 1996 could be the first of three successive years of below threshold
income, resulting in the termination of the Trust as early as the end of 1998.
If the drilling is successful, the effect on Royalty income and Trust reserves
will depend on the quality and quantity of reserves found.
MESA Inc. has advised the Trust that its independent public accountants
included a going concern paragraph in their report on its 1995 financial
statements. The going concern paragraph refers to MESA Inc.'s current financial
forecasts, which indicate that MESA Inc. will be unable to fund required debt
principal and interest obligations due in June 1996 with cash flows from
operating activities, available cash, and investment balances. Subsequent to the
issuance of its 1995 financial statements, MESA Inc. revised its financial
forecasts to reflect actual first quarter 1996 results and expectations of
increased prices to be received for production during the remainder of 1996. As
a result, MESA Inc. expects to have sufficient available cash and investment
balances at June 30, 1996 to meet its obligations. However, assuming no changes
in its capital structure and no significant transactions are completed,
available cash and securities balances are not expected to be sufficient to meet
such obligations in the second half of 1996.
On April 29, 1996, MESA Inc. signed a definitive agreement with a
partnership controlled by Rainwater, Inc. (Rainwater) intended to recapitalize
MESA Inc. with a $265 million equity infusion and a refinancing of substantially
all of MESA Inc.'s remaining debt. The proposed transaction is subject to MESA
Inc. stockholder approval. There can be no assurance that this transaction will
be completed, what the final terms or timing thereof will be. If the Rainwater
transaction is not completed, MESA Inc. has advised the Trust it will pursue
other alternatives to address its liquidity issues and financial condition,
including other potential transactions arising from the proposal solicitation
process, the possibility of seeking to restructure its balance sheet by
negotiating with its current debt holders or seeking protection from its
creditors under the Federal Bankruptcy Code.
MESA Inc.'s projected debt service problems, as well as any refinancing,
restructuring or other strategic alternative, could have significant effects on
the Trust, although the precise nature of such effects cannot be predicted or
quantified at this time. No assurance can be given by the Trust regarding MESA
Inc.'s financial condition. An event of bankruptcy of MESA Inc. that includes
the Managing General Partner would cause a dissolution of the Partnership which
could cause a termination of the
3
MESA OFFSHORE TRUST
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)
Trust as described above. An event of bankruptcy of MESA Inc. could also result
in a delay in receipt of royalty payments by the Trust, increased administrative
expenses of the Trust and other effects which cannot be predicted or quantified
at this time.
NOTE 2 -- BASIS OF PRESENTATION
The accompanying unaudited financial information has been prepared by Texas
Commerce Bank National Association (Trustee) in accordance with the instructions
to Form 10-Q, and the Trustee believes such information includes all the
disclosures necessary to make the information presented not misleading. The
information furnished reflects all adjustments which are, in the opinion of the
Trustee, necessary for a fair presentation of the results for the interim
periods presented. The financial information should be read in conjunction with
the financial statements and notes thereto included in the Trust's 1995 Annual
Report on Form 10-K.
The financial statements of the Trust are prepared on the following basis:
(a) Royalty income recorded for a month is the Trust's interest in
the amount computed and paid by Mesa to the Partnership for such month
rather than either the value of a portion of the oil and gas produced by
Mesa for such month or the amount subsequently determined to be 90% of the
net proceeds for such month;
(b) Interest income, interest receivable and distributions payable to
unitholders include interest to be earned on short-term investments from
the financial statement date through the next distribution date;
(c) Trust general and administrative expenses are recorded in the
month they accrue;
(d) Amortization of the net overriding royalty interest, which is
calculated on the basis of current royalty income in relation to estimated
future royalty income, is charged directly to trust corpus since such
amount does not affect distributable income; and
(e) Distributions payable are determined on a monthly basis and are
payable to unitholders of record as of the last business day of each month.
However, cash distributions are made quarterly in January, April, July and
October, and include interest earned from the monthly record dates to the
date of distribution.
This basis for reporting royalty income is considered to be the most
meaningful because distributions to the unitholders for a month are based on net
cash receipts for such month. However, it will differ from the basis used for
financial statements prepared in accordance with generally accepted accounting
principles in several respects. Under such principles, royalty income for a
month would be based on net proceeds from production for such month without
regard to when calculated or received and interest income would be calculated
only for the periods covered by the financial statements and would exclude
interest from the period end to the date of distribution.
The instruments conveying the Royalty provide that Mesa will calculate and
pay the Partnership each month an amount equal to 90% of the net proceeds for
the preceding month. Generally, net proceeds means the excess of the amounts
received by Mesa from sales of oil and gas from the Royalty Properties plus
other cash receipts over operating and capital costs incurred.
4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Form 10-Q includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements other than
statements of historical facts included in this Form 10-Q, including without
limitation the statements under "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and Note 1 to the financial
statements of the Trust regarding the financial position of MESA Inc., the
drilling program currently being pursued by Mesa and the potential effects of
such matters on the Trust, are forward-looking statements. Although MESA Inc.
has advised the Trust that it believes that the expectations reflected in such
forward-looking statements are reasonable, no assurance can be given that such
expectations will prove to have been correct. Important factors that could cause
actual results to differ materially from expectations ("Cautionary Statements")
are disclosed in this Form 10-Q, including, without limitation in conjunction
with the forward-looking statements included in this Form 10-Q. All subsequent
written and oral forward-looking statements attributable to the Trust or persons
acting on its behalf are expressly qualified in their entirety by the Cautionary
Statements.
FINANCIAL REVIEW
During the first quarter of 1996, the Trust had no distributable income, as
compared to $1,246,506, representing $.0173 per unit, of distributable income in
the first quarter of 1995. The suspension of distributions is due to expenses
related to the drilling on South Marsh Island and Matagorda Island discussed
below. The per unit amounts of distributable income for the first quarter of
1996 and 1995 were earned by month as follows:
1996 1995
--------- ---------
January.............................. $ -- $ .0058
February............................. -- .0060
March................................ -- .0055
--------- ---------
$ -- $ .0173
========= =========
Royalty income decreased to $36,014 in the first quarter of 1996 as
compared to $1,303,852 for the first quarter of 1995. The decrease in Royalty
income is due to the recovery of drilling costs by Mesa on the South Marsh
Island blocks 155 and 156 and Matagorda Island 624.
Production volumes for natural gas decreased to 763,371 Mcf in the first
quarter of 1996 from 1,126,855 Mcf in the first quarter of 1995. The average
price received for natural gas was $2.27 per Mcf in the first quarter of 1996
compared to $1.64 per Mcf in the first quarter of 1995.
Crude oil, condensate and natural gas liquids production decreased to
18,809 barrels in the first quarter of 1996 from 35,732 barrels in the first
quarter of 1995. The average price received for crude oil, condensate and
natural gas liquids was $16.00 per barrel in the first quarter of 1996, compared
to $15.22 per barrel in the first quarter of 1995.
OPERATIONAL REVIEW
Mesa has advised the Trust that during the first quarter its offshore gas
production was marketed under short term contracts at spot market prices to
multiple purchasers, including Penn Union Energy, Neste and Conoco, and that it
expects to continue to market its production under short term contracts for the
foreseeable future. Spot market prices for natural gas in the first quarter of
1996 were generally higher than spot market prices in the first quarter of 1995.
The amount of cash distributed by the Trust is dependent on, among other
things, the sales prices and quantities of gas, crude oil, condensate and
natural gas liquids produced from the Royalty Properties. Substantial
uncertainties exist with regard to future gas and oil prices, which are subject
to fluctuations due to the regional supply and demand for natural gas and oil,
production levels and other
5
activities of OPEC and other oil and gas producers, weather, industrial growth,
conservation measures, competition and other variables.
The Brazos A-7 and A-39 blocks experienced a decrease in production in the
first quarter of 1996 as compared to the first quarter of 1995 primarily due to
natural production decline. During 1995, Mesa purchased a three dimensional
seismic survey of the A-7 block at a cost of $222,000 ($200,000 net to the
Trust). Mesa is currently evaluating the survey. On block A-39, well A-3 ceased
production in February 1996. Mesa commenced operations in April to perform a
through tubing recompletion in the A-3 well. Operational problems were
encountered, and the work was suspended at an estimated cost of $85,000 ($38,250
net to the Trust). It is anticipated that an additional $210,000 ($94,500 net to
the Trust) will be required to finish the operation.
The South Marsh Island 155 and 156 blocks experienced a decrease in
production in the first quarter of 1996 as compared to the first quarter of
1995, primarily due to natural production decline. During 1994 Mesa obtained a
new seismic survey for block 155 to better evaluate exploration and development
opportunities. The cost of the survey was approximately $280,000 ($176,000 net
to the Trust). In the first quarter of 1995, Mesa's management approved the
purchase of additional three dimensional seismic data for the west half at block
156 at an estimated cost of $198,000 ($125,000 net to the Trust). Mesa has
advised the Trust that it is pursuing its planned drilling program on this
property which includes up to five wells from the existing "A" platform. Mesa
commenced drilling in February 1996 with the A-20 development well on South
Marsh Island block 156. The A-20 well was drilled and completed at a cost of
$2,519,000 ($1,587,000 net to the Trust). The well encountered 70 feet of net
gas pay and tested 14.6 MMcf of natural gas and 264 barrels of condensate per
day. The A-21 well was drilled and completed in the second quarter of 1996 at a
cost of $1,914,000 ($1,206,000 net to the Trust). The well tested 4.5 MMcf of
natural gas per day from 31 feet of gas pay. The A-6 sidetrack well was drilled
in the second quarter of 1996 at a cost of $1,980,000 ($1,247,000 net to the
Trust) and encountered 63 feet of hydrocarbon pay. Mesa intends to complete and
test the well in May. Mesa intends to commence drilling the A-22 exploratory
well on South Marsh Island 155 during May 1996, with a completed well cost
estimated at approximately $6.0 million ($3.8 million net to the Trust).
Depending on the success of the A-22 exploratory well, an additional well may be
drilled on the South Marsh Island block 155, with a completed well cost
estimated at approximately $6.0 million ($3.8 million net to the Trust). Mesa
anticipates that completion of these latter two wells, if each is undertaken,
would occur by the fourth quarter of 1996.
West Delta 61 and 62 production decreased in the first quarter of 1996 as
compared to the first quarter of 1995 primarily due to natural production
declines. The Trust is receiving royalty income from this property pursuant to a
farmout agreement with another operator. The interest in the farmout wells which
is attributable to the Trust consists of a 7.5% net profits interest. In
addition, Mesa has advised the Trust that it has purchased a three dimensional
seismic survey of this property at a cost of approximately $513,000 ($462,000
net to the Trust). The data from this survey is currently being evaluated by
Mesa.
Matagorda Island 624 production increased in the first quarter of 1996 in
comparison to the first quarter of 1995 due to production from the A-8 well
drilled in the fourth quarter of 1995. Mesa successfully drilled the A-8
development well in the fourth quarter of 1995 to a total depth of 9,470 feet at
an estimated cost of $3,202,000 ($940,000 net to the Trust). The well
encountered 29 feet of net gas pay and tested approximately 20 MMcf of natural
gas and 270 barrels of condensate per day. However, production from the A-8 well
declined rapidly and it is currently producing .8 MMcf per day and 4 barrels of
condensate per day.
TERMINATION OF THE TRUST
The terms of the Mesa Offshore Trust Indenture provide that the Trust will
terminate upon the first to occur of the following events: (1) the total amount
of cash received per year by the Trust for each of three successive years
commencing after December 31, 1987 is less than 10 times one-third of the total
amount payable to the Trustee as compensation for such three year period or (2)
a vote by the unitholders in favor of termination. Because the Trust will
terminate in the event the total amount of
6
cash received per year by the Trust falls below certain levels, it would be
possible for the Trust to terminate even though some of the Royalty Properties
continued to have remaining productive lives. For information regarding the
estimated remaining life of each of the Royalty Properties and the estimated
future net revenues of the Trust based on information provided by Mesa, see the
Trust's 1995 Annual Report on Form 10-K. Upon termination of the Trust, the
Trustee will sell for cash all the assets held in the Trust estate and make a
final distribution to unitholders of any funds remaining after all Trust
liabilities have been satisfied. The discussion set forth above is qualified in
its entirety by reference to the Trust Indenture itself, which is available upon
request from the Trustee.
Amounts paid to the Trustee as compensation were $149,000, $177,500, and
$207,000 for the years 1995, 1994 and 1993, respectively. Royalty income of
$3,139,620 for 1995 was above the termination threshold prescribed in the
Indenture.
The terms of the First Amended and Restated Articles of General Partnership
of the Partnership provide that the Partnership shall dissolve upon the
occurrence of any of the following: (a) December 31, 2030; (b) the election of
the Trustee to dissolve the Partnership; (c) the termination of the Trust; (d)
the bankruptcy of the Managing General Partner; or (e) the dissolution of the
Managing General Partner or its election to dissolve the Partnership; provided
that the Managing General Partner shall not elect to dissolve the Partnership so
long as the Trustee remains the only other partner of the Partnership. In the
event of a dissolution of the Partnership and a subsequent winding up and
termination thereof, the assets of the Partnership (i.e., the Royalty interest)
could either (i) be distributed in kind ratably to the Managing General Partner
and the Trustee or (ii) be sold and the proceeds thereof distributed ratably to
the Managing General Partner and the Trustee. In the event of a sale of the
Royalty and a distribution of the cash proceeds to the Trustee, the Trustee
would make a final distribution to unitholders of such cash proceeds plus any
other cash held by the trust after the payment of or provision for all
liabilities of the Trust, and the Trust would be terminated.
In addition, MESA Inc. has advised the Trust that its independent public
accountants included a going concern paragraph in their report on its 1995
financial statements. The going concern paragraph refers to MESA Inc.'s current
financial forecasts, which indicate that MESA Inc. will be unable to fund
required debt principal and interest obligations due in June 1996 with cash
flows from operating activities, available cash, and investment balances.
Subsequent to the issuance of its 1995 financial statements, MESA Inc. revised
its financial forecasts to reflect actual first quarter 1996 results and
expectations of increased prices to be received for production during the
remainder of 1996. As a result, MESA Inc. expects to have sufficient available
cash and investment balances at June 30, 1996 to meet its obligations. However,
assuming no changes in its capital structure and no significant transactions are
completed, available cash and securities balances are not expected to be
sufficient to meet such obligations in the second half of 1996.
On April 29, 1996, MESA Inc. signed a definitive agreement with a
partnership controlled by Rainwater, Inc. (Rainwater) intended to recapitalize
MESA Inc. with a $265 million equity infusion and a refinancing of substantially
all of of MESA Inc.'s remaining debt. The proposed transaction is subject to
MESA Inc. stockholder approval. There can be no assurance that this transaction
will be completed, what the final terms or timing thereof will be. If the
Rainwater transaction is not completed, MESA Inc. has advised the Trust it will
pursue other alternatives to address its liquidity issues and financial
condition, including other potential transactions arising from the proposal
solicitation process, the possibility of seeking to restructure its balance
sheet by negotiating with its current debt holders or seeking protection from
its creditors under the Federal Bankruptcy Code.
MESA Inc.'s projected debt service problems, as well as any refinancing,
restructuring or other strategic alternative, could have significant effects on
the Trust, although the precise nature of such effects cannot be predicted or
quantified at this time. No assurance can be given by the Trust regarding MESA
Inc.'s financial condition. An event of bankruptcy of MESA Inc. that includes
the Managing General Partner would cause a dissolution of the Partnership which
could cause a termination of the Trust as described above. An event of
bankruptcy of MESA Inc. could also result in a delay in receipt
7
of royalty payments by the Trust, increased administrative expenses of the Trust
and other effects which cannot be predicted or quantified at this time.
As discussed above, Mesa has advised the Trust that it is pursuing its
planned drilling program on the South Marsh Island property which includes up to
five wells from the existing "A" platform on the South Marsh Island 155 block
during 1996. Mesa anticipates that the total cost of these five wells, if each
is drilled, will be approximately $22 million ($14 million net to the Trust).
During the first quarter of 1996, Mesa recovered approximately $1.5 million
($1.4 million net to the Trust) in drilling expenses. Mesa has advised the Trust
that no Royalty income will be paid to the Trust until Mesa recovers all costs
related to the South Marsh Island drilling along with any additional completion
costs required if the drilling is successful. In addition, if payments of
Royalty income to the Trust are resumed, distributions to unitholders may be
further delayed to allow the Trust to recover administrative expenses paid
during the period that Royalty income was not paid to the Trust. The recovery of
costs associated with the Matagorda Island and South Marsh Island drilling
programs is expected to cause the cash received by the Trust in 1996 to fall
below the termination threshold prescribed in the Indenture; therefore 1996
could be the first of three successive years of below threshold income,
resulting in the termination of the Trust as early as the end of 1998. If the
drilling is successful, the effect on Royalty income and Trust reserves will
depend on the quality and quantity of reserves found.
8
The following tables provide a summary of the calculations of the net
proceeds attributable to the Partnership's royalty interest (unaudited):
<PAGE>
<TABLE>
<CAPTION>
SOUTH
BRAZOS MARSH WEST
A-7 AND ISLAND 155 DELTA 61 MATAGORDA
A-39 AND 156 AND 62 ISLAND 624 TOTAL
------------ ---------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
THREE MONTHS ENDED MARCH 31, 1996:
Ninety percent of gross proceeds.. $ 393,557 $ 573,676 $ 841,901 $ 221,187 $ 2,030,321
Less ninety percent of --
Operating expenditures....... (154,303) (164,073) (157,950) (93,250) (569,576)
Capital costs recovered......... -- (1,061,721) -- (294,442) (1,356,163)
Accrual for future abandonment
costs........................ (28,769) 2,917 (40,460) (2,252) (68,564)
------------ ---------- ----------- ---------- -------------
Net proceeds (excess costs)..... $ 210,485 $ (649,201) $ 643,491 $ (168,757) $ 36,018
============ =========== =========== =========== =============
Trust share of net proceeds
(99.99%)..................... $ 36,014
=============
Production Volumes and Average
Prices:
Crude oil, condensate and
natural gas liquids (Bbls)... 383 14,953 1,941 1,532 18,809
============ ========== =========== ========== ==============
Average sales price per Bbl..... $ 16.44 $ 15.85 $ 15.18 $ 18.39 $ 16.00
============ ========== =========== ========== ==============
Natural gas (Mcf)............... 193,166 141,980 329,189 99,036 763,371
============ ========== =========== ========== ==============
Average sales price per Mcf..... $ 2.00 $ 2.37 $ 2.47 $ 1.95 $ 2.27
============ ========== =========== ========== ==============
Producing wells................. 2 2 2 3 9
============ ========== =========== ========== ==============
THREE MONTHS ENDED MARCH 31, 1995:
Ninety percent of gross
proceeds..................... $ 546,014 $ 914,071 $ 799,110 $ 127,908 $ 2,387,103
Less ninety percent of --
Operating expenditures....... (145,940) (450,707) (183,702) (94,440) (874,789)
Capital costs recovered......... -- (32,778) (56,475) -- (89,253)
Accrual for future abandonment
costs........................ (31,230) (40,799) (27,254) (19,796) (119,079)
------------ ---------- ----------- ---------- -------------
Net proceeds (excess costs)..... $ 368,844 $ 389,787 $ 531,679 $ 13,672 $ 1,303,982
============ ========== =========== ========== =============
Trust share of net proceeds
(99.99%)..................... $ 1,303,852
=============
Production Volumes and Average
Prices:
Crude oil, condensate and
natural gas liquids (Bbls)... 936 30,170 3,469 1,157 35,732
============ ========== =========== ========== =============
Average sales price per Bbl..... $ 15.50 $ 15.32 $ 14.32 $ 15.00 $ 15.22
============ ========== =========== ========== =============
Natural gas (Mcf)............... 323,719 291,434 441,390 70,312 1,126,855
============ ========== =========== ========== =============
Average sales price per Mcf..... $ 1.64 $ 1.55 $ 1.70 $ 1.57 $ 1.64
============ ========== =========== ========== =============
Producing wells................. 3 2 2 3 10
</TABLE>
- ------------
o The amounts shown are for Mesa Offshore Royalty Partnership.
o The amounts for the three months ended March 31, 1996 and 1995 represent
actual production for the periods November 1995 through January 1996 and
November 1994 through January 1995, respectively.
o Capital costs recovered represent capital costs incurred during the
current or prior periods to the extent that such costs have been recovered
by Mesa from current period Gross Proceeds.
o Producing wells indicate the number of wells capable of production as of
the end of the period.
o The cost carryforward resulting from the drilling on South Marsh Island
155 was $102,875 at March 31, 1996.
9
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
(Asterisk indicates exhibit previously filed with the Securities and
Exchange Commission and incorporated herein by reference.)
SEC FILE
OR
REGISTRATION EXHIBIT
NUMBER NUMBER
------------ ------
4(a) *Mesa Offshore Trust Indenture between
Mesa Petroleum Co. and Texas Commerce
Bank National Association, as
Trustee, dated December 15, 1982..... 2-79673 10(gg)
4(b) *Overriding Royalty Conveyance between
Mesa Petroleum Co. and Mesa Offshore
Royalty Partnership, dated December
15, 1982............................. 2-79673 10(hh)
4(c) *Partnership Agreement between Mesa
Offshore Management Co. and Texas
Commerce Bank National Association,
as Trustee, dated December 15,
1982................................. 2-79673 10(ii)
4(d) *Amendment to Partnership Agreement
between Mesa Offshore Management Co.,
Texas Commerce Bank National
Association, as Trustee, and Mesa
Operating Limited Partnership, dated
December 27, 1985 (Exhibit 4(d) to
Form 10-K for year ended December 31,
1992 of Mesa Offshore Trust)......... 1-8432 4(d)
4(e) *Amendment to Partnership Agreement
between Texas Commerce Bank National
Association, as Trustee and Mesa
Operating dated as of January 5, 1994
(Exhibit 4(e) to Form 10-K for year
ended December 31, 1993 of Mesa
Offshore Trust)...................... 1-8432 4(e)
27 Financial Data Schedule
(B) REPORTS ON FORM 8-K
None.
10
SIGNATURES
PURSUANT TO THE REQUIREMENTS 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.
MESA OFFSHORE TRUST
TEXAS COMMERCE BANK
By NATIONAL ASSOCIATION
TRUSTEE
By MICHAEL J. ULRICH
MICHAEL J. ULRICH
SENIOR VICE PRESIDENT & TRUST
OFFICER
Date: May 13, 1996
The Registrant, Mesa Offshore Trust, has no principal executive officer,
principal financial officer, board of directors or persons performing similar
functions. Accordingly, no additional signatures are available and none have
been provided.
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM MESA OFFSHORE TRUST AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,835,590
<SECURITIES> 0
<RECEIVABLES> 6,200
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,841,790
<PP&E> 380,905,000
<DEPRECIATION> 379,842,595
<TOTAL-ASSETS> 2,904,595
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,062,405
<TOTAL-LIABILITY-AND-EQUITY> 2,904,195
<SALES> 36,014
<TOTAL-REVENUES> 51,805
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 51,803
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0.0
<EPS-DILUTED> 0.0
</TABLE>
