SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30,
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 August 9, 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)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------ ------------------------
1996 1995 1996 1995
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Royalty income....................... $ -- $ 836,005 $ 36,014 $ 2,139,857
Interest income...................... 16,961 22,655 32,750 46,827
General and administrative expense... (16,961) (170,022) (68,764) (251,540)
---------- ------------ ---------- ------------
Distributable income............ $ -- $ 688,638 $ -- $ 1,935,144
========== ============ ========== ============
Distributable income per unit... $ -- $ .0096 $ -- $ .0269
========== ============ ========== ============
</TABLE>
STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS
JUNE 30, DECEMBER 31,
1996 1995
------------- -------------
(UNAUDITED)
ASSETS
Cash and short-term investments...... $ 1,710,286 $ 2,015,016
Interest receivable.................. 5,957 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)
------------- -------------
$ 2,778,648 $ 3,103,451
============= =============
LIABILITIES AND TRUST CORPUS
Reserve for Trust expenses........... $ 1,716,243 $ 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
------------- -------------
$ 2,778,648 $ 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)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- -----------------------
1996 1995 1996 1995
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Trust corpus, beginning of period.... $1,062,405 $1,311,155 $1,067,160 $ 1,527,797
Distributable income................. -- 688,638 -- 1,935,144
Distributions to unitholders......... -- (688,638) -- (1,935,144)
Amortization of net overriding
royalty interest................... -- (138,881) (4,755) (355,523)
---------- ---------- ---------- -----------
Trust corpus, end of period.......... $1,062,405 $1,172,274 $1,062,405 $ 1,172,274
========== ========== ========== ===========
</TABLE>
(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 continuing its drilling program on
the South Marsh Island property consisting of five wells from the existing "A"
platform on the South Marsh Island 155/156 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 program. 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 from the Trust's reserve fund during the period that Royalty
income was not paid to the Trust. The recovery of costs associated with the
South Marsh Island drilling program 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. The effect of the South Marsh Island drilling program on Royalty income
and Trust reserves will depend on the quality and quantity of reserves found.
For additional information regarding the status of this drilling program, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" elsewhere in this Form 10-Q.
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 then current
financial forecasts, which indicated that MESA Inc. would 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. In
fact, MESA Inc. had sufficient available cash and investment balances at June
30, 1996 to meet its obligations.
On April 29, 1996, MESA Inc. signed a definitive agreement with a
partnership controlled by Rainwater, Inc. 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 was approved by MESA Inc.'s
stockholders at a special meeting held June 25, 1996 and the equity infusion and
the refinancing of substantially all of MESA Inc.'s debt was completed in August
of 1996. As a result, MESA Inc. expects it will have sufficient cash flows from
operating activities and cash balances to fund its required debt principal and
interest obligations in the forseeable future.
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
3
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
There was no distributable income for the second quarter of 1996 as
compared to distributable income for the second quarter of 1995 of $688,638,
representing $.0096 per unit. The per unit amounts of distributable income for
the second quarter of 1996 and 1995 were earned by month as follows:
1996 1995
--------- ---------
April................................ $ -- $ --
May.................................. -- .0047
June................................. -- .0049
--------- ---------
$ -- $ .0096
========= =========
There was no Royalty income in the second quarter of 1996, compared to
Royalty income of $836,005 in the second quarter of 1995. The lack of
distributable income and royalty income in the second quarter of 1996 was
primarily due to the cost of drilling and completions of projects on South Marsh
Island and Matagorda Island.
Production volumes for natural gas decreased to 726,904 Mcf in the second
quarter of 1996 as compared to 982,988 Mcf in the second quarter of 1995. This
decrease in production was primarily due to the continued natural decline in the
productive capacities of the Royalty Properties. The average price received for
natural gas was $2.65 per Mcf in the second quarter of 1996 compared to $1.43
per Mcf in the second quarter of 1995.
Crude oil, condensate and natural gas liquids production decreased to
24,097 barrels in the second quarter of 1996 as compared to 33,883 barrels in
the second quarter of 1995. This decrease in production was primarily due to the
continued natural decline in the productive capacities of the Royalty
Properties. The average price received for crude oil, condensate and natural gas
liquids was $13.68 per barrel in the second quarter of 1996 compared to $13.91
per barrel in the second quarter of 1995.
For the six months ended June 30, 1996, natural gas production volumes
decreased to 1,490,275 Mcf from 2,109,841 Mcf for the first six months ended
June 30, 1995. Crude oil, condensate and natural gas liquids production volumes
decreased to 42,906 barrels in the first six months of 1996 as compared to
69,614 barrels in the first six months of 1995. The decrease in natural gas
production and crude oil, condensate and natural gas liquids production was
primarily due to natural production declines.
5
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 second quarter of
1996 were generally higher than spot market prices in the second 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 activities of OPEC and other oil and gas producers,
weather, storage levels, industrial growth, conservation measures, competition
and other variables.
The Brazos A-7 and A-39 blocks experienced a decrease in production in the
second quarter of 1996 as compared to the second 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 ($38,000
net to the Trust). It is currently anticipated that an additional $150,000
($67,500 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 second quarter of 1996 as compared to the second quarter of
1995, primarily due to natural production decline. In February 1996 Mesa
commenced its South Marsh Island drilling program 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 and completed in the second quarter of 1996 at a cost of $2,198,000
($1,385,000 net to the Trust). The well tested 12.8 MMcf of natural gas and 259
barrels of condensate per day from 63 feet of gas pay. Combined production from
these three wells is currently 20 MMcf of gas and 360 barrels of condensate per
day. The drilling of the A-22 well was completed in the third quarter of 1996 at
a cost of $4,700,000 ($2,961,000 net to the Trust). The well was drilled to a
total depth of 16,346 feet, encountering 55 feet of gas pay at 11,350 feet and a
potentially productive oil pay at 11,000 feet. The deeper objectives in the well
were not productive. When completed, the total cost of the A-22 is estimated at
$5,500,000 ($3,465,000 net to the Trust). Drilling has commenced on a fifth
well, the A-14 sidetrack. This development well is being drilled to a depth of
approximately 12,000 feet with an estimated cost of $3,168,000 ($1,996,000 net
to the Trust). Mesa expects completion of the A-22 well and A-14 sidetrack well,
if successful, to occur by the end of the third quarter. The cost of the total
program is now estimated at approximately $19 million ($12 million net to the
Trust). In addition to the drilling of the five new wells, Mesa anticipates
performing a workover in the third quarter of 1996 to increase production on the
A-19 well at a cost of approximately $975,000 ($614,000 net to the Trust).
West Delta 61 and 62 production decreased in the second quarter of 1996 as
compared to the second 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 purchased a three
6
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 second quarter of 1996 in
comparison to the second quarter of 1995 due to production from the A-8 well.
Mesa successfully drilled the A-8 development well in the fourth quarter of 1995
to a total depth of 9,470 feet at a cost of approximately $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 .7 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 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. The discussion set
forth above is qualified in its entirety by reference to the Partnership
Agreement itself, which is available upon request from the Trustee.
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 then current
financial forecasts, which indicated that MESA Inc. would 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. In
fact, MESA Inc. had sufficient available cash and investment balances at June
30, 1996 to meet its obligations.
7
On April 29, 1996, MESA Inc. signed a definitive agreement with a
partnership controlled by Rainwater, Inc. 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 was approved by MESA Inc.'s
stockholders at a special meeting held June 25, 1996 and the equity infusion and
the refinancing of substantially all of MESA Inc.'s debt was completed in August
of 1996. As a result, MESA Inc. expects it will have sufficient cash flows from
operating activities and cash balances to fund its required debt principal and
interest obligations in the forseeable future.
As discussed above, Mesa has advised the Trust that it is continuing its
drilling program on the South Marsh Island property consisting of five wells
from the existing "A" platform on the South Marsh Island 155/156 block during
1996. Mesa anticipates that the total cost of these five wells will be
approximately $19 million ($12 million net to the Trust). During the first six
months of 1996, Mesa recovered approximately $3.2 million ($2.9 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 program. 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 from the Trust's reserve
fund during the period that Royalty income was not paid to the Trust. The
recovery of costs associated with the 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. The effect of the drilling
program 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):
<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 JUNE 30, 1996:
Ninety percent of gross
proceeds....................... $ 127,272 $ 1,021,101 $ 891,936 $214,513 $ 2,254,822
Less ninety percent of --
Operating expenditures......... (143,946) (221,259) (174,302) (95,059) (634,566)
Capital costs recovered........ 0 (1,518,260) 0 (20,319) (1,538,579)
Accrual for future abandonment
costs....................... (9,518) 4,470 (76,551) (78) (81,677)
---------- ------------ ----------- ---------- ------------
Net proceeds (excess costs)...... $ (26,192) $ (713,948) $ 641,083 $ 99,057 $ 0
========== ============ =========== ========== ============
Trust share of net proceeds
(99.99%)....................... $ 0
============
Production Volumes and Average
Prices:
Crude oil, condensate and
natural gas liquids
(Bbls)...................... (365) 21,525 1,395 1,542 24,097
========== ============ =========== ========== ============
Average sales price per Bbl.... $ -- $ 14.63 $ 17.00 $ 20.30 $ 13.68
========== ============ =========== ========== ============
Natural gas (Mcf).............. 83,786 236,592 317,637 88,889 726,904
========== ============ =========== ========== ============
Average sales price per Mcf.... $ 2.00 $ 2.98 $ 2.73 $ 2.06 $ 2.65
========== ============ =========== ========== ============
Producing wells.................. 2 4 2 3 11
THREE MONTHS ENDED JUNE 30, 1995:
Ninety percent of gross
proceeds....................... $ 417,518 $ 735,395 $ 612,827 $106,560 $ 1,872,300
Less ninety percent of --
Operating expenditures......... (172,817) (196,908) (208,658) (84,736) (663,119)
Capital costs recovered........ (154,039) (133,314) (869) (2,533) (290,755)
Accrual for future abandonment
costs....................... (37,616) (1,850) (41,651) (1,220) (82,337)
---------- ------------ ----------- ---------- ------------
Net proceeds..................... $ 53,046 $ 403,323 $ 361,649 $ 18,071 $ 836,089
========== ============ =========== ========== ============
Trust share of net proceeds
(99.99%)....................... $ 836,005
============
Production Volumes and Average
Prices:
Crude oil, condensate and
natural gas liquids
(Bbls)...................... 878 28,709 3,175 1,121 33,883
========== ============ =========== ========== ============
Average sales price per Bbl.... $ 16.75 $ 13.58 $ 15.35 $ 16.16 $ 13.91
========== ============ =========== ========== ============
Natural gas (Mcf).............. 282,410 261,140 373,976 65,462 982,988
========== ============ =========== ========== ============
Average sales price per Mcf.... $ 1.43 $ 1.32 $ 1.51 $ 1.35 $ 1.43
========== ============ =========== ========== ============
Producing wells.................. 3 2 2 2 9
</TABLE>
- ------------
o The amounts shown are for Mesa Offshore Royalty Partnership.
o The amounts for the three months ended June 30, 1996 and 1995 represent
actual production for the periods February 1996 through April 1996 and
February 1995 through April 1995, respectively.
o Capital costs recovered represents 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 Crude oil, condensate and natural gas liquids production and prices for the
three months ended June 30, 1996 are distorted due to prior period
accounting adjustments on Brazos A-7 and A-39.
o The cost carryforward resulting from the drilling on South Marsh Island
155/156 was $2,242,370 at June 30, 1996.
9
<TABLE>
<CAPTION>
SOUTH
BRAZOS MARSH WEST MATAGORDA
A-7 AND ISLAND 155 DELTA 61 ISLAND
A-39 AND 156 AND 62 624 TOTAL
--------- ---------- ----------- --------- ------------
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED JUNE 30, 1996:
Ninety percent of gross
proceeds....................... $ 520,829 $1,594,777 $ 1,733,837 $ 435,700 $ 4,285,143
Less ninety percent of --
Operating expenditures......... (298,249) (385,332) (332,252) (188,309) (1,204,142)
Capital costs recovered........ 0 (2,579,981) 0 (314,761) (2,894,742)
Accrual for future abandonment
costs....................... (38,287) 7,387 (117,011) (2,330) (150,241)
--------- ---------- ----------- --------- ------------
Net proceeds (excess costs)...... $ 184,293 $(1,363,149) $ 1,284,574 $ (69,700) $ 36,018
========= ========== =========== ========= ============
Trust share of net proceeds
(99.99%)....................... $ 36,014
============
Production Volumes and Average
Prices:
Crude oil, condensate and
natural gas liquids
(Bbls)...................... 18 36,478 3,336 3,074 42,906
========= ========== =========== ========= ============
Average sales price per Bbl.... $ -- $ 15.13 $ 15.94 $ 19.35 $ 14.70
========= ========== =========== ========= ============
Natural gas (Mcf).............. 276,952 378,572 646,826 187,925 1,490,275
========= ========== =========== ========= ============
Average sales price per Mcf.... $ 2.00 $ 2.75 $ 2.60 $ 2.00 $ 2.45
========= ========== =========== ========= ============
Producing wells.................. 2 4 2 3 11
</TABLE>
<TABLE>
<CAPTION>
SOUTH
BRAZOS MARSH WEST MATAGORDA
A-7 AND ISLAND 155 DELTA 61 ISLAND
A-39 AND 156 AND 62 624 TOTAL
--------- ---------- ----------- --------- ------------
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED JUNE 30, 1995:
Ninety percent of gross
proceeds....................... $ 963,532 $1,649,466 $ 1,411,937 $ 234,468 $ 4,259,403
Less ninety percent of --
Operating expenditures......... (318,757) (647,615) (392,359) (181,709) (1,540,440)
Capital costs recovered........ (154,039) (166,092) (57,344) -- (377,475)
Accrual for future abandonment
costs.......................... (68,846) (42,649) (68,905) (21,017) (201,417)
--------- ---------- ----------- --------- ------------
Net proceeds..................... $ 421,890 $ 793,110 $ 893,329 $ 31,742 $ 2,140,071
========= ========== =========== ========= ============
Trust share of net proceeds
(99.99%)....................... $ 2,139,857
============
Production Volumes and Average
Prices:
Crude oil, condensate and
natural gas liquids
(Bbls)...................... 1,814 58,879 6,644 2,277 69,614
========= ========== =========== ========= ============
Average sales price per Bbl.... $ 16.10 $ 14.47 $ 14.81 $ 15.57 $ 14.58
========= ========== =========== ========= ============
Natural gas (Mcf).............. 606,129 552,573 815,366 135,773 2,109,841
========= ========== =========== ========= ============
Average sales price per Mcf.... $ 1.54 $ 1.44 $ 1.61 $ 1.47 $ 1.54
========= ========== =========== ========= ============
Producing wells.................. 3 2 2 2 9
</TABLE>
- ------------
o The amounts shown are for Mesa Offshore Royalty Partnership.
o The amounts for the six months ended June 30, 1996 and 1995 represent actual
production for the periods November 1995 through April 1996, and November
1994 through April 1995 respectively.
o Capital costs recovered represents 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 Crude oil, condensate and natural gas liquids production and prices for the
six months ended June 30, 1996 are distorted due to prior period accounting
adjustments on Brazos A-7 and A-39.
o The cost carryforward resulting from the drilling on South Marsh Island
155/156 was $2,242,370 at June 30, 1996.
10
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.)
<TABLE>
<CAPTION>
SEC FILE
OR
REGISTRATION EXHIBIT
NUMBER NUMBER
------------ -------
<S> <C> <C> <C>
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
</TABLE>
(b) REPORTS ON FORM 8-K
None.
11
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 PETE FOSTER
--------------------------------
PETE FOSTER
SENIOR VICE PRESIDENT & TRUST
OFFICER
Date: August 12, 1995
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.
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MESA
OFFSHORE TRUST JUNE 30, 1996, FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1996
<CASH> 1,710,286
<SECURITIES> 0
<RECEIVABLES> 5,957
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,716,243
<PP&E> 380,905,000
<DEPRECIATION> (379,842,595)
<TOTAL-ASSETS> 2,778,648
<CURRENT-LIABILITIES> 1,716,243
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,062,405
<TOTAL-LIABILITY-AND-EQUITY> 2,778,648
<SALES> 36,014
<TOTAL-REVENUES> 68,764
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 68,764
<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
<EPS-DILUTED> 0
</TABLE>
