UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
/ x / Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 1997
or
/ / Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from _______ to _______
Commission File No. 2-75530A
PARKER & PARSLEY 82-1, LTD.
(Exact name of Registrant as specified in its charter)
Texas 75-1825545
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
303 West Wall, Suite 101, Midland, Texas 79701
(Address of principal executive offices) (Zip code)
Registrant's Telephone Number, including area code : (915) 683-4768
Not applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes / x / No / /
Page 1 of 11 pages.
Exhibit index on page 10.
<PAGE>
PARKER & PARSLEY 82-I, LTD.
TABLE OF CONTENTS
Page
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of September 30, 1997 and
December 31, 1996 .................................... 3
Statements of Operations for the three and nine
months ended September 30, 1997 and 1996................. 4
Statement of Partners' Capital for the nine months
ended September 30, 1997................................. 5
Statements of Cash Flows for the nine months ended
September 30, 1997 and 1996.............................. 6
Notes to Financial Statements.............................. 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...................... 7
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K........................... 10
27. Financial Data Schedule
Signatures................................................. 11
2
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PARKER & PARSLEY 82-I, LTD.
(A Texas Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
September 30, December 31,
1997 1996
------------- ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $93,957 at September 30
and $94,031 at December 31 $ 94,457 $ 94,531
Accounts receivable - oil and gas sales 51,338 106,548
----------- -----------
Total current assets 145,795 201,079
----------- -----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 10,329,242 10,327,153
Accumulated depletion (9,121,836) (9,001,467)
----------- -----------
Net oil and gas properties 1,207,406 1,325,686
----------- -----------
$ 1,353,201 $ 1,526,765
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 19,743 $ 16,749
Partners' capital:
General partners 239,042 264,514
Limited partners (4,891 interests) 1,094,416 1,245,502
----------- -----------
1,333,458 1,510,016
----------- -----------
$ 1,353,201 $ 1,526,765
=========== ===========
The financial information included as of September 30, 1997 has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
3
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PARKER & PARSLEY 82-I, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
--------------------- ---------------------
1997 1996 1997 1996
--------- --------- --------- ---------
Revenues:
Oil and gas $ 124,449 $ 149,723 $ 441,021 $ 501,581
Interest 1,494 1,494 4,499 3,816
Litigation settlement - - - 43,618
Gain on disposition of assets - - 3,870 -
-------- -------- -------- --------
125,943 151,217 449,390 549,015
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 82,991 68,402 244,325 229,874
General and administrative 4,605 7,114 15,724 18,368
Depletion 40,136 22,225 120,369 77,010
Abandoned property - - - 2,236
-------- -------- -------- --------
127,732 97,741 380,418 327,488
-------- -------- -------- --------
Net income (loss) $ (1,789) $ 53,476 $ 68,972 $ 221,527
======== ======== ======== ========
Allocation of net income (loss):
General partners $ 5,573 $ 16,703 $ 34,718 $ 65,949
======== ======== ======== ========
Limited partners $ (7,362) $ 36,773 $ 34,254 $ 155,578
======== ======== ======== ========
Net income (loss) per limited
partnership interest $ (1.51) $ 7.52 $ 7.00 $ 31.81
======== ======== ======== ========
Distributions per limited
partnership interest $ 9.69 $ 12.59 $ 37.89 $ 38.37
======== ======== ======== ========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
4
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PARKER & PARSLEY 82-I, LTD.
(A Texas Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
General Limited
partners partners Total
---------- ----------- -----------
Balance at January 1, 1997 $ 264,514 $ 1,245,502 $ 1,510,016
Distributions (60,190) (185,340) (245,530)
Net income 34,718 34,254 68,972
--------- ---------- ----------
Balance at September 30, 1997 $ 239,042 $ 1,094,416 $ 1,333,458
========= ========== ==========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
5
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PARKER & PARSLEY 82-I, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
September 30,
----------------------
1997 1996
---------- ---------
Cash flows from operating activities:
Net income $ 68,972 $ 221,527
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 120,369 77,010
Gain on disposition of assets (3,870) -
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 55,210 (5,466)
Increase (decrease) in accounts payable 2,994 (20,482)
--------- --------
Net cash provided by operating activities 243,675 272,589
--------- --------
Cash flows from investing activities:
Additions to oil and gas properties (2,089) -
Proceeds from disposition of assets 3,870 482
--------- --------
Net cash provided by investing activities 1,781 482
--------- --------
Cash flows from financing activities:
Cash distributions to partners (245,530) (252,548)
--------- --------
Net increase (decrease) in cash and cash equivalents (74) 20,523
Cash and cash equivalents at beginning of period 94,531 83,890
--------- --------
Cash and cash equivalents at end of period $ 94,457 $ 104,413
========= ========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
PARKER & PARSLEY 82-I, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
(Unaudited)
Note 1. Basis of presentation
In the opinion of management, the unaudited financial statements of Parker &
Parsley 82-I, Ltd. (the "Partnership") as of September 30, 1997 and for the
three and nine months ended September 30, 1997 and 1996 include all adjustments
and accruals consisting only of normal recurring accrual adjustments which are
necessary for a fair presentation of the results for the interim period. These
interim results are not necessarily indicative of results for a full year.
Certain information and footnote disclosure normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted in this Form 10-Q pursuant to the rules and
regulations of the Securities and Exchange Commission. The financial statements
should be read in conjunction with the financial statements and the notes
thereto contained in the Partnership's Report on Form 10-K for the year ended
December 31, 1996, as filed with the Securities and Exchange Commission, a copy
of which is available upon request by writing to Rich Dealy, Vice President and
Controller, 303 West Wall, Suite 101, Midland, Texas 79701.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (1)
As of August 8, 1997, Pioneer Natural Resources USA, Inc. ("Pioneer USA") became
the managing general partner of the Partnership, joining the existing general
partner, P&P Employees 82-I, Ltd. ("EMPL"), a Texas limited partnership whose
general partner is Pioneer USA, and 4,891 limited partners as of March 8, 1997.
Prior to August 8, 1997, the Partnership's managing general partner and the
general partner of EMPL was Parker & Parsley Development L.P. ("PPDLP"), a
wholly-owned subsidiary of Parker & Parsley Petroleum Company ("Parker &
Parsley"). On August 7, 1997, Parker & Parsley and Mesa Inc. received
shareholder approval to merge and create Pioneer Natural Resources Company
("Pioneer"). On August 8, 1997, PPDLP was merged with and into Pioneer USA, a
wholly-owned subsidiary of Pioneer, resulting in Pioneer USA becoming the
managing general partner of the Partnership and the general partner of EMPL as
PPDLP's successor by merger. For a more complete description of the Parker &
Parsley and Mesa Inc. merger, see Pioneer's Registration Statement on Form S-4
as filed with the Securities and Exchange Commission.
Results of Operations
Nine months ended September 30, 1997 compared with nine months ended
September 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 12% to $441,021 from $501,581
for the nine months ended September 30, 1997 as compared to the nine months
7
<PAGE>
ended September 30, 1996. The decrease in revenues resulted from declines in
barrels of oil and mcf of gas produced and sold and a lower average price
received per barrel of oil, offset by a higher average price received per mcf of
gas. For the nine months ended September 30, 1997, 15,270 barrels of oil were
sold compared to 16,758 for the same period in 1996, a decrease of 1,488
barrels, or 9%. For the nine months ended September 30, 1997, 57,480 mcf of gas
were sold compared to 66,916 for the same period in 1996, a decrease of 9,436
mcf, or 14%. The decreases in production volumes were primarily due to the
decline characteristics of the Partnership's oil and gas properties. Because of
these characteristics, management expects a certain amount of decline in
production to continue in the future until the Partnership's economically
recoverable reserves are fully depleted.
The average price received per barrel of oil decreased $1.07, or 5%, from $21.06
for the nine months ended September 30, 1996 to $19.99 for the same period in
1997, while the average price received per mcf of gas increased 6% from $2.22
during the nine months ended September 30, 1996 to $2.36 for the same period in
1997. The market price for oil and gas has been extremely volatile in the past
decade, and management expects a certain amount of volatility to continue in the
foreseeable future. The Partnership may therefore sell its future oil and gas
production at average prices lower or higher than that received during the nine
months ended September 30, 1997.
On April 29, 1996, Southmark Corporation, the managing general partner and the
Partnership entered into a final $7.4 million settlement agreement with Jack N.
Price resolving all outstanding litigation between the parties. As a result, all
of the pending lawsuits and judgments have been dismissed, the supersedeas bond
released, and the Reserve released as collateral. On June 28, 1996, a final
distribution was made to the working interest owners of $43,618, which included
$34,033, or $6.96 per limited partnership interest, to the Partnership and its
partners.
Gain on disposition of assets resulted from salvage income from equipment
disposals of $3,870 received during the nine months ended September 30, 1997
from equipment credits received on two fully depleted wells.
Costs and Expenses:
Total costs and expenses increased to $380,418 for the nine months ended
September 30, 1997 as compared to $327,488 for the same period in 1996, an
increase of $52,930, or 16%. This increase was due to increases in depletion and
production costs, offset by decreases in general and administrative expenses
("G&A") and abandoned property costs.
Production costs were $244,325 for the nine months ended September 30, 1997 and
$229,874 for the same period in 1996 resulting in a $14,451 increase, or 6%,
primarily attributable to an increase in well maintenance costs incurred in an
effort to stimulate well production.
G&A's components are independent accounting and engineering fees and managing
general partner personnel and operating costs. During this period, G&A
decreased, in aggregate, 14% from $18,368 for the nine months ended September
30, 1996 to $15,724 for the same period in 1997.
Depletion was $120,369 for the nine months ended September 30, 1997 compared to
$77,010 for the same period in 1996, representing an increase of $43,359, or
56%. This increase was the result of a decline in oil reserves during 1997 due
to lower commodity prices.
8
<PAGE>
Abandoned property costs for the nine months ended September 30, 1996 were
$2,236 to plug and abandon one uneconomical oil and gas well.
Three months ended September 30, 1997 compared with three months ended
September 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 17% to $124,449 from $149,723
for the three months ended September 30, 1997 as compared to the three months
ended September 30, 1996. The decrease resulted from lower average prices
received per barrel of oil and mcf of gas and declines in barrels of oil and mcf
of gas produced and sold. For the three months ended September 30, 1997, 4,910
barrels of oil were sold compared to 5,135 for the same period in 1996, a
decrease of 225 barrels, or 4%. For the three months ended September 30, 1997,
17,052 mcf of gas were sold compared to 18,715 for the same period in 1996, a
decrease of 1,663 mcf, or 9%. The decreases in production volumes were primarily
due to the decline characteristics of the Partnership's oil and gas properties.
The average price received per barrel of oil decreased $3.44, or 16%, from
$21.95 for the three months ended September 30, 1996 to $18.51 for the three
months ended September 30, 1997 while the average price received per mcf of gas
decreased slightly from $1.98 during the three months ended September 30, 1996
to $1.97 for the same period in 1997.
Costs and Expenses:
Total costs and expenses increased to $127,732 for the three months ended
September 30, 1997 as compared to $97,741 for the same period in 1996, an
increase of $29,991 or 31%. This increase was due to increases in depletion and
production costs, offset by a decrease in G&A.
Production costs were $82,991 for the three months ended September 30, 1997 and
$68,402 for the same period in 1996 resulting in a $14,589 increase, or 21%. The
increase was primarily due to additional well maintenance costs.
G&A's components are independent accounting and engineering fees and managing
general partner personnel and operating costs. During this period, G&A
decreased, in aggregate, 35% from $7,114 for the three months ended September
30, 1996 to $4,605 for the same period in 1997.
Depletion was $40,136 for the three months ended September 30, 1997 compared to
$22,225 for the same period in 1996, representing an increase of $17,911, or
81%, as the result of a decline in oil reserves during the third quarter of 1997
due to lower commodity prices.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased $28,914 during the nine
months ended September 30, 1997 from the same period ended September 30, 1996.
This decrease was primarily due to the receipt of proceeds from the litigation
settlement received in 1996 as discussed in Item 2, offset by a decline in
production costs paid and an increase in oil and gas sales receipts.
9
<PAGE>
Net Cash Provided by Investing Activities
The Partnership's principal investing activities during the nine months ended
September 30, 1997 and 1996 were related to the disposal or replacement of oil
and gas equipment on various oil and gas properties.
Proceeds of $3,870 were received during the nine months ended September 30, 1997
from the disposal of oil and gas equipment on active properties.
Net Cash Used in Financing Activities
Cash was sufficient for the nine months ended September 30, 1997 to cover
distributions to the partners of $245,530 of which $60,190 was distributed to
the general partners and $185,340 to the limited partners. For the same period
ended September 30, 1996, cash was sufficient for distributions to the partners
of $252,548 of which $64,897 was distributed to the general partners and
$187,651 to the limited partners. Cash distributions to the partners of $252,548
for the nine months ended September 30, 1996 included $9,585 to the general
partners and $34,033 to the limited partners, resulting from proceeds received
in the litigation settlement as discussed in Item 2.
It is expected that future net cash provided by operating activities will be
sufficient for any capital expenditures and any distributions. As the production
from the properties declines, distributions are also expected to decrease.
- ---------------
(1) "Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations" contains forward looking statements that involve
risks and uncertainties. Accordingly, no assurances can be given that
the actual events and results will not be materially different than the
anticipated results described in the forward looking statements.
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K - none
10
<PAGE>
PARKER & PARSLEY 82-1, LTD.
(A Texas Limited Partnership)
S I G N A T U R E S
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.
PARKER & PARSLEY 82-1, LTD.
By: Pioneer Natural Resources USA, Inc.,
Managing General Partner
Dated: November 6, 1997 By: /s/ Rich Dealy
-------------------------------------
Rich Dealy, Vice President and
Controller
11
<PAGE>
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<ARTICLE> 5
<CIK> 0000714909
<NAME> 82I.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 94,457
<SECURITIES> 0
<RECEIVABLES> 51,338
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 145,795
<PP&E> 10,329,242
<DEPRECIATION> 9,121,836
<TOTAL-ASSETS> 1,353,201
<CURRENT-LIABILITIES> 19,743
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,333,458
<TOTAL-LIABILITY-AND-EQUITY> 1,353,201
<SALES> 441,021
<TOTAL-REVENUES> 449,390
<CGS> 0
<TOTAL-COSTS> 380,418
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 68,972
<INCOME-TAX> 0
<INCOME-CONTINUING> 68,972
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 68,972
<EPS-PRIMARY> 7.00
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