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 June 30, 1998
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-I, 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 / /
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PARKER & PARSLEY 82-I, LTD.
TABLE OF CONTENTS
Page
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of June 30, 1998 and
December 31, 1997........................................ 3
Statements of Operations for the three and six
months ended June 30, 1998 and 1997....................... 4
Statement of Partners' Capital for the six months
ended June 30, 1998....................................... 5
Statements of Cash Flows for the six months
months ended June 30, 1998 and 1997....................... 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............................ 11
27.1 Financial Data Schedule
Signatures.................................................. 12
2
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PARKER & PARSLEY 82-I, LTD.
(A Texas Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
June 30, December 31,
1998 1997
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $57,886 at June 30
and $82,785 at December 31 $ 58,386 $ 83,286
Accounts receivable:
Oil and gas sales 39,990 63,698
Other - 14,198
---------- ----------
Total current assets 98,376 161,182
---------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 9,883,400 9,878,650
Accumulated depletion (8,937,333) (8,881,697)
---------- ----------
Net oil and gas properties 946,067 996,953
---------- ----------
$ 1,044,443 $ 1,158,135
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 13,115 $ 15,475
Partners' capital:
General partners 204,667 221,119
Limited partners (4,891 interests) 826,661 921,541
---------- ----------
1,031,328 1,142,660
---------- ----------
$ 1,044,443 $ 1,158,135
========== ==========
The financial information included as of June 30, 1998 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 Six months ended
June 30, June 30,
--------------------- ---------------------
1998 1997 1998 1997
--------- --------- --------- ---------
Revenues:
Oil and gas $ 86,663 $ 138,574 $ 205,570 $ 316,572
Interest 1,202 1,593 2,519 3,005
Gain on disposition of assets 199 1,278 199 3,870
-------- -------- -------- --------
88,064 141,445 208,288 323,447
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 100,496 84,880 175,267 161,334
General and administrative 2,240 5,324 6,722 11,119
Depletion 29,095 37,752 55,636 80,233
-------- -------- -------- --------
131,831 127,956 237,625 252,686
-------- -------- -------- --------
Net income (loss) $ (43,767) $ 13,489 $ (29,337) $ 70,761
======== ======== ======== ========
Allocation of net income (loss):
General partners $ (6,611) $ 8,811 $ 981 $ 29,145
======== ======== ======== ========
Limited partners $ (37,156) $ 4,678 $ (30,318) $ 41,616
======== ======== ======== ========
Net income (loss) per limited
partnership interest $ (7.60) $ .96 $ (6.20) $ 8.51
======== ======== ======== ========
Distributions per limited
partnership interest $ 3.38 $ 11.64 $ 13.20 $ 28.20
======== ======== ======== ========
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, 1998 $ 221,119 $ 921,541 $1,142,660
Distributions (17,433) (64,562) (81,995)
Net income (loss) 981 (30,318) (29,337)
--------- --------- ---------
Balance at June 30, 1998 $ 204,667 $ 826,661 $1,031,328
========= ========= =========
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)
Six months ended
June 30,
-----------------------
1998 1997
--------- ---------
Cash flows from operating activities:
Net income (loss) $ (29,337) $ 70,761
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depletion 55,636 80,233
Gain on disposition of assets (199) (3,870)
Changes in assets and liabilities:
Accounts receivable 23,708 43,019
Accounts payable (2,360) 4,302
-------- --------
Net cash provided by operating activities 47,448 194,445
-------- --------
Cash flows from investing activities:
Additions to oil and gas properties (4,750) (127)
Proceeds from asset dispositions 14,397 3,870
-------- --------
Net cash provided by investing activities 9,647 3,743
-------- --------
Cash flows from financing activities:
Cash distributions to partners (81,995) (183,138)
-------- --------
Net increase (decrease) in cash and cash equivalents (24,900) 15,050
Cash and cash equivalents at beginning of period 83,286 94,531
-------- --------
Cash and cash equivalents at end of period $ 58,386 $ 109,581
======== ========
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
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PARKER & PARSLEY 82-I, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
(Unaudited)
Note 1. Organization and nature of operations
Parker & Parsley 82-I, Ltd. (the "Partnership") is a limited partnership
organized in 1982 under the laws of the State of Texas.
The Partnership engages primarily in oil and gas exploration, development and
production in Texas and New Mexico and is not involved in any industry segment
other than oil and gas.
Note 2. Basis of presentation
In the opinion of management, the unaudited financial statements of the
Partnership as of June 30, 1998 and for the three and six months ended June 30,
1998 and 1997 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, 1997, as filed with the Securities and Exchange Commission, a copy
of which is available upon request by writing to Rich Dealy, Vice President and
Chief Accounting Officer, 5205 North O'Connor Boulevard, 1400 Williams Square
West, Irving, Texas 75039-3746.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (1)
Results of Operations
Six months ended June 30, 1998 compared with six months ended
June 30, 1997
Revenues:
The Partnership's oil and gas revenues decreased 35% to $205,570 from $316,572
for the six months ended June 30, 1998 and 1997, respectively. The decrease in
revenues resulted from lower average prices received and a decline in
production. For the six months ended June 30, 1998, 9,753 barrels of oil, 2,988
barrels of natural gas liquids ("NGLs") and 23,991 mcf of gas were sold, or
7
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16,740 barrel of oil equivalents ("BOEs"). For the six months ended June 30,
1997, 10,361 barrels of oil and 40,428 mcf of gas were sold, or 17,099 BOEs.
As of September 30, 1997, the Partnership began accounting for processed natural
gas production as processed natural gas liquids and dry residue gas.
Consequently, separate product volumes will not be comparable to periods prior
to September 30, 1997. Also, prices for gas products will not be comparable as
the price per mcf for natural gas for the three and six months ended June 30,
1998 is the price received for dry residue gas and the price per mcf for natural
gas for the three and six months ended June 30, 1997 is a price for wet gas
(i.e., natural gas liquids combined with dry residue gas).
The average price received per barrel of oil decreased $6.50, or 31%, from
$20.70 for the six months ended June 30, 1997 to $14.20 for the same period in
1998. The average price received per barrel of NGLs during the six months ended
June 30, 1998 was $8.43. The average price received per mcf of gas decreased 31%
from $2.53 during the six months ended June 30, 1997 to $1.74 in 1998. 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 six months ended
June 30, 1998.
During most of 1997, the Partnership benefitted from higher oil prices as
compared to previous years. However, during the fourth quarter of 1997, oil
prices began a downward trend that has continued into 1998. On July 29, 1998,
the market price for West Texas intermediate crude was $11.58 per barrel. A
continuation of the oil price environment experienced during the first half of
1998 will have an adverse effect on the Partnership's revenues and operating
cash flow and could result in additional decreases in the carrying value of the
Partnership's oil and gas properties.
A gain on disposition of assets of $199 was received during the six months ended
June 30, 1998 from post closing adjustments received from the sale of eight oil
and gas wells during 1997. A gain on disposition of assets of $3,870 was
received during the six months ended June 30, 1997 from equipment credits
received on two fully depleted wells.
Costs and Expenses:
Total costs and expenses decreased to $237,625 for the six months ended June 30,
1998 as compared to $252,686 for the same period in 1997, a decrease of $15,061,
or 6%. This decrease was due to declines in depletion and general and
administrative expenses ("G&A"), offset by an increase in production costs.
Production costs were $175,267 for the six months ended June 30, 1998 and
$161,334 for the same period in 1997 resulting in a $13,933 increase, or 9%.
This increase was due to additional well maintenance costs incurred in an effort
to stimulate well production, offset by declines in production taxes and ad
valorem taxes, in addition to the sale of eight oil and gas wells during 1997.
8
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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, 40% from $11,119 for the six months ended June 30, 1997
to $6,722 for the same period in 1998.
Depletion was $55,636 for the six months ended June 30, 1998 compared to $80,233
for the same period in 1997. This represented a decrease in depletion of
$24,597, or 31%. This decrease was primarily attributable to a reduction in the
Partnership's net depletable basis from charges taken in accordance with
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of"
("SFAS 121") during the fourth quarter of 1997 and a reduction in oil production
of 608 barrels for the period ended June 30, 1998 compared to the same period in
1997, offset by a decrease in oil reserves during the six months ended June 30,
1998 as a result of lower commodity prices.
Three months ended June 30, 1998 compared with three months ended
June 30, 1997
Revenues:
The Partnership's oil and gas revenues decreased 37% to $86,663 from $138,574
for the three months ended June 30, 1998 and 1997, respectively. The decrease in
revenues resulted from lower average prices received and a decline in
production. For the three months ended June 30, 1998, 4,429 barrels of oil, 957
barrels of NGLs and 8,265 mcf of gas were sold, or 6,764 BOEs. For the three
months ended June 30, 1997, 4,875 barrels of oil and 19,714 mcf of gas were
sold, or 8,161 BOEs.
The average price received per barrel of oil decreased $5.65, or 30%, from
$19.04 for the three months ended June 30, 1997 to $13.39 for the three months
ended June 30, 1998. The average price received per barrel of NGLs during the
three months ended June 30, 1998 was $8.51. The average price received per mcf
of gas was $2.32 for the three months ended June 30, 1997 and 1998.
A gain on disposition of assets of $199 was received during the three months
ended June 30, 1998 from post closing adjustments received from the sale of
eight oil and gas wells during 1997. Salvage income from equipment disposals of
$1,278 was received during the three months ended June 30, 1997 from equipment
credits received on two fully depleted wells.
Costs and Expenses:
Total costs and expenses increased to $131,831 for the three months ended June
30, 1998 as compared to $127,956 for the three months ended June 30, 1997, an
increase of $3,875, or 3%. This increase was due to an increase in production
costs, offset by decreases in depletion and G&A.
Production costs were $100,496 for the three months ended June 30, 1998 and
$84,880 for the same period in 1997 resulting in a $15,616 increase, or 18%.
This increase was primarily due to additional well maintenance costs incurred in
9
<PAGE>
an effort to stimulate well production and ad valorem taxes, offset by a
decrease in production taxes and the sale of eight oil and gas wells during
1997.
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, 58% from $5,324 for the three months ended June 30,
1997 to $2,240 for the same period in 1998.
Depletion was $29,095 for the three months ended June 30, 1998 compared to
$37,752 for the same period in 1997. This represented a decrease in depletion of
$8,657, or 23%. This decrease was primarily attributable to a reduction in the
Partnership's net depletable basis from charges taken in accordance with SFAS
121 during the fourth quarter of 1997 and a reduction in oil production of 446
barrels for the three months ended June 30, 1998 compared to the same period in
1997, offset by a decrease in oil reserves during the three months ended June
30, 1998 as a result of lower commodity prices.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased $146,997 during the six
months ended June 30, 1998 from the same period ended June 30, 1997. This
decrease was due to a decline in oil and gas sales receipts and an increase in
production costs paid, offset by a decrease in G&A expenses.
Net Cash Provided by Investing Activities
The Partnership's principle investing activities during the six months ended
June 30, 1998 and 1997 were related to the additions of oil and gas equipment on
active properties.
Proceeds from asset dispositions of $14,397 were received during the six months
ended June 30, 1998 from the sale of properties during 1997. During the six
months ended June 30, 1997, proceeds of $3,870 were received from the disposal
of oil and gas equipment on two fully depleted wells.
Net Cash Used in Financing Activities
Cash was sufficient for the six months ended June 30, 1998 to cover
distributions to the partners of $81,995 of which $17,433 was distributed to the
general partners and $64,562 to the limited partners. For the same period ended
June 30, 1997, cash was sufficient for distributions to the partners of $183,138
of which $45,204 was distributed to the general partners and $137,934 to the
limited partners.
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.
10
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Information systems for the year 2000
The managing general partner will be required to modify its information systems
in order to accurately process Partnership data referencing the year 2000.
Because of the importance of occurrence dates in the oil and gas industry, the
consequences of not pursuing these modifications could be very significant to
the Partnership's ability to manage and report operating activities. Currently,
the managing general partner plans to contract with third parties to perform the
software programming changes necessary to correct any existing deficiencies.
Such programming changes are anticipated to be completed and tested by June
1999. The managing general partner will allocate a portion of the costs of the
year 2000 programming charges to the Partnership when they are incurred, along
with recurring general and administrative expenses. Although the costs are not
estimable at this time, they should not be significant to the Partnership.
- ---------------
(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
27.1 Financial Data Schedule
(b) Reports on Form 8-K - none
11
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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: August 3, 1998 By: /s/ Rich Dealy
--------------------------------
Rich Dealy, Vice President and
Chief Accounting Officer
12
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<ARTICLE> 5
<CIK> 0000714909
<NAME> 81I.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 58,386
<SECURITIES> 0
<RECEIVABLES> 39,990
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 98,376
<PP&E> 9,883,400
<DEPRECIATION> 8,937,333
<TOTAL-ASSETS> 1,044,443
<CURRENT-LIABILITIES> 13,115
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,031,328
<TOTAL-LIABILITY-AND-EQUITY> 1,044,443
<SALES> 205,570
<TOTAL-REVENUES> 208,288
<CGS> 0
<TOTAL-COSTS> 237,625
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (29,337)
<INCOME-TAX> 0
<INCOME-CONTINUING> (29,337)
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<CHANGES> 0
<NET-INCOME> (29,337)
<EPS-PRIMARY> (6.20)
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