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, 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. 2-75530B
PARKER & PARSLEY 82-II, LTD.
(Exact name of Registrant as specified in its charter)
Texas 75-1867115
(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 12 pages.
Exhibit index on page 11.
<PAGE>
PARKER & PARSLEY 82-II, LTD.
TABLE OF CONTENTS
Page
----
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of June 30, 1997 and
December 31, 1996 .................................... 3
Statements of Operations for the three and six
months ended June 30, 1997 and 1996...................... 4
Statement of Partners' Capital for the six months
ended June 30, 1997...................................... 5
Statements of Cash Flows for the six months
ended June 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........................... 11
27. Financial Data Schedule
Signatures................................................. 12
2
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PARKER & PARSLEY 82-II, LTD.
(A Texas Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
June 30, December 31,
1997 1996
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $163,187 at June 30 and
$178,658 at December 31 $ 163,687 $ 179,158
Accounts receivable - oil and gas sales 67,404 114,039
----------- -----------
Total current assets 231,091 293,197
----------- -----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 8,858,263 9,058,497
Accumulated depletion (7,326,076) (7,457,953)
----------- -----------
Net oil and gas properties 1,532,187 1,600,544
----------- -----------
$ 1,763,278 $ 1,893,741
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 18,268 $ 17,546
Partners' capital:
General partners 198,275 217,566
Limited partners (6,126 interests) 1,546,735 1,658,629
----------- -----------
1,745,010 1,876,195
----------- -----------
$ 1,763,278 $ 1,893,741
=========== ===========
The financial information included as of June 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
<PAGE>
PARKER & PARSLEY 82-II, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
1997 1996 1997 1996
--------- --------- --------- ---------
Revenues:
Oil and gas $ 140,301 $ 173,367 $ 316,893 $ 341,557
Interest 2,367 2,329 4,597 4,387
Gain (loss) on abandoned
properties 1,528 (29,142) 1,528 (29,142)
Salvage income from equipment
disposals 2,092 - 2,092 -
Litigation settlement - 45,027 - 45,027
-------- -------- -------- --------
146,288 191,581 325,110 361,829
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 77,737 78,562 154,892 159,947
General and administrative 5,346 6,214 11,413 11,485
Depletion 34,813 27,719 68,389 56,772
Abandoned property 666 4,059 666 4,059
-------- -------- -------- --------
118,562 116,554 235,360 232,263
-------- -------- -------- --------
Net income $ 27,726 $ 75,027 $ 89,750 $ 129,566
======== ======== ======== ========
Allocation of net income:
General partners $ 11,999 $ 24,814 $ 32,567 $ 42,807
======== ======== ======== ========
Limited partners $ 15,727 $ 50,213 $ 57,183 $ 86,759
======== ======== ======== ========
Net income per limited
partnership interest $ 2.56 $ 8.19 $ 9.33 $ 14.16
======== ======== ======== ========
Distributions per limited
partnership interest $ 11.60 $ 16.47 $ 27.60 $ 23.47
======== ======== ======== ========
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-II, LTD.
(A Texas Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
General Limited
partners partners Total
--------- ---------- ----------
Balance at January 1, 1997 $ 217,566 $1,658,629 $1,876,195
Distributions (51,858) (169,077) (220,935)
Net income 32,567 57,183 89,750
-------- --------- ---------
Balance at June 30, 1997 $ 198,275 $1,546,735 $1,745,010
======== ========= =========
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
<PAGE>
PARKER & PARSLEY 82-II, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended
June 30,
-------------------------
1997 1996
---------- ----------
Cash flows from operating activities:
Net income $ 89,750 $ 129,566
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 68,389 56,772
(Gain) loss on abandoned properties (1,528) 29,142
Salvage income from equipment disposals (2,092) -
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 46,635 (9,515)
Increase (decrease) in accounts payable 722 (16,831)
--------- ---------
Net cash provided by operating activities 201,876 189,134
--------- ---------
Cash flows from investing activities:
Additions to oil and gas properties (32) (64)
Proceeds from salvage income on equipment
disposals 2,092 -
Proceeds from equipment salvage on abandoned
properties 1,528 -
--------- ---------
Net cash provided by (used in) investing
activities 3,588 (64)
--------- ---------
Cash flows from financing activities:
Cash distributions to partners (220,935) (187,695)
--------- ---------
Net increase (decrease) in cash and cash equivalents (15,471) 1,375
Cash and cash equivalents at beginning of period 179,158 199,420
--------- ---------
Cash and cash equivalents at end of period $ 163,687 $ 200,795
========= =========
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-II, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
(Unaudited)
Note 1. Basis of presentation
In the opinion of management, the unaudited financial statements of Parker &
Parsley 82-II, Ltd. (the "Partnership") as of June 30, 1997 and for the three
and six months ended June 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, Controller, 303
West Wall, Suite 101, Midland, Texas 79701.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (1)
Results of Operations
Six months ended June 30, 1997 compared with six months ended
June 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 7% to $316,893 from $341,557
for the six months ended June 30, 1997 as compared to the six months ended June
30, 1996. The decrease in revenues resulted from a 17% decline in mcf of gas
produced and sold, a 6% decline in barrels of oil produced and sold and a slight
decline in the average price received per barrel of oil, offset by a higher
average price received per mcf of gas. For the six months ended June 30, 1997,
11,177 barrels of oil were sold compared to 11,915 for the same period in 1996,
a decrease of 738 barrels. For the six months ended June 30, 1997, 34,041 mcf of
gas were sold compared to 41,041 for the same period in 1996, a decrease of
7,000 mcf. The declines in production volumes were primarily attributable 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.
7
<PAGE>
The average price received per barrel of oil decreased slightly from $20.66 for
the six months ended June 30, 1996 to $20.43 for the same period in 1997, while
the average price received per mcf of gas increased 12% from $2.32 during the
six months ended June 30, 1996 to $2.60 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 six months ended June 30,
1997.
A gain on abandoned property of $1,528 was recognized during the six months
ended June 30, 1997 as a result of proceeds from equipment sales related to an
abandoned well. During the same period in 1996, a loss on abandoned property of
$29,142 resulted from the abandonment of one uneconomical well. Expenses
incurred to plug and abandon these wells totaled $666 and $4,059 for the six
months ended June 30, 1997 and 1996, respectively.
Salvage income of $2,092 was received during the six months ended June 30, 1997
from the disposal of equipment on one well abandoned in a prior period.
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 $45,027, which included
$36,851, or $6.02 per limited partnership interest, to the Partnership and its
partners.
Costs and Expenses:
Total costs and expenses increased to $235,360 for the six months ended June 30,
1997 as compared to $232,263 for the same period in 1996, an increase of $3,097.
This increase was due to an increase in depletion, offset by declines in
production costs, abandoned property costs and general and administrative
expenses ("G&A").
Production costs were $154,892 for the six months ended June 30, 1997 and
$159,947 for the same period in 1996 resulting in a $5,055 decrease, or 3%. The
decrease was due to declines in ad valorem taxes and production taxes.
G&A's components are independent accounting and engineering fees and managing
general partner personnel and operating costs. During this period, G&A decreased
slightly from $11,485 for the six months ended June 30, 1996 to $11,413 for the
same period in 1997.
Depletion was $68,389 for the six months ended June 30, 1997 compared to $56,772
for the same period in 1996. This represented an increase in depletion of
$11,617, or 20%. This increase was the result of a decline in oil reserves
during 1997 as a result of lower commodity prices.
8
<PAGE>
Three months ended June 30, 1997 compared with three months ended
June 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 19% to $140,301 from $173,367
for the three months ended June 30, 1997 as compared to the three months ended
June 30, 1996. The decrease in revenues resulted from lower average prices
received per barrel of oil and mcf of gas, a 9% decrease in barrels of oil
produced and sold and a 4% decrease in mcf of gas produced and sold. For the
three months ended June 30, 1997, 5,330 barrels of oil were sold compared to
5,848 for the same period in 1996, a decrease of 518 barrels. For the three
months ended June 30, 1997, 17,071 mcf of gas were sold compared to 17,734 for
the same period in 1996, a decrease of 663 mcf.
The average price received per barrel of oil decreased $3.55, or 16%, from
$22.31 for the three months ended June 30, 1996 to $18.76 for the three months
ended June 30, 1997, while the average price received per mcf of gas decreased
2% to $2.36 during the three months ended June 30, 1997 from $2.42 during the
same period in 1996.
A gain on abandoned property of $1,528 was recognized during the three months
ended June 30, 1997 as a result of proceeds from equipment sales related to an
abandoned well. During the same period in 1996, a loss on abandoned property of
$29,142 resulted from the abandonment of one uneconomical well. Expenses
incurred to plug and abandon these wells totaled $666 and $4,059 for the three
months ended June 30, 1997 and 1996, respectively.
Salvage income of $2,092 was received during the three months ended June 30,
1997 from the disposal of equipment on one well abandoned in a prior period.
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 $45,027, which included
$36,851, or $6.02 per limited partnership interest, to the Partnership and its
partners.
Costs and Expenses:
Total costs and expenses increased to $118,562 for the three months ended June
30, 1997 as compared to $116,554 for the same period in 1996, an increase of
$2,008. This increase was due to an increase in depletion, offset by decreases
in abandoned property costs, G&A and production costs.
Production costs were $77,737 for the three months ended June 30, 1997 and
$78,562 for the same period in 1996 resulting in an $825 decrease. The decrease
was due to declines in ad valorem taxes and production taxes, offset by an
increase in well repair and maintenance costs.
9
<PAGE>
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 $6,214 for the three months ended June 30,
1996 to $5,346 for the same period in 1997.
Depletion was $34,813 for the three months ended June 30, 1997 compared to
$27,719 for the same period in 1996. This represented an increase in depletion
of $7,094, or 26%, primarily attributable to a decline in oil reserves during
1997 as a result of lower commodity prices.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $12,742 during the six
months ended June 30, 1997 from the same period ended June 30, 1996. This
increase was due to an increase in oil and gas sales receipts and a decrease in
expenditures for production costs, offset by proceeds from the litigation
settlement received in 1996 as discussed in Item 2.
Net Cash Provided by (Used in) Investing Activities
The Partnership's investing activities during the six months ended June 30, 1997
and 1996 were related to the addition of oil and gas equipment on active
properties.
During the six months ended June 30, 1997, proceeds of $2,092 were received from
the disposal of oil and gas equipment on one well abandoned in a prior year.
Proceeds of $1,528 were also received during the six months ended June 30, 1997
from the disposal of equipment on one fully depleted well abandoned during the
current period.
Net Cash Used in Financing Activities
Cash was sufficient for the six months ended June 30, 1997 to cover
distributions to the partners of $220,935 of which $51,858 was distributed to
the general partners and $169,077 to the limited partners. For the same period
ended June 30, 1996, cash was sufficient for distributions to the partners of
$187,695 of which $43,904 was distributed to the general partners and $143,791
to the limited partners. Cash distributions to the partners of $187,695 for the
six months ended June 30, 1996 included $8,176 to the general partners and
$36,851 to the limited partners, resulting from proceeds received in the
litigation settlement.
10
<PAGE>
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
11
<PAGE>
PARKER & PARSLEY 82-II, 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-II, LTD.
By: Parker & Parsley Development L.P.,
Managing General Partner
By: Parker & Parsley Petroleum USA, Inc.
("PPUSA"), General Partner
Dated: August 11, 1997 By: /s/ Rich Dealy
-------------------------------
Rich Dealy, Controller of PPUSA
12
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000717374
<NAME> 82II.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 163,687
<SECURITIES> 0
<RECEIVABLES> 67,404
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 231,091
<PP&E> 8,858,263
<DEPRECIATION> 7,326,076
<TOTAL-ASSETS> 1,763,278
<CURRENT-LIABILITIES> 18,268
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,745,010
<TOTAL-LIABILITY-AND-EQUITY> 1,763,278
<SALES> 316,893
<TOTAL-REVENUES> 325,110
<CGS> 0
<TOTAL-COSTS> 235,360
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 89,750
<INCOME-TAX> 0
<INCOME-CONTINUING> 89,730
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 89,750
<EPS-PRIMARY> 9.33
<EPS-DILUTED> 0
</TABLE>
