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, 1996
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. 33-3353C
PARKER & PARSLEY 86-C, LTD.
(Exact name of Registrant as specified in its charter)
Texas 75-2142283
(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 __ pages.
-There are no exhibits-
<PAGE>
PARKER & PARSLEY 86-C, LTD.
TABLE OF CONTENTS
Page
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of September 30, 1996 and
December 31, 1995 .................................. 3
Statements of Operations for the three and nine
months ended September 30, 1996 and 1995............... 4
Statement of Partners' Capital for the nine months
ended September 30, 1996............................... 5
Statements of Cash Flows for the nine months ended
September 30, 1996 and 1995............................ 6
Notes to Financial Statements............................ 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................... 9
Part II. Other Information
Item 1. Legal Proceedings........................................ 14
Signatures............................................... 15
2
<PAGE>
PARKER & PARSLEY 86-C, LTD.
(A Texas Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
September 30, December 31,
1996 1995
------------ -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $208,598 at September 30
and $73,587 at December 31 $ 208,802 $ 73,796
Accounts receivable - oil and gas sales 168,582 151,051
----------- ----------
Total current assets 377,384 224,847
----------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 14,551,083 15,562,115
Accumulated depletion (10,611,906) (11,373,411)
----------- ----------
Net oil and gas properties 3,939,177 4,188,704
----------- ----------
$ 4,316,561 $ 4,413,551
=========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 108,296 $ 113,085
Partners' capital:
Limited partners (19,317 interests) 4,167,490 4,258,769
Managing general partner 40,775 41,697
----------- ----------
4,208,265 4,300,466
----------- ----------
$ 4,316,561 $ 4,413,551
=========== ==========
The financial information included as of September 30, 1996 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 86-C, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
--------------------- -----------------------
1996 1995 1996 1995
--------- --------- ---------- ----------
Revenues:
Oil and gas $ 400,781 $ 324,985 $1,207,241 $1,093,317
Interest 2,670 2,359 5,821 6,203
Salvage income from equipment
disposal - - 28,740 4,257
Gain (loss) on sale of assets (1,638) - 37,396 -
Litigation settlement - - 704,864 -
-------- -------- --------- ---------
401,813 327,344 1,984,062 1,103,777
-------- -------- --------- ---------
Costs and expenses:
Oil and gas production 180,835 217,486 614,436 625,706
General and administrative 12,024 9,750 36,218 32,800
Depletion 85,319 124,975 268,472 448,330
Loss (gain) on abandoned
property - (21,895) - 119,491
Abandoned property - 327 27,923 11,068
-------- -------- --------- ---------
278,178 330,643 947,049 1,237,395
-------- -------- --------- ---------
Net income (loss) $ 123,635 $ (3,299) $1,037,013 $ (133,618)
======== ======== ========= =========
Allocation of net income
(loss):
Managing general partner $ 1,236 $ (33) $ 10,370 $ (1,336)
======== ======== ========= =========
Limited partners $ 122,399 $ (3,266) $1,026,643 $ (132,282)
======== ======== ========= =========
Net income (loss) per limited
partnership interest $ 6.34 $ (.17) $ 53.15 $ (6.85)
======== ======== ========= =========
Distributions per limited
partnership interest $ 7.77 $ 7.20 $ 57.87 $ 25.15
======== ======== ========= =========
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
<PAGE>
PARKER & PARSLEY 86-C, LTD.
(A Texas Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
---------- ----------- -----------
Balance at January 1, 1996 $ 41,697 $ 4,258,769 $ 4,300,466
Distributions (11,292) (1,117,922) (1,129,214)
Net income 10,370 1,026,643 1,037,013
--------- ---------- ----------
Balance at September 30, 1996 $ 40,775 $ 4,167,490 $ 4,208,265
========= ========== ==========
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 86-C, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
September 30,
1996 1995
----------- ----------
Cash flows from operating activities:
Net income (loss) $ 1,037,013 $ (133,618)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depletion 268,472 448,330
Loss on abandoned property - 119,491
Salvage income from equipment disposal (28,740) (4,257)
Gain on sale of assets (37,396) -
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (17,531) 18,679
Increase (decrease) in accounts payable (7,722) 53,379
---------- ---------
Net cash provided by operating activities 1,214,096 502,004
---------- ---------
Cash flows from investing activities:
(Additions) disposals of oil and gas properties (17,896) 12,565
Proceeds from salvage income from equipment
disposal 28,740 4,257
Proceeds from equipment salvage on abandoned
property - 25,213
Proceeds from sale of assets 39,280 -
---------- ---------
Net cash provided by investing activities 50,124 42,035
---------- ---------
Cash flows from financing activities:
Cash distributions to partners (1,129,214) (490,645)
---------- ---------
Net increase in cash and cash equivalents 135,006 53,394
Cash and cash equivalents at beginning of period 73,796 67,305
---------- ---------
Cash and cash equivalents at end of period $ 208,802 $ 120,699
========== =========
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 86-C, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
Note 1.
Parker & Parsley 86-C, Ltd. (the "Registrant") is a limited partnership
organized in 1986 under the laws of the State of Texas.
The Registrant engages primarily in oil and gas development and production in
Texas and is not involved in any industry segment other than oil and gas.
Note 2.
In the opinion of management, the Registrant's unaudited financial statements as
of September 30, 1996 and for the three and nine months ended September 30, 1996
and 1995 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 Registrant's Report on Form 10-K for the year ended
December 31, 1995, as filed with the Securities and Exchange Commission, a copy
of which is available upon request by writing to Steven L. Beal, Senior Vice
President, 303 West Wall, Suite 101, Midland, Texas 79701.
Note 3.
On May 25, 1993, a final settlement agreement was negotiated, drafted and
finally executed, ending litigation which had begun on September 5, 1989, when
the Registrant filed suit along with other parties against Dresser Industries,
Inc.; Titan Services, Inc.; BJ-Titan Services Company; BJ-Hughes Holding
Company; Hughes Tool Company; Baker Hughes Production Tools, Inc.; and Baker
Hughes Incorporated alleging that the defendants had intentionally failed to
provide the materials and services ordered and paid for by the Registrant and
other parties in connection with the fracturing and acidizing of 523 wells, and
then fraudulently concealed the shorting practice from Parker & Parsley
Development L.P. ("PPDLP"). The May 25, 1993 settlement agreement called for a
payment of $115 million in cash by the defendants, and Southmark, the
Registrant, and the other plaintiffs indemnified the defendants against the
claims of Jack N. Price. The managing general partner received the funds,
deducted incurred legal expenses, accrued interest, determined the general
partner's portion of the funds and calculated any inter-partnership allocations.
7
<PAGE>
On May 3, 1993, Jack N. Price, the attorney who represented Gary G. "Zeke"
Lancaster in the Federal Court lawsuit, filed suit in State Court in Beaumont
against all of the plaintiff partnerships, including the Registrant and others,
alleging his entitlement to 12% of the settlement proceeds. Price's lawsuit
claim for approximately $13.8 million is predicated on a purported contract
entered into with Southmark Corporation in August 1988 in which he allegedly
binds the Registrant and the other defendants, as well as Southmark. Although
PPDLP believes the lawsuit was without merit and has vigorously defended it,
PPDLP has held in reserve approximately 12.5% of the total settlement (the
"Reserve") pending final resolution of the litigation.
A distribution of $91,000,000 was made to the working interest owners, including
the Registrant, on July 30, 1993. The limited partners received their
distribution of $6,972,477, or $360.95 per limited partnership interest, in
September 1993. The allocation of the lawsuit settlement amount was based on the
original verdict entered on October 26, 1990. The allocation to the working
interest owners in each well (including the Registrant) was based on a ratio of
the relative amount of damages due to overcharges for services and materials
("Materials") and damages for loss of past and future production ("Production"),
each as determined in that initial judgment. Within the Registrant, damages for
Materials were allocated between the partners based on their original sharing
percentages for costs of acquiring and/or drilling of wells. Similarly, damages
related to Production were allocated to the partners in the Registrant based on
their respective share of revenues from the subject wells.
As a condition of the purchase by Parker & Parsley Petroleum Company of Parker &
Parsley Development Company ("PPDC"), which was merged into PPDLP on January 1,
1995, from its former parent in May 1989, PPDC's interest in the lawsuit and
subsequent settlement was retained by the former parent. Consequently, all of
PPDC's share of the settlement related to its separately held interests in the
wells and its partnership interests in the sponsored partnerships (except that
portion allocable to interests acquired by PPDC after May 1989) was paid to the
former parent.
On September 20, 1995, the Beaumont trial judge entered a summary judgment
against Southmark for the $13,790,000 contingent fee sought by Price, together
with prejudgment interest, and also awarded Price an additional $5,498,525 in
attorneys' fees. On January 22, 1996, the trial judge entered an interlocutory
summary judgment against Dresser Industries and Baker Hughes for an amount yet
to be determined. Pursuant to their indemnity obligations, the Registrant,
Southmark, PPDLP and other original plaintiffs have vigorously protected the
rights of both Dresser and Baker Hughes. Southmark has vigorously pursued its
appeal of the judgment, and has posted a supersedeas bond using the Reserve as
collateral. On April 29, 1996, all of the parties, including the Registrant and
Southmark, entered into a $7.4 million settlement with Price which fully and
finally resolves all of the litigation and disputes between the parties,
including the Registrant's indemnity obligations to Dresser and Baker Hughes.
Pursuant to the settlement agreement, 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, including $697,816, or $36.12 per limited partnership interest
to the Registrant and its partners.
8
<PAGE>
Note 4.
A gain of $37,396 from the sale of four oil and gas wells and four saltwater
disposal wells to Costilla Energy, L.L.C. was recognized during the nine months
ended September 30, 1996, attributable to proceeds of $39,280 received from the
sale, less the write-off of remaining capitalized well costs of $1,884.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (1)
Results of Operations
Nine months ended September 30, 1996 compared with nine months ended September
30, 1995
Revenues:
The Registrant's oil and gas revenues increased to $1,207,241 from $1,093,317
for the nine months ended September 30, 1996 and 1995, respectively, an increase
of 10%. The increase in revenues resulted from a 21% increase in the average
price received per barrel of oil and a 29% increase in the average price
received per mcf of gas, offset by a 13% decline in barrels of oil produced and
sold and a 6% decline in mcf of gas produced and sold. For the nine months ended
September 30, 1996, 38,211 barrels of oil were sold compared to 43,671 for the
same period in 1995, a decrease of 5,460 barrels. For the nine months ended
September 30, 1996, 191,063 mcf of gas were sold compared to 203,215 for the
same period in 1995, a decrease of 12,152 mcf. The decrease in oil and gas
produced and sold was due to the decline characteristics of the Registrant'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
Registrant's economically recoverable reserves are fully depleted.
The average price received per barrel of oil increased $3.55 from $17.27 for the
nine months ended September 30, 1995 to $20.82 for the same period in 1996 while
the average price received per mcf of gas increased from $1.67 during the nine
months ended September 30, 1995 to $2.16 in 1996. 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
Registrant 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, 1996.
Salvage income of $28,740 and $4,257 for the nine months ended September 30,
1996 and 1995, respectively, was received from the disposal of equipment on one
fully depleted well.
A gain of $37,396 from the sale of four oil and gas wells and four saltwater
disposal wells was recognized during the nine months ended September 30, 1996,
attributable to proceeds of $39,280 received from the sale, less the write-off
of remaining capitalized well costs of $1,884.
9
<PAGE>
Costs and Expenses:
Total costs and expenses decreased to $947,049 for the nine months ended
September 30, 1996 as compared to $1,237,395 for the same period in 1995, a
decrease of $290,346, or 23%. This decrease was due to declines in production
costs, depletion and loss on abandoned property, offset by increases in general
and administrative expenses ("G&A") and abandoned property costs.
Production costs were $614,436 for the nine months ended September 30, 1996 and
$625,706 for the same period in 1995, resulting in a $11,270 decrease. This
decrease was the result of declines in well repair and maintenance costs and
production taxes.
G&A's components are independent accounting and engineering fees, computer
services, postage and managing general partner personnel costs. During this
period, G&A increased, in aggregate, 10% from $32,800 for the nine months ended
September 30, 1995 to $36,218 for the same period in 1996. The Partnership
agreement limits G&A to 3% of gross oil and gas revenues.
Depletion was $268,472 for the nine months ended September 30, 1996 compared to
$448,330 for the same period in 1995, representing a decrease of $179,858, or
40%. This decrease was primarily attributable to the following factors: (i) a
reduction in the Registrant'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" ("FAS 121"), (ii) a reduction in oil production of 5,460 barrels for the
nine months ended September 30, 1996 as compared to the same period in 1995, and
(iii) an increase in oil and gas reserves during the during the third quarter of
1996 as a result of higher commodity prices.
Incurred expenses of $27,923 for abandoned property costs during the nine months
ended September 30, 1996 were related to two of the four oil and gas wells sold
and are reflected in the net post-closing adjustment to proceeds from the sale
of properties.
A loss on abandoned property of $119,491 was recognized during the nine months
ended September 30, 1995. This loss was the result of the write-off of remaining
capitalized well costs of $144,704, less proceeds received of $25,213 from
equipment salvage on abandoned property. Expenses incurred during the nine-month
period ended September 30, 1995 to plug and abandon one well totaled $11,068.
On May 25, 1993, a final settlement agreement was negotiated, drafted and
finally executed, ending litigation which had begun on September 5, 1989, when
the Registrant filed suit along with other parties against Dresser Industries,
Inc.; Titan Services, Inc.; BJ-Titan Services Company; BJ-Hughes Holding
Company; Hughes Tool Company; Baker Hughes Production Tools, Inc.; and Baker
Hughes Incorporated alleging that the defendants had intentionally failed to
provide the materials and services ordered and paid for by the Registrant and
other parties in connection with the fracturing and acidizing of 523 wells, and
then fraudulently concealed the shorting practice from PPDLP. The May 25, 1993
settlement agreement called for a payment of $115 million in cash by the
defendants, and Southmark, the Registrant, and the other plaintiffs indemnified
10
<PAGE>
the defendants against the claims of Jack N. Price. The managing general partner
received the funds, deducted incurred legal expenses, accrued interest,
determined the general partner's portion of the funds and calculated any
inter-partnership allocations.
On May 3, 1993, Jack N. Price, the attorney who represented Gary G. "Zeke"
Lancaster in the Federal Court lawsuit, filed suit in State Court in Beaumont
against all of the plaintiff partnerships, including the Registrant and others,
alleging his entitlement to 12% of the settlement proceeds. Price's lawsuit
claim for approximately $13.8 million is predicated on a purported contract
entered into with Southmark Corporation in August 1988 in which he allegedly
binds the Registrant and the other defendants, as well as Southmark. Although
PPDLP believes the lawsuit was without merit and has vigorously defended it,
PPDLP has held in reserve approximately 12.5% of the total settlement (the
"Reserve") pending final resolution of the litigation.
A distribution of $91,000,000 was made to the working interest owners, including
the Registrant, on July 30, 1993. The limited partners received their
distribution of $6,972,477, or $360.95 per limited partnership interest, in
September 1993. The allocation of the lawsuit settlement amount was based on the
original verdict entered on October 26, 1990. The allocation to the working
interest owners in each well (including the Registrant) was based on a ratio of
the relative amount of damages due to overcharges for services and materials
("Materials") and damages for loss of past and future production ("Production"),
each as determined in that initial judgment. Within the Registrant, damages for
Materials were allocated between the partners based on their original sharing
percentages for costs of acquiring and/or drilling of wells. Similarly, damages
related to Production were allocated to the partners in the Registrant based on
their respective share of revenues from the subject wells.
As a condition of the purchase by Parker & Parsley Petroleum Company of PPDC,
which was merged into PPDLP on January 1, 1995, from its former parent in May
1989, PPDC's interest in the lawsuit and subsequent settlement was retained by
the former parent. Consequently, all of PPDC's share of the settlement related
to its separately held interests in the wells and its partnership interests in
the sponsored partnerships (except that portion allocable to interests acquired
by PPDC after May 1989) was paid to the former parent.
On September 20, 1995, the Beaumont trial judge entered a summary judgment
against Southmark for the $13,790,000 contingent fee sought by Price, together
with prejudgment interest, and also awarded Price an additional $5,498,525 in
attorneys' fees. On January 22, 1996, the trial judge entered an interlocutory
summary judgment against Dresser Industries and Baker Hughes for an amount yet
to be determined. Pursuant to their indemnity obligations, the Registrant,
Southmark, PPDLP and other original plaintiffs have vigorously protected the
rights of both Dresser and Baker Hughes. Southmark has vigorously pursued its
appeal of the judgment, and has posted a supersedeas bond using the Reserve as
collateral. On April 29, 1996, all of the parties, including the Registrant and
Southmark, entered into a $7.4 million settlement with Price which fully and
finally resolves all of the litigation and disputes between the parties,
including the Registrant's indemnity obligations to Dresser and Baker Hughes.
11
<PAGE>
Pursuant to the settlement agreement, 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, including $697,816, or $36.12 per limited partnership interest
to the Registrant and its partners.
Three months ended September 30, 1996 compared with three months ended September
30, 1995
Revenues:
The Registrant's oil and gas revenues increased to $400,781 from $324,985 for
the three months ended September 30, 1996 and 1995, respectively, an increase of
23%. The increase in revenues resulted from a 31% increase in the average price
received per barrel of oil and a 39% increase in the average price received per
mcf of gas, offset by a 9% decline in barrels of oil produced and sold and a 5%
decline in mcf of gas produced and sold. For the three months ended September
30, 1996, 12,064 barrels of oil were sold compared to 13,194 for the same period
in 1995, a decrease of 1,130 barrels. For the three months ended September 30,
1996, 65,370 mcf of gas were sold compared to 69,136 for the same period in
1995, a decrease of 3,766 mcf. The decrease in oil and gas production was due to
the decline characteristics of the Registrant's oil and gas properties.
The average price received per barrel of oil increased $5.04 from $16.51 for the
three months ended September 30, 1995 to $21.55 for the same period in 1996
while the average price received per mcf of gas increased from $1.55 for the
three months ended September 30, 1995 to $2.15 for the same period in 1996.
Costs and Expenses:
Total costs and expenses decreased to $278,178 for the three months ended
September 30, 1996 as compared to $330,643 for the same period in 1995, a
decrease of $52,465, or 16%. This decrease consisted of declines in production
costs, depletion, abandoned property costs and gain on abandoned property,
offset by an increase in G&A.
Production costs were $180,835 for the three months ended September 30, 1996 and
$217,486 for the same period in 1995, resulting in a $36,651 decrease, or 17%.
This decrease was the result of decreases in well repair and maintenance costs
and workover expense, offset by an increase in production taxes resulting from
the increase in oil and gas revenues.
G&A's components are independent accounting and engineering fees, computer
services, postage and managing general partner personnel costs. During this
period, G&A increased, in aggregate, 23% from $9,750 for the three months ended
September 30, 1995 to $12,024 for the same period in 1996.
Depletion was $85,319 for the three months ended September 30, 1996 compared to
$124,975 for the same period in 1995, representing a decrease of $39,656, or
32%, primarily attributable to the following factors: (i) a reduction in the
Registrant's net depletable basis from charges taken in accordance with FAS 121,
(ii) a reduction in oil production of 1,130 barrels for the three months ended
12
<PAGE>
September 30, 1996 as compared to the same period in 1995, and (iii) an increase
in oil and gas reserves during the third quarter of 1996 as a result of higher
commodity prices.
A gain on abandoned property of $21,895 for the three months ended September 30,
1995 consisted of equipment credits received on one abandoned oil and gas well,
with costs incurred to abandon the property of $327. There was no abandonment
activity during the same period in 1996.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $712,092 during the nine
months ended September 30, 1996 from the same period ended September 30, 1995.
This increase was primarily due to the receipt of litigation proceeds as
discussed in Note 3 and an increase in oil and gas sales, offset by an increase
in production costs and abandoned property costs paid.
Net Cash Provided by Investing Activities
The Registrant's investment activities during the nine months ended September
30, 1996 included expenses related to expenditures for equipment replacement on
various oil and gas properties. Proceeds received during the nine months ended
September 30, 1995 resulted from the disposal of oil and gas equipment on active
properties.
Proceeds from salvage income of $28,740 and $4,257 were received during the nine
months ended September 30, 1996 and 1995, respectively, from the sale of oil and
gas equipment on one fully depleted well.
Proceeds of $25,213 were received from the salvage of equipment on one well
abandoned during the nine months ended September 30, 1995.
Proceeds of $39,280 were received during the nine months ended September 30,
1996 from the sale of four oil and gas wells and four saltwater disposal wells.
Net Cash Used in Financing Activities
Cash was sufficient for the nine months ended September 30, 1996 to cover
distributions to the partners of $1,129,214 of which $1,117,922 was distributed
to the limited partners and $11,292 to the managing general partner. For the
same period ended September 30, 1995, cash was sufficient for distributions to
the partners of $490,645 of which $485,738 was distributed to the limited
partners and $4,907 to the managing general partner.
Cash distributions to the partners of $1,129,214 for the nine months ended
September 30, 1996 included $697,816 to the limited partners and $7,048 to the
managing general partner, resulting from proceeds received in the litigation
settlement as discussed in Note 3.
13
<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 1. Legal Proceedings
During April 1996, the Registrant completed the settlement of a material
litigation to which it was a party. This litigation and settlement thereof is
described in Note 3 of Notes to Financial Statements above.
14
<PAGE>
PARKER & PARSLEY 86-C, 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 86-C, LTD.
By: Parker & Parsley Development L.P.,
Managing General Partner
By: Parker & Parsley Petroleum USA, Inc.
("PPUSA"), General Partner
Dated: November 13, 1996 By: /s/ Steven L. Beal
-----------------------------------------
Steven L. Beal, Senior Vice President
and Chief Financial Officer of PPUSA
15
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000789791
<NAME> 86C.TXT
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 208,802
<SECURITIES> 0
<RECEIVABLES> 168,582
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 377,384
<PP&E> 14,551,083
<DEPRECIATION> 10,611,906
<TOTAL-ASSETS> 4,316,561
<CURRENT-LIABILITIES> 108,296
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,208,265
<TOTAL-LIABILITY-AND-EQUITY> 4,316,561
<SALES> 1,207,241
<TOTAL-REVENUES> 1,984,062
<CGS> 0
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