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, 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 16 pages.
There are no exhibits.
<PAGE>
PARKER & PARSLEY 86-C, LTD.
(A Texas Limited Partnership)
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
BALANCE SHEETS
June 30, December 31,
1996 1995
------------ ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including
interest bearing deposits of $167,178
at June 30 and $73,587 at December 31 $ 167,631 $ 73,796
Accounts receivable - oil and gas sales 172,519 151,051
----------- -----------
Total current assets 340,150 224,847
Oil and gas properties - at cost, based
on the successful efforts accounting
method 14,633,228 15,562,115
Accumulated depletion (10,608,365) (11,373,411)
----------- -----------
Net oil and gas properties 4,024,863 4,188,704
----------- -----------
$ 4,365,013 $ 4,413,551
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 128,630 $ 113,085
Partners' capital:
Limited partners (19,317 interests) 4,195,327 4,258,769
Managing general partner 41,056 41,697
----------- -----------
4,236,383 4,300,466
----------- -----------
$ 4,365,013 $ 4,413,551
=========== ===========
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.
2
<PAGE>
PARKER & PARSLEY 86-C, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended
June 30, June 30,
1996 1995 1996 1995
---------- ---------- ---------- ----------
Revenues:
Oil and gas sales $ 415,925 $ 383,810 $ 806,460 $ 768,332
Interest income 1,845 2,175 3,151 3,844
Salvage income from
equipment disposal - 4,257 28,740 4,257
Gain on sale of assets 39,034 - 39,034 -
Litigation settlement 704,864 - 704,864 -
--------- --------- --------- ---------
Total revenues 1,161,668 390,242 1,582,249 776,433
Costs and expenses:
Production costs 206,401 199,717 433,601 408,220
General and adminis-
trative expenses 12,478 11,514 24,194 23,050
Depletion 86,010 148,150 183,153 323,355
Loss on abandoned property - 141,386 - 141,386
Abandoned property costs 6,572 10,741 27,923 10,741
--------- --------- --------- ---------
Total costs and
expenses 311,461 511,508 668,871 906,752
--------- --------- --------- ---------
Net income (loss) $ 850,207 $ (121,266) $ 913,378 $ (130,319)
========= ========= ========= =========
Allocation of net
income (loss):
Managing general
partner $ 8,502 $ (1,213) $ 9,134 $ (1,303)
========= ========= ========= =========
Limited partners $ 841,705 $ (120,053) $ 904,244 $ (129,016)
========= ========= ========= =========
Net income (loss) per
limited partnership
interest $ 43.57 $ (6.22) $ 46.81 $ (6.68)
========= ========= ========= =========
Distributions per limited
partnership interest $ 44.12 $ 8.83 $ 50.10 $ 17.95
========= ========= ========= =========
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.
3
<PAGE>
PARKER & PARSLEY 86-C, LTD.
(A Texas Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
----------- ----------- -----------
Balance at January 1, 1995 $ 58,247 $ 5,897,267 $ 5,955,514
Distributions (3,502) (346,729) (350,231)
Net loss (1,303) (129,016) (130,319)
---------- ---------- ----------
Balance at June 30, 1995 $ 53,442 $ 5,421,522 $ 5,474,964
========== ========== ==========
Balance at January 1, 1996 $ 41,697 $ 4,258,769 $ 4,300,466
Distributions (9,775) (967,686) (977,461)
Net income 9,134 904,244 913,378
---------- ---------- ----------
Balance at June 30, 1996 $ 41,056 $ 4,195,327 $ 4,236,383
========== ========== ==========
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)
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended
June 30,
1996 1995
---------- ----------
Cash flows from operating activities:
Net income (loss) $ 913,378 $ (130,319)
Adjustments to reconcile net income
(loss) to net cash provided by operating
activities:
Depletion 183,153 323,355
Loss on abandoned property - 141,386
Salvage income from equipment disposal (28,740) (4,257)
Gain on sale of assets (39,034) -
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (21,468) 4,064
Increase (decrease) in accounts payable (25) 52,389
--------- ---------
Net cash provided by operating
activities 1,007,264 386,618
Cash flows from investing activities:
Proceeds from salvage income on equipment
disposal 28,740 4,257
Proceeds from equipment salvage on abandoned
property - 678
Proceeds from sale of assets 39,318 -
(Additions) disposals of oil and gas
properties (4,026) 11,551
--------- ---------
Net cash provided by investing
activities 64,032 16,486
Cash flows from financing activities:
Cash distributions to partners (977,461) (350,231)
--------- ---------
Net increase in cash and cash equivalents 93,835 52,873
Cash and cash equivalents at beginning
of period 73,796 67,305
--------- ---------
Cash and cash equivalents at end of period $ 167,631 $ 120,178
========= =========
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)
NOTES TO FINANCIAL STATEMENTS
June 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 June 30, 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. However, these interim results of operations are
not necessarily indicative of results for a full year.
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
6
<PAGE>
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.
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
7
<PAGE>
attorneys' fees. On January 22, 1996, the trial judge entered an interlocutory
summary judgment against Dresser Industries and Baker Hughes for an amount to be
determined. Pursuant to their indemnity obligations, the Registrant, Southmark,
PPDLP and other original plaintiffs vigorously protected the rights of both
Dresser and Baker Hughes. Southmark vigorously pursued its appeal of the
judgment, and 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. The managing general partner conducted an accounting of income and
expenses among the parties, and, on June 28, 1996, made a final $9.3 million
distribution to the working interest owners, including the Registrant and its
partners, resulting in a distribution of $697,816 to the limited partners, or
$36.12 per limited partnership interest. The distribution was allocated to the
limited partners using the same methodology as the original $91 million
distribution in 1993.
NOTE 4.
A gain of $39,034 from the sale of four oil and gas wells to Costilla Energy,
L.L.C. was recognized during the six months ended June 30, 1996, attributable to
proceeds of $39,318 received from the sale, less the write-off of remaining
capitalized well costs of $284.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (1)
Results of Operations
Six months ended June 30, 1996 compared with six months ended June 30, 1995
Revenues:
The Registrant's oil and gas revenues increased to $806,460 from $768,332 for
the six months ended June 30, 1996 and 1995, respectively, an increase of 5%.
The increase in revenues resulted from a 16% increase in the average price
received per barrel of oil and a 25% increase in the average price received per
mcf of gas, offset by a 14% decrease in barrels of oil produced and sold and a
6% decrease in mcf of gas produced and sold. For the six months ended June 30,
8
<PAGE>
1996, 26,147 barrels of oil were sold compared to 30,477 for the same period in
1995, a decrease of 4,330 barrels. For the six months ended June 30, 1996,
125,693 mcf of gas were sold compared to 134,079 for the same period in 1995, a
decrease of 8,386 mcf. The decreases in production volumes were primarily 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 $2.88 from $17.60 for the
six months ended June 30, 1995 to $20.48 for the same period in 1996 while the
average price received per mcf of gas increased from $1.73 during the six months
ended June 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 six months ended June 30, 1996.
Salvage income of $28,740 and $4,257 was received during the six months ended
June 30, 1996 and 1995, respectively, attributable to credits received from the
disposal of oil and gas equipment on one fully depleted well.
A gain of $39,034 from the sale of four oil and gas wells was recognized during
the six months ended June 30, 1996, attributable to proceeds of $39,318 received
from the sale, less the write-off of remaining capitalized well costs of $284.
Costs and Expenses:
Total costs and expenses decreased to $668,871 for the six months ended June 30,
1996 as compared to $906,752 for the same period in 1995, a decrease of
$237,881, or 26%. This decrease was due to declines in depletion and loss on
abandoned property, offset by increases in production costs, general and
administrative expenses ("G&A") and abandoned property costs.
Production costs were $433,601 for the six months ended June 30, 1996 and
$408,220 for the same period in 1995 resulting in a $25,381 increase, or 6%.
This increase was primarily the result of additional well repair and maintenance
costs incurred in an effort to stimulate well production.
G&A's components are independent accounting and engineering fees, computer
services, postage and managing general partner personnel costs. During this
9
<PAGE>
period, G&A increased, in aggregate, 5% from $23,050 for the six months ended
June 30, 1995 to $24,194 for the same period in 1996. The Partnership agreement
limits G&A to 3% of gross oil and gas revenues.
Depletion was $183,153 for the six months ended June 30, 1996 compared to
$323,355 for the same period in 1995. This represented a decline in depletion of
$140,202, or 43%, primarily attributable to the adoption of the provisions of
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") effective the fourth quarter of 1995 and the reduction of net
depletable basis resulting from the charge taken upon such adoption. Depletion
was computed property-by-property utilizing the unit-of-production method based
upon the dominant mineral produced, generally oil. Oil production decreased
4,330 barrels for the six months ended June 30, 1996 from the same period in
1995, while oil reserves of barrels were revised downward by 34,442 barrels, or
5%.
Incurred expenses of $27,923 for abandoned property costs during the six months
ended June 30, 1996 were related to two of the four wells sold and is reflected
in the net post-closing adjustment on the sale of properties.
A loss on abandoned property of $141,386 was recognized during the six months
ended June 30, 1995. This loss was the result of proceeds received of $3,318
from equipment salvage on abandoned property, less the write-off of remaining
capitalized well costs of $144,704. Expenses incurred during the six month
period ended June 30, 1995 to plug and abandon one well totaled $10,741.
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
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.
10
<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 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 to be
determined. Pursuant to their indemnity obligations, the Registrant, Southmark,
PPDLP and other original plaintiffs vigorously protected the rights of both
Dresser and Baker Hughes. Southmark vigorously pursued its appeal of the
judgment, and posted a supersedeas bond using the Reserve as collateral. On
11
<PAGE>
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. The managing general partner conducted an accounting of income and
expenses among the parties, and, on June 28, 1996, made a final $9.3 million
distribution to the working interest owners, including the Registrant and its
partners, resulting in a distribution of $697,816 to the limited partners, or
$36.12 per limited partnership interest. The distribution was allocated to the
limited partners using the same methodology as the original $91 million
distribution in 1993.
Three months ended June 30, 1996 compared with three months ended June 30, 1995
Revenues:
The Registrant's oil and gas revenues increased to $415,925 from $383,810 for
the three months ended June 30, 1996 and 1995, respectively, an increase of 8%.
The increase in revenues resulted from a 22% increase in the average price
received per barrel of oil and a 42% increase in the average price received per
mcf of gas, offset by a 16% decline in barrels of oil produced and sold and a
15% decline in mcf of gas produced and sold. For the three months ended June 30,
1996, 12,670 barrels of oil were sold compared to 15,017 for the same period in
1995, a decrease of 2,347 barrels. For the three months ended June 30, 1996,
60,830 mcf of gas were sold compared to 71,654 for the same period in 1995, a
decrease of 10,824 mcf. The decrease in production volumes was primarily due to
the decline characteristics of the Registrant's oil and gas properties.
The average price received per barrel of oil increased $4.05 from $18.02 for the
three months ended June 30, 1995 to $22.07 for the same period in 1996 while the
average price received per mcf of gas increased from $1.58 during the three
months ended June 30, 1995 to $2.24 in 1996.
Salvage income of $4,257 for the three months ended June 30, 1995 consisted of
equipment credits received on one fully depleted well.
A gain of $39,034 from the sale of four oil and gas wells was recognized during
the three months ended June 30, 1996, attributable to proceeds received of
$39,318, less the write-off of remaining capitalized well costs of $284.
12
<PAGE>
Costs and Expenses:
Total costs and expenses decreased to $311,461 for the three months ended June
30, 1996 as compared to $511,508 for the same period in 1995, a decrease of
$200,047, or 39%. This decrease was due to declines in depletion, loss on
abandoned property and abandoned property costs, offset by increases in
production costs and G&A.
Production costs were $206,401 for the three months ended June 30, 1996 and
$199,717 for the same period in 1995 resulting in a $6,684 increase, or 3%. This
increase was primarily the result of additional well repair and maintenance and
workover costs incurred in an effort to stimulate well production.
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, 8% from $11,514 for the three months ended
June 30, 1995 to $12,478 for the same period in 1996.
Depletion was $86,010 for the three months ended June 30, 1996 compared to
$148,150 for the same period in 1995. This represented a decrease in depletion
of $62,140, or 42%, primarily attributable to the adoption of FAS 121 the fourth
quarter of 1995, as discussed previously. Oil production decreased 2,347 barrels
for the three months ended June 30, 1996 from the same period in 1995.
A loss on abandoned property of $141,386 was recognized during the three months
ended June 30, 1995. This loss was the result of proceeds received of $3,318
from equipment salvage on abandoned property, less the write-off of remaining
capitalized well costs of $144,704.
Incurred expenses of $6,572 for abandoned property costs during the three months
ended June 30, 1996 were related to two of the four wells sold and is reflected
in the net post-closing adjustment on the sale of properties. Expenses incurred
during the three month period ended June 30, 1995 to plug and abandon one well
totaled $10,741.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $620,646 during the six
months ended June 30, 1996 from the same period ended June 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.
13
<PAGE>
Net Cash Provided by Investing Activities
The Registrant's investing activities during the six months ended June 30, 1996
included expenses related to expenditures for equipment replacement on various
oil and gas properties. Proceeds received during the six months ended June 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 six
months ended June 30, 1996 and 1995, respectively, from the sale of oil and gas
equipment on one fully depleted well.
Proceeds of $678 were received from the salvage of equipment on one well
abandoned during the six months ended June 30, 1995.
Proceeds of $39,318 were received during the six months ended June 30, 1996 from
the sale of four oil and gas wells.
Net Cash Used in Financing Activities
Cash was sufficient for the six months ended June 30, 1996 to cover
distributions to the partners of $977,461 of which $967,686 was distributed to
the limited partners and $9,775 to the managing general partner. For the same
period ended June 30, 1995, cash was sufficient for distributions to the
partners of $350,231 of which $346,729 was distributed to the limited partners
and $3,502 to the managing general partner.
Cash distributions to the partners of $977,461 for the six months ended June 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.
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.
14
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Registrant is party to material litigation which is described in Note 3 of
Notes to Financial Statements above.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - none
(b) Reports on Form 8-K - none
15
<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: August 12, 1996 By: /s/ Steven L. Beal
---------------------------------------
Steven L. Beal, Senior Vice
President and Chief Financial
Officer of PPUSA
16
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000789791
<NAME> 86C.TXT
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 167,631
<SECURITIES> 0
<RECEIVABLES> 172,519
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 340,150
<PP&E> 14,633,228
<DEPRECIATION> 10,608,365
<TOTAL-ASSETS> 4,365,013
<CURRENT-LIABILITIES> 128,630
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,236,383
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</TABLE>
