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. 33-11193-1
PARKER & PARSLEY PRODUCING PROPERTIES 87-A, LTD.
(Exact name of Registrant as specified in its charter)
Texas 75-2195512
(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 14 pages.
-There are no exhibits-
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PARKER & PARSLEY PRODUCING PROPERTIES 87-A, 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
bearings deposits of $598,106 at June 30 and
$133,580 at December 31 $ 598,306 $ 133,580
Accounts receivable - affiliate 128,864 53,753
---------- ----------
Total current assets 727,170 187,333
Oil and gas properties - at cost, based on the
successful efforts accounting method 6,461,044 7,039,141
Accumulated depletion (4,159,926) (4,505,198)
---------- ----------
Net oil and gas properties 2,301,118 2,533,943
---------- ----------
$ 3,028,288 $ 2,721,276
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - other $ 6,722 $ -
Partners' capital:
Limited partners (24,426 interests) 2,990,109 2,692,822
Managing general partner 31,457 28,454
---------- ----------
3,021,566 2,721,276
---------- ----------
$ 3,028,288 $ 2,721,276
========== ==========
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
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PARKER & PARSLEY PRODUCING PROPERTIES 87-A, 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 $416,547 $385,878 $ 838,024 $777,673
Interest income 2,254 3,346 4,228 5,471
Salvage income from equipment
disposal 538 - 21,058 -
Gain on sale of assets 376,954 320 376,954 320
Litigation settlement 19,935 - 19,935 -
------- ------- --------- --------
Total revenues 816,228 389,544 1,260,199 783,464
Costs and expenses:
Production costs 231,464 288,494 469,080 525,259
General and administrative
expenses 12,497 11,576 25,141 23,330
Depletion 50,807 96,775 112,838 202,296
Loss on abandoned properties 6,902 2,607 734 14,339
Abandoned property costs 25,709 565 48,445 6,217
------- ------- --------- --------
Total costs and expenses 327,379 400,017 656,238 771,441
------- ------- --------- --------
Net income (loss) $488,849 $(10,473) $ 603,961 $ 12,023
======= ======= ========= ========
Allocation of net income (loss):
Managing general partner $ 4,889 $ (105) $ 6,040 $ 120
======= ======= ========= ========
Limited partners $483,960 $(10,368) $ 597,921 $ 11,903
======= ======= ========= ========
Net income (loss) per limited
partnership interest $ 19.81 $ (.42) $ 24.48 $ .49
======= ======= ========= ========
Distributions per limited
partnership interest $ 7.81 $ 6.25 $ 12.31 $ 10.80
======= ======= ========= ========
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
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PARKER & PARSLEY PRODUCING PROPERTIES 87-A, LTD.
(A Texas Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
---------- ---------- ----------
Balance at January 1, 1995 $ 35,453 $3,385,691 $3,421,144
Distributions (2,665) (263,802) (266,467)
Net income 120 11,903 12,023
--------- --------- ---------
Balance at June 30, 1995 $ 32,908 $3,133,792 $3,166,700
========= ========= =========
Balance at January 1, 1996 $ 28,454 $2,692,822 $2,721,276
Distributions (3,037) (300,634) (303,671)
Net income 6,040 597,921 603,961
--------- --------- ---------
Balance at June 30, 1996 $ 31,457 $2,990,109 $3,021,566
========= ========= =========
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 PRODUCING PROPERTIES 87-A, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended
June 30,
1996 1995
---------- ----------
Cash flows from operating activities:
Net income $ 603,961 $ 12,023
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 112,838 202,296
Loss on abandoned properties 734 14,339
Salvage income from equipment disposal (21,058) -
Gain on sale of assets (376,954) (320)
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (50,077) 48,668
Increase in accounts payable - 10,856
--------- ---------
Net cash provided by operating activities 269,444 287,862
Cash flows from investing activities:
Deletions to oil and gas properties 7,818 4,266
Proceeds from equipment salvage on abandoned
properties 33,479 2,705
Proceeds from salvage income from equipment
disposal 19,980 22,939
Proceeds from sale of asset 437,676 323
--------- ---------
Net cash provided by investing activities 498,953 30,233
Cash flows from financing activities:
Cash distributions to partners (303,671) (266,467)
--------- ---------
Net increase in cash and cash equivalents 464,726 51,628
Cash and cash equivalents at beginning of period 133,580 99,355
--------- ---------
Cash and cash equivalents at end of period $ 598,306 $ 150,983
========= =========
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 PRODUCING PROPERTIES 87-A, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
NOTE 1.
Parker & Parsley Producing Properties 87-A, Ltd. (the "Registrant") is a limited
partnership organized in 1987 under the laws of the State of Texas.
The Registrant engages primarily in oil and gas 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 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
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
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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 $208,711, or $8.54 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 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 $19,736 to the limited partners, or
$.81 per limited partnership interest. The distribution was allocated to the
limited partners using the same methodology as the original $91 million
distribution in 1993.
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NOTE 4.
During the six months ended June 30, 1996, a gain of $376,954 was realized from
the sale of three oil and gas wells and one saltwater disposal well to Costilla
Energy, L.L.C. The gain resulted from proceeds received from the sale of
$437,676 less the write-off of remaining capitalized well costs of $60,722.
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 $838,024 from $777,673 for
the six months ended June 30, 1996 and 1995, respectively, an increase of 8%.
The increase in revenues resulted from higher average prices received per barrel
of oil and mcf of gas, offset by a 7% decline in barrels of oil produced and
sold and an 8% decline in mcf of gas produced and sold. For the six months ended
June 30, 1996, 34,202 barrels of oil were sold compared to 36,729 for the same
period in 1995, a decrease of 2,527 barrels. Of the decrease, 668 barrels, or
2%, was attributable to the sale of three oil and gas wells during the six
months ended June 30, 1996. The remaining decrease of 1,859 barrels, or 5%, was
due to the decline characteristics of the Registrant's oil and gas properties.
For the six months ended June 30, 1996, 74,849 mcf of gas were sold compared to
81,265 for the same period in 1995, a decrease of 6,416 mcf. Of the decrease,
3,374 mcf, or 4%, was attributable to the sale of three oil and gas wells and
the remaining 3,042 mcf decrease, or 4%, was due to the decline characteristics
of the Registrant's oil and gas properties. 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 $2.75, or 16%, from
$17.60 for the six months ended June 30, 1995 to $20.35 for the same period in
1996 while the average price received per mcf of gas increased 18% from $1.61
for the six months ended June 30, 1995 to $1.90 for the same period 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 $21,058 for the six months ended June 30, 1996 was derived
from equipment credits received on several wells that were plugged and abandoned
in prior years, whereas, for the same period in 1995, no equipment credits were
received on prior year abandonments.
During the six months ended June 30, 1996, a gain of $376,954 was realized from
the sale of three oil and gas wells and one saltwater disposal well. The gain
resulted from proceeds received from the sale of $437,676 less the write-off of
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remaining capitalized well costs of $60,722. A gain of $320 from the sale of one
fully depleted well was realized during the six months ended June 30, 1995.
Costs and Expenses:
Total costs and expenses decreased to $656,238 for the six months ended June 30,
1996 as compared to $771,441 for the same period in 1995, a decrease of
$115,203, or 15%. This decrease was due to reductions in production costs,
depletion and loss on abandoned properties, offset by increases in general and
administrative expenses ("G&A") and abandoned property costs.
Production costs were $469,080 for the six months ended June 30, 1996 and
$525,259 for the same period in 1995, resulting in a $56,179 decrease, or 11%.
The decrease was attributable to less well repair and maintenance costs,
workover expenses and lower ad valorem 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, 8% from $23,330 for the six months ended
June 30, 1995 to $25,141 for the same period in 1996.
Depletion was $112,838 for the six months ended June 30, 1996 compared to
$202,296 for the same period in 1995. This represented a decrease in depletion
of $89,458, or 44%, 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 on a property-by-property basis utilizing the unit-of-production
method based upon the dominant mineral produced, generally oil, and using oil
prices in effect at the end of the respective quarter. Oil production decreased
2,527 barrels for the six months ended June 30, 1996 from the same period in
1995, while oil reserves of barrels were revised upward by 62,496 barrels, or
8%.
A loss of $734 from the abandonment of three oil and gas wells and two saltwater
disposal wells during the six months ended June 30, 1996 resulted from the
write-off of remaining capitalized well costs of $52,406, less proceeds received
from equipment salvage of $51,672. For the same period in 1995, a $14,339 loss
was the result of the write-off of remaining capitalized well costs of $39,008,
less proceeds received from equipment disposal of $24,669. Expenses incurred
during 1996 to plug and abandon several uneconomical wells totaled $48,445
compared to $6,217 for the same period in 1995.
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
9
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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.
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 $208,711, or $8.54 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
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
10
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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 $19,736 to the limited partners, or
$.81 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 $416,547 from $385,878 for
the three months ended June 30, 1996 and 1995, respectively, an increase of 8%.
The increase in revenues resulted from higher average prices received per barrel
of oil and mcf of gas, offset by an 11% decline in barrels of oil produced and
sold and a 14% decline in mcf of gas produced and sold. For the three months
ended June 30, 1996, 16,002 barrels of oil were sold compared to 17,943 for the
same period in 1995, a decrease of 1,941 barrels. For the three months ended
June 30, 1996, 36,255 mcf of gas were sold compared to 42,048 for the same
period in 1995, a decrease of 5,793 mcf. The decrease in oil and gas produced
and sold was due to the decline characteristics of the Registrant's oil and gas
properties.
The average price received per barrel of oil increased $3.89, or 22%, from
$18.00 for the three months ended June 30, 1995 to $21.89 for the same period in
1996 while the average price received per mcf of gas increased 22% from $1.50
during the three months ended June 30, 1995 to $1.83 in 1996 . Salvage income of
$538 for the three months ended June 30, 1996 was derived from equipment credits
received on several wells that were plugged and abandoned in prior years,
whereas, for the same period in 1995, no equipment credits were received on
prior year abandonments.
During the three months ended June 30, 1996, a gain of $376,954 was realized
from the sale of three oil and gas wells and one saltwater disposal well. The
gain resulted from proceeds received from the sale of $437,676 less the
write-off of remaining capitalized well costs of $60,722. A gain of $320 from
the sale of one fully depleted well was realized during the three months ended
June 30, 1995.
Costs and Expenses:
Total costs and expenses decreased to $327,379 for the three months ended June
30, 1996 as compared to $400,017 for the same period in 1995, a decrease of
$72,638, or 18%. This decrease was due to declines in production costs and
depletion, offset by increases in G&A, abandoned property costs and loss on
abandoned properties.
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Production costs were $231,464 for the three months ended June 30, 1996 and
$288,494 for the same period in 1995, resulting in a $57,030 decrease, or 20%.
The decrease was attributable to less well repair and maintenance costs and
workover expenses.
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 $11,576 for the three months ended
June 30, 1995 to $12,497 for the same period in 1996.
Depletion was $50,807 for the three months ended June 30, 1996 compared to
$96,775 for the same period in 1995. This represented a decrease in depletion of
$45,968, or 47%, partially attributable to the adoption of FAS 121 the fourth
quarter of 1995, as discussed previously. A portion of the decrease, $5,524 or
6%, was attributable to the sale of three oil and gas wells during the three
months ended June 30, 1996. Oil production decreased 1,941 barrels for the three
months ended June 30, 1996 from the same period in 1995.
A loss of $6,902 from the abandonment of three oil and gas wells and two
saltwater disposal wells, during the three months ended June 30, 1996, resulted
from the write-off of remaining capitalized well costs of $52,406, less proceeds
received from equipment salvage of $45,504. During the same period in 1995, a
loss of $2,607 resulted from the write-off of remaining capitalized well costs
of $3,700 on three abandoned oil and gas wells, less proceeds received from
equipment salvage of $1,093.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased during the six months ended
June 30, 1996 $18,418 from the same period in 1995. The decrease was primarily
attributable to an increase in production costs paid and abandoned property
costs, offset by an increase in oil and gas sales and the receipt of litigation
settlement proceeds.
Net Cash Provided by Investing Activities
The Registrant's investing activities during the six months ended June 30, 1996
and 1995 related to the disposal of oil and gas equipment on active properties.
Proceeds of $33,479 and $2,705 were received from the salvage of equipment on
several properties abandoned during the six months ended June 30, 1996 and 1995,
respectively. Proceeds from salvage income of $19,980 from the sale of oil and
gas equipment on properties abandoned in prior years were received during the
six months ended June 30, 1996, compared to $22,939 received during the same
period in 1995.
Three oil and gas wells and one saltwater disposal well were sold during the six
months ended June 30, 1996, resulting in the receipt of $437,676 in proceeds
from the sale compared to $323 in proceeds received during the same period in
1995 from the sale of one fully depleted well.
12
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Net Cash Used in Financing Activities
Cash was sufficient for the six months ended June 30, 1996 to cover
distributions to the partners of $303,671 of which $300,634 was distributed to
the limited partners and $3,037 to the managing general partner. For the same
period ended June 30, 1995, cash was sufficient for distributions to the
partners of $266,467 of which $263,802 was distributed to the limited partners
and $2,665 to the managing general partner.
Cash distributions to the partners of $303,671 for the six months ended June 30,
1996 included $19,736 to the limited partners and $199 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.
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
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PARKER & PARSLEY PRODUCING PROPERTIES 87-A, 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 PRODUCING
PROPERTIES 87-A, 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
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<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000809016
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