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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
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 number 0-16693
COASTAL 1987 DRILLING PROGRAM, LTD.
(Exact name of registrant as specified in its charter)
Texas 76-0214087
(State or other jurisdiction of ) (I.R.S. Employer Identification No.)
incorporation or organization
Coastal Tower
Nine Greenway Plaza
Houston, Texas 77046-0995
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 877-1400
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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, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No _____
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<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The financial statements of the Coastal 1987 Drilling Program, Ltd., a
Texas limited partnership, (the "Program"), are presented herein and are
unaudited, except for balances as of December 31, 1994, and therefore are
subject to year-end adjustments; however, all adjustments which are of a normal
recurring nature and, in the opinion of management, necessary for a fair
statement of the results of operations for the periods covered have been made.
Such results are not necessarily indicative of results to be expected for the
year due to seasonal variations and market conditions affecting gas and oil
sales and corresponding unit prices.
COASTAL 1987 DRILLING PROGRAM, LTD.
BALANCE SHEET
(Thousands of Dollars)
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1995 1994
------------- ------------
(Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents................................................... $ 110 $ 40
Accounts receivable - affiliates............................................ 90 95
-------- ---------
Total Current Assets..................................................... 200 135
-------- ---------
Gas and Oil Properties - at full-cost.......................................... 17,750 17,809
Less accumulated depreciation and amortization.............................. 16,799 16,591
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951 1,218
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$ 1,151 $ 1,353
======== =========
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities:
Accounts payable - affiliates............................................... $ 108 $ 101
Long-Term Liabilities:
Accounts payable - affiliate................................................ 91 98
Partners' Capital.............................................................. 952 1,154
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$ 1,151 $ 1,353
======== =========
</TABLE>
See Note to Financial Statements.
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<PAGE>
COASTAL 1987 DRILLING PROGRAM, LTD.
STATEMENT OF PARTNERS' CAPITAL
(Thousands of Dollars)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------------
1995 1994
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(Unaudited)
<S> <C> <C>
General Partner:
Balance, beginning of period................................................. $ 11 $ 14
Earnings (loss).............................................................. (1) -
Distributions................................................................ (1) (2)
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Balance, end of period..................................................... 9 12
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Limited Partners:
Balance, beginning of period................................................. 1,143 1,374
Earnings (loss).............................................................. (104) 33
Distributions................................................................ (96) (193)
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Balance, end of period..................................................... 943 1,214
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$ 952 $ 1,226
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</TABLE>
STATEMENT OF OPERATIONS
(Thousands of Dollars, Except per Limited Partnership Unit)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
1995 1994 1995 1994
---------- ----------- ----------- -----------
(Unaudited)
<S> <C> <C> <C> <C>
Revenues:
Sale of gas and oil............................ $ 156 $ 186 $ 486 $ 599
Interest and other............................. 2 3 15 9
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158 189 501 608
---------- ----------- ----------- -----------
Costs and Expenses:
Lease operating................................ 108 95 341 363
Administrative fee............................. 19 18 57 57
Depreciation and amortization.................. 127 49 208 155
---------- ----------- ----------- -----------
254 162 606 575
---------- ----------- ----------- -----------
Net Earnings (Loss)............................... $ (96) $ 27 $ (105) $ 33
========== =========== =========== ===========
Net Earnings (Loss) Per Limited
Partnership Unit................................ $ (6.79) $ 1.91 $ (7.43) $ 2.33
========== =========== =========== ===========
</TABLE>
See Note to Financial Statements.
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<PAGE>
COASTAL 1987 DRILLING PROGRAM, LTD.
STATEMENT OF CASH FLOWS
(Thousands of Dollars)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------------
1995 1994
----------- -----------
(Unaudited)
<S> <C> <C>
Cash Flows From Operating Activities:
Net earnings (loss).......................................................... $ (105) $ 33
----------- -----------
Adjustments to reconcile net earnings (loss)
to net cash provided by operating activities:
Depreciation and amortization.......................................... 208 155
(Increase) decrease in accounts receivable - affiliates................ 5 (27)
Decrease in accounts payable - affiliates.............................. - (63)
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Total adjustments................................................... 213 65
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Net cash provided by operating activities........................ 108 98
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Cash Flows From Investing Activities:
Capital expenditures......................................................... (15) 2
Proceeds from the sale of property and equipment............................. 74 37
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Net cash provided by investing activities................................. 59 39
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Cash Flows From Financing Activities:
Distributions paid........................................................... (97) (195)
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Net increase (decrease) in cash and cash equivalents...................... 70 (58)
Cash and cash equivalents at beginning of the period...................... 40 109
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Cash and cash equivalents at end of the period............................ $ 110 $ 51
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</TABLE>
NOTE TO FINANCIAL STATEMENTS
For additional information relative to operations and financial position,
reference is made to the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1994. For purposes of the Statement of Cash Flows, cash
equivalents include time deposits, certificates of deposit and all highly liquid
instruments with original maturities of three months or less.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Liquidity and Capital Resources
The Partnership Payout balance decreased by $75,000 in the third quarter
of 1995 to $9,783,000 as of September 30, 1995, compared to the original balance
of $14,141,000. Management is of the opinion that Partnership Payout will not
occur.
A cash distribution of $3.70 per limited partnership unit was made for the
third quarter of 1995, bringing the aggregate distributions since the Program
began operations to $222.15 per $1,000 unit. The distribution includes proceeds
attributable to the sale of two Program wells.
Results of Operations
The Program's results of operations for the comparable three and nine
month periods ended September 30, 1995 and 1994 are as follows:
Revenues from the sale of production in the third quarter of 1995
decreased $30,000 (16%) from the 1994 third quarter. Natural gas revenues were
down $24,000 (36%) as the weighted average price, net of severance taxes,
decreased to $1.33 in the 1995 third quarter from $1.64 per thousand cubic feet
in the 1994 third quarter and production volumes decreased to 27 million cubic
feet in the 1995 third quarter from 38 million cubic feet in the 1994 third
quarter. Crude oil, condensate and natural gas liquids revenues decreased $6,000
(5%) reflecting a decrease in the weighted average price, net of severance
taxes, to $13.65 per barrel in the 1995 third quarter from $14.20 per barrel in
the 1994 third quarter, partially offset by an increase in production volumes to
7,827 barrels in the third quarter of 1995 from 7,791 barrels in the third
quarter of 1994.
The decrease in natural gas volumes in the third quarter of 1995 is
primarily attributable to decreased production from the LaPerla Ranch Field in
south Texas due to market conditions in the area.
In the third quarter of 1995, lease operating expense increased $13,000
(14%) primarily due to increased maintenance expenses. Depreciation and
amortization expense increased $78,000 (159%) in the same period primarily as a
result of a non-cash charge of $86,000 being recorded in the third quarter of
1995 in order that the net investment in gas and oil properties would not exceed
the estimated future net revenues from proved reserves, computed at current
prices, and discounted at 10% as required under the full-cost method of
accounting for gas and oil properties, partially offset by decreased production
volumes.
Revenues from the sale of production in the first nine months of 1995
decreased $113,000 (19%) from the first nine months of 1994. Natural gas
revenues were down $63,000 (30%) as the production volumes decreased to 103
million cubic feet from 110 million cubic feet in the first nine months of 1994,
and the weighted average price, net of severance taxes, decreased to $1.28 from
$1.76 per thousand cubic feet in the first nine months of 1994. Crude oil,
condensate and natural gas liquids revenues decreased $50,000 (13%) reflecting a
decrease in production volumes to 21,836 barrels from 26,221 barrels in the
first nine months of 1994, partially offset by an increase in the weighted
average price, net of severance taxes, to $14.45 per barrel in the first nine
months of 1995 from $13.81 per barrel in the first nine months of 1994.
The decrease in natural gas volumes in the first nine months of 1995 was
primarily attributable to decreased production from the LaPerla Ranch Field in
south Texas due to market conditions in the area. The reduction in crude oil,
condensate and natural gas liquids volumes in the first nine months of 1995 was
primarily the result of normal production declines.
In the first nine months of 1995, lease operating expense decreased
$22,000 (6%) due primarily to decreased production taxes. Depreciation and
amortization expense increased $53,000 (34%) in the same period primarily as a
result of a non-cash charge of $86,000 being recorded in the third quarter of
1995 in order that the net investment in gas and oil properties would not exceed
the estimated future net revenues from proved reserves, computed at current
prices, and discounted at 10% as required under the full-cost method of
accounting for gas and oil properties, partially offset by decreased production
volumes.
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<PAGE>
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
None.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended
September 30, 1995.
SIGNATURES
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.
COASTAL 1987 DRILLING PROGRAM, LTD.
(Registrant)
By Its General Partner,
Coastal Limited Ventures, Inc.
Date: November 13, 1995 By: COBY C. HESSE
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Coby C. Hesse
Senior Vice President
(As Authorized Officer and
Chief Accounting Officer)
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