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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, 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 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
incorporation or organization) Identification No.)
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, 1995, 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 1996 1995
------------- ------------
(Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents................................................... $ 40 $ 48
Accounts receivable - affiliates............................................ 100 122
-------- ---------
Total Current Assets..................................................... 140 170
-------- ---------
Gas and Oil Properties - at full-cost.......................................... 17,760 17,751
Less accumulated depreciation and amortization.............................. 16,908 16,828
-------- ---------
852 923
-------- ---------
$ 992 $ 1,093
======== =========
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities:
Accounts payable - affiliates............................................... $ 53 $ 98
Long-Term Liabilities:
Accounts payable - affiliate................................................ 65 86
Partners' Capital.............................................................. 874 909
-------- ---------
$ 992 $ 1,093
======== =========
</TABLE>
See Note to Financial Statements.
- 1 -
<PAGE>
COASTAL 1987 DRILLING PROGRAM, LTD.
STATEMENT OF PARTNERS' CAPITAL
(Thousands of Dollars)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------------
1996 1995
----------- -----------
(Unaudited)
<S> <C> <C>
General Partner:
Balance, beginning of period................................................. $ 9 $ 11
Earnings (loss).............................................................. 1 (1)
Distributions................................................................ (1) (1)
----------- -----------
Balance, end of period..................................................... 9 9
----------- -----------
Limited Partners:
Balance, beginning of period................................................. 900 1,143
Earnings (loss).............................................................. 83 (104)
Distributions................................................................ (118) (96)
----------- -----------
Balance, end of period..................................................... 865 943
----------- -----------
$ 874 $ 952
=========== ===========
</TABLE>
STATEMENT OF OPERATIONS
(Thousands of Dollars, Except per Limited Partnership Unit)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------- ----------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
(Unaudited)
<S> <C> <C> <C> <C>
Revenues:
Sale of gas and oil............................ $ 168 $ 156 $ 514 $ 486
Interest....................................... 2 2 3 15
---------- ----------- ----------- -----------
170 158 517 501
---------- ----------- ----------- -----------
Costs and Expenses:
Lease operating................................ 97 108 302 341
Administrative fee............................. 17 19 51 57
Depreciation and amortization.................. 27 127 80 208
---------- ----------- ----------- -----------
141 254 433 606
---------- ----------- ----------- -----------
Net Earnings (Loss)............................... $ 29 $ (96) $ 84 $ (105)
========== =========== =========== ===========
Net Earnings (Loss) Per Limited
Partnership Unit................................ $ 2.05 $ (6.79) $ 5.94 $ (7.43)
========== =========== =========== ===========
</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,
----------------------------
1996 1995
----------- -----------
(Unaudited)
<S> <C> <C>
Cash Flows From Operating Activities:
Net earnings (loss).......................................................... $ 84 $ (105)
----------- -----------
Adjustments to reconcile net earnings (loss)
to net cash provided by operating activities:
Depreciation and amortization.......................................... 80 208
Decrease in accounts receivable - affiliates........................... 22 5
Decrease in accounts payable - affiliates.............................. (66) -
----------- -----------
Total adjustments................................................... 36 213
----------- -----------
Net cash provided by operating activities........................ 120 108
----------- -----------
Cash Flows From Investing Activities:
Capital expenditures......................................................... (9) (15)
Proceeds from the sale of property and equipment............................. - 74
----------- -----------
Net cash provided (used) by investing activities.......................... (9) 59
----------- -----------
Cash Flows From Financing Activities:
Distributions paid........................................................... (119) (97)
----------- -----------
Net increase (decrease) in cash and cash equivalents...................... (8) 70
Cash and cash equivalents at beginning of the period...................... 48 40
----------- -----------
Cash and cash equivalents at end of the period............................ $ 40 $ 110
=========== ===========
</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, 1995. 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.
- 3 -
<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 $71,000 in the third quarter of
1996 to $9,482,000 as of September 30, 1996, compared to the original balance of
$14,141,000. Partnership Payout will not have been achieved at termination of
the Partnership on January 1, 1997.
A cash distribution of $3.30 per limited partnership unit was made for the
third quarter of 1996, bringing the aggregate distributions since the Program
began operations to $233.60 per $1,000 unit.
Results of Operations
The Program's results of operations for the comparable three and nine month
periods ended September 30, 1996 and 1995 are as follows:
Revenues from the sale of production in the third quarter of 1996 increased
$12,000 (8%) over the 1995 third quarter. Natural gas revenues were up $25,000
(58%) reflecting an increase in the net weighted average price of natural gas to
$2.01 per thousand cubic feet in the third quarter of 1996 from $1.33 per
thousand cubic feet in the third quarter of 1995 and an increase in production
volumes to 31 million cubic feet in the 1996 third quarter compared with 27
million cubic feet in the 1995 third quarter. Crude oil, condensate and natural
gas liquids revenues decreased $13,000 (12%), reflecting a decrease in
production volumes to 5,478 barrels from 7,827 barrels partially offset by an
increase in the net weighted average price of crude oil, condensate and natural
gas liquids to $16.73 per barrel in the 1996 third quarter from $13.65 per
barrel in the 1995 third quarter.
The increase in natural gas volumes was primarily attributable to increased
production from the LaPerla Ranch Field in South Texas due to market conditions
in the area. The decrease in crude oil, condensate and natural gas liquids
volumes was primarily attributable to normal production declines.
Lease operating expense decreased $11,000 (10%) primarily attributable to
decreased maintenance expenses. Administrative fee decreased $2,000 (11%) as a
result of a restructuring of the fee by the General Partner. Depreciation and
amortization expense decreased $100,000 (79%) 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 proven reserves, computed at current prices, and
discounted at 10% as required under the full-cost method of accounting for gas
and oil properties.
Revenues from the sale of production in the first nine months of 1996
increased $28,000 (6%) over the 1995 first nine months. Natural gas revenues
were up $36,000 (24%) as the average price, net of severance taxes, increased to
$1.92 per thousand cubic feet in the first nine months of 1996 from $1.28 in the
first nine months of 1995, partially offset by a decrease in production volumes
to 88 million cubic feet in the first nine months of 1996 from 103 million cubic
feet in the first nine months of 1995. Crude oil, condensate and natural gas
liquids revenues decreased $8,000 (2%), reflecting a decrease in production
volumes to 18,360 barrels in the first nine months of 1996 from 21,836 barrels
in the first nine months of 1995 partially offset by an increase in the weighted
average price, net of severance taxes, to $16.49 per barrel in the first nine
months of 1996 from $14.45 per barrel in the first nine months of 1995.
The decreases in natural gas production and crude oil, condensate and
natural gas liquids volumes in the first nine months of 1996 were primarily the
result of normal production declines.
Lease operating expense decreased $39,000 (11%) in the first nine months of
1996 due primarily to decreased operations and maintenance expenses. The
administrative fee decreased $6,000 (11%) in the first nine months of 1996 as a
result of a restructuring of the fee by the General Partner. Depreciation and
amortization decreased $128,000 (62%) 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.
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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.
(27) Financial Data Schedule.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended
September 30, 1996.
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 12, 1996 By: COBY C. HESSE
-------------------------------
Coby C. Hesse
Senior Vice President
(As Authorized Officer and
Chief Accounting Officer)
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<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
- ------------------------------------------------------------------------------
27 Financial Data Schedule
- 6 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE COASTAL 1987 DRILLING PROGRAM, LTD.
FORM 10-Q QUARTERLY REPORT FOR THE PERIOD ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 40
<SECURITIES> 0
<RECEIVABLES> 100
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 140
<PP&E> 17,760
<DEPRECIATION> 16,908
<TOTAL-ASSETS> 992
<CURRENT-LIABILITIES> 53
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 874
<TOTAL-LIABILITY-AND-EQUITY> 992
<SALES> 514
<TOTAL-REVENUES> 517
<CGS> 0
<TOTAL-COSTS> 433
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 84
<INCOME-TAX> 0
<INCOME-CONTINUING> 84
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 84
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
