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, 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 No. 33-19659-01
PARKER & PARSLEY 88-A, L.P.
(Exact name of Registrant as specified in its charter)
Delaware 75-2225738
(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 11 pages.
There are no exhibits.
<PAGE>
PARKER & PARSLEY 88-A, L.P.
(A Delaware Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
September 30, December 31,
1995 1994
(Unaudited)
ASSETS
Current assets:
Cash, including interest bearing deposits of
$187,042 at September 30 and $118,620
at December 31 $ 187,142 $ 118,721
Accounts receivable - oil and gas sales 117,370 130,263
---------- ----------
Total current assets 304,512 248,984
Oil and gas properties - at cost, based on the
successful efforts accounting method 10,059,559 10,052,895
Accumulated depletion (5,599,686) (5,295,318)
---------- ----------
Net oil and gas properties 4,459,873 4,757,577
---------- ----------
$ 4,764,385 $ 5,006,561
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 58,160 $ 29,943
Partners' capital:
Limited partners (12,935 interests) 4,658,921 4,926,608
Managing general partner 47,304 50,010
---------- ----------
4,706,225 4,976,618
---------- ----------
$ 4,764,385 $ 5,006,561
========== ==========
The financial information included as of September 30, 1995 has been
prepared by management without audit by independent public accountants.
The accompanying notes are an integral part of these statements.
2
<PAGE>
PARKER & PARSLEY 88-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
1995 1994 1995 1994
Revenues:
Oil and gas sales $ 280,084 $ 315,225 $ 890,762 $ 896,582
Interest income 3,527 1,770 8,307 3,577
-------- -------- -------- --------
Total revenues 283,611 316,995 899,069 900,159
Costs and expenses:
Production costs 132,734 141,808 393,848 436,666
General and administrative
expenses 8,403 9,457 26,723 26,898
Depletion 99,307 89,781 304,368 293,782
-------- -------- -------- --------
Total costs and expenses 240,444 241,046 724,939 757,346
-------- -------- -------- --------
Net income $ 43,167 $ 75,949 $ 174,130 $ 142,813
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 431 $ 760 $ 1,741 $ 1,428
======== ======== ======== ========
Limited partners $ 42,736 $ 75,189 $ 172,389 $ 141,385
======== ======== ======== ========
Net income per limited
partnership interest $ 3.31 $ 5.81 $ 13.33 $ 10.93
======== ======== ======== ========
Distributions per limited
partnership interest $ 11.51 $ 11.50 $ 34.02 $ 32.46
======== ======== ======== ========
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 statements.
3
<PAGE>
PARKER & PARSLEY 88-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
Balance at January 1, 1994 $ 53,913 $5,312,998 $5,366,911
Distributions (4,241) (419,850) (424,091)
Net income 1,428 141,385 142,813
------- --------- ---------
Balance at September 30, 1994 $ 51,100 $5,034,533 $5,085,633
======= ========= =========
Balance at January 1, 1995 $ 50,010 $4,926,608 $4,976,618
Distributions (4,447) (440,076) (444,523)
Net income 1,741 172,389 174,130
------- --------- ---------
Balance at September 30, 1995 $ 47,304 $4,658,921 $4,706,225
======= ========= =========
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 statements.
4
<PAGE>
PARKER & PARSLEY 88-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
September 30,
1995 1994
Cash flows from operating activities:
Net income $ 174,130 $ 142,813
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 304,368 293,782
Changes in assets and liabilities:
Decrease in accounts receivable 12,893 3,105
Increase in accounts payable 28,217 37,617
--------- ---------
Net cash provided by operating activities 519,608 477,317
Cash flows from investing activities:
Additions to oil and gas properties (6,664) (5,186)
Cash flows from financing activities:
Cash distributions to partners (444,523) (424,091)
--------- ---------
Net increase in cash and cash equivalents 68,421 48,040
Cash and cash equivalents at beginning of period 118,721 104,442
--------- ---------
Cash and cash equivalents at end of period $ 187,142 $ 152,482
========= =========
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 statements.
5
<PAGE>
PARKER & PARSLEY 88-A, L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Unaudited)
NOTE 1.
In the opinion of management, the unaudited financial statements as of September
30, 1995 of Parker & Parsley 88-A, L.P. (the "Registrant") 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, the results of operations for the nine months ended September
30, 1995 are not necessarily indicative of the results for the full year ending
December 31, 1995.
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, 1994, 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.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Registrant was formed June 30, 1988. The managing general partner of the
Registrant at December 31, 1994 was Parker & Parsley Development Company ("
PPDC") which was merged into Parker & Parsley Development L.P. (" PPDLP") on
January 1, 1995. On January 1, 1995, PPDLP, a Texas limited partnership, became
the sole managing general partner of the Registrant, by acquiring the rights and
assuming the obligations of PPDC. PPDLP acquired PPDC's rights and obligations
as managing general partner of the Registrant in connection with the merger of
PPDC, P&P Producing, Inc. and Spraberry Development Corporation into MidPar LP.,
which survived the merger with a change of name to PPDLP. The sole general
partner of PPDLP is Parker & Parsley Petroleum USA, Inc. PPDLP has the power and
authority to manage, control and administer all Registrant affairs. The limited
partners contributed $12,935,000 representing 12,935 interests ($1,000 per
interest) sold to a total of 999 limited partners.
Since its formation, the Registrant invested $10,335,381 in various prospects
that were drilled in Texas. At September 30, 1995, the Registrant had 39
producing oil wells with one well plugged and abandoned during 1989.
6
<PAGE>
RESULTS OF OPERATIONS
Nine months ended September 30, 1995 compared with nine months ended
September 30, 1994
REVENUES:
The Registrant's oil and gas revenues decreased to $890,762 from $896,582 for
the nine months ended September 30, 1995 and 1994, respectively. The decrease in
revenues resulted from a 13% decline in barrels of oil produced and sold, offset
by an 8% increase in mcf of gas produced and sold and increases in the average
prices received per barrel of oil and mcf of gas. For the nine months ended
September 30, 1995, 36,546 barrels of oil were sold compared to 42,080 for the
same period in 1994, a decrease of 5,534 barrels. For the nine months ended
September 30, 1995, 148,060 mcf of gas were sold compared to 137,126 for the
same period in 1994, an increase of 10,934 mcf. The decrease in oil production
volumes was primarily due to the decline characteristics of the Registrant's oil
and gas properties. The increase in gas production volumes was due to
operational changes on several wells. Management expects a certain amount of
decline in production in the future until the Registrant's economically
recoverable reserves are fully depleted.
The average price received per barrel of oil increased 9% from $15.86 for the
nine months ended September 30, 1994 to $17.33 for the same period in 1995 while
the average price received per mcf of gas increased 4% from $1.67 during the
nine months ended September 30, 1994 to $1.74 for the same period in 1995. 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, 1995.
COSTS AND EXPENSES:
Total costs and expenses decreased to $724,939 for the nine months ended
September 30, 1995 as compared to $757,346 for the same period in 1994, a
decrease of $32,407, or 4%. This decrease was due to declines in production
costs and general and administrative expenses ("G&A"), offset by an increase in
depletion.
Production costs were $393,848 for the nine months ended September 30, 1995 and
$436,666 for the same period in 1994 resulting in a $42,818 decrease, or 10%.
The decrease was due to a decline in well repair and maintenance costs and 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 decreased, in aggregate, from $26,898 for the nine months ended
September 30, 1994 to $26,723 for the same period in 1995. The Partnership
agreement limits G&A to 3% of gross oil and gas revenues.
7
<PAGE>
Depletion was $304,368 for the nine months ended September 30, 1995 compared to
$293,782 for the same period in 1994. This represented an increase in depletion
of $10,586, or 4%. Depletion was computed quarterly on a property-by-property
basis utilizing the unit-of-production method based upon the dominant mineral
produced, generally oil. Oil production decreased 5,534 barrels for the nine
months ended September 30, 1995 from the same period in 1994. Depletion expense
for the nine months ended September 30, 1995 was calculated based on reserves
computed utilizing an oil price of $16.38 per barrel. Comparatively, depletion
expense for the three months ended September 30, 1994 and June 30, 1994 was
calculated based on reserves computed utilizing an oil price of $18.29 per
barrel while depletion expense for the three months ended March 31, 1994 was
calculated based on reserves computed utilizing an oil price of $12.79 per
barrel.
Three months ended September 30, 1995 compared with three months ended
September 30, 1994
REVENUES:
The Registrant's oil and gas revenues decreased to $280,084 from $315,225 for
the three months ended September 30, 1995 and 1994, respectively, a decrease of
11%. The decrease in revenues resulted from a 17% decline in barrels of oil
produced and sold and a decline in the average price received per barrel of oil,
offset by an 11% increase in mcf of gas produced and sold and an increase in the
average price received per mcf of gas. For the three months ended September 30,
1995, 11,578 barrels of oil were sold compared to 13,908 for the same period in
1994, a decrease of 2,330 barrels. For the three months ended September 30,
1995, 53,073 mcf of gas were sold compared to 47,972 for the same period in
1994, an increase of 5,101 mcf. The decrease in oil production volumes was
primarily due to the decline characteristics of the Registrant's oil and gas
properties. The increase in gas production volumes was due to operational
changes on several wells.
The average price received per barrel of oil decreased 5% from $17.42 for the
three months ended September 30, 1994 to $16.60 for the same period in 1995. The
average price received per mcf of gas increased 9% from $1.52 during the three
months ended September 30, 1994 to $1.65 for the same period in 1995.
COSTS AND EXPENSES:
Total costs and expenses decreased to $240,444 for the three months ended
September 30, 1995 as compared to $241,046 for the same period in 1994, a
decrease of $602. This decrease was due to declines in production costs and G&A,
offset by an increase in depletion.
Production costs were $132,734 for the three months ended September 30, 1995 and
$141,808 for the same period in 1994, resulting in a $9,074 decrease, or 6%. The
decrease consisted of declines in well repair and maintenance costs, production
taxes and 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 decreased, in aggregate,
8
<PAGE>
11% from $9,457 for the three months ended September 30, 1994 to $8,403 for the
same period in 1995.
Depletion was $99,307 for the three months ended September 30, 1995 compared to
$89,781 for the same period in 1994. This represented an increase in depletion
of $9,526, or 11%. Depletion was computed quarterly on a property-by-property
basis utilizing the unit-of-production method based upon the dominant mineral
produced, generally oil. Oil production decreased 2,330 barrels for the three
months ended September 30, 1995 from the same period in 1994. Depletion expense
for the three months ended September 30, 1995 was calculated based on reserves
computed utilizing an oil price of $16.38 per barrel while depletion expense for
the three months ended September 30, 1994 was calculated based on reserves
computed utilizing an oil price of $18.29 per barrel.
LIQUIDITY AND CAPITAL RESOURCES
NET CASH PROVIDED BY OPERATING ACTIVITIES
Net cash provided by operating activities increased to $519,608 during the nine
months ended September 30, 1995, a 9% increase from the same period ended
September 30, 1994. This increase was due to an increase in oil and gas sales
and a decline in production costs. The increase in oil and gas sales was due to
an increase in mcf of gas produced and sold and increases in the average prices
received per barrel of oil and mcf of gas. The decline in production costs was
primarily due to a decrease in well repair and maintenance costs.
NET CASH USED IN INVESTING ACTIVITIES
The Registrant's principal investing activities during the nine months ended
September 30, 1995 was for repair and maintenance activity on various oil and
gas properties.
NET CASH USED IN FINANCING ACTIVITIES
Cash was sufficient for the nine months ended September 30, 1995 to cover
distributions to the partners of $444,523 of which $440,076 was distributed to
the limited partners and $4,447 to the managing general partner. For the same
period ended September 30, 1994, cash was sufficient for distributions to the
partners of $424,091 of which $419,850 was distributed to the limited partners
and $4,241 to the managing general partner.
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.
ACCOUNTING STANDARD ON IMPAIRMENT OF LONG-LIVED ASSETS
In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121 - Accounting for Impairment of Long-lived
Assets and for Long-lived Assets to Be Disposed Of ("FAS 121") regarding the
impairment of long-lived assets, identifiable intangibles
9
<PAGE>
and goodwill related to those assets. FAS 121 is effective for financial
statements for fiscal years beginning after December 15, 1995, although earlier
adoption is encouraged. The application of FAS 121 to oil and gas companies
utilizing the successful efforts method (such as the Registrant) will require
periodic determination of whether the book value of long-lived assets exceeds
the future cash flows expected to result from the use of such assets and, if so,
will require reduction of the carrying amount of the "impaired" assets to their
estimated fair values. There is currently a great deal of uncertainty as to how
FAS 121 will apply to oil and gas companies using the successful efforts method,
including uncertainty regarding the determination of expected future cash flows
from the relevant assets and, if an impairment is determined to exist, their
estimated fair value. There is also uncertainty regarding the level at which the
test might be applied. Given this uncertainty, the Registrant is currently
unable to estimate the effect that FAS 121 will have on the Registrant's results
of operations for the period in which it is adopted.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - none
(b) Reports on Form 8-K - none
10
<PAGE>
PARKER & PARSLEY 88-A, L.P.
(A Delaware 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 88-A, L.P.
By: Parker & Parsley Development L.P.,
Managing General Partner
By: Parker & Parsley Petroleum USA, Inc.
("PPUSA"), General Partner
Dated: November 9, 1995 By: /s/ Steven L. Beal
--------------------------------------
Steven L. Beal, Senior Vice President
and Chief Financial Officer of PPUSA
11
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000828186
<NAME> 88ALP.TXT
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 187,142
<SECURITIES> 0
<RECEIVABLES> 117,370
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 304,512
<PP&E> 10,059,559
<DEPRECIATION> 5,599,686
<TOTAL-ASSETS> 4,764,385
<CURRENT-LIABILITIES> 58,160
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 4,706,225
<TOTAL-LIABILITY-AND-EQUITY> 4,764,385
<SALES> 890,762
<TOTAL-REVENUES> 899,069
<CGS> 0
<TOTAL-COSTS> 724,939
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 174,130
<INCOME-TAX> 0
<INCOME-CONTINUING> 174,130
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 174,130
<EPS-PRIMARY> 13.33
<EPS-DILUTED> 0
</TABLE>
