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. 33-19659-01
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 10 pages.
-There are no exhibits-
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PARKER & PARSLEY 88-A, L.P.
(A Delaware 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 $234,644 at June 30
and $212,946 at December 31 $ 235,144 $ 213,046
Accounts receivable - oil and gas sales 146,883 136,424
---------- ----------
Total current assets 382,027 349,470
Oil and gas properties - at cost, based on the
successful efforts accounting method 10,060,704 10,059,560
Accumulated depletion (6,418,800) (6,287,308)
---------- ----------
Net oil and gas properties 3,641,904 3,772,252
---------- ----------
$ 4,023,931 $ 4,121,722
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 48,300 $ 61,407
Partners' capital:
Limited partners (12,935 interests) 3,935,633 4,019,470
Managing general partner 39,998 40,845
---------- ----------
3,975,631 4,060,315
---------- ----------
$ 4,023,931 $ 4,121,722
========== ==========
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 88-A, L.P.
(A Delaware 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 $ 343,199 $ 307,861 $ 654,675 $ 610,678
Interest income 3,134 2,687 5,751 4,780
-------- -------- -------- --------
Total revenues 346,333 310,548 660,426 615,458
Costs and expenses:
Production costs 127,493 126,997 256,767 261,114
General and administrative
expenses 10,296 9,235 19,640 18,320
Depletion 62,908 101,361 131,492 205,061
-------- -------- -------- --------
Total costs and expenses 200,697 237,593 407,899 484,495
-------- -------- -------- --------
Net income $ 145,636 $ 72,955 $ 252,527 $ 130,963
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 1,456 $ 730 $ 2,525 $ 1,310
======== ======== ======== ========
Limited partners $ 144,180 $ 72,225 $ 250,002 $ 129,653
======== ======== ======== ========
Net income per limited
partnership interest $ 11.15 $ 5.58 $ 19.33 $ 10.02
======== ======== ======== ========
Distributions per limited
partnership interest $ 14.30 $ 11.00 $ 25.81 $ 22.51
======== ======== ======== ========
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 88-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
---------- ---------- ----------
Balance at January 1, 1995 $ 50,010 $4,926,608 $4,976,618
Distributions (2,944) (291,188) (294,132)
Net income 1,310 129,653 130,963
--------- --------- ---------
Balance at June 30, 1995 $ 48,376 $4,765,073 $4,813,449
========= ========= =========
Balance at January 1, 1996 $ 40,845 $4,019,470 $4,060,315
Distributions (3,372) (333,839) (337,211)
Net income 2,525 250,002 252,527
--------- --------- ---------
Balance at June 30, 1996 $ 39,998 $3,935,633 $3,975,631
========= ========= =========
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 88-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended
June 30,
1996 1995
--------- ---------
Cash flows from operating activities:
Net income $ 252,527 $ 130,963
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 131,492 205,061
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (10,459) 3,077
Increase (decrease) in accounts payable (13,107) 25,023
-------- --------
Net cash provided by operating activities 360,453 364,124
Cash flows from investing activities:
Additions to oil and gas properties (1,144) (369)
Cash flows from financing activities:
Cash distributions to partners (337,211) (294,132)
-------- --------
Net increase in cash and cash equivalents 22,098 69,623
Cash and cash equivalents at beginning of period 213,046 118,721
-------- --------
Cash and cash equivalents at end of period $ 235,144 $ 188,344
======== ========
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 88-A, L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
NOTE 1.
Parker & Parsley 88-A, L.P. (the "Registrant") is a limited partnership
organized in 1988 under the laws of the State of Delaware.
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 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.
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 $654,675 from $610,678 for
the six months ended June 30, 1996 and 1995, respectively, an increase of 7%.
The increase in revenues resulted from higher average prices received for both
oil and gas, offset by a 10% decrease in barrels of oil produced and sold and a
10% decrease in mcf of gas produced and sold. For the six months ended June 30,
1996, 22,392 barrels of oil were sold compared to 24,968 for the same period in
1995, a decrease of 2,576 barrels. For the six months ended June 30, 1996,
85,169 mcf of gas were sold compared to 94,987 for the same period in 1995, a
decrease of 9,818 mcf. The production volume decreases were primarily due to the
decline characteristics of the Registrant's oil and gas properties. Management
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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, or 16%, from
$17.66 for the six months ended June 30, 1995 to $20.54 for the same period in
1996 while the average price received per mcf of gas increased 28% from $1.79
during the six months ended June 30, 1995 to $2.29 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.
Costs and Expenses:
Total costs and expenses decreased to $407,899 for the six months ended June 30,
1996 as compared to $484,495 for the same period in 1995, a decrease of $76,596,
or 16%. This decrease was due to a decline in production costs and depletion,
offset by an increase in general and administrative expenses ("G&A").
Production costs were $256,767 for the six months ended June 30, 1996 and
$261,114 for the same period in 1995 resulting in a $4,347 decrease. The
decrease was primarily the result of 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, 7% from $18,320 for the six months ended
June 30, 1995 to $19,640 for the same period in 1996. The Partnership agreement
limits G&A to 3% of gross oil and gas revenues.
Depletion was $131,492 for the six months ended June 30, 1996 compared to
$205,061 for the same period in 1995. This represented a decrease in depletion
of $73,569, or 36%, 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. Oil production
decreased 2,576 barrels for the six months ended June 30, 1996 from the same
period in 1995, while oil reserves of barrels were revised upward by 16,527
barrels, or 2%.
Three months ended June 30, 1996 compared with three months ended
June 30, 1995
Revenues:
The Registrant's oil and gas revenues increased to $343,199 from $307,861 for
the three months ended June 30, 1996 and 1995, respectively, an increase of 11%.
The increase in revenues resulted from higher average prices received for both
7
<PAGE>
oil and gas, offset by an 11% decrease in barrels of oil produced and sold and a
17% decrease in mcf of gas produced and sold. For the three months ended June
30, 1996, 11,023 barrels of oil were sold compared to 12,340 for the same period
in 1995, a decrease of 1,317 barrels. For the three months ended June 30, 1996,
42,503 mcf of gas were sold compared to 51,265 for the same period in 1995, a
decrease of 8,762 mcf. The production volume decreases were primarily due to the
decline characteristics of the Registrant's oil properties.
The average price received per barrel of oil increased $3.93, or 22%, from
$18.11 for the three months ended June 30, 1995 to $22.04 for the same period in
1996 while the average price received per mcf of gas increased 43% from $1.65
during the three months ended June 30, 1995 to $2.36 in 1996.
Costs and Expenses:
Total costs and expenses decreased to $200,697 for the three months ended June
30, 1996 as compared to $237,593 for the same period in 1995, a decrease of
$36,896, or 16%. This decrease was due to a decline in depletion, offset by
increases in production costs and G&A.
Production costs were $127,493 for the three months ended June 30, 1996 and
$126,997 for the same period in 1995 resulting in a $496 increase. The increase
resulted from additional well repair and maintenance costs and production 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 11% from $9,235 for the three months ended June 30, 1995
to $10,296 for the same period in 1996.
Depletion was $62,908 for the three months ended June 30, 1996 compared to
$101,361 for the same period in 1995. This represented a decrease in depletion
of $38,453, or 38%, primarily attributable to the adoption of FAS 121 the fourth
quarter of 1995, as discussed previously. Oil production decreased 1,317 barrels
for the three months ended June 30, 1996 from the same period in 1995.
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 $3,671 from the same period ended June 30, 1995. This decrease was
primarily due to an increase in production costs paid, offset by an increase in
oil and gas sales.
Net Cash Used in Investing Activities
The Registrant's principal investing activities during the six months ended June
30, 1996 and 1995 included expenditures for equipment replacement on various oil
and gas properties.
8
<PAGE>
Net Cash Used in Financing Activities
Cash was sufficient for the six months ended June 30, 1996 to cover
distributions to the partners of $337,211 of which $333,839 was distributed to
the limited partners and $3,372 to the managing general partner. For the same
period ended June 3, 1995, cash was sufficient for distributions to the
partners of $294,132 of which $291,188 was distributed to the limited partners
and $2,944 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.
- ---------------
(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 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - none
(b) Reports on Form 8-K - none
9
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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: August 12, 1996 By: /s/ Steven L. Beal
-----------------------------------------
Steven L. Beal, Senior Vice President
and Chief Financial Officer of PPUSA
10
<PAGE>
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<CIK> 0000828186
<NAME> 88A.TXT
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 235,144
<SECURITIES> 0
<RECEIVABLES> 146,883
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 382,027
<PP&E> 10,060,704
<DEPRECIATION> 6,418,800
<TOTAL-ASSETS> 4,023,931
<CURRENT-LIABILITIES> 48,300
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,975,631
<TOTAL-LIABILITY-AND-EQUITY> 4,023,931
<SALES> 654,675
<TOTAL-REVENUES> 660,426
<CGS> 0
<TOTAL-COSTS> 407,899
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 252,527
<INCOME-TAX> 0
<INCOME-CONTINUING> 252,527
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 252,527
<EPS-PRIMARY> 19.33
<EPS-DILUTED> 0
</TABLE>
