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, 1997
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.
Exhibit index on page 10.
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PARKER & PARSLEY 88-A, L.P.
TABLE OF CONTENTS
Page
----
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of June 30, 1997 and
December 31, 1996 ..................................... 3
Statements of Operations for the three and six
months ended June 30, 1997 and 1996....................... 4
Statement of Partners' Capital for the six months
ended June 30, 1997....................................... 5
Statements of Cash Flows for the six months ended
June 30, 1997 and 1996.................................... 6
Notes to Financial Statements............................... 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations....................... 7
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K............................ 10
27. Financial Data Schedule
Signatures.................................................. 11
2
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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,
1997 1996
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $219,621 at June 30
and $178,702 at December 31 $ 220,021 $ 179,202
Accounts receivable - oil and gas sales 134,310 228,344
---------- ----------
Total current assets 354,331 407,546
---------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 10,080,508 10,070,081
Accumulated depletion (6,661,911) (6,537,411)
---------- ----------
Net oil and gas properties 3,418,597 3,532,670
---------- ----------
$ 3,772,928 $ 3,940,216
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 34,966 $ 25,585
Partners' capital:
Managing general partner 37,621 39,388
Limited partners (12,935 interests) 3,700,341 3,875,243
---------- ----------
3,737,962 3,914,631
---------- ----------
$ 3,772,928 $ 3,940,216
========== ==========
The financial information included as of June 30, 1997 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 88-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
1997 1996 1997 1996
--------- --------- --------- ---------
Revenues:
Oil and gas $ 264,483 $ 343,199 $ 595,354 $ 654,675
Interest 3,363 3,134 6,064 5,751
-------- -------- -------- --------
267,846 346,333 601,418 660,426
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 121,096 127,493 261,843 256,767
General and administrative 8,035 10,296 17,961 19,640
Depletion 61,482 62,908 124,500 131,492
-------- -------- -------- --------
190,613 200,697 404,304 407,899
-------- -------- -------- --------
Net income $ 77,233 $ 145,636 $ 197,114 $ 252,527
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 772 $ 1,456 $ 1,971 $ 2,525
======== ======== ======== ========
Limited partners $ 76,461 $ 144,180 $ 195,143 $ 250,002
======== ======== ======== ========
Net income per limited
partnership interest $ 5.91 $ 11.15 $ 15.09 $ 19.33
======== ======== ======== ========
Distributions per limited
partnership interest $ 13.92 $ 14.30 $ 28.61 $ 25.81
======== ======== ======== ========
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 88-A, L.P.
(A Delaware Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
--------- ---------- ----------
Balance at January 1, 1997 $ 39,388 $3,875,243 $3,914,631
Distributions (3,738) (370,045) (373,783)
Net income 1,971 195,143 197,114
-------- --------- ---------
Balance at June 30, 1997 $ 37,621 $3,700,341 $3,737,962
======== ========= =========
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 88-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended
June 30,
------------------------
1997 1996
---------- ----------
Cash flows from operating activities:
Net income $ 197,114 $ 252,527
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 124,500 131,492
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 94,034 (10,459)
Increase (decrease) in accounts payable 9,381 (13,107)
--------- ---------
Net cash provided by operating activities 425,029 360,453
--------- ---------
Cash flows from investing activities:
Additions to oil and gas properties (10,427) (1,144)
Cash flows from financing activities:
Cash distributions to partners (373,783) (337,211)
--------- ---------
Net increase in cash and cash equivalents 40,819 22,098
Cash and cash equivalents at beginning of period 179,202 213,046
--------- ---------
Cash and cash equivalents at end of period $ 220,021 $ 235,144
========= =========
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.
6
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PARKER & PARSLEY 88-A, L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
(Unaudited)
Note 1. Basis of presentation
In the opinion of management, the unaudited financial statements of Parker &
Parsley 88-A, L.P. (the "Partnership") as of June 30, 1997 and for the three and
six months ended June 30, 1997 and 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. These interim results
are not necessarily indicative of results for a full year.
Certain information and footnote disclosure normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted in this Form 10-Q pursuant to the rules and
regulations of the Securities and Exchange Commission. The financial statements
should be read in conjunction with the financial statements and the notes
thereto contained in the Partnership's Report on Form 10-K for the year ended
December 31, 1996, as filed with the Securities and Exchange Commission, a copy
of which is available upon request by writing to Rich Dealy, Controller, 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, 1997 compared with six months ended
June 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 9% to $595,354 from $654,675
for the six months ended June 30, 1997 as compared to the six months ended June
30, 1996. The decrease in revenues resulted from 12% decrease in barrels of oil
produced and sold and a 7% decrease in mcf of gas produced and sold and a lower
average price received per barrel of oil, offset by an increase in the average
price received per mcf of gas. For the six months ended June 30, 1997, 19,690
barrels of oil were sold compared to 22,392 for the same period in 1996, a
decrease of 2,702 barrels. For the six months ended June 30, 1997, 78,919 mcf of
gas were sold compared to 85,169 for the same period in 1996, a decrease of
6,250 mcf. The production volume decreases were primarily due to the decline
characteristics of the Partnership's oil and gas properties. Management expects
a certain amount of decline in production to continue in the future until the
Partnership's economically recoverable reserves are fully depleted.
7
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The average price received per barrel of oil decreased slightly from $20.54 for
the six months ended June 30, 1996 to $20.38 for the same period in 1997 while
the average price received per mcf of gas increased 7% from $2.29 during the six
months ended June 30, 1996 to $2.46 in 1997. 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 Partnership 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, 1997.
Costs and Expenses:
Total costs and expenses decreased to $404,304 for the six months ended June 30,
1997 as compared to $407,899 for the same period in 1996, a decrease of $3,595.
This decrease was due to declines in depletion and general and administrative
expenses ("G&A"), offset by an increase in production costs.
Production costs were $261,843 for the six months ended June 30, 1997 and
$256,767 for the same period in 1996 resulting in a $5,076 increase. The
increase was primarily the result of higher workover expenses, offset by a
decline in well repair and maintenance costs.
G&A's components are independent accounting and engineering fees and managing
general partner personnel and operating costs. During this period, G&A
decreased, in aggregate, 9% from $19,640 for the six months ended June 30, 1996
to $17,961 for the same period in 1997.
Depletion was $124,500 for the six months ended June 30, 1997 compared to
$131,492 for the same period in 1996. This represented a decrease in depletion
of $6,992, or 5%.
Three months ended June 30, 1997 compared with three months ended
June 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 23% to $264,483 from $343,199
for the three months ended June 30, 1997 as compared to the three months ended
June 30, 1996. The decrease in revenues resulted from lower average prices
received per barrel of oil and mcf of gas, a 14% decrease in barrels of oil
produced and sold and a 7% decrease in mcf of gas produced and sold. For the
three months ended June 30, 1997, 9,461 barrels of oil were sold compared to
11,023 for the same period in 1996, a decrease of 1,562 barrels. For the three
months ended June 30, 1997, 39,490 mcf of gas were sold compared to 42,503 for
the same period in 1996, a decrease of 3,013 mcf. The production volume
decreases were primarily due to the decline characteristics of the Partnership's
oil and gas properties.
The average price received per barrel of oil decreased $3.25, or 15%, from
$22.04 for the three months ended June 30, 1996 to $18.79 for the same period in
1997 and the average price received per mcf of gas decreased 7% from $2.36
during the three months ended June 30, 1996 to $2.20 in 1997.
8
<PAGE>
Costs and Expenses:
Total costs and expenses decreased to $190,613 for the three months ended June
30, 1997 as compared to $200,697 for the same period in 1996, a decrease of
$10,084, or 5%. This decrease was due to a decline in production costs, G&A and
depletion.
Production costs were $121,096 for the three months ended June 30, 1997 and
$127,493 for the same period in 1996 resulting in a $6,397 decrease, or 5%. The
decrease was due to a decline in production taxes and ad valorem taxes.
G&A's components are independent accounting and engineering fees and managing
general partner personnel and operating costs. During this period, G&A decreased
22% from $10,296 for the three months ended June 30, 1996 to $8,035 for the same
period in 1997.
Depletion was $61,482 for the three months ended June 30, 1997 compared to
$62,908 for the same period in 1996. This represented a decrease in depletion of
$1,426.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $64,576 during the six
months ended June 30, 1997 from the same period ended June 30, 1996. This
increase was primarily due to an increase in oil and gas sales receipts and a
decrease in production costs paid.
Net Cash Used in Investing Activities
The Partnership's principal investing activities during the six months ended
June 30, 1997 and 1996 included expenditures for equipment replacement on
various oil and gas properties.
Net Cash Used in Financing Activities
Cash was sufficient for the six months ended June 30, 1997 to cover
distributions to the partners of $373,783 of which $3,738 was distributed to the
managing general partner and $370,045 to the limited partners. For the same
period ended June 30, 1996, cash was sufficient for distributions to the
partners of $337,211 of which $3,372 was distributed to the managing general
partner and $333,839 to the limited partners.
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.
9
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- ---------------
(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
27. Financial Data Schedule
(b) Reports on Form 8-K - none
10
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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 13, 1997 By: /s/ Rich Dealy
--------------------------------
Rich Dealy, Controller of PPUSA
11
<PAGE>
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<ARTICLE> 5
<CIK> 0000828186
<NAME> 88A.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 220,021
<SECURITIES> 0
<RECEIVABLES> 134,310
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 354,331
<PP&E> 10,080,508
<DEPRECIATION> 6,661,911
<TOTAL-ASSETS> 3,772,928
<CURRENT-LIABILITIES> 34,966
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,737,962
<TOTAL-LIABILITY-AND-EQUITY> 3,772,928
<SALES> 595,354
<TOTAL-REVENUES> 601,418
<CGS> 0
<TOTAL-COSTS> 404,304
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 197,114
<INCOME-TAX> 0
<INCOME-CONTINUING> 197,114
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 197,114
<EPS-PRIMARY> 15.09
<EPS-DILUTED> 0
</TABLE>
