UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2000
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)
1400 Williams Square West, 5205 N. O'Connor Blvd., Irving, Texas 75039
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(Address of principal executive offices) (Zip code)
Registrant's Telephone Number, including area code : (972) 444-9001
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 / /
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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, 2000 and
December 31, 1999.................................... 3
Statements of Operations for the three and six
months ended June 30, 2000 and 1999................... 4
Statement of Partners' Capital for the six months
ended June 30, 2000................................... 5
Statements of Cash Flows for the six months ended
June 30, 2000 and 1999................................ 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
27.1 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
<TABLE>
June 30, December 31,
2000 1999
----------- -----------
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash $ 208,786 $ 215,801
Accounts receivable - oil and gas sales 165,477 177,635
---------- ----------
Total current assets 374,263 393,436
---------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 10,107,832 10,102,308
Accumulated depletion (8,479,179) (8,430,381)
---------- ----------
Net oil and gas properties 1,628,653 1,671,927
---------- ----------
$ 2,002,916 $ 2,065,363
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 35,767 $ 23,009
Partners' capital:
Managing general partner 19,913 20,665
Limited partners (12,935 interests) 1,947,236 2,021,689
---------- ----------
1,967,149 2,042,354
---------- ----------
$ 2,002,916 $ 2,065,363
========== ==========
</TABLE>
The financial information included as of June 30, 2000 has been prepared by
the managing general partner 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)
<TABLE>
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Oil and gas $ 334,067 $ 209,933 $ 638,135 $ 374,957
Interest 3,963 1,893 7,078 3,533
Gain on disposition of assets - - 259 -
-------- -------- -------- --------
338,030 211,826 645,472 378,490
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 135,737 122,011 285,013 223,897
General and administrative 10,022 6,298 19,144 11,249
Depletion 23,217 31,272 48,798 108,330
-------- -------- -------- --------
168,976 159,581 352,955 343,476
-------- -------- -------- --------
Net income $ 169,054 $ 52,245 $ 292,517 $ 35,014
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 1,690 $ 522 $ 2,925 $ 350
======== ======== ======== ========
Limited partners $ 167,364 $ 51,723 $ 289,592 $ 34,664
======== ======== ======== ========
Net income per limited
partnership interest $ 12.94 $ 4.00 $ 22.39 $ 2.68
======== ======== ======== ========
</TABLE>
The financial information included herein has been prepared by
the managing general partner 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)
<TABLE>
Managing
general Limited
partner partners Total
--------- ---------- ----------
<S> <C> <C> <C>
Balance at January 1, 2000 $ 20,665 $2,021,689 $2,042,354
Distributions (3,677) (364,045) (367,722)
Net income 2,925 289,592 292,517
-------- --------- ---------
Balance at June 30, 2000 $ 19,913 $1,947,236 $1,967,149
======== ========= =========
</TABLE>
The financial information included herein has been prepared by
the managing general partner 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)
<TABLE>
Six months ended
June 30,
-----------------------
2000 1999
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 292,517 $ 35,014
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 48,798 108,330
Gain on disposition of assets (259) -
Changes in assets and liabilities:
Accounts receivable 12,158 (55,299)
Accounts payable 12,758 16,896
-------- --------
Net cash provided by operating activities 365,972 104,941
-------- --------
Cash flows used in investing activities:
Additions to oil and gas properties (5,524) (7,514)
Proceeds from asset dispositions 259 -
-------- ------
Net cash used in investing activities (5,265) (7,514)
-------- --------
Cash flows used in financing activities:
Cash distributions to partners (367,722) (81,243)
-------- --------
Net increase (decrease) in cash (7,015) 16,184
Cash at beginning of period 215,801 157,782
-------- --------
Cash at end of period $ 208,786 $ 173,966
======== ========
</TABLE>
The financial information included herein has been prepared by
the managing general partner 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, 2000
(Unaudited)
Note 1. Organization and nature of operations
Parker & Parsley 88-A, L.P. (the "Partnership") is a limited partnership
organized in 1988 under the laws of the State of Delaware.
The Partnership engages in oil and gas development and production in Texas and
is not involved in any industry segment other than oil and gas.
Note 2. Basis of presentation
In the opinion of management, the unaudited financial statements of the
Partnership as of June 30, 2000 and for the three and six months ended June 30,
2000 and 1999 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 reclassifications may have been
made to the June 30, 1999 financial statements to conform to the June 30, 2000
financial statement presentations.
Certain information and footnote disclosures 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, 1999 as filed with the Securities and Exchange Commission, a copy
of which is available upon request by writing to Rich Dealy, Vice President and
Chief Accounting Officer, 5205 North O'Connor Boulevard, 1400 Williams Square
West, Irving, Texas 75039-3746.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (1)
Results of Operations
Six months ended June 30, 2000 compared with six months ended
June 30, 1999
Revenues:
The Partnership's oil and gas revenues increased 70% to $638,135 for the six
months ended June 30, 2000 as compared to $374,957 for the same period in 1999.
The increase in revenues resulted from higher average prices received, offset by
a decrease in production. For the six months ended June 30, 2000, 15,055 barrels
of oil, 9,352 barrels of natural gas liquids ("NGLs") and 36,489 mcf of gas were
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sold, or 30,489 barrel of oil equivalents ("BOEs"). For the six months ended
June 30, 1999, 17,589 barrels of oil, 11,663 barrels of NGLs and 45,216 mcf of
gas were sold, or 36,788 BOEs.
The average price received per barrel of oil increased $15.50, or 119%, from
$13.00 for the six months ended June 30, 1999 to $28.50 for the same period in
2000. The average price received per barrel of NGLs increased $6.95, or 101%,
from $6.86 during the six months ended June 30, 1999 to $13.81 for the same
period in 2000. The average price received per mcf of gas increased 49% from
$1.47 during the six months ended June 30, 1999 to $2.19 for the same period in
2000. 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, 2000.
The volatility of commodity prices has had, and continues to have, a significant
impact on the Partnership's revenues and operating cash flow and could result in
additional decreases to the carrying value of the Partnership's oil and gas
properties.
Gain on disposition of assets of $259 was recognized during the six months ended
June 30, 2000 resulting from equipment credits received on one fully depleted
well.
Costs and Expenses:
Total costs and expenses increased to $352,955 for the six months ended June 30,
2000 as compared to $343,476 for the same period in 1999, an increase of $9,479,
or 3%. This increase was due to increases in production costs and general and
administrative expenses ("G&A"), offset by a decline in depletion.
Production costs were $285,013 for the six months ended June 30, 2000 and
$223,897 for the same period in 1999 resulting in a $61,116 increase, or 27%.
The increase was the result of additional well maintenance costs and workover
expenses incurred to stimulate well production and higher production taxes due
to higher oil and gas prices.
G&A's components are independent accounting and engineering fees and managing
general partner personnel and operating costs. During this period, G&A
increased, in aggregate, 70% from $11,249 for the six months ended June 30, 1999
to $19,144 for the same period in 2000 primarily due to a higher allocation of
the managing general partner's G&A being allocated (limited to 3% of oil and gas
revenues) as a result of increased oil and gas revenues.
Depletion was $48,798 for the six months ended June 30, 2000 compared to
$108,330 for the same period in 1999, a decrease of $59,532, or 55%. This
decrease was due to an increase in proved reserves during the period ended June
30, 2000 due to higher commodity prices and a decline in oil production of 2,534
barrels for the six months ended June 30, 2000 compared to the same period in
1999.
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Three months ended June 30, 2000 compared with three months ended June 30, 1999
Revenues:
The Partnership's oil and gas revenues increased 59% to $334,067 for the three
months ended June 30, 2000 as compared to $209,933 for the same period in 1999.
The increase in revenues resulted from higher average prices received, offset by
a decrease in production. For the three months ended June 30, 2000, 7,177
barrels of oil, 5,284 barrels of NGLs and 20,502 mcf of gas were sold, or 15,878
BOEs. For the three months ended June 30, 1999, 7,934 barrels of oil, 6,797
barrels of NGLs and 24,720 mcf of gas were sold, or 18,851 BOEs.
The average price received per barrel of oil increased $14.69, or 101%, from
$14.48 for the three months ended June 30, 1999 to $29.17 for the same period in
2000. The average price received per barrel of NGLs increased $5.50, or 67%,
from $8.21 during the three months ended June 30, 1999 to $13.71 for the same
period in 2000. The average price received per mcf of gas increased 60% from
$1.59 during the three months ended June 30, 1999 to $2.55 for the same period
in 2000.
Costs and Expenses:
Total costs and expenses increased to $168,976 for the three months ended June
30, 2000 as compared to $159,581 for the same period in 1999, an increase of
$9,395, or 6%. This increase was due to increases in production costs and G&A,
offset by a decline in depletion.
Production costs were $135,737 for the three months ended June 30, 2000 and
$122,011 for the same period in 1999 resulting in a $13,726 increase, or 11%.
The increase was the result of higher production taxes due to higher oil and gas
prices and additional well maintenance costs incurred to stimulate well
production.
During this period, G&A increased, in aggregate, 59% from $6,298 for the three
months ended June 30, 1999 to $10,022 for the same period in 2000 primarily due
to a higher allocation of the managing general partner's G&A being allocated
(limited to 3% of oil and gas revenues) as a result of increased oil and gas
sales.
Depletion was $23,217 for the three months ended June 30, 2000 compared to
$31,272 for the same period in 1999, a decrease of $8,055, or 26%. This decrease
was primarily attributable to an increase in proved reserves during the period
ended June 30, 2000 due to higher commodity prices and a decline in oil
production of 757 barrels for the three months ended June 30, 2000 compared to
the same period in 1999.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $261,031 during the six
months ended June 30, 2000 from the same period ended June 30, 1999. This
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increase was primarily due to an increase of $334,180 in oil and gas sales
receipts, offset by increases in operating costs paid of $61,988 and G&A
expenses paid of $11,161.
Net Cash Used in Investing Activities
The Partnership's principal investing activities during the six months ended
June 30, 2000 and 1999 included expenditures for equipment upgrades on various
oil and gas properties.
Proceeds from asset dispositions of $259 received during the six months ended
June 30, 2000 were due to equipment credits received on one fully depleted well.
Net Cash Used in Financing Activities
For the six months ended June 30, 2000, cash distributions to the partners were
$367,722, of which $3,677 was distributed to the managing general partner and
$364,045 to the limited partners. For the same period ended June 30, 1999, cash
distributions to the partners were $81,243, of which $812 was distributed to the
managing general partner and $80,431 to the limited partners.
---------------
(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
27.1 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: Pioneer Natural Resources USA, Inc.
Managing General Partner
Dated: August 8, 2000 By: /s/ Rich Dealy
------------------------------
Rich Dealy, Vice President and
Chief Accounting Officer
11
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