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. 33-19659-02
PARKER & PARSLEY 88-B, L.P.
(Exact name of Registrant as specified in its charter)
Delaware 75-2240121
(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-B, 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-B, 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
bearings deposits of $158,650 at June 30
and $106,356 at December 31 $ 159,050 $ 106,856
Accounts receivable - oil and gas sales 108,767 210,757
---------- ----------
Total current assets 267,817 317,613
---------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 7,111,898 7,107,384
Accumulated depletion (4,670,161) (4,576,529)
---------- ----------
Net oil and gas properties 2,441,737 2,530,855
---------- ----------
$ 2,709,554 $ 2,848,468
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 29,068 $ 22,500
Partners' capital:
Managing general partner 26,773 28,229
Limited partners (8,954 interests) 2,653,713 2,797,739
---------- ----------
2,680,486 2,825,968
---------- ----------
$ 2,709,554 $ 2,848,468
========== ==========
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
<PAGE>
PARKER & PARSLEY 88-B, 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 $ 208,414 $ 251,186 $ 438,420 $ 482,932
Interest 2,475 1,960 4,538 3,572
-------- -------- -------- --------
210,889 253,146 442,958 486,504
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 103,549 96,860 205,440 197,290
General and administrative 6,154 7,536 13,253 14,488
Depletion 48,558 53,911 93,632 110,182
Loss on abandoned property - 951 - 951
Abandoned property - 331 - 331
-------- -------- -------- --------
158,261 159,589 312,325 323,242
-------- -------- -------- --------
Net income $ 52,628 $ 93,557 $ 130,633 $ 163,262
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 526 $ 935 $ 1,306 $ 1,632
======== ======== ======== ========
Limited partners $ 52,102 $ 92,622 $ 129,327 $ 161,630
======== ======== ======== ========
Net income per limited
partnership interest $ 5.82 $ 10.34 $ 14.44 $ 18.05
======== ======== ======== ========
Distributions per limited
partnership interest $ 13.82 $ 13.80 $ 30.53 $ 25.41
======== ======== ======== ========
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-B, L.P.
(A Delaware Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
--------- ---------- ----------
Balance at January 1, 1997 $ 28,229 $2,797,739 $2,825,968
Distributions (2,762) (273,353) (276,115)
Net income 1,306 129,327 130,633
-------- --------- ---------
Balance at June 30, 1997 $ 26,773 $2,653,713 $2,680,486
======== ========= =========
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-B, 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 $ 130,633 $ 163,262
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 93,632 110,182
Loss on abandoned property - 951
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 101,990 (12,447)
Increase (decrease) in accounts payable 6,568 (13,109)
--------- ---------
Net cash provided by operating activities 332,823 248,839
--------- ---------
Cash flows from investing activities:
Additions to oil and gas properties (4,514) (2,071)
Proceeds from equipment salvage on abandoned
property - 42
--------- ---------
Net cash used in investing activities (4,514) (2,029)
--------- ---------
Cash flows from financing activities:
Cash distributions to partners (276,115) (229,819)
--------- ---------
Net increase in cash and cash equivalents 52,194 16,991
Cash and cash equivalents at beginning of period 106,856 126,330
--------- ---------
Cash and cash equivalents at end of period $ 159,050 $ 143,321
========= =========
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
<PAGE>
PARKER & PARSLEY 88-B, 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-B, 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 $438,420 from $482,932
for the six months ended June 30, 1997 as compared to the six months ended June
30, 1996. The decrease in revenues resulted from a 13% decrease in mcf of gas
produced and sold, an 11% decrease in barrels of oil produced and sold and a
lower average price received per barrel of oil, offset by a higher average price
received per mcf of gas. For the six months ended June 30, 1997, 16,275 barrels
of oil were sold compared to 18,337 for the same period in 1996, a decrease of
2,062 barrels. For the six months ended June 30, 1997, 42,074 mcf of gas were
sold compared to 48,232 for the same period in 1996, a decrease of 6,158 mcf.
The volume decreases were primarily due to the decline characteristics of the
Partnership's oil and gas properties. Because of these characteristics,
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
<PAGE>
The average price received per barrel of oil decreased slightly from $20.27 for
the six months ended June 30, 1996 to $20.19 for the same period in 1997, while
the average price received per mcf of gas increased 13% from $2.31 during the
six months ended June 30, 1996 to $2.61 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 $312,325 for the six months ended June 30,
1997 as compared to $323,242 for the same period in 1996, a decrease of $10,917,
or 3%. This decrease was due to declines in depletion, general and
administrative expenses ("G&A"), loss on abandoned property and abandoned
property costs, offset by an increase in production costs.
Production costs were $205,440 for the six months ended June 30, 1997 and
$197,290 for the same period in 1996 resulting in a $8,150 increase, or 4%. The
increase was due to an increase in well repair and maintenance costs and
workover expenses incurred in an effort to stimulate well production, offset by
declines in ad valorem taxes and production 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, in aggregate, 9% from $14,488 for the six months ended June 30, 1996
to $13,253 for the same period in 1997.
Depletion was $93,632 for the six months ended June 30, 1997 compared to
$110,182 for the same period in 1996. This represented a decrease in depletion
of $16,550, or 15%, primarily attributable to a decline in oil production of
2,062 barrels for the six months ended June 30, 1997 from the same period in
1996.
A loss on abandoned property of $951 was recognized during the six months ended
June 30, 1996. This loss resulted from the abandonment of a saltwater disposal
well. Abandoned property costs incurred on this well totaled $331 for the six
months ended June 30, 1996.
Three months ended June 30, 1997 compared with three months ended
June 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 17% to $208,414 from $251,186
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 7% decline in barrels of oil
8
<PAGE>
produced and sold and a 5% decline in mcf of gas produced and sold. For the
three months ended June 30, 1997, 8,342 barrels of oil were sold compared to
8,942 for the same period in 1996, a decrease of 600 barrels. For the three
months ended June 30, 1997, 22,677 mcf of gas were sold compared to 23,954 for
the same period in 1996, a decrease of 1,277 mcf. The production volume
decreases were due to the decline characteristics of the Partnership's oil and
gas properties.
The average price received per barrel of oil decreased $2.96, or 14%, from
$21.64 for the three months ended June 30, 1996 to $18.68 for the same period in
1997, while the average price received per mcf decreased 4% from $2.41 during
the three months ended June 30, 1996 to $2.32 for the same period in 1997.
Costs and Expenses:
Total costs and expenses decreased to $158,261 for the three months ended June
30, 1997 as compared to $159,589 for the same period in 1996, a decrease of
$1,328. This decrease was due to declines in depletion, G&A, loss on abandoned
property and abandoned property costs, offset by an increase in production
costs.
Production costs were $103,549 for the three months ended June 30, 1997 and
$96,860 for the same period in 1996 resulting in a $6,689 increase, or 7%. The
increase was due to an increase in well repair and maintenance costs and
workover expenses incurred in an effort to stimulate well production, offset by
declines 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, in aggregate, 18% from $7,536 for the three months ended June 30,
1996 to $6,154 for the same period in 1997.
Depletion was $48,558 for the three months ended June 30, 1997 compared to
$53,911 for the same period in 1996, a decrease of $5,353, or 10%, primarily due
to a decline in oil production of 600 barrels for the three months ended June
30, 1997 from the same period in 1996.
A loss on abandoned property of $951 was recognized during the three months
ended June 30, 1996. This loss resulted from the abandonment of a saltwater
disposal well. Abandoned property costs incurred on this well totaled $331 for
the three months ended June 30, 1996.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $83,984 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.
9
<PAGE>
Net Cash Used in Investing Activities
The Partnership's principal investing activities during the six months ended
June 30, 1997 and 1996 were 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 $276,115 of which $2,762 was distributed to the
managing general partner and $273,353 to the limited partners. For the same
period ended June 30, 1996, cash was sufficient for distributions to the
partners of $229,819 of which $2,298 was distributed to the managing general
partner and $227,521 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.
- ---------------
(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
<PAGE>
PARKER & PARSLEY 88-B, 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-B, L.P.
By: Parker & Parsley Development L.P.,
Managing General Partner
By: Parker & Parsley Petroleum USA, Inc.
("PPUSA"), General Partner
Dated: August 7, 1997 By: /s/ Rich Dealy
--------------------------------
Rich Dealy, Controller of PPUSA
11
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000828191
<NAME> 88B.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 159,050
<SECURITIES> 0
<RECEIVABLES> 108,767
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 267,817
<PP&E> 7,111,898
<DEPRECIATION> 4,670,161
<TOTAL-ASSETS> 2,709,554
<CURRENT-LIABILITIES> 29,068
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,680,486
<TOTAL-LIABILITY-AND-EQUITY> 2,709,554
<SALES> 438,420
<TOTAL-REVENUES> 442,958
<CGS> 0
<TOTAL-COSTS> 312,325
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 130,633
<INCOME-TAX> 0
<INCOME-CONTINUING> 130,633
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 130,633
<EPS-PRIMARY> 14.44
<EPS-DILUTED> 0
</TABLE>
