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. 33-19133-A
PARKER & PARSLEY PRODUCING PROPERTIES 88-A, L.P.
(Exact name of Registrant as specified in its charter)
Delaware 75-2225758
(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 PRODUCING PROPERTIES 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 and cash equivalents, all interest
bearing deposits $ 469,235 $ 454,847
Accounts receivable - affiliate 49,201 110,141
---------- ----------
Total current assets 518,436 564,988
Oil and gas properties - at cost, based on the
successful efforts accounting method 4,834,585 4,833,333
Accumulated depletion (2,346,379) (2,144,947)
---------- ----------
Net oil and gas properties 2,488,206 2,688,386
---------- ----------
$ 3,006,642 $ 3,253,374
========== ==========
PARTNERS' CAPITAL
Partners' capital:
Limited partners (11,222 interests) $ 2,976,828 $ 3,221,145
Managing general partner 29,814 32,229
---------- ----------
$ 3,006,642 $ 3,253,374
========== ==========
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 PRODUCING PROPERTIES 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 $ 157,750 $ 211,180 $ 559,944 $ 590,399
Interest income 6,916 4,646 18,712 10,848
-------- -------- -------- --------
Total revenues 164,666 215,826 578,656 601,247
Costs and expenses:
Production costs 89,439 93,306 271,285 267,178
General and administrative
expenses 4,732 6,100 16,798 17,695
Depletion 43,066 89,937 201,432 290,642
-------- -------- -------- --------
Total costs and expenses 137,237 189,343 489,515 575,515
-------- -------- -------- --------
Net income $ 27,429 $ 26,483 $ 89,141 $ 25,732
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 274 $ 264 $ 891 $ 257
======== ======== ======== ========
Limited partners $ 27,155 $ 26,219 $ 88,250 $ 25,475
======== ======== ======== ========
Net income per limited
partnership interest $ 2.42 $ 2.34 $ 7.86 $ 2.27
======== ======== ======== ========
Distributions per limited
partnership interest $ 10.49 $ 9.72 $ 29.64 $ 27.38
======== ======== ======== ========
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 PRODUCING PROPERTIES 88-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
Balance at January 1, 1994 $ 36,001 $ 3,603,741 $ 3,639,742
Distributions (3,142) (307,257) (310,399)
Net income 257 25,475 25,732
-------- ---------- ----------
Balance at September 30, 1994 $ 33,116 $ 3,321,959 $ 3,355,075
======== ========== ==========
Balance at January 1, 1995 $ 32,229 $ 3,221,145 $ 3,253,374
Distributions (3,306) (332,567) (335,873)
Net income 891 88,250 89,141
-------- ---------- ----------
Balance at September 30, 1995 $ 29,814 $ 2,976,828 $ 3,006,642
======== ========== ==========
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 PRODUCING PROPERTIES 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 $ 89,141 $ 25,732
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 201,432 290,642
Changes in assets:
(Increase) decrease in accounts receivable 60,940 (6,922)
--------- ---------
Net cash provided by operations 351,513 309,452
Cash flows from investing activities:
Additions to oil and gas properties (1,252) (7,753)
Cash flows from financing activities:
Cash distributions to partners (335,873) (310,399)
--------- ---------
Net increase (decrease) in cash and cash
equivalents 14,388 (8,700)
Cash and cash equivalents at beginning of period 454,847 491,622
--------- ---------
Cash and cash equivalents at end of period $ 469,235 $ 482,922
========= =========
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 PRODUCING PROPERTIES 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 Producing Properties 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 103, Midland, Texas
79701.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Registrant was formed August 31, 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 $5,611,000 representing 11,222 interests ($500 per
interest) sold to a total of 525 limited partners.
Since its formation, the Registrant invested $4,910,975 in various prospects
that were purchased in Texas. At September 30, 1995, the Registrant had
completed one acquisition of producing properties involving the purchase of
working interests in 21 properties. One uneconomical well was plugged and
abandoned during 1992. The Registrant also participated in the drilling of three
oil and gas wells of which two were completed as producers in 1989 and one in
1990.
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 $559,944 from $590,399 for
the nine months ended September 30, 1995 and 1994, respectively, a decrease of
5%. The decrease in revenues resulted from a 12% decline in barrels of oil
produced and sold, a 5% decline in mcf of gas produced and sold and a 6%
decrease in the average price received per mcf of gas, offset by a 10% increase
in the average price received per barrel of oil. For the nine months ended
September 30, 1995, 23,745 barrels of oil were sold compared to 26,895 for the
same period in 1994, a decrease of 3,150 barrels. For the nine months ended
September 30, 1995, 89,925 mcf of gas were sold compared to 94,446 for the same
period in 1994, a decrease of 4,521 mcf. Because of the decline characteristics
of the Registrant's oil and gas properties, management 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 $1.57 from $15.73 for the
nine months ended September 30, 1994 to $17.30 for the same period in 1995 while
the average price received per mcf of gas decreased from $1.77 during the nine
months ended September 30, 1994 to $1.66 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 $489,515 for the nine months ended
September 30, 1995 as compared to $575,515 for the same period in 1994, a
decrease of $86,000, or 15%. This decrease resulted from declines in depletion
and general and administrative expenses ("G&A"), offset by an increase in
production costs.
Production costs were $271,285 for the nine months ended September 30, 1995 and
$267,178 for the same period in 1994 resulting in a $4,107 increase. The
increase was primarily due to additional well repair and maintenance costs
incurred in an effort to stimulate well production.
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, 5% from $17,695 for the nine months ended
September 30, 1994 to $16,798 for the same period in 1995. The Partnership
agreement limits G&A to 3% of gross oil and gas revenues.
Depletion was $201,432 for the nine months ended September 30, 1995 compared to
$290,642 for the same period in 1994. This represented a decrease in depletion
of $89,210, or 31%. Depletion was computed quarterly on a property-by-property
basis utilizing the unit-of-production
7
<PAGE>
method based upon the dominant mineral produced, generally oil. Oil production
decreased 3,150 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 $16.35
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 $18.26 per barrel while depletion expense for the
three months ended March 31, 1994 was calculated based on reserves computed
utilizing an oil price of $12.76 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 $157,750 from $211,180 for
the three months ended September 30, 1995 and 1994, respectively, a decrease of
25%. The decrease in revenues resulted from a 25% decline in barrels of oil
produced and sold, an 8% decline in mcf of gas produced and sold and decreases
in the average prices received per barrel of oil and mcf of gas. For the three
months ended September 30, 1995, 6,722 barrels of oil were sold compared to
8,932 for the same period in 1994, a decrease of 2,210 barrels. For the three
months ended September 30, 1995, 30,158 mcf of gas were sold compared to 32,892
for the same period in 1994, a decrease of 2,734 mcf. The decline in oil and gas
production was due to the decline characteristics of the oil and gas properties.
The average price received per barrel of oil decreased 4% from $17.30 for the
three months ended September 30, 1994 to $16.55 for the same period in 1995,
while the average price received per mcf of gas decreased 10% from $1.72 during
the three months ended September 30, 1994 to $1.54 in 1995.
COSTS AND EXPENSES:
Total costs and expenses decreased to $137,237 for the three months ended
September 30, 1995 as compared to $189,343 for the same period in 1994, a
decrease of $52,106, or 28%. This decrease was due to reductions in production
costs, depletion and G&A.
Production costs were $89,439 for the three months ended September 30, 1995 and
$93,306 for the same period in 1994, resulting in a $3,867 decrease, or 4%. The
decrease was primarily attributable to declines in well repair and maintenance
costs and production taxes, offset by an increase in 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, 22% from $6,100 for the three months ended
September 30, 1994 to $4,732 for the same period in 1995.
8
<PAGE>
Depletion was $43,066 for the three months ended September 30, 1995 compared to
$89,937 for the same period in 1994. This represented a decrease in depletion of
$46,871, or 52%. Oil production decreased 2,210 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 $16.35 per barrel while depletion expense for the
three months ended September 30, 1994 was calculated based on reserves computed
utilizing an oil price of $18.26 per barrel.
LIQUIDITY AND CAPITAL RESOURCES
NET CASH PROVIDED BY OPERATING ACTIVITIES
Net cash provided by operating activities increased to $351,513 during the nine
months ended September 30, 1995, a 14% increase from the same period ended
September 30, 1994, resulting from an increase in oil and gas sales and a
decline in production costs. The increase in oil and gas sales was attributable
to higher average prices received for oil. The decline in production costs was
due to less well repair and maintenance.
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 $335,873 of which $332,567 was distributed to
the limited partners and $3,306 to the managing general partner. For the same
period ended September 30, 1994, cash was sufficient for distributions to the
partners of $310,399 of which $307,257 was distributed to the limited partners
and $3,142 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 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
9
<PAGE>
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 PRODUCING PROPERTIES 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 PRODUCING
PROPERTIES 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>
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<CIK> 0000837893
<NAME> 88AP.TXT
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 469,235
<SECURITIES> 0
<RECEIVABLES> 49,201
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 518,436
<PP&E> 4,834,585
<DEPRECIATION> 2,346,379
<TOTAL-ASSETS> 3,006,642
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 3,006,642
<TOTAL-LIABILITY-AND-EQUITY> 3,006,642
<SALES> 559,944
<TOTAL-REVENUES> 578,656
<CGS> 0
<TOTAL-COSTS> 489,515
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 89,141
<INCOME-TAX> 0
<INCOME-CONTINUING> 89,141
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 89,141
<EPS-PRIMARY> 7.86
<EPS-DILUTED> 0
</TABLE>
