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, 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. 33-19133-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.
TABLE OF CONTENTS
Page
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of September 30, 1996 and
December 31, 1995 ................................. 3
Statements of Operations for the three and nine
months ended September 30, 1996 and 1995.............. 4
Statement of Partners' Capital for the nine months
ended September 30, 1996.............................. 5
Statements of Cash Flows for the nine months ended
September 30, 1996 and 1995........................... 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....................................... 10
Signatures............................................ 11
2
<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,
1996 1995
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including
interest bearing deposits of $411,418
at September 30 and $444,066 at
December 31 $ 411,618 $ 444,066
Accounts receivable - affiliate 120,420 74,105
------------ -----------
Total current assets 532,038 518,171
------------ -----------
Oil and gas properties - at cost, based on
the successful efforts accounting method 4,842,434 4,834,585
Accumulated depletion (2,884,568) (2,774,101)
------------ -----------
Net oil and gas properties 1,957,866 2,060,484
------------ -----------
$ 2,489,904 $ 2,578,655
============= ============
PARTNERS' CAPITAL
Partners' capital:
Limited partners (11,222 interests) $ 2,465,334 $ 2,553,220
Managing general partner 24,570 25,435
------------ -----------
$ 2,489,904 $ 2,578,655
============= ============
The financial information included as of September 30, 1996 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 PRODUCING PROPERTIES 88-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
--------------------- ---------------------
1996 1995 1996 1995
--------- --------- --------- ---------
Revenues:
Oil and gas $ 224,719 $ 157,750 $ 650,538 $ 559,944
Interest 4,946 6,916 14,385 18,712
-------- -------- -------- --------
229,665 164,666 664,923 578,656
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 93,844 89,439 262,819 271,285
General and administrative 6,741 4,732 19,516 16,798
Depletion 32,231 43,066 110,467 201,432
-------- -------- -------- --------
132,816 137,237 392,802 489,515
-------- -------- -------- --------
Net income $ 96,849 $ 27,429 $ 272,121 $ 89,141
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 968 $ 274 $ 2,721 $ 891
======== ======== ======== ========
Limited partners $ 95,881 $ 27,155 $ 269,400 $ 88,250
======== ======== ======== ========
Net income per limited
partnership interest $ 8.55 $ 2.42 $ 24.01 $ 7.86
======== ======== ======== ========
Distributions per limited
partnership interest $ 11.33 $ 10.49 $ 31.84 $ 29.64
======== ======== ======== ========
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 PRODUCING PROPERTIES 88-A, L.P.
(A Delaware Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
--------- ----------- -----------
Balance at January 1, 1996 $ 25,435 $ 2,553,220 $ 2,578,655
Distributions (3,586) (357,286) (360,872)
Net income 2,721 269,400 272,121
------- --------- ----------
Balance at September 30, 1996 $ 24,570 $ 2,465,334 $ 2,489,904
======== ========== ==========
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 PRODUCING PROPERTIES 88-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
September 30,
1996 1995
---------- ----------
Cash flows from operating activities:
Net income $ 272,121 $ 89,141
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 110,467 201,432
Changes in assets:
(Increase) decrease in accounts receivable (46,315) 60,940
--------- ---------
Net cash provided by operations 336,273 351,513
--------- ---------
Cash flows from investing activities:
Additions to oil and gas properties (7,849) (1,252)
Cash flows from financing activities:
Cash distributions to partners (360,872) (335,873)
--------- ---------
Net increase (decrease) in cash and cash
equivalents (32,448) 14,388
Cash and cash equivalents at beginning
of period 444,066 454,847
--------- ---------
Cash and cash equivalents at end of period $ 411,618 $ 469,235
========= =========
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 PRODUCING PROPERTIES 88-A, L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
Note 1.
Parker & Parsley Producing Properties 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 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 September 30, 1996 and for the three and nine months ended September 30, 1996
and 1995 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 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 103, Midland, Texas 79701.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (1)
Results of Operations
Nine months ended September 30, 1996 compared with nine months ended September
30, 1995
Revenues:
The Registrant's oil and gas revenues increased to $650,538 from $559,944 for
the nine months ended September 30, 1996 and 1995, respectively, an increase of
16%. The increase in revenues resulted from higher average prices received per
barrel of oil and mcf of gas, offset by a 3% decline in barrels of oil produced
and sold and a 14% decline in mcf of gas produced and sold.
For the nine months ended September 30, 1996, 23,091 barrels of oil were sold
compared to 23,745 for the same period in 1995, a decrease of 654 barrels. For
7
<PAGE>
the nine months ended September 30, 1996, 77,668 mcf of gas were sold compared
to 89,925 for the same period in 1995, a decrease of 12,257 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 $3.49, or 20%, from
$17.30 for the nine months ended September 30, 1995 to $20.79 for the same
period in 1996 while the average price received per mcf of gas increased 32%
from $1.66 during the nine months ended September 30, 1995 to $2.19 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 nine months ended
September 30, 1996.
Costs and Expenses:
Total costs and expenses decreased to $392,802 for the nine months ended
September 30, 1996 as compared to $489,515 for the same period in 1995, a
decrease of $96,713, or 20%. This decrease resulted from declines in production
costs and depletion, offset by an increase in general and administrative
expenses ("G&A").
Production costs were $262,819 for the nine months ended September 30, 1996 and
$271,285 for the same period in 1995 resulting in an $8,466 decrease, or 3%. The
decrease was primarily due to a reduction in well repair and maintenance costs.
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, 16% from $16,798 for the nine months ended
September 30, 1995 to $19,516 for the same period in 1996. The Partnership
agreement limits G&A to 3% of gross oil and gas revenues.
Depletion was $110,467 for the nine months ended September 30, 1996 compared to
$201,432 for the same period in 1995, representing a decrease of $90,965, or
45%. This decrease was primarily attributable to the following factors: (i) a
reduction in the Registrant's net depletable basis from charges taken in
accordance with 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"), (ii) a reduction in oil production of 654 barrels for the nine
months ended September 30, 1996 as compared to the same period in 1995, and
(iii) an increase in oil and gas reserves during the third quarter of 1996 as a
result of higher commodity prices.
Three months ended September 30, 1996 compared with three months ended September
30, 1995
Revenues:
The Registrant's oil and gas revenues increased to $224,719 from $157,750 for
the three months ended September 30, 1996 and 1995, respectively, an increase of
42%. The increase in revenues resulted from a 15% increase in barrels of oil
8
<PAGE>
produced and sold and higher average prices received per barrel and oil and mcf
of gas, offset by a 12% decline in mcf of gas produced and sold. For the three
months ended September 30, 1996, 7,711 barrels of oil were sold compared to
6,722 for the same period in 1995, an increase of 989 barrels, resulting from
operational changes on several wells. For the three months ended September 30,
1996, 26,415 mcf of gas were sold compared to 30,158 for the same period in
1995, a decrease of 3,743 mcf. The decline in gas production was due to the
decline characteristics of the oil and gas properties.
The average price received per barrel of oil increased $5.26, or 32% from $16.55
for the three months ended September 30, 1995 to $21.81 for the same period in
1996, while the average price received per mcf of gas increased 39% from $1.54
during the three months ended September 30, 1995 to $2.14 in 1996.
Costs and Expenses:
Total costs and expenses decreased to $132,816 for the three months ended
September 30, 1996 as compared to $137,237 for the same period in 1995, a
decrease of $4,421, or 3%. This decrease was due to a decline in depletion,
offset by additional production costs and G&A.
Production costs were $93,844 for the three months ended September 30, 1996 and
$89,439 for the same period in 1995, resulting in a $4,405 increase, or 5%. The
increase was primarily attributable to additional production taxes due to the
increase in oil and gas revenues.
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, 42% from $4,732 for the three months ended
September 30, 1995 to $6,741 for the same period in 1996.
Depletion was $32,231 for the three months ended September 30, 1996 compared to
$43,066 for the same period in 1995, representing a decrease in depletion of
$10,835, or 25%, primarily attributable to the following factors: (i) a
reduction in the Registrant's net depletable basis from charges taken in
accordance with FAS 121, (ii) a reduction in oil production of 989 barrels for
the three months ended September 30, 1996 as compared to the same period in
1995, and (iii) an increase in oil and gas reserves during the third quarter of
1996 as a result of higher commodity prices.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased $15,240 during the nine
months ended September 30, 1996 from the same period ended September 30, 1995,
resulting from an increase in production costs paid, offset by an increase in
oil and gas sales received.
9
<PAGE>
Net Cash Used in Investing Activities
The Registrant's principal investing activities during the nine months ended
September 30, 1996 was related to equipment replacement on various oil and gas
properties.
Net Cash Used in Financing Activities
Cash was sufficient for the nine months ended September 30, 1996 to cover
distributions to the partners of $360,872 of which $357,286 was distributed to
the limited partners and $3,586 to the managing general partner. For the same
period ended September 30, 1995, cash was sufficient for 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.
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
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 6, 1996 By: /s/ Steven L. Beal
---------------------------------------
Steven L. Beal, Senior Vice President
and Chief Financial Officer of PPUSA
11
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000837893
<NAME> 88AP.TXT
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 411,618
<SECURITIES> 0
<RECEIVABLES> 120,420
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 532,038
<PP&E> 4,842,434
<DEPRECIATION> 2,884,568
<TOTAL-ASSETS> 2,489,904
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,489,904
<TOTAL-LIABILITY-AND-EQUITY> 2,489,904
<SALES> 650,538
<TOTAL-REVENUES> 664,923
<CGS> 0
<TOTAL-COSTS> 392,802
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 272,121
<INCOME-TAX> 0
<INCOME-CONTINUING> 272,121
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 272,121
<EPS-PRIMARY> 24.01
<EPS-DILUTED> 0
</TABLE>
