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, 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 10 pages.
-There are no exhibits-
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PARKER & PARSLEY PRODUCING PROPERTIES 88-A, L.P.
(A Delaware Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
June 30, December 31,
1996 1995
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $411,081 at June 30 and
$444,066 at December 31 $ 411,281 $ 444,066
Accounts receivable - affiliate 121,428 74,105
---------- ----------
Total current assets 532,709 518,171
Oil and gas properties - at cost, based on the
successful efforts accounting method 4,841,060 4,834,585
Accumulated depletion (2,852,337) (2,774,101)
---------- ----------
Net oil and gas properties 1,988,723 2,060,484
---------- ----------
$ 2,521,432 $ 2,578,655
========== ==========
PARTNERS' CAPITAL
Partners' capital:
Limited partners (11,222 interests) $ 2,496,600 $ 2,553,220
Managing general partner 24,832 25,435
---------- ----------
$ 2,521,432 $ 2,578,655
========== ==========
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.
2
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 88-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
1996 1995 1996 1995
--------- --------- --------- ---------
Revenues:
Oil and gas sales $ 222,322 $ 194,134 $ 425,819 $ 402,194
Interest income 4,844 6,557 9,439 11,796
-------- -------- -------- --------
Total revenues 227,166 200,691 435,258 413,990
Costs and expenses:
Production costs 86,584 89,087 168,975 181,846
General and administrative
expenses 6,670 5,824 12,775 12,066
Depletion 39,295 64,908 78,236 158,366
-------- -------- -------- --------
Total costs and expenses 132,549 159,819 259,986 352,278
-------- -------- -------- --------
Net income $ 94,617 $ 40,872 $ 175,272 $ 61,712
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 947 $ 409 $ 1,753 $ 617
======== ======== ======== ========
Limited partners $ 93,670 $ 40,463 $ 173,519 $ 61,095
======== ======== ======== ========
Net income per limited
partnership interest $ 8.34 $ 3.60 $ 15.46 $ 5.44
======== ======== ======== ========
Distributions per limited
partnership interest $ 11.01 $ 9.15 $ 20.51 $ 19.15
======== ======== ======== ========
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.
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, 1995 $ 32,229 $3,221,145 $3,253,374
Distributions (2,271) (214,923) (217,194)
Net income 617 61,095 61,712
-------- --------- ---------
Balance at June 30, 1995 $ 30,575 $3,067,317 $3,097,892
======== ========= =========
Balance at January 1, 1996 $ 25,435 $2,553,220 $2,578,655
Distributions (2,356) (230,139) (232,495)
Net income 1,753 173,519 175,272
-------- --------- ---------
Balance at June 30, 1996 $ 24,832 $2,496,600 $2,521,432
======== ========= =========
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)
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended
June 30,
1996 1995
--------- ---------
Cash flows from operating activities:
Net income $ 175,272 $ 61,712
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 78,236 158,366
Changes in assets:
(Increase) decrease in accounts receivable (47,323) 21,312
-------- --------
Net cash provided by operating activities 206,185 241,390
Cash flows from investing activities:
Additions to oil and gas properties (6,475) (1,252)
Cash flows from financing activities:
Cash distributions to partners (232,495) (217,194)
--------- --------
Net increase (decrease) in cash and cash equivalents (32,785) 22,944
Cash and cash equivalents at beginning of period 444,066 454,847
--------- --------
Cash and cash equivalents at end of period $ 411,281 $ 477,791
========= ========
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)
NOTES TO FINANCIAL STATEMENTS
June 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 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 June 30, 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. However, these interim results are not
necessarily indicative of results for a full year.
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 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, 1996 compared with six months ended
June 30, 1995
Revenues:
The Registrant's oil and gas revenues increased to $425,819 from $402,194 for
the six months ended June 30, 1996 and 1995, respectively, an increase of 6%.
The increase in revenues resulted from higher average prices received per barrel
of oil and mcf of gas, offset by decreases in barrels of oil and mcf of gas
produced and sold. For the six months ended June 30, 1996, 15,380 barrels of oil
were sold compared to 17,023 for the same period in 1995, a decrease of 1,643
barrels, or 10%. For the six months ended June 30, 1996, 51,253 mcf of gas were
sold compared to 59,767 for the same period in 1995, a decrease of 8,514 mcf, or
14%. 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.
6
<PAGE>
The average price received per barrel of oil increased $2.69, or 15%, from
$17.59 for the six months ended June 30, 1995 to $20.28 for the same period in
1996 while the average price received per mcf of gas increased 29% from $1.72
during the six months ended June 30, 1995 to $2.22 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 six months ended June 30,
1996.
Costs and Expenses:
Total costs and expenses decreased to $259,986 for the six months ended June 30,
1996 as compared to $352,278 for the same period in 1995, a decrease of $92,292,
or 26%. This decrease was the result of reduced production costs and a decline
in depletion, offset by an increase in general and administrative expenses
("G&A").
Production costs were $168,975 for the six months ended June 30, 1996 and
$181,846 for the same period in 1995, resulting in a $12,871 decrease, or 7%,
attributable to less well repair and maintenance costs, offset by an increase in
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, 6% from $12,066 for the six months ended
June 30, 1995 to $12,775 for the same period in 1996. The Partnership agreement
limits G&A to 3% of gross oil and gas revenues.
Depletion was $78,236 for the six months ended June 30, 1996 compared to
$158,366 for the same period in 1995. This represented a decrease in depletion
of $80,130, or 51%, primarily attributable to the adoption of the provisions of
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") effective the fourth quarter of 1995 and the reduction of net
depletable basis resulting from the charge taken upon such adoption. Depletion
was calculated on a property-by-property basis utilizing the unit-of-production
method based upon the dominant mineral produced, generally oil, and using oil
prices in effect at the end of the respective quarter. Oil production decreased
1,643 barrels for the six months ended June 30, 1996 from the same period in
1995, while oil reserves of barrels were revised upward by 20,541, or 5%.
Three months ended June 30, 1996 compared with three months ended
June 30, 1995
Revenues:
The Registrant's oil and gas revenues increased to $222,322 from $194,134 for
the three months ended June 30, 1996 and 1995, respectively, an increase of 15%.
The increase in revenues resulted from higher average prices received per barrel
7
<PAGE>
of oil and mcf of gas, offset by declines in barrels of oil and mcf of gas
produced and sold. For the three months ended June 30, 1996, 7,747 barrels of
oil were sold compared to 8,037 for the same period in 1995, a decrease of 290
barrels, or 4%. For the three months ended June 30, 1996, 23,332 mcf of gas were
sold compared to 31,499 for the same period in 1995, a decrease of 8,167 mcf, or
26%. The declines in production volumes were due to the decline characteristics
of the Registrant's oil and gas properties.
The average price received per barrel of oil increased $3.78, or 21%, from
$18.05 for the three months ended June 30, 1995 to $21.83 for the same period in
1996 while the average price received per mcf of gas increased 46% from $1.56
during the three months ended June 30, 1995 to $2.28 in 1996.
Costs and Expenses:
Total costs and expenses decreased to $132,549 for the three months ended June
30, 1996 as compared to $159,819 for the same period in 1995, a decrease of
$27,270, or 17%. This decrease was the result of reduced production costs and a
decline in depletion, offset by an increase in G&A.
Production costs were $86,584 for the three months ended June 30, 1996 and
$89,087 for the same period in 1995 resulting in a $2,503 decrease, or 3%,
attributable to less well repair and maintenance costs, offset by an increase in
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, 15% from $5,824 for the three months ended
June 30, 1995 to $6,670 for the same period in 1996.
Depletion was $39,295 for the three months ended June 30, 1996 compared to
$64,908 for the same period in 1995. This represented a decrease in depletion of
$25,613, or 39%, primarily attributable to the adoption of FAS 121 the fourth
quarter of 1995, as discussed previously. Oil production decreased 290 barrels
for the three months ended June 30, 1996 from the same period in 1995.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased during the six months ended
June 30, 1996 $35,205 from the same period ended June 30, 1995. This decrease
was primarily due to an increase in production costs paid, offset by an increase
in oil and gas sales.
Net Cash Used in Investing Activities
The Registrant's investing activities during the six months ended June 30, 1996
and 1995 included expenditures related to equipment replacement on various oil
and gas properties.
8
<PAGE>
Net Cash Used in Financing Activities
Cash was sufficient for the six months ended June 30, 1996 to cover
distributions to the partners of $232,495 of which $230,139 was distributed to
the limited partners and $2,356 to the managing general partner. For the same
period ended June 30, 1995, cash was sufficient for distributions to the
partners of $217,194 of which $214,923 was distributed to the limited partners
and $2,271 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
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - none
(b) Reports on Form 8-K - none
9
<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: August 8, 1996 By: /s/ Steven L. Beal
------------------------------------------
Steven L. Beal, Senior Vice President
and Chief Financial Officer of PPUSA
10
<PAGE>
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<ARTICLE> 5
<CIK> 0000837893
<NAME> 88AP.TXT
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 411,281
<SECURITIES> 0
<RECEIVABLES> 121,428
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 532,709
<PP&E> 4,841,060
<DEPRECIATION> 2,852,337
<TOTAL-ASSETS> 2,521,432
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,521,432
<TOTAL-LIABILITY-AND-EQUITY> 2,521,432
<SALES> 425,819
<TOTAL-REVENUES> 435,258
<CGS> 0
<TOTAL-COSTS> 259,986
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 175,272
<INCOME-TAX> 0
<INCOME-CONTINUING> 175,272
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 175,272
<EPS-PRIMARY> 15.46
<EPS-DILUTED> 0
</TABLE>
