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, 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. 33-19133-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.
Exhibit index on page 10.
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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, 1997 and
December 31, 1996 ...................................... 3
Statements of Operations for the three and nine
months ended September 30, 1997 and 1996................... 4
Statement of Partners' Capital for the nine months
ended September 30, 1997................................... 5
Statements of Cash Flows for the nine months ended
September 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 PRODUCING PROPERTIES 88-A, L.P.
(A Delaware Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
September 30, December 31,
1997 1996
------------ -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $375,386 at September 30
and $430,432 at December 31 $ 375,586 $ 430,500
Accounts receivable - affiliate 87,800 150,093
----------- ----------
Total current assets 463,386 580,593
----------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 4,845,828 4,842,343
Accumulated depletion (3,048,862) (2,931,081)
----------- ----------
Net oil and gas properties 1,796,966 1,911,262
----------- ----------
$ 2,260,352 $ 2,491,855
=========== ==========
PARTNERS' CAPITAL
Partners' capital:
Managing general partner $ 22,256 $ 24,280
Limited partners (11,222 interests) 2,238,096 2,467,575
----------- ---------
$ 2,260,352 $ 2,491,855
=========== ==========
The financial information included as of September 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
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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,
--------------------- ---------------------
1997 1996 1997 1996
--------- --------- --------- ---------
Revenues:
Oil and gas $ 175,612 $ 224,719 $ 599,800 $ 650,538
Interest 4,735 4,946 14,543 14,385
-------- -------- -------- --------
180,347 229,665 614,343 664,923
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 86,285 93,844 251,285 262,819
General and administrative 5,268 6,741 17,994 19,516
Depletion 36,548 32,231 117,781 110,467
-------- -------- -------- --------
128,101 132,816 387,060 392,802
-------- -------- -------- --------
Net income $ 52,246 $ 96,849 $ 227,283 $ 272,121
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 523 $ 968 $ 2,273 $ 2,721
======== ======== ======== ========
Limited partners $ 51,723 $ 95,881 $ 225,010 $ 269,400
======== ======== ======== ========
Net income per limited
partnership interest $ 4.61 $ 8.55 $ 20.05 $ 24.01
======== ======== ======== ========
Distributions per limited
partnership interest $ 10.25 $ 11.33 $ 40.50 $ 31.84
======== ======== ======== ========
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
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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, 1997 $ 24,280 $2,467,575 $2,491,855
Distributions (4,297) (454,489) (458,786)
Net income 2,273 225,010 227,283
-------- --------- ---------
Balance at September 30, 1997 $ 22,256 $2,238,096 $2,260,352
======== ========= =========
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
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PARKER & PARSLEY PRODUCING PROPERTIES 88-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
September 30,
------------------------
1997 1996
---------- ----------
Cash flows from operating activities:
Net income $ 227,283 $ 272,121
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 117,781 110,467
Changes in assets:
(Increase) decrease in accounts receivable 62,293 (46,315)
--------- ---------
Net cash provided by operations 407,357 336,273
--------- ---------
Cash flows from investing activities:
Additions to oil and gas properties (3,485) (7,849)
Cash flows from financing activities:
Cash distributions to partners (458,786) (360,872)
--------- ---------
Net decrease in cash and cash equivalents (54,914) (32,448)
Cash and cash equivalents at beginning of period 430,500 444,066
--------- ---------
Cash and cash equivalents at end of period $ 375,586 $ 411,618
========= =========
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
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PARKER & PARSLEY PRODUCING PROPERTIES 88-A, L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
(Unaudited)
Note 1. Basis of presentation
In the opinion of management, the unaudited financial statements of Parker &
Parsley Producing Properties 88-A, L.P. (the "Partnership") as of September 30,
1997 and for the three and nine months ended September 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, Vice President and
Controller, 303 West Wall, Suite 103, Midland, Texas 79701.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (1)
As of August 8, 1997, Pioneer Natural Resources USA, Inc. ("Pioneer USA") became
the general partner of the Partnership. Prior to August 8, 1997, the
Partnership's general partner was Parker & Parsley Development L.P. ("PPDLP"), a
wholly-owned subsidiary of Parker & Parsley Petroleum Company ("Parker &
Parsley"). On August 7, 1997, Parker & Parsley and Mesa Inc. received
shareholder approval to merge and create Pioneer Natural Resources Company
("Pioneer"). On August 8, 1997, PPDLP was merged with and into Pioneer USA, a
wholly-owned subsidiary of Pioneer, resulting in Pioneer USA becoming the
general partner of the Partnership as PPDLP's successor by merger. For a more
complete description of the Parker & Parsley and Mesa Inc. merger, see Pioneer's
Registration Statement on Form S-4 as filed with the Securities & Exchange
Commission.
Results of Operations
Nine months ended September 30, 1997 compared with nine months ended
September 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 8% to $599,800 from $650,538
for the nine months ended September 30, 1997 as compared to the nine months
ended September 30, 1996. The decrease in revenues resulted from declines in
barrels of oil and mcf of gas produced and sold and a lower average price
7
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received per barrel of oil, offset by a higher average price received per mcf of
gas. For the nine months ended September 30, 1997, 21,380 barrels of oil were
sold compared to 23,091 for the same period in 1996, a decrease of 1,711
barrels, or 7%. For the nine months ended September 30, 1997, 75,316 mcf of gas
were sold compared to 77,668 for the same period in 1996, a decrease of 2,352
mcf, or 3%. Because of the decline characteristics of the Partnership's oil and
gas properties, management expects a certain amount of decline in production to
continue in the future until the Partnership's economically recoverable reserves
are fully depleted.
The average price received per barrel of oil decreased $1.25, or 6%, from $20.79
for the nine months ended September 30, 1996 to $19.54 for the same period in
1997, while the average price received per mcf of gas increased 10% from $2.19
during the nine months ended September 30, 1996 to $2.42 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 nine months ended
September 30, 1997.
Costs and Expenses:
Total costs and expenses decreased to $387,060 for the nine months ended
September 30, 1997 as compared to $392,802 for the same period in 1996, a
decrease of $5,742. This decrease resulted from declines in production costs and
general and administrative expenses ("G&A"), offset by an increase in depletion.
Production costs were $251,285 for the nine months ended September 30, 1997 and
$262,819 for the same period in 1996 resulting in an $11,534 decrease, or 4%.
The decrease was primarily due to a reduction in well repair and maintenance
costs.
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, 8% from $19,516 for the nine months ended September 30,
1996 to $17,994 for the same period in 1997. The Partnership agreement limits
G&A to 3% of gross oil and gas revenues.
Depletion was $117,781 for the nine months ended September 30, 1997 compared to
$110,467 for the same period in 1996, representing an increase of $7,314, or 7%.
This increase was primarily attributable to a decline in oil reserves during
1997 as a result of lower commodity prices.
Three months ended September 30, 1997 compared with three months ended September
30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 22% to $175,612 from $224,719
for the three months ended September 30, 1997 as compared to the three months
ended September 30, 1996. The decrease in revenues resulted from a lower average
price received per barrel of oil and declines in barrels of oil and mcf of gas
produced and sold. For the three months ended September 30, 1997, 6,635 barrels
of oil were sold compared to 7,711 for the same period in 1996, a decrease of
1,076 barrels, or 14%. For the three months ended September 30, 1997, 26,032 mcf
8
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of gas were sold compared to 26,415 for the same period in 1996, a decrease of
383 mcf. The declines in production were due to the decline characteristics of
the oil and gas properties.
The average price received per barrel of oil decreased $3.73, or 17% from $21.81
for the three months ended September 30, 1996 to $18.08 for the same period in
1997, while the average price received per mcf of gas remained constant at $2.14
during the three months ended September 30, 1997 and 1996.
Costs and Expenses:
Total costs and expenses decreased to $128,101 for the three months ended
September 30, 1997 as compared to $132,816 for the same period in 1996, a
decrease of $4,715, or 4%. This decrease was due to declines in production costs
and G&A, offset by an increase in depletion.
Production costs were $86,285 for the three months ended September 30, 1997 and
$93,844 for the same period in 1996, resulting in a $7,559 decrease, or 8%. The
decrease was primarily attributable to a reduction in well repair and
maintenance costs.
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, 22% from $6,741 for the three months ended September
30, 1996 to $5,268 for the same period in 1997.
Depletion was $36,548 for the three months ended September 30, 1997 compared to
$32,231 for the same period in 1996, representing an increase in depletion of
$4,317, or 13%, primarily attributable to a decline in oil reserves during 1997
as a result of lower commodity prices.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $71,084 during the nine
months ended September 30, 1997 from the same period ended September 30, 1996,
resulting from a decrease in production costs paid and an increase in oil and
gas sales receipts.
Net Cash Used in Investing Activities
The Partnership's principal investing activities during the nine months ended
September 30, 1997 and 1996 were 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, 1997 to cover
distributions to the partners of $458,786 of which $4,297 was distributed to the
managing general partner and $454,489 to the limited partners. For the same
period ended September 30, 1996, cash was sufficient for distributions to the
partners of $360,872 of which $3,586 was distributed to the managing general
partner and $357,286 to the limited partners.
9
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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
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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: Pioneer Natural Resources USA, Inc.,
Managing General Partner
Dated: November 13, 1997 By: /s/ Rich Dealy
----------------------------------
Rich Dealy, Vice President and
Controller
11
<PAGE>
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<ARTICLE> 5
<CIK> 0000837893
<NAME> 88AP
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 375,586
<SECURITIES> 0
<RECEIVABLES> 87,800
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 463,386
<PP&E> 4,845,828
<DEPRECIATION> 3,048,862
<TOTAL-ASSETS> 2,260,352
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,260,352
<TOTAL-LIABILITY-AND-EQUITY> 2,260,352
<SALES> 599,800
<TOTAL-REVENUES> 614,343
<CGS> 0
<TOTAL-COSTS> 387,060
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 227,283
<INCOME-TAX> 0
<INCOME-CONTINUING> 227,283
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 227,283
<EPS-PRIMARY> 20.05
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</TABLE>
