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. 33-19133-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 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 PRODUCING PROPERTIES 88-A, 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
bearing deposits of $396,070 at June 30 and
$430,432 at December 31 $ 396,270 $ 430,500
Accounts receivable - affiliate 95,220 150,093
---------- ----------
Total current assets 491,490 580,593
---------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 4,845,135 4,842,343
Accumulated depletion (3,012,314) (2,931,081)
---------- ----------
Net oil and gas properties 1,832,821 1,911,262
---------- ----------
$ 2,324,311 $ 2,491,855
========== ==========
PARTNERS' CAPITAL
Partners' capital:
Managing general partner $ 22,913 $ 24,280
Limited partners (11,222 interests) 2,301,398 2,467,575
----------- ----------
$ 2,324,311 $ 2,491,855
=========== ==========
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 PRODUCING PROPERTIES 88-A, 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 $ 183,157 $ 222,322 $ 424,188 $ 425,819
Interest 5,387 4,844 9,808 9,439
-------- -------- -------- --------
188,544 227,166 433,996 435,258
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 77,516 86,584 165,000 168,975
General and administrative 5,510 6,670 12,726 12,775
Depletion 39,956 39,295 81,233 78,236
-------- -------- -------- --------
122,982 132,549 258,959 259,986
-------- -------- -------- --------
Net income $ 65,562 $ 94,617 $ 175,037 $ 175,272
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 655 $ 947 $ 1,750 $ 1,753
======== ======== ======== ========
Limited partners $ 64,907 $ 93,670 $ 173,287 $ 173,519
======== ======== ======== ========
Net income per limited
partnership interest $ 5.78 $ 8.34 $ 15.44 $ 15.46
======== ======== ======== ========
Distributions per limited
partnership interest $ 15.50 $ 11.01 $ 30.25 $ 20.51
======== ======== ======== ========
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, 1997 $ 24,280 $2,467,575 $2,491,855
Distributions (3,117) (339,464) (342,581)
Net income 1,750 173,287 175,037
-------- --------- ---------
Balance at June 30, 1997 $ 22,913 $2,301,398 $2,324,311
======== ========= =========
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)
Six months ended
June 30,
-------------------------
1997 1996
---------- ----------
Cash flows from operating activities:
Net income $ 175,037 $ 175,272
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 81,233 78,236
Changes in assets:
(Increase) decrease in accounts receivable 54,873 (47,323)
--------- ---------
Net cash provided by operating activities 311,143 206,185
--------- ---------
Cash flows from investing activities:
Additions to oil and gas properties (2,792) (6,475)
Cash flows from financing activities:
Cash distributions to partners (342,581) (232,495)
--------- ---------
Net decrease in cash and cash equivalents (34,230) (32,785)
Cash and cash equivalents at beginning of period 430,500 444,066
--------- ---------
Cash and cash equivalents at end of period $ 396,270 $ 411,281
========= =========
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
June 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 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 slightly to $424,188 from
$425,819 for the six months ended June 30, 1997 as compared to the six months
ended June 30, 1996. The decrease in revenues resulted from declines in barrels
of oil and mcf of gas produced and sold and a decline in the 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, 14,745 barrels of oil were sold
compared to 15,380 for the same period in 1996, a decrease of 635 barrels, or
4%. For the six months ended June 30, 1997, 49,284 mcf of gas were sold compared
to 51,253 for the same period in 1996, a decrease of 1,969 mcf, or 4%. 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.
7
<PAGE>
The average price received per barrel of oil decreased slightly from $20.28 for
the six months ended June 30, 1996 to $20.20 for the same period in 1997, while
the average price received per mcf of gas increased 15% from $2.22 during the
six months ended June 30, 1996 to $2.56 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 $258,959 for the six months ended June 30,
1997 as compared to $259,986 for the same period in 1996, a decrease of $1,027.
This decrease was the result of reduced production costs and general and
administrative expenses ("G&A"), offset by an increase in depletion.
Production costs were $165,000 for the six months ended June 30, 1997 and
$168,975 for the same period in 1996, resulting in a $3,975 decrease
attributable to declines in well repair and maintenance costs 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
slightly from $12,775 for the six months ended June 30, 1996 to $12,726 for the
same period in 1997. The Partnership agreement limits G&A to 3% of gross oil and
gas revenues.
Depletion was $81,233 for the six months ended June 30, 1997 compared to $78,236
for the same period in 1996. This represented an increase in depletion of
$2,997, or 4%, primarily attributable to a decline in oil reserves during 1997
as a result of lower commodity prices.
Three months ended June 30, 1997 compared with three months ended
June 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 18% to $183,157 from $222,322
for the three months ended June 30, 1997 and 1996, respectively. The decrease in
revenues resulted from a decline in average prices received per barrel of oil
and mcf of gas produced and sold and a decline in barrels of oil produced and
sold, offset by an increase in mcf of gas produced and sold. For the three
months ended June 30, 1997, 7,041 barrels of oil were sold compared to 7,747 for
the same period in 1996, a decrease of 706 barrels, or 9%. For the three months
ended June 30, 1997, 24,167 mcf of gas were sold compared to 23,332 for the same
period in 1996, an increase of 835 mcf, or 4%. The decline in oil production
volumes were due to the decline characteristics of the Partnership's oil and gas
properties, while the slight increase in gas production was due to operational
changes on several wells.
8
<PAGE>
The average price received per barrel of oil decreased $3.16, or 14%, from
$21.83 for the three months ended June 30, 1996 to $18.67 for the same period in
1997, while the average price received per mcf of gas decreased 6% from $2.28
during the three months ended June 30, 1996 to $2.14 for the same period in
1997.
Costs and Expenses:
Total costs and expenses decreased to $122,982 for the three months ended June
30, 1997 as compared to $132,549 for the same period in 1996, a decrease of
$9,567, or 7%. This decrease was the result of reduced production costs and G&A,
offset by an increase in depletion.
Production costs were $77,516 for the three months ended June 30, 1997 and
$86,584 for the same period in 1996 resulting in a $9,068 decrease, or 10%,
attributable to declines in well repair and maintenance costs 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, 17% from $6,670 for the three months ended June 30,
1996 to $5,510 for the same period in 1997.
Depletion was $39,956 for the three months ended June 30, 1997 compared to
$39,295 for the same period in 1996. This represented an increase in depletion
of $661 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 $104,958 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
decline in production costs paid.
Net Cash Used in Investing Activities
The Partnership's investing activities during the six months ended June 30, 1997
and 1996 included expenditures related to 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 $342,581 of which $3,117 was distributed to the
managing general partner and $339,464 to the limited partners. For the same
period ended June 30, 1996, cash was sufficient for distributions to the
partners of $232,495 of which $2,356 was distributed to the managing general
partner and $230,139 to the limited partners.
9
<PAGE>
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: Parker & Parsley Development L.P.,
Managing General Partner
By: Parker & Parsley Petroleum USA, Inc.
("PPUSA"), General Partner
Dated: August 8, 1997 By: /s/ Rich Dealy
--------------------------------
Rich Dealy, Controller of PPUSA
11
<PAGE>
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<CIK> 0000837893
<NAME> 88APP.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 396,270
<SECURITIES> 0
<RECEIVABLES> 95,220
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 491,490
<PP&E> 4,845,135
<DEPRECIATION> 3,012,314
<TOTAL-ASSETS> 2,324,311
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,324,311
<TOTAL-LIABILITY-AND-EQUITY> 2,324,311
<SALES> 424,188
<TOTAL-REVENUES> 433,996
<CGS> 0
<TOTAL-COSTS> 258,959
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 175,037
<INCOME-TAX> 0
<INCOME-CONTINUING> 175,037
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 175,037
<EPS-PRIMARY> 15.44
<EPS-DILUTED> 0
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