UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2000
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)
1400 Williams Square West, 5205 N. O'Connor Blvd., Irving, Texas 75039
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(Address of principal executive offices) (Zip code)
Registrant's Telephone Number, including area code : (972) 444-9001
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 / /
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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, 2000 and
December 31, 1999........................................ 3
Statements of Operations for the three and six
months ended June 30, 2000 and 1999....................... 4
Statement of Partners' Capital for the six months
ended June 30, 2000....................................... 5
Statements of Cash Flows for the six months ended
June 30, 2000 and 1999.................................... 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
27.1 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
<TABLE>
BALANCE SHEETS
June 30, December 31,
2000 1999
----------- -----------
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash $ 243,567 $ 323,271
Accounts receivable - oil and gas sales 101,736 87,732
---------- ----------
Total current assets 345,303 411,003
---------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 4,855,712 4,854,930
Accumulated depletion (3,682,252) (3,652,305)
---------- ----------
Net oil and gas properties 1,173,460 1,202,625
---------- ----------
$ 1,518,763 $ 1,613,628
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 26,274 $ 13,463
Partners' capital:
Managing general partner 14,857 15,933
Limited partners (11,222 interests) 1,477,632 1,584,232
---------- ----------
1,492,489 1,600,165
---------- ----------
$ 1,518,763 $ 1,613,628
========== ==========
</TABLE>
The financial information included as of June 30, 000 has been prepared by
the managing general partner without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
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PARKER & PARSLEY PRODUCING PROPERTIES 88-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Oil and gas $ 197,479 $ 111,050 $ 346,895 $ 194,872
Interest 4,202 2,763 7,804 5,175
Gain on disposition of assets - - 9,859 -
-------- -------- -------- --------
201,681 113,813 364,558 200,047
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 124,619 62,301 199,253 122,130
General and administrative 5,925 3,331 10,407 5,846
Depletion 17,322 20,466 29,947 50,009
-------- -------- -------- --------
147,866 86,098 239,607 177,985
-------- -------- -------- --------
Net income $ 53,815 $ 27,715 $ 124,951 $ 22,062
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 539 $ 278 $ 1,250 $ 221
======== ======== ======== ========
Limited partners $ 53,276 $ 27,437 $ 123,701 $ 21,841
======== ======== ======== ========
Net income per limited
partnership interest $ 4.74 $ 2.45 $ 11.02 $ 1.95
======== ======== ======== ========
</TABLE>
The financial information included herein has been prepared by
the managing general partner 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)
<TABLE>
Managing
general Limited
partner partners Total
---------- ---------- ----------
<S> <C> <C> <C>
Balance at January 1, 2000 $ 15,933 $1,584,232 $1,600,165
Distributions (2,326) (230,301) (232,627)
Net income 1,250 123,701 124,951
--------- --------- ---------
Balance at June 30, 2000 $ 14,857 $1,477,632 $1,492,489
========= ========= =========
</TABLE>
The financial information included herein has been prepared by
the managing general partner 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)
<TABLE>
Six months ended
June 30,
------------------------
2000 1999
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 124,951 $ 22,062
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 29,947 50,009
Gain on disposition of assets (9,859) -
Changes in assets and liabilities:
Accounts receivable (14,004) (12,329)
Accounts payable 12,811 12,643
--------- ---------
Net cash provided by operating activities 143,846 72,385
--------- ---------
Cash flows from investing activities:
Additions to oil and gas properties (782) -
Proceeds from asset dispositions 9,859 -
--------- ---------
Net cash provided by investing activities 9,077 -
--------- ---------
Cash flows used in financing activities:
Cash distributions to partners (232,627) (59,573)
--------- ---------
Net increase (decrease) in cash (79,704) 12,812
Cash at beginning of period 323,271 278,229
--------- ---------
Cash at end of period $ 243,567 $ 291,041
========= =========
</TABLE>
The financial information included herein has been prepared by
the managing general partner 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
June 30, 2000
(Unaudited)
Note 1. Organization and nature of operations
Parker & Parsley Producing Properties 88-A, L.P. (the "Partnership") is a
limited partnership organized in 1988 under the laws of the State of Delaware.
The Partnership engages in oil and gas production in Texas and is not involved
in any industry segment other than oil and gas.
Note 2. Basis of presentation
In the opinion of management, the unaudited financial statements of the
Partnership as of June 30, 2000 and for the three and six months ended June 30,
2000 and 1999 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 reclassifications may have been
made to the June 30, 1999 financial statements to conform to the June 30, 2000
financial statement presentations.
Certain information and footnote disclosures 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, 1999, as filed with the Securities and Exchange Commission, a copy
of which is available upon request by writing to Rich Dealy, Vice President and
Chief Accounting Officer, 5205 North O'Connor Boulevard, 1400 Williams Square
West, Irving, Texas 75039-3746.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (1)
Results of Operations
Six months ended June 30, 2000 compared with six months ended
June 30, 1999
Revenues:
The Partnership's oil and gas revenues increased 78% to $346,895 for the six
months ended June 30, 2000 as compared to $194,872 for the same period in 1999.
The increase in revenues resulted from higher average prices received, offset by
a decline in production. For the six months ended June 30, 2000, 8,488 barrels
of oil, 5,238 barrels of natural gas liquids ("NGLs") and 20,402 mcf of gas were
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sold, or 17,126 barrel of oil equivalents ("BOEs"). For the six months ended
June 30, 1999, 10,144 barrels of oil, 5,069 barrels of NGLs and 22,550 mcf of
gas were sold, or 18,971 BOEs.
The average price received per barrel of oil increased $14.78, or 114%, from
$12.93 for the six months ended June 30, 1999 to $27.71 for the same period in
2000. The average price received per barrel of NGLs increased $7.09, or 104%,
from $6.84 during the six months ended June 30, 1999 to $13.93 for the same
period in 2000. The average price received per mcf of gas increased 47% from
$1.29 during the six months ended June 30, 1999 to $1.90 for the same period in
2000. 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, 2000.
The volatility of commodity prices has had, and continues to have, a significant
impact on the Partnership's revenues and operating cash flow and could result in
additional decreases to the carrying value of the Partnership's oil and gas
properties.
Gain on disposition of assets of $9,859 was recognized during the six months
ended June 30, 2000 resulting from equipment credits received on one fully
depleted well.
Costs and Expenses:
Total costs and expenses increased to $239,607 for the six months ended June 30,
2000 as compared to $177,985 for the same period in 1999, an increase of
$61,622, or 35%. This increase was the result of increases in production costs
and general and administrative expenses ("G&A"), offset by a decline in
depletion.
Production costs were $199,253 for the six months ended June 30, 2000 and
$122,130 for the same period in 1999, resulting in an increase of $77,123, or
63%. This increase was attributable to additional workover and well maintenance
costs incurred to stimulate well production and higher production taxes due to
higher oil and gas prices.
G&A's components are independent accounting and engineering fees and managing
general partner personnel and operating costs. During this period, G&A
increased, in aggregate, 78% from $5,846 for the six months ended June 30, 1999
to $10,407 for the same period in 2000 primarily due to a higher allocation of
the managing general partner's G&A being allocated (limited to 3% of oil and gas
revenues) as a result of increased oil and gas revenues.
Depletion was $29,947 for the six months ended June 30, 2000 compared to $50,009
for the same period in 1999, a decrease of $20,062, or 40%. This decrease was
primarily attributable to an increase in proved reserves during the period ended
June 30, 2000 due to higher commodity prices, a decline in oil production of
1,656 barrels for the six months ended June 30, 2000 compared to the same period
in 1999 and a reduction in the Partnership'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" ("SFAS 121") during the fourth quarter of 1999.
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Three months ended June 30, 2000 compared with three months ended June 30, 1999
Revenues:
The Partnership's oil and gas revenues increased 78% to $197,479 for the three
months ended June 30, 2000 as compared to $111,050 for the same period in 1999.
The increase in revenues resulted from higher average prices received, offset by
a decline in production. For the three months ended June 30, 2000, 4,780 barrels
of oil, 2,886 barrels of NGLs and 10,613 mcf of gas were sold, or 9,435 BOEs.
For the three months ended June 30, 1999, 4,974 barrels of oil, 2,728 barrels of
NGLs and 11,075 mcf of gas were sold, or 9,548 BOEs.
The average price received per barrel of oil increased $13.01, or 90%, from
$14.49 for the three months ended June 30, 1999 to $27.50 for the same period in
2000. The average price received per barrel of NGLs increased $6.41, or 78%,
from $8.25 during the three months ended June 30, 1999 to $14.66 for the same
period in 2000. The average price received per mcf of gas increased 50% from
$1.49 during the three months ended June 30, 1999 to $2.23 for the same period
in 2000.
Costs and Expenses:
Total costs and expenses increased to $147,866 for the three months ended June
30, 2000 as compared to $86,098 for the same period in 1999, an increase of
$61,768, or 72%. This increase was the result of increases in production costs
and G&A, offset by a decline in depletion.
Production costs were $124,619 for the three months ended June 30, 2000 and
$62,301 for the same period in 1999 resulting in a $62,318 increase, or 100%.
This increase was attributable to additional workover costs and well maintenance
costs incurred to stimulate well production and higher production taxes due to
higher oil and gas prices.
During this period, G&A increased, in aggregate, 78% from $3,331 for the three
months ended June 30, 1999 to $5,925 for the same period in 2000 primarily due
to a higher allocation of the managing general partner's G&A being allocated
(limited to 3% of oil and gas revenues) as a result of increased oil and gas
revenues.
Depletion was $17,322 for the three months ended June 30, 2000 compared to
$20,466 for the same period in 1999, a decrease of $3,144, or 15%. This decrease
was primarily attributable to an increase in proved reserves during the period
ended June 30, 2000 as a result of higher commodity prices, and a decline in oil
production of 194 barrels for the three months ended June 30, 2000 compared to
the same period in 1999 and a reduction in the Partnership's net depletable
basis from charges taken in accordance with SFAS 121 during the fourth quarter
of 1999.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $71,461 during the six
months ended June 30, 2000 from the same period ended June 30, 1999. This
9
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increase was primarily due to an increase in oil and gas sales receipts of
$152,977, offset by increases in operating costs paid of $73,790 and G&A
expenses paid of $7,726.
Net Cash Provided by Investing Activities
The Partnership's investing activities during the six months ended June 30, 2000
were related to expenditures for upgrades of oil and gas equipment on active
properties.
Proceeds from disposition of assets of $9,859 recognized during the six months
ended June 30, 2000 were from equipment credits on one fully depleted well.
Net Cash Used in Financing Activities
For the six months ended June 30, 2000, cash distributions to the partners were
$232,627, of which $2,326 was distributed to the managing general partner and
$230,301 to the limited partners. For the same period ended June 30, 1999, cash
distributions to the partners were $59,573, of which $530 was distributed to the
managing general partner and $59,043 to the limited partners.
---------------
(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
27.1 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: August 9, 2000 By: /s/ Rich Dealy
--------------------------------
Rich Dealy, Vice President and
Chief Accounting Officer
11
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