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 September 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 September 30, 2000 and
December 31, 1999.................................... 3
Statements of Operations for the three and nine
months ended September 30, 2000 and 1999.............. 4
Statement of Partners' Capital for the nine months
ended September 30, 2000.............................. 5
Statements of Cash Flows for the nine months ended
September 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
<CAPTION>
September 30, December 31,
2000 1999
------------ -----------
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash $ 270,374 $ 323,271
Accounts receivable - oil and gas sales 89,019 87,732
---------- ----------
Total current assets 359,393 411,003
---------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 4,855,712 4,854,930
Accumulated depletion (3,701,989) (3,652,305)
---------- ----------
Net oil and gas properties 1,153,723 1,202,625
---------- ----------
$ 1,513,116 $ 1,613,628
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 30,138 $ 13,463
Partners' capital:
Managing general partner 14,761 15,933
Limited partners (11,222 interests) 1,468,217 1,584,232
---------- ----------
1,482,978 1,600,165
---------- ----------
$ 1,513,116 $ 1,613,628
========== ==========
</TABLE>
The financial information included as of September 30, 2000 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.
3
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PARKER & PARSLEY PRODUCING PROPERTIES 88-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
---------------------- ----------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Oil and gas $ 182,810 $ 124,646 $ 529,705 $ 319,518
Interest 4,475 3,136 12,279 8,311
Gain on disposition of assets - - 9,859 -
-------- -------- -------- --------
187,285 127,782 551,843 327,829
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 64,917 60,264 264,170 182,394
General and administrative 5,484 3,740 15,891 9,586
Depletion 19,737 16,669 49,684 66,678
-------- -------- -------- --------
90,138 80,673 329,745 258,658
-------- -------- -------- --------
Net income $ 97,147 $ 47,109 $ 222,098 $ 69,171
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 971 $ 471 $ 2,221 $ 692
======== ======== ======== ========
Limited partners $ 96,176 $ 46,638 $ 219,877 $ 68,479
======== ======== ======== ========
Net income per limited
partnership interest $ 8.57 $ 4.15 $ 19.59 $ 6.10
======== ======== ======== ========
</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
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 88-A, L.P.
(A Delaware Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
<TABLE>
<CAPTION>
Managing
general Limited
partner partners Total
---------- ---------- ----------
<S> <C> <C> <C>
Balance at January 1, 2000 $ 15,933 $1,584,232 $1,600,165
Distributions (3,393) (335,892) (339,285)
Net income 2,221 219,877 222,098
--------- --------- ---------
Balance at September 30, 2000 $ 14,761 $1,468,217 $1,482,978
========= ========= =========
</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
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 88-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 30,
------------------------
2000 1999
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 222,098 $ 69,171
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 49,684 66,678
Gain on disposition of assets (9,859) -
Changes in assets and liabilities:
Accounts receivable (1,287) (20,559)
Accounts payable 16,675 15,509
--------- ---------
Net cash provided by operating activities 277,311 130,799
--------- ---------
Cash flows from investing activities:
Additions to oil and gas properties (782) (9,944)
Proceeds from asset dispositions 9,859 -
--------- ---------
Net cash provided by (used in) investing
activities 9,077 (9,944)
--------- ---------
Cash flows used in financing activities:
Cash distributions to partners (339,285) (102,536)
--------- ---------
Net increase (decrease) in cash (52,897) 18,319
Cash at beginning of period 323,271 278,229
--------- ---------
Cash at end of period $ 270,374 $ 296,548
========= =========
</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
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 88-A, L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 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 September 30, 2000 and for the three and nine months ended
September 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 September 30, 1999 financial statements to conform to
the September 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
Nine months ended September 30, 2000 compared with nine months ended September
30, 1999
Revenues:
The Partnership's oil and gas revenues increased 66% to $529,705 for the nine
months ended September 30, 2000 as compared to $319,518 for the same period in
1999. The increase in revenues resulted from higher average prices received,
7
<PAGE>
offset by a decrease in production. For the nine months ended September 30,
2000, 12,685 barrels of oil, 7,553 barrels of natural gas liquids ("NGLs") and
29,106 mcf of gas were sold, or 25,089 barrel of oil equivalents ("BOEs"). For
the nine months ended September 30, 1999, 14,529 barrels of oil, 7,574 barrels
of NGLs and 32,929 mcf of gas were sold, or 27,591 BOEs.
The average price received per barrel of oil increased $13.78, or 93%, from
$14.76 for the nine months ended September 30, 1999 to $28.54 for the same
period in 2000. The average price received per barrel of NGLs increased $5.92,
or 75%, from $7.88 during the nine months ended September 30, 1999 to $13.80 for
the same period in 2000. The average price received per mcf of gas increased 58%
from $1.38 during the nine months ended September 30, 1999 to $2.18 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 nine months ended September 30, 2000.
Gain on disposition of assets of $9,859 was recognized during the nine months
ended September 30, 2000 resulting from equipment credits received on one well.
Costs and Expenses:
Total costs and expenses increased to $329,745 for the nine months ended
September 30, 2000 as compared to $258,658 for the same period in 1999, an
increase of $71,087, or 27%. This increase resulted from increases in production
costs and general and administrative expenses ("G&A"), offset by a decline in
depletion.
Production costs were $264,170 for the nine months ended September 30, 2000 and
$182,394 for the same period in 1999 resulting in an $81,776 increase, or 45%.
The increase was primarily due to additional workover expenses of $35,272 and
well maintenance costs incurred to stimulate well production of $26,073 and
higher production taxes of $16,917 associated with 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, 66% from $9,586 for the nine months ended September 30,
1999 to $15,891 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 $49,684 for the nine months ended September 30, 2000 compared to
$66,678 for the same period in 1999, representing a decrease of $16,994, or 25%.
This decrease was the result of an increase in proved reserves due to higher
commodity prices as compared to the same period in 1999, a decline in oil
production of 1,844 barrels for the nine months ended September 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.
8
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Three months ended September 30, 2000 compared with three months ended September
30, 1999
Revenues:
The Partnership's oil and gas revenues increased 47% to $182,810 for the three
months ended September 30, 2000 as compared to $124,646 for the same period in
1999. The increase in revenues resulted from higher average prices received,
offset by a decrease in production. For the three months ended September 30,
2000, 4,197 barrels of oil, 2,315 barrels of NGLs and 8,704 mcf of gas were
sold, or 7,963 BOEs. For the three months ended September 30, 1999, 4,385
barrels of oil, 2,505 barrels of NGLs and 10,379 mcf of gas were sold, or 8,620
BOEs.
The average price received per barrel of oil increased $11.26, or 59%, from
$18.97 for the three months ended September 30, 1999 to $30.23 for the same
period in 2000. The average price received per barrel of NGLs increased $3.53,
or 35%, from $9.97 during the three months ended September 30, 1999 to $13.50
for the same period in 2000. The average price received per mcf of gas increased
79% from $1.59 during the three months ended September 30, 1999 to $2.84 for the
same period in 2000.
Costs and Expenses:
Total costs and expenses increased to $90,138 for the three months ended
September 30, 2000 as compared to $80,673 for the same period in 1999, an
increase of $9,465, or 12%. This increase was due to increases in production
costs, depletion and G&A.
Production costs were $64,917 for the three months ended September 30, 2000 and
$60,264 for the same period in 1999, resulting in a $4,653 increase, or 8%. The
increase was primarily due to higher production taxes of $6,125 associated with
higher oil and gas prices and additional well maintenance costs incurred to
stimulate well production of $572, offset by a decline in workover expenses of
$5,594.
During this period, G&A increased, in aggregate, 47% from $3,740 for the three
months ended September 30, 1999 to $5,484 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 $19,737 for the three months ended September 30, 2000 compared to
$16,669 for the same period in 1999, representing an increase in depletion of
$3,068, or 18%. This increase was attributable to a decline in proved reserves
as compared to the same period in 1999, offset by a decline in oil production of
188 barrels for the three months ended September 30, 2000 compared to the same
period in 1999.
9
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Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $146,512 during the nine
months ended September 30, 2000 from the same period ended September 30, 1999.
This increase was due to an increase in oil and gas sales receipts of $233,427,
offset by increases in production costs paid of $77,394 and G&A expenses paid of
$9,521.
Net Cash Provided by (Used in) Investing Activities
The Partnership's principal investing activities during the nine months ended
September 30, 2000 and 1999 were related to equipment upgrades on various oil
and gas properties.
Proceeds from disposition of assets of $9,859 recognized during the nine months
ended September 30, 2000 were from equipment credits on one well.
Net Cash Used in Financing Activities
For the nine months ended September 30, 2000, cash distributions to the partners
were $339,285, of which $3,393 was distributed to the managing general partner
and $335,892 to the limited partners. For the same period ended September 30,
1999, cash distributions to the partners were $102,536, of which $950 was
distributed to the managing general partner and $101,586 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: November 13, 2000 By: /s/ Rich Dealy
-----------------------------------
Rich Dealy, Vice President and
Chief Accounting Officer
11
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