<PAGE>
- --------------------------------------------------------------------------------
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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 QUARTER ENDED JUNE 30, 1996 COMMISSION FILE NO. 0-23784
KELLEY PARTNERS 1994 DEVELOPMENT
DRILLING PROGRAM
(Exact name of registrant as specified in its charter)
TEXAS 76-0419001
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
601 JEFFERSON ST.
SUITE 1100
HOUSTON, TEXAS 77002
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 652-5200
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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<PAGE>
KELLEY PARTNERS 1994 DEVELOPMENT DRILLING PROGRAM
INDEX
PART I. FINANCIAL INFORMATION PAGE
----
Balance Sheets as of June 30, 1996 (unaudited) and December 31, 1995... 2
Statements of Income (Loss) for the three months ended June 30,
1996 and 1995 (unaudited)............................................. 3
Statements of Income (Loss) for the six months ended June 30, 1996
and 1995 (unaudited).................................................. 4
Statements of Cash Flows for the six months ended June 30, 1996
and 1995 (unaudited).................................................. 5
Notes to Financial Statements.......................................... 6
Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................. 7
PART II. OTHER INFORMATION................................................. 11
1
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PART I. FINANCIAL INFORMATION
KELLEY PARTNERS 1994 DEVELOPMENT DRILLING PROGRAM
BALANCE SHEETS
($ IN THOUSANDS)
<TABLE>
JUNE 30, DECEMBER 31,
1996 1995
---------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS:
Cash and cash equivalents....................................... $ 210 57
Accounts receivable - trade..................................... 156 141
Accounts receivable - affiliates................................ 4,174 2,855
Other assets.................................................... 32 21
-------- -------
Total current assets 4,572 3,074
-------- -------
Oil and gas properties, successful efforts method:
Properties subject to amortization........................... 39,044 31,932
Less: Accumulated depreciation, depletion & amortization.... (23,020) (19,217)
-------- -------
Total oil and gas properties................................. 16,024 12,715
-------- -------
TOTAL ASSETS.................................................... $20,596 15,789
-------- -------
-------- -------
LIABILITIES:
Accounts payable and accrued expenses........................... $ 4,197 7,533
Accounts payable - affiliates................................... 365 56
-------- -------
Total current liabilities.................................... 4,562 7,589
-------- -------
TOTAL LIABILITIES............................................... 4,562 7,589
-------- -------
PARTNERS' EQUITY:
LP unitholders' equity.......................................... 1,590 1,985
GP unitholders' equity.......................................... 13,268 4,751
Managing and special general partners' equity................... 1,176 1,464
-------- -------
TOTAL PARTNERS' EQUITY.......................................... 16,034 8,200
-------- -------
TOTAL LIABILITIES AND PARTNERS' EQUITY............................ $ 20,596 15,789
-------- -------
-------- -------
</TABLE>
See Notes to Financial Statements.
2
<PAGE>
KELLEY PARTNERS 1994 DEVELOPMENT DRILLING PROGRAM
STATEMENTS OF INCOME (LOSS)
($ IN THOUSANDS, EXCEPT PER UNIT DATA)
(UNAUDITED)
<TABLE>
THREE MONTHS ENDED
JUNE 30,
---------------------
1996 1995
--------- ---------
<S> <C> <C>
REVENUES:
Oil and gas sales................................. $ 4,261 1,780
Interest income................................... 300 749
--------- ---------
Total revenues.................................. 4,561 2,529
--------- ---------
COSTS AND EXPENSES:
Lease operating expenses.......................... 356 130
Severance taxes................................... 165 109
Exploration costs................................. 167 2,343
General and administrative expenses............... 213 178
Depreciation, depletion and amortization.......... 2,330 1,352
--------- ---------
Total costs and expenses........................ 3,231 4,112
--------- ---------
NET INCOME (LOSS)........................................... $ 1,330 (1,583)
--------- ---------
--------- ---------
NET INCOME (LOSS) ALLOCABLE TO LP UNITHOLDERS
AND GP UNITHOLDERS........................................ $ 1,277 (1,520)
--------- ---------
--------- ---------
NET INCOME (LOSS) ALLOCABLE TO MANAGING AND
INDIVIDUAL GENERAL PARTNERS............................... $ 53 (63)
--------- ---------
--------- ---------
NET INCOME (LOSS) PER UNIT.................................. $ .06 (.07)
--------- ---------
--------- ---------
Average units outstanding................................... 20,864,414 20,864,414
---------- ----------
---------- ----------
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
KELLEY PARTNERS 1994 DEVELOPMENT DRILLING PROGRAM
STATEMENTS OF INCOME (LOSS)
($ IN THOUSANDS, EXCEPT PER UNIT DATA)
(UNAUDITED)
SIX MONTHS ENDED
JUNE 30,
------------------------
1996 1995
----------- -----------
REVENUES:
Oil and gas sales. . . . . . . . . . . . . . . . $ 8,299 3,311
Interest income. . . . . . . . . . . . . . . . . 781 1,570
----------- -----------
Total revenues . . . . . . . . . . . . . . . . 9,080 4,881
----------- -----------
COSTS AND EXPENSES:
Lease operating expenses . . . . . . . . . . . . 704 255
Severance taxes. . . . . . . . . . . . . . . . . 300 201
Exploration costs. . . . . . . . . . . . . . . . 322 2,636
General and administrative expenses. . . . . . . 439 270
Depreciation, depletion and amortization . . . . 3,732 2,549
----------- -----------
Total costs and expenses . . . . . . . . . . . 5,497 5,911
----------- -----------
NET INCOME (LOSS). . . . . . . . . . . . . . . . . $ 3,583 (1,030)
----------- -----------
----------- -----------
NET INCOME (LOSS) ALLOCABLE TO LP UNITHOLDERS
AND GP UNITHOLDERS . . . . . . . . . . . . . . . $ 3,441 (989)
----------- -----------
----------- -----------
NET INCOME (LOSS) ALLOCABLE TO MANAGING AND
INDIVIDUAL GENERAL PARTNERS. . . . . . . . . . . $ 142 (41)
----------- -----------
----------- -----------
NET INCOME (LOSS) PER UNIT . . . . . . . . . . . . $ .17 (.05)
----------- -----------
----------- -----------
Average units outstanding. . . . . . . . . . . . . 20,864,414 20,864,414
----------- -----------
----------- -----------
See Notes to Financial Statements.
4
<PAGE>
KELLEY PARTNERS 1994 DEVELOPMENT DRILLING PROGRAM
STATEMENTS OF CASH FLOWS
($ IN THOUSANDS)
(UNAUDITED)
<TABLE>
SIX MONTHS ENDED
JUNE 30,
-----------------
1996 1995
------- ------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,583 (1,030)
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation, depletion and amortization. . . . . . . . . . . . . 3,732 2,549
Dry hole costs. . . . . . . . . . . . . . . . . . . . . . . . . . -- 2,053
Changes in operating assets and liabilities:
Increase in accounts receivable . . . . . . . . . . . . . . . . . (1,334) (2,140)
Increase in other assets. . . . . . . . . . . . . . . . . . . . . (11) (16)
Increase (decrease) in accounts payable and accrued expenses. . . (3,027) 2,529
------- ------
Net cash provided by operating activities . . . . . . . . . . . . . 2,943 3,945
------- ------
INVESTING ACTIVITIES:
Purchases of property and equipment . . . . . . . . . . . . . . . . (7,112) (9,058)
Sale of non-current assets. . . . . . . . . . . . . . . . . . . . . 71 5
------- ------
Net cash used in investing activities . . . . . . . . . . . . . . . (7,041) (9,053)
------- ------
FINANCING ACTIVITIES:
Capital contributed by partners . . . . . . . . . . . . . . . . . . 11,108 7,355
Distribution of uncommitted capital . . . . . . . . . . . . . . . . (340) --
Syndication costs charged to equity . . . . . . . . . . . . . . . . -- (9)
Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,517) (2,824)
------- ------
Net cash provided by financing activities . . . . . . . . . . . . . 4,251 4,522
------- ------
Increase (decrease) in cash and cash equivalents. . . . . . . . . . . 153 (586)
Cash and cash equivalents, beginning of period. . . . . . . . . . . . 57 762
------- ------
Cash and cash equivalents, end of period. . . . . . . . . . . . . . . $ 210 176
------- ------
------- ------
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
KELLEY PARTNERS 1994 DEVELOPMENT DRILLING PROGRAM
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying financial statements of Kelley Partners 1994
Development Drilling Program (the "Partnership") have been prepared in
accordance with generally accepted accounting principles and, in the opinion of
management, reflect all adjustments (consisting of normal recurring adjustments)
necessary for a fair statement in all material respects of the results for the
interim periods presented. The accounting policies followed by the Partnership
are set forth in Note 1 to the financial statements included in its Annual
Report on Form 10-K for the year ended December 31, 1995.
6
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Partnership commenced operations in February 1994 upon completing
a public offering of 20,864,414 units of limited and general partner interests
("Units") at a purchase price of $3.00 per Unit. Kelley Oil Corporation, the
managing general partner of the Partnership ("Kelley Oil"), owns 91.9% of the
Units, together with a 3.94% general partner interest in the Partnership. See
"Liquidity and Capital Resources" below.
RECENT DEVELOPMENTS
DRILLING OPERATIONS. As of August 5, 1996, the Partnership had
participated in drilling 71 wells, of which 67 gross (21.34 net) wells were
productive and 4 gross (2.67 net) wells were dry. A total of 38 wells were
on stream at December 31, 1995, with 17 wells brought into production in the
first six months of 1996 and 5 wells added in July 1996. The Partnership
plans to drill a total of 38 proved undeveloped locations in north Louisiana
during 1996. In addition, another 10 proved undeveloped locations in north
Louisiana have been allocated to the Partnership for drilling after 1996. As
of the date of this Report, 23 of the allocated wells have been drilled and
all have been completed as producers. For the balance of its drilling
program, no south Louisiana drilling rights are committed to the Partnership.
Consistent with historical arrangements, drilling activities are being
allocated and financed two-thirds by the Partnership and one-third by Kelley
Operating Company, Ltd. ("Kelley Operating"), a subsidiary partnership of
Kelley Oil & Gas Corporation ("KOGC"), the parent company of Kelley Oil. See
"Other Information" below.
HEDGING ACTIVITIES. KOGC periodically uses forward sales contracts,
natural gas swap agreements and options to reduce exposure to downward price
fluctuations on natural gas production of KOGC and its subsidiaries, including
the Partnership (collectively, the "Kelley Group"). The swap agreements
generally provide for the Kelley Group to receive or make counterparty payments
on the differential between a fixed price and a variable indexed price for
natural gas. Gains and losses realized by the Partnership from hedging
activities are included in oil and gas revenues. Through a combination of
natural gas swap agreements and forward sales contracts, 44.3% of the Kelley
Group's natural gas production for the second quarter of 1996 was affected by
hedging transactions at an average Nymex quoted price of $2.13 per MMBtu, before
transaction costs and transportation costs on gas delivered under forward sales
contracts. As of July 31, 1996, approximately 41.5% of the Kelley Group's
anticipated natural gas production for the balance of 1996 has been hedged by
forward sales contracts and natural gas swap agreements at an average Nymex
quoted price of $2.22 per MMBtu, before transaction and transportation costs.
Additionally, the Kelley Group has secured a price floor on 21.1% of estimated
production for the remainder of the year at an average price of $1.99 per MMBtu,
after transaction costs.
CONTOUR TRANSACTION. In February 1996, KOGC completed an equity
private placement with Contour Production Company L.L.C. ("Contour") for $48
million of common stock, providing Contour with 49.8% of KOGC's voting power
at the time of the transaction (the "Contour Transaction"). As part of the
Contour Transaction, John F. Bookout, President of Contour, and other
executives named by him assumed senior management positions with KOGC and
Kelley Oil, and designees of Contour obtained a majority of the seats on
KOGC's board of directors.
RESULTS OF OPERATIONS
QUARTERS ENDED JUNE 30, 1996 AND 1995. Oil and gas revenues of
$4,261,000 in the second quarter of 1996 increased 139.4% compared to $1,780,000
in the corresponding quarter last year. During the second quarter of 1996,
production of natural gas increased 103.8% from 897,000 Mcf in the year-earlier
quarter to 1,828,000 Mcf, while the average price of natural gas increased 27.5%
to $2.18 per Mcf from $1.71 per Mcf in the second quarter of 1995. Production
of crude oil in the second quarter of 1996 totaled 12,404 barrels, with an
average sales price of $22.18
7
<PAGE>
per barrel compared to 12,189 barrels at $19.40 per barrel in the second
quarter of 1995, representing volume and price increases of 1.8% and
14.3%, respectively.
Lease operating expenses and severance taxes were $521,000 in the
current quarter versus $239,000 in the second quarter of 1995, an increase of
118.0%, reflecting the increased level of production. On a unit of production
basis, these expenses increased to $.27 per Mcfe in the second quarter of 1996
from $.25 per Mcfe in the same quarter last year.
The Partnership expensed exploration costs in the second quarters of
1996 and 1995 aggregating $167,000 and $2,343,000, respectively, a decrease of
92.9%, primarily reflecting a reduction in exploratory activities during the
current period. All of the Partnership's drilling expenditures in the second
quarter of 1996 were incurred for development wells and were therefore
capitalized.
General and administrative expenses of $213,000 in the second quarter
of 1996 increased 19.7% from $178,000 in same quarter last year, reflecting the
Partnership's share of administration costs associated with development
operations of the Partnership. On a unit of production basis, these expenses
decreased to $.11 per Mcfe in the current quarter from $.18 per Mcfe in the
second quarter of 1995.
Depreciation, depletion and amortization ("DD&A") increased 72.3% from
$1,352,000 in the second quarter of 1995 to $2,330,000 in the current quarter,
primarily as a result of increased production largely offset by lower depletion
rates following noncash impairment charges aggregating $10,914,000 recognized in
the fourth quarter of 1995 against the carrying value of the Partnership's oil
and gas properties under the Financial Accounting Standards Board's Statement
No. 121, Accounting for the Impairment of Long-Lived Assets ("FAS 121"). On a
unit of production basis, DD&A decreased from $1.39 per Mcfe in the second
quarter 1995 to $1.22 per Mcfe in the current quarter.
The Partnership realized net income of $1,330,000 or $.06 per Unit for
the second quarter of 1996 and a net loss of $1,583,000 or $.07 per Unit in the
year-earlier quarter, reflecting the foregoing developments. Net available cash
from Partnership operations, representing its net income (loss) plus exploration
costs and noncash charges for DD&A, aggregated $3,827,000 or $.18 per Unit in
the current quarter compared to $2,112,000 or $.10 per Unit in the second
quarter of 1995.
SIX MONTHS ENDED JUNE 30, 1996 AND 1995. Oil and gas revenues of
$8,299,000 in the first half of 1996 increased 150.6% compared to $3,311,000 in
the corresponding period last year. During the first half of 1996, production
of natural gas increased 98.8% from 1,731,000 Mcf in the year-earlier period to
3,442,000 Mcf, while the average price of natural gas increased 36.7% to $2.27
per Mcf from $1.66 per Mcf in the first half of 1995. Production of crude oil
in the first six months of 1996 totaled 24,914 barrels, with an average sales
price of $21.19 per barrel compared to 23,212 barrels at $17.18 per barrel in
the first half of 1995, representing volume and price increases of 7.3% and
23.3%, respectively.
Lease operating expenses and severance taxes were $1,004,000 in the
current period versus $456,000 in the first half of 1995, an increase of 120.2%,
reflecting the increased level of production. On a unit of production basis,
these expenses increased to $.28 per Mcfe in the first half of 1996 from $.24
per Mcfe in the same period last year.
The Partnership expensed exploration costs in the first six months of
1996 and 1995 aggregating $322,000 and $2,636,000, respectively, a decrease of
87.8%, primarily reflecting a reduction in exploratory activities during the
current period. All of the Partnership's drilling expenditures in the first
half of 1996 were incurred for development wells and were therefore capitalized.
General and administrative expenses of $439,000 in the first half of
1996 increased 62.6% from $270,000 in same period last year, reflecting the
Partnership's share of administration costs associated with development
8
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operations of the Partnership. On a unit of production basis, these expenses
decreased to $.12 per Mcfe in the current period from $.14 per Mcfe in the first
half of 1995.
DD&A increased 46.4% from $2,549,000 in the first six months of 1995
to $3,732,000 in the current period, primarily as a result of increased
production largely offset by lower depletion rates and noncash impairment
charges aggregating $10,914,000 recognized in the fourth quarter of 1995 against
the carrying value of the Partnership's oil and gas properties under FAS 121.
On a unit of production basis, DD&A decreased from $1.36 per Mcfe in the first
half 1995 to $1.04 per Mcfe in the current period.
The Partnership realized net income of $3,583,000 or $.17 per Unit for
the first half of 1996 compared to a net loss of $1,030,000 or $.05 per Unit in
the year-earlier period, reflecting the foregoing developments. Net available
cash from Partnership operations, representing its net income (loss) plus
exploration costs and noncash charges for DD&A, aggregated $7,637,000 or $.36
per Unit in the current period compared to $4,155,000 or $.19 per Unit in the
first six months of 1995.
The results of operations for the quarter and six months ended June
30, 1996 are not necessarily indicative of the Partnership's operating results
to be expected for the full year.
LIQUIDITY AND CAPITAL RESOURCES
LIQUIDITY. Net cash used in the Partnership's operating activities
during the first six months of 1996, as reflected on its statement of cash
flows, totaled $2,943,000. The Partnership's cash position was increased during
the period by payments of subscriptions for Units and general partner
contributions aggregating $11,108,000. During the first six months of 1996,
funds were used in investing and financing activities comprised primarily of
property and equipment expenditures of $7,112,000 for development of the
Partnership's oil and gas properties and distributions to partners aggregating
$6,517,000. As a result of these activities, the Partnership's cash and cash
equivalents increased from $57,000 at December 31, 1995 to $210,000 at June 30,
1996.
CAPITAL RESOURCES. The Partnership Agreement contemplates pro rata
contributions from the Unitholders and the general partners of $62,593,242
(96.04%) and $2,580,897 (3.96%), respectively, or an aggregate of $65,174,139
("Contemplated Capital"). In accordance with its undertaking to purchase all
unsubscribed and unpaid Units, Kelley Oil subscribed for 19,163,889 Units or
91.9% of the total outstanding Units. Kelley Oil did not have adequate current
liquidity or capital resources to fund its entire subscription commitment by the
end of the deferred payment period in November 1994. Subsequent contributions
are being made by Kelley Oil, together with interest at a market rate, as funds
are needed for the Partnership's drilling activities. After giving effect to a
required reduction of Partnership capital to reflect a distribution of
uncommitted funds to Unitholders other than Kelley Oil (the "Public
Unitholders") in March 1996, Kelley Oil's outstanding subscription commitment
was $10,023,532 million as of the date of this Report.
From its inception through December 31, 1995, a total of $43.7 million
was expended on Partnership activities, including syndication costs. For the
balance of the Partnership's drilling program, a total of $15.5 million has been
contracted or allocated for drilling an additional 38 wells during 1996 and 10
proved undeveloped locations thereafter, plus $1.5 million for drilling
overruns, contingencies and necessary operating capital. The expenditures
through 1995 plus these budgeted expenditures aggregate $60.7 million
("Committed Expenditures"). Accordingly, the Contemplated Capital exceeded the
Committed Expenditures by $4.4 million or .20 per Unit. The Public Unitholders'
share of the excess Contemplated Capital aggregating $340,105 was distributed to
the Public Unitholders as a return of capital in March 1996.
During 1995, the Partnership and its operating joint venture (the
"Joint Venture") were guarantors under the Kelley Group's revolving credit
facility (the "Prior Credit Facility"). In February 1996, KOGC repaid
outstanding borrowings of $30 million under the Prior Credit Facility with
proceeds from the Contour Transaction. See "Recent Developments--Contour
Transaction" above. In connection with the Contour Transaction, KOGC replaced
the Prior
9
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Credit Facility with a new $35 million revolving credit facility agented by
Texas Commerce Bank National Association ("Credit Facility"). The borrowers
under the Credit Facility are Kelley Oil and Kelley Operating, with KOGC, the
Partnership and KOGC's other subsidiary partnerships as guarantors. The
Credit Facility is secured by all the oil and gas properties and other assets
of the Kelley Group, including the Partnership and the Joint Venture. The
agreement covering the Credit Facility provides various financial covenants
as well as restrictions on additional debt, mergers and asset sales, but
limits the lenders' recourse upon any default to Partnership and Joint
Venture assets attributable to Kelley Oil's interests in the Partnership.
DISTRIBUTIONS POLICY. The Partnership made quarterly distributions
of $.12 per Unit in January 1996 and $.18 per Unit in each of May and August
1996 (aggregating $10,014,919), together with $412,943 to the general
partners. The distributions in each quarter represented substantially all of
the Partnership's net available cash from prior quarter operations.
Net available cash per Unit from operations for the six months ended
1996 and 1995 was determined as follows:
(UNAUDITED)
SIX MONTHS ENDED
JUNE 30,
-------------------
1996 1995
------ ------
Net income per Unit. . . . . . . . . . . . . . . . . . . $ .17 $(.05)
Depreciation, depletion and amortization charges
per Unit. . . . . . . . . . . . . . . . . . . . . . . . .17 .12
Exploration and dry hole costs per Unit. . . . . . . . . .02 .12
----- ------
Net available cash per Unit . . . . . . . . . $ .36 $ .19
----- ------
----- ------
10
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PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
Initial test results for wells completed in the second quarter of
1996 are summarized in the following table.
INITIAL TEST RESULTS(1)
FROM
SECOND QUARTER 1996 COMPLETIONS
<TABLE>
THOUSAND
WELL NAME /64" FLOWING CUBIC BARRELS PARTNERSHIP
FIELD NAME COMPLETION RESERVOIR CHOKE TUBING FEET OIL WORKING
PARISH, STATE DATE COMPLETED PERFORATIONS SIZE PRESSURE PER DAY PER DAY INTEREST
- -------------------- ---------- --------- ------------ ------ -------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Felts # 1-Alt 5/1/96 Hoss A&B 6871-8756 32 1,125 4,915 10 .28860039
Sibley
Webster
Woods #1-Alt 5/23/96 Hoss A&B 7157-9721 18 2,175 5,161 18 .12869510
W. Bryceland
Bienville
La Minerals, Ltd.
'27' #2-Alt 5/31/96 Hoss A&B 7357-9980 20 1,425 3,177 8 .32670703
Sailes
Bienville
Gray etal #1-Alt 6/18/96 Hoss A&B 6901-8778 20 1,940 5,013 12 .16640912
Sibley
Webster
</TABLE>
_______________
(1) Reflects initial test results reported under state reporting
requirements and may not be indicative of actual producing
rates to sales.
11
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SIGNATURES
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.
KELLEY PARTNERS 1994
DEVELOPMENT DRILLING PROGRAM
By: KELLEY OIL CORPORATION
Managing General Partner
Date: August 14, 1996 By: /s/ WILLIAM C. RANKIN
---------------------------
William C. Rankin,
Senior Vice President and
Chief Financial Officer
(Duly Authorized Officer)
(Principal Financial Officer)
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 210
<SECURITIES> 0
<RECEIVABLES> 4,330
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,572
<PP&E> 39,044
<DEPRECIATION> 23,020
<TOTAL-ASSETS> 20,596
<CURRENT-LIABILITIES> 4,562
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 16,034
<TOTAL-LIABILITY-AND-EQUITY> 20,596
<SALES> 8,299
<TOTAL-REVENUES> 9,080
<CGS> 0
<TOTAL-COSTS> 1,326
<OTHER-EXPENSES> 4,171
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,583
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,583
<EPS-PRIMARY> .17
<EPS-DILUTED> 0
</TABLE>
