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 March 31, 1996
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. 1-10695
PARKER & PARSLEY PETROLEUM COMPANY
(Exact name of Registrant as specified in its charter)
Delaware 74-2570602
(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 / /
Number of shares of Common Stock outstanding as of April 30, 1996.... 35,510,370
Page 1 of 24 pages.
Exhibit Index begins on Page ___.
PARKER & PARSLEY PETROLEUM COMPANY
TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 1996 and
December 31, 1995 ..........................................3
Consolidated Statements of Operations for the three months
ended March 31, 1996 and 1995..................................5
Consolidated Statement of Stockholders' Equity for the three
months ended March 31, 1996....................................6
Consolidated Statements of Cash Flows for the three months
ended March 31, 1996 and 1995..................................7
Notes to Consolidated Financial Statements.......................8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...........................15
PART II. OTHER INFORMATION
Item 1. Legal Proceedings...............................................23
Item 6. Exhibits and Reports on Form 8-K................................23
Signatures......................................................24
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
PARKER & PARSLEY PETROLEUM COMPANY
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
March 31, December 31,
1996 1995
---------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 26,298 $ 19,940
Restricted cash 20,447 15,572
Accounts receivable:
Trade, net 35,879 49,257
Affiliates 1,060 2,369
Oil and gas sales 35,008 37,358
Assets held for resale 3,679 3,677
Inventories 5,936 9,880
Deferred income taxes 1,800 1,600
Other current assets 2,068 2,757
--------- ---------
Total current assets 132,175 142,410
--------- ---------
Property, plant and equipment, at cost:
Oil and gas properties, using the successful
efforts method of accounting:
Proved properties 1,316,147 1,450,290
Unproved properties 6,595 14,574
Natural gas processing facilities 59,331 63,395
Accumulated depletion, depreciation and
amortization (401,618) (406,513)
--------- ---------
980,455 1,121,746
--------- ---------
Restricted investments - 5,345
Other property and equipment, net 28,513 31,755
Other assets, net 15,657 17,973
--------- ---------
$1,156,800 $1,319,229
========= =========
The financial information included as of March 31, 1996 has been
prepared by management without audit by independent public accountants.
The accompanying notes are an integral part of these consolidated
financial statements.
3
PARKER & PARSLEY PETROLEUM COMPANY
CONSOLIDATED BALANCE SHEETS (continued)
(in thousands, except share data)
March 31, December 31,
1996 1995
---------- -----------
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 1,701 $ 2,608
Distributable litigation settlement 18,567 13,633
Undistributed unit purchases 1,880 1,939
Accounts payable:
Trade 48,653 58,263
Affiliates 1,210 574
Domestic and foreign income taxes 47 2,875
Other current liabilities 33,315 31,017
--------- ---------
Total current liabilities 105,373 110,909
--------- ---------
Long-term debt, less current maturities 416,832 586,549
Other noncurrent liabilities 11,854 16,656
Deferred income taxes 12,200 5,300
Preferred stock of subsidiary 188,820 188,820
Stockholders' equity:
Preferred stock, $.01 par value; 20,000,000 shares
authorized; none issued and outstanding - -
Common stock, $.01 par value; 180,000,000 shares
authorized; 36,446,955 and 36,387,960 shares
issued at March 31, 1996 and December 31, 1995,
respectively 364 364
Additional paid-in capital 453,554 452,718
Treasury stock, at cost; 1,008,118 and 1,004,684
shares at March 31, 1996 and December 31, 1995,
respectively (6,917) (6,844)
Unearned compensation (1,729) (2,055)
Retained deficit (23,551) (36,491)
Cumulative translation adjustment - 3,303
--------- ---------
Total stockholders' equity 421,721 410,995
--------- ---------
Commitments and contingencies (Note C)
$1,156,800 $1,319,229
========= =========
The financial information included as of March 31, 1996 has been
prepared by management without audit by independent public accountants.
The accompanying notes are an integral part of these consolidated
financial statements.
4
PARKER & PARSLEY PETROLEUM COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(Unaudited)
Three months ended
March 31,
1996 1995
----------- -----------
Revenues:
Oil and gas $ 98,025 $ 94,541
Natural gas processing 5,419 9,424
Gas marketing - 26,692
Interest and other 1,167 1,521
Gain (loss) on disposition of assets 13,671 (2,760)
---------- ----------
118,282 129,418
Costs and expenses:
Oil and gas production 30,494 34,753
Natural gas processing 3,198 7,205
Gas marketing - 26,300
Depletion, depreciation and amortization 31,179 45,109
Exploration and abandonments 4,986 6,572
General and administrative 6,360 12,552
Interest 14,682 17,567
Other 373 938
---------- ----------
91,272 150,996
---------- ----------
Income (loss) before income taxes 27,010 (21,578)
Income tax benefit (provision) (12,300) 6,800
---------- ----------
Net income (loss) $ 14,710 $ (14,778)
========== ==========
Net income (loss) per share:
Primary $ .41 $ (.42)
========== ==========
Fully diluted $ .39 $ (.42)
========== ==========
Dividends declared per share $ .05 $ .05
========== ==========
Weighted average shares outstanding 35,591,835 34,972,327
=========== ===========
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 consolidated
financial statements.
5
PARKER & PARSLEY PETROLEUM COMPANY
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(in thousands, except share and per share data)
(Unaudited)
Common
Stock Additional Cumulative Total
Shares Common Paid-in Treasury Unearned Retained Translation Stockholders'
Outstanding Stock Capital Stock Compensation Deficit Adjustment Equity
----------- ------ --------- -------- ------------ -------- ---------- ------------
Balance at January
1, 1996 35,383,276 $ 364 $ 452,718 $ (6,844) $ (2,055) $(36,491) $ 3,303 $ 410,995
Exercise of long-term
incentive plan stock
options 58,995 - 736 - - - - 736
Tax benefits related to
stock options - - 100 - - - - 100
Purchase of treasury
stock (3,434) - - (73) - - - (73)
Shares awarded - - - - (108) - - (108)
Amortization of unearned
compensation - - - - 434 - - 434
Net income - - - - - 14,710 - 14,710
Dividends ($.05 per
share) - - - - - (1,770) - (1,770)
Currency translation
adjustment - - - - - - (3,303) (3,303)
---------- ----- -------- ------- ---------- ------- -------- ----------
Balance at March 31, 1996 35,438,837 $ 364 $ 453,554 $ (6,917) $ (1,729) $(23,551) $ - $ 421,721
========== ===== ======== ======= ========== ======= ======== ==========
<FN>
<F1>
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
consolidated financial statements.
6
</FN>
PARKER & PARSLEY PETROLEUM COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Three months ended
March 31,
1996 1995
----------- -----------
Cash flows from operating activities:
Net income (loss) $ 14,710 $ (14,778)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depletion, depreciation and amortization 31,179 45,109
Exploration and abandonments 1,840 2,885
Deferred income taxes 12,300 (6,800)
Loss (gain) on disposition of assets (13,671) 2,760
Other noncash charges 260 2,611
---------- ----------
46,618 31,787
Change in operating assets and liabilities,
net of effects from acquisitions
and divestitures:
Accounts receivable 8,648 7,219
Inventory (54) (728)
Other current assets 514 681
Accounts payable (4,893) (4,320)
Accrued income taxes and other current
liabilities 13,823 7
---------- ----------
Net cash provided by operating activities 64,656 34,646
---------- ----------
Cash flows from investing activities:
Payment for acquisitions, net of cash acquired (59) (992)
Proceeds from disposition of wholly-owned
subsidiaries, net of cash disposed 108,281 -
Proceeds from disposition of assets 3,802 15,392
Additions to oil and gas properties (39,607) (35,045)
Additions to natural gas processing facilities (842) (5,167)
Additions to other property and equipment and
other assets (787) (4,182)
---------- ----------
Net cash provided by (used in) investing
activities 70,788 (29,994)
---------- ----------
Cash flows from financing activities:
Borrowings under long-term debt 168 14,744
Principal payments on long-term debt (128,278) (6,992)
Payment of noncurrent liabilities (110) (254)
Dividends (1,770) (1,746)
Purchase of treasury stock (73) (76)
Exercise of long-term incentive plan stock options 736 388
Distributable litigation settlement - receipts 4,934 107
Other (108) 2
---------- ----------
Net cash provided by (used in) financing
activities (124,501) 6,173
---------- ----------
Effect of exchange rate changes on cash and cash
equivalents 290 (525)
Net increase in cash, cash equivalents and
restricted cash 10,943 10,825
Cash, cash equivalents and restricted cash,
beginning of period 35,512 39,902
---------- ----------
Cash, cash equivalents and restricted cash,
end of period $ 46,745 $ 50,202
========== ==========
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
consolidated financial statements.
7
PARKER & PARSLEY PETROLEUM COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1996
(Unaudited)
NOTE A. Summary of Significant Accounting Policies
Basis of Presentation
In the opinion of management, the unaudited consolidated financial
statements of Parker & Parsley Petroleum Company (the "Company") as of March 31,
1996 and for the three months ended March 31, 1996 and 1995 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 periods. These interim results are not necessarily indicative of results
for a full year. Certain amounts in the prior period financial statements have
been reclassified to conform to the current period presentation.
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. These consolidated
financial statements should be read in connection with the consolidated
financial statements and notes thereto included in the Company's 1995 Annual
Report.
NOTE B. Disposition of Australasian Assets
On March 28, 1996, the Company completed the sale of certain wholly-owned
Australian subsidiaries to Santos Ltd. for aggregate consideration of $161.7
million which consisted of cash proceeds of $111.1 million for the equity of
such entities, $21.5 million for reimbursement of certain intercompany cash
advances, and the assumption of such subsidiaries' net liabilities, exclusive of
oil and gas properties, of $29.1 million. The accompanying Consolidated
Statement of Operations for the three months ended March 31, 1996 includes a
pre-tax gain of $11 million from the disposition of these subsidiaries (net of
estimated transaction expenses of approximately $8 million) and an income tax
provision of $6.4 million related to the write-off of certain net operating loss
carryforwards which, with the sale of the income producing assets in the
Australian tax jurisdiction, will not be utilized in the future.
The assets sold to Santos Ltd. consisted primarily of properties located in
the Cooper Basin in Central Australia, the Surat Basin in Northeast Australia,
the Carnarvon Basin on the Northwest Shelf off the coast of Western Australia,
the Otway Basin off the coast of Southeast Australia and the Central Sumatra
Basin in Indonesia. At December 31, 1995, the Company's interests in these
properties contained 32.1 million BOE of proved reserves (consisting of 12.4
million Bbls of oil and 118.3 Bcf of gas), representing $133.8 million of SEC 10
value. During the first quarter of 1996 and 1995, daily production from these
properties averaged 3,841 and 4,181 Bbls of oil at average prices of $19.55 and
8
$18.71, respectively, and 21,176 and 21,911 Mcf of gas at average prices of
$1.95 and $1.89, respectively. Total production costs associated with these
properties were $3.3 million ($4.92 per equivalent Bbl) for the three months
ended March 31, 1996 and $3.2 million ($4.53 per equivalent Bbl) for the same
period in 1995. Depletion expense was $3.9 million ($5.84 per equivalent Bbl)
for the quarter ended March 31, 1996 and $4.8 million ($6.88 per equivalent Bbl)
for the quarter ended March 31, 1995.
On March 28, 1996, the Company entered into an agreement to sell another
wholly-owned Australian subsidiary, Bridge Oil Timor Sea, Inc., to Phillips
Petroleum International Investment Company for cash proceeds of $78.6 million.
Bridge Oil Timor Sea, Inc. has a wholly-owned subsidiary, Bridge Oil Timor Sea
Pty Ltd., which owns a 22.5% interest in the ZOCA 91-13 permit in the offshore
Bonaparte Basin in the Zone of Cooperation between Australia and Indonesia. This
sale is expected to be completed during the second quarter of 1996.
NOTE C. Commitments and Contingencies
Severance agreements. On January 1, 1996, the Company entered into
severance agreements with its officers to replace their employment agreements
that expired at the end of 1995. Salaries and bonuses for the Company's officers
are set by the Compensation Committee of the Company's Board of Directors (the
"Committee") independent of this severance agreement, and the Committee can
grant increases or reductions to base salary at its discretion. The current
annual salaries for the officers covered under such severance agreements total
approximately $2.7 million.
Either the Company or the officer may terminate the officer's employment
under the severance agreement at any time. The Company must pay the officer an
amount equal to one year's base salary if employment is terminated because of
death, disability, or normal retirement. The Company must pay the officer an
amount equal to one year's base salary and continue health insurance for the
officer and his immediate family for one year if the Company terminates
employment without cause or if the officer terminates employment with good
reason, which occurs when reductions in the officer's base annual salary exceed
specified limits or when the officer's responsibilities have been significantly
reduced. If within one year after a change of control of the Company, the
Company terminates the officer without cause or if the officer terminates
employment with good reason, the Company must pay the officer an amount equal to
2.99 times the sum of the officer's base salary plus target bonus for the year
and continue health insurance for the officer and his immediate family for one
year. If the officer terminates employment with the Company without good reason
between six months and one year after a change in control, or at any time within
one year after a change in control if the officer is required to move, then the
Company must pay the officer one year's base salary and continue health
insurance for the officer and his immediate family for one year. Officers are
also entitled to additional payments for certain tax liabilities that may apply
to severance payments following a change of control.
9
Indemnifications. The Company has indemnified its directors and certain of
its officers, employees and agents with respect to claims and damages arising
from acts or omissions taken in such capacity, as well as with respect to
certain litigation.
Legal actions. The following is a brief description of certain litigation
to which the Company is subject. The Company does not currently believe that it
has a probable and estimable loss with respect to any such litigation in excess
of currently provided for reserves. If such a loss becomes probable and
estimable, the amount of any recorded liability could have a material adverse
effect on the Company's results of operations for the period in which such
liability is recorded. However, the Company does not expect that any such
liability would have a material adverse effect on its consolidated financial
position as a whole or on its liquidity or capital resources.
Damson Master Limited Partnership ("DMLP"), a wholly-owned subsidiary of
the Company, owns a natural gas processing plant located in Texas County,
Oklahoma known as the "Hooker Plant" and the gas gathering system associated
therewith (the "Hooker Gathering System"). Prior to 1993, Dorchester Hugoton,
Ltd. ("DHL") and DMLP were parties to a gas processing agreement (the "Hooker
Processing Agreement") pursuant to which DMLP gathered and processed the gas
produced from certain oil and gas properties owned by DHL (the "Texas County
Properties"). Under the terms of the Hooker Processing Agreement, DMLP retained
the extracted natural gas liquids and returned the residue gas to DHL, which
sold the residue gas to Natural Gas Pipeline Co. of America ("NGPL") under a gas
purchase contract that had been entered into in 1946 (the "NGPL Contract"). As
compensation for the amount of Btu content extracted from the natural gas stream
during processing, DMLP was obligated to make a "keep-whole payment" to DHL, the
amount of which was related to the price that DHL received for residue gas under
the NGPL Contract. Several related litigation matters involving DMLP and DHL
have arisen in connection with the Hooker Plant, the Hooker Gathering System and
the Hooker Processing Agreement. The following is a summary of those matters.
(a) In March 1989, DHL filed a lawsuit, entitled Dorchester Hugoton,
Ltd. v. Dorchester Master Limited Partnership and Damson Oil Corporation
(Cause No. C-89-34), in the District Court of Texas County, Oklahoma,
alleging that DMLP had improperly and fraudulently computed the price at
which certain of the Texas County Properties were sold by DMLP to DHL
pursuant to a preferential right to purchase. DHL sought actual damages of
$775,000, interest and an unspecified amount of punitive damages. DHL also
asked the trial court to quiet its title to all the real and personal
property covered by the assignment pursuant to which such properties were
conveyed (the "1986 Assignment"). In September 1990, a jury verdict was
rendered in favor of DHL in the amount of approximately $750,000 in actual
damages, $400,000 in interest and $3.5 million in punitive damages. The
trial court also awarded DHL its requested quiet title decree. DMLP
appealed the judgment to the Court of Appeals, and in November 1993, the
Court of Appeals affirmed the trial court's quiet title decree but reversed
the jury's verdict and remanded the case for a new trial. DHL appealed the
Court of Appeals judgment to the Oklahoma Supreme Court, which on June 20,
1995, declined to hear the appeal. The case is now back in the trial court
awaiting a new trial which is expected some time in 1996.
10
(b) In May 1990, DHL filed a lawsuit, entitled Dorchester Hugoton, Ltd.
v. Natural Gas Pipeline Co. of America, in the District Court of Wharton
County, Texas, alleging that the price NGPL was paying for residue gas
under the NGPL Contract was unreasonably low and seeking cancellation of
such contract. Because the lawsuit could have resulted in an increase in
the price of residue gas sold under the NGPL Contract (which, in turn,
would result in DHL's claim to an increase in the amount of the keep-whole
payment that DMLP was required to pay under the Hooker Processing
Agreement), DMLP intervened in the lawsuit. DHL settled its dispute with
NGPL in December 1992, amended the NGPL Contract effective January 1, 1993
and dismissed all of its claims against NGPL. DHL then asserted various
claims against DMLP, including a claim that the amendment to the NGPL
Contract substantially increased DMLP's keep-whole payment obligation to
DHL pursuant to the Hooker Processing Agreement and that DMLP was liable to
DHL for over-extraction of Btus during processing at the Hooker Plant.
During depositions related to the lawsuit, DHL for the first time asserted
that it owned both the Hooker Gathering System and the right to process the
gas produced from the Texas County Properties. DMLP requested a declaratory
judgment that the amendment to the NGPL Contract effected a termination of
the Hooker Processing Agreement (or, alternatively, was void and not
effective to change the obligations of DMLP under the Hooker Processing
Agreement), that DMLP owned the Hooker Gathering System and that DMLP owned
the right to process the gas produced from the Texas County Properties.
In February 1994, the court rendered a final judgment that the Hooker
Processing Agreement was terminated as of January 1, 1993 (and, therefore,
DMLP was not liable for a substantially increased keep-whole payment) and
that DMLP has no liability to DHL on the various other claims that DHL had
asserted against DMLP (including claims that DMLP was liable to DHL for
over-extraction of Btus). With respect to the issues of the ownership of
the Hooker Gathering System and the right to process gas produced from the
Texas County Properties, the court ruled that it lacked the proper
jurisdiction and dismissed those issues. Both parties appealed the judgment
to the 13th Court of Appeals in Corpus Christi, Texas, and on October 9,
1995, the Corpus Christi Court affirmed the Wharton County District Court's
judgment declaring (i) that the 1982 gas processing agreement between the
parties was terminated on January 1, 1993, and therefore, the Company was
not liable to DHL for any additional fuel and shrinkage payments, (ii) that
the Company was not liable to DHL for overextraction under the contract,
and (iii) that the Company was entitled to recover $200,000 in attorney's
fees from DHL. Additionally, the Court also ruled in the Company's favor by
reversing the trial court's dismissal on jurisdictional grounds of the
Company's claim to ownership of the Hooker Gas Gathering System and its
right to process the gas produced by DHL in the Guymon-Hugoton Field. These
two claims have been remanded to the trial court for determination on the
merits. DHL filed a Motion for Rehearing in the Court of Appeals which was
denied on January 18, 1996. On February 2, 1996, DHL filed an additional
Motion for Rehearing En Banc, which was denied on April 4, 1996. The
Company expects DHL to now attempt an appeal to the Texas Supreme Court.
The above claims appealed by DHL (which involve monetary claims against
DMLP) were identical to claims DHL has also made in the Texas County,
Oklahoma lawsuits discussed in (c) and (d) below.
11
(c) In January 1993, DHL filed another lawsuit in the District Court of
Texas County, Oklahoma, entitled Dorchester Hugoton, Ltd. v. Parker &
Parsley Gas Processing Co., et al. (Cause No. C-93-6), asserting claims
that were virtually identical to those already at issue in the Wharton
County, Texas case discussed in paragraph (b) above. In this case, DHL
alleged that the 1986 Assignment effectively conveyed the Hooker Gathering
System to DHL and asserted that the quiet title decree obtained in the
lawsuit described in paragraph (a) above gave it ownership of the Hooker
Gathering System. On September 21, 1995, the court entered a summary
judgment to the effect that DHL owns the Hooker Gathering System and the
right to process the gas produced from the Texas County Properties, that
the Hooker Processing Agreement was still in full force and effect from
January 1, 1993 to April 30, 1994, and that DMLP must pay DHL the principal
sum of $6,558,036 in damages for failure to properly pay for fuel and
shrinkage during that time period. Assuming the Texas Supreme Court denies
DHL's appeal, DMLP believes the Oklahoma trial court should be required
to give full faith and credit to the Texas judgment described in (b) above
nullifying the $6,558,036 judgment entered by the District Court of Texas
County, Oklahoma.
Effective May 1, 1994, NGPL terminated the NGPL Contract with DHL,
resulting in the unquestioned termination of the Hooker Processing
Agreement. In April 1994, DHL gave notice to DMLP that, effective May 1,
1994, it was taking possession of the Hooker Gathering System and was
diverting the gas produced from the Texas County Properties to another
purchaser, bypassing the Hooker Plant. Both parties sought injunctive
relief. On April 20, 1994, the Oklahoma trial court denied DMLP its
requested relief and granted DHL an injunction permitting it to assume
possession and control of the Hooker Gathering System and to cease delivery
of the gas produced from the Texas County Properties to the Hooker Plant.
Both of the court's rulings were appealed by DMLP, and on May 7, 1996, the
Court of Appeals, Oklahoma City, ruled in DMLP's favor reversing both of
the trial court's rulings.
After receiving its requested injunctive relief, DHL tapped into the Hooker
Gathering System with new lines that permitted it to deliver gas, without
processing, directly to another purchaser. Such action reduced the volume
of processable gas available to the Hooker Plant to a level at which the
Hooker Plant could not economically operate. Consequently, DMLP shut down
the Hooker Plant, reducing its value to the salvage value of the equipment
constituting the plant. In recognition of such impairment, the Company
wrote down the carrying value of the Hooker Plant to its salvage value
through an $8.9 million charge to the litigation reserve associated with
the DHL litigation (discussed more fully below).
(d) In February 1993, DHL filed another lawsuit in the District Court
of Texas County, Oklahoma, entitled Dorchester Hugoton, Ltd. v. Parker &
Parsley Development Company, Parker & Parsley Gas Processing Co. and
Dorchester Master Limited Partnership (Cause No. C-93-12). In this lawsuit,
DHL has asserted that DMLP is liable to DHL (as assignee of all of NGPL's
rights and causes of actions against DHL) for over-extraction of Btus
during processing at the Hooker Plant and has claimed damages in excess of
$5 million. This lawsuit is currently dormant and while a loss of up to $5
12
million is possible in this lawsuit, the Company believes that due to the
fact that issues identical to the ones involved have been decided in DMLP's
favor by the Corpus Christi Court of Appeals in the Wharton County, Texas
lawsuit described in paragraph (b) above, and assuming the Court of Appeals
judgment is not changed, the lawsuit should be dismissed by the Oklahoma
trial court giving full faith and credit to the Texas Appellate Court
judgment. The Company intends to pursue, in the lawsuits described in both
paragraphs (b) and (c) above, its full faith and credit claim with the
Oklahoma trial court, and, if necessary, with the Oklahoma Supreme Court.
At the same time, the Company also intends to vigorously pursue its claims
to ownership of the Hooker Gas Gathering System and its right to process
DHL's gas in the Guymon-Hugoton Field.
(e) In May 1994, DMLP filed a lawsuit against DHL in the District Court
of Dallas County, Texas entitled Dorchester Master Limited Partnership,
Parker & Parsley Development Company, Parker & Parsley Gas Processing Co.,
and Midland Gas Processing Co. v. Dorchester Hugoton Ltd. (Cause No.
94-4931) for tortious interference with contractual relationships, unfair
competition and breach of contract for DHL's refusal to make a production
payment to the Company and to allow the Company to participate in the
drilling of a new well. The Company believes the production payment owed by
DHL is in excess of $3 million to date and is seeking substantial damages
under its tortious interference and unfair competition claims, which the
Company has asserted arose from the actions of DHL essentially described in
(c) above.
Also in May 1994, DHL filed another lawsuit in the District Court of Texas
County, Oklahoma, entitled Dorchester Hugoton Limited v. Parker & Parsley
Gas Processing Co., Dorchester Master Limited Partnership, Parker & Parsley
Development Company and Midland Gas Processing Co. (Cause No. CV-94-83) for
a declaratory judgment that it does not owe a production payment to the
Company and that the Company does not have a right to participate in any
new wells drilled by DHL and specifically the new well in question. Both
cases are in discovery without a definite trial setting.
In recording the 1991 Consolidation Transaction (pursuant to which DMLP
became a wholly-owned subsidiary of the Company), the Company evaluated the
contingent liabilities associated with the entities and assets acquired,
including the DHL litigation matters as they existed at the time the transaction
was completed, and established litigation reserves associated with the
litigation matters. Upon evaluation of the DHL litigation matters in
consultation with legal counsel, the Company estimated the probable loss
resulting from the DHL litigation matters to be approximately $1 million, in
addition to the $5.3 million loss resulting from the lawsuit described in
paragraph (a) above (for which DMLP had already posted $5.3 million in cash
collateral and recorded a $5.3 million charge to earnings), and established an
appropriate litigation reserve. The Company increased the litigation reserve to
$6.3 million as of December 31, 1993, when it was able to receive a return of
the $5.3 million in cash that had been posted as collateral for the appeal bond
in the lawsuit described in paragraph (a) above. In recognition of the
impairment of the Hooker Plant, the Company further increased the litigation
reserve through a $2.7 million charge to earnings during the first quarter of
1994 and wrote down the carrying value of the Hooker Plant to its salvage value
13
through an $8.9 million charge to the litigation reserve. In the second quarter
of 1995 the Company determined, based upon its evaluation of the DHL litigation
matters and consultation with legal counsel, that it had a probable liability of
$2 million resulting from costs associated with resolution of these matters and
recognized such liability through a charge to other expense.
The Company will continue to evaluate its litigation matters on a
quarter-by-quarter basis and will adjust the litigation reserve as appropriate
to reflect the then current status of the litigation. The Company is party to
other legal actions arising in the ordinary course of its business, none of
which management believes will result in a material adverse effect on the
Company's consolidated financial position or results of operations.
NOTE D. Derivative Financial Instruments
Commodity hedges. The Company utilizes various swap and option contracts
to hedge the effect of price changes on future oil and gas production. The
following table sets forth the future volumes hedged by year and the weighted
average price to be received based upon the fixed price of the individual swap
and option contracts outstanding at March 31, 1996:
Gas Oil
Volume Volume Price
Year (Bcf) (MMBbls) per Mcf/Bbl
---- ------ ------ -----------
Gas production:
1996 - Swap Contracts 2.3 - $ 1.70
Oil production:
1996 - Collar Option Contracts - 1.9 $ 17.14-$19.55
During April 1996, the Company entered into additional hedge positions
for 1996 and 1997 oil and gas production. The additional gas swap contracts have
provided the Company with hedge positions for 14.3 Bcf of gas at a weighted
average price of $2.05 for the nine-month period ending December 31, 1996 and 7
Bcf of gas at a weighted average price of $1.99 for the four-month period ending
April 30, 1997. The additional oil swap contracts have provided the Company with
hedge positions for 828,000 Bbls of oil at a price of $18.90 for the six-month
period ending December 31, 1996, and 1.1 million Bbls of oil hedged at a price
of $18.04 for the year ending December 31, 1997.
NOTE E. Gas Marketing
Effective January 1, 1996, the Company, along with Apache Corporation and
Oryx Energy Company, formed Producers Energy Marketing, LLC ("ProEnergy"), a
natural gas marketing company organized to create a direct link between gas
producers and purchasers. The venture is structured to flow through the benefits
arising out of the expanded services and the economies of scale from the
aggregation of substantial volumes of gas. The Company is obligated to sell to
ProEnergy all gas production (subject to certain exclusions relative to
immaterial volumes) owned or controlled by the Company, or any affiliate, in
North America (onshore and offshore), which is not subject to a binding and
enforceable gas sales contract in effect on April 1, 1996. As a result, as of
January 1, 1996, the Company no longer has any revenues or expenses associated
with third party gas marketing activities.
14
PARKER & PARSLEY PETROLEUM COMPANY
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations(1)
General
Financial Performance. The Company reported net income of $14.7 million, or $.41
per share, for the first quarter of 1996 as compared to a net loss of $14.8
million, or $.42 per share, for the comparable 1995 period. Excluding the after
tax net gain on disposition of assets of $6.4 million, including an after tax
gain of $4.6 million ($.13 per share) resulting from the disposition of certain
of the Company's Australasian assets (see "Disposition of Australasian Assets"
below), the Company reported net income from continuing operations of $8.3
million, or $.23 per share. The Company's financial performance in the first
quarter of 1996 was also affected by the following items: (i) improved oil and
gas prices, (ii) decreases in production costs due to the sale of certain high
operating cost properties in 1995 and certain other cost reduction efforts
initiated in 1995, (iii) decreases in depletion, depreciation, and amortization
expenses as a result of a significant increase in the Company's oil and gas
reserves during 1995 and a reduction in the Company's net depletable basis from
charges taken in accordance with the Statement of Financial Accounting Standards
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of," (iv) a decrease in general and administrative
expenses primarily resulting from the implementation during 1995 of measures
intended to reduce overall general and administrative expenses, and (v) a
decrease in interest expense due to a decrease in the Company's outstanding
long-term indebtedness.
Net cash provided by operating activities, before changes in operating assets
and liabilities, increased 47% to $46.6 million during the first quarter of 1996
compared to $31.8 million for the same period in 1995. This increase was
primarily attributable to the improvements made in the overall cost structure of
the Company during 1995 and improved commodity prices realized during the first
quarter of 1996.
Disposition of Australasian Assets. On March 28, 1996, the Company completed the
sale of certain wholly-owned Australian subsidiaries to Santos Ltd. for
aggregate consideration of $161.7 million which consisted of cash proceeds of
$111.1 million for the equity of such entities, $21.5 million for reimbursement
of certain intercompany cash advances, and the assumption of such subsidiaries'
net liabilities, exclusive of oil and gas properties, of $29.1 million. The
proceeds, after payment of certain costs and expenses, were utilized to reduce
the Company's outstanding bank indebtedness and for general working capital
purposes. The Company recognized a pre-tax gain of $11 million from the
disposition of these subsidiaries (net of estimated transaction expenses of
approximately $8 million) and an income tax provision of $6.4 million related to
the write-off of certain net operating loss carryforwards which, with the sale
of the income producing assets in the Australian tax jurisdiction, will not be
utilized in the future.
15
PARKER & PARSLEY PETROLEUM COMPANY
Also on March 28, 1996, the Company entered into an agreement to sell another
wholly-owned Australian subsidiary, Bridge Oil Timor Sea, Inc. to Phillips
Petroleum International Investment Company for cash proceeds of $78.6 million.
Bridge Oil Timor Sea, Inc. has a wholly-owned subsidiary, Bridge Oil Timor Sea
Pty Ltd., which owns a 22.5 % interest in the ZOCA 91-13 permit in the offshore
Bonaparte Basin in the Zone of Cooperation between Australia and Indonesia. This
sale is expected to be completed during the second quarter of 1996.
Asset Dispositions. From time to time, the Company disposes of nonstrategic
assets in order to raise capital for other activities, reduce debt or eliminate
costs associated with nonstrategic assets. Based on its current property
divestiture plan, the Company anticipates realizing property sale proceeds of
approximately $50 million during 1996 from the divestiture of domestic
nonstrategic assets. Such proceeds will initially be used to reduce the amount
of outstanding indebtedness and subsequently to provide funding for a portion of
the Company's 1996 capital expenditures including purchases of oil and gas
properties in the Company's core areas.
During March 1996, the Company entered into an agreement to sell certain
nonstrategic assets for aggregate proceeds of approximately $45 million.
Production during the three months ended March 31, 1996 from these properties
averaged 1,712 Bbls of oil per day and 12,134 Mcf per day. The sale is expected
to be completed during the second quarter of 1996.
Cost Reductions. As a result of the Company's emphasis on cost control efforts
and the disposition of certain nonstrategic oil and gas properties during 1995,
production costs per BOE for the first quarter of 1996 declined 4% to $4.76 from
$4.95 in the first quarter of 1995. During 1995, the Company initiated programs
to study specific opportunities for significant future reductions in its entire
cost structure. These programs have continued in 1996, and the Company expects
production costs per BOE to decline as the benefits of continuing to sell high
cost properties are realized and as specific programs for further cost
reductions are implemented.
During 1995, the Company performed a comprehensive internal evaluation of its
general and administrative cost structure and implemented measures intended to
reduce overall general and administrative expense. These measures primarily
involved organizational realignments, streamlining of management
responsibilities and implementation of Company-wide cost control policies. The
benefits of these measures continue to be realized during 1996 as evidenced by
the reduction of general and administrative expenses from $8.1 million for the
first three months ended March 31, 1995 (excluding $4.5 million in nonrecurring
reorganization charges) to $6.4 million for the three months ended March 31,
1996.
16
PARKER & PARSLEY PETROLEUM COMPANY
Commodity Prices. The Company attempts to reduce its exposure to adverse
commodity price fluctuations through various hedging techniques. At March 31,
1996, the Company had entered into swap agreements fixing the price of 2.3 Bcf
of remaining 1996 gas production at a weighted average price of $1.70 per Mcf.
In addition, at March 31, 1996, the Company had fixed the price of 1.9 million
Bbls of remaining 1996 oil production in the weighted average price range of
$17.14 to $19.55 per Bbl through various collar option contracts. During April
1996, the Company entered into additional hedge positions for 1996 and 1997 oil
and gas production. The additional gas swap contracts have provided the Company
with hedge positions for 14.3 Bcf of gas at a weighted average price of $2.05
for the nine-month period ending December 31, 1996 and 7 Bcf of gas at a
weighted average price of $1.99 for the four-month period ending April 30, 1997.
The additional oil swap contracts have provided the Company with hedge positions
for 828,000 Bbls of oil at a price of $18.90 for the six-month period ending
December 31, 1996, and 1.1 million Bbls of oil hedged at a price of $18.04 for
the year ending December 31, 1997.
17
PARKER & PARSLEY PETROLEUM COMPANY
Results of Operations
Oil and Gas Production.
Three months ended
March 31,
1996 1995
--------- ---------
(in thousands, except average
production, price and
cost data)
Revenues:
Oil and gas $ 98,025 $ 94,541
Gain (loss) on disposition of oil and gas
properties (a) 463 (2,453)
-------- --------
98,488 92,088
-------- --------
Costs and expenses:
Oil and gas production (30,494) (34,753)
Depletion (28,596) (41,661)
Exploration and abandonments (1,524) (3,450)
Geological and geophysical (2,827) (3,122)
-------- --------
(63,441) (82,986)
-------- --------
Operating profit (excluding general and
administrative expenses and income taxes) $ 35,047 $ 9,102
======== ========
- - ---------------
(a) The 1996 amount does not include the gain related
to the disposition of Australasian assets.
Worldwide:
Production:
Oil (MBbls) 3,116 3,343
Gas (MMcf) 19,735 22,045
Total (MBOE) 6,405 7,017
Average daily production:
Oil (Bbls) 34,243 37,143
Gas (Mcf) 216,869 244,945
Average oil price (per Bbl) $ 18.37 $ 16.63
Average gas price (per Mcf) $ 2.07 $ 1.77
Costs:
Production costs (per BOE) $ 4.76 $ 4.95
Depletion (per BOE) $ 4.46 $ 5.94
Domestic:
Production:
Oil (MBbls) 2,767 2,967
Gas (MMcf) 17,808 20,073
Total (MBOE) 5,735 6,313
Average daily production:
Oil (Bbls) 30,402 32,962
Gas (Mcf) 195,693 223,033
Average oil price (per Bbl) $ 18.22 $ 16.37
Average gas price (per Mcf) $ 2.08 $ 1.75
Costs:
Production costs (per BOE) $ 4.74 $ 5.00
Depletion (per BOE) $ 4.30 $ 5.83
18
PARKER & PARSLEY PETROLEUM COMPANY
Oil and Gas Revenues. Revenues from oil and gas operations totaled $98.5 million
for the three months ended March 31, 1996 as compared to $92.1 million for the
comparable period in 1995. The increase is primarily attributable to an increase
in the average price received for both oil and gas production. The average oil
price received increased from $16.63 to $18.37 per Bbl and the average gas price
received increased from $1.77 to $2.07 per Mcf from the first quarter of 1995 as
compared to the first quarter of 1996. The first quarter of 1995 includes 7,606
Bbls per day and 37,850 Mcf per day of production attributable to property
dispositions which occurred during 1995. Excluding production from the
properties sold during 1995, average daily oil and gas production increased 16%
and 5%, respectively, for the three months ended March 31, 1996 as compared to
the same period in 1995. The increases are primarily due to the Company's
successful drilling activities during 1995 and the first quarter of 1996.
Production Costs. Total production costs decreased 12% from the first quarter of
1995 as compared to the first quarter of 1996, and production costs per BOE
decreased 4% during the same time period (from $4.95 to $4.76 during the first
quarters of 1995 and 1996, respectively). The decrease is due to the sale of
certain high operating cost properties sold during 1995 and a concentrated
effort to evaluate and reduce all operating costs.
Depletion Expense. Depletion expense per BOE decreased 25% in the first quarter
of 1996 as compared to the first quarter of 1995. The decrease is primarily the
result of the following factors: (i) the significant increase in oil and gas
reserves during 1995 resulting from the Company's exploration and development
drilling activities, including revisions, and (ii) a reduction in the Company'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."
Exploration and Abandonments. Exploration and abandonments decreased
significantly during the first quarter of 1996 as compared to the first quarter
of 1995 (from $6.6 million in 1995 to $4.4 million in 1996). This decrease is
largely the result of decreased activity, both in exploratory drilling and
geological and geophysical activity, related to the Company's Australian
subsidiaries which were sold in March 1996 (see "Disposition of Australasian
Assets" above and Note B of Notes to Consolidated Financial Statements included
in "Item 1. Financial Statements"). The following table sets forth the
components of the 1996 and 1995 first quarter expense:
19
PARKER & PARSLEY PETROLEUM COMPANY
Three months
ended March 31,
1996 1995
-------- --------
(in thousands)
Exploratory dry holes:
United States $ 315 $ 295
Australia and other foreign 580 1,334
Geological and geophysical costs:
United States 1,205 467
Australia and other foreign 1,622 2,655
Leasehold abandonments and other 629 1,821
------- -------
$ 4,351 $ 6,572
======= =======
Approximately 10% of the Company's 1996 capital budget will be spent on
exploratory projects compared to 15.9% in 1994 and 16.1% in 1995. The Company
currently anticipates that its 1996 exploration efforts will be concentrated in
the onshore Gulf Coast area and its interests in Argentina.
Natural Gas Processing. Natural gas processing revenues and costs decreased 42%
and 56%, respectively, for the three months ended March 31, 1996 as compared to
the three months ended March 31, 1995. The decrease is primarily due to the sale
of four gas plants during 1995. The average price per Bbl of NGL's increased 12%
in the first quarter of 1996 as compared to the first quarter of 1995 (from
$12.00 in 1995 to $13.38 in 1996), and the average price per Mcf of gas residue
increased 40% during the same period (from $1.37 in 1995 to $1.92 in 1996). In
addition, the accompanying Consolidated Statement of Operations for the three
months ended March 31, 1996 includes expenses of $635,000 related to the
abandonment of a processing facility.
General and Administrative Expenses. General and administrative expense was $6.4
million for the quarter ended March 31, 1996 as compared to $12.6 million for
the quarter ended March 31, 1995. The 1995 amount includes a nonrecurring
pre-tax charge of approximately $4.5 million consisting primarily of severance
costs associated with staff reductions made in the Company's Midland, Texas and
Sydney, Australia offices which resulted from organizational changes effected in
March, 1995. In addition, the 1996 amount reflects reductions resulting from the
implementation of measures intended to reduce overall general and administrative
expenses. These measures resulted from the Company's comprehensive internal
evaluation of its cost control structure performed during 1995 and primarily
consisted of organizational realignments, streamlining of management
responsibilities and implementation of company-wide cost control policies.
Interest Expense. Interest expense for the quarter ended March 31, 1996
decreased to $14.7 million as compared to $17.6 million for the comparable
period in 1995. The decrease is due to (i) a decrease of $122.4 million in the
weighted average outstanding balance of the company's indebtedness resulting
20
PARKER & PARSLEY PETROLEUM COMPANY
primarily from the application of proceeds from the 1995 asset disposition
program, offset by (ii) an increase in the weighted average interest rate on the
Company's indebtedness to 7.56% for the quarter ended March 31, 1996 from 7.03%
for the quarter ended March 31, 1995.
Income Taxes. The Company's income tax expense of $12.3 million for the quarter
ended March 31, 1996 and its income tax benefit of $6.8 million for the quarter
ended March 31, 1995 reflect the net expense and benefit, respectively,
resulting from the separate tax calculation prepared for each tax jurisdiction
in which the Company is subject to income taxes. For the quarter ended March 31,
1996, the Company had an effective total tax rate of 46%, including a provision
of $6.4 million related to the write-off of certain net operating loss
carryforwards which, with the sale of the income producing assets in the
Australian tax jurisdiction, will not be utilized in the future (see Note B of
Notes to Consolidated Financial Statements included in "Item 1. Financial
Statements").
Liquidity and Capital Resources
Capital Commitments. The Company's primary needs for cash are for exploration,
development and acquisitions of oil and gas properties, repayment of principal
and interest on outstanding indebtedness and working capital obligations.
Funding for the Company's exploration and development activities and its working
capital obligations is provided primarily by internally-generated cash flow. The
Company budgets its capital expenditures based on projected cash flows and
routinely adjusts the level of its capital expenditures in response to
anticipated changes in cash flows.
The Company's current capital expenditure budget for 1996 is approximately $175
million, which includes approximately $135 million associated with drilling
approximately 475 oil and gas wells. The remaining amount represents costs
associated with recompletions, facilities and geological and geophysical costs.
Cash expenditures during the first quarter of 1996 for additions to oil and gas
properties totaled $39.6 million. This amount includes $2.8 million for the
acquisition of properties and $36.8 million for development and exploratory
drilling. Significant drilling expenditures included $18 million in the
Spraberry Field of the Permian Basin (including $8.6 million in the Driver unit,
$2.7 million in the North Pembrook unit, $1.8 million in the Shackelford unit
and $4.9 million in other portions of the Spraberry field), $4.9 million in the
onshore Gulf Coast region and $7 million in Australia and other international
areas.
In total, the Company spudded 104 domestic wells in the first quarter of 1996
including 86 wells in the Permian Basin, 11 wells in the Gulf Coast region and
seven wells in other areas.
Additions to natural gas processing facilities during the first quarter of 1996
represented costs associated with the Company's Spraberry natural gas processing
facilities.
21
PARKER & PARSLEY PETROLEUM COMPANY
Capital Resources. The Company's primary capital resources are net cash provided
by operating activities, proceeds from financing activities and proceeds from
sales of non-strategic properties, and the Company expects that these resources
will be sufficient to fund its capital commitments in 1996. Net cash provided by
operating activities, before changes in operating assets and liabilities,
increased 47% to $46.6 million during the first quarter of 1996 compared to
$31.8 million for the same period in 1995. This increase was primarily
attributable to the improvements made in the overall cost structure of the
Company during 1995 and improved commodity prices realized during the first
quarter of 1996.
During the quarter ended March 31, 1996, net cash received (excluding the
subsidiaries' cash on hand of $16.6 million) from the sale of the Australian
subsidiaries totaled $108.3 million. Such receipts were utilized to reduce the
Company's outstanding bank indebtedness and for general working capital
purposes. Also on March 28, 1996, the Company entered into an agreement to sell
another wholly-owned Australian subsidiary for cash proceeds of $78.6 million.
This sale is expected to be completed during the second quarter of 1996, and the
proceeds will be utilized to reduce the Company's outstanding bank indebtedness.
See Note B of Notes to Consolidated Financial Statements included in "Item 1.
Financial Statements." In addition, as mentioned above in "General - Asset
Dispositions," the Company has entered into an agreement to sell certain
nonstrategic domestic properties for proceeds of approximately $45 million. The
sale is expected to close during the second quarter of 1996, and the proceeds
will initially be used to reduce the Company's outstanding bank indebtedness and
subsequently to provide funding for a portion of the Company's 1996 capital
expenditures, including purchases of oil and gas properties in the Company's
core areas.
At March 31, 1996, the Company's outstanding long-term indebtedness was
principally comprised of approximately $300 million of Senior Notes and $100
million of bank indebtedness.
As the Company continues to pursue its growth strategy, it may utilize
alternative financing sources, including the issuance for cash of fixed rate
long-term public debt, convertible securities or preferred stock. The Company
may also issue securities in exchange for oil and gas properties, stock or other
interests in other oil and gas companies or related assets. Additional
securities may be of a class preferred to common stock with respect to such
matters as dividends and liquidation rights and may also have other rights and
preferences as determined by the Company's Board of Directors.
22
PARKER & PARSLEY PETROLEUM COMPANY
Liquidity. At March 31, 1996, the Company had $26.3 million of cash and cash
equivalents on hand, compared to $19.9 million at December 31, 1995. The
Company's ratio of current assets to current liabilities was 1.25 at March 31,
1996 and 1.28 at December 31, 1995.
- - ---------------
(1) The information in this document includes forward-looking statements that
are based on assumptions that in the future may prove not to have been
accurate. Those statements, and Parker & Parsley Petroleum Company's
business and prospects, are subject to a number of risks including the
volatility of oil and gas prices, environmental risks, operating hazards
and risks, risks associated with natural gas processing plants, risks
related to exploration and development drilling, uncertainties about
estimates of reserves, competition, government regulation, and the ability
of the Company to implement its business strategy. These and other risks
are described in the Company's 1995 Annual Report on Form 10-K and in other
reports that are available from the United States Securities and Exchange
Commission.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is a party to various legal proceedings, which are described under
"Legal actions" in Note C of Notes to Consolidated Financial Statements included
in "Item 1. Financial Statements." The Company is also party to other litigation
incidental to its business involving claims in oil and gas leases or interests,
other claims or damages in amounts not in excess of 10% of its current assets
and other matters, none of which the Company believes to be material.
Item 6. Exhibits and Reports on Form 8-K
Exhibits
(1) None
Reports on Form 8-K
(1) None
23
PARKER & PARSLEY PETROLEUM COMPANY
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 thereto duly authorized.
PARKER & PARSLEY PETROLEUM COMPANY
Date: May 13, 1996 By: /s/ Scott D. Sheffield
-------------------------------------
Scott D. Sheffield
President and Chief Executive Officer
Date: May 13, 1996 By: /s/ Steven L. Beal
-------------------------------------
Steven L. Beal
Senior Vice President and Chief
Financial Officer
24