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EXHIBIT 12
PARKER & PARSLEY PETROLEUM COMPANY
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
(in thousands, except ratio)
Nine Months
ended Year ended December 31,
September 30, -------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991
------------- ------------- ------------- ------------- ------------- -------------
Pretax earnings (loss) $ 163,031 $ (150,007) $ (20,491) $ 48,403 $ 30,146 $ 15,359
---------- ---------- ---------- ---------- ---------- ----------
Adjustments:
Add fixed charges:
Interest:
Expensed 36,105 65,449 50,552 23,338 14,708 7,759
Capitalized - - - - 733 2,079
Rental expense attributable
to interest (a) 725 1,200 500 567 367 333
---------- ---------- ---------- ---------- ---------- ----------
Total fixed charges 36,830 66,649 51,052 23,905 15,808 10,171
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Deduct:
Interest capitalized - - - - 733 2,079
---------- ---------- ---------- ---------- ---------- ----------
Total deducts - - - - 733 2,079
---------- ---------- ---------- ---------- ---------- ----------
Adjusted earnings (loss) $ 199,861 $ (83,358) $ 30,561 $ 72,308 $ 45,221 $ 23,451
========== ========== ========== ========== ========== ==========
Ratio of earnings to fixed
charges (b) $ 5.43 (c) (c) $ 3.02 $ 2.86 $ 2.31
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Pro Forma Combined
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Nine Months
ended Year ended
September 30, December 31,
1996 1995
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Pretax earnings (loss) $ 72,287 $ (113,313)
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Adjustments:
Add fixed charges:
Interest:
Expensed 30,670 42,339
Capitalized - -
Rental expense attributable
to interest (a) 725 752
---------- ----------
Total fixed charges 31,395 43,091
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Deduct:
Interest capitalized - -
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Total deducts - -
---------- ----------
Adjusted earnings (loss) $ 103,682 $ (70,222)
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Ratio of earnings to fixed
charges (b) $ 3.30 (c)
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(a) Assumes the interest expense attributable to rental expense approximates
one-third of rental expense.
(b) For purposes of computing such ratio, earnings consist of income (loss)
before income taxes, extraordinary item and cumulative effect of accounting
change plus fixed charges net of interest capitalized. Fixed charges
consist of interest expense, interest capitalized and the portion of
rental expense attributable to interest.
(c) The Company's 1995 earnings (computed for purposes of this ratio), on both
a historical and pro forma basis, and the 1994 earnings on a historical
basis were inadequate to cover its fixed charges. The amount of such
deficiency was $150 million and $20.5 million, respectively, on a
historical basis and $113.3 million for 1995 on a pro forma basis.
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