<PAGE> 1
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, 1995, 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. 2-81398A
PARKER & PARSLEY 83-A, LTD.
(Exact name of Registrant as specified in its charter)
Texas 75-1891384
(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 / /
Page 1 of 13 pages.
There are no exhibits.
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PARKER & PARSLEY 83-A, LTD.
(A Texas Limited Partnership)
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
BALANCE SHEETS
March 31, December 31,
1995 1994
------------ ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including
interest bearing deposits of
$122,150 at March 31 and $99,816
at December 31 $ 122,400 $ 100,066
Accounts receivable - oil and gas sales 160,910 154,457
----------- -----------
Total current assets 283,310 254,523
Oil and gas properties - at cost, based
on the successful efforts accounting
method 19,216,625 19,215,522
Accumulated depletion (14,219,868) (14,084,473)
----------- -----------
Net oil and gas properties 4,996,757 5,131,049
----------- -----------
$ 5,280,067 $ 5,385,572
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 65,493 $ 52,109
Partners' capital:
Limited partners (19,505 interests) 4,681,125 4,789,418
General partners 533,449 544,045
----------- -----------
5,214,574 5,333,463
----------- -----------
$ 5,280,067 $ 5,385,572
=========== ===========
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 statements.
2
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PARKER & PARSLEY 83-A, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
March 31,
1995 1994
---------- ----------
Revenues:
Oil and gas sales $ 380,895 $ 325,980
Interest income 1,794 868
--------- ---------
Total revenues 382,689 326,848
Costs and expenses:
Production costs 225,891 224,024
General and administrative expenses 12,575 12,679
Depletion 135,395 145,974
Abandoned property costs - 4,110
--------- ---------
Total costs and expenses 373,861 386,787
--------- ---------
Net income (loss) $ 8,828 $ (59,939)
========= =========
Allocation of net income (loss):
General partners $ 22,741 $ 8,190
========= =========
Limited partners $ (13,913) $ (68,129)
========= =========
Net loss per limited partnership
interest $ (.71) $ (3.49)
========= =========
Distributions per limited partnership
interest $ 4.84 $ 4.90
========= =========
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 statements.
3
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PARKER & PARSLEY 83-A, LTD.
(A Texas Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
(Unaudited)
General Limited
partners partners Total
----------- ----------- -----------
Balance at January 1, 1994 $ 644,718 $ 5,692,338 $ 6,337,056
Distributions (27,299) (95,575) (122,874)
Net income (loss) 8,190 (68,129) (59,939)
---------- ---------- ----------
Balance at March 31, 1994 $ 625,609 $ 5,528,634 $ 6,154,243
========== ========== ==========
Balance at January 1, 1995 $ 544,045 $ 4,789,418 $ 5,333,463
Distributions (33,337) (94,380) (127,717)
Net income (loss) 22,741 (13,913) 8,828
---------- ---------- ----------
Balance at March 31, 1995 $ 533,449 $ 4,681,125 $ 5,214,574
========== ========== ==========
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 statements.
4
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PARKER & PARSLEY 83-A, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended
March 31,
1995 1994
---------- ----------
Cash flows from operating activities:
Net income (loss) $ 8,828 $ (59,939)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depletion 135,395 145,974
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (6,453) 678
Increase in accounts payable 13,384 15,332
--------- ---------
Net cash provided by operating
activities 151,154 102,045
Cash flows from investing activities:
Additions to oil and gas properties (1,103) -
Cash flows from financing activities:
Cash distributions to partners (127,717) (122,874)
--------- ---------
Net increase (decrease) in cash and cash
equivalents 22,334 (20,829)
Cash and cash equivalents at beginning
of period 100,066 119,491
--------- ---------
Cash and cash equivalents at end of period $ 122,400 $ 98,662
========= =========
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 statements.
5
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PARKER & PARSLEY 83-A, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1995
(Unaudited)
NOTE 1.
In the opinion of management, the unaudited financial statements as of
March 31, 1995 of Parker & Parsley 83-A, Ltd. (the "Registrant") 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. However, the results of operations for the
three months ended March 31, 1995 are not necessarily indicative of the
results for the full year ending December 31, 1995.
The financial statements should be read in conjunction with the
financial statements and the notes thereto contained in the Registrant's
Report on Form 10-K for the year ended December 31, 1994, as filed with
the Securities and Exchange Commission, a copy of which is available
upon request by writing to Steven L. Beal, Senior Vice President, 303
West Wall, Suite 101, Midland, Texas 79701.
NOTE 2.
On May 25, 1993, a final settlement agreement was negotiated, drafted
and finally executed, ending litigation which had begun on September 5,
1989, when the Registrant filed suit along with other parties against
Dresser Industries, Inc.; Titan Services, Inc.; BJ-Titan Services
Company; BJ-Hughes Holding Company; Hughes Tool Company; Baker Hughes
Production Tools, Inc.; and Baker Hughes Incorporated alleging that the
defendants had intentionally failed to provide the materials and
services ordered and paid for by the Registrant and other parties in
connection with the fracturing and acidizing of 523 wells, and then
fraudulently concealed the shorting practice from the managing general
partner, Parker & Parsley Development L.P. ("PPDLP") (see Item 2). The
May 25, 1993 settlement agreement called for a payment of $115 million
in cash by the defendants. The managing general partner received the
funds, deducted incurred legal expenses, accrued interest, determined
the general partner's portion of the funds and calculated any inter-
partnership allocations. A distribution of $91,000,000 was made to the
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working interest owners, including the Registrant, on July 30, 1993.
The limited partners received their distribution of $6,894,930, or
$353.50 per limited partnership interest, in September 1993.
On May 3, 1993, Jack N. Price, the attorney who represented Gary G.
"Zeke" Lancaster in the Federal Court lawsuit, filed suit in State Court
in Beaumont against all of the plaintiff partnerships, including the
Registrant and others, alleging his entitlement to 12% of the settlement
proceeds. Price's lawsuit claim for approximately $13.8 million is
predicated on a purported contract entered into with Southmark
Corporation in August 1988, in which he allegedly binds the Registrant
and the other defendants, as well as Southmark. Although PPDLP believes
the lawsuit is without merit and intends to vigorously defend it, PPDLP
is holding in reserve approximately 12.5% of the total settlement
pending final resolution of the litigation by the court. Upon payment
of the costs associated with the Price litigation, and assuming a
successful defense, a second distribution will be made consisting of the
balance of the settlement funds, including any accrued interest.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Registrant was formed July 1, 1983. The Registrant consisted of two
general partners at December 31, 1994, Parker & Parsley Development
Company ("PPDC") and P&P Employees 83-A, Ltd. ("EMPL"), a Texas limited
partnership whose general partner was PPDC and 1,354 limited partners.
On January 1, 1995, PPDLP, a Texas limited partnership, became the
managing general partner of the Registrant and EMPL, by acquiring the
rights and assuming the obligations of PPDC. PPDC was merged into PPDLP
on January 1, 1995. PPDLP's co-general partner is EMPL. PPDLP acquired
PPDC's rights and obligations as managing general partner of the
Registrant in connection with the merger of PPDC, P&P Producing, Inc.
and Spraberry Development Corporation into MidPar L.P., which survived
the merger with a change of name to PPDLP. The sole general partner of
PPDLP is Parker & Parsley Petroleum USA, Inc. PPDLP has the power and
authority to manage, control and administer all Registrant affairs. The
limited partners contributed $19,505,000 representing 19,505 interests
($1,000 per interest).
Since its formation, the Registrant has invested $19,961,406 in various
prospects that were drilled in Texas. At March 31, 1995, the Registrant
had 63 producing oil and gas wells, two wells were dry holes from
previous periods, one well was sold in 1992 and three wells were plugged
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and abandoned due to unprofitable operations; two in 1990 and one in
1993. The Registrant received interests in five additional wells in
1993 due to the Registrant's back-in after payout provision.
Results of Operations
Revenues:
The Registrant's oil and gas revenues increased to $380,895 for the
three months ended March 31, 1995 from $325,980 for the same period
ended March 31, 1994, an increase of 17%. The increase in revenues
primarily resulted from higher average prices received per barrel of oil
and mcf of gas during 1995, offset by a 7% decline in barrels of oil
produced and sold and a 4% decline in mcf of gas produced and sold. For
the three months ended March 31, 1995, 16,493 barrels of oil were sold
compared to 17,742 for the same period in 1994, a decrease of 1,249
barrels. For the three months ended March 31, 1995, 51,363 mcf of gas
were sold compared to 53,564 for the same period in 1994, a decrease of
2,201 mcf. The decrease in production volumes was primarily due to the
decline characteristics of the Registrant's oil and gas properties.
Because of these characteristics, management expects a certain amount of
decline in production to continue in the future until the Registrant's
economically recoverable reserves are fully depleted.
The average price received per barrel of oil increased $3.91 from $13.17
for the three months ended March 31, 1994 to $17.08 for the same period
in 1995 while the average price received per mcf increased from $1.72
for the three months ended March 31, 1994 to $1.93 for the same period
ended March 31, 1995. 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
Registrant may therefore sell its future oil and gas production at
average prices lower or higher than that received during the three
months ended March 31, 1995.
Costs and Expenses:
Total costs and expenses decreased to $373,861 for the three months
ended March 31, 1995 as compared to $386,787 for the same period in
1994, a decline of $12,926, or 3%. This decrease was attributable to
declines in depletion, abandoned property costs and general and
administrative expenses ("G&A"), offset by an increase in production
costs.
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Production costs were $225,891 for the three months ended March 31, 1995
and $224,024 for the same period in 1994 resulting in a $1,867 increase.
The increase consisted of additional well repair and maintenance costs
incurred in an effort to stimulate well production and an increase in
severance taxes due to the increase in oil and gas sales, offset by
lower ad valorem taxes.
G&A's components are independent accounting and engineering fees,
computer services, postage and managing general partner personnel costs.
During this period, G&A decreased slightly from $12,679 for the three
months ended March 31, 1994 to $12,575 for the same period in 1995.
Abandoned property costs were $4,110 for the three months ended March
31, 1994. There were no expenses incurred for the same period in 1995.
Depletion was $135,395 for the three months ended March 31, 1995
compared to $145,974 for the same period in 1994. This represented a
decrease in depletion of $10,579, or 7%. Depletion was computed
property-by-property utilizing the unit-of-production method based upon
the dominant mineral produced, generally oil. Oil production decreased
1,249 barrels for the three months ended March 31, 1995 from the same
period in 1994, while oil reserves of barrels were revised downward by
26,296 barrels, or 4%.
On May 25, 1993, a final settlement agreement was negotiated, drafted
and finally executed, ending litigation which had begun on September 5,
1989, when the Registrant filed suit along with other parties against
Dresser Industries, Inc.; Titan Services, Inc.; BJ-Titan Services
Company; BJ-Hughes Holding Company; Hughes Tool Company; Baker Hughes
Production Tools, Inc.; and Baker Hughes Incorporated alleging that the
defendants had intentionally failed to provide the materials and
services ordered and paid for by the Registrant and other parties in
connection with the fracturing and acidizing of 523 wells, and then
fraudulently concealed the shorting practice from the managing general
partner. The May 25, 1993 settlement agreement called for a payment of
$115 million in cash by the defendants. The managing general partner
received the funds, deducted incurred legal expenses, accrued interest,
determined the general partner's portion of the funds and calculated any
inter-partnership allocations. A distribution of $91,000,000 was made
to the working interest owners, including the Registrant, on July 30,
1993. The limited partners received their distribution of $6,894,930,
or $353.50 per limited partnership interest, in September 1993.
9
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On May 3, 1993, Jack N. Price, the attorney who represented Gary G.
"Zeke" Lancaster in the Federal Court lawsuit, filed suit in State Court
in Beaumont against all of the plaintiff partnerships, including the
Registrant and others, alleging his entitlement to 12% of the settlement
proceeds. Price's lawsuit claim for approximately $13.8 million is
predicated on a purported contract entered into with Southmark
Corporation in August 1988, in which he allegedly binds the Registrant
and the other defendants, as well as Southmark. Although PPDLP believes
the lawsuit is without merit and intends to vigorously defend it, PPDLP
is holding in reserve approximately 12.5% of the total settlement
pending final resolution of the litigation by the court. Upon payment
of the costs associated with the Price litigation, and assuming a
successful defense, a second distribution will be made consisting of the
balance of the settlement funds, including any accrued interest.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased to $151,154 during
the three months ended March 31, 1995, a 48% increase from the same
period ended March 31, 1994. This increase was due to an increase in
oil and gas sales and declines in abandoned property costs and G&A,
offset by an increase in production costs. The increase in oil and gas
sales was primarily the result of higher average prices received per
barrel of oil and per mcf of gas. The decline in abandoned property
costs was due to an absence of abandonment activity during the three
months ended March 31, 1995. The decline in G&A was due to less
allocated expenses by the managing general partner. The increase in
production costs was due to an increase in well repair and maintenance
costs incurred in an effort to stimulate production.
Net Cash Used in Investing Activities
The Registrant's principal investing activities during the three months
ended March 31, 1995 was for repair and maintenance activity on various
oil and gas properties.
Net Cash Used in Financing Activities
Cash was sufficient for the three months ended March 31, 1995 to cover
distributions to the partners of $127,717 of which $94,380 was
distributed to the limited partners and $33,337 to the general partners.
For the same period ended March 31, 1994, cash was sufficient for
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distributions to the partners of $122,874 of which $95,575 was
distributed to the limited partners and $27,299 to the general partners.
It is expected that future net cash provided by operating activities
will be sufficient for any capital expenditures and any distributions.
As the production from the properties declines, distributions are also
expected to decrease.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On May 25, 1993, a final settlement agreement was negotiated, drafted
and finally executed, ending litigation which had begun on September 5,
1989, when the Registrant filed suit along with other parties against
Dresser Industries, Inc.; Titan Services, Inc.; BJ-Titan Services
Company; BJ-Hughes Holding Company; Hughes Tool Company; Baker Hughes
Production Tools, Inc.; and Baker Hughes Incorporated alleging that the
defendants had intentionally failed to provide the materials and
services ordered and paid for by the Registrant and other parties in
connection with the fracturing and acidizing of 523 wells, and then
fraudulently concealed the shorting practice from the managing general
partner. The May 25, 1993 settlement agreement called for a payment of
$115 million in cash by the defendants. The managing general partner
received the funds, deducted incurred legal expenses, accrued interest,
determined the general partner's portion of the funds and calculated any
inter-partnership allocations. A distribution of $91,000,000 was made
to the working interest owners, including the Registrant, on July 30,
1993. The limited partners received their distribution of $6,894,930,
or $353.50 per limited partnership interest, in September 1993.
On May 3, 1993, Jack N. Price, the attorney who represented Gary G.
"Zeke" Lancaster in the Federal Court lawsuit, filed suit in State Court
in Beaumont against all of the plaintiff partnerships, including the
Registrant and others, alleging his entitlement to 12% of the settlement
proceeds. Price's lawsuit claim for approximately $13.8 million is
predicated on a purported contract entered into with Southmark
Corporation in August 1988, in which he allegedly binds the Registrant
and the other defendants, as well as Southmark. Although PPDLP believes
the lawsuit is without merit and intends to vigorously defend it, PPDLP
is holding in reserve approximately 12.5% of the total settlement
pending final resolution of the litigation by the court. Upon payment
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of the costs associated with the Price litigation, and assuming a
successful defense, a second distribution will be made consisting of the
balance of the settlement funds, including any accrued interest.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - none
(b) Reports on Form 8-K - none
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PARKER & PARSLEY 83-A, LTD.
(A Texas 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 83-A, LTD.
By: Parker & Parsley Development L.P.,
Managing General Partner
By: Parker & Parsley Petroleum USA, Inc.
("PPUSA"), General Partner
Dated: May 12, 1995 By: /s/ Steven L. Beal
--------------------------------------
Steven L. Beal, Senior Vice
President - Finance and
Chief Financial Officer
of PPUSA
13
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<ARTICLE> 5
<CIK> 0000743456
<NAME> 83AL
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 122,400
<SECURITIES> 0
<RECEIVABLES> 160,910
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 283,310
<PP&E> 19,216,625
<DEPRECIATION> 14,219,868
<TOTAL-ASSETS> 5,280,067
<CURRENT-LIABILITIES> 65,493
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 5,214,574
<TOTAL-LIABILITY-AND-EQUITY> 5,280,067
<SALES> 380,895
<TOTAL-REVENUES> 382,690
<CGS> 0
<TOTAL-COSTS> 373,862
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 8,828
<INCOME-TAX> 0
<INCOME-CONTINUING> 8,828
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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<NET-INCOME> 8,828
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