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 June 30, 1997
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 11 pages.
Exhibit index on page 10.
<PAGE>
PARKER & PARSLEY 83-A, LTD.
TABLE OF CONTENTS
Page
----
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of June 30, 1997 and
December 31, 1996 .................................... 3
Statements of Operations for the three and six
months ended June 30, 1997 and 1996...................... 4
Statement of Partners' Capital for the six months
ended June 30, 1997...................................... 5
Statements of Cash Flows for the six months
ended June 30, 1997 and 1996............................. 6
Notes to Financial Statements.............................. 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...................... 7
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K........................... 10
27. Financial Data Schedule
Signatures................................................. 11
2
<PAGE>
PARKER & PARSLEY 83-A, LTD.
(A Texas Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
June 30, December 31,
1997 1996
------------ ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $196,273 at June 30
and $171,164 at December 31 $ 196,973 $ 171,664
Accounts receivable - oil and gas sales 167,188 271,000
----------- -----------
Total current assets 364,161 442,664
----------- -----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 17,824,353 17,822,921
Accumulated depletion (13,969,308) (13,806,313)
----------- -----------
Net oil and gas properties 3,855,045 4,016,608
----------- -----------
$ 4,219,206 $ 4,459,272
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 51,841 $ 38,807
Partners' capital:
General partners 461,457 492,167
Limited partners (19,505 interests) 3,705,908 3,928,298
----------- -----------
4,167,365 4,420,465
----------- -----------
$ 4,219,206 $ 4,459,272
=========== ===========
The financial information included as of June 30, 1997 has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these
financial statements.
3
<PAGE>
PARKER & PARSLEY 83-A, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended
June 30, June 30,
---------------------- ----------------------
1997 1996 1997 1996
--------- ---------- --------- ----------
Revenues:
Oil and gas $ 340,309 $ 425,650 $ 728,771 $ 819,960
Interest 2,931 4,663 5,679 8,700
Salvage income from equipment
disposals - 924 - 924
Litigation settlement - 852,211 - 852,211
-------- --------- -------- ---------
343,240 1,283,448 734,450 1,681,795
-------- --------- -------- ---------
Costs and expenses:
Oil and gas production 210,578 179,370 439,832 360,765
General and administrative 11,715 15,016 25,153 27,095
Depletion 84,331 82,863 162,995 167,798
-------- --------- -------- ---------
306,624 277,249 627,980 555,658
-------- --------- -------- ---------
Net income $ 36,616 $1,006,199 $ 106,470 $1,126,137
======== ========= ======== =========
Allocation of net income:
General partners $ 22,180 $ 234,036 $ 51,889 $ 276,823
======== ========= ======== =========
Limited partners $ 14,436 $ 772,163 $ 54,581 $ 849,314
======== ========= ======== =========
Net income per limited
partnership interest $ .74 $ 39.58 $ 2.80 $ 43.54
======== ========= ======== =========
Distributions per limited
partnership interest $ 6.00 $ 42.83 $ 14.20 $ 49.03
======== ========= ======== =========
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
financial statements.
4
<PAGE>
PARKER & PARSLEY 83-A, LTD.
(A Texas Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
General Limited
partners partners Total
---------- ---------- ----------
Balance at January 1, 1997 $ 492,167 $3,928,298 $4,420,465
Distributions (82,599) (276,971) (359,570)
Net income 51,889 54,581 106,470
--------- --------- ---------
Balance at June 30, 1997 $ 461,457 $3,705,908 $4,167,365
========= ========= =========
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
financial statements.
5
<PAGE>
PARKER & PARSLEY 83-A, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended
June 30,
--------------------------
1997 1996
---------- -----------
Cash flows from operating activities:
Net income $ 106,470 $ 1,126,137
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 162,995 167,798
Salvage income from equipment disposals - (924)
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 103,812 (13,555)
Increase (decrease) in accounts payable 13,034 (50,592)
--------- ----------
Net cash provided by operating activities 386,311 1,228,864
--------- ----------
Cash flows from investing activities:
Additions to oil and gas properties (1,432) (126)
Proceeds from salvage income on equipment
disposals - 924
--------- ----------
Net cash provided by (used in) investing
activities (1,432) 798
--------- ----------
Cash flows from financing activities:
Cash distributions to partners (359,570) (1,239,137)
--------- ----------
Net increase (decrease) in cash and cash equivalents 25,309 (9,475)
Cash and cash equivalents at beginning of period 171,664 377,780
--------- ----------
Cash and cash equivalents at end of period $ 196,973 $ 368,305
========= ==========
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
financial statements.
6
<PAGE>
PARKER & PARSLEY 83-A, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
(Unaudited)
Note 1. Basis of presentation
In the opinion of management, the unaudited financial statements of Parker &
Parsley 83-A, Ltd. (the "Partnership") as of June 30, 1997 and for the three and
six months ended June 30, 1997 and 1996 include all adjustments and accruals
consisting only of normal recurring accrual adjustments which are necessary for
a fair presentation of the results for the interim period. These interim results
are not necessarily indicative of results for a full year.
Certain information and footnote disclosure normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted in this Form 10-Q pursuant to the rules and
regulations of the Securities and Exchange Commission. The financial statements
should be read in conjunction with the financial statements and the notes
thereto contained in the Partnership's Report on Form 10-K for the year ended
December 31, 1996, as filed with the Securities and Exchange Commission, a copy
of which is available upon request by writing to Rich Dealy, Controller, 303
West Wall, Suite 101, Midland, Texas 79701.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (1)
Results of Operations
Six months ended June 30, 1997 compared with six months ended
June 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 11% to $728,771 from $819,960
for the six months ended June 30, 1997 as compared to the same period in 1996.
The decrease in revenues resulted from a 15% decline in mcf of gas produced and
sold, a 10% decline in barrels of oil produced and sold and a slight decline in
the average price received per barrel of oil, offset by a higher average price
received per mcf of gas. For the six months ended June 30, 1997, 25,751 barrels
of oil were sold compared to 28,761 for the same period in 1996, a decrease of
3,010 barrels. For the six months ended June 30, 1997, 83,941 mcf of gas were
sold compared to 98,623 for the same period in 1996, a decrease of 14,682 mcf.
The decreases in production volumes were primarily due to the decline
characteristics of the Partnership'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 Partnership's economically recoverable reserves
are fully depleted.
7
<PAGE>
The average price received per barrel of oil decreased slightly from $20.43 for
the six months ended June 30, 1996 to $20.28 for the same period in 1997, while
the average price received per mcf of gas increased 4% from $2.36 during the six
months ended June 30, 1996 to $2.46 in 1997. The market price for oil and gas
has been extremely volatile in the past decade, and management expects a certain
amount of volatility to continue in the foreseeable future. The Partnership may
therefore sell its future oil and gas production at average prices lower or
higher than that received during the six months ended June 30, 1997.
Salvage income of $924 was received during the six months ended June 30, 1996
from equipment credits received on two fully depleted wells.
On April 29, 1996, Southmark Corporation, the managing general partner and the
Partnership entered into a final $7.4 million settlement agreement with Jack N.
Price resolving all outstanding litigation between the parties. As a result, all
of the pending lawsuits and judgments have been dismissed, the supersedeas bond
released, and the Reserve released as collateral. On June 28, 1996, a final
distribution was made to the working interest owners of $852,211, which includes
$669,535, or $34.33 per limited partnership interest, to the Partnership and its
partners.
Costs and Expenses:
Total costs and expenses increased to $627,980 for the six months ended June 30,
1997 as compared to $555,658 for the same period in 1996, an increase of
$72,322, or 13%. This increase was primarily due to an increase in production
costs, offset by decreases in depletion and general and administrative expenses
("G&A").
Production costs were $439,832 for the six months ended June 30, 1997 and
$360,765 for the same period in 1996 resulting in a $79,067 increase, or 22%.
The increase was due to additional well repair and maintenance costs incurred in
an effort to stimulate well production.
G&A's components are independent accounting and engineering fees and managing
general partner personnel and operating costs. During this period, G&A
decreased, in aggregate, 7% from $27,095 for the six months ended June 30, 1996
to $25,153 for the same period in 1997.
Depletion was $162,995 for the six months ended June 30, 1997 compared to
$167,798 for the same period in 1996. This represented a decrease in depletion
of $4,803, or 3%.
Three months ended June 30, 1997 compared with three months ended
June 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 20% to $340,309 for the three
months ended June 30, 1997 from $425,650 for the same period ended June 30,
1996. The decrease in revenues resulted from lower average prices received per
8
<PAGE>
barrel of oil and mcf of gas, an 8% decline in barrels of oil produced and sold
and a slight decline in mcf of gas produced and sold. For the three months ended
June 30, 1997, 12,764 barrels of oil were sold compared to 13,819 for the same
period in 1996, a decrease of 1,055 barrels. For the three months ended June 30,
1997, 47,899 mcf of gas were sold compared to 48,665 for the same period in
1996, a decrease of 766 mcf. The decreases in production volumes were primarily
due to the decline characteristics of the Partnership's oil and gas properties.
The average price received per barrel of oil decreased $3.43, or 15%, from
$22.14 for the three months ended June 30, 1996 to $18.71 for the same period in
1997, while the average price received per mcf of gas decreased 14% to $2.12 for
the three months ended June 30, 1997 from $2.46 in 1996.
Salvage income of $924 was received during the six months ended June 30, 1996
from equipment credits received on two fully depleted wells.
On April 29, 1996, Southmark Corporation, the managing general partner and the
Partnership entered into a final $7.4 million settlement agreement with Jack N.
Price resolving all outstanding litigation between the parties. As a result, all
of the pending lawsuits and judgments have been dismissed, the supersedeas bond
released, and the Reserve released as collateral. On June 28, 1996, a final
distribution was made to the working interest owners of $852,211, which includes
$669,535, or $34.33 per limited partnership interest, to the Partnership and its
partners.
Costs and Expenses:
Total costs and expenses increased to $306,624 for the three months ended June
30, 1997 as compared to $277,249 for the same period in 1996, an increase of
$29,375, or 11%. This increase was due to increases in production costs and
depletion, offset by a decrease in G&A.
Production costs were $210,578 for the three months ended June 30, 1997 and
$179,370 for the same period in 1996 resulting in a $31,208 increase, or 17%.
The increase was primarily due to an increase in well repair and maintenance
costs incurred in an effort to stimulate well production.
G&A's components are independent accounting and engineering fees and managing
general partner personnel and operating costs. During this period, G&A
decreased, in aggregate, 22% from $15,016 for the three months ended June 30,
1996 to $11,715 for the same period in 1997.
Depletion was $84,331 for the three months ended June 30, 1997 compared to
$82,863 for the same period in 1996. This represented an increase in depletion
of $1,468, or 2%.
9
<PAGE>
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased $842,553 during the six
months ended June 30, 1997 from the same period in 1996. This decrease was due
to the receipt of proceeds from the litigation settlement as discussed in Item
2, offset by an increase in oil and gas sales receipts.
Net Cash Provided by (Used in) Investing Activities
The Partnership's investment activities during the six months ended June 30,
1997 and 1996 were related to the addition or disposal of oil and gas equipment
on active properties.
During the six months ended June 30, 1996, proceeds of $924 were received from
the disposal of oil and gas equipment on two fully depleted properties.
Net Cash Used in Financing Activities
Cash was sufficient for the six months ended June 30, 1997 to cover
distributions to the partners of $359,570 of which $82,599 was distributed to
the general partners and $276,971 to the limited partners. For the same period
ended June 30, 1996, cash was sufficient for distributions to the partners of
$1,239,137 of which $282,877 was distributed to the general partners and
$956,260 to the limited partners. Cash distributions to the partners of
$1,239,137 for the six months ended June 30, 1996 included $182,676 to the
general partners and $669,535 to the limited partners, resulting from proceeds
received in the litigation settlement as discussed in Item 2.
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.
- ---------------
(1) "Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations" contains forward looking statements that involve
risks and uncertainties. Accordingly, no assurances can be given that the
actual events and results will not be materially different than the
anticipated results described in the forward looking statements.
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K - none
10
<PAGE>
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: August 12, 1997 By: /s/ Rich Dealy
--------------------------------
Rich Dealy, Controller of PPUSA
11
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000743456
<NAME> 83A.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 196,973
<SECURITIES> 0
<RECEIVABLES> 167,188
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 364,161
<PP&E> 17,824,353
<DEPRECIATION> 13,969,308
<TOTAL-ASSETS> 4,219,206
<CURRENT-LIABILITIES> 51,841
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,167,365
<TOTAL-LIABILITY-AND-EQUITY> 4,219,206
<SALES> 728,771
<TOTAL-REVENUES> 734,450
<CGS> 0
<TOTAL-COSTS> 627,980
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 106,470
<INCOME-TAX> 0
<INCOME-CONTINUING> 106,470
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 106,470
<EPS-PRIMARY> 2.80
<EPS-DILUTED> 0
</TABLE>
