<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. 2-90417
PARKER & PARSLEY 84-A, LTD.
(Exact name of Registrant as specified in its charter)
Texas 75-1974814
(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 84-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 bearings deposits of
$52,284 at March 31 and $68,292 at
December 31 $ 52,534 $ 68,542
Accounts receivable - oil and gas sales 193,773 178,618
----------- -----------
Total current assets 246,307 247,160
Oil and gas properties - at cost, based
on the successful efforts accounting
method 18,669,196 18,669,312
Accumulated depletion (12,713,161) (12,560,042)
----------- -----------
Net oil and gas properties 5,956,035 6,109,270
----------- -----------
$ 6,202,342 $ 6,356,430
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 72,369 $ 56,035
Partners' capital:
Limited partners (19,435 interests) 5,489,492 5,639,089
General partners 640,481 661,306
----------- -----------
6,129,973 6,300,395
----------- -----------
$ 6,202,342 $ 6,356,430
=========== ===========
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 84-A, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
March 31,
1995 1994
---------- ----------
Revenues:
Oil and gas sales $ 412,623 $ 359,699
Interest income 1,616 627
--------- ---------
Total revenue 414,239 360,326
Costs and expenses:
Production costs 254,966 247,422
General and administrative expenses 13,930 13,499
Depletion 153,119 150,408
--------- ---------
Total costs and expenses 422,015 411,329
--------- ---------
Net loss $ (7,776) $ (51,003)
========= =========
Allocation of net income (loss):
General partners $ 21,349 $ 10,425
========= =========
Limited partners $ (29,125) $ (61,428)
========= =========
Net loss per limited partnership
interest $ (1.50) $ (3.16)
========= =========
Distributions per limited partnership
interest $ 6.20 $ 4.60
========= =========
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 84-A, LTD.
(A Texas Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
(Unaudited)
General Limited
partners partners Total
----------- ----------- -----------
Balance at January 1, 1994 $ 710,620 $ 6,120,544 $ 6,831,164
Distributions (26,550) (89,401) (115,951)
Net income (loss) 10,425 (61,428) (51,003)
---------- ---------- ----------
Balance at March 31, 1994 $ 694,495 $ 5,969,715 $ 6,664,210
========== ========== ==========
Balance at January 1, 1995 $ 661,306 $ 5,639,089 $ 6,300,395
Distributions (42,174) (120,472) (162,646)
Net income (loss) 21,349 (29,125) (7,776)
---------- ---------- ----------
Balance at March 31, 1995 $ 640,481 $ 5,489,492 $ 6,129,973
========== ========== ==========
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 84-A, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended
March 31,
1995 1994
---------- ----------
Cash flows from operating activities:
Net loss $ (7,776) $ (51,003)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Depletion 153,119 150,408
Changes in assets and liabilities:
(Increase) decrease in accounts
receivable (15,155) 10,893
Increase in accounts payable 16,334 11,699
--------- ---------
Net cash provided by operating
activities 146,522 121,997
Cash flows from investing activities:
Disposals of oil and gas equipment 116 16,639
Cash flows from financing activities:
Cash distributions to partners (162,646) (115,951)
--------- ---------
Net increase (decrease) in cash and
cash equivalents (16,008) 22,685
Cash and cash equivalents at beginning
of period 68,542 31,681
--------- ---------
Cash and cash equivalents at end of period $ 52,534 $ 54,366
========= =========
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 84-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 84-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 $8,512,603, or
$438.00 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 6, 1984. The general partners of the
Registrant at December 31, 1994 were Parker & Parsley Development
Company ("PPDC") and P&P Employees 84-A, Ltd. ("EMPL") (a Texas limited
partnership whose general partner was PPDC) and 1,319 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 $19,435,000 representing 19,435 interests
($1,000 per interest).
Since its formation, the Registrant has invested $19,682,790 in various
prospects that were drilled in Texas. At March 31, 1995, 39 wells were
producing and three wells were plugged and abandoned; one in 1989, one
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in 1990 and one in 1992 due to unprofitable operations. The Registrant
received interests in four additional wells in 1993 due to the
Registrant's back-in after payout provisions.
Results of Operations
Revenues:
The Registrant's oil and gas revenues increased to $412,623 from
$359,699 for the three months ended March 31, 1995 and 1994,
respectively, an increase of 15%. The increase in revenues resulted
from a 3% increase in mcf of gas produced and sold and a 28% increase in
the average price received per barrel of oil, offset by a 5% decrease in
barrels of oil produced and sold and a 3% decrease in the average price
received per mcf of gas. For the three months ended March 31, 1995,
17,558 barrels of oil were sold compared to 18,457 for the same period
in 1994, a decrease of 899 barrels. For the three months ended March
31, 1995, 63,398 mcf of gas were sold compared to 61,742 for the same
period in 1994, an increase of 1,656 mcf. The decrease in oil
production volumes was primarily due to the decline characteristics of
the Registrant's oil properties, while the increase in gas volumes was
due to operational changes on several wells. Management expects a
certain amount of decline in production in the future until the
Registrant's economically recoverable reserves are fully depleted.
The average price received per barrel of oil increased $3.72 from $13.45
for the three months ended March 31, 1994 to $17.17 for the same period
in 1995. The average price received per mcf of gas decreased from $1.81
during the three months ended March 31, 1994 to $1.75 for the same
period in 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 increased to $422,015 for the three months
ended March 31, 1995 as compared to $411,329 for the same period in
1994, an increase of $10,686, or 3%. This increase was due to increases
in production costs, general and administrative expenses ("G&A") and
depletion.
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Production costs were $254,966 for the three months ended March 31, 1995
and $247,422 for the same period in 1994 resulting in a $7,544 increase,
or 3%. The increase primarily consisted of additional well repair and
maintenance costs incurred in an effort to stimulate well production.
In addition, production taxes increased due to the increase in oil and
gas revenues, offset by a decline in 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 increased, in aggregate, 3% from $13,499 for the
three months ended March 31, 1994 to $13,930 for the same period in
1995.
Depletion was $153,119 for the three months ended March 31, 1995
compared to $150,408 for the same period in 1994. This represented an
increase in depletion of $2,711, or 2%. Depletion was computed
property-by-property utilizing the unit-of-production method based upon
the dominant mineral produced, generally oil. Oil production decreased
899 barrels for the three months ended March 31, 1995 from the same
period in 1994, while oil reserves of barrels were revised downward by
36,338 barrels, or 4%, resulting in a higher unit cost per barrel of
production.
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 $8,512,603,
or $438.00 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
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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 $146,522 during
the three months ended March 31, 1995, a 20% increase from the same
period ended March 31, 1994. This increase was due to an increase in
oil and gas sales, offset by an increase in production costs and G&A.
The increase in oil and gas sales was due to an increase in the mcf of
gas produced and sold and an increase in the average price received per
barrel of oil, offset by a decrease in the barrels of oil produced and
sold. The increase in production costs was due to additional well
repair and maintenance costs incurred in an effort to stimulate well
production in the three months ended March 31, 1995 as compared to the
same period in 1994 and an increase in production taxes. The increase
in G&A was due to additional allocated expenses by the managing general
partner.
Net Cash Provided by Investing Activities:
The Registrant's principal investing activities during the three months
ended March 31, 1995 were proceeds derived from the disposal of oil and
gas equipment.
Net Cash Used in Financing Activities
Cash was sufficient for the three months ended March 31, 1995 to cover
distributions to the partners of $162,646 of which $120,472 was
distributed to the limited partners and $42,174 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 $115,951 of which $89,401 was
distributed to the limited partners and $26,550 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 $8,512,603,
or $438.00 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 84-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 84-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> 0000757545
<NAME> 84AL
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 52,534
<SECURITIES> 0
<RECEIVABLES> 193,773
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 246,307
<PP&E> 18,669,196
<DEPRECIATION> 12,713,161
<TOTAL-ASSETS> 6,202,342
<CURRENT-LIABILITIES> 72,369
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 6,129,973
<TOTAL-LIABILITY-AND-EQUITY> 6,202,342
<SALES> 412,623
<TOTAL-REVENUES> 414,239
<CGS> 0
<TOTAL-COSTS> 422,015
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (7,776)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,776)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,776)
<EPS-PRIMARY> (1.50)
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</TABLE>
