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. 2-90417
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 11 pages.
Exhibit index on page 10.
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PARKER & PARSLEY 84-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
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PARKER & PARSLEY 84-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 $203,499 at June 30
and $161,973 at December 31 $ 203,999 $ 162,473
Accounts receivable - oil and gas sales 218,596 330,344
----------- -----------
Total current assets 422,595 492,817
----------- -----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 18,214,204 18,207,994
Accumulated depletion (14,424,865) (14,264,426)
----------- -----------
Net oil and gas properties 3,789,339 3,943,568
----------- -----------
$ 4,211,934 $ 4,436,385
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 54,180 $ 44,799
Partners' capital:
General partners 450,494 490,387
Limited partners (19,435 interests) 3,707,260 3,901,199
----------- -----------
4,157,754 4,391,586
----------- -----------
$ 4,211,934 $ 4,436,385
=========== ===========
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 84-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 $ 405,039 $ 479,847 $ 864,492 $ 902,490
Interest 3,353 2,302 6,281 4,225
Salvage income from equipment
disposals 3,072 - 3,072 -
Litigation settlement - 1,055,353 - 1,055,353
-------- --------- -------- ---------
411,464 1,537,502 873,845 1,962,068
-------- --------- -------- ---------
Costs and expenses:
Oil and gas production 211,953 212,880 439,628 454,322
General and administrative 13,137 16,463 28,435 29,392
Depletion 81,427 92,391 160,439 181,518
-------- --------- -------- ---------
306,517 321,734 628,502 665,232
-------- --------- -------- ---------
Net income $ 104,947 $1,215,768 $ 245,343 $1,296,836
======== ========= ======== =========
Allocation of net income:
General partners $ 38,213 $ 284,238 $ 85,566 $ 317,937
======== ========= ======== =========
Limited partners $ 66,734 $ 931,530 $ 159,777 $ 978,899
======== ========= ======== =========
Net income per limited
partnership interest $ 3.43 $ 47.93 $ 8.22 $ 50.37
======== ========= ======== =========
Distributions per limited
partnership interest $ 8.00 $ 50.38 $ 18.20 $ 56.38
======== ========= ======== =========
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 84-A, LTD.
(A Texas Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
General Limited
partners partners Total
---------- ---------- ----------
Balance at January 1, 1997 $ 490,387 $3,901,199 $4,391,586
Distributions (125,459) (353,716) (479,175)
Net income 85,566 159,777 245,343
--------- --------- ---------
Balance at June 30, 1997 $ 450,494 $3,707,260 $4,157,754
========= ========= =========
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 84-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 $ 245,343 $ 1,296,836
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 160,439 181,518
Salvage income from equipment disposals (3,072) -
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 111,748 (18,638)
Increase (decrease) in accounts payable 9,381 (30,160)
--------- ----------
Net cash provided by operating activities 523,839 1,429,556
--------- ----------
Cash flows from investing activities:
Additions to oil and gas properties (6,210) (3,936)
Proceeds from salvage income of equipment
disposals 3,072 -
--------- ----------
Net cash used in investing activities (3,138) (3,936)
--------- ----------
Cash flows from financing activities:
Cash distributions to partners (479,175) (1,418,281)
--------- ----------
Net increase in cash and cash equivalents 41,526 7,339
Cash and cash equivalents at beginning of period 162,473 157,388
--------- ----------
Cash and cash equivalents at end of period $ 203,999 $ 164,727
========= ==========
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 84-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 84-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 4% to $864,492 from $902,490
for the six months ended June 30, 1997 as compared to the six months ended June
30, 1996. The decrease in revenues resulted from a 5% decrease in barrels of oil
produced and sold and a lower average price received per barrel of oil, offset
by a 3% increase in mcf of gas produced and sold and a higher average price
received per mcf of gas. For the six months ended June 30, 1997, 29,876 barrels
of oil were sold compared to 31,497 for the same period in 1996, a decrease of
1,621 barrels. For the six months ended June 30, 1997, 119,663 mcf of gas were
sold compared to 116,401 for the same period in 1996, an increase of 3,262 mcf.
The decrease in oil production volumes was primarily due to the decline
characteristics of the Partnership's oil properties. The increase in gas
production volumes was due to operational changes on several of the
Partnership's gas properties. Management expects a certain amount of decline in
production 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 $20.65 for
the six months ended June 30, 1996 to $20.23 for the same period in 1997, while
the average price received per mcf of gas increased slightly from $2.16 during
the six months ended June 30, 1996 to $2.17 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 $3,072, received during the six months ended June 30, 1997,
was derived from equipment disposals on one saltwater disposal well.
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 $1,055,353, which
included $825,594, or $42.48 per limited partnership interest, to the
Partnership and its partners.
Costs and Expenses:
Total costs and expenses decreased to $628,502 for the six months ended June 30,
1997 as compared to $665,232 for the same period in 1996, a decrease of $36,730,
or 6%. This decrease was due to reductions in depletion, production costs and
general and administrative expenses ("G&A").
Production costs were $439,628 for the six months ended June 30, 1997 and
$454,322 for the same period in 1996 resulting in a $14,694 decrease, or 3%. The
decrease was primarily due to a decline in well repair and maintenance costs.
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, 3% from $29,392 for the six months ended June 30, 1996
to $28,435 for the same period in 1997.
Depletion was $160,439 for the six months ended June 30, 1997 compared to
$181,518 for the same period in 1996. This represented a decrease in depletion
of $21,079, or 12%, attributable to a decline in oil production of 1,621 barrels
for the six months ended June 30, 1997, compared to the same period in 1996, and
declines in depreciation rates due to upward reserve revisions on significant
properties.
Three months ended June 30, 1997 compared with three months ended
June 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 16% to $405,039 from $479,847
for the three months ended June 30, 1997 as compared to the three months ended
8
<PAGE>
June 30, 1996. The decrease in revenues resulted from lower average prices
received per barrel of oil and mcf of gas and a 6% decrease in barrels of oil
produced and sold, offset by a 3% increase in mcf of gas produced and sold.
For the three months ended June 30, 1997, 14,733 barrels of oil were sold
compared to 15,705 for the same period in 1996, a decrease of 972 barrels. For
the three months ended June 30, 1997, 63,916 mcf of gas were sold compared to
61,825 for the same period in 1996, an increase of 2,091 mcf. The decrease in
oil production volumes was primarily due to the decline characteristics of the
Partnership's oil properties. The increase in gas production volumes was due to
operational changes on several of the Partnership's gas properties.
The average price received per barrel of oil decreased $3.35, or 15%, from
$22.09 for the three months ended June 30, 1996 to $18.74 for the three months
ended June 30, 1997. The average price received per mcf of gas decreased 6% to
$2.02 for the three months ended June 30, 1997 from $2.15 in 1996.
Salvage income of $3,072, received during the three months ended June 30, 1997,
was derived from equipment disposals on one saltwater disposal well.
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 $1,055,353, which
included $825,594, or $42.48 per limited partnership interest, to the
Partnership and its partners.
Costs and Expenses:
Total costs and expenses decreased to $306,517 for the three months ended June
30, 1997 as compared to $321,734 for the same period in 1996, a decrease of
$15,217, or 5%. This decrease was due to declines in depletion, G&A and
production costs.
Production costs were $211,953 for the three months ended June 30, 1997 and
$212,880 for the same period in 1996 resulting in a $927 decrease. The decrease
was due to a decline in production taxes, offset by 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, 20% from $16,463 for the three months ended June 30,
1996 to $13,137 for the same period in 1997.
Depletion was $81,427 for the three months ended June 30, 1997 compared to
$92,391 for the same period in 1996. This represented a decrease in depletion of
$10,964, or 12%. This decrease was due to a decline in oil production of 972
barrels for the three months ended June 30, 1997, compared to the same period in
1996, and declines in depreciaiton rates due to upward reserve revisions on
significant properties.
9
<PAGE>
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased $905,717 during the six
months ended June 30, 1997 from the same period ended June 30, 1996. This
decrease resulted primarily from the receipt of proceeds in 1996 from the
litigation settlement as discussed in Item 2, offset by an increase in oil and
gas receipts and a decrease in production costs paid during 1997.
Net Cash Used in Investing Activities
The Partnership's principal investing activities during the six months ended
June 30, 1997 and 1996 included equipment replacement on various oil and gas
properties.
Proceeds of $3,072 were received for the six months ended June 30, 1997 from the
disposal of equipment on one saltwater disposal well.
Net Cash Used in Financing Activities
Cash was sufficient for the six months ended June 30, 1997 to cover
distributions to the partners of $479,175 of which $125,459 was distributed to
the general partners and $353,716 to the limited partners. For the same period
ended June 30, 1996, cash was sufficient for distributions to the partners of
$1,418,281 of which $322,541 was distributed to the general partners and
$1,095,740 to the limited partners. Cash distributions to the partners of
$1,418,281 for the six months ended June 30, 1996 included $229,759 to the
general partners and $825,594 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 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: August 12, 1997 By: /s/ Rich Dealy
-------------------------------
Rich Dealy, Controller of PPUSA
11
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000757545
<NAME> 84A.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 203,999
<SECURITIES> 0
<RECEIVABLES> 218,596
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 422,595
<PP&E> 18,214,204
<DEPRECIATION> 14,424,865
<TOTAL-ASSETS> 4,211,934
<CURRENT-LIABILITIES> 54,180
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,157,754
<TOTAL-LIABILITY-AND-EQUITY> 4,211,934
<SALES> 864,492
<TOTAL-REVENUES> 873,845
<CGS> 0
<TOTAL-COSTS> 628,502
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 245,343
<INCOME-TAX> 0
<INCOME-CONTINUING> 245,343
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 245,343
<EPS-PRIMARY> 8.22
<EPS-DILUTED> 0
</TABLE>
