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 September 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 September 30, 1997 and
December 31, 1996 ....................................... 3
Statements of Operations for the three and nine
months ended September 30, 1997 and 1996.................... 4
Statement of Partners' Capital for the nine months
ended September 30, 1997.................................... 5
Statements of Cash Flows for the nine months ended
September 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
September 30, December 31,
1997 1996
------------- ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $173,991 at September
30 and $161,973 at December 31 $ 174,491 $ 162,473
Accounts receivable - oil and gas sales 180,574 330,344
----------- -----------
Total current assets 355,065 492,817
----------- -----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 18,220,214 18,207,994
Accumulated depletion (14,499,271) (14,264,426)
----------- -----------
Net oil and gas properties 3,720,943 3,943,568
----------- -----------
$ 4,076,008 $ 4,436,385
============ ============
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 62,979 $ 44,799
Partners' capital:
General partners 423,571 490,387
Limited partners (19,435 interests) 3,589,458 3,901,199
----------- -----------
4,013,029 4,391,586
----------- -----------
$ 4,076,008 $ 4,436,385
============ ============
The financial information included as of September 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
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PARKER & PARSLEY 84-A, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
-------------------- ----------------------
1997 1996 1997 1996
--------- --------- ---------- ----------
Revenues:
Oil and gas $ 342,616 $ 470,808 $1,207,108 $1,373,298
Interest 3,159 2,845 9,440 7,070
Gain on disposition of assets - - 3,072 -
Litigation settlement - - - 1,055,353
-------- -------- --------- ---------
345,775 473,653 1,219,620 2,435,721
-------- -------- --------- ---------
Costs and expenses:
Oil and gas production 207,926 223,011 647,554 677,333
General and administrative 11,513 15,232 39,948 44,624
Depletion 74,406 74,693 234,845 256,211
-------- -------- --------- ---------
293,845 312,936 922,347 978,168
-------- -------- --------- ---------
Net income $ 51,930 $ 160,717 $ 297,273 $1,457,553
======== ======== ========= =========
Allocation of net income:
General partners $ 23,518 $ 51,660 $ 109,084 $ 369,597
======== ======== ========= =========
Limited partners $ 28,412 $ 109,057 $ 188,189 $1,087,956
======== ======== ========= =========
Net income per limited
partnership interest $ 1.46 $ 5.61 $ 9.68 $ 55.98
======== ======== ========= =========
Distributions per limited
partnership interest $ 7.52 $ 8.10 $ 25.72 $ 64.48
======== ======== ========= =========
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
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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 (175,900) (499,930) (675,830)
Net income 109,084 188,189 297,273
--------- --------- ---------
Balance at September 30, 1997 $ 423,571 $3,589,458 $4,013,029
========= ========= =========
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
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PARKER & PARSLEY 84-A, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
September 30,
------------------------
1997 1996
---------- -----------
Cash flows from operating activities:
Net income $ 297,273 $ 1,457,553
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 234,845 256,211
Gain on disposition of assets (3,072) -
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 149,770 (30,284)
Increase (decrease) in accounts payable 18,180 (23,263)
--------- ----------
Net cash provided by operating activities 696,996 1,660,217
--------- ----------
Cash flows from investing activities:
Additions to oil and gas properties (12,220) (6,506)
Proceeds from disposition of assets 3,072 -
--------- ----------
Net cash used in investing activities (9,148) (6,506)
--------- ----------
Cash flows from financing activities:
Cash distributions to partners (675,830) (1,633,743)
--------- ----------
Net increase in cash and cash equivalents 12,018 19,968
Cash and cash equivalents at beginning of period 162,473 157,388
--------- ----------
Cash and cash equivalents at end of period $ 174,491 $ 177,356
========= ==========
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
September 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 September 30, 1997 and for the
three and nine months ended September 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, Vice President and
Controller, 303 West Wall, Suite 101, Midland, Texas 79701.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (1)
As of August 8, 1997, Pioneer Natural Resources USA, Inc. ("Pioneer USA") became
the managing general partner of the Partnership, joining the existing general
partner, P&P Employees 84-A, Ltd. ("EMPL"), a Texas limited partnership whose
general partner is Pioneer USA, and 1,332 limited partners. Prior to August 8,
1997, the Partnership's managing general partner and the general partner of EMPL
was Parker & Parsley Development L.P. ("PPDLP"), a wholly-owned subsidiary of
Parker & Parsley Petroleum Company ("Parker & Parsley"). On August 7, 1997,
Parker & Parsley and Mesa Inc. received shareholder approval to merge and create
Pioneer Natural Resources Company ("Pioneer"). On August 8, 1997, PPDLP was
merged with and into Pioneer USA, a wholly-owned subsidiary of Pioneer,
resulting in Pioneer USA becoming the managing general partner of the
Partnership and the general partner of EMPL as PPDLP's successor by merger. For
a more complete description of the Parker & Parsley and Mesa Inc. merger, see
Pioneer's Registration Statement on Form S-4 as filed with the Securities and
Exchange Commission.
Results of Operations
Nine months ended September 30, 1997 compared with nine months ended
September 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 12% to $1,207,108 from
$1,373,298 for the nine months ended September 30, 1997 as compared to the nine
7
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months ended September 30, 1996. The decrease in revenues resulted from a
decline in barrels of oil produced and sold and lower average prices received
per barrel of oil and mcf of gas, offset by an increase in mcf of gas produced
and sold. For the nine months ended September 30, 1997, 42,828 barrels were sold
compared to 47,627 for the same period in 1996, a decrease of 4,799 barrels, or
10%. For the nine months ended September 30, 1997, 178,633 mcf of gas were sold
compared to 177,818 for the same period in 1996, an increase of 815 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.
The average price received per barrel of oil decreased $1.42, or 7%, from $21.01
for the nine months ended September 30, 1996 to $19.59 for the same period in
1997, while the average price received per mcf of gas decreased slightly from
$2.09 during the nine months ended September 30, 1996 to $2.06 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 nine months ended
September 30, 1997.
A gain on disposition of assets of $3,072, received during the nine months ended
September 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 $922,347 for the nine months ended
September 30, 1997 as compared to $978,168 for the same period in 1996, a
decrease of $55,821, or 6%. This decrease was due to declines in production
costs, depletion and general and administrative expenses ("G&A").
Production costs were $647,554 for the nine months ended September 30, 1997 and
$677,333 for the same period in 1996 resulting in a $29,779 decrease, or 4%. The
decrease was due to lower well maintenance costs and a decline in production
taxes.
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, 10% from $44,624 for the nine months ended September
30, 1996 to $39,948 for the same period in 1997.
Depletion was $234,845 for the nine months ended September 30, 1997 compared to
$256,211 for the same period in 1996, representing a decrease of $21,366, or 8%.
8
<PAGE>
Three months ended September 30, 1997 compared with three months ended
September 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 27% to $342,616 from $470,808
for the three months ended September 30, 1997 as compared to the three months
ended September 30, 1996. The decrease in revenues resulted from declines in
barrels of oil and mcf of gas produced and sold and lower average prices
received per barrel of oil and mcf of gas. For the three months ended September
30, 1997, 12,952 barrels of oil were sold compared to 16,130 for the same period
in 1996, a decrease of 3,178 barrels, or 20%. For the three months ended
September 30, 1997, 58,970 mcf of gas were sold compared to 61,417 for the same
period in 1996, a decrease of 2,447 mcf, or 4%. The decrease in production
volumes was primarily due to the decline characteristics of the Partnership's
oil and gas properties.
The average price received per barrel of oil decreased $3.59, or 17%, from
$21.71 for the three months ended September 30, 1996 compared to $18.12 for the
same period in 1997, while the average price received per mcf of gas decreased
7% from $1.96 during the three months ended September 30, 1996 to $1.83 in 1997.
Costs and Expenses:
Total costs and expenses decreased to $293,845 for the three months ended
September 30, 1997 as compared to $312,936 for the same period in 1996, a
decrease of $19,091, or 6%. This decrease was due to declines in production
costs, G&A and depletion.
Production costs were $207,926 for the three months ended September 30, 1997 and
$223,011 for the same period in 1996, resulting in a $15,085 decrease, or 7%.
The decrease was due to declines in well maintenance costs and production taxes,
offset by an increase in ad valorem taxes.
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, 24% from $15,232 for the three months ended September
30, 1996 to $11,513 for the same period in 1997.
Depletion was $74,406 for the three months ended September 30, 1997 compared to
$74,693 for the same period in 1996, representing a decrease of $287. This
decrease was attributable to a decline in oil production of 3,178 barrels for
the nine months ended September 30, 1997, compared to the same period in 1996,
offset by a decline in oil reserves during 1997 due to lower commodity prices.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased $963,221 during the nine
months ended September 30, 1997 from the same period ended in 1996. This
decrease resulted primarily from the receipt of proceeds from the litigation
settlement in 1996 as discussed in Item 2 and a decline in production costs
paid, offset by an increase in oil and gas sales receipts.
9
<PAGE>
Net Cash Used in Investing Activities
The Partnership's principal investing activities during the nine months ended
September 30, 1997 and 1996 were related to expenditures for equipment
replacement on various oil and gas properties.
Proceeds from disposition of assets of $3,072 were received for the nine months
ended September 30, 1997 from the disposal of equipment on one saltwater
disposal well.
Net Cash Used in Financing Activities
Cash was sufficient for the nine months ended September 30, 1997 to cover
distributions to the partners of $675,830 of which $175,900 was distributed to
the general partners and $499,930 to the limited partners. For the same period
ended September 30, 1996, cash was sufficient for distributions to the partners
of $1,633,743 of which $380,603 was distributed to the general partners and
$1,253,140 to the limited partners. Cash distributions to the partners of
$1,633,743 for the nine months ended September 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
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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: Pioneer Natural Resources USA, Inc.,
Managing General Partner
Dated: November 6, 1997 By: /s/ Rich Dealy
-------------------------------------
Rich Dealy, Vice President and
Controller
11
<PAGE>
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<ARTICLE> 5
<CIK> 0000757545
<NAME> 84A.FDS
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 174,491
<SECURITIES> 0
<RECEIVABLES> 180,574
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 355,065
<PP&E> 18,220,214
<DEPRECIATION> 14,499,271
<TOTAL-ASSETS> 4,076,008
<CURRENT-LIABILITIES> 62,979
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,013,029
<TOTAL-LIABILITY-AND-EQUITY> 4,076,008
<SALES> 1,207,108
<TOTAL-REVENUES> 1,219,620
<CGS> 0
<TOTAL-COSTS> 922,347
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 297,273
<INCOME-TAX> 0
<INCOME-CONTINUING> 297,273
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 297,273
<EPS-PRIMARY> 9.68
<EPS-DILUTED> 0
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