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, 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. 2-99079A
PARKER & PARSLEY 85-A, LTD.
(Exact name of Registrant as specified in its charter)
Texas 75-2064518
(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 10 pages.
-There are no exhibits-
<PAGE>
PARKER & PARSLEY 85-A, LTD.
TABLE OF CONTENTS
Page
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of March 31, 1997 and
December 31, 1996.......................................... 3
Statements of Operations for the three months
ended March 31, 1997 and 1996.............................. 4
Statement of Partners' Capital for the three months
ended March 31, 1997....................................... 5
Statements of Cash Flows for the three months
ended March 31, 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............................. 9
27. Financial Data Schedule
Signatures................................................... 10
2
<PAGE>
PARKER & PARSLEY 85-A, LTD.
(A Texas Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
March 31, December 31,
1997 1996
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $103,943 at March 31
and $49,971 at December 31 $ 104,118 $ 50,279
Accounts receivable - oil and gas sales 69,079 100,147
---------- ----------
Total current assets 173,197 150,426
---------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 7,373,817 7,373,688
Accumulated depletion (6,093,051) (6,063,706)
---------- ----------
Net oil and gas properties 1,280,766 1,309,982
---------- ----------
$ 1,453,963 $ 1,460,408
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 34,390 $ 14,353
Partners' capital:
Managing general partner 14,207 14,472
Limited partners (9,613 interests) 1,405,366 1,431,583
---------- ----------
1,419,573 1,446,055
---------- ----------
$ 1,453,963 $ 1,460,408
========== ==========
The financial information included as of March 31, 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 85-A, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
March 31,
-----------------------
1997 1996
--------- ---------
Revenues:
Oil and gas $ 161,528 $ 139,706
Interest 1,047 661
-------- --------
162,575 140,367
-------- --------
Costs and expenses:
Oil and gas production 70,388 91,145
General and administrative 4,846 4,191
Depletion 29,345 29,871
-------- --------
104,579 125,207
-------- --------
Net income $ 57,996 $ 15,160
======== ========
Allocation of net income:
Managing general partner $ 580 $ 152
======== ========
Limited partners $ 57,416 $ 15,008
======== ========
Net income per limited partnership interest $ 5.97 $ 1.56
======== ========
Distributions per limited partnership interest $ 8.70 $ 3.50
======== ========
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 85-A, LTD.
(A Texas Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
--------- ---------- ----------
Balance at January 1, 1997 $ 14,472 $1,431,583 $1,446,055
Distributions (845) (83,633) (84,478)
Net income 580 57,416 57,996
-------- --------- ---------
Balance at March 31, 1997 $ 14,207 $1,405,366 $1,419,573
======== ========= =========
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 85-A, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended
March 31,
-----------------------
1997 1996
--------- ---------
Cash flows from operating activities:
Net income $ 57,996 $ 15,160
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 29,345 29,871
Changes in assets and liabilities:
Decrease in accounts receivable 31,068 6,111
Increase in accounts payable 20,037 9,482
-------- --------
Net cash provided by operating activities 138,446 60,624
-------- --------
Cash flows from investing activities:
Additions to oil and gas properties (129) (4,109)
Cash flows from financing activities:
Cash distributions to partners (84,478) (33,989)
-------- --------
Net increase in cash and cash equivalents 53,839 22,526
Cash and cash equivalents at beginning of period 50,279 36,955
-------- --------
Cash and cash equivalents at end of period $ 104,118 $ 59,481
======== ========
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 85-A, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
(Unaudited)
Note 1. Organization and nature of operations
Parker & Parsley 85-A, Ltd. (the "Partnership") is a limited partnership
organized in 1985 under the laws of the State of Texas.
The Partnership engages primarily in oil and gas development and production in
Texas and is not involved in any industry segment other than oil and gas.
Note 2. Basis of presentation
In the opinion of management, the unaudited financial statements as of March 31,
1997 of the Partnership 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, these interim results are not
necessarily indicative of results for a full year.
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
Steven L. Beal, Senior Vice President, 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
Revenues:
The Partnership's oil and gas revenues increased to $161,528 from $139,706 for
the three months ended March 31, 1997 and 1996, respectively, an increase of
16%. The increase in revenues resulted from higher average prices received per
barrel of oil and mcf of gas, offset by a 10% decrease in barrels of oil
produced and sold and a 7% decrease in mcf of gas produced and sold. For the
three months ended March 31, 1997, 4,953 barrels of oil were sold compared to
5,530 for the same period in 1996, a decrease of 577 barrels. Of the decrease,
273 barrels, or 5%, was attributable to the sale of four oil and gas wells
during 1996, with the remaining decrease of 304 barrels, or 5%, due to the
decline characteristics of the Partnership's oil and gas properties. For the
three months ended March 31, 1997, 16,696 mcf of gas were sold compared to
17,878 for the same period in 1996, a decrease of 1,182 mcf. Of the decrease,
306 mcf, or 2%, was attributable to the sale of four oil and gas wells during
1996 with the remaining decrease of 876 mcf, or 5%, due to the decline
characteristics of the Partnership's oil and gas properties. Because of these
7
<PAGE>
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.
The average price received per barrel of oil increased $3.16, or 17%, from
$18.95 for the three months ended March 31, 1996 to $22.11 for the same period
in 1997, while the average price received per mcf of gas increased 60% from
$1.95 during the three months ended March 31, 1996 to $3.12 for the same period
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
three months ended March 31, 1997.
Costs and Expenses:
Total costs and expenses decreased to $104,579 for the three months ended March
31, 1997 as compared to $125,207 for the same period in 1996, a decrease of
$20,628, or 16%. This decrease was due to declines in production costs and
depletion, offset by an increase in general and administrative expenses ("G&A").
Production costs were $70,388 for the three months ended March 31, 1997 and
$91,145 for the same period in 1996, a decrease of $20,757, or 23%. The decrease
was principally due to less well repair and maintenance costs for the three
months ended March 31, 1997 compared to the same period in 1996.
G&A's components are independent accounting and engineering fees and managing
general partner personnel and operating costs. During this period, G&A
increased, in aggregate, 16% from $4,191 for the three months ended March 31,
1996 to $4,846 for the same period in 1997. The Partnership agreement limits G&A
to 3% of gross oil and gas revenues.
Depletion was $29,345 for the three months ended March 31, 1997 compared to
$29,871 for the same period in 1996. This represented a decrease in depletion of
$526.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $77,822 for the three months
ended March 31, 1997 from the same period in 1996. This increase was due to an
increase in oil and gas sales receipts and a decrease in production cost
expenditures.
Net Cash Used in Investing Activities
The Partnership's investing activities during the three months ended March 31,
1997 and 1996 were related to the addition of oil and gas equipment on active
properties.
8
<PAGE>
Net Cash Used in Financing Activities
Cash was sufficient for the three months ended March 31, 1997 to cover
distributions to the partners of $84,478 of which $83,633 was distributed to the
limited partners and $845 to the managing general partner. For the same period
ended March 31, 1996, cash was sufficient for distributions to the partners of
$33,989 of which $33,644 was distributed to the limited partners and $345 to the
managing general partner.
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
9
<PAGE>
PARKER & PARSLEY 85-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 85-A, LTD.
By: Parker & Parsley Development L.P.,
Managing General Partner
By: Parker & Parsley Petroleum USA, Inc.
("PPUSA"), General Partner
Dated: May 8, 1997 By: /s/ Steven L. Beal
-------------------------------------
Steven L. Beal, Senior Vice President
and Chief Financial Officer of PPUSA
10
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000791230
<NAME> 85A.TXT
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 104,118
<SECURITIES> 0
<RECEIVABLES> 69,079
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 173,197
<PP&E> 7,373,817
<DEPRECIATION> 6,093,051
<TOTAL-ASSETS> 1,453,963
<CURRENT-LIABILITIES> 34,390
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,419,573
<TOTAL-LIABILITY-AND-EQUITY> 1,453,963
<SALES> 161,528
<TOTAL-REVENUES> 162,575
<CGS> 0
<TOTAL-COSTS> 104,579
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 57,996
<INCOME-TAX> 0
<INCOME-CONTINUING> 57,996
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 57,996
<EPS-PRIMARY> 5.97
<EPS-DILUTED> 0
</TABLE>
