UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2000
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)
1400 Williams Square West, 5205 N. O'Connor Blvd., Irving, Texas 75039
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(Address of principal executive offices) (Zip code)
Registrant's Telephone Number, including area code : (972) 444-9001
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 / /
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PARKER & PARSLEY 85-A, LTD.
TABLE OF CONTENTS
Page
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of June 30, 2000 and
December 31, 1999................................... 3
Statements of Operations for the three and six
months ended June 30, 2000 and 1999.................. 4
Statement of Partners' Capital for the six months
ended June 30, 2000.................................. 5
Statements of Cash Flows for the six
months ended June 30, 2000 and 1999.................. 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
27.1 Financial Data Schedule
Signatures............................................. 11
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PARKER & PARSLEY 85-A, LTD.
(A Texas Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
<TABLE>
BALANCE SHEETS
June 30, December 31,
2000 1999
----------- -----------
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash $ 64,497 $ 73,810
Accounts receivable - oil and gas sales 81,352 72,517
---------- ----------
Total current assets 145,849 146,327
---------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 7,399,203 7,396,111
Accumulated depletion (6,855,545) (6,839,838)
---------- ----------
Net oil and gas properties 543,658 556,273
---------- ----------
$ 689,507 $ 702,600
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 17,969 $ 13,487
Partners' capital:
Managing general partner 6,727 6,903
Limited partners (9,613 interests) 664,811 682,210
---------- ----------
671,538 689,113
---------- ----------
$ 689,507 $ 702,600
========== ==========
</TABLE>
The financial information included as of June 30, 2000 has been prepared by
the managing general partner without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
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PARKER & PARSLEY 85-A, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Oil and gas $ 174,901 $ 122,223 $ 353,329 $ 201,384
Interest 1,518 658 2,548 1,155
-------- -------- -------- --------
176,419 122,881 355,877 202,539
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 76,933 74,972 168,879 133,355
General and administrative 5,247 3,669 10,600 6,044
Depletion 7,115 11,205 15,707 31,837
-------- -------- -------- --------
89,295 89,846 195,186 171,236
-------- -------- -------- --------
Net income $ 87,124 $ 33,035 $ 160,691 $ 31,303
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 871 $ 330 $ 1,607 $ 313
======== ======== ======== ========
Limited partners $ 86,253 $ 32,705 $ 159,084 $ 30,990
======== ======== ======== ========
Net income per limited
partnership interest $ 8.97 $ 3.40 $ 16.55 $ 3.22
======== ======== ======== ========
</TABLE>
The financial information included herein has been prepared by
the managing general partner without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
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PARKER & PARSLEY 85-A, LTD.
(A Texas Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
<TABLE>
Managing
general Limited
partner partners Total
--------- ---------- ----------
<S> <C> <C> <C>
Balance at January 1, 2000 $ 6,903 $ 682,210 $ 689,113
Distributions (1,783) (176,483) (178,266)
Net income 1,607 159,084 160,691
-------- --------- ---------
Balance at June 30, 2000 $ 6,727 $ 664,811 $ 671,538
======== ========= =========
</TABLE>
The financial information included herein has been prepared by
the managing general partner without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
5
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PARKER & PARSLEY 85-A, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
Six months ended
June 30,
------------------------
2000 1999
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 160,691 $ 31,303
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 15,707 31,837
Changes in assets and liabilities:
Accounts receivable (8,835) (27,689)
Accounts payable 4,482 5,404
--------- ---------
Net cash provided by operating activities 172,045 40,855
--------- ---------
Cash flows from investing activities:
Additions to oil and gas properties (3,092) (5,325)
Proceeds from asset dispositions - 278
--------- ---------
Net cash used in investing activities (3,092) (5,047)
--------- ---------
Cash flows from financing activities:
Cash distributions to partners (178,266) (22,522)
--------- ---------
Net increase (decrease) in cash (9,313) 13,286
Cash at beginning of period 73,810 41,498
--------- ---------
Cash at end of period $ 64,497 $ 54,784
========= =========
</TABLE>
The financial information included herein has been prepared by
the managing general partner without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
6
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PARKER & PARSLEY 85-A, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(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 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 of the
Partnership as of June 30, 2000 and for the three and six months ended June 30,
2000 and 1999 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 reclassifications may have been
made to the June 30, 1999 financial statements to conform to the June 30, 2000
financial statement presentations.
Certain information and footnote disclosures 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, 1999, as filed with the Securities and Exchange Commission, a copy
of which is available upon request by writing to Rich Dealy, Vice President and
Chief Accounting Officer, 5205 North O'Connor Boulevard, 1400 Williams Square
West, Irving, Texas 75039-3746.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (1)
Results of Operations
Six months ended June 30, 2000 compared with six months ended June 30, 1999
Revenues:
The Partnership's oil and gas revenues increased 75% to $353,329 for the six
months ended June 30, 2000 as compared to $201,384 for the same period in 1999.
The increase in revenues resulted from higher average prices received, offset by
a decrease in production. For the six months ended June 30, 2000, 8,535 barrels
of oil, 5,502 barrels of natural gas liquids ("NGLs") and 21,614 mcf of gas were
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sold, or 17,639 barrel of oil equivalents ("BOEs"). For the six months ended
June 30, 1999, 8,668 barrels of oil, 6,436 barrels of NGLs and 26,371 mcf of gas
were sold, or 19,499 BOEs.
The average price received per barrel of oil increased $14.63, or 111%, from
$13.15 for the six months ended June 30, 1999 to $27.78 for the same period in
2000. The average price received per barrel of NGLs increased $5.78, or 79%,
from $7.34 during the six months ended June 30, 1999 to $13.12 for the same
period in 2000. The average price received per mcf of gas increased 34% from
$1.52 during the six months ended June 30, 1999 to $2.04 for the same period in
2000. The market price for oil and gas has been extremely volatile in the past
decade and management expects a certain amount of volatility 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, 2000.
The volatility of commodity prices has had, and continues to have, a significant
impact on the Partnership's revenues and operating cash flow and could result in
additional decreases to the carrying value of the Partnership's oil and gas
properties.
Costs and Expenses:
Total costs and expenses increased to $195,186 for the six months ended June 30,
2000 as compared to $171,236 for the same period in 1999, an increase of
$23,950, or 14%. This increase was due to increases in production costs and
general and administrative expenses ("G&A"), offset by a decline in depletion.
Production costs were $168,879 for the six months ended June 30, 2000 and
$133,355 for the same period in 1999 resulting in an increase of $35,524, or
27%. The increase was due to additional well maintenance costs incurred to
stimulate well production and higher production taxes due to higher oil and gas
prices.
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, 75% from $6,044 for the six months ended June 30, 1999
to $10,600 for the same period in 2000 primarily due to a higher allocation of
the managing general partner's G&A being allocated (limited to 3% of oil and gas
revenues) as a result of increased oil and gas revenues.
Depletion was $15,707 for the six months ended June 30, 2000 compared to $31,837
for the same period in 1999, a decrease of $16,130, or 51%. This decrease was
due to an increase in proved reserves during the period ended June 30, 2000 due
to higher commodity prices and a decline in oil production of 133 barrels for
the six months ended June 30, 2000 compared to the same period in 1999.
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Three months ended June 30, 2000 compared with three months ended June 30, 1999
Revenues:
The Partnership's oil and gas revenues increased 43% to $174,901 for the three
months ended June 30, 2000, as compared to $122,223 for the same period in 1999.
The increase in revenues resulted from higher average prices received, offset by
a decline in production. For the three months ended June 30, 2000, 4,084 barrels
of oil, 2,518 barrels of NGLs and 9,802 mcf of gas were sold, or 8,236 BOEs. For
the three months ended June 30, 1999, 4,347 barrels of oil, 3,965 barrels of
NGLs and 14,678 mcf of gas were sold, or 10,758 BOEs.
The average price received per barrel of oil increased $13.61, or 93%, from
$14.57 for the three months ended June 30, 1999 to $28.18 for the same period in
2000. The average price received per barrel of NGLs increased $5.53, or 63%,
from $8.73 during the three months ended June 30, 1999 to $14.26 for the same
period in 2000. The average price received per mcf of gas increased 48% from
$1.65 during the three months ended June 30, 1999 to $2.44 for the same period
in 2000.
Costs and Expenses:
Total costs and expenses decreased to $89,295 for the three months ended June
30, 2000 as compared to $89,846 for the same period in 1999, a decrease of $551.
This decrease was due to a decline in depletion, offset by increases in
production costs and G&A.
Production costs were $76,933 for the three months ended June 30, 2000 and
$74,972 for the same period in 1999 resulting in a $1,961 increase, or 3%. The
increase was due to higher production taxes due to higher oil and gas prices,
offset by lower well maintenance costs.
During this period, G&A increased, in aggregate, 43% from $3,669 for the three
months ended June 30, 1999 to $5,247 for the same period in 2000 primarily due
to a higher allocation of the managing general partner's G&A being allocated
(limited to 3% of oil and gas revenues) as a result of increased oil and gas
revenues.
Depletion was $7,115 for the three months ended June 30, 2000 compared to
$11,205 for the same period in 1999, a decrease of $4,090, or 37%. This decrease
was primarily attributable to an increase in proved reserves during the period
ended June 30, 2000 as a result of higher commodity prices and a decline in oil
production of 263 barrels for the three months ended June 30, 2000 as compared
to the same period in 1999.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $131,190 during the six
months ended June 30, 2000 from the same period ended June 30, 1999. This
increase was due to an increase in oil and gas sales receipts of $172,192,
offset by increases in operating costs paid of $35,213 and G&A expenses paid of
$5,789.
9
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Net Cash Used in Investing Activities
The Partnership's investing activities during the six months ended June 30, 2000
and 1999 included expenditures related to equipment upgrades on various oil and
gas properties.
Proceeds from asset dispositions of $278 were received during the six months
ended June 30, 1999 from equipment credits received on active properties.
Net Cash Used in Financing Activities
For the six months ended June 30, 2000, cash distributions to the partners were
$178,266, of which $1,783 was distributed to the managing general partner and
$176,483 to the limited partners. For the same period ended June 30, 1999, cash
distributions to the partners were $22,522, of which $225 was distributed to the
managing general partner and $22,297 to the limited partners.
---------------
(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
27.1 Financial Data Schedule
(b) Reports on Form 8-K - none
10
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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: Pioneer Natural Resources USA, Inc.,
Managing General Partner
Dated: August 9, 2000 By: /s/ Rich Dealy
-------------------------------
Rich Dealy, Vice President and
Chief Accounting Officer
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