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, 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. 33-11193-1
PARKER & PARSLEY PRODUCING PROPERTIES 87-A, LTD.
(Exact name of Registrant as specified in its charter)
Texas 75-2195512
(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 16 pages.
There are no exhibits.
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 87-A, LTD.
(A Texas Limited Partnership)
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
BALANCE SHEETS
September 30, December 31,
1995 1994
------------ ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, all interest
bearing deposits $ 152,444 $ 99,355
Accounts receivable - affiliate - 92,397
----------- -----------
Total current assets 152,444 191,752
Oil and gas properties - at cost, based on
the successful efforts accounting method 7,027,032 7,030,659
Accumulated depletion (4,089,649) (3,801,267)
----------- -----------
Net oil and gas properties 2,937,383 3,229,392
----------- -----------
$ 3,089,827 $ 3,421,144
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 34,061 $ -
Partners' capital:
Limited partners (24,426 interests) 3,023,967 3,385,691
Managing general partner 31,799 35,453
----------- -----------
3,055,766 3,421,144
----------- -----------
$ 3,089,827 $ 3,421,144
=========== ===========
The financial information included as of September 30, 1995 has been
prepared by management without audit by independent public accountants.
The accompanying notes are an integral part of these statements.
2
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 87-A, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
1995 1994 1995 1994
-------- -------- ---------- ----------
Revenues:
Oil and gas sales $363,040 $411,028 $1,140,712 $1,149,513
Interest income 3,055 1,518 8,526 3,689
Salvage income from
equipment disposal - 32,791 - 51,533
Gain on sale of assets - - 321 -
------- ------- --------- ---------
Total revenues 366,095 445,337 1,149,559 1,204,735
Costs and expenses:
Production costs 259,831 233,769 785,090 794,656
General and administrative
expenses 10,891 12,330 34,221 34,485
Depletion 93,729 57,904 296,025 205,635
(Gain) loss on abandoned
properties (1,904) 17,157 12,435 118,084
Abandoned property costs 1,052 41,284 7,269 114,122
------- ------- --------- ---------
Total costs and expenses 363,599 362,444 1,135,040 1,266,982
------- ------- --------- ---------
Net income (loss) $ 2,496 $ 82,893 $ 14,519 $ (62,247)
======= ======= ========= =========
Allocation of net income (loss):
Managing general partner $ 25 $ 829 $ 145 $ (622)
======= ======= ========= =========
Limited partners $ 2,471 $ 82,064 $ 14,374 $ (61,625)
======= ======= ========= =========
Net income (loss) per limited
partnership interest $ .10 $ 3.36 $ .59 $ (2.52)
======= ======= ========= =========
Distributions per limited
partnership interest $ 4.60 $ 5.00 $ 15.40 $ 13.85
======= ======= ========= =========
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
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 87-A, LTD.
(A Texas Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
----------- ----------- -----------
Balance at January 1, 1994 $ 41,594 $ 3,993,716 $ 4,035,310
Distributions (3,418) (338,304) (341,722)
Net loss (622) (61,625) (62,247)
---------- ---------- ----------
Balance at September 30, 1994 $ 37,554 $ 3,593,787 $ 3,631,341
========== ========== ==========
Balance at January 1, 1995 $ 35,453 $ 3,385,691 $ 3,421,144
Distributions (3,799) (376,098) (379,897)
Net income 145 14,374 14,519
---------- ---------- ----------
Balance at September 30, 1995 $ 31,799 $ 3,023,967 $ 3,055,766
========== ========== ==========
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
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 87-A, LTD.
(A Texas Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
September 30,
1995 1994
---------- ----------
Cash flows from operating activities:
Net income (loss) $ 14,519 $ (62,247)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depletion 296,025 205,635
Loss on abandoned properties 12,435 118,084
Salvage income from equipment disposal - (51,532)
Gain on sale of assets (321) -
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 54,440 (3,500)
Increase in accounts payable 34,061 -
--------- ---------
Net cash provided by operating activities 411,159 206,440
Cash flows from investing activities:
(Additions) deletions to oil and gas property (6,068) 1,958
Proceeds from equipment salvage on abandoned
properties 3,409 44,332
Proceeds from salvage income from equipment
disposal 24,163 44,379
Proceeds from sale of assets 323 -
--------- ---------
Net cash provided by investing activities 21,827 90,669
Cash flows from financing activities:
Cash distributions to partners (379,897) (341,722)
--------- ---------
Net increase (decrease) in cash and cash
equivalents 53,089 (44,613)
Cash and cash equivalents at beginning
of period 99,355 157,147
--------- ---------
Cash and cash equivalents at end of period $ 152,444 $ 112,534
========= =========
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
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 87-A, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Unaudited)
NOTE 1.
In the opinion of management, the unaudited financial statements as of
September 30, 1995 of Parker & Parsley Producing Properties 87-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 nine months ended September 30, 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
6
<PAGE>
to the working interest owners, including the Registrant, on July 30, 1993.
The limited partners received their distribution of $208,711, or $8.54
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. On September 20, 1995,
the Beaumont trial judge entered a summary judgment against Southmark
for the $13,790,000 contingent fee sought by Price, together with
prejudgment interest, and also awarded Price an additional $5,498,525 in
attorneys' fees. Southmark intends to vigorously pursue appeal of the
judgment. The summary judgment did not give Price any relief against
the Registrant, and 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. Trial against the Registrant is currently
scheduled for April 1996.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Registrant was formed October 1, 1987. The managing general partner
of the Registrant at December 31, 1994 was Parker & Parsley Development
Company ("PPDC") which was merged into PPDLP on January 1, 1995. On
January 1, 1995, PPDLP, a Texas limited partnership, became the sole
managing general partner of the Registrant, by acquiring the rights and
assuming the obligations of PPDC. 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 LP., 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 $12,213,000 representing 24,426 interests ($500 per
interest) sold to a total of 1,150 limited partners.
Since its formation, the Registrant invested $8,710,533 in various
prospects that were purchased in Texas. The Registrant completed seven
purchases of producing properties involving working interests in 187
properties. A total of 81 uneconomical wells have been plugged and
7
<PAGE>
abandoned; two during 1988, 18 in 1989, 17 in 1990, 19 in 1991, nine in
1992, three in 1993, ten in 1994 and three during 1995. One well was
sold during 1995. The Registrant also participated in the drilling of
two oil and gas wells during 1988 which were completed as producers.
All the properties are operated by the managing general partner.
RESULTS OF OPERATIONS
Nine months ended September 30, 1995 compared with nine months ended
September 30, 1994
REVENUES:
The Registrant's oil and gas revenues decreased to $1,140,712 from
$1,149,513 for the nine months ended September 30, 1995 and 1994,
respectively. The decrease in revenues resulted from a 6% decline in
barrels of oil produced and sold and a 15% decline in mcf of gas
produced and sold, in addition to a decline in the average price
received per mcf of gas, offset by an increase in the average price
received per barrel of oil. For the nine months ended September 30,
1995, 54,345 barrels of oil were sold compared to 57,621 for the same
period in 1994, a decrease of 3,276 barrels. For the nine months ended
September 30, 1995, 128,608 mcf of gas were sold compared to 150,436 for
the same period in 1994, a decrease of 21,828 mcf. Because of the
decline characteristics of the Registrant's oil and gas properties,
management expects a certain amount of decline in production to continue
in the future until the Registrant's economically recoverable reserves
are fully depleted.
The average price received per barrel of oil increased $1.53 from $15.73
for the nine months ended September 30, 1994 to $17.26 for the same
period in 1995 while the average price received per mcf of gas decreased
from $1.62 during the nine months ended September 30, 1994 to $1.58 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 nine months ended September 30, 1995.
Salvage income of $51,533 for the nine months ended September 30, 1994
was derived from equipment credits received on several wells that were
plugged and abandoned in prior years. A loss on abandoned properties of
$12,435 was recognized during the nine months ended September 30, 1995.
This loss was the result of proceeds received of $26,572 from equipment
salvage on abandoned properties, less the write-off of remaining
8
<PAGE>
capitalized well costs of $39,007. The loss of $118,084 on abandoned
properties during the nine months ended September 30, 1994 resulted from
proceeds received of $76,463 from equipment salvage on abandoned
properties, less the write-off of remaining capitalized well costs of
$194,547. Expenses incurred during 1995 to plug and abandon
uneconomical wells totaled $7,269 compared to $114,122 for the same
period in 1994.
A gain of $321 from the sale of one fully depleted well was realized
during the nine months ended September 30, 1995.
COSTS AND EXPENSES:
Total costs and expenses decreased to $1,135,040 for the nine months
ended September 30, 1995 as compared to $1,266,982 for the same period
in 1994, a decrease of $131,942, or 10%. This decrease was due to
declines in production costs, general and administrative expenses
("G&A"), abandoned property costs and the loss on abandoned properties,
offset by an increase in depletion.
Production costs were $785,090 for the nine months ended September 30,
1995 and $794,656 for the same period in 1994, resulting in a $9,566
decrease. The decrease was primarily attributable to declines in
workover expenses and ad valorem taxes, offset by an increase in well
repair and maintenance costs incurred in an effort to stimulate
production.
G&A's components are independent accounting and engineering fees,
computer services, postage and managing general partner personnel costs.
During this period, G&A decreased from $34,485 for the nine months ended
September 30, 1994 to $34,221 for the same period in 1995.
Depletion was $296,025 for the nine months ended September 30, 1995
compared to $205,635 for the same period in 1994. This represented an
increase in depletion of $90,390, or 44%. Depletion was computed
quarterly on a property-by-property basis utilizing the unit-of-production
method based upon the dominant mineral produced, generally
oil. Oil production decreased 3,276 barrels for the nine months ended
September 30, 1995 from the same period in 1994. Depletion expense for
the nine months ended September 30, 1995 was calculated based on
reserves computed utilizing an oil price of $16.34 per barrel.
Comparatively, depletion expense for the three months ended September
30, 1994 and June 30, 1994 was calculated based on reserves computed
9
<PAGE>
utilizing an oil price of $18.26 per barrel while depletion expense for
the three months ended March 31, 1994 was calculated based on reserves
computed utilizing an oil price of $12.76 per barrel.
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 PPDLP. The May 25,
1993 settlement agreement called for a payment of $115 million in cash
by the defendants. PPDLP 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 $208,711, or $8.54 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. On September 20, 1995,
the Beaumont trial judge entered a summary judgment against Southmark
for the $13,790,000 contingent fee sought by Price, together with
prejudgment interest, and also awarded Price an additional $5,498,525 in
attorneys' fees. Southmark intends to vigorously pursue appeal of the
judgment. The summary judgment did not give Price any relief against
the Registrant, and 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. Trial against the Registrant is currently
scheduled for April 1996.
10
<PAGE>
Three months ended September 30, 1995 compared with three months ended
September 30, 1994
REVENUES:
The Registrant's oil and gas revenues decreased to $363,040 from
$411,028 for the three months ended September 30, 1995 and 1994,
respectively, a decrease of 12%. The decrease in revenues was the
result of an 8% decline in barrels of oil produced and sold and a 10%
decline in mcf of gas produced and sold, in addition to a 5% decrease in
the average price received per barrel of oil, offset by a 3% increase in
the average price received per mcf of gas. For the three months ended
September 30, 1995, 17,615 barrels of oil were sold compared to 19,243
for the same period in 1994, a decrease of 1,628 barrels. For the three
months ended September 30, 1995, 47,343 mcf of gas were sold compared to
52,452 for the same period in 1994, a decrease of 5,109 mcf. The
decrease in production was due to the decline characteristics of the
Registrant's oil and gas properties.
The average price received per barrel of oil decreased $.80 from $17.33
for the three months ended September 30, 1994 to $16.53 for the same
period in 1995 while the average price received per mcf of gas increased
from $1.48 during the three months ended September 30, 1994 to $1.52 in
1995.
Salvage income of $32,791 for the three months ended September 30, 1994
was derived from equipment credits received on wells that were plugged
and abandoned in prior years. A gain on abandoned properties of $1,904
was recognized during the three months ended September 30, 1995,
resulting from proceeds received of $1,904 from equipment salvage. The
loss of $17,157 on abandoned properties during the three months ended
September 30, 1994, resulted from proceeds received of $30,147 from
equipment salvage on abandoned properties, less the write-off of
remaining capitalized well costs of $47,304. Expenses incurred during
the three months ended September 30, 1995 to plug and abandon
uneconomical wells totaled $1,052 compared to $41,284 for the same
period in 1994.
COSTS AND EXPENSES:
Total costs and expenses increased to $365,503 for the three months
ended September 30, 1995 as compared to $362,444 for the same period in
1994, an increase of $3,059. This increase was due to increases in
production costs and depletion, offset by declines in G&A, loss on
abandoned properties and abandoned property costs.
11
<PAGE>
Production costs were $259,831 for the three months ended September 30,
1995 and $233,769 for the same period in 1994, resulting in a $26,062
increase, or 11%. The increase was attributable to increases in well
repair and maintenance costs and 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 decreased, in aggregate, 12% from $12,330 for
the three months ended September 30, 1994 to $10,891 for the same period
in 1995.
Depletion was $93,729 for the three months ended September 30, 1995
compared to $57,904 for the same period in 1994. This represented an
increase in depletion of $35,825, or 62%. Oil production decreased 1,628
barrels for the three months ended September 30, 1995 from the same
period in 1994. Depletion expense for the three months ended September
30, 1995 was calculated based on reserves computed utilizing an oil
price of $16.34 per barrel while depletion expense for the three months
ended September 30, 1994 was calculated based on reserves computed
utilizing an oil price of $18.26 per barrel.
LIQUIDITY AND CAPITAL RESOURCES
NET CASH PROVIDED BY OPERATING ACTIVITIES
Net cash provided by operating activities increased to $411,159 during
the nine months ended September 30, 1995, a $204,719 increase from the
same period ended September 30, 1994. This increase was primarily
attributable to declines in production costs and abandoned property
costs, offset by a slight decline in oil and gas sales. The decline in
production costs was the result of less well repair and maintenance
costs, while abandoned property costs declined due to less activity
during the nine months ended September 30, 1995 compared to the same
period in 1994. The decline in oil and gas sales was due to declines in
barrels of oil and mcf of gas produced and sold and declining average
prices received per mcf of gas.
NET CASH PROVIDED BY INVESTING ACTIVITIES
The Registrant's investing activities during the nine months ended
September 30, 1995 included $6,068 for expenditures related to repair
and maintenance activity on several oil and gas properties. The
Registrant received $1,958 during the nine months ended September 30,
1994 from the disposal of oil and gas equipment on active properties.
12
<PAGE>
Proceeds from salvage income of $24,163 from the sale of oil and gas
equipment on properties abandoned in prior years were received during
the nine months ended September 30, 1995, compared to $44,379 received
during the same period in 1994. Proceeds of $3,409 and $44,332 were
received from the salvage of equipment on several properties abandoned
during the nine months ended September 30, 1995 and 1994, respectively.
One fully depleted property was sold during the nine months ended
September 30, 1995, resulting in the receipt of $323 in proceeds from
the sale.
NET CASH USED IN FINANCING ACTIVITIES
Cash was sufficient for the nine months ended September 30, 1995 to
cover distributions to the partners of $379,897 of which $376,098 was
distributed to the limited partners and $3,799 to the managing general
partner. For the same period ended September 30, 1994, cash was
sufficient for distributions to the partners of $341,722 of which
$338,304 was distributed to the limited partners and $3,418 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.
ACCOUNTING STANDARD ON IMPAIRMENT OF LONG-LIVED ASSETS
In March 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 121 - Accounting for Impairment of
Long-lived Assets and for Long-lived Assets to Be Disposed Of ("FAS
121") regarding the impairment of long-lived assets, identifiable
intangibles and goodwill related to those assets. FAS 121 is effective
for financial statements for fiscal years beginning after December 15,
1995, although earlier adoption is encouraged. The application of FAS
121 to oil and gas companies utilizing the successful efforts method
(such as the Registrant) will require periodic determination of whether
the book value of long-lived assets exceeds the future cash flows
expected to result from the use of such assets and, if so, will require
reduction of the carrying amount of the "impaired" assets to their
estimated fair values. There is currently a great deal of uncertainty
as to how FAS 121 will apply to oil and gas companies using the
successful efforts method, including uncertainty regarding the
determination of expected future cash flows from the relevant assets
and, if an impairment is determined to exist, their estimated fair
13
<PAGE>
value. There is also uncertainty regarding the level at which the test
might be applied. Given this uncertainty, the Registrant is currently
unable to estimate the effect that FAS 121 will have on the Registrant's
results of operations for the period in which it is adopted.
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 PPDLP. The May 25,
1993 settlement agreement called for a payment of $115 million in cash
by the defendants. PPDLP 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 $208,711, or $8.54 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. On September 20, 1995,
the Beaumont trial judge entered a summary judgment against Southmark
for the $13,790,000 contingent fee sought by Price, together with
prejudgment interest, and also awarded Price an additional $5,498,525 in
attorneys' fees. Southmark intends to vigorously pursue appeal of the
judgment. The summary judgment did not give Price any relief against
the Registrant, and 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. Trial against the Registrant is currently
scheduled for April 1996.
14
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - none
(b) Reports on Form 8-K - none
15
<PAGE>
PARKER & PARSLEY PRODUCING PROPERTIES 87-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 PRODUCING
PROPERTIES 87-A, LTD.
By: Parker & Parsley Development L.P.,
Managing General Partner
By: Parker & Parsley Petroleum USA, Inc.
("PPUSA"), General Partner
Dated: November 9, 1995 By: /s/ Steven L. Beal
----------------------------------------
Steven L. Beal, Senior Vice President
and Chief Financial Officer of PPUSA
16
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<ARTICLE> 5
<CIK> 0000809016
<NAME> 87AP1.TXT
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 152,444
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 152,444
<PP&E> 7,027,032
<DEPRECIATION> 4,089,649
<TOTAL-ASSETS> 3,089,827
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 3,055,766
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<SALES> 1,140,712
<TOTAL-REVENUES> 1,149,559
<CGS> 0
<TOTAL-COSTS> 1,135,040
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<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 14,519
<INCOME-TAX> 0
<INCOME-CONTINUING> 14,519
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,519
<EPS-PRIMARY> 0.59
<EPS-DILUTED> 0
</TABLE>
