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. 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 10 pages.
-There are no exhibits-
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PARKER & PARSLEY PRODUCING PROPERTIES 87-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
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PARKER & PARSLEY PRODUCING PROPERTIES 87-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 $375,768 at March 31
and $327,271 at December 31 $ 375,940 $ 327,443
Accounts receivable - affiliate 147,062 297,667
----------- -----------
Total current assets 523,002 625,110
----------- -----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 6,452,701 6,465,143
Accumulated depletion (4,306,749) (4,272,670)
----------- ----------
Net oil and gas properties 2,145,952 2,192,473
----------- ----------
$ 2,668,954 $ 2,817,583
=========== ===========
PARTNERS' CAPITAL
Partners' capital:
Managing general partner $ 27,930 $ 29,417
Limited partners (24,426 interests) 2,641,024 2,788,166
----------- -----------
$ 2,668,954 $ 2,817,583
=========== ===========
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 PRODUCING PROPERTIES 87-A, LTD.
(A Texas Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
March 31,
------------------------
1997 1996
--------- ---------
Revenues:
Oil and gas $ 357,769 $ 421,477
Interest 4,905 1,974
Salvage income from equipment disposals 14,394 20,520
-------- --------
377,068 443,971
-------- --------
Costs and expenses:
Oil and gas production 227,562 237,616
General and administrative 10,628 12,644
Depletion 40,599 62,031
Abandoned property 2,966 22,736
(Gain) loss on abandoned properties 3,386 (6,168)
-------- --------
285,141 328,859
-------- --------
Net income $ 91,927 $ 115,112
========= =========
Allocation of net income:
Managing general partner $ 919 $ 1,151
========= =========
Limited partners $ 91,008 $ 113,961
========= =========
Net income per limited partnership interest $ 3.73 $ 4.67
========= =========
Distributions per limited partnership interest $ 9.75 $ 4.50
========= =========
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 PRODUCING PROPERTIES 87-A, LTD.
(A Texas Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
--------- ----------- -----------
Balance at January 1, 1997 $ 29,417 $ 2,788,166 $ 2,817,583
Distributions (2,406) (238,150) (240,556)
Net income 919 91,008 91,927
--------- ----------- -----------
Balance at March 31, 1997 $ 27,930 $ 2,641,024 $ 2,668,954
========= =========== ===========
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 PRODUCING PROPERTIES 87-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 $ 91,927 $ 115,112
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 40,599 62,031
Salvage income from equipment disposals (14,394) (20,520)
(Gain) loss on abandoned properties 3,386 (6,168)
Changes in assets:
(Increase) decrease in accounts receivable 151,918 (79,292)
--------- ---------
Net cash provided by operating activities 273,436 71,163
--------- ---------
Cash flows from investing activities:
Disposals of oil and gas equipment 1,223 4,305
Proceeds from disposition of assets 14,394 20,581
--------- ---------
Net cash provided by investing activities 15,617 24,886
--------- ---------
Cash flows from financing activities:
Cash distributions to partners (240,556) (111,029)
--------- ---------
Net increase (decrease) in cash and cash equivalents 48,497 (14,980)
Cash and cash equivalents at beginning of period 327,443 133,580
--------- ---------
Cash and cash equivalents at end of period $ 375,940 $ 118,600
========= =========
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 PRODUCING PROPERTIES 87-A, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
(Unaudited)
Note 1. Organization and nature of operations
Parker & Parsley Producing Properties 87-A, Ltd. (the "Partnership") is a
limited partnership organized in 1987 under the laws of the State of Texas.
The Partnership engages primarily in oil and gas 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. Certain reclassifications
have been made to the March 31, 1996 financial statements to conform to the
March 31, 1997 financial statement presentations.
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 decreased to $357,769 from $421,477 for
the three months ended March 31, 1997 and 1996, respectively, a decrease of 15%.
The decrease in revenues was the net result of a 23% decline in barrels of oil
produced and sold and a 31% decline in mcf of gas produced and sold, offset by
higher average prices received per barrel of oil and mcf of gas. For the
three months ended March 31, 1997, 13,976 barrels of oil were sold compared to
18,200 for the same period in 1996, a decrease of 4,224 barrels. Of the
decrease, 1,102 barrels, or 6%, was attributable to the sale of six wells during
1996, with the remaining decrease of 3,122 barrels, or 17%, due to the decline
characteristics of the Partnership's oil and gas properties. For the three
months ended March 31, 1997, 26,683 mcf of gas were sold compared to 38,594 for
the same period in 1996, a decrease of 11,911 mcf. Of the decrease, 5,222 mcf,
7
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or 14%,was attributable to the sale of six wells during 1996, with the remaining
decrease of 6,689 mcf,or 17%, due to the decline characteristics of the Partner-
ship's oil and gas properties. Because of these 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 $2.13, or 11%, from
$18.99 for the three months ended March 31, 1996 to $21.12 for the same period
in 1997, while the average price received per mcf of gas increased 19% from
$1.96 for the three months ended March 31, 1996 to $2.34 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.
During the three months ended March 31, 1997 and 1996, salvage income of $14,394
and $20,520, respectively, was derived from equipment credits received from the
disposal of oil and gas equipment on properties that were plugged and abandoned
in prior years.
Costs and Expenses:
Total costs and expenses decreased to $285,141 for the three months ended March
31, 1997 as compared to $328,859 for the same period in 1996, a decrease of
$43,718, or 13%. This decrease was the result of declines in production costs,
depletion, general and administrative expenses ("G&A") and abandoned property
costs, offset by a loss on abandonment.
Production costs were $227,562 for the three months ended March 31, 1997 and
$237,616 for the same period in 1996, resulting in a $10,054 decrease, or 4%.
This decrease was attributable 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, 16% from $12,644 for the three months ended March 31,
1996 to $10,628 for the same period in 1997. The Partnership agreement limits
G&A to 3% of the gross oil and gas revenues.
Depletion was $40,599 for the three months ended March 31, 1997 compared to
$62,031 for the same period in 1996. This represented a decrease in depletion of
$21,432, or 35%, primarily attributable to the following factors: (i) a decline
in oil production of 4,224 barrels for the three months ended March 31, 1997
compared to the same period in 1996, (ii) an upward revision of oil and gas
reserves and (iii) the sale of six oil and gas wells and one saltwater disposal
well during 1996.
A loss on abandonment of $3,386 during the three months ended March 31, 1997
resulted from the write-off of capitalized well costs. For the three months
ended March 31, 1996, a gain on abandonment of $6,168 was the result of
equipment credits received on the abandonment of one fully depleted well.
Abandonment expenses of $2,966 and $22,736 were incurred for the three months
ended March 31, 1997 and 1996, respectively.
8
<PAGE>
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $202,273 during the three
months ended March 31, 1997 from the same period in 1996. The increase was the
result of declines in expenditures for production costs and abandoned property
costs and an increase in oil and gas sales receipts.
Net Cash Provided by Investing Activities
The Partnership's principle investing activities during the three months ended
March 31, 1997 and 1996 were related to the disposal of oil and gas equipment on
active properties.
Proceeds from disposition of assets of $14,394 and $20,581 from the sale of oil
and gas equipment on properties abandoned in prior years were received during
the three months ended March 31, 1997 and 1996, respectively.
Net Cash Used in Financing Activities
Cash was sufficient for the three months ended March 31, 1997 to cover
distributions to the partners of $240,556 of which $238,150 was distributed to
the limited partners and $2,406 to the managing general partner. For the same
period ended March 31, 1996, cash was sufficient for distributions to the
partners of $111,029 of which $109,918 was distributed to the limited partners
and $1,111 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
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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: May 13, 1997 By: /s/ Steven L. Beal
-------------------------------------
Steven L. Beal, Senior Vice President
and Chief Financial Officer of PPUSA
10
<PAGE>
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