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. 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)
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 PRODUCING PROPERTIES 87-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
2
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PARKER & PARSLEY PRODUCING PROPERTIES 87-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 $ 166,068 $ 170,538
Accounts receivable - oil and gas sales 239,162 195,636
---------- ----------
Total current assets 405,230 366,174
---------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 5,776,619 5,774,563
Accumulated depletion (4,990,796) (4,958,910)
---------- ----------
Net oil and gas properties 785,823 815,653
---------- ----------
$ 1,191,053 $ 1,181,827
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 46,151 $ 35,908
Partners' capital:
Managing general partner 12,690 12,700
Limited partners (24,426 interests) 1,132,212 1,133,219
---------- ----------
1,144,902 1,145,919
---------- ----------
$ 1,191,053 $ 1,181,827
========== ==========
</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.
3
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PARKER & PARSLEY PRODUCING PROPERTIES 87-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 $ 329,057 $ 198,979 $ 695,926 $ 351,757
Interest 4,213 2,131 7,149 4,084
Gain on disposition of assets 8,716 - 24,345 5,299
-------- -------- -------- --------
341,986 201,110 727,420 361,140
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 200,770 137,049 359,931 271,521
General and administrative 9,872 5,970 20,878 10,553
Depletion 15,068 20,518 33,217 60,354
Abandoned property 286 189 13,069 1,813
-------- -------- -------- --------
225,996 163,726 427,095 344,241
-------- -------- -------- --------
Net income $ 115,990 $ 37,384 $ 300,325 $ 16,899
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 1,160 $ 374 $ 3,003 $ 169
======== ======== ======== ========
Limited partners $ 114,830 $ 37,010 $ 297,322 $ 16,730
======== ======== ======== ========
Net income per limited
partnership interest $ 4.70 $ 1.51 $ 12.17 $ .68
======== ======== ======== ========
</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.
4
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PARKER & PARSLEY PRODUCING PROPERTIES 87-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 $ 12,700 $1,133,219 $1,145,919
Distributions (3,013) (298,329) (301,342)
Net income 3,003 297,322 300,325
--------- --------- ---------
Balance at June 30, 2000 $ 12,690 $1,132,212 $1,144,902
========= ========= =========
</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 PRODUCING PROPERTIES 87-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 $ 300,325 $ 16,899
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 33,217 60,354
Gain on disposition of assets (24,345) (5,299)
Changes in assets and liabilities:
Accounts receivable (43,526) (55,153)
Accounts payable 197 7,631
-------- --------
Net cash provided by operating activities 265,868 24,432
-------- --------
Cash flows from investing activities:
Additions to oil and gas properties (3,387) -
Proceeds from asset dispositions 34,391 5,273
-------- --------
Net cash provided by investing activities 31,004 5,273
-------- --------
Cash flows used in financing activities:
Cash distributions to partners (301,342) (29,325)
-------- --------
Net increase (decrease) in cash (4,470) 380
Cash at beginning of period 170,538 183,223
-------- --------
Cash at end of period $ 166,068 $ 183,603
======== ========
</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 PRODUCING PROPERTIES 87-A, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(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 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 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 98% to $695,926 for the six
months ended June 30, 2000 as compared to $351,757 for the same period in 1999.
The increase in revenues resulted from higher average prices received, offset by
a decline in production. For the six months ended June 30, 2000, 21,685 barrels
of oil, 4,984 barrels of natural gas liquids ("NGLs") and 22,894 mcf of gas were
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sold, or 30,485 barrel of oil equivalents ("BOEs"). For the six months ended
June 30, 1999, 22,010 barrels of oil, 5,918 barrels of NGLs and 25,190 mcf of
gas were sold, or 32,126 BOEs.
The average price received per barrel of oil increased $14.15, or 107%, from
$13.18 for the six months ended June 30, 1999 to $27.33 for the same period in
2000. The average price received per barrel of NGLs increased $5.80, or 103%,
from $5.61 during the six months ended June 30, 1999 to $11.41 for the same
period in 2000. The average price received per mcf of gas increased 80% from
$1.13 for the six months ended June 30, 1999 to $2.03 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 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 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.
Gains on disposition of assets of $24,345 and $5,299 were recognized during the
six months ended June 30, 2000 and 1999, respectively. The gain recognized
during the period ended June 30, 2000 was comprised of $10,858 from equipment
credits on one well plugged and abandoned in the current period and $13,487
salvage income primarily from wells plugged and abandoned during 1999. The gain
recognized during the period ended June 30, 1999 consisted of $4,004 from
equipment credits on fully depleted wells and $1,295 from equipment credits on a
well plugged and abandoned during 1998. Expenses incurred during the six months
ended June 30, 2000 and 1999 to plug and abandon these wells were $13,069 and
$1,813, respectively.
Costs and Expenses:
Total costs and expenses increased to $427,095 for the six months ended June 30,
2000 as compared to $344,241 for the same period in 1999, an increase of
$82,854, or 24%. This increase was the result of higher production costs,
abandoned property costs and general and administrative expenses ("G&A"), offset
by a decline in depletion.
Production costs were $359,931 for the six months ended June 30, 2000 and
$271,521 for the same period in 1999, resulting in an $88,410 increase, or 33%.
The increase was attributable to additional workover expenses and 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, 98% from $10,553 for the six months ended June 30, 1999
to $20,878 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 $33,217 for the six months ended June 30, 2000 compared to $60,354
for the same period in 1999, a decrease of $27,137, or 45%. This decrease was
the result of an increase in proved reserves during the period ended June 30,
2000 due to higher commodity prices, a decline in oil production of 325 barrels
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for the six months ended June 30, 2000 compared to the same period in 1999 and a
reduction in the Partnership's net depletable basis from charges taken in
accordance with Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long- Lived Assets and for Long-Lived Assets to be
Disposed Of" ("SFAS 121") during the fourth quarter of 1999.
Three months ended June 30, 2000 compared with three months ended June 30, 1999
Revenues:
The Partnership's oil and gas revenues increased 65% to $329,057 for the three
months ended June 30, 2000 as compared to $198,979 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, 9,809 barrels
of oil, 2,987 barrels of NGLs and 13,759 mcf of gas were sold, or 15,089 BOEs.
For the three months ended June 30, 1999, 10,807 barrels of oil, 3,090 barrels
of NGLs and 12,770 mcf of gas were sold, or 16,025 BOEs.
The average price received per barrel of oil increased $12.01, or 79%, from
$15.15 for the three months ended June 30, 1999 to $27.16 for the same period in
2000. The average price received per barrel of NGLs increased $4.42, or 66%,
from $6.65 during the three months ended June 30, 1999 to $11.07 for the same
period in 2000. The average price received per mcf of gas increased 87% from
$1.15 during the three months ended June 30, 1999 to $2.15 for the same period
in 2000.
Gain on disposition of assets of $8,716 was recognized for the three months
ended June 30, 2000. The gain consisted of $4,981 from equipment credits
received on a fully depleted well and $3,735 salvage income on a well plugged
and abandoned during 1999. Expenses incurred during the three months ended June
30, 2000 and 1999 to plug and abandon wells totaled $286 and $189, respectively.
Costs and Expenses:
Total costs and expenses increased to $225,996 for the three months ended June
30, 2000 as compared to $163,726 for the same period in 1999, an increase of
$62,270, or 38%. This increase was due to increases in production costs, G&A and
abandoned property costs, offset by a decline in depletion.
Production costs were $200,770 for the three months ended June 30, 2000 and
$137,049 for the same period in 1999, resulting in a $63,721 increase, or 46%.
The increase was due to additional workover expenses and well maintenance costs
incurred to stimulate well production and higher production taxes due to higher
oil and gas prices.
During this period, G&A increased, in aggregate, 65% from $5,970 for the three
months ended June 30, 1999 to $9,872 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.
9
<PAGE>
Depletion was $15,068 for the three months ended June 30, 2000 compared to
$20,518 for the same period in 1999, a decrease of $5,450, or 27%. This decrease
was the result of an increase in proved reserves during the period ended June
30, 2000 as a result of higher commodity prices, a decline in oil production of
998 barrels for the three months ended June 30, 2000 as compared to the same
period in 1999 and a reduction in the Partnership's net depletable basis from
charges taken in accordance with SFAS 121 during the fourth quarter of 1999.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $241,436 during the six
months ended June 30, 2000 from the same period in 1999. The increase was
attributable to an increase of $358,861 in oil and gas sales receipts, offset by
increases in operating costs paid of $95,658, abandoned property costs paid of
$11,256 and G&A expenses paid of $10,511.
Net Cash Provided by Investing Activities
The Partnership's principal investing activities during the six months ended
June 30, 2000 were related to upgrade expenditures for oil and gas equipment on
active properties.
Proceeds from disposition of assets of $34,391 and $5,273 were received during
the six months ended June 30, 2000 and 1999, respectively. The proceeds
recognized during the period in 2000 were primarily from equipment credits on
wells plugged and abandoned during 2000 and 1999. During the period in 1999, the
proceeds were primarily from equipment credits on fully depleted wells.
Net Cash Used in Financing Activities
For the six months ended June 30, 2000, cash distributions to the partners were
$301,342, of which $3,013 was distributed to the managing general partner and
$298,329 to the limited partners. For the same period ended June 30, 1999, cash
distributions to the partners were $29,325 of which $293 was distributed to the
managing general partner and $29,032 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 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: Pioneer Natural Resources USA, Inc.,
Managing General Partner
Dated: August 11, 2000 By: /s/ Rich Dealy
----------------------------------
Rich Dealy, Vice President and
Chief Accounting Officer
11
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