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 September 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 September 30, 2000 and
December 31, 1999...................................... 3
Statements of Operations for the three and nine
months ended September 30, 2000 and 1999................ 4
Statement of Partners' Capital for the nine months
ended September 30, 2000................................ 5
Statements of Cash Flows for the nine months ended
September 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.......................... 11
27.1 Financial Data Schedule
Signatures................................................ 12
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
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------ ------------
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash $ 166,094 $ 170,538
Accounts receivable - oil and gas sales 288,578 195,636
----------- -----------
Total current assets 454,672 366,174
----------- -----------
Oil and gas properties - at cost, based on
the successful efforts accounting method 5,741,921 5,774,563
Accumulated depletion (4,988,134) (4,958,910)
----------- -----------
Net oil and gas properties 753,787 815,653
----------- -----------
$ 1,208,459 $ 1,181,827
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 53,113 $ 35,908
Partners' capital:
Managing general partner 12,794 12,700
Limited partners (24,426 interests) 1,142,552 1,133,219
----------- -----------
1,155,346 1,145,919
----------- -----------
$ 1,208,459 $ 1,181,827
=========== ===========
</TABLE>
The financial information included as of September 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>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
--------------------- ----------------------
2000 1999 2000 1999
--------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Revenues:
Oil and gas $ 425,268 $ 243,870 $1,121,194 $ 595,627
Interest 4,409 2,795 11,558 6,879
Gain (loss) on disposition
of assets (1,034) 17,374 23,311 22,673
-------- -------- --------- --------
428,643 264,039 1,156,063 625,179
-------- -------- --------- --------
Costs and expenses:
Oil and gas production 232,421 142,879 592,352 414,400
General and administrative 12,758 7,316 33,636 17,869
Depletion 19,469 17,065 52,686 77,419
Abandoned property 4,038 16,042 17,107 17,855
-------- -------- --------- --------
268,686 183,302 695,781 527,543
-------- -------- --------- --------
Net income $ 159,957 $ 80,737 $ 460,282 $ 97,636
======== ======== ========= ========
Allocation of net income:
Managing general partner $ 1,600 $ 807 $ 4,603 $ 976
======== ======== ========= ========
Limited partners $ 158,357 $ 79,930 $ 455,679 $ 96,660
======== ======== ========= ========
Net income per limited
partnership interest $ 6.49 $ 3.28 $ 18.66 $ 3.96
======== ======== ========= ========
</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)
Managing
general Limited
partner partners Total
---------- ---------- ----------
Balance at January 1, 2000 $ 12,700 $1,133,219 $1,145,919
Distributions (4,509) (446,346) (450,855)
Net income 4,603 455,679 460,282
--------- --------- ---------
Balance at September 30, 2000 $ 12,794 $1,142,552 $1,155,346
========= ========= =========
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>
<CAPTION>
Nine months ended
September 30,
------------------------
2000 1999
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 460,282 $ 97,636
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 52,686 77,419
Gain on disposition of assets (23,311) (22,673)
Changes in assets and liabilities:
Accounts receivable (92,942) (77,153)
Accounts payable 7,159 10,382
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Net cash provided by operating activities 403,874 85,611
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Cash flows from investing activities:
Additions to oil and gas properties (829) (1,741)
Proceeds from asset dispositions 43,366 15,127
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Net cash provided by investing activities 42,537 13,386
--------- ---------
Cash flows used in financing activities:
Cash distributions to partners (450,855) (105,936)
--------- ---------
Net decrease in cash (4,444) (6,939)
Cash at beginning of period 170,538 183,223
--------- ---------
Cash at end of period $ 166,094 $ 176,284
========= =========
</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
September 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 September 30, 2000 and for the three and nine months ended
September 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 September 30, 1999 financial statements to conform to
the September 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
Nine months ended September 30, 2000 compared with nine months ended September
30, 1999
Revenues:
The Partnership's oil and gas revenues increased 88% to $1,121,194 for the nine
months ended September 30, 2000 as compared to $595,627 for the same period in
1999. The increase in revenues resulted from higher average prices received and
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an increase in oil production. For the nine months ended September 30, 2000,
33,684 barrels of oil, 7,631 barrels of natural gas liquids ("NGLs") and 34,418
mcf of gas were sold, or 47,051 barrel of oil equivalents ("BOEs"). For the nine
months ended September 30, 1999, 32,089 barrels of oil, 8,530 barrels of NGLs
and 37,863 mcf of gas were sold, or 46,930 BOEs.
The average price received per barrel of oil increased $13.01, or 85%, from
$15.32 for the nine months ended September 30, 1999 to $28.33 for the same
period in 2000. The average price received per barrel of NGLs increased $5.36,
or 85%, from $6.28 during the nine months ended September 30, 1999 to $11.64 for
the same period in 2000. The average price received per mcf of gas increased 69%
from $1.34 during the nine months ended September 30, 1999 to $2.27 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 nine months ended September 30, 2000.
Gains on disposition of assets of $23,311 and $22,673 were recognized during the
nine months ended September 30, 2000 and 1999, respectively. The gain recognized
during the period ended September 30, 2000 was comprised of $10,858 from
equipment credits on one well plugged and abandoned in the current period and
$17,081 salvage income primarily from wells plugged and abandoned during 1999,
offset by a $4,628 loss on the abandonment of two additional wells plugged in
the current period. The gain recognized during the period ended September 30,
1999 consisted of $15,129 due to the abandonment of one well during the current
period and $7,544 primarily from equipment credits on several wells. Expenses
incurred during the nine months ended September 30, 2000 and 1999 to plug and
abandon these wells were $17,107 and $17,855, respectively.
Costs and Expenses:
Total costs and expenses increased to $695,781 for the nine months ended
September 30, 2000 as compared to $527,543 for the same period in 1999, an
increase of $168,238, or 32%. This increase was the result of higher production
costs and general and administrative expenses ("G&A"), offset by declines in
depletion and abandoned property costs.
Production costs were $592,352 for the nine months ended September 30, 2000 and
$414,400 for the same period in 1999, resulting in a $177,952 increase, or 43%.
The increase was primarily due to additional workover expenses of $82,130 and
well maintenance costs incurred to stimulate well production of $53,195 and
higher production taxes of $38,547 associated with 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, 88%, from $17,869 for the nine months ended September
30, 1999 to $33,636 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 $52,686 for the nine months ended September 30, 2000 compared to
$77,419 for the same period in 1999, representing a decrease of $24,733, or 32%.
This decrease was the result of a combination of factors that included an
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increase in proved reserves due to higher commodity prices as 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, offset by an increase in oil production of 1,595 barrels for the nine
months ended September 30, 2000 compared to the same period in 1999.
Three months ended September 30, 2000 compared with three months ended September
30, 1999
Revenues:
The Partnership's oil and gas revenues increased 74% to $425,268 for the three
months ended September 30, 2000 as compared to $243,870 for the same period in
1999. The increase in revenues resulted from higher average prices received and
an increase in oil production. For the three months ended September 30, 2000,
11,999 barrels of oil, 2,647 barrels of NGLs and 11,524 mcf of gas were sold, or
16,567 BOEs. For the three months ended September 30, 1999, 10,079 barrels of
oil, 2,612 barrels of NGLs and 12,673 mcf of gas were sold, or 14,803 BOEs.
The average price received per barrel of oil increased $10.15, or 51%, from
$19.99 for the three months ended September 30, 1999 to $30.14 for the same
period in 2000. The average price received per barrel of NGLs increased $4.24,
or 54%, from $7.81 during the three months ended September 30, 1999 to $12.05
for the same period in 2000. The average price received per mcf of gas increased
58% from $1.74 during the three months ended September 30, 1999 to $2.75 for the
same period in 2000.
Loss on disposition of assets of $1,034 recognized during the three months ended
September 30, 2000 resulted primarily from the loss on the abandonment of two
wells plugged during the current period. Gain on disposition of assets of
$17,374 recognized during the three months ended September 30, 1999 consisted of
$15,129 due to the abandonment of one well during the current period and $2,245
primarily from equipment credits on several wells. Expenses incurred during the
three months ended September 30, 2000 and 1999 to plug and abandon these wells
were $4,038 and $16,042, respectively.
Costs and Expenses:
Total costs and expenses increased to $268,686 for the three months ended
September 30, 2000 as compared to $183,302 for the same period in 1999, an
increase of $85,384, or 47%. This increase was the result of higher production
costs, G&A and depletion, offset by a decline in abandoned property costs.
Production costs were $232,421 for the three months ended September 30, 2000 and
$142,879 for the same period in 1999, resulting in an $89,542 increase, or 63%.
The increase was primarily due to additional workover expenses of $45,292 and
well maintenance costs incurred to stimulate well production of $24,845 and
higher production taxes of $15,347 associated with higher oil and gas prices.
9
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During this period, G&A increased, in aggregate, 74% from $7,316 for the three
months ended September 30, 1999 to $12,758 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 $19,469 for the three months ended September 30, 2000 compared to
$17,065 for the same period in 1999, representing an increase of $2,404, or 14%.
This increase was attributable to an increase in oil production of 1,920 barrels
for the three months ended September 30, 2000 compared to the same period in
1999, offset by a reduction in the Partnership's net depletable basis from
charges taken in accordance with SFAS 121 during the fourth quarter of 1999 and
an increase in proved reserves as a result of higher commodity prices when
compared to the respective information for the same period in 1999.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $318,263 during the nine
months ended September 30, 2000 from the same period ended September 30, 1999.
The increase was attributable to an increase in oil and gas sales receipts of
$514,457 and a decrease in abandoned property costs paid of $748, offset by
increases in production costs paid of $180,140 and G&A expenses paid of $16,802.
Net Cash Provided by Investing Activities
The Partnership's investing activities during the nine months ended September
30, 2000 and 1999 were related to upgrades of oil and gas equipment on active
properties.
Proceeds from disposition of assets of $43,366 and $15,127 were received during
the nine months ended September 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. The proceeds recognized during
the period in 1999 were primarily due to the abandonment of one well.
Net Cash Used in Financing Activities
For the nine months ended September 30, 2000, cash distributions to the partners
were $450,855, of which $4,509 was distributed to the managing general partner
and $446,346 to the limited partners. For the same period ended September 30,
1999, cash distributions to the partners were $105,936, of which $1,059 was
distributed to the managing general partner and $104,877 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.
10
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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
11
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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: November 7, 2000 By: /s/ Rich Dealy
------------------------------------
Rich Dealy, Vice President and
Chief Accounting Officer
12
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