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 March 31, 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
- ---------------------------------------------------------------- ---------
(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 March 31, 2000 and
December 31, 1999..................................... 3
Statements of Operations for the three months
ended March 31, 2000 and 1999.......................... 4
Statement of Partners' Capital for the three months
ended March 31, 2000................................... 5
Statements of Cash Flows for the three months
ended March 31, 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
BALANCE SHEETS
March 31, December 31,
2000 1999
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash $ 184,143 $ 170,538
Accounts receivable - oil and gas sales 250,815 195,636
---------- ----------
Total current assets 434,958 366,174
---------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 5,773,232 5,774,563
Accumulated depletion (4,975,728) (4,958,910)
---------- ----------
Net oil and gas properties 797,504 815,653
---------- ----------
$ 1,232,462 $ 1,181,827
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 36,975 $ 35,908
Partners' capital:
Managing general partner 13,195 12,700
Limited partners (24,426 interests) 1,182,292 1,133,219
---------- ----------
1,195,487 1,145,919
---------- ----------
$ 1,232,462 $ 1,181,827
========== ==========
The financial information included as of March 31, 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)
Three months ended
March 31,
-------------------------
2000 1999
---------- ----------
Revenues:
Oil and gas $ 366,869 $ 152,778
Interest 2,936 1,953
Gain on disposition of assets 15,629 5,299
--------- ---------
385,434 160,030
--------- ---------
Costs and expenses:
Oil and gas production 159,161 134,472
General and administrative 11,006 4,583
Depletion 18,149 39,836
Abandoned property 12,783 1,624
--------- ---------
201,099 180,515
--------- ---------
Net income (loss) $ 184,335 $ (20,485)
========= =========
Allocation of net income (loss):
Managing general partner $ 1,843 $ (205)
========= =========
Limited partners $ 182,492 $ (20,280)
========= =========
Net income (loss) per limited partnership interest $ 7.47 $ (.83)
========= =========
Distributions per limited partnership interest $ 5.46 $ .74
========= =========
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 (1,348) (133,419) (134,767)
Net income 1,843 182,492 184,335
--------- --------- ---------
Balance at March 31, 2000 $ 13,195 $1,182,292 $1,195,487
========= ========= =========
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)
Three months ended
March 31,
-------------------------
2000 1999
---------- ----------
Cash flows from operating activities:
Net income (loss) $ 184,335 $ (20,485)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depletion 18,149 39,836
Gain on disposition of assets (15,629) (5,299)
Changes in assets and liabilities:
Accounts receivable (55,179) (27,990)
Accounts payable (1,433) 2,465
--------- ---------
Net cash provided by (used in) operating
activities 130,243 (11,473)
--------- ---------
Cash flows from investing activities:
Additions to oil and gas properties - (26)
Proceeds from asset dispositions 18,129 5,299
--------- ---------
Net cash provided by investing activities 18,129 5,273
--------- ---------
Cash flows used in financing activities:
Cash distributions to partners (134,767) (18,364)
--------- ---------
Net increase (decrease) in cash 13,605 (24,564)
Cash at beginning of period 170,538 183,223
--------- ---------
Cash at end of period $ 184,143 $ 158,659
========= =========
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
March 31, 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 March 31, 2000 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 March 31, 1999 financial statements to conform to the
March 31, 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
Revenues:
The Partnership's oil and gas revenues increased 140% to $366,869 for the three
months ended March 31, 2000 as compared to $152,778 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 March 31, 2000, 11,876
barrels of oil, 1,997 barrels of natural gas liquids ("NGLs") and 9,135 mcf of
gas were sold, or 15,396 barrel of oil equivalents ("BOEs"). For the three
months ended March 31, 1999, 11,203 barrels of oil, 2,828 barrels of NGLs and
12,420 mcf of gas were sold, or 16,101 BOEs.
7
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The average price received per barrel of oil increased $16.19, or 144%, from
$11.28 for the three months ended March 31, 1999 to $27.47 for the same period
in 2000. The average price received per barrel of NGLs increased $7.46, or 167%,
from $4.47 for the three months ended March 31, 1999 to $11.93 for the same
period in 2000. The average price received per mcf of gas increased 66% from
$1.11 during the three months ended March 31, 1999 to $1.84 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
three months ended March 31, 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.
Gain on disposition of assets of $15,629 and $5,299 was recognized during the
three months ended March 31, 2000 and 1999, respectively. The gain recognized
during 2000 was comprised of $10,858 from equipment credits on one well plugged
and abandoned in the current period and $4,771 salvage income on a well plugged
and abandoned during 1999. The gain recognized during 1999 consisted of $4,004
from equipment credits on fully depleted wells and $1,295 from equipment credits
on a well plugged and abandoned in 1998.
Costs and Expenses:
Total costs and expenses increased to $201,099 for the three months ended March
31, 2000 as compared to $180,515 for the same period in 1999, an increase of
$20,584, or 11%. 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 $159,161 for the three months ended March 31, 2000 and
$134,472 for the same period in 1999, resulting in a $24,689 increase, or 18%.
This increase was primarily attributable to higher production taxes due to
increased oil and gas revenues and additional well maintenance costs incurred to
stimulate well production.
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, 140% from $4,583 for the three months ended March 31,
1999 to $11,006 for the same period in 2000 primarily due to increased oil and
gas revenues.
Depletion was $18,149 for the three months ended March 31, 2000 compared to
$39,836 for the same period in 1999, a decrease of $21,687, or 54%. This
decrease was primarily attributable to an increase in proved reserves during the
three months ended March 31, 2000 as a result of higher commodity prices 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 673 barrels for the period ended March 31, 2000 compared to the
same period in 1999.
8
<PAGE>
Abandonment expenses of $12,783 and $1,624 were incurred on the abandonment of
several properties during the three months ended March 31, 2000 and 1999,
respectively.
Liquidity and Capital Resources
Net Cash Provided by (Used in) Operating Activities
Net cash provided by operating activities increased $141,716 during the three
months ended March 31, 2000 from the same period in 1999. The increase was
primarily attributable to an increase of $187,885 in oil and gas sales receipts,
offset by increases in operating costs paid of $31,644, in abandoned property
costs paid of $11,159 and in G&A expenses paid of $3,366.
Net Cash Provided by Investing Activities
Proceeds from disposition of assets of $18,129 and $5,299 were recognized during
the three months ended March 31, 2000 and 1999, respectively. The proceeds
recognized during the period in 2000 were from equipment credits on wells
plugged and abandoned during 2000 and 1999. During the period in 1999, the
proceeds were primarily from equipment credits received on fully depleted wells.
Net Cash Used in Financing Activities
For the three months ended March 31, 2000, cash distributions to the partners
were $134,767, of which $1,348 was distributed to the managing general partner
and $133,419 to the limited partners. For the same period ended March 31, 1999,
cash distributions to the partners were $18,364, of which $183 was distributed
to the managing general partner and $18,181 to the limited partners.
Other Items
Year 2000
During 1998, the managing general partner established a "Year 2000" project that
assessed the Partnership's and the managing general partner's internal Year 2000
problem; took remedial actions necessary to minimize the Year 2000 risk exposure
to the managing general partner and third parties; and, tested the managing
general partner's systems and processes once remedial actions were taken.
The managing general partner has closely monitored its information and
non-information technology systems since the beginning of 2000 and has
identified no significant Year 2000 failures or problems.
- ---------------
(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.
9
<PAGE>
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: May 10, 2000 By: /s/ Rich Dealy
------------------------------------
Rich Dealy, Vice President
and Chief Accounting Officer
11
<PAGE>
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<NAME> 87AP
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 184,143
<SECURITIES> 0
<RECEIVABLES> 250,815
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 434,958
<PP&E> 5,773,232
<DEPRECIATION> 4,975,728
<TOTAL-ASSETS> 1,232,462
<CURRENT-LIABILITIES> 36,975
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,195,487
<TOTAL-LIABILITY-AND-EQUITY> 1,232,462
<SALES> 366,869
<TOTAL-REVENUES> 385,434
<CGS> 0
<TOTAL-COSTS> 201,099
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<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 184,335
<INCOME-TAX> 0
<INCOME-CONTINUING> 184,335
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 184,335
<EPS-BASIC> 7.47
<EPS-DILUTED> 0
</TABLE>
