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. 33-12244-01
PARKER & PARSLEY 87-A, LTD.
-----------------------------
(Exact name of Registrant as specified in its charter)
Texas 75-2185148
--------------------------------------- ---------------------
(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 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........................ 10
27.1 Financial Data Schedule
Signatures.............................................. 11
2
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PARKER & PARSLEY 87-A, LTD.
(A Texas Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
<TABLE>
BALANCE SHEETS
<CAPTION>
September 30, December 31,
2000 1999
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 352,249 $ 339,531
Accounts receivable - oil and gas sales 396,348 324,832
----------- -----------
Total current assets 748,597 664,363
----------- -----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 20,195,898 20,183,108
Accumulated depletion (17,527,245) (17,382,852)
----------- -----------
Net oil and gas properties 2,668,653 2,800,256
----------- -----------
$ 3,417,250 $ 3,464,619
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 78,194 $ 45,651
Partners' capital:
Managing general partner 33,364 34,163
Limited partners (28,811 interests) 3,305,692 3,384,805
----------- -----------
3,339,056 3,418,968
----------- -----------
$ 3,417,250 $ 3,464,619
=========== ===========
</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 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 $ 732,635 $ 571,976 $2,089,710 $1,243,362
Interest 8,101 4,380 20,403 10,670
Gain on disposition of assets 546 8,848 6,407 8,848
-------- -------- --------- ---------
741,282 585,204 2,116,520 1,262,880
-------- -------- --------- ---------
Costs and expenses:
Oil and gas production 277,007 242,584 804,325 697,588
General and administrative 22,375 17,160 62,691 37,301
Depletion 48,184 47,604 144,393 216,111
-------- -------- --------- ---------
347,566 307,348 1,011,409 951,000
-------- -------- --------- ---------
Net income $ 393,716 $ 277,856 $1,105,111 $ 311,880
======== ======== ========= =========
Allocation of net income:
Managing general partner $ 3,937 $ 2,779 $ 11,051 $ 3,119
======== ======== ========= =========
Limited partners $ 389,779 $ 275,077 $1,094,060 $ 308,761
======== ======== ========= =========
Net income per limited
partnership interest $ 13.53 $ 9.55 $ 37.97 $ 10.72
======== ======== ========= =========
</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 87-A, LTD.
(A Texas Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
<TABLE>
<CAPTION>
Managing
general Limited
partner partners Total
---------- ----------- -----------
<S> <C> <C> <C>
Balance at January 1, 2000 $ 34,163 $ 3,384,805 $ 3,418,968
Distributions (11,850) (1,173,173) (1,185,023)
Net income 11,051 1,094,060 1,105,111
--------- ---------- ----------
Balance at September 30, 2000 $ 33,364 $ 3,305,692 $ 3,339,056
========= ========== ==========
</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
<PAGE>
PARKER & PARSLEY 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 $ 1,105,111 $ 311,880
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 144,393 216,111
Gain on disposition of assets (6,407) (8,848)
Changes in assets and liabilities:
Accounts receivable (71,516) (194,663)
Accounts payable 32,543 33,635
---------- ---------
Net cash provided by operating activities 1,204,124 358,115
---------- ---------
Cash flows from investing activities:
Additions to oil and gas properties (14,078) (32,029)
Proceeds from asset dispositions 7,695 9,249
---------- ---------
Net cash used in investing activities (6,383) (22,780)
---------- ---------
Cash flows used in financing activities:
Cash distributions to partners (1,185,023) (293,711)
---------- ---------
Net increase in cash 12,718 41,624
Cash at beginning of period 339,531 282,299
---------- ---------
Cash at end of period $ 352,249 $ 323,923
========== =========
</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 statements.
6
<PAGE>
PARKER & PARSLEY 87-A, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
(Unaudited)
Note 1. Organization and nature of operations
Parker & Parsley 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 development and production in the
Spraberry Trend area of West 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 68% to $2,089,710 for the nine
months ended September 30, 2000 as compared to $1,243,362 for the same period in
1999. The increase in revenues resulted from higher average prices received,
7
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offset by a decrease in production. For the nine months ended September 30,
2000, 48,110 barrels of oil, 27,559 barrels of natural gas liquids ("NGLs") and
121,076 mcf of gas were sold, or 95,848 barrel of oil equivalents ("BOEs"). For
the nine months ended September 30, 1999, 49,854 barrels of oil, 30,436 barrels
of NGLs and 141,383 mcf of gas were sold, or 103,854 BOEs.
The average price received per barrel of oil increased $13.27, or 88%, from
$15.11 for the nine months ended September 30, 1999 to $28.38 for the same
period in 2000. The average price received per barrel of NGLs increased $6.73,
or 78%, from $8.61 during the nine months ended September 30, 1999 to $15.34 for
the same period in 2000. The average price received per mcf of gas increased 55%
from $1.61 during the nine months ended September 30, 1999 to $2.49 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 $6,407 and $8,848 were due to equipment
credits received on one well during the nine months ended September 30, 2000 and
1999, respectively,
Costs and Expenses:
Total costs and expenses increased to $1,011,409 for the nine months ended
September 30, 2000 as compared to $951,000 for the same period in 1999, an
increase of $60,409, or 6%. This increase was due to increases in production
costs and general and administrative expenses ("G&A"), offset by a decline in
depletion.
Production costs were $804,325 for the nine months ended September 30, 2000 and
$697,588 for the same period in 1999, resulting in a $106,737 increase, or 15%.
The increase was primarily due to higher production taxes of $66,427 associated
with higher oil and gas prices and additional well maintenance costs incurred to
stimulate well production of $31,664.
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, 68%, from $37,301 for the nine months ended September
30, 1999 to $62,691 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 $144,393 for the nine months ended September 30, 2000 compared to
$216,111 for the same period in 1999, representing a decrease of $71,718, or
33%. This decrease was attributable to an increase in proved reserves due to
higher commodity prices and a decline in oil production of 1,744 barrels when
compared to the respective information for the same period in 1999.
8
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Three months ended September 30, 2000 compared with three months ended September
30, 1999
Revenues:
The Partnership's oil and gas revenues increased 28% to $732,635 for the three
months ended September 30, 2000 as compared to $571,976 for the same period in
1999. The increase in revenues resulted from higher average prices received,
offset by a decrease in production. For the three months ended September 30,
2000, 15,537 barrels of oil, 8,410 barrels of NGLs and 36,098 mcf of gas were
sold, or 29,963 BOEs. For the three months ended September 30, 1999, 19,121
barrels of oil, 11,890 barrels of NGLs and 51,295 mcf of gas were sold, or
39,560 BOEs.
The average price received per barrel of oil increased $12.24, or 67%, from
$18.19 for the three months ended September 30, 1999 to $30.43 for the same
period in 2000. The average price received per barrel of NGLs increased $6.24,
or 58%, from $10.72 during the three months ended September 30, 1999 to $16.96
for the same period in 2000. The average price received per mcf of gas increased
72% from $1.89 during the three months ended September 30, 1999 to $3.25 for the
same period in 2000.
Gains on disposition of assets of $546 and $8,848 were due to equipment credits
received on one well during the three months ended September 30, 2000 and 1999,
respectively,
Costs and Expenses:
Total costs and expenses increased to $347,566 for the three months ended
September 30, 2000 as compared to $307,348 for the same period in 1999, an
increase of $40,218, or 13%. This increase was due to increases in production
costs, G&A and depletion.
Production costs were $277,007 for the three months ended September 30, 2000 and
$242,584 for the same period in 1999, resulting in a $34,423 increase, or 14%.
The increase was primarily due to higher production taxes of $19,929 associated
with higher oil and gas prices and additional well maintenance costs incurred to
stimulate well production of $3,607.
During this period, G&A increased, in aggregate, 30% from $17,160 for the three
months ended September 30, 1999 to $22,375 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 $48,184 for the three months ended September 30, 2000 compared to
$47,604 for the same period in 1999, representing an increase of $580, or 1%.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $846,009 during the nine
months ended September 30, 2000 from the same period ended September 30, 1999.
9
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This increase was due to an increase in oil and gas sales receipts of $979,228,
offset by increases in production costs paid of $100,963 and G&A expenses paid
of $32,256.
Net Cash Used in Investing Activities
During the nine months ended September 30, 2000 and 1999, the Partnership's
principal investing activities were for expenditures related to equipment
upgrades on various oil and gas properties.
Proceeds from asset dispositions of $7,695 and $9,249 received during the nine
months ended September 30, 2000 and 1999, respectively, were from equipment
credits on one well.
Net Cash Used in Financing Activities
For the nine months ended September 30, 2000, cash distributions to the partners
were $1,185,023, of which $11,850 was distributed to the managing general
partner and $1,173,173 to the limited partners. For the same period ended
September 30, 1999, cash distributions to the partners were $293,711, of which
$2,937 was distributed to the managing general partner and $290,774 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 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 87-A, LTD.
By: Pioneer Natural Resources USA, Inc.
Managing General Partner
Dated: November 13, 2000 By: /s/ Rich Dealy
------------------------------------
Rich Dealy, Vice President and
Chief Accounting Officer
11
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