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. 33-12244-01
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
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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 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 87-A, LTD.
(A Texas Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
<TABLE>
June 30, December 31,
2000 1999
------------ ------------
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash $ 325,523 $ 339,531
Accounts receivable - oil and gas sales 387,723 324,832
----------- -----------
Total current assets 713,246 664,363
----------- -----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 20,189,824 20,183,108
Accumulated depletion (17,479,061) (17,382,852)
----------- -----------
Net oil and gas properties 2,710,763 2,800,256
----------- -----------
$ 3,424,009 $ 3,464,619
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 72,514 $ 45,651
Partners' capital:
Managing general partner 33,488 34,163
Limited partners (28,811 interests) 3,318,007 3,384,805
----------- -----------
3,351,495 3,418,968
----------- -----------
$ 3,424,009 $ 3,464,619
=========== ===========
</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.
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PARKER & PARSLEY 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 $ 708,134 $ 367,387 $1,357,075 $ 671,386
Interest 7,074 3,341 12,302 6,290
Gain on disposition of assets - - 5,861 -
-------- -------- --------- --------
715,208 370,728 1,375,238 677,676
-------- -------- --------- --------
Costs and expenses:
Oil and gas production 261,610 233,876 527,318 455,004
General and administrative 20,848 11,018 40,316 20,141
Depletion 44,465 53,650 96,209 168,507
-------- -------- --------- --------
326,923 298,544 663,843 643,652
-------- -------- --------- --------
Net income $ 388,285 $ 72,184 $ 711,395 $ 34,024
======== ======== ========= ========
Allocation of net income:
Managing general partner $ 3,883 $ 722 $ 7,114 $ 340
======== ======== ========= ========
Limited partners $ 384,402 $ 71,462 $ 704,281 $ 33,684
======== ======== ========= ========
Net income per limited
partnership interest $ 13.34 $ 2.48 $ 24.44 $ 1.17
======== ======== ========= ========
</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>
Managing
general Limited
partner partners Total
--------- ---------- ----------
<S> <C> <C> <C>
Balance at January 1, 2000 $ 34,163 $3,384,805 $3,418,968
Distributions (7,789) (771,079) (778,868)
Net income 7,114 704,281 711,395
-------- --------- ---------
Balance at June 30, 2000 $ 33,488 $3,318,007 $3,351,495
======== ========= =========
</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 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 $ 711,395 $ 34,024
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 96,209 168,507
Gain on disposition of assets (5,861) -
Changes in assets and liabilities:
Accounts receivable (62,891) (83,077)
Accounts payable 26,863 28,433
--------- ---------
Net cash provided by operating activities 765,715 147,887
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Cash flows from investing activities:
Additions to oil and gas properties (8,446) (14,488)
Proceeds from asset dispositions 7,591 207
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Net cash used in investing activities (855) (14,281)
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Cash flows used in financing activities:
Cash distributions to partners (778,868) (117,040)
--------- ---------
Net increase (decrease) in cash (14,008) 16,566
Cash at beginning of period 339,531 282,299
--------- ---------
Cash at end of period $ 325,523 $ 298,865
========= =========
</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 87-A, LTD.
(A Texas Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 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 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 with six months ended
June 30, 1999
Revenues:
The Partnership's oil and gas revenues increased 102% to $1,357,075 for the six
months ended June 30, 2000 as compared to $671,386 for the same period in 1999.
The increase in revenues resulted from higher average prices received and an
increase in production. For the six months ended June 30, 2000, 32,573 barrels
of oil, 19,149 barrels of natural gas liquids ("NGLs") and 84,978 mcf of gas
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were sold, or 65,885 barrel of oil equivalents ("BOEs"). For the six months
ended June 30, 1999, 30,733 barrels of oil, 18,546 barrels of NGLs and 90,088
mcf of gas were sold, or 64,294 BOEs.
The average price received per barrel of oil increased $14.21, or 108%, from
$13.20 for the six months ended June 30, 1999 to $27.41 for the same period in
2000. The average price received per barrel of NGLs increased $7.37, or 102%,
from $7.26 during the six months ended June 30, 1999 to $14.63 for the same
period in 2000. The average price received per mcf of gas increased 49% from
$1.46 during the six months ended June 30, 1999 to $2.17 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.
Gain on disposition of assets of $5,861 recognized during the six months ended
June 30, 2000 was due to equipment credits received on a fully depleted well.
Costs and Expenses:
Total costs and expenses increased to $663,843 for the six months ended June 30,
2000 as compared to $643,652 for the same period ended June 30, 1999, an
increase of $20,191, or 3%. 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 $527,318 for the six months ended June 30, 2000 and
$455,004 for the same period in 1999 resulting in an increase of $72,314, or
16%. The increase was the result of higher production taxes due to higher oil
and gas prices 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, 100% from $20,141 for the six months ended June 30,
1999 to $40,316 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 $96,209 for the six months ended June 30, 2000 compared to
$168,507 for the same period in 1999, a decrease of $72,298, or 43%. This
decrease was the result of an increase in proved reserves during the period
ended June 30, 2000 due to higher commodity prices, offset by an increase in oil
production of 1,840 barrels for the six months ended June 30, 2000 compared to
the same period in 1999.
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Three months ended June 30, 2000 compared with three months ended June 30, 1999
Revenues:
The Partnership's oil and gas revenues increased 93% to $708,134 for the three
months ended June 30, 2000 as compared to $367,387 for the same period in 1999.
The increase in revenues resulted from higher average prices received and an
increase in production. For the three months ended June 30, 2000, 16,239 barrels
of oil, 10,298 barrels of NGLs and 44,352 mcf of gas were sold, or 33,929 BOEs.
For the three months ended June 30, 1999, 14,427 barrels of oil, 9,753 barrels
of NGLs and 42,172 mcf of gas were sold, or 31,209 BOEs.
The average price received per barrel of oil increased $12.87, or 87%, from
$14.77 for the three months ended June 30, 1999 to $27.64 for the same period in
2000. The average price received per barrel of NGLs increased $5.48, or 63%,
from $8.73 during the three months ended June 30, 1999 to $14.21 for the same
period in 2000. The average price received per mcf of gas increased 55% from
$1.64 during the three months ended June 30, 1999 to $2.55 for the same period
in 2000.
Costs and Expenses:
Total costs and expenses increased to $326,923 for the three months ended June
30, 2000 as compared to $298,544 for the same period in 1999, an increase of
$28,379, or 10%. This increase was due to increases in production costs and G&A,
offset by a decline in depletion.
Production costs were $261,610 for the three months ended June 30, 2000 and
$233,876 for the same period in 1999 resulting in a $27,734 increase, or 12%.
The increase was the result of higher production taxes due to higher oil and gas
prices and additional well maintenance costs incurred to stimulate well
production.
During this period, G&A increased, in aggregate, 89% from $11,018 for the three
months ended June 30, 1999 to $20,848 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 $44,465 for the three months ended June 30, 2000 compared to
$53,650 for the same period in 1999, a decrease of $9,185, or 17%. This decrease
was primarily attributable to an increase in proved reserves during the period
ended June 30, 2000 as a result of higher commodity prices, offset by an
increase in oil production of 1,812 barrels for the three months ended June 30,
2000 compared to the same period in 1999.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $617,828 during the six
months ended June 30, 2000 from the same period ended June 30, 1999. This
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increase was primarily due to an increase in oil and gas sales receipts of
$711,887, offset by increases in operating costs paid of $72,793 and G&A
expenses paid of $21,266.
Net Cash Used in Investing Activities
The Partnership's principal investing activities during the six months ended
June 30, 2000 and 1999 were for expenditures related to equipment upgrades on
various oil and gas properties.
Proceeds from asset dispositions of $7,591 and $207 were received during the six
months ended June 30, 2000 and 1999, respectively, from equipment credits on
active properties.
Net Cash Used in Financing Activities
For the six months ended June 30, 2000, cash distributions to the partners were
$778,868, of which $7,789 was distributed to the managing general partner and
$771,079 to the limited partners. For the same period ended June 30, 1999, cash
distributions to the partners were $117,040, of which $1,175 was distributed to
the managing general partner and $115,865 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: August 8, 2000 By: /s/ Rich Dealy
------------------------------
Rich Dealy, Vice President and
Chief Accounting Officer
11
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