UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
/ x / Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 1996
or
/ / Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from _______ to _______
Commission File No. 33-26097-01
PARKER & PARSLEY 89-A, L.P.
(Exact name of Registrant as specified in its charter)
Delaware 75-2297058
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
303 West Wall, Suite 101, Midland, Texas 79701
(Address of principal executive offices) (Zip code)
Registrant's Telephone Number, including area code : (915) 683-4768
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 / /
Page 1 of 10 pages.
-There are no exhibits-
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PARKER & PARSLEY 89-A, L.P.
(A Delaware Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
March 31, December 31,
1996 1995
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $144,178 at March 31
and $170,108 at December 31 $ 144,211 $ 170,141
Accounts receivable - oil and gas sales 116,556 95,946
---------- ----------
Total current assets 260,767 266,087
Oil and gas properties - at cost, based on the
successful efforts accounting method 6,712,985 6,712,280
Accumulated depletion (4,011,828) (3,957,167)
---------- ----------
Net oil and gas properties 2,701,157 2,755,113
---------- ----------
$ 2,961,924 $ 3,021,200
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 29,759 $ 62,091
Partners' capital:
Limited partners (8,317 interests) 2,902,654 2,929,323
Managing general partner 29,511 29,786
---------- ----------
2,932,165 2,959,109
---------- ----------
$ 2,961,924 $ 3,021,200
========== ==========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
PARKER & PARSLEY 89-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
March 31,
1996 1995
---------- ----------
Revenues:
Oil and gas sales $ 266,658 $ 248,854
Interest income 1,850 1,884
--------- ---------
Total revenues 268,508 250,738
Costs and expenses:
Production costs 131,973 112,808
General and administrative expenses 8,000 8,360
Depletion 54,661 97,756
--------- ---------
Total costs and expenses 194,634 218,924
--------- ---------
Net income $ 73,874 $ 31,814
========= =========
Allocation of net income:
Managing general partner $ 739 $ 318
========= =========
Limited partners $ 73,135 $ 31,496
========= =========
Net income per limited partnership interest $ 8.79 $ 3.79
========= =========
Distributions per limited partnership interest $ 12.00 $ 16.29
========= =========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
PARKER & PARSLEY 89-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
----------- ----------- -----------
Balance at January 1, 1995 $ 40,446 $ 3,984,222 $ 4,024,668
Distributions (1,369) (135,515) (136,884)
Net income 318 31,496 31,814
---------- ---------- ----------
Balance at March 31, 1995 $ 39,395 $ 3,880,203 $ 3,919,598
========== ========== ==========
Balance at January 1, 1996 $ 29,786 $ 2,929,323 $ 2,959,109
Distributions (1,014) (99,804) (100,818)
Net income 739 73,135 73,874
---------- ---------- ----------
Balance at March 31, 1996 $ 29,511 $ 2,902,654 $ 2,932,165
========== ========== ==========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
PARKER & PARSLEY 89-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended
March 31,
1996 1995
--------- ---------
Cash flows from operating activities:
Net income $ 73,874 $ 31,814
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 54,661 97,756
Changes in assets and liabilities:
Increase in accounts receivable (20,610) (4,719)
Increase (decrease) in accounts payable (32,332) 13,642
-------- --------
Net cash provided by operating activities 75,593 138,493
Cash flows from investing activities:
Additions to oil and gas properties (705) (4,563)
Cash flows from financing activities:
Cash distributions to partners (100,818) (136,884)
-------- --------
Net decrease in cash and cash equivalents (25,930) (2,954)
Cash and cash equivalents at beginning of period 170,141 117,053
-------- --------
Cash and cash equivalents at end of period $ 144,211 $ 114,099
======== ========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
PARKER & PARSLEY 89-A, L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
(Unaudited)
NOTE 1.
Parker & Parsley 89-A, L.P. (the "Registrant") is a limited partnership
organized in 1989 under the laws of the State of Delaware.
The Registrant engages primarily in oil and gas development and production in
Texas and is not involved in any industry segment other than oil and gas.
NOTE 2.
In the opinion of management, the unaudited financial statements as of March 31,
1996 of the Registrant 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. However, these interim results are not
necessarily indicative of results for a full year.
The financial statements should be read in conjunction with the financial
statements and the notes thereto contained in the Registrant's Report on Form
10-K for the year ended December 31, 1995, as filed with the Securities and
Exchange Commission, a copy of which is available upon request by writing to
Steven L. Beal, Senior Vice President, 303 West Wall, Suite 101, Midland, Texas
79701.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations(1)
The Registrant was formed October 30, 1989. On January 1, 1995, Parker & Parsley
Development L.P. ("PPDLP"), a Texas limited partnership, became the sole
managing general partner of the Registrant, by acquiring the rights and assuming
the obligations of Parker Parsley Development Company ("PPDC"). PPDLP acquired
PPDC's rights and obligations as managing general partner of the Registrant in
connection with the merger of PPDC, P&P Producing, Inc. and Spraberry
Development Corporation into MidPar L.P., which survived the merger with a
change of name to PPDLP. The sole general partner of PPDLP is Parker & Parsley
Petroleum USA, Inc. PPDLP has the power and authority to manage, control and
administer all Registrant affairs. The limited partners contributed $8,317,000
representing 8,317 interests ($1,000 per interest) sold to a total of 616
limited partners.
Since its formation, the Registrant invested $6,712,985 in various prospects
that were drilled in Texas. At March 31, 1996, the Registrant had 33 producing
oil and gas wells.
6
<PAGE>
Results of Operations
Revenues:
The Registrant's oil and gas revenues increased to $266,658 from $248,854 for
the three months ended March 31, 1996 and 1995, respectively, an increase of
$17,804, or 7%. The increase in revenues was primarily the result of higher
average prices received per barrel of oil and per mcf of gas during 1996, offset
by a 6% decline in barrels of oil produced and sold and a 4% decline in the mcf
of gas produced and sold. For the three months ended March 31, 1996, 9,383
barrels of oil were sold compared to 9,982 for the same period in 1995, a
decrease of 599 barrels. For the three months ended March 31, 1996, 36,044 mcf
of gas were sold compared to 37,523 for the same period ended March 31, 1995, a
decrease of 1,479 mcf. The decrease in oil and gas production was due to the
decline characteristics of the Registrant's oil and gas properties, and
management expects a certain amount of decline in production to continue in the
future until the Registrant's economically recoverable reserves are fully
depleted.
The average price received per barrel of oil increased $1.79, or 10%, from
$17.17 for the three months ended March 31, 1995 to $18.96 for the same period
in 1996, while the average price received per mcf of gas increased 19% from
$2.07 during the three months ended March 31, 1995 to $2.46 in 1996. 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 Registrant 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, 1996.
Costs and Expenses:
Total costs and expenses decreased to $194,634 for the three months ended March
31, 1996 as compared to $218,924 for the same period in 1995, a decrease of
$24,290, or 11%. This decrease was due to declines in depletion and general and
administrative expenses ("G&A"), offset by an increase in production costs.
Production costs were $131,973 for the three months ended March 31, 1996 and
$112,808 for the same period in 1995 resulting in a $19,165 increase, or 17%.
The increase was primarily attributable to workover expenses incurred in an
effort to stimulate well production, offset by a decline in well repair and
maintenance costs.
G&A's components are independent accounting and engineering fees, computer
services, postage and managing general partner personnel costs. During this
period, G&A decreased, in aggregate, 4% from $8,360 for the three months ended
March 31, 1995 to $8,000 for the same period in 1996. The Partnership agreement
limits G&A to 3% of the gross oil and gas revenues.
Depletion was $54,661 for the three months ended March 31, 1996 compared to
$97,756 for the same period in 1995. This represented a decrease in depletion of
$43,095, or 44%, primarily attributable to the adoption of the provisions of
Statement of Financial Accounting Standards No. 121, "Accounting for the
7
<PAGE>
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of"
effective for the fourth quarter of 1995 and the reduction of net depletable
basis resulting from the charge taken upon such adoption. Depletion was computed
property-by-property utilizing the unit-of-production method based upon the
dominant mineral produced, generally oil. Oil production decreased 599 barrels
for the three months ended March 31, 1996 from 1995, while oil reserves of
barrels were revised downward by 6,841 barrels, or 1%.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased to $75,593 during the three
months ended March 31, 1996, a $62,900 decrease from the same period ended March
31, 1995. This decrease was due to an increase in expenditures for production
costs, offset by an increase in oil and gas sales receipts. The increase in
production cost expenditures was due to an increase in workover expense. The
increase in oil and gas sales receipts was the result of higher average prices
received per barrel of oil and mcf of gas, offset by declines in both oil and
gas production.
Net Cash Used in Investing Activities
The Registrant's principal investing activities during the three months ended
March 31, 1996 and 1995 were for repair and maintenance activity on various oil
and gas properties.
Net Cash Used in Financing Activities
Cash was sufficient for the three months ended March 31, 1996 to cover
distributions to the partners of $100,818 of which $99,804 was distributed to
the limited partners and $1,014 to the managing general partner. For the same
period ended March 31, 1995, cash was sufficient for distributions to the
partners of $136,884 of which $135,515 was distributed to the limited partners
and $1,369 to the managing general partner.
It is expected that future net cash provided by operating activities will be
sufficient for any capital expenditures and any distributions. As the production
from the properties declines, distributions are also expected to decrease.
- - --------------
(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.
8
<PAGE>
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - none
(b) Reports on Form 8-K - none
9
<PAGE>
PARKER & PARSLEY 89-A, L.P.
(A Delaware 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 89-A, L.P.
By: Parker & Parsley Development L.P.,
Managing General Partner
By: Parker & Parsley Petroleum USA, Inc.
("PPUSA"), General Partner
Dated: May 13, 1996 By: /s/ Steven L. Beal
-----------------------------------------
Steven L. Beal, Senior Vice President
and Chief Financial Officer of PPUSA
10
<PAGE>
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<NAME> 89A.TXT
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 144,211
<SECURITIES> 0
<RECEIVABLES> 116,556
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 260,767
<PP&E> 6,712,985
<DEPRECIATION> 4,011,828
<TOTAL-ASSETS> 2,961,924
<CURRENT-LIABILITIES> 29,759
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,932,165
<TOTAL-LIABILITY-AND-EQUITY> 2,961,924
<SALES> 266,658
<TOTAL-REVENUES> 268,508
<CGS> 0
<TOTAL-COSTS> 194,634
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 73,874
<INCOME-TAX> 0
<INCOME-CONTINUING> 73,874
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 73,874
<EPS-PRIMARY> 8.79
<EPS-DILUTED> 0
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