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 June 30, 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
June 30, December 31,
1996 1995
---------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $180,620 at June 30 and
$170,108 at December 31 $ 180,753 $ 170,141
Accounts receivable - oil and gas sales 114,002 95,946
---------- ----------
Total current assets 294,755 266,087
Oil and gas properties - at cost, based on the
successful efforts accounting method 6,712,985 6,712,280
Accumulated depletion (4,065,361) (3,957,167)
---------- ----------
Net oil and gas properties 2,647,624 2,755,113
---------- ----------
$ 2,942,379 $ 3,021,200
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 40,016 $ 62,091
Partners' capital:
Limited partners (8,317 interests) 2,873,146 2,929,323
Managing general partner 29,217 29,786
---------- ----------
2,902,363 2,959,109
---------- ----------
$ 2,942,379 $ 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 Six months ended
June 30, June 30,
--------------------- ---------------------
1996 1995 1996 1995
--------- --------- --------- ---------
Revenues:
Oil and gas sales $ 278,655 $ 233,499 $ 545,313 $ 482,353
Interest income 2,229 2,181 4,079 4,065
-------- -------- -------- --------
Total revenues 280,884 235,680 549,392 486,418
Costs and expenses:
Production costs 94,973 122,590 226,946 235,398
General and administrative
expenses 9,268 6,836 17,268 15,196
Depletion 53,533 98,112 108,194 195,868
-------- -------- -------- --------
Total costs and expenses 157,774 227,538 352,408 446,462
-------- -------- -------- --------
Net income $ 123,110 $ 8,142 $ 196,984 $ 39,956
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 1,231 $ 81 $ 1,970 $ 399
======== ======== ======== ========
Limited partners $ 121,879 $ 8,061 $ 195,014 $ 39,557
======== ======== ======== ========
Net income per limited
partnership interest $ 14.66 $ .97 $ 23.45 $ 4.76
======== ======== ======== ========
Distributions per limited
partnership interest $ 18.20 $ 13.44 $ 30.20 $ 29.73
======== ======== ======== ========
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 (2,498) (247,300) (249,798)
Net income 399 39,557 39,956
--------- --------- ---------
Balance at June 30, 1995 $ 38,347 $3,776,479 $3,814,826
========= ========= =========
Balance at January 1, 1996 $ 29,786 $2,929,323 $2,959,109
Distributions (2,539) (251,191) (253,730)
Net income 1,970 195,014 196,984
--------- --------- ---------
Balance at June 30, 1996 $ 29,217 $2,873,146 $2,902,363
========= ========= =========
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)
Six months ended
June 30,
1996 1995
---------- ----------
Cash flows from operating activities:
Net income $ 196,984 $ 39,956
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 108,194 195,868
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (18,056) 6,408
Increase (decrease) in accounts payable (22,075) 32,197
--------- ---------
Net cash provided by operating activities 265,047 274,429
Cash flows from investing activities:
Additions to oil and gas properties (705) (6,069)
Cash flows from financing activities:
Cash distributions to partners (253,730) (249,798)
--------- ---------
Net increase in cash and cash equivalents 10,612 18,562
Cash and cash equivalents at beginning of period 170,141 117,053
--------- ---------
Cash and cash equivalents at end of period $ 180,753 $ 135,615
========= =========
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
June 30, 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 Registrant's unaudited financial statements as
of June 30, 1996 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)
Results of Operations
Six months ended June 30, 1996 compared with six months ended
June 30, 1995
Revenues:
The Registrant's oil and gas revenues increased to $545,313 from $482,353 for
the six months ended June 30, 1996 and 1995, respectively, an increase of 13%.
The increase in revenues primarily resulted from higher average prices received
per barrel of oil and mcf of gas, offset by an 8% decrease in barrels of oil
produced and sold and a 7% decrease in mcf of gas produced and sold. For the six
months ended June 30, 1996, 18,360 barrels of oil were sold compared to 19,904
for the same period in 1995, a decrease of 1,544 barrels. For the six months
ended June 30, 1996, 71,585 mcf of gas were sold compared to 76,698 for the same
period in 1995, a decrease of 5,113 mcf. The decreases in oil and gas production
were due to the decline characteristics of the Registrant's oil and gas
properties. Management expects a certain amount of decline in production to
continue in the future until the Registrant's economically recoverable reserves
are fully depleted.
6
<PAGE>
The average price received per barrel of oil increased $2.83, or 16%, from
$17.62 for the six months ended June 30, 1995 to $20.45 for the same period in
1996 while the average price received per mcf of gas increased 38% from $1.72
during the six months ended June 30, 1995 to $2.37 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 six months ended June 30,
1996.
Costs and Expenses:
Total costs and expenses decreased to $352,408 for the six months ended June 30,
1996 as compared to $446,462 for the same period in 1995, resulting in a
decrease of $94,054, or 21%. This decrease was due to declines in production
costs and depletion, offset by an increase in general and administrative
expenses ("G&A").
Production costs were $226,946 for the six months ended June 30, 1996 and
$235,398 for the same period in 1995 resulting in a $8,452 decrease, or 4%. This
decrease resulted from a reduction in well repair and maintenance costs and
lower ad valorem taxes, offset by an increase in workover costs incurred in an
effort to stimulate production.
G&A's components are independent accounting and engineering fees, computer
services, postage and managing general partner personnel costs. During this
period, G&A increased, in aggregate, 14% from $15,196 for the six months ended
June 30, 1995 to $17,268 for the same period in 1996. The Partnership agreement
limits G&A to 3% of the gross oil and gas revenues.
Depletion was $108,194 for the six months ended June 30, 1996 compared to
$195,868 for the same period in 1995. This represented a decrease in depletion
of $87,674, or 45%, primarily attributable to the adoption of the provisions of
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of"
("FAS 121") effective the fourth quarter of 1995 and the reduction of net
depletable basis resulting from the charge taken upon such adoption. Depletion
was calculated on a property-by-property basis utilizing the unit-of-production
method based upon the dominant mineral produced, generally oil. Oil production
decreased 1,544 barrels for the six months ended June 30, 1996 from the same
period in 1995, while oil reserves of barrels were revised downward by 6,841
barrels, or 1%.
Three months ended June 30, 1996 compared with three months ended
June 30, 1995
Revenues:
The Registrant's oil and gas revenues increased to $278,655 from $233,499 for
the three months ended June 30, 1996 and 1995, respectively, an increase of 19%.
The increase in revenues resulted from an increase in the average prices
received per barrel of oil and mcf of gas, offset by a 10% decrease in barrels
7
<PAGE>
of oil produced and sold and a 9% decrease in mcf of gas produced and sold. For
the three months ended June 30, 1996, 8,977 barrels of oil were sold compared to
9,921 for the same period in 1995, a decrease of 944 barrels. For the three
months ended June 30, 1996, 35,541 mcf of gas were sold compared to 39,175 for
the same period in 1995, a decrease of 3,634 mcf. The decreases in production
were due to the decline characteristics of the Registrant's oil and gas
properties.
The average price received per barrel of oil increased $3.94, or 22%, from
$18.07 for the three months ended June 30, 1995 to $22.01 for the same period in
1996 while the average price received per mcf of gas increased from $1.38, or
65%, during the three months ended June 30, 1995 to $2.28 in 1996.
Costs and Expenses:
Total costs and expenses decreased to $157,774 for the three months ended June
30, 1996 as compared to $227,538 for the same period in 1995, a decrease of
$69,764, or 31%. This decrease was due to declines in production costs and
depletion, offset by an increase in G&A.
Production costs were $94,973 for the three months ended June 30, 1996 and
$122,590 for the same period in 1995 resulting in a $27,617 decrease, or 23%.
This decrease was primarily the result of reductions in well repair and
maintenance costs and workover 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 increased, in aggregate, 36% from $6,836 for the three months ended
June 30, 1995 to $9,268 for the same period in 1996.
Depletion was $53,533 for the three months ended June 30, 1996 compared to
$98,112 for the same period in 1995. This represented a decrease in depletion of
$44,579, or 45%, primarily attributable to the adoption of FAS 121 the fourth
quarter of 1995, as discussed previously. Oil production decreased 944 barrels
for the three months ended June 30, 1996 from the same period in 1995.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased during the six months ended
June 30, 1996 $9,382 from the same period in 1995. This decrease was primarily
attributable to an increase in production costs paid, offset by an increase in
oil and gas sales.
Net Cash Used in Investing Activities
The Registrant's principal investing activities during the six months ended June
30, 1996 and 1995 were for expenditures related to equipment replacement on
various oil and gas properties.
8
<PAGE>
Net Cash Used in Financing Activities
Cash was sufficient for the six months ended June 30, 1996 to cover
distributions to the partners of $253,730 of which $251,191 was distributed to
the limited partners and $2,539 to the managing general partner. For the same
period ended June 30, 1995, cash was sufficient for distributions to the
partners of $249,798 of which $247,300 was distributed to the limited partners
and $2,498 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.
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: August 8, 1996 By: /s/ Steven L. Beal
-----------------------------------------
Steven L. Beal, Senior Vice President
and Chief Financial Officer of PPUSA
10
<PAGE>
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<ARTICLE> 5
<CIK> 0000844582
<NAME> 89A.TXT
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 180,753
<SECURITIES> 0
<RECEIVABLES> 114,002
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 294,755
<PP&E> 6,712,985
<DEPRECIATION> 4,065,361
<TOTAL-ASSETS> 2,942,379
<CURRENT-LIABILITIES> 40,016
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,902,363
<TOTAL-LIABILITY-AND-EQUITY> 2,942,379
<SALES> 545,313
<TOTAL-REVENUES> 549,392
<CGS> 0
<TOTAL-COSTS> 352,408
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 196,984
<INCOME-TAX> 0
<INCOME-CONTINUING> 196,984
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 196,984
<EPS-PRIMARY> 23.45
<EPS-DILUTED> 0
</TABLE>
