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, 1997
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.
TABLE OF CONTENTS
Page
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of March 31, 1997 and
December 31, 1996 ..................................... 3
Statements of Operations for the three months
ended March 31, 1997 and 1996............................ 4
Statement of Partners' Capital for the three months
ended March 31, 1997..................................... 5
Statements of Cash Flows for the three months
ended March 31, 1997 and 1996............................ 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........................... 9
27. Financial Data Schedule
Signatures............................................. 10
2
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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,
1997 1996
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $178,651 at March 31
and $162,738 at December 31 $ 178,784 $ 162,871
Accounts receivable - oil and gas sales 108,427 170,304
----------- -----------
Total current assets 287,211 333,175
----------- -----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 6,712,589 6,709,438
Accumulated depletion (4,194,196) (4,151,873)
----------- -----------
Net oil and gas properties 2,518,393 2,557,565
----------- -----------
$ 2,805,604 $ 2,890,740
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 25,471 $ 22,606
Partners' capital:
Managing general partner 27,994 28,873
Limited partners (8,317 interests) 2,752,139 2,839,261
----------- -----------
2,780,133 2,868,134
----------- -----------
$ 2,805,604 $ 2,890,740
=========== ===========
The financial information included as of March 31, 1997 has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
3
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PARKER & PARSLEY 89-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
March 31,
-------------------------
1997 1996
--------- ----------
Revenues:
Oil and gas $ 238,030 $ 266,658
Interest 2,306 1,850
--------- ----------
240,336 268,508
--------- ----------
Costs and expenses:
Oil and gas production 111,729 131,973
General and administrative 7,950 8,000
Depletion 42,323 54,661
--------- ----------
162,002 194,634
--------- ----------
Net income $ 78,334 $ 73,874
========= ==========
Allocation of net income:
Managing general partner $ 783 $ 739
========= ==========
Limited partners $ 77,551 $ 73,135
========= ==========
Net income per limited partnership interest $ 9.32 $ 8.79
========= ==========
Distributions per limited partnership interest $ 19.80 $ 12.00
========= ==========
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
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PARKER & PARSLEY 89-A, L.P.
(A Delaware Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
----------- ----------- -----------
Balance at January 1, 1997 $ 28,873 $ 2,839,261 $ 2,868,134
Distributions (1,662) (164,673) (166,335)
Net income 783 77,551 78,334
----------- ----------- -----------
Balance at March 31, 1997 $ 27,994 $ 2,752,139 $ 2,780,133
=========== =========== ===========
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
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PARKER & PARSLEY 89-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended
March 31,
--------------------
1997 1996
-------- --------
Cash flows from operating activities:
Net income $ 78,334 $ 73,874
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 42,323 54,661
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 61,877 (20,610)
Increase (decrease) in accounts payable 2,865 (32,332)
-------- --------
Net cash provided by operating activities 185,399 75,593
-------- --------
Cash flows from investing activities:
Additions to oil and gas properties (3,151) (705)
Cash flows from financing activities:
Cash distributions to partners (166,335) (100,818)
-------- --------
Net increase (decrease) in cash and cash equivalents 15,913 (25,930)
Cash and cash equivalents at beginning of period 162,871 170,141
-------- --------
Cash and cash equivalents at end of period $ 178,784 $ 144,211
======== ========
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.
6
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PARKER & PARSLEY 89-A, L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
(Unaudited)
Note 1. Organization and nature of operations
Parker & Parsley 89-A, L.P. (the "Partnership") is a limited partnership
organized in 1989 under the laws of the State of Delaware.
The Partnership 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. Basis of presentation
In the opinion of management, the unaudited financial statements as of March 31,
1997 of the Partnership 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 Partnership's Report on Form
10-K for the year ended December 31, 1996, 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
Revenues:
The Partnership's oil and gas revenues decreased to $238,030 from $266,658 for
the three months ended March 31, 1997 and 1996, respectively, a decrease of
$28,628, or 11%. The decrease in revenues was the result of a 17% decline in
barrels of oil produced and sold and a 34% decline in the mcf of gas produced
and sold, offset by higher average prices received per barrel of oil and mcf of
gas. For the three months ended March 31, 1997, 7,824 barrels of oil were sold
compared to 9,383 for the same period in 1996, a decrease of 1,559 barrels. For
the three months ended March 31, 1997, 23,625 mcf of gas were sold compared to
36,044 for the same period ended March 31, 1996, a decrease of 12,149 mcf. The
decreases in oil and gas production volumes were due to the decline
characteristics of the Partnership's oil and gas properties. Management expects
a certain amount of decline in production to continue in the future until the
Partnership's economically recoverable reserves are fully depleted.
7
<PAGE>
The average price received per barrel of oil increased $3.03, or 16%, from
$18.96 for the three months ended March 31, 1996 to $21.99 for the same period
in 1997, while the average price received per mcf of gas increased 13% from
$2.46 during the three months ended March 31, 1996 to $2.79 for the same period
in 1997. The market price for oil and gas has been extremely volatile in the
past decade, and management expects a certain amount of volatility 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, 1997.
Costs and Expenses:
Total costs and expenses decreased to $162,002 for the three months ended March
31, 1997 as compared to $194,634 for the same period in 1996, a decrease of
$32,632, or 17%. This decrease was due to declines in production costs,
depletion and general and administrative expenses ("G&A").
Production costs were $111,729 for the three months ended March 31, 1997 and
$131,973 for the same period in 1996, resulting in a $20,244 decrease, or 15%.
The decrease was primarily attributable to a decline in workover expenses.
G&A's components are independent accounting and engineering fees and managing
general partner personnel and operating costs. During this period, G&A decreased
slightly from $8,000 for the three months ended March 31, 1996 to $7,950 for the
same period in 1997.
Depletion was $42,323 for the three months ended March 31, 1997 compared to
$54,661 for the same period in 1996, a decrease of $12,338, or 23%. The decrease
was primarily attributable to a decline in oil production of 1,559 barrels for
the three months ended March 31, 1997 compared to the same period in 1996 and an
upward revision in oil and gas reserves.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $109,806 during the three
months ended March 31, 1997 from the same period in 1996. This increase was due
to an increase in oil and gas sales receipts and a decline in expenditures for
production costs.
Net Cash Used in Investing Activities
The Partnership's investing activities during the three months ended March 31,
1997 and 1996 were related to the addition to oil and gas equipment on active
properties.
8
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Net Cash Used in Financing Activities
Cash was sufficient for the three months ended March 31, 1997 to cover
distributions to the partners of $166,335 of which $164,673 was distributed to
the limited partners and $1,662 to the managing general partner. For the same
period ended March 31, 1996, cash was sufficient for 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.
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
27. Financial Data Schedule
(b) Reports on Form 8-K - none
9
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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 12, 1997 By: /s/ Steven L. Beal
-------------------------------------
Steven L. Beal, Senior Vice President
and Chief Financial Officer of PPUSA
10
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<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 178,784
<SECURITIES> 0
<RECEIVABLES> 108,427
<ALLOWANCES> 0
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<PP&E> 6,712,589
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0
0
<COMMON> 0
<OTHER-SE> 2,780,133
<TOTAL-LIABILITY-AND-EQUITY> 2,805,604
<SALES> 238,030
<TOTAL-REVENUES> 240,336
<CGS> 0
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<INCOME-CONTINUING> 78,334
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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<NET-INCOME> 78,334
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