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, 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 11 pages.
Exhibit index on page 10.
1
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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 June 30, 1997 and
December 31, 1996 ................................. 3
Statements of Operations for the three and six
months ended June 30, 1997 and 1996................... 4
Statement of Partners' Capital for the six months
ended June 30, 1997................................... 5
Statements of Cash Flows for the six months ended
June 30, 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........................ 10
27. Financial Data Schedule
Signatures.............................................. 11
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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,
1997 1996
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $172,009 at June 30 and
$162,738 at December 31 $ 172,142 $ 162,871
Accounts receivable - oil and gas sales 112,700 170,304
---------- ----------
Total current assets 284,842 333,175
---------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 6,717,068 6,709,438
Accumulated depletion (4,239,751) (4,151,873)
---------- ----------
Net oil and gas properties 2,477,317 2,557,565
---------- ----------
$ 2,762,159 $ 2,890,740
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 29,401 $ 22,606
Partners' capital:
Managing general partner 27,520 28,873
Limited partners (8,317 interests) 2,705,238 2,839,261
---------- ----------
2,732,758 2,868,134
---------- ----------
$ 2,762,159 $ 2,890,740
========== ==========
The financial information included as of June 30, 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 Six months ended
June 30, June 30,
-----------------------------------------------
1997 1996 1997 1996
--------- --------- ---------- ----------
Revenues:
Oil and gas $ 209,234 $ 278,655 $ 447,264 $ 545,313
Interest 2,500 2,229 4,806 4,079
-------- -------- --------- ---------
211,734 280,884 452,070 549,392
-------- -------- --------- ---------
Costs and expenses:
Oil and gas production 94,805 94,973 206,534 226,946
General and administrative 6,175 9,268 14,125 17,268
Depletion 45,555 53,533 87,878 108,194
-------- -------- --------- ---------
146,535 157,774 308,537 352,408
-------- -------- --------- ---------
Net income $ 65,199 $ 123,110 $ 143,533 $ 196,984
======== ======== ========= =========
Allocation of net income:
Managing general partner $ 652 $ 1,231 $ 1,435 $ 1,970
======== ======== ========= =========
Limited partners $ 64,547 $ 121,879 $ 142,098 $ 195,014
======== ======== ========= =========
Net income per limited
partnership interest $ 7.77 $ 14.66 $ 17.09 $ 23.45
======== ======== ========= =========
Distributions per limited
partnership interest $ 13.40 $ 18.20 $ 33.20 $ 30.20
======== ======== ========= =========
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 (2,788) (276,121) (278,909)
Net income 1,435 142,098 143,533
------- --------- ---------
Balance at June 30, 1997 $ 27,520 $2,705,238 $2,732,758
======== ========= =========
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)
Six months ended
June 30,
---------------------
1997 1996
--------- ---------
Cash flows from operating activities:
Net income $ 143,533 $ 196,984
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 87,878 108,194
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 57,604 (18,056)
Increase (decrease) in accounts payable 6,795 (22,075)
-------- --------
Net cash provided by operating activities 295,810 265,047
-------- --------
Cash flows from investing activities:
Additions to oil and gas properties (7,630) (705)
Cash flows from financing activities:
Cash distributions to partners (278,909) (253,730)
-------- --------
Net increase in cash and cash equivalents 9,271 10,612
Cash and cash equivalents at beginning of period 162,871 170,141
-------- --------
Cash and cash equivalents at end of period $ 172,142 $ 180,753
======== ========
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
June 30, 1997
(Unaudited)
Note 1. Basis of presentation
In the opinion of management, the unaudited financial statements of Parker &
Parsley 89-A, L.P. (the "Partnership") as of June 30, 1997 and for the three and
six months ended June 30, 1997 and 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. These interim results
are not necessarily indicative of results for a full year.
Certain information and footnote disclosure 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, 1996, as filed with the Securities and Exchange Commission, a copy
of which is available upon request by writing to Rich Dealy, Controller, 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, 1997 compared with six months ended
June 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 18% to $447,264 from $545,313
for the six months ended June 30, 1997 as compared to the six months ended June
30, 1996. The decrease in revenues primarily resulted from a 16% decline in
barrels of oil produced and sold, a 25% decline in mcf of gas produced and sold
and a decline in the average price received per barrel of oil, offset by an
increase in the average price received per mcf of gas. For the six months ended
June 30, 1997, 15,500 barrels of oil were sold compared to 18,360 for the same
period in 1996, a decrease of 2,860 barrels. For the six months ended June 30,
1997, 53,459 mcf of gas were sold compared to 71,585 for the same period in
1996, a decrease of 18,126 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.
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The average price received per barrel of oil decreased slightly from $20.45 for
the six months ended June 30, 1996 to $20.37 for the same period in 1997, while
the average price received per mcf of gas increased 4% from $2.37 during the six
months ended June 30, 1996 to $2.46 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 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, 1997.
Costs and Expenses:
Total costs and expenses decreased to $308,537 for the six months ended June 30,
1997 as compared to $352,408 for the same period in 1996, resulting in a
decrease of $43,871, or 12%. This decrease was due to declines in production
costs, depletion and general and administrative expenses ("G&A").
Production costs were $206,534 for the six months ended June 30, 1997 and
$226,946 for the same period in 1996 resulting in a $20,412 decrease, or 9%. 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, in aggregate, 18% from $17,268 for the six months ended June 30, 1996
to $14,125 for the same period in 1997.
Depletion was $87,878 for the six months ended June 30, 1997 compared to
$108,194 for the same period in 1996. This represented a decrease in depletion
of $20,316, or 19%, primarily attributable to a decline in production of 2,860
barrels for the six months ended June 30, 1997 from the same period in 1996.
Three months ended June 30, 1997 compared with three months ended
June 30, 1996
Revenues:
The Partnership's oil and gas revenues decreased 25% to $209,234 from 278,655
for the three months ended June 30, 1997 as compared to the three months ended
June 30, 1996. The decrease in revenues resulted from a 15% decline in the
average price received per barrel of oil and a 4% decline in the average price
received per mcf of gas, a 15% decline in barrels of oil produced and sold and a
16% decline in mcf of gas produced and sold. For the three months ended June 30,
1997, 7,675 barrels of oil were sold compared to 8,977 for the same period in
1996, a decrease of 1,302 barrels. For the three months ended June 30, 1997,
29,833 mcf of gas were sold compared to 35,541 for the same period in 1996, a
decrease of 5,708 mcf. The decreases in production were due to the decline
characteristics of the Partnership's oil and gas properties.
The average price received per barrel of oil decreased $3.30 from $22.01 for the
three months ended June 30, 1996 to $18.71 for the same period in 1997 while the
average price received per mcf of gas decreased from $2.28 during the three
months ended June 30, 1996 to $2.20 in 1997.
8
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Costs and Expenses:
Total costs and expenses decreased to $146,535 for the three months ended June
30, 1997 as compared to $157,774 for the same period in 1996, a decrease of
$11,239, or 7%. This decrease was due to declines in depletion, G&A and
production costs.
Production costs were $94,805 for the three months ended June 30, 1997 and
$94,973 for the same period in 1996 resulting in a $168 decrease. This decrease
was primarily the result of reductions in ad valorem taxes.
G&A's components are independent accounting and engineering fees and managing
general partner personnel and operating costs. During this period, G&A
decreased, in aggregate, 33% from $9,268 for the three months ended June 30,
1996 to $6,175 for the same period in 1997.
Depletion was $45,555 for the three months ended June 30, 1997 compared to
$53,533 for the same period in 1996. This represented a decrease in depletion of
7,978, or 15%, primarily attributable to a decline in production of 1,302
barrels for the three months ended June 30, 1997 compared to the same period in
1996.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $30,763 during the six
months ended June 30, 1997 from the same period ended June 30, 1996. This
increase was primarily attributable to a decrease in production costs paid,
offset by a decrease in oil and gas sales receipts.
Net Cash Used in Investing Activities
The Partnership's investing activities during the six months ended June 30, 1997
and 1996 included equipment replacement expenditures on several oil and gas
properties.
Net Cash Used in Financing Activities
Cash was sufficient for the six months ended June 30, 1997 to cover
distributions to the partners of $278,909 of which $2,788 was distributed to the
managing general partner and $276,121 to the limited partners. For the same
period ended June 30, 1996, cash was sufficient for distributions to the
partners of 253,730 of which $2,539 was distributed to the managing general
partner and $251,191 to the limited partners.
9
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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
10
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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: August 7, 1997 By: /s/ Rich Dealy
------------------------------
Rich Dealy, Controller of PPUSA
11
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<ARTICLE> 5
<CIK> 0000844582
<NAME> 89A.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 172,142
<SECURITIES> 0
<RECEIVABLES> 112,700
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 284,842
<PP&E> 6,717,068
<DEPRECIATION> 4,239,751
<TOTAL-ASSETS> 2,762,159
<CURRENT-LIABILITIES> 29,401
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,732,758
<TOTAL-LIABILITY-AND-EQUITY> 2,762,159
<SALES> 447,264
<TOTAL-REVENUES> 452,070
<CGS> 0
<TOTAL-COSTS> 308,537
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 143,533
<INCOME-TAX> 0
<INCOME-CONTINUING> 143,533
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 143,533
<EPS-PRIMARY> 17.09
<EPS-DILUTED> 0
</TABLE>
