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 September 30, 2000
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)
1400 Williams Square West, 5205 N. O'Connor Blvd., Irving, Texas 75039
---------------------------------------------------------------- ----------
(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 89-A, L.P.
TABLE OF CONTENTS
Page
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of September 30, 2000 and
December 31, 1999..................................... 3
Statements of Operations for the three and nine
months ended September 30, 2000 and 1999............... 4
Statement of Partners' Capital for the nine months
ended September 30, 2000............................... 5
Statements of Cash Flows for the nine months ended
September 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 89-A, L.P.
(A Delaware Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
<TABLE>
BALANCE SHEETS
<CAPTION>
September 30, December 31,
2000 1999
------------ ------------
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash $ 167,413 $ 180,301
Accounts receivable - oil and gas sales 143,280 112,165
----------- -----------
Total current assets 310,693 292,466
----------- -----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 6,559,123 6,552,266
Accumulated depletion (5,494,816) (5,447,549)
----------- -----------
Net oil and gas properties 1,064,307 1,104,717
----------- -----------
$ 1,375,000 $ 1,397,183
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 37,422 $ 17,110
Partners' capital:
Managing general partner 13,568 13,993
Limited partners (8,317 interests) 1,324,010 1,366,080
----------- -----------
1,337,578 1,380,073
----------- -----------
$ 1,375,000 $ 1,397,183
=========== ===========
</TABLE>
The financial information included as of September 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.
3
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PARKER & PARSLEY 89-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
--------------------- ---------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Oil and gas $ 305,191 $ 199,875 $ 810,322 $ 465,559
Interest 3,498 1,927 8,795 4,615
Gain on disposition of assets - - 6,194 4,410
-------- -------- -------- --------
308,689 201,802 825,311 474,584
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 103,256 81,220 316,752 268,458
General and administrative 10,777 8,390 27,049 18,070
Depletion 14,978 18,749 47,267 94,677
-------- -------- -------- --------
129,011 108,359 391,068 381,205
-------- -------- -------- --------
Net income $ 179,678 $ 93,443 $ 434,243 $ 93,379
======== ======== ======== ========
Allocation of net income:
Managing general partner $ 1,796 $ 935 $ 4,342 $ 934
======== ======== ======== ========
Limited partners $ 177,882 $ 92,508 $ 429,901 $ 92,445
======== ======== ======== ========
Net income per limited
partnership interest $ 21.39 $ 11.13 $ 51.69 $ 11.12
======== ======== ======== ========
</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 89-A, L.P.
(A Delaware Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
<TABLE>
<CAPTION>
Managing
general Limited
partner partners Total
---------- ---------- ----------
<S> <C> <C> <C>
Balance at January 1, 2000 $ 13,993 $1,366,080 $1,380,073
Distributions (4,767) (471,971) (476,738)
Net income 4,342 429,901 434,243
--------- --------- ---------
Balance at September 30, 2000 $ 13,568 $1,324,010 $1,337,578
========= ========= =========
</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
<PAGE>
PARKER & PARSLEY 89-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 30,
------------------------
2000 1999
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 434,243 $ 93,379
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion 47,267 94,677
Gain on disposition of assets (6,194) (4,410)
Changes in assets and liabilities:
Accounts receivable (31,115) (43,230)
Accounts payable 20,312 10,992
--------- ---------
Net cash provided by operating activities 464,513 151,408
--------- ---------
Cash flows from investing activities:
(Additions) deletions to oil and gas properties (6,857) 2,499
Proceeds from asset dispositions 6,194 4,410
--------- ---------
Net cash provided by (used in)
investing activities (663) 6,909
--------- ---------
Cash flows used in financing activities:
Cash distributions to partners (476,738) (122,611)
--------- ---------
Net increase (decrease) in cash (12,888) 35,706
Cash at beginning of period 180,301 117,381
--------- ---------
Cash at end of period $ 167,413 $ 153,087
========= =========
</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
<PAGE>
PARKER & PARSLEY 89-A, L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
(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 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 of the
Partnership as of September 30, 2000 and for the three and nine months ended
September 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 September 30, 1999 financial statements to conform to
the September 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
Nine months ended September 30, 2000 compared with nine months ended September
30, 1999
Revenues:
The Partnership's oil and gas revenues increased 74% to $810,322 for the nine
months ended September 30, 2000 as compared to $465,559 for the same period in
1999. The increase in revenues resulted from higher average prices received,
7
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offset by a decrease in production. For the nine months ended September 30,
2000, 18,609 barrels of oil, 10,334 barrels of natural gas liquids ("NGLs") and
46,510 mcf of gas were sold, or 36,695 barrel of oil equivalents ("BOEs"). For
the nine months ended September 30, 1999, 20,062 barrels of oil, 10,661 barrels
of NGLs and 44,134 mcf of gas were sold, or 38,079 BOEs.
The average price received per barrel of oil increased $13.57, or 90%, from
$15.02 for the nine months ended September 30, 1999 to $28.59 for the same
period in 2000. The average price received per barrel of NGLs increased $6.53,
or 80%, from $8.14 during the nine months ended September 30, 1999 to $14.67 for
the same period in 2000. The average price received per mcf of gas increased 55%
from $1.76 during the nine months ended September 30, 1999 to $2.73 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 nine months ended September 30, 2000.
A gain on disposition of assets of $6,194 and $4,410 was attributable to credits
received from the disposal of oil and gas equipment on one well for the nine
months ended September 30, 2000 and 1999, respectively.
Costs and Expenses:
Total costs and expenses increased to $391,068 for the nine months ended
September 30, 2000 as compared to $381,205 for the same period in 1999, an
increase of $9,863, 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 $316,752 for the nine months ended September 30, 2000 and
$268,458 for the same period in 1999 resulting in a $48,294 increase, or 18%.
The increase was primarily due to higher production taxes of $23,045 associated
with higher oil and gas prices and additional workover expenses of $10,470 and
well maintenance costs incurred to stimulate well production of $6,616.
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, 50% from $18,070 for the nine months ended September
30, 1999 to $27,049 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 $47,267 for the nine months ended September 30, 2000 compared to
$94,677 for the same period in 1999, representing a decrease of $47,410, or 50%.
This decrease was the result of an increase in proved reserves due to higher
commodity prices and a decline in oil production of 1,453 barrels when compared
to the respective information for the same period in 1999.
8
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Three months ended September 30, 2000 compared with three months ended September
30, 1999
Revenues:
The Partnership's oil and gas revenues increased $105,316, or 53% to $305,191
for the three months ended September 30, 2000 as compared to $199,875 for the
same period in 1999. The increase in revenues resulted from higher average
prices received, offset by a decrease in production. For the three months ended
September 30, 2000, 6,197 barrels of oil, 3,652 barrels of NGLs and 16,282 mcf
of gas were sold, or 12,563 BOEs. For the three months ended September 30, 1999,
6,518 barrels of oil, 3,954 barrels of NGLs and 17,246 mcf of gas were sold, or
13,346 BOEs.
The average price received per barrel of oil increased $11.92, or 64%, from
$18.72 for the three months ended September 30, 1999 to $30.64 for the same
period in 2000. The average price received per barrel of NGLs increased $5.85,
or 56%, from $10.50 during the three months ended September 30, 1999 to $16.35
for the same period in 2000. The average price received per mcf of gas increased
62% from $2.11 during the three months ended September 30, 1999 to $3.42 for the
same period in 2000.
Costs and Expenses:
Total costs and expenses increased to $129,011 for the three months ended
September 30, 2000 as compared to $108,359 for the same period in 1999, an
increase of $20,652, or 19%. This increase was due to increases in production
costs and G&A, offset by a decline in depletion.
Production costs were $103,256 for the three months ended September 30, 2000 and
$81,220 for the same period in 1999, resulting in a $22,036 increase, or 27%.
The increase was primarily due to higher production taxes of $8,607 associated
with higher oil and gas prices and additional well maintenance costs incurred to
stimulate well production of $7,712, offset by a decline in workover expenses of
$6,276.
During this period, G&A increased, in aggregate, 28% from $8,390 for the three
months ended September 30, 1999 to $10,777 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 $14,978 for the three months ended September 30, 2000 compared to
$18,749 for the same period in 1999, representing a decrease of $3,771, or 20%.
This decrease was due to an increase in proved reserves as a result of higher
commodity prices and a decline in oil production of 321 barrels when compared to
the respective information for the same period in 1999.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $313,105 during the nine
months ended September 30, 2000 from the same period ended September 30, 1999.
9
<PAGE>
This increase was due to an increase in oil and gas sales receipts of $361,058,
offset by increases in production costs paid of $40,507 and G&A expenses paid of
$7,446.
Net Cash Provided by (Used in) Investing Activities
The Partnership's investing activities during the nine months ended September
30, 2000 were related to equipment upgrades on active oil and gas properties.
During the period ended September 30, 1999, refunds were received on oil and gas
equipment on active properties which were incurred during the previous year.
Proceeds from salvage income of $6,194 and $4,410 were recognized during the
nine months ended September 30, 2000 and 1999, respectively, from equipment
credits on one well.
Net Cash Used in Financing Activities
For the nine months ended September 30, 2000, cash distributions to the partners
were $476,738, of which $4,767 was distributed to the managing general partner
and $471,971 to the limited partners. For the same period ended September 30,
1999, cash distributions to the partners were $122,611, of which $1,226 was
distributed to the managing general partner and $121,385 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 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: Pioneer Natural Resources USA, Inc.,
Managing General Partner
Dated: November 7, 2000 By: /s/ Rich Dealy
-----------------------------------
Rich Dealy, Vice President and
Chief Accounting Officer
11
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