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 June 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
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(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 June 30, 2000 and
December 31, 1999....................................... 3
Statements of Operations for the three and six
months ended June 30, 2000 and 1999...................... 4
Statement of Partners' Capital for the six months
ended June 30, 2000...................................... 5
Statements of Cash Flows for the six months ended
June 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
BALANCE SHEETS
<TABLE>
June 30, December 31,
2000 1999
----------- -----------
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash $ 159,495 $ 180,301
Accounts receivable - oil and gas sales 122,880 112,165
---------- ----------
Total current assets 282,375 292,466
---------- ----------
Oil and gas properties - at cost, based on the
successful efforts accounting method 6,555,754 6,552,266
Accumulated depletion (5,479,838) (5,447,549)
---------- ----------
Net oil and gas properties 1,075,916 1,104,717
---------- ----------
$ 1,358,291 $ 1,397,183
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 29,009 $ 17,110
Partners' capital:
Managing general partner 13,485 13,993
Limited partners (8,317 interests) 1,315,797 1,366,080
---------- ----------
1,329,282 1,380,073
---------- ----------
$ 1,358,291 $ 1,397,183
========== ==========
</TABLE>
The financial information included as of June 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>
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Oil and gas $ 264,301 $ 144,764 $ 505,131 $ 265,684
Interest 2,930 1,463 5,297 2,688
Gain on disposition of assets 6,194 1,166 6,194 4,410
-------- -------- -------- --------
273,425 147,393 516,622 272,782
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 120,113 88,188 213,496 187,238
General and administrative 8,814 4,882 16,272 9,680
Depletion 13,489 20,943 32,289 75,928
-------- -------- -------- --------
142,416 114,013 262,057 272,846
-------- -------- -------- --------
Net income (loss) $ 131,009 $ 33,380 $ 254,565 $ (64)
======== ======== ======== ========
Allocation of net income (loss):
Managing general partner $ 1,310 $ 333 $ 2,546 $ (1)
======== ======== ======== ========
Limited partners $ 129,699 $ 33,047 $ 252,019 $ (63)
======== ======== ======== ========
Net income (loss) per limited
partnership interest $ 15.59 $ 3.97 $ 30.30 $ (.01)
======== ======== ======== ========
</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>
Managing
general Limited
partner partners Total
---------- ---------- ----------
<S> <C> <C> <C>
Balance at January 1, 2000 $ 13,993 $1,366,080 $1,380,073
Distributions (3,054) (302,302) (305,356)
Net income 2,546 252,019 254,565
--------- --------- ---------
Balance at June 30, 2000 $ 13,485 $1,315,797 $1,329,282
========= ========= =========
</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
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PARKER & PARSLEY 89-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
Six months ended
June 30,
-----------------------
2000 1999
---------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 254,565 $ (64)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depletion 32,289 75,928
Gain on disposition of assets (6,194) (4,410)
Changes in assets and liabilities:
Accounts receivable (10,715) (30,833)
Accounts payable 11,899 10,613
--------- --------
Net cash provided by operating activities 281,844 51,234
--------- --------
Cash flows from investing activities:
(Additions) deletions to oil and gas properties (3,488) 6,187
Proceeds from disposition of assets 6,194 4,410
--------- --------
Net cash provided by investing activities 2,706 10,597
--------- --------
Cash flows from financing activities:
Cash distributions to partners (305,356) (45,634)
--------- --------
Net increase (decrease) in cash (20,806) 16,197
Cash at beginning of period 180,301 117,381
--------- --------
Cash at end of period $ 159,495 $ 133,578
========= ========
</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.
6
<PAGE>
PARKER & PARSLEY 89-A, L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 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 June 30, 2000 and for the three and six months ended June 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 June 30, 1999 financial statements to conform to the June 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
Six months ended June 30, 2000 compared with six months ended
June 30, 1999
Revenues:
The Partnership's oil and gas revenues increased 90% to $505,131 for the six
months ended June 30, 2000 as compared to $265,684 for the same period in 1999.
The increase in revenues resulted from higher average prices received, offset by
a decrease in production. For the six months ended June 30, 2000, 12,412 barrels
of oil, 6,682 barrels of natural gas liquids ("NGLs") and 30,228 mcf of gas were
7
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sold, or 24,132 barrel of oil equivalents ("BOEs"). For the six months ended
June 30, 1999, 13,544 barrels of oil, 6,707 barrels of NGLs and 26,888 mcf of
gas were sold, or 24,732 BOEs.
The average price received per barrel of oil increased $14.33, or 108%, from
$13.23 for the six months ended June 30, 1999 to $27.56 for the same period in
2000. The average price received per barrel of NGLs increased $6.99, or 104%,
from $6.75 during the six months ended June 30, 1999 to $13.74 for the same
period in 2000. The average price received per mcf of gas increased 54% from
$1.53 during the six months ended June 30, 1999 to $2.35 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 six
months ended June 30, 2000.
The volatility of commodity prices has had, and continues to have, a significant
impact on the Partnership's revenues and operating cash flow and could result in
additional decreases to the carrying value of the Partnership's oil and gas
properties.
Gains on disposition of assets of $6,194 and $4,410 were recognized during the
six months ended June 30, 2000 and 1999, respectively, from equipment credits
received on one fully depleted well.
Costs and Expenses:
Total costs and expenses decreased to $262,057 for the six months ended June 30,
2000 as compared to $272,846 for the same period in 1999, resulting in a
decrease of $10,789, or 4%. This decrease was due to a decline in depletion,
offset by increases in production costs and general and administra tive expenses
("G&A").
Production costs were $213,496 for the six months ended June 30, 2000 and
$187,238 for the same period in 1999 resulting in a $26,258 increase, or 14%.
The increase was the result of additional workover costs incurred to stimulate
well production and higher production taxes due to higher oil and gas prices.
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, 68% from $9,680 for the six months ended June 30, 1999
to $16,272 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 $32,289 for the six months ended June 30, 2000 compared to $75,928
for the same period in 1999, a decrease in depletion of $43,639, or 57%. This
decrease was primarily the result of an increase in proved reserves during the
period ended June 30, 2000 due to higher commodity prices and a decline in oil
production of 1,132 barrels for the six months ended June 30, 2000 compared to
the same period in 1999.
8
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Three months ended June 30, 2000 compared with three months ended June 30, 1999
Revenues:
The Partnership's oil and gas revenues increased 83% to $264,301 for the three
months ended June 30, 2000 as compared to $144,764 for the same period in 1999.
The increase in revenues resulted higher average prices received and an increase
in production. For the three months ended June 30, 2000, 6,233 barrels of oil,
3,495 barrels of NGLs and 16,086 mcf of gas were sold, or 12,409 BOEs. For the
three months ended June 30, 1999, 6,136 barrels of oil, 3,776 barrels of NGLs
and 14,034 mcf of gas were sold, or 12,251 BOEs.
The average price received per barrel of oil increased $12.99, or 89%, from
$14.66 for the three months ended June 30, 1999 to $27.65 for the same period in
2000. The average price received per barrel of NGLs increased $5.44, or 66%,
from $8.21 during the three months ended June 30, 1999 to $13.65 for the same
period in 2000. The average price received per mcf of gas increased 62% from
$1.70 during the three months ended June 30, 1999 to $2.75 for the same period
in 2000.
Gains on disposition of assets of $6,194 and $1,166 were recognized during the
three months ended June 30, 2000 and 1999, respectively, from equipment credits
received on one fully depleted well.
Costs and Expenses:
Total costs and expenses increased to $142,416 for the three months ended June
30, 2000 as compared to $114,013 for the same period in 1999, an increase of
$28,403, or 25%. This increase was due to increases in production costs and G&A,
offset by a decline in depletion.
Production costs were $120,113 for the three months ended June 30, 2000 and
$88,188 for the same period in 1999 resulting in a $31,925 increase, or 36%.
This increase was the result of additional workover expenses and well
maintenance costs incurred to stimulate well production and higher production
taxes due to higher oil and gas prices.
During this period, G&A increased, in aggregate, 81% from $4,882 for the three
months ended June 30, 1999 to $8,814 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 $13,489 for the three months ended June 30, 2000 compared to
$20,943 for the same period in 1999, a decrease of $7,454, or 36%. This decrease
was primarily the result of an increase in proved reserves during the period
ended June 30, 2000 due to higher commodity prices, offset by an increase in oil
production of 97 barrels for the three months ended June 30, 2000 compared to
the same period in 1999.
9
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Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased $230,610 during the six
months ended June 30, 2000 from the same period ended June 30, 1999. This
increase was due to an increase in oil and gas sales receipts of $262,174,
offset by increases in operating costs paid of $27,580 and G&A expenses paid of
$3,984.
Net Cash Provided by Investing Activities
The Partnership's investing activities during the six months ended June 30, 2000
were related to upgrades of oil and gas equipment on active properties. During
the period ended June 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 six
months ended June 30, 2000 and 1999, respectively, from equipment credits on one
fully depleted well.
Net Cash Used in Financing Activities
For the six months ended June 30, 2000, cash distributions to the partners were
$305,356, of which $3,054 was distributed to the managing general partner and
$302,302 to the limited partners. For the same period ended June 30, 1999, cash
distributions to the partners were $45,634, of which $456 was distributed to the
managing general partner and $45,178 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: August 8, 2000 By: /s/ Rich Dealy
----------------------------------
Rich Dealy, Vice President and
Chief Accounting Officer
11
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