Mewbourne Energy Partners 09-a 10-Q 16 Nov 20 2020 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information	9 Months Ended
	Sep. 30, 2020
Document And Entity Information
Entity Central Index Key	0001462103
Entity Registrant Name	MEWBOURNE ENERGY PARTNERS 09-A, L.P.
Document Type	10-Q
Document Period End Date	Sep. 30, 2020
Entity File Number	000-53959
Entity Incorporation, State Code	DE
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2020
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false

CONDENSED BALANCE SHEETS (Unaud

CONDENSED BALANCE SHEETS (Unaudited) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
ASSETS
Cash	$ 2,686	$ 1,678
Accounts receivable, affiliate	177,842	267,307
Prepaid state taxes	2,361	880
Total current assets	182,889	269,865
Oil and gas properties at cost, full-cost method	63,813,317	63,786,044
Less accumulated depreciation, depletion, amortization and costs ceiling write-downs	(61,417,813)	(60,101,424)
[us-gaap:OilAndGasPropertyFullCostMethodNet]	2,395,504	3,684,620
Total assets	2,578,393	3,954,485
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable, affiliate	147,457	71,073
Total current liabilities	147,457	71,073
Asset retirement obligation	1,114,398	1,080,825
Total liabilities	1,261,855	1,151,898
Partners' capital	1,316,538	2,802,587
Total liabilities and partners' capital	$ 2,578,393	$ 3,954,485

CONDENSED STATEMENTS OF OPERATI

CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenues:
Total revenues	$ 286,209	$ 352,104	$ 661,182	$ 1,223,077
Expenses:
Lease operating expense	128,171	179,844	439,366	541,117
Production taxes	19,894	22,358	43,993	76,291
Administrative and general expense	13,540	21,523	80,523	92,327
Depreciation, depletion, and amortization	51,870	56,309	165,679	195,341
Cost ceiling write-downs	299,524		1,150,710
Asset retirement obligation accretion	11,191	7,103	33,573	32,205
Total expenses	524,190	287,137	1,913,844	937,281
Net (loss) income	(237,981)	64,967	(1,252,662)	285,796
Oil Sales [Member]
Revenues:
Sales	178,660	257,353	412,322	811,078
Gas Sales [Member]
Revenues:
Sales	$ 107,549	$ 94,751	$ 248,860	$ 411,999

CONDENSED STATEMENT OF CHANGES

CONDENSED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (Unaudited)	Partners' CapitalUSD ($)
Balance, beginning at Dec. 31, 2018	$ 4,398,759
Cash distributions	(1,851,297)
Net (loss) income	285,796
Balance, ending at Sep. 30, 2019	2,833,258
Balance, beginning at Jun. 30, 2019	3,893,291
Cash distributions	(1,125,000)
Net (loss) income	64,967
Balance, ending at Sep. 30, 2019	2,833,258
Balance, beginning at Dec. 31, 2019	2,802,587
Cash distributions	(233,387)
Net (loss) income	(1,252,662)
Balance, ending at Sep. 30, 2020	1,316,538
Balance, beginning at Jun. 30, 2020	1,574,519
Cash distributions	(20,000)
Net (loss) income	(237,981)
Balance, ending at Sep. 30, 2020	$ 1,316,538

CONDENSED STATEMENTS OF CASH FL

CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Net (loss) income	$ (1,252,662)	$ 285,796
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation, depletion, and amortization	165,679	195,341
Cost ceiling write-downs	1,150,710
Asset retirement obligation accretion	33,573	32,205
Plugging and abandonment cost paid from asset retirement obligation		(3,320)
Changes in operating assets and liabilities:
Accounts receivable, affiliate	89,465	82,502
Prepaid state taxes	(1,481)	(1,860)
Accounts payable, affiliate	76,109	(17,683)
Net cash provided by operating activities	261,393	572,981
Cash flows from investing activities:
Proceeds from sale of oil and gas properties	4,134	1,276,077
Development of oil and gas properties	(31,132)	(11,119)
Net cash (used in) provided by investing activities	(26,998)	1,264,958
Cash flows from financing activities:
Cash distributions to partners	(233,387)	(1,851,297)
Net cash used in financing activities	(233,387)	(1,851,297)
Net increase (decrease) in cash	1,008	(13,358)
Cash, beginning of period	1,678	15,585
Cash, end of period	2,686	2,227
Supplemental Cash Flow Information:
Change to net oil & gas properties related to asset retirement obligation liabilities		(167,385)
Changes to oil and gas property additions included in accounts payable, affiliate	$ 275	$ 30,059

Description of Business

Description of Business	9 Months Ended
	Sep. 30, 2020
Description Of Business
Description of Business	1. Description of Business Mewbourne Energy Partners 09-A, L.P., (the “Registrant” or the “Partnership”), a Delaware limited partnership engaged primarily in oil and natural gas development and production in Texas, Oklahoma, and New Mexico, was organized on February 26, 2009. During 2011, all general partner equity interests were converted to limited partner equity interests. In accordance with the laws of the State of Delaware, Mewbourne Development Corporation (“MD”), a Delaware Corporation, has been appointed as the Partnership's managing general partner. MD has no significant equity interest in the Partnership.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Reference is hereby made to the financial statements within the Registrant’s Annual Report on Form 10-K for 2019, which contains a summary of significant accounting policies followed by the Partnership in the preparation of its financial statements. These policies are also followed in preparing these financial statements within the quarterly report included herein. In the opinion of management, the accompanying unaudited financial statements contain all adjustments of a normal recurring nature necessary to present fairly our financial position, results of operations, cash flows and partners’ capital for the periods presented. The results of operations for the interim periods are not necessarily indicative of the final results expected for the full year. In preparing these financial statements, the Partnership has evaluated subsequent events for potential recognition and disclosure through the date the financial statements were issued. Full Cost Accounting The Partnership follows the full-cost method of accounting for its oil and natural gas activities. Under the full-cost method, all productive and non-productive costs incurred in the acquisition, exploration and development of oil and natural gas properties are capitalized. Depreciation, depletion and amortization of oil and natural gas properties subject to amortization is computed on the units-of-production method based on the proved reserves underlying the oil and natural gas properties. At September 30, 2020 and 2019, all capitalized costs were subject to amortization. Proceeds from the sale or other disposition of properties are credited to the full cost pool. Gains and losses are not recognized unless such adjustments would significantly alter the relationship between capitalized costs and the proved oil and natural gas reserves. Capitalized costs are subject to a quarterly ceiling test that limits such costs to the aggregate of the present value of estimated future net cash flows of proved reserves, computed using the 12-month unweighted average of first-day-of-the-month oil and natural gas prices, discounted at 10%, and the lower of cost or fair value of unproved properties. If unamortized costs capitalized exceed the ceiling, the excess is charged to expense in the period the excess occurs. There were cost ceiling write-downs of $299,524 and $1,150,710 for the three and nine months ended September 30, 2020, respectively.

Asset Retirement Obligations

Asset Retirement Obligations	9 Months Ended
	Sep. 30, 2020
Asset Retirement Obligation Disclosure [Abstract]
Asset Retirement Obligations	3. Asset Retirement Obligations The Partnership has recognized an estimated asset retirement obligation liability (“ARO”) for future plugging and abandonment costs. A liability for the estimated fair value of the future plugging and abandonment costs is recorded with a corresponding increase in the full cost pool at t The Partnership estimates a liability for plugging and abandonment costs based on historical experience and estimated well life. The liability is discounted using the credit-adjusted risk-free rate. Revisions to the liability could occur due to changes in well plugging and abandonment costs or well useful lives, or if federal or state regulators enact new well restoration requirements. The Partnership recognizes accretion expense in connection with the discounted liability over the remaining life of the well. A reconciliation of the Partnership’s liability for well plugging and abandonment costs for the nine months ended September 30, 2020 and the year ended December 31, 2019 is as follows: 2020 2019 Balance, beginning of period $ 1,080,825 $ 1,208,590 Liabilities reduced due to plugging and abandonments and sales of property — (170,705 ) Accretion expense 33,573 42,940 Balance, end of period $ 1,114,398 $ 1,080,825

Oil and Gas Sales

Oil and Gas Sales	9 Months Ended
	Sep. 30, 2020
Oil and Gas Exploration and Production Industries Disclosures [Abstract]
Oil and Gas Sales	4. Oil and Natural Gas Sales The Partnership’s oil and condensate production is sold and revenue recognized at or near the Partnership’s wells under short-term purchase contracts at prevailing prices in accordance with arrangements which are customary in the oil industry. Sales of natural gas applicable to the Partnership's interest are recorded as revenue when the natural gas is metered and title transferred pursuant to the natural gas sales contracts covering the Partnership's interest in natural gas reserves. Substantially all the Partnership's accounts receivable result from oil and natural gas sales by Mewbourne Oil Company (MOC) to third parties in the oil and natural gas industry. This concentration of customers may impact the Partnership's overall credit risk in that these entities may be similarly affected by changes in economic and other conditions. Historically, the Partnership has not experienced significant credit losses on such receivables. No bad debt expense was recorded for the nine months ended September 30, 2020 or 2019. The Partnership cannot ensure that such losses will not occur in the future. The Partnership has only non-operated working interests in oil and natural gas wells and receives monthly net revenue checks from the operator of these oil and natural gas wells. Each unit of oil and natural gas is accounted for as a separate performance obligation. It recognizes revenue for oil and condensate when control transfers to the purchaser at a contractually specified delivery point at or near the wellhead at market prices in accordance with the contractual arrangement. Sales of natural gas applicable to the Partnership's interest are recorded as revenue when the natural gas is metered and control is transferred pursuant to the natural gas sales contracts covering the Partnership's interest in natural gas reserves. Disaggregation of Revenue The Partnership has identified two material revenue streams in its business: oil sales and natural gas sales. Revenue attributable to each of the Partnership’s identified revenue streams is disaggregated in the Statements of Operations. Principal versus agent In the case of the non-operating agreements, the operator is responsible for providing the goods due to its contractual obligations with the purchaser. Based on the joint operating and marketing agreement arrangements between the Partnership and operator, the Partnership does not take title to the product prior to the operator’s ultimate sale to a customer. The operator is responsible for fulfilling promises to provide specified goods and remitting proceeds back to the Partnership for the Partnership’s proportionate share of the total product sold. Accounts Receivable, affiliate Under the Partnership’s joint operating and marketing agreements, the Partnership is entitled to consideration as production occurs at the wellhead and the value of such consideration is an estimate. Final amounts are only determined upon sale by the operator to the ultimate third-party customer, and recorded in “Accounts receivable, affiliate” in its balance sheet.

Related Party Transactions

Related Party Transactions	9 Months Ended
	Sep. 30, 2020
Related Party Transactions [Abstract]
Related Party Transactions	5. Related Party Transactions In accordance with the laws of the State of Delaware, MD has been appointed as the Partnership’s managing general partner. MD has no significant equity interest in the Partnership. Mewbourne Oil Company (“MOC”) is operator of oil and natural gas properties owned by the Partnership. Mewbourne Holdings, Inc. is the parent of both MD and MOC. Substantially all transactions are with MD and MOC. The Partnership participates in oil and natural gas activities through a Drilling Program Agreement (the “Program”). In the ordinary course of business, MOC will incur certain costs that will be passed on to owners of the well for which the costs were incurred. The Partnership will receive its portion of these costs based upon its ownership in each well incurring the costs. These costs are referred to as operator charges and are standard and customary in the oil and natural gas industry. Operator charges include recovery of natural gas marketing costs, fixed rate overhead, supervision, pumping, and equipment furnished by the operator, some of which will be included in the full cost pool pursuant to Rule 4-10(c)(2) of Regulation S-X. Services and operator charges are billed in accordance with the Program and Partnership agreements. In accordance with the Partnership agreement, during any calendar year the total amount of administrative expenses allocated to the Partnership by MOC shall not exceed the greater of (a) 3.5% of the Partnership’s gross revenue from the sale of oil and natural gas production during each year (calculated without any deduction for operating costs or other costs and expenses) or (b) the sum of $50,000 plus 0.25% of the capital contributions of limited and general partners. The Partnership participates in oil and natural gas activities through the Program. The Partnership and MD are the parties to the Program, and the costs and revenues are allocated between them as follows: Partnership MD (1) Revenues: Proceeds from disposition of depreciable and depletable properties 75 % 25 % All other revenues 75 % 25 % Costs and expenses: Organization and offering costs (1) 0 % 100 % Lease acquisition costs (1) 0 % 100 % Tangible and intangible drilling costs (1) 100 % 0 % Operating costs, reporting and legal expenses, general and administrative expenses and all other costs 75 % 25 % (1) As noted above, pursuant to the Program, MD must contribute 100% of organization and offering costs and lease acquisition costs which should approximate 15% of total capital costs. To the extent that organization and offering costs and lease acquisition costs are less than 15% of total capital costs, MD is responsible for tangible drilling costs until its share of the Program’s total capital costs reaches approximately 15%. The Partnership’s financial statements reflect its respective proportionate interest in the Program.

COVID-19

COVID-19	9 Months Ended
	Sep. 30, 2020
Unusual or Infrequent Items, or Both [Abstract]
COVID-19	6. COVID-19 In March 2020, the new strain of coronavirus (“COVID-19”) was declared a global pandemic and, as a result, consumer demand of oil decreased due to governments putting in place new travel restrictions to try to curtail the spread of the coronavirus. Also, increases in oil production by Russia and the Organization of Petroleum Exporting Countries (“OPEC”), particularly Saudi Arabia, caused an increase in supply. These led to a substantial decrease in oil prices and an increasingly volatile market. Declines in oil and natural gas prices affect the Partnership’s revenues and reduce the amount of oil and natural gas that the Partnership can produce economically. During the nine months ended September 30, 2020, this resulted in declines in production due to temporary production shut-ins from certain of the Partnership’s non-operated oil and natural gas properties. These revenue and production declines resulted in limited cash resources, negative working capital, and the Partnership being carried by the operator as of June 30, 2020. Consequently, as of June 30, 2020, there was substantial doubt about the Partnership’s ability to continue as a going concern. During the three months ended September 30, 2020, the shut-in wells resumed normal production and oil and natural gas prices have increased from the prior period and remained stable in the current period, resulting in positive working capital and the Partnership no longer being carried by the operator as of September 30, 2020. Consequently, there is no longer substantial doubt about the Partnership’s ability to continue as a going concern. The Partnership has no planned drilling activity. If oil or natural gas prices remain depressed or decline, the Partnership may be required to record oil and natural gas property write-downs and strain its liquidity. Management is actively monitoring the global situation and the impact on the Partnership’s financial condition, liquidity, operations, industry, and workforce. Although the Partnership cannot estimate the length or gravity of the impacts of these events at this time, if the pandemic and/or decreased oil prices continue, they will have a material adverse effect on the Partnership’s results of future operations, financial position, liquidity, and partner distributions.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
Full Cost Accounting	Full Cost Accounting The Partnership follows the full-cost method of accounting for its oil and natural gas activities. Under the full-cost method, all productive and non-productive costs incurred in the acquisition, exploration and development of oil and natural gas properties are capitalized. Depreciation, depletion and amortization of oil and natural gas properties subject to amortization is computed on the units-of-production method based on the proved reserves underlying the oil and natural gas properties. At September 30, 2020 and 2019, all capitalized costs were subject to amortization. Proceeds from the sale or other disposition of properties are credited to the full cost pool. Gains and losses are not recognized unless such adjustments would significantly alter the relationship between capitalized costs and the proved oil and natural gas reserves. Capitalized costs are subject to a quarterly ceiling test that limits such costs to the aggregate of the present value of estimated future net cash flows of proved reserves, computed using the 12-month unweighted average of first-day-of-the-month oil and natural gas prices, discounted at 10%, and the lower of cost or fair value of unproved properties. If unamortized costs capitalized exceed the ceiling, the excess is charged to expense in the period the excess occurs. There were cost ceiling write-downs of $299,524 and $1,150,710 for the three and nine months ended September 30, 2020, respectively.

Asset Retirement Obligations (T

Asset Retirement Obligations (Tables)	9 Months Ended
	Sep. 30, 2020
Asset Retirement Obligation [Abstract]
A reconciliation of the Partnership's liability for well plugging and abandonment costs	A reconciliation of the Partnership’s liability for well plugging and abandonment costs for the nine months ended September 30, 2020 and the year ended December 31, 2019 is as follows: 2020 2019 Balance, beginning of period $ 1,080,825 $ 1,208,590 Liabilities reduced due to plugging and abandonments and sales of property — (170,705 ) Accretion expense 33,573 42,940 Balance, end of period $ 1,114,398 $ 1,080,825

Related Party Transactions (Tab

Related Party Transactions (Tables)	9 Months Ended
	Sep. 30, 2020
Related Party Transactions [Abstract]
Costs and revenues allocated between Partnership and MD	The Partnership participates in oil and natural gas activities through the Program. The Partnership and MD are the parties to the Program, and the costs and revenues are allocated between them as follows: Partnership MD (1) Revenues: Proceeds from disposition of depreciable and depletable properties 75 % 25 % All other revenues 75 % 25 % Costs and expenses: Organization and offering costs (1) 0 % 100 % Lease acquisition costs (1) 0 % 100 % Tangible and intangible drilling costs (1) 100 % 0 % Operating costs, reporting and legal expenses, general and administrative expenses and all other costs 75 % 25 % (1) As noted above, pursuant to the Program, MD must contribute 100% of organization and offering costs and lease acquisition costs which should approximate 15% of total capital costs. To the extent that organization and offering costs and lease acquisition costs are less than 15% of total capital costs, MD is responsible for tangible drilling costs until its share of the Program’s total capital costs reaches approximately 15%. The Partnership’s financial statements reflect its respective proportionate interest in the Program.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2020
Accounting Policies [Abstract]
Discount rate of future cash flows		10.00%
Cost ceiling write-downs	$ 299,524	$ 1,150,710

Asset Retirement Obligations (D

Asset Retirement Obligations (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Partnership's liability for well plugging and abandonment costs
Balance, beginning of period	$ 1,080,825	$ 1,208,590
Liabilities reduced due to plugging and abandonments and sales of property		(170,705)
Accretion expense	33,573	42,940
Balance, end of period	$ 1,114,398	$ 1,080,825

Related Party Transactions (Det

Related Party Transactions (Details Narrative)	9 Months Ended
	Sep. 30, 2020USD ($)
Related Party Transactions [Abstract]
Description of management control	In accordance with the laws of the State of Delaware, MD has been appointed as the Partnership's managing general partner. MD has no significant equity interest in the Partnership. Mewbourne Oil Company ("MOC") is operator of oil and gas properties owned by the Partnership. Mewbourne Holdings, Inc. is the parent of both MD and MOC. Substantially all transactions are with MD and MOC.
Description of allocated administrative expenses	In accordance with the Partnership agreement, during any calendar year the total amount of administrative expenses allocated to the Partnership by MOC shall not exceed the greater of (a) 3.5% of the Partnership's gross revenue from the sale of oil and natural gas production during each year (calculated without any deduction for operating costs or other costs and expenses) or (b) the sum of $50,000 plus 0.25% of the capital contributions of limited and general partners.
Percentage of Partnership's gross revenue from sale of oil and gas	3.50%
Amount of administrative fees allocated	$ 50,000
Percentage of capital contributions of limited and general partners	0.25%

Related Party Transactions (D_2

Related Party Transactions (Details)	9 Months Ended
	Sep. 30, 2020
Revenues:
Proceeds from disposition of depreciable and depletable properties	75.00%
All other revenues	75.00%
Costs and expenses:
Organization and offering costs	0.00%	[1]
Lease acquisition costs	0.00%	[1]
Tangible and intangible drilling costs	100.00%	[1]
Operating costs, reporting and legal expenses, general and administrative expenses and all other costs	75.00%
Mewbourne Development Corporation [Member]
Revenues:
Proceeds from disposition of depreciable and depletable properties	25.00%
All other revenues	25.00%
Costs and expenses:
Organization and offering costs	100.00%	[1]
Lease acquisition costs	100.00%	[1]
Tangible and intangible drilling costs	0.00%	[1]
Operating costs, reporting and legal expenses, general and administrative expenses and all other costs	25.00%
Total capital costs, (percent)	15.00%
[1]	As noted above, pursuant to the Program, MD must contribute 100% of organization and offering costs and lease acquisition costs which should approximate 15% of total capital costs. To the extent that organization and offering costs and lease acquisition costs are less than 15% of total capital costs, MD is responsible for tangible drilling costs until its share of the Program’s total capital costs reaches approximately 15%. The Partnership’s financial statements reflect its respective proportionate interest in the Program.