Mewbourne Energy Partners 10-A 10-Q 14 Nov 17 2017 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information	9 Months Ended
	Sep. 30, 2017
Document And Entity Information
Entity Central Index Key	1,491,262
Entity Registrant Name	Mewbourne Energy Partners 10-A, L.P.
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Entity Filer Category	Smaller Reporting Company
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,017

CONDENSED BALANCE SHEETS (Unaud

CONDENSED BALANCE SHEETS (Unaudited) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
ASSETS
Cash	$ 15,377	$ 7,860
Accounts receivable, affiliate	422,045	430,934
Prepaid state taxes	8,605	5,118
Total current assets	446,027	443,912
Oil and gas properties at cost, full-cost method	69,468,951	69,462,837
Less accumulated depreciation, depletion, amortization and cost ceiling write-downs	(64,125,294)	(63,878,364)
Net oil and gas properties at cost, full-cost method	5,343,657	5,584,473
Total assets	5,789,684	6,028,385
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable, affiliate	104,526	106,813
Total current liabilities	104,526	106,813
Asset retirement obligation	854,946	834,771
Partners' capital	4,830,212	5,086,801
Total liabilities and partners' capital	$ 5,789,684	$ 6,028,385

CONDENSED STATEMENTS OF OPERATI

CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenues:
Oil sales	$ 299,896	$ 284,847	$ 1,048,406	$ 890,598
Gas sales	287,627	258,871	893,501	670,906
Total revenues	587,523	543,718	1,941,907	1,561,504
Expenses:
Lease operating expense	185,463	231,260	616,808	762,352
Production taxes	33,893	30,613	113,862	89,695
Administrative and general expense	32,862	30,937	122,455	121,161
Depreciation, depletion, and amortization	80,431	110,021	260,711	399,715
Cost ceiling write-down				1,617,571
Asset retirement obligation accretion	8,808	8,495	26,497	25,509
Total expenses	341,457	411,326	1,140,333	3,016,003
Net income (loss)	$ 246,066	$ 132,392	$ 801,574	$ (1,454,499)

CONDENSED STATEMENT OF CHANGES

CONDENSED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (Unaudited) - 9 months ended Sep. 30, 2017	Partners' CapitalUSD ($)
Balance, beginning at Dec. 31, 2016	$ 5,086,801
Cash distributions	(1,058,163)
Net income	801,574
Balance, ending at Sep. 30, 2017	$ 4,830,212

CONDENSED STATEMENTS OF CASH FL

CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash flows from operating activities:
Net income (loss)	$ 801,574	$ (1,454,499)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion, and amortization	260,711	399,715
Cost ceiling write-down		1,617,571
Asset retirement obligation accretion	26,497	25,509
Plugging and abandonment cost paid from asset retirement obligation	(15,905)
Changes in operating assets and liabilities:
Accounts receivable, affiliate	8,889	(46,164)
Prepaid state taxes	(3,487)	(15,520)
Accounts payable, affiliate	(2,287)	(3,292)
Net cash provided by operating activities	1,075,992	523,320
Cash flows from investing activities:
Proceeds from sale of oil and gas properties	806	947
Purchase and development of oil and gas properties	(11,118)	(15,402)
Net cash used in investing activities	(10,312)	(14,455)
Cash flows from financing activities:
Cash distributions to partners	(1,058,163)	(526,013)
Net cash used in financing activities	(1,058,163)	(526,013)
Net increase (decrease) in cash	7,517	(17,148)
Cash, beginning of period	7,860	22,038
Cash, end of period	15,377	4,890
Supplemental Cash Flow Information:
Change to net oil & gas properties related to asset retirement obligation liabilities	$ 9,583	$ 1,467

Description of Business

Description of Business	9 Months Ended
	Sep. 30, 2017
Description Of Business
Description of Business	1. Description of Business Mewbourne Energy Partners 10-A, L.P., (the “Registrant” or the “Partnership”), a Delaware limited partnership engaged primarily in oil and gas development and production in Texas, Oklahoma, and New Mexico, was organized on February 9, 2010. The offering of limited and general partner interests began May 1, 2010 as a part of a private placement pursuant to Section 4(2) of the Securities Act of 1933 and Regulation D promulgated thereunder, and concluded August 2, 2010, with total investor contributions of $73,000,000 originally being sold to accredited investors of which $67,820,000 were sold to accredited investors as general partner interests and $5,180,000 were sold to accredited investors as limited partner interests. During 2012, 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, 2017
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Reference is hereby made to the Registrant’s Annual Report on Form 10-K for 2016, 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 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. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, a comprehensive new revenue recognition standard that will supersede nearly all existing revenue recognition guidance. The standard outlines a single comprehensive model for revenue recognition based on the core principle that an entity will recognize revenue when promised goods or services are transferred to clients, in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. We continue to evaluate the impact of the ASU on our accounting policies, internal controls, and financial statements and related disclosures. We only have non-operated working interests in oil and gas wells and receive monthly net revenue checks from the operator of the oil and gas wells in which we have working interests. We have reviewed our partnership, joint operating and marketing agreements as they relate to our non-operated working interests and this ASU. The ASU includes provisions regarding future revenues and expenses under a gross-versus-net presentation as it relates to principal vs agent relationship. We are evaluating the impact, if any, on the presentation of our future revenues and expenses under this gross-versus-net presentation guidance. Based upon our assessments performed to date, we do not expect the ASU to have a material effect on the timing of revenue recognition or our financial position, although our assessment, which we expect to complete during the fourth quarter, is still under evaluation. The standard is required to be adopted using either the full retrospective approach, with all prior periods presented adjusted, or the modified retrospective approach, with a cumulative adjustment to capital on the opening balance sheet. We will adopt the new standard on January 1, 2018, using the modified retrospective approach with a cumulative adjustment to capital as necessary.

Accounting for Oil and Gas Prod

Accounting for Oil and Gas Producing Activities	9 Months Ended
	Sep. 30, 2017
Accounting For Oil And Gas Producing Activities
Accounting for Oil and Gas Producing Activities	3. Accounting for Oil and Gas Producing Activities The Partnership follows the full-cost method of accounting for its oil and gas activities. Under the full-cost method, all productive and non-productive costs incurred in the acquisition, exploration and development of oil and gas properties are capitalized. Depreciation, depletion and amortization of oil and gas properties subject to amortization is computed on the units-of-production method based on the proved reserves underlying the oil and gas properties. At September 30, 2017 and 2016, 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 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 totaling $1,617,571 for the nine months ended September 30, 2016. There were no cost ceiling write-downs for the nine months ended September 30, 2017.

Asset Retirement Obligations

Asset Retirement Obligations	9 Months Ended
	Sep. 30, 2017
Asset Retirement Obligation [Abstract]
Asset Retirement Obligations	4. 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 the time a new well is drilled. Depreciation expense associated with estimated plugging and abandonment costs is recognized in accordance with the full cost methodology. 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, 2017 and the year ended December 31, 2016 is as follows: 2017 2016 Balance, beginning of period $ 834,771 $ 799,280 Liabilities incurred 2,777 2,432 Liabilities reduced due to settlements and plugging and abandonments (9,099 ) (965 ) Accretion expense 26,497 34,024 Balance, end of period $ 854,946 $ 834,771

Related Party Transactions

Related Party Transactions	9 Months Ended
	Sep. 30, 2017
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 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. 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 their portion of these costs based upon their ownership in each well incurring the costs. These costs are referred to as operator charges and are standard and customary in the oil and gas industry. Operator charges include recovery of 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 particular 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 .25% of the capital contributions of limited and general partners. The Partnership participates in oil and 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 % Reporting and legal expenses 100 % 0 % Operating costs, general and administrative expenses (except for reporting and legal 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.

Asset Retirement Obligations (T

Asset Retirement Obligations (Tables)	9 Months Ended
	Sep. 30, 2017
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, 2017 and the year ended December 31, 2016 is as follows: 2017 2016 Balance, beginning of period $ 834,771 $ 799,280 Liabilities incurred 2,777 2,432 Liabilities reduced due to settlements and plugging and abandonments (9,099 ) (965 ) Accretion expense 26,497 34,024 Balance, end of period $ 854,946 $ 834,771

Related Party Transactions (Tab

Related Party Transactions (Tables)	9 Months Ended
	Sep. 30, 2017
Related Party Transactions [Abstract]
Costs and revenues allocated between Partnership and MD	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 % Reporting and legal expenses 100 % 0 % Operating costs, general and administrative expenses (except for reporting and legal 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.

Description of Business (Detail

Description of Business (Details Narrative)	3 Months Ended
	Aug. 02, 2010USD ($)
Description Of Business Details Narrative
Investor contributions, total	$ 73,000,000
General Partners investor contributions	67,820,000
Limited Partners investor contributions	$ 5,180,000

Accounting for Oil and Gas Pr14

Accounting for Oil and Gas Producing Activities (Details Narrative)	9 Months Ended
	Sep. 30, 2017
Accounting For Oil And Gas Producing Activities Details Narrative
Discount rate of future cash flows	10.00%

Asset Retirement Obligations (D

Asset Retirement Obligations (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Partnership's liability for well plugging and abandonment costs
Balance, beginning of period	$ 834,771	$ 799,280
Liabilities incurred	2,777	2,432
Liabilities reduced due to settlements and plugging and abandonments	(9,099)	(965)
Accretion expense	26,497	34,024
Balance, end of period	$ 854,946	$ 834,771

Related Party Transactions (Det

Related Party Transactions (Details Narrative)	9 Months Ended
	Sep. 30, 2017USD ($)
Related Party Transactions [Abstract]
Description of management control	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. 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 particular 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 .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 (D17

Related Party Transactions (Details)	9 Months Ended
	Sep. 30, 2017
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]
Reporting and legal expenses	100.00%
Operating costs, general and administrative expenses (except for reporting and legal 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]
Reporting and legal expenses	0.00%
Operating costs, general and administrative expenses (except for reporting and legal expenses) and all other costs	25.00%
Total capital costs, (percent)	15.00%
[1]	s 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.