Mewbourne Energy Partners 10-A 10-Q 15 May 20 2020 Q1 Quarterly report Financial data

Document And Entity Information

Document And Entity Information	3 Months Ended
	Mar. 31, 2020
Document And Entity Information
Entity Central Index Key	0001491262
Entity Registrant Name	Mewbourne Energy Partners 10-A, L.P.
Document Type	10-Q
Document Period End Date	Mar. 31, 2020
Entity File Number	000-54370
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	Q1
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 ($)	Mar. 31, 2020	Dec. 31, 2019
ASSETS
Cash	$ 11,575	$ 3,822
Accounts receivable, affiliate	279,385	408,429
Prepaid state taxes	6,961	5,221
Total current assets	297,921	417,472
Oil and gas properties at cost, full-cost method	69,547,726	69,539,065
Less accumulated depreciation, depletion, amortization and cost ceiling write-downs	(66,338,989)	(66,281,564)
[us-gaap:OilAndGasPropertyFullCostMethodNet]	3,208,737	3,257,501
Total assets	3,506,658	3,674,973
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable, affiliate	148,534	105,105
Total current liabilities	148,534	105,105
Asset retirement obligation	880,251	869,657
Total liabilities	1,028,785	974,762
Partners' capital	2,477,873	2,700,211
Total liabilities and partners' capital	$ 3,506,658	$ 3,674,973

CONDENSED STATEMENTS OF OPERATI

CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenues:
Total revenues	$ 491,314	$ 758,609
Expenses:
Lease operating expense	238,425	221,307
Production taxes	34,732	54,630
Administrative and general expense	62,074	51,646
Depreciation, depletion, and amortization	57,425	89,714
Asset retirement obligation accretion	9,299	9,617
Total expenses	401,955	426,914
Net income	89,359	331,695
Oil Sales [Member]
Revenues:
Sales	408,418	557,981
Gas Sales [Member]
Revenues:
Sales	$ 82,896	$ 200,628

CONDENSED STATEMENT OF CHANGES

CONDENSED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (Unaudited)	Partners' CapitalUSD ($)
Balance, beginning at Dec. 31, 2018	$ 4,408,717
Cash distributions	(300,651)
Net income	331,695
Balance, ending at Mar. 31, 2019	4,439,761
Balance, beginning at Dec. 31, 2019	2,700,211
Cash distributions	(311,697)
Net income	89,359
Balance, ending at Mar. 31, 2020	$ 2,477,873

CONDENSED STATEMENTS OF CASH FL

CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash flows from operating activities:
Net income	$ 89,359	$ 331,695
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, and amortization	57,425	89,714
Asset retirement obligation accretion	9,299	9,617
Changes in operating assets and liabilities:
Accounts receivable, affiliate	129,044	(162,539)
Prepaid state taxes	(1,740)	(1,675)
Accounts payable, affiliate	43,429	39,759
Net cash provided by operating activities	326,816	306,571
Cash flows from investing activities:
Proceeds from sale of oil and gas properties		561
Development of oil and gas properties	(7,366)	(435)
Net cash (used in) provided by investing activities	(7,366)	126
Cash flows from financing activities:
Cash distributions to partners	(311,697)	(300,651)
Net cash used in financing activities	(311,697)	(300,651)
Net increase in cash	7,753	6,046
Cash, beginning of period	3,822	4,970
Cash, end of period	11,575	11,016
Supplemental Cash Flow Information:
Change to net oil & gas properties related to asset retirement obligation liabilities	$ 1,295
Changes to oil and gas property additions included in accounts payable, affiliate		$ 1,130

Description of Business

Description of Business	3 Months Ended
	Mar. 31, 2020
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. 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	3 Months Ended
	Mar. 31, 2020
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 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 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 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 March 31, 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 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 no cost ceiling write-downs for the three months ended March 31, 2020 or 2019.

Asset Retirement Obligations

Asset Retirement Obligations	3 Months Ended
	Mar. 31, 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 three months ended March 31, 2020 and the year ended December 31, 2019 is as follows: 2020 2019 Balance, beginning of period $ 869,657 $ 901,457 Liabilities incurred 1,295 1,347 Liabilities reduced due to plugging and abandonments and sales of property — (68,748 ) Accretion expense 9,299 35,601 Balance, end of period $ 880,251 $ 869,657

Oil and Gas Sales

Oil and Gas Sales	3 Months Ended
	Mar. 31, 2020
Oil and Gas Exploration and Production Industries Disclosures [Abstract]
Oil and Gas Sales	4. Oil and 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 gas applicable to the Partnership’s interest are recorded as revenue when the gas is metered and title transferred pursuant to the gas sales contracts covering the Partnership’s interest in 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 three months ended March 31, 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 gas wells and receives monthly net revenue checks from the operator of these oil and gas wells. Each unit of oil and 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 gas applicable to the Partnership’s interest are recorded as revenue when the gas is metered and control is transferred pursuant to the gas sales contracts covering the Partnership’s interest in 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	3 Months Ended
	Mar. 31, 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 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 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 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 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 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.

COVID-19 and OPEC

COVID-19 and OPEC	3 Months Ended
	Mar. 31, 2020
COVID-19 and OPEC
COVID-19 and OPEC	6. COVID-19 and OPEC In March 2020, the new strain of coronavirus ("COVID-19") was declared a global pandemic and, as a result, consumer demand decreased due to governments putting in place new travel restrictions in an effort to curtail the spread of the coronavirus. In addition, in March 2020, members of OPEC failed to agree on production levels which resulted in an increased supply. These global situations led to a substantial decrease in oil prices and an increasingly volatile market. In April 2020, even though OPEC announced that it had reached an agreement to cut production by 9.7 million barrels per day, oil prices did not increase. Oil prices decreased to $24.02 per barrel on May 11, 2020, down from $61.14 on December 31, 2019, and gas prices decreased to $1.70 per million British Thermal Units (Btu), down from $2.09 on December 31, 2019. Declines in oil and natural gas prices affect the Partnership's revenues and partner distributions and reduce the amount of oil and natural gas that the Partnership can produce economically. 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, and liquidity in the year 2020. During the current economic downturn, if future lease operating expenses and production taxes are in excess of total revenues from the sale of crude oil and natural gas, the Partnership will be carried by the operator. The Partnership has no planned drilling activity. If oil or natural gas prices remain depressed or continue to decline, the Partnership will be required to record oil and gas property write-downs. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was signed into law, which is aimed at supporting the U.S. economy and providing emergency assistance to individuals, families, and businesses affected by the COVID-19 pandemic. Due to the structure of the Partnership, the CARES Act does not impact the Partnership's business.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2020
Accounting Policies [Abstract]
Full Cost Accounting	Full Cost Accounting 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 March 31, 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 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 no cost ceiling write-downs for the three months ended March 31, 2020 or 2019.

Asset Retirement Obligations (T

Asset Retirement Obligations (Tables)	3 Months Ended
	Mar. 31, 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 three months ended March 31, 2020 and the year ended December 31, 2019 is as follows: 2020 2019 Balance, beginning of period $ 869,657 $ 901,457 Liabilities incurred 1,295 1,347 Liabilities reduced due to plugging and abandonments and sales of property — (68,748 ) Accretion expense 9,299 35,601 Balance, end of period $ 880,251 $ 869,657

Related Party Transactions (Tab

Related Party Transactions (Tables)	3 Months Ended
	Mar. 31, 2020
Related Party Transactions [Abstract]
Costs and revenues allocated between Partnership and MD	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.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Accounting Policies [Abstract]
Discount rate of future cash flows	10.00%
Cost ceiling write-downs	$ 0	$ 0

Asset Retirement Obligations (D

Asset Retirement Obligations (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Partnership's liability for well plugging and abandonment costs
Balance, beginning of period	$ 869,657	$ 901,457
Liabilities incurred	1,295	1,347
Liabilities reduced due to settlements, plugging and abandonments, and sale		(68,748)
Accretion expense	9,299	35,601
Balance, end of period	$ 880,251	$ 869,657

Related Party Transactions (Det

Related Party Transactions (Details Narrative)	3 Months Ended
	Mar. 31, 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)	3 Months Ended
	Mar. 31, 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]
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]	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 and OPEC (Details Narr

COVID-19 and OPEC (Details Narrative)	1 Months Ended
	Apr. 30, 2020MMBoe / d	May 11, 2020$ / Boe$ / MMBTU	Dec. 31, 2019$ / Boe$ / MMBTU
Crude Oil [Member]
Oil or Gas price | $ / Boe			61.14
Gas [Member]
Oil or Gas price | $ / MMBTU			2.09
Subsequent Event [Member]
Reduction in oil production by OPEC agreement, million barrels per day | MMBoe / d	9.7
Subsequent Event [Member] | Crude Oil [Member]
Oil or Gas price | $ / Boe		24.02
Subsequent Event [Member] | Gas [Member]
Oil or Gas price | $ / MMBTU		1.70