UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
/ x / Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 1996
or
/ / Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from _______ to _______
Commission File No. 33-26097-05
PARKER & PARSLEY 90-A, L.P.
(Exact name of Registrant as specified in its charter)
Delaware 75-2329245
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
303 West Wall, Suite 101, Midland, Texas 79701
(Address of principal executive offices) (Zip code)
Registrant's Telephone Number, including area code : (915) 683-4768
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 / /
Page 1 of 10 pages.
-There are no exhibits-
PARKER & PARSLEY 90-A, L.P.
(A Delaware Limited Partnership)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEETS
June 30, December 31,
1996 1995
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents, including interest
bearing deposits of $136,857 at June 30
and $118,538 at December 31 $ 137,057 $ 118,751
Accounts receivable - oil and gas sales 79,074 67,632
---------- ----------
Total current assets 216,131 186,383
Oil and gas properties - at cost, based on the
successful efforts accounting method 5,052,742 5,246,047
Accumulated depletion (3,095,629) (3,154,493)
---------- ----------
Net oil and gas properties 1,957,113 2,091,554
---------- ----------
$ 2,173,244 $ 2,277,937
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliate $ 27,848 $ 41,576
Partners' capital:
Limited partners (6,811 interests) 2,124,031 2,213,917
Managing general partner 21,365 22,444
---------- ----------
2,145,396 2,236,361
---------- ----------
$ 2,173,244 $ 2,277,937
========== ==========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
2
PARKER & PARSLEY 90-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
1996 1995 1996 1995
--------- --------- --------- ---------
Revenues:
Oil and gas sales $ 183,070 $ 168,625 $ 367,716 $ 351,169
Interest income 1,697 1,988 3,114 3,638
-------- -------- -------- --------
Total revenues 184,767 170,613 370,830 354,807
Costs and expenses:
Production costs 72,605 83,360 147,773 171,471
General and administrative
expenses 6,260 4,789 11,799 10,956
Depletion 47,333 98,515 99,108 218,104
Loss on sale of assets 28,704 - 28,704 -
Amortization of organization
costs - 239 - 957
-------- -------- -------- --------
Total costs and expenses 154,902 186,903 287,384 401,488
-------- -------- -------- --------
Net income (loss) $ 29,865 $ (16,290) $ 83,446 $ (46,681)
======== ======== ======== ========
Allocation of net income (loss):
Managing general partner $ 298 $ (160) $ 834 $ (457)
======== ======== ======== ========
Limited partners $ 29,567 $ (16,130) $ 82,612 $ (46,224)
======== ======== ======== ========
Net income (loss) per limited
partnership interest $ 4.34 $ (2.37) $ 12.13 $ (6.79)
======== ======== ======== ========
Distributions per limited
partnership interest $ 13.83 $ 13.38 $ 25.33 $ 26.45
======== ======== ======== ========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
3
PARKER & PARSLEY 90-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
(Unaudited)
Managing
general Limited
partner partners Total
--------- ---------- ----------
Balance at January 1, 1995 $ 32,653 $3,233,970 $3,266,623
Distributions (1,820) (180,162) (181,982)
Net loss (457) (46,224) (46,681)
-------- --------- ---------
Balance at June 30, 1995 $ 30,376 $3,007,584 $3,037,960
======== ========= =========
Balance at January 1, 1996 $ 22,444 $2,213,917 $2,236,361
Distributions (1,913) (172,498) (174,411)
Net income 834 82,612 83,446
-------- --------- ---------
Balance at June 30, 1996 $ 21,365 $2,124,031 $2,145,396
======== ========= =========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
4
PARKER & PARSLEY 90-A, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended
June 30,
1996 1995
---------- ----------
Cash flows from operating activities:
Net income (loss) $ 83,446 $ (46,681)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depletion and amortization 99,108 219,061
Loss on sale of assets 28,704 -
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (11,442) 6,963
Increase (decrease) in accounts payable (13,470) 12,403
--------- ---------
Net cash provided by operating activities 186,346 191,746
Cash flows from investing activities:
Additions to oil and gas properties (457) (4,747)
Proceeds from sale of assets 6,828 -
--------- ---------
Net cash provided by (used in) investing
activities 6,371 (4,747)
Cash flows from financing activities:
Cash distributions to partners (174,411) (181,982)
--------- ---------
Net increase in cash and cash equivalents 18,306 5,017
Cash and cash equivalents at beginning of period 118,751 116,292
--------- ---------
Cash and cash equivalents at end of period $ 137,057 $ 121,309
========= =========
The financial information included herein has been prepared by
management without audit by independent public accountants.
The accompanying notes are an integral part of these financial statements.
5
PARKER & PARSLEY 90-A, L.P.
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
NOTE 1.
Parker & Parsley 90-A, L.P. (the "Registrant") is a limited partnership
organized in 1990 under the laws of the State of Delaware.
The Registrant engages primarily in oil and gas development and production in
the Spraberry Trend area of West Texas and is not involved in any industry
segment other than oil and gas.
NOTE 2.
In the opinion of management, the Registrant's unaudited financial statements as
of June 30, 1996 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. However, these interim results are not
necessarily indicative of results for a full year.
The financial statements should be read in conjunction with the financial
statements and the notes thereto contained in the Registrant's Report on Form
10-K for the year ended December 31, 1995, as filed with the Securities and
Exchange Commission, a copy of which is available upon request by writing to
Steven L. Beal, Senior Vice President, 303 West Wall, Suite 101, Midland, Texas
79701.
NOTE 3.
A loss of $28,704 on sale of assets to Costilla Energy, L.L.C. was recognized
during the six months ended June 30, 1996. This loss was the result of the
write-off of remaining capitalized well costs for one gas well of $35,532, less
proceeds received of $6,828.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (1)
Results of Operations
Six months ended June 30, 1996 compared with six months ended
June 30, 1995
Revenues:
The Registrant's oil and gas revenues increased to $367,716 from $351,169 for
the six months ended June 30, 1996 and 1995, respectively, an increase of 5%.
The increase in revenues resulted from a 14% increase in the average price
received per barrel of oil and a 27% increase in the average price received per
6
mcf of gas, offset by a 10% decline in barrels of oil produced and sold and a
14% decline in mcf of gas produced and sold . For the six months ended June 30,
1996, 12,900 barrels of oil were sold compared to 14,337 for the same period in
1995, a decrease of 1,437 barrels. For the six months ended June 30, 1996,
46,721 mcf of gas were sold compared to 54,512 for the same period in 1995, a
decrease of 7,791 mcf. Of the decrease, 5,332 mcf, or 10%, was attributable to
the sale of one gas well. The remainder of the decrease, 2,459 mcf or 4%, was
due to the decline characteristics of the Registrant's oil and gas properties.
Management expects a certain amount of decline in production to continue in the
future until the Registrant's economically recoverable reserves are fully
depleted.
The average price received per barrel of oil increased $2.55 from $17.61 for the
six months ended June 30, 1995 to $20.16 for the same period ended June 30, 1996
while the average price received per mcf of gas increased from $1.81 during the
six months ended June 30, 1995 to $2.30 for the same period in 1996. 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 Registrant 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, 1996.
Costs and Expenses:
Total costs and expenses decreased to $287,384 for the six months ended June 30,
1996 as compared to $401,488 for the same period in 1996, a decrease of
$114,104, or 28%. This decrease was due to declines in production costs,
depletion and amortization of organization costs, offset by increases in general
and administrative expenses ("G&A") and loss on sale of assets.
Production costs were $147,773 for the six months ended June 30, 1996 and
$171,471 for the same period in 1995 resulting in a $23,698 decrease, or 14%.
The decrease was due to reductions in well repair and maintenance costs.
G&A's components are independent accounting and engineering fees and managing
general partner personnel costs. During this period, G&A increased, in
aggregate, 8% from $10,956 for the six months ended June 30, 1995 to $11,799 for
the same period in 1996.
Depletion was $99,108 for the six months ended June 30, 1996 compared to
$218,104 for the same period in 1995. This represented a decrease in depletion
of $118,996, or 55%, primarily attributable to the adoption of the provision of
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for long-Lived Assets to be Disposed Of"
("FAS 121") effective the fourth quarter of 1995 and the reduction of net
depletable basis resulting from the charge taken upon such adoption. In
addition, $9,660 or 4% of the decrease was attributable to the sale of one gas
well during the six months ended June 30, 1996. Depletion was computed
property-by-property utilizing the unit-of-production method based upon the
dominant mineral produced, generally oil. Oil production decreased 1,437 barrels
for the six months ended June 30, 1996 from the same period in 1995, while oil
reserves of barrels were revised downward by 21,993 barrels, or 6%.
7
A loss on sale of assets of $28,704 was recognized during the six months ended
June 30, 1996. This loss was the result of the write-off of remaining
capitalized well costs for one gas well of $35,532, less proceeds received of
$6,828.
Three months ended June 30, 1996 compared with three months ended
June 30, 1995
Revenues:
The Registrant's oil and gas revenues increased to $183,070 from $168,625 for
the three months ended June 30, 1996 and 1995, respectively, an increase of 9%.
The increase in revenues resulted from a 19% increase in the average price
received per barrel of oil and a 45% increase in the average price received per
mcf of gas, offset by a 10% decline in barrels of oil produced and sold and a
21% decline in mcf of gas produced and sold. For the three months ended June 30,
1996, 6,224 barrels of oil were sold compared to 6,930 for the same period in
1995, a decrease of 706 barrels, due to the decline characteristics of the
Registrant's oil and gas properties. For the three months ended June 30, 1996,
20,828 mcf of gas were sold compared to 26,523 for the same period in 1995, a
decrease of 5,695 mcf. Of the decrease, 3,091 mcf, or 12%, was attributable to
the sale of one gas well. The remainder of the decrease, 2,604 mcf, or 9%, was
due to the decline characteristics of the Registrant's oil and gas properties.
The average price received per barrel of oil increased $3.43 from $18.04 for the
three months ended June 30, 1995 to $21.47 for the same period in 1996 while the
average price received per mcf of gas increased from $1.64 during the three
months ended June 30, 1995 to $2.37 in 1996.
Costs and Expenses:
Total costs and expenses decreased to $154,902 for the three months ended June
30, 1996 as compared to $186,903 for the same period in 1995, a decrease of
$32,001, or 17%. This decrease was due to declines in production costs,
depletion and amortization of organization costs, offset by increases in G&A and
loss on sale of assets.
Production costs were $72,605 for the three months ended June 30, 1996 and
$83,360 for the same period in 1995 resulting in a $10,755 decrease, or 13%. The
decrease was due to reductions in well repair and maintenance costs.
G&A's components are independent accounting and engineering fees, computer
services, postage and managing general partner personnel costs. During this
period, G&A increased, in aggregate, 31% from $4,789 for the three months ended
June 30, 1995 to $6,260 for the same period in 1996.
Depletion was $47,333 for the three months ended June 30, 1996 compared to
$98,515 for the same period in 1995. This represented a decrease in depletion of
$51,182, or 52%, primarily attributable to the adoption of FAS 121 the fourth
quarter of 1995, as discussed previously. In addition, $4,501 or 4% of the
decrease was attributable to the sale of one gas well during the three months
ended June 30, 1996. Oil production decreased 706 barrels for the three months
ended June 30, 1996 from the same period in 1995.
8
A loss on sale of assets of $28,704 was recognized during the three months ended
June 30, 1996. This loss was the result of the write-off of remaining
capitalized well costs for one gas well of $35,532, less proceeds received of
$6,828.
Liquidity and Capital Resources
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased during the six months ended
June 30, 1996 $5,400 from the same period ended June 30, 1995. This decrease was
primarily due to a decline in oil and gas receipts and an increase in production
costs paid.
Net Cash Provided by (Used in) Investing Activities
The Registrant's principal investing activities during the six months ended June
30, 1996 and 1995 were for expenditures related to equipment replacement on
various oil and gas properties.
Proceeds of $6,828 were received from the sale of one gas well during the six
months ended June 30, 1996.
Net Cash Used in Financing Activities
Cash was sufficient for the six months ended June 30, 1996 to cover
distributions to the partners of $174,411 of which $172,498 was distributed to
the limited partners and $1,913 to the managing general partner. For the same
period ended June 30, 1995, cash was sufficient for distributions to the
partners of $181,982 of which $180,162 was distributed to the limited partners
and $1,820 to the managing general partner.
It is expected that future net cash provided by operating activities will be
sufficient for any capital expenditures and any distributions. As the production
from the properties declines, distributions are also expected to decrease.
- ---------------
(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 - none
(b) Form 8-K - none
9
PARKER & PARSLEY 90-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 90-A, L.P.
By: Parker & Parsley Development L.P.,
Managing General Partner
By: Parker & Parsley Petroleum USA, Inc.
("PPUSA"), General Partner
Dated: August 12, 1996 By: /s/ Steven L. Beal
------------------------------------------
Steven L. Beal, Senior Vice President
and Chief Financial Officer of PPUSA
10