10-Q 1 s91a0l.txt P&P 91A 9/30/01 10-Q 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 September 30, 2001 Commission File No. 33-38582-01 PARKER & PARSLEY 91-A, L.P. ----------------------------- (Exact name of Registrant as specified in its charter) Delaware 75-2387572 ----------------------------------------- ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 5205 N. O'Connor Blvd., Suite 1400, Irving, Texas 75039 ------------------------------------------------- ------------ (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 / / PARKER & PARSLEY 91-A, L.P. TABLE OF CONTENTS Page Part I. Financial Information Item 1. Financial Statements Balance Sheets as of September 30, 2001 and December 31, 2000........................................ 3 Statements of Operations for the three and nine months ended September 30, 2001 and 2000.................. 4 Statement of Partners' Capital for the nine months ended September 30, 2001.................................. 5 Statements of Cash Flows for the nine months ended September 30, 2001 and 2000............................... 6 Notes to Financial Statements............................... 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations....................... 8 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K............................ 11 Signatures.................................................. 12 2 PARKER & PARSLEY 91-A, L.P. (A Delaware Limited Partnership) Part 1. Financial Information Item 1. Financial Statements BALANCE SHEETS September 30, December 31, 2001 2000 ------------ ----------- (Unaudited) ASSETS Current assets: Cash $ 485,377 $ 219,827 Accounts receivable - oil and gas sales 159,572 255,270 ---------- ---------- Total current assets 644,949 475,097 ---------- ---------- Oil and gas properties - at cost, based on the successful efforts accounting method 9,717,616 9,710,132 Accumulated depletion (7,827,996) (7,727,573) ---------- ---------- Net oil and gas properties 1,889,620 1,982,559 ---------- ---------- $ 2,534,569 $ 2,457,656 ========== ========== LIABILITIES AND PARTNERS' CAPITAL Current liabilities: Accounts payable - affiliate $ 82,277 $ 32,513 Partners' capital: Managing general partner 24,567 24,295 Limited partners (11,620 interests) 2,427,725 2,400,848 ---------- ---------- 2,452,292 2,425,143 ---------- ---------- $ 2,534,569 $ 2,457,656 ========== ==========

The financial information included as of September 30, 2001 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 PARKER & PARSLEY 91-A, L.P. (A Delaware Limited Partnership) STATEMENTS OF OPERATIONS (Unaudited) Three months ended Nine months ended September 30, September 30, ------------------------- ------------------------ 2001 2000 2001 2000 ---------- ---------- ---------- ---------- Revenues: Oil and gas $ 365,972 $ 511,495 $1,250,138 $1,389,696 Interest 2,856 5,114 9,910 12,766 --------- --------- --------- --------- 368,828 516,609 1,260,048 1,402,462 --------- --------- --------- --------- Costs and expenses: Oil and gas production 143,757 145,610 457,405 454,327 General and administrative 12,580 21,669 44,745 53,767 Depletion 37,575 31,705 100,423 110,745 --------- --------- --------- --------- 193,912 198,984 602,573 618,839 --------- --------- --------- --------- Net income $ 174,916 $ 317,625 $ 657,475 $ 783,623 ========= ========= ========= ========= Allocation of net income: Managing general partner $ 1,749 $ 3,176 $ 6,575 $ 7,836 ========= ========= ========= ========= Limited partners $ 173,167 $ 314,449 $ 650,900 $ 775,787 ========= ========= ========= ========= Net income per limited partnership interest $ 14.91 $ 27.06 $ 56.02 $ 66.76 ========= ========= ========= =========

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 PARKER & PARSLEY 91-A, L.P. (A Delaware Limited Partnership) NOTES TO FINANCIAL STATEMENTS September 30, 2001 (Unaudited) Note 1. Organization and nature of organization Parker & Parsley 91-A, L.P. (the "Partnership") is a limited partnership organized in 1991 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 September 30, 2001 and for the three and nine months ended September 30, 2001 and 2000 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 September 30, 2000 financial statements to conform to the September 30, 2001 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, 2000, 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, Suite 1400, Irving, Texas 75039-3746. Note 3. Proposal to acquire Partnership On October 22, 2001, Pioneer Natural Resources Company ("Pioneer") mailed materials to the limited partners of the Partnership soliciting their approval of an agreement and plan of merger among Pioneer, Pioneer Natural Resources USA, Inc. ("Pioneer USA"), a wholly-owned subsidiary of Pioneer, and the Partnership. Pioneer has valued the Partnership interest at $4,730,736 of which $4,665,291 is attributable to the limited partners, excluding Pioneer USA in its capacity as a general partner or a limited partner. If two-thirds of the limited partners approve the transaction, each limited partner will receive their proportionate share of the value in the form of Pioneer common stock. 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (1) Results of Operations Nine months ended September 30, 2001 compared with nine months ended September 30, 2000 Revenues: The Partnership's oil and gas revenues decreased 10% to $1,250,138 for the nine months ended September 30, 2001 as compared to $1,389,696 for the same period in 2000. The decrease in revenues resulted from a decline in production and lower average prices received for oil and natural gas liquids ("NGLs"), offset by higher average prices received for gas. For the nine months ended September 30, 2001, 30,122 barrels of oil, 8,255 barrels of NGLs and 78,636 mcf of gas were sold, or 51,483 barrel of oil equivalents ("BOEs"). For the nine months ended September 30, 2000, 33,643 barrels of oil, 15,741 barrels of NGLs and 72,334 mcf of gas were sold, or 61,440 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. The average price received per barrel of oil decreased $1.95, or 7%, from $28.90 for the nine months ended September 30, 2000 to $26.95 for the same period in 2001. The average price received per barrel of NGLs decreased $3.57, or 25%, from $14.33 during the nine months ended September 30, 2000 to $10.76 for the same period in 2001. The average price received per mcf of gas increased 68% from $2.65 during the nine months ended September 30, 2000 to $4.45 for the same period in 2001. 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 nine months ended September 30, 2001. Costs and Expenses: Total costs and expenses decreased to $602,573 for the nine months ended September 30, 2001 as compared to $618,839 for the same period in 2000, a decrease of $16,266, or 3%. This decrease was due to declines in depletion and general and administrative expenses ("G&A"), offset by an increase in production costs. Production costs were $457,405 for the nine months ended September 30, 2001 and $454,327 for the same period in 2000, resulting in a $3,078 increase, or 1%. This increase was primarily due to higher ad valorem taxes, offset by a decline in production taxes. G&A components are independent accounting and engineering fees and managing general partner personnel and operating costs. During this period, G&A decreased 17% from $53,767 for the nine months ended September 30, 2000 to $44,745 for the same period in 2001 primarily due to a lower percentage of the managing general partner's G&A being allocated (limited to 3% of oil and gas revenues) as a result of decreased oil and gas revenues. 8 Depletion was $100,423 for the nine months ended September 30, 2001 as compared to $110,745 for the same period in 2000, representing a decrease of $10,322, or 9%. This decrease was primarily due to a reduction in the Partnership's net depletable basis from charges taken in accordance with Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long- Lived Assets and for Long-Lived Assets to be Disposed Of" ("SFAS 121") during the fourth quarter of 2000 and a decline in oil production of 3,521 barrels for the nine months ended September 30, 2001 as compared to the same period in 2000. Three months ended September 30, 2001 compared with three months ended September 30, 2000 Revenues: The Partnership's oil and gas revenues decreased 28% to $365,972 for the three months ended September 30, 2001 as compared to $511,495 for the same period in 2000. The decrease in revenues resulted from a decline in production and lower average prices received. For the three months ended September 30, 2001, 10,359 barrels of oil, 3,069 barrels of NGLs and 26,409 mcf of gas were sold, or 17,830 BOEs. For the three months ended September 30, 2000, 11,160 barrels of oil, 5,343 barrels of NGLs and 25,051 mcf of gas were sold, or 20,678 BOEs. Due to the decline characteristics of the Partnership's oil and gas properties, management expects a certain amount of decline in production in the future until the Partnership's economically recoverable reserves are fully depleted. The average price received per barrel of oil decreased $4.95, or 16%, from $31.00 for the three months ended September 30, 2000 to $26.05 for the same period in 2001. The average price received per barrel of NGLs decreased $6.59, or 44%, from $15.09 during the three months ended September 30, 2000 to $8.50 in 2001. The average price received per mcf of gas decreased 22% from $3.39 during the three months ended September 30, 2000 to $2.65 for the same period in 2001. Costs and Expenses: Total costs and expenses decreased to $193,912 for the three months ended September 30, 2001 as compared to $198,984 for the same period in 2000, a decrease of $5,072, or 3%. This decrease was due to declines in G&A and production costs, offset by an increase in depletion. Production costs were $143,757 for the three months ended September 30, 2001 and $145,610 for the same period in 2000, resulting in a $1,853 decrease, or 1%. This decrease was primarily due to lower well maintenance costs and production taxes, offset by higher ad valorem taxes. During this period, G&A decreased 42% from $21,669 for the three months ended September 30, 2000 to $12,580 for the same period in 2001, primarily due to a lower percentage of the managing general partner's G&A being allocated (limited to 3% of oil and gas revenues) as a result of decreased oil and gas revenues. Depletion was $37,575 for the three months ended September 30, 2001 as compared to $31,705 for the same period in 2000, representing an increase of $5,870, or 19%. This increase was attributable to a decrease in proved reserves during the period ended September 30, 2001 as a result of lower commodity prices as 9 compared to the same period in 2000, offset by a reduction in the Partnership's net depletable basis from charges taken in accordance with SFAS 121 during the fourth quarter of 2000 and a decrease in oil production of 801 barrels for the three months ended September 30, 2001 as compared to the same period in 2000. Liquidity and Capital Resources Net Cash Provided by Operating Activities Net cash provided by operating activities increased $73,746 during the nine months ended September 30, 2001 from the same period ended September 30, 2000. This increase was the result of a reduction in working capital of $210,216 and a decrease of $9,022 in G&A costs, offset by a decrease in oil and gas sales receipts of $142,414 and an increase in production costs of $3,078. The decrease in oil and gas receipts resulted from the decrease in production of $147,382 during 2001 as compared to the same period in 2000 and a decrease in oil and NGL prices of $124,676, offset by an increase in gas prices of $129,644. The increase in production costs was primarily due to increased ad valorem taxes, offset by lower production taxes. The decrease in G&A was primarily due to a lower percentage of the managing general partner's G&A being allocated (limited to 3% of oil and gas revenues) as a result of decreased oil and gas revenue. Net Cash Used in Investing Activities The Partnership's investing activities during the nine months ended September 30, 2001 and 2000 included expenditures related to equipment upgrades on various oil and gas properties. Proceeds from asset dispositions of $8,812 were from the disposition of oil and gas equipment during the nine months ended September 30, 2000. Net Cash Used in Financing Activities For the nine months ended September 30, 2001, cash distributions to the partners were $630,326, of which $6,303 was distributed to the managing general partner and $624,023 to the limited partners. For the same period ended September 30, 2000, cash distributions to the partners were $821,399, of which $8,214 was distributed to the managing general partner and $813,185 to the limited partners. During 2001, the Partnership made distributions in March and July but no distributions were made by the Partnership during September pending the vote of the proposed merger of the Partnership into Pioneer Natural Resources USA, Inc. ("Pioneer USA"). For further information, see "Proposal to acquire partnerships" below. Proposal to acquire partnerships On October 22, 2001, Pioneer Natural Resources Company ("Pioneer") mailed definitive materials (the "proxy statement/prospectus") to solicit the approval of limited partners of 46 Parker & Parsley limited partnerships, including the Partnership, of an agreement and plan of merger among Pioneer, Pioneer USA, a wholly-owned subsidiary of Pioneer, and those limited partnerships. The special 10 meetings of the limited partners to consider and vote on the merger proposal are scheduled for December 20, 2001. The record date to identify the limited partners who are entitled to notice of and to vote at the special meetings was September 21, 2001. Each partnership that approves the agreement and plan of merger and the other related merger proposals will merge with and into Pioneer USA. As a result, the partnership interests of those partnerships will be converted into the right to receive Pioneer common stock. The proxy statement/prospectus is non-binding and is subject to, among other things, consideration of offers from third parties to purchase any partnership or its assets and the two-thirds approval of the limited partnership interests in each partnership. A copy of the proxy statement/prospectus may be obtained without charge upon request from Pioneer Natural Resources Company, 5205 North O'Connor Blvd., Suite 1400, Irving, Texas 75039, Attention: Investor Relations. The limited partners are urged to read the proxy statement/prospectus of Pioneer filed with the Securities and Exchange Commission because it contains important information about the proposed mergers, including information about the direct and indirect interests of Pioneer USA and Pioneer in the mergers. The limited partners may also obtain the final proxy statement/prospectus and other relevant documents relating to the proposed mergers free through the internet web site that the Securities and Exchange Commission maintains at www.sec.gov. --------------- (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 (b) Reports on Form 8-K - none 11 PARKER & PARSLEY 91-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 91-A, L.P. By: Pioneer Natural Resources USA, Inc., Managing General Partner Dated: November 7, 2001 By: /s/ Rich Dealy ----------------------------------- Rich Dealy, Vice President and Chief Accounting Officer 12

PARKER & PARSLEY 91-A LP 10-Q