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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, 2002
or
[ ] TRANSITION REPORT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 333-57156
MEWBOURNE ENERGY PARTNERS 01-A, L.P.
Delaware 75-2926279
- ------------------------- ------------------
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3901 South Broadway, Tyler, Texas 75701
- -------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code:(903) 561-2900
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. [X] Yes [ ] No
1
MEWBOURNE ENERGY PARTNERS 01-A, L. P.
INDEX
Part I - Financial Information Page No.
Item 1. Financial Statements
Balance Sheets - 3
June 30, 2002 and December 31, 2001
Statements of Income (Loss) - 4
For the three months ended June 30, 2002 and 2001,
the six months ended June 30, 2002 and
the period from February 23, 2001 (date of inception)
through June 30, 2001
Statements of Cash Flows - 5
For the six months ended June 30, 2002 and
the period from February 23, 2001 (date of inception)
through June 30, 2001
Statement of Changes In Partners' Capital - 6
For the six months ended June 30, 2002
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Part II-Other Information
Item 1. Legal Proceedings 10
Item 6. Exhibits and Reports on Form 8-K 10
2
MEWBOURNE ENERGY PARTNERS 01-A, L. P.
Part I - Financial Information
Item 1. Financial Statements
BALANCE SHEETS
June 30, 2002 and December 31, 2001
June 30, December 31,
2002 2001
---------- -----------
(Unaudited)
ASSETS
Cash and cash equivalents $ 1,860,253 $ 4,976,657
----------- -----------
Prepaid well cost 0 59,719
----------- -----------
Accounts receivable, affiliate 704,698 128,812
----------- -----------
Oil and gas properties at cost,
full cost method 13,386,051 10,049,549
Less accumulated depreciation,
depletion and amortization (5,106,464) (2,231,065)
----------- -----------
8,279,587 7,818,484
----------- -----------
Total assets $10,844,538 $12,983,672
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable, affiliate $ 239,013 $ 10,754
----------- -----------
Partners' capital
General partners 9,554,158 11,686,869
Limited partners 1,051,367 1,286,049
----------- ----------
Total partners' capital 10,605,525 12,972,918
----------- ----------
Total liabilities and partners' capital $10,844,538 $12,983,672
=========== ===========
The accompanying notes are an integral
part of the financial statements.
3
MEWBOURNE ENERGY PARTNERS 01-A, L. P.
STATEMENTS OF INCOME (LOSS)
For the three months ended
June 30, 2002 and 2001,
the six months ended June 30, 2002 and
the period from February 23, 2001 (date of inception)
through June 30, 2001
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
2002 2001 2002 2001
------- ------ ------ -----
Revenues:
Oil and gas sales $1,141,537 $ 0 $1,528,443 $ 0
Interest income 9,729 0 29,309 0
---------- ----- ---------- ----
1,151,266 0 1,557,752 0
---------- ----- ---------- ----
Expenses:
Lease operating expense 68,731 0 119,380 0
Production taxes 90,638 0 122,074 0
Administrative and general expense 19,032 0 28,291 0
Depreciation, depletion and amortization 420,507 0 722,709 0
Cost ceiling write-down 0 0 2,152,691 0
--------- ---- --------- ----
598,908 0 3,145,145 0
--------- ---- --------- ----
Net income (loss) $ 552,358 $ 0 $(1,587,393) $ 0
========== ===== ============ =====
Allocation of net income (loss):
General partners $ 497,602 $ 0 $(1,430,033) $ 0
========== ===== ============ =====
Limited partners $ 54,756 $ 0 $ (157,360) $ 0
========== ===== ============ =====
Basic and diluted net income (loss)per limited and
general partner interest (15,000 outstanding) $ 36.82 $ 0 $ (105.83) $ 0
========== ===== ============ =====
The accompanying notes are an integral
part of the financial statements.
4
MEWBOURNE ENERGY PARTNERS 01-A, L. P.
STATEMENTS OF CASH FLOWS
For the six months ended June 30, 2002 and
the period from February 23, 2001 (date of inception)
through June 30, 2001
(Unaudited)
2002 2001
------ ------
Cash flows from financing activities:
Net loss $(1,587,393) $ 0
Adjustment to reconcile net loss to net cash
provided by operating activities:
Depreciation depletion and amortization 722,709 0
Cost ceiling write-down 2,152,691 0
Changes in operating assets and liabilities:
Accounts receivables, affiliate (575,886) 0
Accounts payable, affiliate 228,259 0
--------- -------
Net cash provided by operating activities 940,380 0
--------- -------
Cash flows from investing activities:
Purchase of oil and gas properties (3,276,784) 0
----------- -------
Net cash used in investing activities (3,276,784) 0
----------- -------
Cash flows from financing activities:
Cash distributions to partners (780,000) 0
----------- -------
Net cash used in financing activities (780,000) 0
----------- -------
Net decrease in cash (3,116,404) 0
Cash and cash equivalents, beginning of period 4,976,657 0
---------- -------
Cash and cash equivalents, end of period $1,860,253 $ 0
========== =======
The accompanying notes are an integral
part of the financial statements.
5
MEWBOURNE ENERGY PARTNERS 01-A, L. P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
For the six months ended June 30,2002
(Unaudited)
General Limited
Partners Partners Total
---------- ---------- ---------
Balance at December 31, 2001 $11,686,869 $1,286,049 $12,972,918
Cash distributions (702,678) (77,322) (780,000)
Net loss (1,430,033) (157,360) (1,587,393)
----------- ---------- -----------
Balance at June 30, 2002 $ 9,554,158 $1,051,367 $10,605,525
=========== ========== ===========
The accompanying notes are an integral
part of the financial statements.
6
MEWBOURNE ENERGY PARTNERS 01-A, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Accounting Policies
Reference is hereby made to the Partnership's Annual Report on Form 10-K for
2001, 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.
2. Accounting for Oil and Gas Producing Activities
Mewbourne Energy Partners 01-A, L.P., (the "Partnership"), a Delaware limited
partnership formed on February 23, 2001, is engaged primarily in oil and gas
development and production in Texas, Oklahoma, and New Mexico. The offering of
limited and general partnership interests began June 12, 2001 as a part of an
offering registered under the name Mewbourne Energy Partners 01-02 Drilling
Programs and concluded August 28, 2001, with total investor contributions of
$15,000,000. Since the Partnership was not funded until August 28, 2001, no
business was conducted by the Partnership during the period February 23, 2001
(date of inception) though June 30, 2001, therefore, there are no items of
income or expense for that reporting period.
The Partnership follows the full-cost method of accounting for its oil and gas
activities. Under the full-cost method, all productive and nonproductive 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
June 30, 2002, substantially all capitalized costs were subject to amortization,
while at December 31, 2001, approximately $5.7 million of capitalized cost were
excluded from amortization. Gains and losses on the sale or other disposition of
properties 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 periodic ceiling test that limits such costs
to the aggregate of the present value of future net cash flows of proved
reserves and the lower of cost or fair value of unproved properties.
3. Comprehensive Income
Total comprehensive income (loss) equals net income (loss) during each of the
periods presented herein.
4. Recently Issued Accounting Standards
In August 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 143 (FAS 143), Accounting for Asset
Retirement Obligations. This statement changes financial accounting and
reporting for obligations associated with the
7
retirement and disposal of long-lived assets and the associated asset retirement
costs and is effective for the Partnership beginning January 1, 2003. The
Partnership is currently evaluating the effect of adopting FAS 143.
In August 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 144 (FAS 144), Accounting for the Impairment
or Disposal of Long-Lived Assets. This statement changes financial accounting
and reporting for the impairment or disposal of long-lived assets and was
effective for the Partnership beginning January 1, 2002. The adoption of FAS 144
did not have a material impact on the Partnership.
In June 2002, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 146 (FAS 146), Accounting for Costs
Associated with Exit or Disposal Activities. This statement addresses financial
accounting and reporting for costs associated with exit or disposal activities
and is effective for the Partnership beginning January 1, 2003. The Partnership
is currently evaluating the effect of adopting FAS 146.
8
Item 2 Managements's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
Mewbourne Energy Partners 01-A, L.P. (the "Partnership")was formed February 23,
2001. The offering of limited and general partnership interests began on June
12, 2001 and concluded on August 28, 2001, with investor partner contributions
of $15,000,000.
The Partnership has acquired interests in oil and gas prospects for the purpose
of development drilling. At June 30, 2002, 34 wells had been drilled and were
productive and 7 wells were drilled and abandoned.
Operations will be conducted with available funds and revenues generated from
oil and gas activities. No bank borrowing is anticipated. The Partnership had
net working capital at June 30, 2002 of $2,325,938.
During the six months ended June 30, 2002, the Partnership made cash
distributions to the investor partners in the amount of $780,000. The
Partnership expects that cash distributions will increase during 2002 as
additional oil and gas revenues are received.
The sale of crude oil and natural gas produced by the Partnership will be
affected by a number of factors which are beyond the Partnership's control.
These factors include the price of crude oil and natural gas, the fluctuating
supply of and demand for these products, competitive fuels, refining,
transportation, extensive federal and state regulations governing the production
and sale of crude oil and natural gas, and other competitive conditions. It is
impossible to predict with any certainty the future effect of these factors on
the Partnership.
Results of Operations
Revenues during the three months ended June 30, 2002 totaled $1,151,266, and
consisted of oil and gas sales in the amount of $1,141,537 and interest income
in the amount of $9,729. Production volumes during the period ended June 30,
2002 amounted to approximately 1,201 bbls of oil and 368,176 mcf of gas at
corresponding average realized prices of $24.42 per bbl of oil and $3.02 per mcf
of gas. Expenses totaling $598,908, consisting primarily of lease operating
expense in the amount of $68,731, production taxes in the amount of $90,638, and
depreciation, depletion and amortization in the amount of $420,507 resulted in a
net income for the period of $552,358.
Revenues during the six months ended June 30, 2002 totaled $1,557,752, and
consisted of oil and gas sales in the amount of $1,528,443 and interest income
in the amount of $29,309. Production volumes during the period ended June 30,
2002 amounted to approximately 1,455 bbls of oil and 569,248 mcf of gas at
corresponding average realized prices of $23.32 per bbl of oil and $2.63 per mcf
of gas. Expenses totaling $3,145,145, consisting primarily of lease operating
expense in the amount of $119,380, production taxes in the amount of $122,074,
depreciation, depletion and amortization in the amount of $722,709, and a cost
ceiling write-down in the amount of $2,152,691 resulted in a net loss for the
period of $1,587,393. The Partnership's oil and gas production should increase
during the remainder of 2002 as additional wells are completed and oil and gas
production is sold. Interest income should decrease in 2002 as the remaining
wells are drilled and the available cash is utilized for the equipping of such
wells. The Partnership expects that drilling and completion costs will decrease
during 2002 and that production cost and depletion provisions will increase.
9
During the six months ended June 30, 2002, the Partnership made cash
distributions to the investor partners in the amount of $780,000. The
Partnership expects that cash distributions will increase during 2002 as
additional oil and gas revenues are received.
The Partnership's operations did not commence until the third quarter of 2001.
No corresponding activities, therefore, occurred during the period February 23,
2001 (date of inception) through June 30, 2001.
Recently Issued Accounting Standards
In August 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 143 (FAS 143), Accounting for Asset
Retirement Obligations. This statement changes financial accounting and
reporting for obligations associated with the retirement and disposal of
long-lived assets and the associated asset retirement costs and is effective for
the Partnership beginning January 1, 2003. The Partnership is currently
evaluating the effect of adopting FAS 143.
In August 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 144 (FAS 144), Accounting for the Impairment
or Disposal of Long-Lived Assets. This statement changes financial accounting
and reporting for the impairment or disposal of long-lived assets and is
effective for the Partnership beginning January 1, 2002. The adoption of FAS144
will not have a material impact on the Partnership.
In June 2002, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 146 (FAS 146), Accounting for Costs
Associated with Exit or Disposal Activities. This statement addresses financial
accounting and reporting for costs associated with exit or disposal activities
and is effective for the Partnership beginning January 1, 2003. The Partnership
is currently evaluating the effect of adopting FAS 146.
Part II - Other Information
Item 1. Legal Proceedings
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - none
(b) Reports on Form 8-K - none
10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Partnership has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
MEWBOURNE ENERGY PARTNERS 01-A, L.P.
By: Mewbourne Development Corporation
Managing General Partner
Date: August 12, 2002 By: /s/ Alan Clark
---------------------------
Alan Clark, Treasurer
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