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EX-31.2 - CERTIFICATION OF CHIEF FINANCIAL OFFICER - MEWBOURNE ENERGY PARTNERS 01-A LPex-31_2.htm
EX-32.1 - CERTIFICATION OF CHIEF EXECUTIVE OFFICER - MEWBOURNE ENERGY PARTNERS 01-A LPex-32_1.htm
EX-31.1 - CERTIFICATION OF CHIEF EXECUTIVE OFFICER - MEWBOURNE ENERGY PARTNERS 01-A LPex-31_1.htm
EX-32.2 - CERTIFICATION OF CHIEF FINANCIAL OFFICER - MEWBOURNE ENERGY PARTNERS 01-A LPex-32_2.htm


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 March 31, 2013

OR
 
o 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. 333-57156

MEWBOURNE ENERGY PARTNERS 01-A, L.P.
 
Delaware
 
75-2926279
(State or jurisdiction of incorporation or organization)   (I.R.S. Employer 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 of 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 o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):
 
 
Large accelerated filer
¨
 
Accelerated filer
¨
           
 
Non-accelerated filer
¨
 
Smaller reporting company
x
 
Do not check if smaller reporting company
     

Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
 
 

 

MEWBOURNE ENERGY PARTNERS 01-A, L.P.
             
INDEX
             
Part 1  -  Financial Information
Page No.
 
             
 
Item 1.  Financial Statements
     
             
         
     
March 31, 2013  (Unaudited) and December 31, 2012
3
   
             
         
     
For the three months ended March 31, 2013 and 2012
4
   
             
         
     
For the three months ended March 31, 2013
5
   
             
         
     
For the three months ended March 31, 2013 and 2012
6
   
             
   
7
   
             
 
9
   
             
 
11
   
             
 
11
   
             
Part II  -  Other Information
     
             
 
12
   
             
 
12
   
             
 
 
2

 

MEWBOURNE ENERGY PARTNERS 01-A, L.P.
           
Part I - Financial Information
     
           
Item 1. Financial Statements
     
 
 
             
   
March 31, 2013
   
December 31, 2012
 
   
(Unaudited)
       
ASSETS
           
             
Cash
  $ 24,729     $ 17,523  
Accounts receivable, affiliate
    76,850       103,029  
Prepaid state taxes
    1,863       1,398  
 Total current assets
    103,442       121,950  
                 
Oil and gas properties at cost, full-cost method
    15,496,408       15,507,120  
Less accumulated depreciation, depletion,
               
amortization and impairment
    (13,988,227 )     (13,972,001 )
      1,508,181       1,535,119  
                 
Total assets
  $ 1,611,623     $ 1,657,069  
                 
                 
LIABILITIES AND PARTNERS' CAPITAL
               
                 
Accounts payable, affiliate
  $ 57,996     $ 28,627  
Total current liabilities
    57,996       28,627  
                 
Asset retirement obligation
    407,582       420,361  
                 
Partners' capital
    1,146,045       1,208,081  
                 
Total liabilities and partners' capital
  $ 1,611,623     $ 1,657,069  
 

The accompanying notes are an integral part of the financial statements.
 
 
3

 

MEWBOURNE ENERGY PARTNERS 01-A, L.P.
                   
(Unaudited)
 
   
For the
 
   
Three Months Ended
 
   
March 31,
 
   
2013
   
2012
 
Revenues:
           
Oil sales
  $ 9,099     $ 30,094  
Gas sales
    118,692       104,120  
Total revenues
    127,791       134,214  
                 
Expenses:
               
Lease operating expense
    69,889       165,101  
Production taxes
    (1,068 )     9,053  
Administrative and general expense
    11,509       9,408  
Depreciation, depletion, and amortization
    22,167       20,139  
Asset retirement obligation accretion
    3,783       3,742  
Total expenses
    106,280       207,443  
                 
Net income (loss)
  $ 21,511     $ (73,229 )
                 
Basic and diluted net income (loss) per
               
partner interest
               
(15,000 interests outstanding)
  $ 1.43     $ (4.88 )
 
 
The accompanying notes are an integral part of the financial statements.

 
 
4

 
 
 
MEWBOURNE ENERGY PARTNERS 01-A, L.P.
     
CONDENSED STATEMENT OF CHANGES IN PARTNERS' CAPITAL
For the three months ended March 31, 2013
(Unaudited)
 
       
   
Partners' Capital
 
       
Balance at December 31, 2012
  $ 1,208,081  
         
Cash distributions
    (83,547 )
         
Net income
    21,511  
         
Balance at March 31, 2013
  $ 1,146,045  
         
 
 
The accompanying notes are an integral part of the financial statements.
 
 
5

 
MEWBOURNE ENERGY PARTNERS 01-A, L.P.
               
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
 
   
Three Months Ended
 
   
March 31,
 
   
2013
   
2012
 
Cash flows from operating activities:
           
Net income (loss)
  $ 21,511     $ (73,229 )
Adjustments to reconcile net income (loss) to net cash
               
  provided by operating activities:
               
Depreciation, depletion, and amortization
    22,167       20,139  
Asset retirement obligation accretion
    3,783       3,742  
Plugging and abandonment cost paid from asset retirement obligation
    (12,099 )      
Changes in operating assets and liabilities:
               
Accounts receivable, affiliate
    26,179       45,416  
Prepaid state taxes
    (465 )     (9,855 )
Accounts payable, affiliate
    29,369       65,108  
Net cash provided by operating activities
    90,445       51,321  
                 
Cash flows from investing activities:
               
Proceeds from sale of oil and gas properties
    308        
Purchase and development of oil and gas properties
          (8,561 )
Net cash provided by (used in) investing activities
    308       (8,561 )
                 
Cash flows from financing activities:
               
Cash distributions to partners
    (83,547 )     (42,018 )
Net cash used in financing activities
    (83,547 )     (42,018 )
                 
Net increase in cash
    7,206       742  
Cash, beginning of period
    17,523       4,947  
                 
Cash, end of period
  $ 24,729     $ 5,689  
                 
Supplemental Cash Flow Information:
               
Non-cash changes to net oil & gas properties related to
               
asset retirement obligation liabilities
  $ (4,463 )   $ 5,687  
 
 
The accompanying notes are an integral part of the financial statements.
 
6

 
 
MEWBOURNE ENERGY PARTNERS 01-A, L.P.

NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)

1.           Description of Business

Mewbourne Energy Partners 01-A, L.P. (the “Registrant” or the “Partnership”), a Delaware limited partnership, is engaged primarily in oil and gas development and production in Texas, Oklahoma, and New Mexico, and was organized on February 23, 2001.  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 Program, (the “Program”), and concluded August 28, 2001, with total investor contributions of $15,000,000 originally being sold to 569 subscribers of which $13,513,000 were sold to 528 subscribers as general partner interests and $1,487,000 were sold to 41 subscribers as limited partner interests.  During 2003, 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.

2.           Summary of Significant Accounting Policies

Reference is hereby made to the Registrant’s Annual Report on Form 10-K for 2012, 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.

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 March 31, 2013 and 2012, 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 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 quarterly 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. There were no cost ceiling write-downs for the three months ended March 31, 2013 or 2012.
 
7

 
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 three months ended March 31, 2013 and the year ended December 31, 2012 is as follows:

   
March 31,
   
December 31,
 
   
2013
   
2012
 
Balance, beginning of period
  $ 420,361     $ 395,401  
Liabilities incurred
          9,869  
Liabilities reduced due to plugging and abandonments
    (16,562 )      
Accretion expense
    3,783       15,091  
Balance, end of period
  $ 407,582     $ 420,361  
 
5.           Related Party Transactions

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. 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.
 
 
8

 
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
 
Revenues:
           
Proceeds from disposition of depreciable and depletable properties
    60 %     40 %
All other revenues
    60 %     40 %
                 
Costs and expenses:
               
Organization and offering costs (1)
    0 %     100 %
Lease acquisition costs (1)
    0 %     100 %
Tangible and intangible drilling costs (1)
    100 %     0 %
Operating costs, reporting and legal expenses, general and
               
   administrative expenses and all other costs
    60 %     40 %
 
(1)  
Pursuant to the Program, MD must contribute 100% of organization and offering costs and lease acquisition costs which should approximate 30% of total capital costs. To the extent that organization and offering costs and lease acquisition costs are less than 30% of total capital costs, MD is responsible for tangible drilling costs until its share of the Program’s total capital costs reaches approximately 30%. The Partnership’s financial statements reflect its respective proportionate interest in the Program.
  
Item 2.           Management’s Discussion and Analysis of Financial Condition and Results of Operations

Liquidity and Capital Resources

Mewbourne Energy Partners 01-A, L.P. was formed February 23, 2001.  The offering of limited and general partnership interests began June 12, 2001 and concluded August 28, 2001, with total investor contributions of $15,000,000. During 2003, all general partner equity interests were converted to limited partner equity interests.

Future capital requirements and operations will be conducted with available funds generated from oil and gas activities.  No bank borrowing is anticipated.  The Partnership had net working capital of $45,446 at March 31, 2013.

During the three months ended March 31, 2013, the Partnership made cash distributions to the investor partners in the amount of $83,547 as compared to $42,018 for the three months ended March 31, 2012.  The Partnership expects that cash distributions will continue during 2013 as additional oil and gas revenues are sufficient to produce cash flows from operations.

The sale of crude oil and natural gas produced by the Partnership will be affected by a number of factors that 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.
 
 
9

 
Results of Operations

For the three months ended March 31, 2013 as compared to the three months ended March 31, 2012:
 
   
Three Months Ended March 31,
 
   
2013
   
2012
 
Oil sales
  $ 9,099     $ 30,094  
Barrels produced
    104       304  
Average price/bbl
  $ 87.49     $ 98.99  
                 
Gas sales
  $ 118,692     $ 104,120  
Mcf produced
    32,712       37,786  
Average price/mcf
  $ 3.63     $ 2.76  

Oil and gas revenues.  As shown in the above table, total oil and gas sales fell by $6,423, a 4.8% decrease, for the three months ended March 31, 2013 as compared to the three months ended March 31, 2012.

Of this decrease, $17,498 and $18,410 were due to decreases in the volumes of oil and gas sold, respectively. The volumes sold decreased by 200 barrels (bbls) and 5,074 thousand cubic feet (mcf) for the three months ended March 31, 2013 as compared to the three months ended March 31, 2012.

Also contributing to the decrease in revenue was $3,497 from a decline in the average price of oil sold. The average price fell to $87.49 from $98.99 per bbl for the three months ended March 31, 2013 as compared to the three months ended March 31, 2012.

These decreases were partially offset by $32,982 from a rise in the average price of gas sold. The average price rose to $3.63 from $2.76 per mcf for the three months ended March 31, 2013 as compared to the three months ended March 31, 2012.

Lease operations.  Lease operating expense during the three month period ended March 31, 2013 fell to $69,889 from $165,101 for the three month period ended March 31, 2012 due to fewer well repairs and workovers.

Production taxes.  Production taxes during the three month period ended March 31, 2013 decreased to a benefit of $1,068 from $9,053 in expense for the three month period ended March 31, 2012 due to production tax credits and lower overall oil and gas revenue.

Administrative and general expense.  Administrative and general expense for the three month period ended March 31, 2013 increased to $11,509 from $9,408 for the three month period ended March 31, 2012 due to higher general expense for reporting and legal costs.

Depreciation, depletion and amortization.  Depreciation, depletion and amortization for the three month period ended March 31, 2013 increased to $22,167 from $20,139 for the three month period ended March 31, 2012 due to an increase in the depreciation, depletion and amortization rate in 2013. This rate increase resulted from a decline in the reserves in 2013 due to lower prices.
 
 
10

 
Item 3.           Quantitative and Qualitative Disclosures about Market Risk

1.    Interest Rate Risk
 
The Partnership Agreement allows borrowings from banks or other financial sources of up to 20% of the total capital contributions to the Partnership without investor approval. Should the Partnership elect to borrow monies for additional development activity on Partnership properties, it will be subject to the interest rate risk inherent in borrowing activities. Changes in interest rates could significantly affect the Partnership’s results of operations and the amount of net cash flow available for partner distributions. Also, to the extent that changes in interest rates affect general economic conditions, the Partnership will be affected by such changes.

2.    Commodity Price Risk
 
The Partnership does not expect to engage in commodity futures trading or hedging activities or enter into derivative financial instrument transactions for trading or other speculative purposes.  The Partnership currently expects to sell a significant amount of its production from successful oil and gas wells on a month-to-month basis at market prices. Accordingly, the Partnership is at risk for the volatility in commodity prices inherent in the oil and gas industry, and the level of commodity prices will have a significant impact on the Partnership’s results of operations. For the three months ended March 31, 2013, a 10% change in the price received for oil and gas production would have had an approximate $13,000 impact on revenue.
 
3.    Exchange Rate Risk
 
The Partnership currently has no income from foreign sources or operations in foreign countries that would subject it to currency exchange rate risk. The Partnership does not currently expect to purchase any prospects located outside of either the United States or United States coastal waters in the Gulf of Mexico.

Item 4.           Disclosure Controls and Procedures

MD maintains a system of controls and procedures designed to provide reasonable assurance as to the reliability of the financial statements and other disclosures included in this report, as well as to safeguard assets from unauthorized use or disposition.  MD’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the design and operation of its disclosure controls and procedures with the assistance and participation of other members of management.  Based upon that evaluation, MD’s Chief Executive Officer and Chief Financial Officer concluded that its disclosure controls and procedures are effective for gathering, analyzing and disclosing the information the Partnership is required to disclose in the reports it files under the Securities Exchange Act of 1934 within the time periods specified in the SEC’s rules and forms. Since MD’s December 31, 2012 annual report on internal control over financial reporting, and for the quarter ended March 31, 2013, there have been no changes in MD’s internal controls or in other factors which have materially affected, or are reasonably likely to materially affect, the internal controls over financial reporting.
 
 
11

 
Part II – Other Information

Item 1.           Legal Proceedings

From time to time, the Registrant may be a party to certain legal actions and claims arising in the ordinary course of business. While the outcome of these events cannot be predicted with certainty, the Partnership does not expect these matters to have a material effect on its financial position or results of operations.
 
Item 6.            Exhibits and Reports on Form 8-K
         
    (a) Exhibits filed herewith
         
 
 
  31.1 Certification of CEO Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
         
 
 
  31.2
Certification of CFO Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
         
 
 
  32.1
Certification of CEO Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
         
 
 
  32.2
Certification of CFO Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
         
 
 
  101
The following materials from the Partnership's Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Balance Sheets, (ii) the Condensed Statements of Operations, (iii) the Condensed Statements of Cash Flows, (iv) the Condensed Statement of Changes in Partners’ Capital and (v) related notes.
         
    (b) Reports on Form 8-K
        None.
 
 
12

 
 
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: May 15, 2013
 
By:
/s/ Alan Clark
   
 
Alan Clark, Treasurer and Controller
 
 
13

 

INDEX TO EXHIBITS

EXHIBIT
NUMBER
DESCRIPTION
   
31.1
Certification of CEO Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
   
31.2
   
32.1
   
32.2
   
101
The following materials from the Partnership's Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Balance Sheets, (ii) the Condensed Statements of Operations, (iii) the Condensed Statements of Cash Flows, (iv) the Condensed Statement of Changes in Partners’ Capital and (v) related notes.
   
 
14