MEWBOURNE ENERGY PARTNERS 03-A LP – 10-Q – Management’s Discussion and Analysis of Financial Condition and Results of Operations

Liquidity and Capital Resources

Mewbourne Energy Partners 03-A, L.P. was formed February 19, 2003. The offering of limited and general partnership interests began May 16, 2003 and concluded July 9, 2003, with total investor contributions of $18,000,000. During 2005, all general partner equity interests were converted to limited partner equity interests.

The Partnership had negative net working capital of $30,212 at March 31, 2016. MOC has informed the Partnership that if cash flows are insufficient to fund its operating costs, MOC will not demand immediate payment of amounts owed to it.

The Partnership had reduced cash flows from operations for the three months ended March 31, 2016 due to the steep decline in oil and gas prices during the previous twelve months. Considering these reduced operating cashflows, the Partnership does not anticipate resuming distributions until oil and gas prices improve.

During the three months ended March 31, 2015, the Partnership made cash distributions to the investor partners in the amount of $25,784 as compared to none for the three months ended March 31, 2016. Since inception, the Partnership has made distributions of $20,448,648, inclusive of state tax payments.

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.

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Results of Operations



For the three months ended March 31, 2016 as compared to the three months ended
March 31, 2015:



                       Three Months Ended March 31,
                          2016               2015
Oil sales           $      12,314       $      14,610
Barrels produced              426                 347
Average price/bbl   $       28.91       $       42.10

Gas sales           $      39,110       $      65,922
Mcf produced               24,833              26,830
Average price/mcf   $        1.57       $        2.46

Oil and gas revenues. As shown in the above table, total oil and gas sales decreased by $29,108, a 36.1% decline, for the three months ended March 31, 2016 as compared to the three months ended March 31, 2015.

Of this decline, $4,580 and $23,667 were due to decreases in the average prices of oil and gas sold, respectively. The average price fell to $28.91 from $42.10 per barrel (bbl) and to $1.57 from $2.46 per thousand cubic feet (mcf) for the three months ended March 31, 2016 as compared to the three months ended March 31, 2015.

Also contributing to the decline in sales was $3,145 due to a lower volume of gas sold by 1,997 mcf.

Slightly offsetting these declines was an increase of $2,284 from an increase in the volume of oil sold by 79 bbls.

Lease operations. Lease operating expense during the three month period ended March 31, 2016 decreased to $52,698 from $88,788 for the three month period ended March 31, 2015 due to fewer well repairs and workovers.

Production taxes. Production taxes during the three month period ended March 31, 2016 decreased to $3,181 from $6,298 for the three month period ended March 31, 2015. This was due to lower overall oil and gas revenue for the three month period ended March 31, 2016.

Administrative and general expense. Administrative and general expense for the three month period ended March 31, 2016 fell to $7,636 from $10,623 for the three month period ended March 31, 2015 due to decreased administrative expenses allocable to the Partnership.

Depreciation, depletion and amortization. Depreciation, depletion and amortization for the three months ended March 31, 2016 decreased to $15,235 from $31,019 for the three months ended March 31, 2015 due to the overall decrease in oil and gas production.

Cost ceiling write-down. There was a cost ceiling write-down of $25,193 for the three months ended March 31, 2016. This was due to lower average oil and gas prices for the twelve months preceding the write-down. There was no cost ceiling write-down for the three months ended March 31, 2015.

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