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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
Commission File Number: P-1: 0-17800; P-2: 0-17801;
P-3: 0-18306; P-4: 0-18308; P-5: 0-18637; P-6: 0-18937
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-2 LIMITED PARTNERSHIP
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
- -------------------------------------------------------------------
(Exact name of Registrant as specified in its Articles)
P-1: 73-1330245
P-2: 73-1330625
P-1 and P-2: P-3: 73-1336573
Texas P-4: 73-1341929
P-3 through P-6: P-5: 73-1353774
Oklahoma P-6: 73-1357375
- --------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Two West Second Street, Tulsa, Oklahoma 74103
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (918) 583-1791
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Depositary Units of Limited Partnership interest
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 the filing requirements for the past 90
days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (Sec. 229.405 of this chapter)
is not contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
Disclosure is not contained herein
-----
X Disclosure is contained herein
-----
The Depository Units are not publicly traded, therefore,
Registrant cannot compute the aggregate market value of the voting
units held by non-affiliates of the Registrant.
DOCUMENTS INCORPORATED BY REFERENCE: None
ii
FORM 10-K
TABLE OF CONTENTS
PART I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ITEM 1. BUSINESS . . . . . . . . . . . . . . . . . . . . . 1
ITEM 2. PROPERTIES . . . . . . . . . . . . . . . . . . . . 7
ITEM 3. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . 16
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF LIMITED
PARTNERS . . . . . . . . . . . . . . . . . . . . . 19
PART II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ITEM 5. MARKET FOR UNITS AND RELATED LIMITED PARTNER
MATTERS . . . . . . . . . . . . . . . . . . . . . 19
ITEM 6. SELECTED FINANCIAL DATA . . . . . . . . . . . . . 22
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS . . . . . . . 28
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . . . 49
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE . . . . . . . 49
PART III . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE GENERAL
PARTNER . . . . . . . . . . . . . . . . . . . . . 50
ITEM 11. EXECUTIVE COMPENSATION . . . . . . . . . . . . . . 51
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT . . . . . . . . . . . . . . . . . . 58
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . 61
PART IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K . . . . . . . . . . . . . . . 64
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . 70
iii
PART I
ITEM 1. BUSINESS
General
The Geodyne Institutional/Pension Energy Income P-1 Limited
Partnership (the "P-1 Partnership") and Geodyne Institutional/Pension
Energy Income P-2 Limited Partnership (the "P-2 Partnership") are
limited partnerships formed under the Texas Revised Limited
Partnership Act and the Geodyne Institutional/Pension Energy Income
Limited Partnership P-3 (the "P-3 Partnership"), Geodyne
Institutional/Pension Energy Income Limited Partnership P-4 (the "P-4
Partnership"), Geodyne Institutional/Pension Energy Income Limited
Partnership P-5 (the "P-5 Partnership"), and Geodyne
Institutional/Pension Energy Income Limited Partnership P-6 (the "P-6
Partnership") are limited partnerships formed under the Oklahoma
Revised Uniform Limited Partnership Act (collectively, the
"Partnerships"). Each Partnership is composed of Geodyne Resources,
Inc. ("Geodyne"), a Delaware corporation, as the general partner,
Geodyne Institutional Depository Company, a Delaware corporation, as
the sole initial limited partner, and public investors as substitute
limited partners (the "Limited Partners"). The Partnerships commenced
operations on the dates set forth below:
Date of
Partnership Activation
----------- -----------------
P-1 October 25, 1988
P-2 February 9, 1989
P-3 May 10, 1989
P-4 November 21, 1989
P-5 February 27, 1990
P-6 September 5, 1990
Immediately following activation, each Partnership invested as a
general partner in a separate Oklahoma general partnership which
actually conducts the Partnerships' operations. Geodyne serves as
managing partner of such general partnerships. Unless the context
indicates otherwise, all references to any single Partnership or all
of the Partnerships in this Annual Report on Form 10-K ("Annual
Report") are references to the Partnership and its related general
partnership, collectively. In addition, unless the context indicates
otherwise, all references to the "General Partner" in this Annual
Report are references to Geodyne as the general partner of the
Partnerships, and as the managing partner of the related general
partnerships.
1
The General Partner currently serves as general partner of 29
limited partnerships, including the Partnerships. The General Partner
is a wholly-owned subsidiary of Samson Investment Company. Samson
Investment Company and its various corporate subsidiaries, including
the General Partner (collectively, the "Samson Companies"), are
engaged in the production and development of and exploration for oil
and gas reserves and the acquisition and operation of producing
properties. At December 31, 1996, the Samson Companies owned
interests in approximately 16,000 oil and gas wells located in 19
states of the United States and Canada, Venezuela, and Russia. At
December 31, 1996, the Samson Companies operated approximately 2,600
oil and gas wells located in 15 states of the United States and
Canada, Venezuela, and Russia.
The Partnerships are currently engaged in the business of owning
net profits and royalty interests in oil and gas properties located in
the continental United States. Most of the net profits interests
acquired by the Partnerships have been carved out of working interests
in producing properties ("Working Interests") which were acquired by
affiliated oil and gas investment programs (the "Affiliated
Programs"). Net profits interests entitle the Partnerships to a share
of net revenues from producing properties measured by a specific
percentage of the net profits realized by such Affiliated Programs.
Except where otherwise noted, references to certain operational
activities of the Partnerships include the activities of the
Affiliated Programs. As the holder of a net profits interest, a
Partnership is not liable to pay any amount by which oil and gas
operating costs and expenses exceed revenues for any period, although
any deficit, together with interest, is applied to reduce the amounts
payable to the Partnership in subsequent periods. As used throughout
this Annual Report, the Partnerships' net profits and royalty
interests in oil and gas sales will be referred to as "Net Profits"
and the Partnerships' net profits and royalty interests in oil and gas
properties will be collectively referred to as "Net Profits
Interests."
In order to prudently manage the properties which are burdened by
the Partnerships' Net Profits Interests, it may be appropriate for
drilling operations to be conducted on such properties. Since the
Partnerships' Net Profits are calculated after considering such costs,
the Partnerships also indirectly engage in development drilling.
As limited partnerships, the Partnerships have no officers,
directors, or employees. They rely instead on the personnel of the
General Partner and the other Samson Companies. As of March 15, 1997,
the Samson Companies employed approximately 780 persons. No employees
are covered by collective bargaining agreements, and management
believes that the Samson Companies provide a sound employee relations
environment. For information regarding the executive officers of the
General Partner, see "Item 10. Directors and Executive Officers of the
General Partner."
2
The General Partner's and the Partnerships' principal place of
business is located at Samson Plaza, Two West Second Street, Tulsa,
Oklahoma 74103, and their telephone number is (918) 583-1791 or (800)
283-1791.
Funding
Although the partnership agreement for each Partnership (the
"Partnership Agreement") permits each Partnership to incur borrowings,
operations and expenses are currently funded out of revenues from each
Partnership's Net Profits Interests. The General Partner may, but is
not required to, advance funds to a Partnership for the same purposes
for which Partnership borrowings are authorized.
Principal Products Produced and Services Rendered
The Partnerships' sole business is the holding of certain Net
Profits Interests. The Partnerships do not refine or otherwise
process crude oil and condensate. The Partnerships do not hold any
patents, trademarks, licenses, or concessions and are not a party to
any government contracts. The Partnerships have no backlog of orders
and do not participate in research and development activities. The
Partnerships are not presently encountering shortages of oilfield
tubular goods, compressors, production material, or other equipment.
Competition and Marketing
The domestic oil and gas industry is highly competitive, with a
large number of companies and individuals engaged in the exploration
and development of oil and gas properties. The ability of the
Partnerships to produce and market oil and gas profitably depends on a
number of factors that are beyond the control of the Partnerships.
These factors include worldwide political instability (especially in
oil-producing regions), United Nations export embargoes, the supply
and price of foreign imports of oil and gas, the level of consumer
product demand (which can be heavily influenced by weather patterns),
government regulations and taxes, the price and availability of
alternative fuels, the overall economic environment, and the
availability and capacity of transportation and processing facilities.
The effect of these factors on future oil and gas industry trends
cannot be accurately predicted or anticipated.
3
The most important variable affecting the Partnerships' revenues
is the prices received for the sale of oil and gas. Predicting future
prices is very difficult. Concerning past trends, average yearly
wellhead gas prices in the United States have been relatively volatile
for a number of years. For the past ten years, such prices have
generally been in the $1.40 to $2.00 per Mcf range, significantly
below prices received in the early 1980s. Average gas prices in the
latter part of 1996 and January 1997, however, were somewhat higher
than those yearly averages. It is not known whether this was a short-
term trend or an indicator of potentially higher average gas prices on
a longer-term basis.
Substantially all of the Partnerships' gas reserves are being
sold in the "spot market." Prices on the spot market are subject to
wide seasonal and regional pricing fluctuations due to the highly
competitive nature of the spot market. In addition, such spot market
sales are generally short-term in nature and are dependent upon the
obtaining of transportation services provided by pipelines. Spot
prices for the Partnerships' gas increased from approximately $2.00
per Mcf at December 31, 1995 to approximately $3.57 per Mcf at
December 31, 1996. Such prices were on an MMBTU basis and differ from
the prices actually received by the Partnerships due to transportation
and marketing costs, BTU adjustments, and regional price and quality
differences.
Due to global consumption and supply trends over the last several
months, oil prices have recently been higher than the yearly average
prices of the late to mid-1980s and early 1990s. It is not known
whether this trend will continue. Prices for the Partnerships' oil
increased from approximately $18.50 per barrel at December 31, 1995 to
approximately $23.75 per barrel at December 31, 1996.
Future prices for both oil and gas will likely be different from
(and may be lower than) the prices in effect on December 31, 1996.
Primarily due to heating season demand, year-end prices in many past
years have tended to be higher, and in some cases significantly
higher, than the yearly average price actually received by the
Partnerships for at least the following year. In particular, it
should be noted that December 31, 1996 prices were much higher than
year-end prices for the last several years and substantially higher
than the average prices received in each of the last several years.
It is not possible to predict whether the December 1996 pricing level
is indicative of a new trend toward higher energy prices or a short-
term deviation from the recent history of low to moderate prices;
therefore, management is unable to predict whether future oil and gas
prices will (i) stabilize, (ii) increase, or (iii) decrease.
4
Significant Customers
The following customers accounted for ten percent or more of the
oil and gas sales attributable to the Partnerships' Net Profits
Interests during the year ended December 31, 1996:
Partnership Customer Percentage
----------- ------------------------ ----------
P-1 El Paso Energy Marketing
Company ("El Paso") 23.0%
Texaco Exploration and
Production, Inc.
("Texaco") 10.4%
Chevron U.S.A., Inc. 10.1%
P-2 El Paso 22.4%
Texaco 12.6%
P-3 El Paso 22.3%
Texaco 12.7%
P-4 El Paso 60.2%
Mesa Pipeline Co. 18.2%
P-5 El Paso 62.0%
P-6 El Paso 27.0%
Tejas Gas Marketing
Company 13.7%
HPL Resources Company 19.1%
In the event of interruption of purchases by one or more of the
Partnerships' significant customers or the cessation or material
change in availability of open access transportation by the
Partnerships' pipeline transporters, the Partnerships may encounter
difficulty in marketing their gas and in maintaining historic sales
levels. Management does not expect any of its open access
transporters to seek authorization to terminate their transportation
services. Even if the services were terminated, management believes
that alternatives would be available whereby the Partnerships would be
able to continue to market their gas.
The Partnerships' principal customers for crude oil production
are refiners and other companies which have pipeline facilities near
the producing properties in which the Partnerships own Net Profits
Interests. In the event pipeline facilities are not conveniently
available to production areas, crude oil is usually trucked by
purchasers to storage facilities.
5
Oil, Gas, and Environmental Control Regulations
Regulation of Production Operations -- The production of oil and
gas is subject to extensive federal and state laws and regulations
governing a wide variety of matters, including the drilling and
spacing of wells, allowable rates of production, prevention of waste
and pollution, and protection of the environment. In addition to the
direct costs borne in complying with such regulations, operations and
revenues may be impacted to the extent that certain regulations limit
oil and gas production to below economic levels.
Regulation of Sales and Transportation of Oil and Gas -- Sales
of crude oil and condensate are made by the Partnerships at market
prices and are not subject to price controls. The sale of gas may be
subject to both federal and state laws and regulations, including, but
not limited to, the Natural Gas Act of 1938 (the "NGA"), the Natural
Gas Policy Act of 1978 (the "NGPA"), and regulations promulgated by
the Federal Energy Regulatory Commission (the "FERC") under the NGA,
the NGPA, and other statutes. The provisions of the NGA and the NGPA,
as well as the regulations thereunder, are complex and affect all who
produce, resell, transport, or purchase gas, including the Partner-
ships. Although virtually all of the Partnerships' natural gas
production is not subject to price regulation, the NGA, NGPA, and FERC
regulations affect the availability of gas transportation services and
the ability of gas consumers to continue to purchase or use gas at
current levels. Accordingly, such regulations may have a material
effect on the Partnerships' operations and projections of future oil
and gas production and revenues.
Future Legislation -- Legislation affecting the oil and gas
industry is under constant review for amendment or expansion. Because
such laws and regulations are frequently amended or reinterpreted,
management is unable to predict what additional energy legislation may
be proposed or enacted or the future cost and impact of complying with
existing or future regulations.
Regulation of the Environment -- The Partnerships' operations
are subject to numerous laws and regulations governing the discharge
of materials into the environment or otherwise relating to
environmental protection. Compliance with such laws and regulations,
together with any penalties resulting from noncompliance therewith,
may increase the cost of the Partnerships' operations or may affect
the Partnerships' ability to complete, in a timely fashion, existing
or future activities. Management anticipates that various local,
state, and federal environmental control agencies will have an
increasing impact on oil and gas operations.
6
Insurance Coverage
The Partnerships by virtue of their Net Profits Interests are
subject to all of the risks inherent in the exploration for and
production of oil and gas, including blowouts, pollution, fires, and
other casualties. The Partnerships maintain insurance coverage as is
customary for entities of a similar size engaged in operations similar
to that of the Partnerships, but losses can occur from uninsurable
risks or in amounts in excess of existing insurance coverage. The
occurrence of an event which is not fully covered by insurance could
have a material adverse effect on the Partnerships' financial position
and results of operations in that it could negatively impact the cash
flow received from the net profits and royalty interests.
ITEM 2. PROPERTIES
Well Statistics
The following table sets forth the number of productive wells in
which the Partnerships had a Net Profits Interest as of December 31,
1996.
P/ship Number of Wells(1)
------ -------------------------------
Total Oil Gas N/A(2)
----- ----- ----- ------
P-1 4,547 1,999 917 1,631
P-2 4,701 2,027 1,037 1,637
P-3 4,701 2,027 1,037 1,637
P-4 356 117 229 10
P-5 729 227 337 165
P-6 799 243 388 168
- ---------------
(1) The designation of a well as an oil well or gas well is made by
the General Partner based on the relative amount of oil and gas
reserves for the well. Regardless of a well's oil or gas
designation, it may produce oil, gas, or both oil and gas.
(2) Wells which have not been designated as oil or gas.
Drilling Activities
The Partnerships' net profits interests were not burdened by any
drilling activities during the year ended December 31, 1996.
7
Oil and Gas Production, Revenue, and Price History
The following tables set forth certain historical information
concerning the oil (including condensates) and gas production
attributable to the Partnerships' net profits interests, revenues
attributable to such production, and certain price information.
Net Production Data
P-1 Partnership
---------------
Year Ended December 31,
----------------------------------
1996 1995 1994
---------- ---------- ----------
Production:
Oil (Bbls) 33,798 39,075 45,617
Gas (Mcf) 468,446 524,079 544,265
Oil and gas sales:
Oil $ 670,897 $ 629,419 $ 677,797
Gas 911,723 704,485 863,753
--------- --------- ---------
Total $1,582,620 $1,333,904 $1,541,550
========= ========= =========
Average sales price:
Per barrel of oil $19.85 $16.11 $14.86
Per Mcf of gas 1.95 1.34 1.59
8
Net Production Data
P-2 Partnership
---------------
Year Ended December 31,
----------------------------------
1996 1995 1994
---------- ---------- ----------
Production:
Oil (Bbls) 24,049 28,040 32,934
Gas (Mcf) 390,047 443,985 418,655
Oil and gas sales:
Oil $ 478,550 $ 453,329 $ 491,847
Gas 764,204 604,448 698,313
--------- --------- ---------
Total $1,242,754 $1,057,777 $1,190,160
========= ========= =========
Average sales price:
Per barrel of oil $19.90 $16.17 $14.93
Per Mcf of gas 1.96 1.36 1.67
9
Net Production Data
P-3 Partnership
---------------
Year Ended December 31,
----------------------------------
1996 1995 1994
---------- ---------- ----------
Production:
Oil (Bbls) 44,496 51,963 61,063
Gas (Mcf) 737,600 840,970 790,479
Oil and gas sales:
Oil $ 885,630 $ 840,314 $ 912,173
Gas 1,441,296 1,143,030 1,323,422
--------- --------- ---------
Total $2,326,926 $1,983,344 $2,235,595
========= ========= =========
Average sales price:
Per barrel of oil $19.90 $16.17 $14.94
Per Mcf of gas 1.95 1.36 1.67
Net Production Data
P-4 Partnership
---------------
Year Ended December 31,
----------------------------------
1996 1995 1994
---------- ---------- ----------
Production:
Oil (Bbls) 22,949 28,847 34,540
Gas (Mcf) 630,841 885,642 914,352
Oil and gas sales:
Oil $ 477,130 $ 505,129 $ 556,163
Gas 1,332,412 1,299,908 1,797,244
--------- --------- ---------
Total $1,809,542 $1,805,037 $2,353,407
========= ========= =========
Average sales price:
Per barrel of oil $20.79 $17.51 $16.10
Per Mcf of gas 2.11 1.47 1.97
10
Net Production Data
P-5 Partnership
---------------
Year Ended December 31,
----------------------------------
1996 1995 1994
---------- ---------- ----------
Production:
Oil (Bbls) 10,757 10,842 9,313
Gas (Mcf) 627,998 784,863 901,804
Oil and gas sales:
Oil $ 214,553 $ 185,791 $ 145,298
Gas 1,229,170 1,061,514 1,406,503
--------- --------- ---------
Total $1,443,723 $1,247,305 $1,551,801
========= ========= =========
Average sales price:
Per barrel of oil $19.95 $17.14 $15.60
Per Mcf of gas 1.96 1.35 1.56
Net Production Data
P-6 Partnership
---------------
Year Ended December 31,
----------------------------------
1996 1995 1994
---------- ---------- ----------
Production:
Oil (Bbls) 21,377 19,149 19,711
Gas (Mcf) 1,162,652 1,380,123 1,502,411
Oil and gas sales:
Oil $ 437,360 $ 318,880 $ 308,168
Gas 2,359,218 1,819,370 2,207,083
--------- --------- ---------
Total $2,796,578 $2,138,250 $2,515,251
========= ========= =========
Average sales price:
Per barrel of oil $20.46 $16.65 $15.63
Per Mcf of gas 2.03 1.32 1.47
11
Proved Reserves and Net Present Value
The following table sets forth each Partnership's estimated
proved oil and gas reserves and net present value therefrom as of
December 31, 1996 which were attributable to the Partnerships' Net
Profits Interests. (Throughout this Annual Report, such interests
will be referred to as the Partnerships' "proved reserves.") The
schedule of quantities of proved oil and gas reserves was prepared by
the General Partner in accordance with the rules prescribed by the
Securities and Exchange Commission (the "SEC"). Certain reserve
information was reviewed by Ryder Scott Company Petroleum Engineers
("Ryder Scott"), an independent petroleum engineering firm. As used
throughout this Annual Report, "proved reserves" refers to those
estimated quantities of crude oil, gas, and gas liquids which
geological and engineering data demonstrate with reasonable certainty
to be recoverable in future years from known oil and gas reservoirs
under existing economic and operating conditions.
Net present value represents estimated future gross cash flow
from the production and sale of proved reserves, net of estimated oil
and gas production costs (including production taxes, ad valorem
taxes, and operating expenses) and estimated future development costs,
discounted at 10% per annum. Net present value of the proved reserves
was calculated on the basis of current costs and prices at December
31, 1996. Such prices were not escalated except in certain circum-
stances where escalations were fixed and readily determinable in
accordance with applicable contract provisions. The prices used in
calculating the net present value of the proved reserves do not
necessarily reflect market prices for oil and gas production
subsequent to December 31, 1996. Furthermore, gas prices at December
31, 1996 were much higher than the price used for determining the net
present value of proved reserves for the year ended December 31, 1995
and substantially higher than the average prices received by the
Partnerships in each of the last several years. There can be no
assurance that the prices used in calculating the net present value at
December 31, 1996 will actually be realized for such production.
The process of estimating oil and gas reserves is complex,
requiring significant subjective decisions in the evaluation of
available geological, engineering, and economic data for each
reservoir. The data for a given reservoir may change substantially
over time as a result of, among other things, additional development
activity, production history, and viability of production under
varying economic conditions; consequently, it is reasonably possible
that material revisions to existing reserve estimates may occur in the
near future. Although every reasonable effort has been made to ensure
that the reserve estimates reported herein represent the most accurate
assessment possible, the significance of the subjective decisions
required and variances in available data for various reservoirs make
12
these estimates generally less precise than other estimates presented
in connection with financial statement disclosures.
Proved Reserves and
Net Present Values
From Proved Reserves
As of December 31, 1996(1)
P-1 Partnership:
- ---------------
Estimated proved reserves:
Gas (Mcf) 2,701,360
Oil and liquids (Bbls) 251,262
Net present value (discounted at 10% per annum) $ 7,404,164
P-2 Partnership:
- ---------------
Estimated proved reserves:
Gas (Mcf) 2,448,132
Oil and liquids (Bbls) 185,693
Net present value (discounted at 10% per annum) $ 6,229,263
P-3 Partnership:
- ---------------
Estimated proved reserves:
Gas (Mcf) 4,622,201
Oil and liquids (Bbls) 344,453
Net present value (discounted at 10% per annum) $11,681,283
P-4 Partnership:
- ---------------
Estimated proved reserves:
Gas (Mcf) 3,123,119
Oil and liquids (Bbls) 75,797
Net present value (discounted at 10% per annum) $ 7,075,498
13
P-5 Partnership:
- ---------------
Estimated proved reserves:
Gas (Mcf) 3,261,422
Oil and liquids (Bbls) 51,531
Net present value (discounted at 10% per annum) $ 6,221,996
P-6 Partnership:
- ---------------
Estimated proved reserves:
Gas (Mcf) 5,483,120
Oil and liquids (Bbls) 140,380
Net present value (discounted at 10% per annum) $10,610,058
- ---------
(1) Includes certain gas balancing adjustments which cause the gas
volumes and net present values to differ from the reserve reports
which were prepared by the General Partner and reviewed by Ryder
Scott.
No estimates of the proved reserves of the Partnerships
comparable to those included herein have been included in reports to
any federal agency other than the SEC. Additional information
relating to the Partnership's proved reserves is contained in Note 4
to the Partnerships' financial statements, included in Item 8 of this
Annual Report.
Significant Properties
The following table sets forth certain well and reserve
information for the basins in which the Partnerships own a significant
amount of Net Profits Interests. The table contains the following
information for each significant basin: (i) the number of wells in
which a Net Profits Interest is owned, (ii) the number and percentage
of wells operated by the Partnership's affiliates, (iii) estimated
proved oil reserves, (iv) estimated proved gas reserves, and (v) the
present value (discounted at 10% per annum) of estimated future net
cash flow.
The Anadarko Basin is located in western Oklahoma and the Texas
panhandle, while the Gulf Coast Basin is located in southern Louisiana
and southeast Texas. The Southern Oklahoma Folded Belt Basin is
located in southern Oklahoma, while the Permian Basin is located in
west Texas and southeast New Mexico. Southern Arkansas and northern
Louisiana contain the Arkla Basin. The San Juan Basin is located in
northwest New Mexico and southwest Colorado.
14
Significant Properties
----------------------
Wells
Operated by
Affiliates Oil Gas
Total ----------- Reserves Revenues Present
Basin Wells Number % (Bbl) (Mcf) Value
- ----------- ----- ------ --- -------- --------- ---------
P-1 P/ship:
Permian 4,320 4 -% 230,317 4,833,187 4,868,788
Anadarko 99 17 17% 6,041 2,201,293 2,217,534
P-2 P/ship:
Permian 4,322 4 0% 157,410 3,303,957 3,327,206
Anadarko 99 17 17% 6,062 1,748,618 1,760,943
South. Ok.
Folded Belt 29 23 79% 10,616 722,681 727,600
P-3 P/ship:
Permian 4,322 4 0% 290,297 6,095,878 6,138,658
Anadarko 99 17 17% 11,387 3,252,278 3,275,323
South. Ok.
Folded Belt 29 23 79% 20,883 1,420,922 1,431,177
P-4 P/ship:
Gulf Coast 79 25 32% 53,038 2,886,047 2,967,058
Anadarko 67 10 15% 9,941 1,876,699 1,930,052
Arkla 40 - -% 4,084 797,302 818,822
San Juan 125 - -% 3,716 779,852 802,499
P-5 P/ship:
Anadarko 159 34 21% 9,444 3,858,963 3,818,764
South. Ok.
Folded Belt 98 - -% 22,827 1,146,384 1,134,357
Permian 118 27 23% 12,681 825,474 816,812
P-6 P/ship:
Anadarko 159 34 21% 6,214 3,573,404 3,543,490
Permian 123 29 24% 14,973 2,764,717 2,742,059
South. Ok.
Folded Belt 118 17 14% 99,128 1,689,707 1,675,973
Gulf Coast 26 7 27% 1,285 1,512,007 1,499,388
15
Title to Oil and Gas Properties
Management believes that the Partnerships have satisfactory title
to their Net Profits Interests. Record title to all of the properties
subject to the Partnerships' Net Profits Interests is held by either
the Partnerships or Geodyne Nominee Corporation, an affiliate of the
General Partner.
Title to the Partnerships' Net Profits Interests is subject to
customary royalty, overriding royalty, carried, working, and other
similar interests and contractual arrangements customary in the oil
and gas industry, to liens for current taxes not yet due, and to other
encumbrances. Management believes that such burdens do not materially
detract from the value of such properties or from the Partnerships'
Net Profits Interests therein or materially interfere with their use
in the operation of the Partnerships' business.
ITEM 3. LEGAL PROCEEDINGS
On December 6, 1994, the Partnerships, among other parties, were
named as defendants in a lawsuit alleging causes of action based on
fraud, negligent misrepresentation, breach of fiduciary duty, breach
of implied covenant, and breach of contract in connection with the
offer and sale of units in the Partnerships ("Units") (Marion Wolfe v.
Geodyne Resources, Inc., et al. Case No. 94-059799, District Court of
Harris County, Texas). The plaintiff's petition alleged that the
lawsuit was being brought as a class action on behalf of the investors
who purchased Units. The lawsuit has been consolidated with another
lawsuit which is also pending in Harris County, Texas, Sidney Neidick,
et al. v. Geodyne Resources, Inc., et al, Case No. 94-052860, District
Court of Harris County, Texas. On June 7, 1995, Geodyne and the
Partnerships were dismissed without prejudice as defendants in the
matter. In addition, on June 7, 1995, the matter was certified as a
class action. A class action notice was mailed on June 7, 1995 to all
Limited Partners who are members of the class.
On November 23 and 25, 1994, Geodyne, PaineWebber Incorporated
("PaineWebber"), and certain other parties were named as defendants in
two related lawsuits alleging misrepresentations made to induce
investments in the Partnerships and asserting causes of action for
common law fraud and deceit and unjust enrichment (Romine v.
PaineWebber, Inc. et al, Case No. 94-CIV-8558, U.S. District Court,
Southern District of New York and Romine v. PaineWebber, Inc., et al,
Case No. 94-132844, Supreme Court of the State of New York, County of
New York). The federal court case was later consolidated with other
similar actions (to which Geodyne is not a party) under the title In
Re: PaineWebber Limited Partnerships' Litigation (the "Federal
Partnership Class Action") and was certified as a class action on May
30, 1995. A class action notice was mailed on June 7, 1995 to all
members of the class. The Federal Partnership
16
Class Action also alleges violations of 18 U.S.C. Section 1962(c) and
the Securities Exchange Act of 1934. Compensatory and punitive
damages, interest, and costs have been requested in both matters. The
amended complaint in the Federal Partnership Class Action no longer
asserts any claim directly against Geodyne.
On January 18, 1996, PaineWebber issued a press release
indicating that it had reached an agreement to settle the pending
Federal Partnership Class Action along with the consolidated Neidick
matter referred to above (collectively, the "PaineWebber Partnership
Class Actions"), along with a settlement with the SEC and an agreement
to settle with various state securities regulators. On that date,
PaineWebber paid $125 million into an interest bearing account as part
of a memorandum of understanding in connection with the proposed
settlement (the "Settlement Fund"). The Settlement Fund applies to
claims related to both the Partnerships and certain other investment
programs sold by PaineWebber. In addition, PaineWebber agreed to a
SEC administrative order creating a capped $40 million fund (the "SEC
Claims Fund"), which is to be distributed to eligible Limited Partners
by an independent administrator (the "Claims Administrator"); a civil
penalty of $5 million leveled by the SEC; and payments aggregating $5
million to state securities administrators. Such settlement is not an
obligation of either the Partnerships or Geodyne and, accordingly,
would not affect the financial statements of the Partnerships.
In connection with the PaineWebber Partnership Class Actions, on
July 17, 1996 the federal court entered a preliminary order regarding
the settlement proceedings referred to above. Pursuant to that order,
plaintiffs' counsel mailed to class members the Class Settlement
Notice (the "Notice") and Proof of Claim. Eligible class members are
generally those who purchased their Units through PaineWebber on or
before December 31, 1992 and who have not (i) previously opted out of
the Class, (ii) previously released PaineWebber, or (iii) finally
adjudicated their claims against PaineWebber.
Plaintiffs' counsel will be responsible for allocating payments
from the $125 million Settlement Fund previously funded by PaineWebber
among eligible Limited Partners and investors in other unrelated
PaineWebber partnerships in accordance with the settlement. The
amount and date of any payment will vary depending upon many factors
set forth in the Notice. It is currently expected that payments from
the Settlement Fund will be made some time in 1997.
17
In addition, eligible Limited Partners in the Partnerships who
held their Units on June 3, 1996 may be entitled to certain additional
payments from an escrow fund to which PaineWebber will make payments
through May 30, 2001 if spot market oil and natural gas prices as
reported by the New York Mercantile Exchange fall below certain
thresholds set forth in the Notice (the "Pricing Guarantee"). The
threshold prices used in the Pricing Guarantee are $18.00 per barrel
of oil and $1.80 per Mcf of gas. Under the Notice, PaineWebber
payments, if any, made pursuant to the Pricing Guarantee will be paid
to Limited Partners of record on June 30, 1996 irrespective of whether
they subsequently sell/dispose of their Units to third parties. The
Pricing Guarantee does NOT attach to the Units as an attribute of
ownership in the Partnerships and is not an obligation of either
Geodyne or the Partnerships.
A look back provision is also included in the settlement which
may provide additional funds as of January 1, 2001 for eligible
Limited Partners. Class members who sold their Units prior to June
30, 1996 will not be eligible for payments, if any, under the Pricing
Guarantee or the look back provision.
Eligible Limited Partners were required to timely execute and
return a proof of claim by January 17, 1997 in order to participate in
the settlement.
In connection with the SEC Claims Fund, on April 17, 1996,
PaineWebber mailed a Notice and Claim Form to each Limited Partner who
purchased Units in the Partnerships through PaineWebber from January
1, 1986 to December 31, 1992. Limited Partners are not eligible to
participate in the claims process if they (i) previously reached a
settlement with PaineWebber or (ii) had their direct investment claim
resolved by a court or in arbitration. Participation in the claims
process is optional, and does not prevent a Limited Partner from
pursuing any other remedy against PaineWebber that may be available.
Limited Partners had until October 22, 1996 to complete the claim form
and return it to the Claims Administrator. The determination of
whether a Limited Partner is entitled to a recovery under the SEC
Claims Fund will be based on whether or not the Claims Administrator
determines that the Limited Partner's investment in the Partnerships
was suitable for him at the time of purchase. In addition, if the
Limited Partner has opted out of the PaineWebber Partnership Class
Action and has not already settled with PaineWebber or has had a claim
resolved by a court or in arbitration, the Claims Administrator will
also consider allegations that misrepresentations were made in
connection with the sale of the Units.
On March 20, 1997 the settlement described above was confirmed by
the federal court.
18
To the knowledge of the General Partner, neither the General
Partner nor the Partnerships or their properties are subject to any
litigation, the results of which would have a material effect on the
Partnerships' or the General Partner's financial condition or
operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF LIMITED PARTNERS
There were no matters submitted to a vote of the Limited Partners
of any Partnership during 1996.
PART II
ITEM 5. MARKET FOR UNITS AND RELATED LIMITED PARTNER MATTERS
As of February 28, 1997, the number of Units outstanding and the
approximate number of Limited Partners of record in the Partnerships
were as follows:
Number of Limited
Partnership Units Partners
----------- --------- --------
P-1 108,074 887
P-2 90,094 663
P-3 169,637 1,510
P-4 126,306 1,006
P-5 118,449 1,074
P-6 143,041 828
Units were initially sold for a price of $100. The Units are not
traded on any exchange and there is no public trading market for them.
The General Partner is aware of certain transfers of Units between
unrelated parties, some of which are facilitated by secondary trading
firms and matching services. However, the General Partner believes
that these transfers have been limited and sporadic in number and
volume. Other than trades facilitated by certain secondary trading
firms and matching services, no organized trading market for Units
exists and none is expected to develop. Due to the nature of these
transactions, the General Partner has no verifiable information
regarding prices at which Units have been transferred. Further, a
transferee may not become a substitute Limited Partner without the
consent of the General Partner.
19
Pursuant to the terms of the Partnership Agreements, the General
Partner is obligated to annually issue a repurchase offer based on the
estimated future net revenues from the Partnerships' reserves and is
calculated pursuant to the terms of the Partnership Agreements. Such
repurchase offer is recalculated monthly in order to reflect cash
distributions to the Limited Partners and extraordinary events. The
following table sets forth the General Partner's repurchase offer per
Unit as of the periods indicated. For purposes of this Annual Report,
a Unit represents an initial subscription of $100 to a Partnership.
Repurchase Offer Prices
-----------------------
1995 1996 1997
---------------------- --------------------- ----
1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st
P/ship Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr.
- ------ ---- ---- ---- ---- ---- ---- ---- ---- ----
P-1 $24 $24 $23 $21 $19 $17 $25 $22 $20
P-2 27 24 22 21 19 17 24 21 19
P-3 27 24 22 21 19 17 24 21 19
P-4 19 21 19 17 15 12 18 15 13
P-5 19 18 16 15 13 12 16 14 12
P-6 33 32 30 29 27 25 26 22 20
Cash Distributions
Cash distributions are primarily dependent upon a Partnership's
cash receipts from its Net Profits Interests and cash requirements of
the Partnership. Distributable cash is determined by the General
Partner at the end of each calendar quarter and distributed to the
Limited Partners within 45 days after the end of the quarter.
Distributions are restricted to cash on hand less amounts required to
be retained out of such cash as determined in the sole judgment of the
General Partner to pay costs, expenses, or other Partnership
obligations whether accrued or anticipated to accrue. In certain
instances, the General Partner may not distribute the full amount of
cash receipts which might otherwise be available for distribution in
an effort to equalize or stabilize the amounts of quarterly
distributions. Any available amounts not distributed are invested and
the interest or income thereon is for the accounts of the Limited
Partners.
The following is a summary of cash distributions paid to the
Limited Partners for the years ended December 31, 1995 and 1996 and
for the first quarter of 1997:
20
Cash Distributions
------------------
1995
----------------------------------
1st 2nd 3rd 4th
P/ship Quarter Quarter Quarter Quarter
------ ------- ------- ------- -------
P-1 $1.76 $1.67 $1.85 $1.71
P-2 1.61 1.44 1.44 1.55
P-3 1.56 1.62 1.47 1.56
P-4 2.26 2.30 1.62 2.18
P-5 0.93 1.86 1.65 1.35
P-6 1.08 1.47 1.89 1.29
1996 1997
------------------------------------ -------
1st 2nd 3rd 4th 1st
P/ship Quarter Quarter Quarter Quarter Quarter
------ ------- ------- ------- --------- -------
P-1 $1.98 $2.00 $2.45 $2.98(1) $2.61(1)
P-2 1.64 1.70 2.31 2.77(1) 2.36(1)
P-3 1.69 1.70 2.06 2.76(1) 2.33(1)
P-4 2.09 2.41 2.19 2.93(1) 2.54(1)
P-5 1.40 1.61 1.85 2.01(1) 2.00(1)
P-6 1.61 2.20 2.22 4.04(1) 2.09
- -----------------------
(1) Includes proceeds from the sale of Net Profits Interests.
21
ITEM 6. SELECTED FINANCIAL DATA
The following tables present selected financial data for the Partnerships. This data
should be read in conjunction with the financial statements of the Partnerships, and the
respective notes thereto, included elsewhere in this Annual Report. See "Item 8. Financial
Statements and Supplementary Data."
Selected Financial Data
P-1 Partnership
---------------
1996 1995 1994 1993 1992
------------ ------------ ------------ ------------ ------------
Net Profits $1,191,311 $ 935,026 $1,089,659 $1,216,344 $1,220,250
Net Income (Loss):
Limited Partners 773,173 6,098 ( 82,364) 84,309 290,109
General Partner 53,849 33,359 38,499 45,008 51,025
Total 827,022 39,457 ( 43,865) 129,317 341,134
Limited Partners' Net
Income (Loss) per
Unit 7.15 .06 ( .76) .78 2.68
Limited Partners' Cash
Distributions per Unit 9.41 6.99 8.60 8.92 10.75
Total Assets 3,230,759 3,488,930 4,243,473 5,268,338 6,151,083
Partners' Capital (Deficit)
Limited Partners 3,293,425 3,537,252 4,286,154 5,298,518 6,178,586
General Partner ( 62,666) ( 48,322) ( 42,681) ( 30,180) ( 27,503)
Number of Units
Outstanding 108,074 108,074 108,074 108,074 108,074
22
Selected Financial Data
P-2 Partnership
---------------
1996 1995 1994 1993 1992
------------ ------------ ------------ ------------ ------------
Net Profits $ 911,429 $ 715,608 $ 786,768 $ 962,561 $ 962,052
Net Income (Loss):
Limited Partners 551,248 ( 182,851) ( 99,086) ( 54,217) 168,320
General Partner 40,232 23,562 26,363 34,851 39,309
Total 591,480 ( 159,289) ( 72,723) ( 19,366) 207,629
Limited Partners' Net
Income (Loss) per Unit 6.12 ( 2.03) ( 1.10) ( .60) 1.87
Limited Partners' Cash
Distributions per Unit 8.42 6.04 8.66 8.45 10.00
Total Assets 2,635,549 2,854,539 3,586,328 4,483,051 5,303,586
Partners' Capital (Deficit)
Limited Partners 2,692,977 2,900,729 3,628,580 4,507,666 5,323,602
General Partner ( 57,428) ( 46,190) ( 42,252) ( 24,615) ( 20,016)
Number of Units
Outstanding 90,094 90,094 90,094 90,094 90,094
23
Selected Financial Data
P-3 Partnership
---------------
1996 1995 1994 1993 1992
------------ ------------ ------------ ------------- -------------
Net Profits $1,706,259 $1,327,052 $1,472,407 $1,798,809 $ 1,803,858
Net Income (Loss):
Limited Partners 1,024,694 ( 413,819) ( 183,184) ( 161,726) 315,060
General Partner 75,192 42,468 49,058 64,658 73,550
Total 1,099,886 ( 371,351) ( 134,126) ( 97,068) 388,610
Limited Partners' Net
Income (Loss) per
Unit 6.04 ( 2.44) ( 1.08) ( .95) 1.86
Limited Partners' Cash
Distributions per
Unit 8.21 6.21 8.60 8.22 10.00
Total Assets 4,968,083 5,355,843 6,836,194 8,508,320 10,074,700
Partners' Capital
(Deficit)
Limited Partners 5,075,168 5,442,474 6,911,293 8,554,477 10,111,366
General Partner ( 107,085) ( 86,631) ( 75,099) ( 46,157) ( 36,666)
Number of Units
Outstanding 169,637 169,637 169,637 169,637 169,637
24
Selected Financial Data
P-4 Partnership
---------------
1996 1995 1994 1993 1992
------------ ------------ ------------ ------------ ------------
Net Profits $1,373,635 $1,251,153 $1,779,306 $2,136,768 $1,928,840
Net Income (Loss):
Limited Partners 584,825 ( 496,777) ( 152,785) 339,911 571,238
General Partner 52,931 40,039 64,877 84,873 77,945
Total 637,756 ( 456,738) ( 87,908) 424,784 649,183
Limited Partners' Net
Income (Loss) per Unit 4.63 ( 3.93) ( 1.21) 2.69 4.52
Limited Partners' Cash
Distributions per Unit 9.62 8.36 15.11 10.87 10.75
Total Assets 3,283,477 3,940,479 5,506,217 7,607,125 8,635,561
Partners' Capital (Deficit)
Limited Partners 3,364,850 3,995,025 5,546,802 7,609,587 8,643,072
General Partner ( 81,373) ( 54,546) ( 40,585) ( 2,462) ( 7,511)
Number of Units
Outstanding 126,306 126,306 126,306 126,306 126,306
25
Selected Financial Data
P-5 Partnership
---------------
1996 1995 1994 1993 1992
------------ ------------ ------------ ------------ ------------
Net Profits $1,112,631 $ 938,957 $1,180,970 $1,228,404 $ 839,505
Net Income (Loss):
Limited Partners 593,334 ( 201,341) ( 1,811,683) ( 755,849) ( 280,489)
General Partner 46,364 30,697 24,070 37,195 30,964
Total 639,698 ( 170,644) ( 1,787,613) ( 718,654) ( 249,525)
Limited Partners' Net
Income (Loss) per Unit 5.01 ( 1.70) ( 15.30) ( 6.38) ( 2.37)
Limited Partners' Cash
Distributions per Unit 6.87 5.79 8.99 4.80 5.50
Total Assets 2,993,188 3,225,517 4,115,661 7,050,262 8,425,895
Partners' Capital (Deficit)
Limited Partners 3,053,276 3,273,942 4,160,283 7,036,966 8,361,653
General Partner ( 60,088) ( 48,425) ( 44,622) ( 9,192) ( 10,804)
Number of Units
Outstanding 118,449 118,449 118,449 118,449 118,449
26
Selected Financial Data
P-6 Partnership
---------------
1996 1995 1994 1993 1992
------------ ------------ ------------ ------------ -------------
Net Profits $2,002,957 $1,284,185 $1,487,321 $1,638,647 $1,417,454
Net Income (Loss):
Limited Partners 996,385 ( 907,347) ( 346,636) ( 221,515) ( 95,704)
General Partner 84,925 36,393 50,124 58,274 52,735
Total 1,081,310 ( 870,954) ( 296,512) ( 163,241) ( 42,969)
Limited Partners' Net
Income (Loss) per Unit 6.97 ( 6.34) ( 2.42) ( 1.54) ( .67)
Limited Partners' Cash
Distributions per Unit 10.07 5.73 9.52 6.46 7.00
Total Assets 4,714,677 5,170,032 6,903,486 8,676,186 9,777,220
Partners' Capital (Deficit)
Limited Partners 4,773,698 5,217,313 6,944,660 8,651,296 9,796,612
General Partner ( 59,021) ( 47,281) ( 41,174) ( 21,298) ( 19,392)
Number of Units
Outstanding 143,041 143,041 143,041 143,041 143,041
27
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Use of Forward-Looking Statements and Estimates
This Annual Report contains certain forward-looking statements.
The words "anticipate," "believe," "expect," "plan," "intend,"
"estimate," "project," "could," "may," and similar expressions are
intended to identify forward-looking statements. Such statements
reflect management's current views with respect to future events and
financial performance. This Annual Report also includes certain
information which is, or is based upon, estimates and assumptions.
Such estimates and assumptions are management's efforts to accurately
reflect the condition and operation of the Partnerships.
Use of forward-looking statements and estimates and assumptions
involve risks and uncertainties which include, but are not limited to,
the volatility of oil and gas prices, the uncertainty of reserve
information, the operating risk associated with oil and gas properties
(including the risk of personal injury, death, property damage, damage
to the well or producing reservoir, environmental contamination, and
other operating risks), the prospect of changing tax and regulatory
laws, the availability and capacity of processing and transportation
facilities, the general economic climate, the supply and price of
foreign imports of oil and gas, the level of consumer product demand,
and the price and availability of alternative fuels. Should one or
more of these risks or uncertainties occur or should estimates or
underlying assumptions prove incorrect, actual conditions or results
may vary materially and adversely from those stated, anticipated,
believed, estimated, or otherwise indicated.
General Discussion
The following general discussion should be read in conjunction
with the analysis of results of operations provided below. The most
important variable affecting the Partnerships' revenues is the prices
received for the sale of oil and gas. Predicting future prices is
very difficult. Concerning past trends, average yearly wellhead gas
prices in the United States have been relatively volatile for a number
of years. For the past ten years, such prices have generally been in
the $1.40 to $2.00 per Mcf range, significantly below prices received
in the early 1980s. Average gas prices in the latter part of 1996 and
January 1997, however, were somewhat higher than those yearly
averages. It is not known whether this was a short-term trend or an
indicator of potentially higher average gas prices on a longer-term
basis.
28
Substantially all of the Partnerships' gas reserves are being
sold in the "spot market." Prices on the spot market are subject to
wide seasonal and regional pricing fluctuations due to the highly
competitive nature of the spot market. In addition, such spot market
sales are generally short-term in nature and are dependent upon the
obtaining of transportation services provided by pipelines. Spot
prices for the Partnerships' gas increased from approximately $2.00
per Mcf at December 31, 1995 to approximately $3.57 per Mcf at
December 31, 1996. Such prices were on an MMBTU basis and differ from
the prices actually received by the Partnerships due to transportation
and marketing costs, BTU adjustments, and regional price and quality
differences.
Due to global consumption and supply trends over the last several
months, oil prices have recently been higher than the yearly average
prices of the late to mid-1980s and early 1990s. It is not known
whether this trend will continue. Prices for the Partnerships' oil
increased from approximately $18.50 per barrel at December 31, 1995 to
approximately $23.75 per barrel at December 31, 1996.
Future prices for both oil and gas will likely be different from
(and may be lower than) the prices in effect on December 31, 1996.
Primarily due to heating season demand, year-end prices in many past
years have tended to be higher, and in some cases significantly
higher, than the yearly average price actually received by the
Partnerships for at least the following year. In particular, it
should be noted that December 31, 1996 prices were much higher than
year-end prices for the last several years and substantially higher
than the average prices received in each of the last several years.
It is not possible to predict whether the December 1996 pricing level
is indicative of a new trend toward higher energy prices or a short-
term deviation from the recent history of low to moderate prices;
therefore, management is unable to predict whether future oil and gas
prices will (i) stabilize, (ii) increase, or (iii) decrease.
Results of Operations
An analysis of the change in net oil and gas operations (oil and
gas sales, less lease operating expenses and production taxes), is
presented in the tables following "Results of Operations" under the
heading "Average Proceeds and Units of Production."
29
Effective October 1, 1995 the Partnerships adopted the
requirements of Statement of Financial Accounting Standards ("SFAS")
No. 121, "Accounting for the Impairment of Long Lived Assets and
Assets Held for Disposal," which is intended to establish more
consistent accounting standards for measuring the recoverability of
long-lived assets. SFAS No. 121 requires successful efforts
companies, like the Partnerships, to evaluate the recoverability of
the carrying costs of their Net Profits Interests for each field,
rather than for the Partnerships' Net Profits Interests as a whole as
previously allowed by the SEC. See Note 1 to the Partnerships'
financial statements, included in Item 8 of this Annual Report for a
further description of this impairment policy. As a result of the
Partnerships' adoption of SFAS No. 121, the Partnerships recorded a
non-cash charge against earnings (impairment provision) during the
fourth quarter of 1995 as follows:
Partnership Amount
----------- --------
P-1 $ 86,264
P-2 182,970
P-3 377,983
P-4 581,036
P-5 194,933
P-6 478,168
The P-5 Partnership recorded a similar charge of $1,191,000 for the
year ended December 31, 1994 pursuant to the Partnerships' prior
impairment policy. No such charge was recorded for any Partnership
during the year ended December 31, 1996 under SFAS No. 121.
Subsequent to December 31, 1996, the oil and gas industry has
seen a drop in oil and gas prices. This drop is a function of the
cyclical nature of oil and gas prices as discussed under the heading
"Competition and Marketing" in Item 1 of this Annual Report. The
Partnerships' reserves were determined at December 31, 1996 using oil
and gas prices of $23.75 per barrel and $3.57 per Mcf, respectively.
As of the date of this Annual Report, oil and gas prices received by
the Partnerships have decreased to approximately $19.00 per barrel and
$1.60 per Mcf, respectively (the "Filing Date Prices"). If the Filing
Date Prices, as opposed to December 31, 1996 prices, were used in
calculating the standardized measure of discounted future net cash
flows of the Partnerships' proved oil and gas reserves as of December
31, 1996, as contained in Note 4 to the Partnerships' financial
statements included in Item 8 of this Annual Report, the value
assigned to the Partnerships' oil and gas reserves would have been
significantly lower. In addition, using the Filing Date Prices to
determine the recoverability of oil and gas reserves would have
required impairment provisions in the following approximate amounts at
December 31, 1996:
30
Partnership Amount
----------- --------
P-1 $114,000
P-2 114,000
P-3 221,000
P-4 85,000
P-5 123,000
P-6 445,000
If the Filing Date Prices are in effect on March 31, 1997, the above
impairment provisions will be reflected in the Partnerships' financial
statements as of March 31, 1997. Impairment provisions do not impact
the Partnerships' cash flows from operating activities; however, they
do impact the amount of General Partner and Limited Partner capital.
The risk that the Partnerships will be required to record further
impairment provisions in the future, beyond those noted above,
increases when oil and gas prices are depressed. Accordingly, the P-4
Partnership has Net Profits Interests in two fields and all other
Partnerships have Net Profits Interests in three fields in which it is
reasonably possible that impairment provisions will be recorded in the
near term if gas prices decrease below the Filing Date Prices.
P-1 Partnership
---------------
Year Ended December 31, 1996 Compared
to Year Ended December 31, 1995
--------------------------------------
Total Net Profits increased $256,285 (27.4%) for the year ended
December 31, 1996 as compared to the year ended December 31, 1995. Of
this increase, approximately $126,000 and $286,000, respectively, were
related to increases in the average prices of oil and gas sold,
partially offset by decreases of approximately $85,000 and $75,000,
respectively, related to decreases in volumes of oil and gas sold.
Volumes of oil and gas sold decreased 5,277 barrels and 55,633 Mcf,
respectively, for the year ended December 31, 1996 as compared to the
year ended December 31, 1995. Average oil and gas prices increased to
$19.85 per barrel and $1.95 per Mcf, respectively, for the year ended
December 31, 1996 from $16.11 per barrel and $1.34 per Mcf,
respectively, for the year ended December 31, 1995.
31
Depletion of Net Profits Interests decreased $373,874 (53.5%) for
the year ended December 31, 1996 as compared to the year ended
December 31, 1995. This decrease was primarily due to (i) a decrease
in capitalized costs due to an impairment provision recognized during
the fourth quarter of 1995, (ii) upward revisions in the estimates of
remaining oil and gas reserves at December 31, 1996, and (iii) the
decrease in equivalent units of production sold during the year ended
December 31, 1996 as compared to the year ended December 31, 1995. As
a percentage of Net Profits, this expense decreased to 27.2% for the
year ended December 31, 1996 from 74.7% for the year ended December
31, 1995. This decrease was primarily due to the dollar decrease in
depletion of Net Profits Interests discussed above and the increases
in the average prices of oil and gas sold during the year ended
December 31, 1996 as compared to the year ended December 31, 1995.
As set forth under "Results of Operations" above, the P-1
Partnership recognized a non-cash charge against earnings of $86,264
for the year ended December 31, 1995. This impairment provision was
necessary due to the unamortized costs of Net Profits Interests
exceeding the undiscounted future net revenues from such Net Profits
Interests, in accordance with the P-1 Partnership's adoption of SFAS
No. 121. No similar charge was necessary during the year ended
December 31, 1996.
General and administrative expenses remained relatively constant
for the year ended December 31, 1996 as compared to the year ended
December 31, 1995. As a percentage of Net Profits, these expenses
decreased to 10.9% for the year ended December 31, 1996 from 13.5% for
the year ended December 31, 1995. This percentage decrease was
primarily due to the increase in Net Profits discussed above.
Cumulative cash distributions to the Limited Partners in the P-1
Partnership through December 31, 1996 totalled $8,777,558 or 81.2% of
Limited Partner capital contributions.
32
Year Ended December 31, 1995 Compared
to Year Ended December 31, 1994
-------------------------------------
Total Net Profits decreased $154,633 (14.2%) for the year ended
December 31, 1995 as compared to the year ended December 31, 1994. Of
this decrease, approximately $97,000 and $32,000, respectively, were
related to decreases in volumes of oil and gas sold and approximately
$131,000 was related to a decrease in the average price of gas sold,
partially offset by an increase of approximately $49,000 related to an
increase in the average price of oil sold. Volumes of oil and gas
sold decreased 6,542 barrels and 20,186 Mcf, respectively, for the
year ended December 31, 1995 as compared to the year ended December
31, 1994. Average gas prices decreased to $1.34 per Mcf for the year
ended December 31, 1995 from $1.59 per Mcf for the year ended December
31, 1994. Average oil prices increased to $16.11 per barrel for the
year ended December 31, 1995 from $14.86 per barrel for the year ended
December 31, 1994.
Depletion of Net Profits Interests decreased $318,929 (31.4%) for
the year ended December 31, 1995 as compared to the year ended
December 31, 1994 primarily due to upward revisions of previous
reserve estimates and the decrease in equivalent units of production
sold.
As set forth under "Results of Operations" above, the P-1
Partnership recognized a non-cash charge against earnings of $86,264
for the year ended December 31, 1995. This impairment provision was
necessary due to the unamortized costs of Net Profits Interests
exceeding the undiscounted future net revenues from such Net Profits
Interests, in accordance with the P-1 Partnership's adoption of SFAS
No. 121. No similar charge was necessary during the year ended
December 31, 1994 under the P-1 Partnership's prior impairment policy.
General and administrative expenses remained relatively constant
for the year ended December 31, 1995 as compared to the year ended
December 31, 1994. As a percentage of Net Profits, these expenses
were 13.5% and 11.9%, respectively, for the years ended December 31,
1995 and 1994. This slight percentage increase was primarily due to
the decrease in Net Profits during the year ended December 31, 1995.
33
P-2 Partnership
---------------
Year Ended December 31, 1996 Compared
to Year Ended December 31, 1995
-------------------------------------
Total Net Profits increased $195,821 (27.4%) for the year ended
December 31, 1996 as compared to the year ended December 31, 1995. Of
this increase, approximately $90,000 and $234,000, respectively, were
related to increases in the average prices of oil and gas sold,
partially offset by decreases of approximately $65,000 and $73,000,
respectively, related to decreases in volumes of oil and gas sold.
Volumes of oil and gas sold decreased 3,991 barrels and 53,938 Mcf,
respectively, for the year ended December 31, 1996 as compared to the
year ended December 31, 1995. Average oil and gas prices increased to
$19.90 per barrel and $1.96 per Mcf, respectively, for the year ended
December 31, 1996 from $16.17 per barrel and $1.36 per Mcf,
respectively, for the year ended December 31, 1995.
Depletion of Net Profits Interests decreased $329,737 (54.5%) for
the year ended December 31, 1996 as compared to the year ended
December 31, 1995. This decrease was primarily due to (i) a decrease
in capitalized costs due to an impairment provision recognized during
the fourth quarter of 1995, (ii) upward revisions in the estimates of
remaining oil and gas reserves at December 31, 1996, and (iii) the
decrease in equivalent units of production sold during the year ended
December 31, 1996 as compared to the year ended December 31, 1995. As
a percentage of Net Profits, this expense decreased to 30.2% for the
year ended December 31, 1996 from 84.6% for the year ended December
31, 1995. This decrease was primarily due to the dollar decrease in
depletion of Net Profits Interests discussed above and the increases
in the average prices of oil and gas sold during the year ended
December 31, 1996 as compared to the year ended December 31, 1995.
As set forth under "Results of Operations" above, the P-2
Partnership recognized a non-cash charge against earnings of $182,970
for the year ended December 31, 1995. This impairment provision was
necessary due to the unamortized costs of Net Profits Interests
exceeding the undiscounted future net revenues from such Net Profits
Interests, in accordance with the P-2 Partnership's adoption of SFAS
No. 121. No similar charge was necessary during the year ended
December 31, 1996.
34
General and administrative expenses remained relatively constant
for the year ended December 31, 1996 as compared to the year ended
December 31, 1995. As a percentage of Net Profits, these expenses
decreased to 11.9% for the year ended December 31, 1996 from 14.7% for
the year ended December 31, 1995. This percentage decrease was
primarily due to the increase in Net Profits discussed above.
Cumulative cash distributions to the Limited Partners in the P-2
Partnership through December 31, 1996 totalled $6,683,561 or 74.2% of
Limited Partner capital contributions.
Year Ended December 31, 1995 Compared
to Year Ended December 31, 1994
-------------------------------------
Total Net Profits decreased $71,160 (9.0%) for the year ended
December 31, 1995 as compared to the year ended December 31, 1994. Of
this decrease, approximately $73,000 and $138,000, respectively, were
related to decreases in volumes of oil sold and the average price of
gas sold, partially offset by an increase of approximately $61,000
related to a decrease in operating expenses incurred by the owners of
the Working Interests and increases of approximately $42,000 and
$35,000, respectively, related to increases in both volumes of gas
sold and the average price of oil sold. Volumes of oil sold decreased
4,894 barrels and volumes of gas sold increased 25,330 Mcf for the
year ended December 31, 1995 as compared to the year ended December
31, 1994. The decrease in volumes of oil sold was primarily due to
(i) the sale of a significant Net Profits Interest during the year
ended December 31, 1995, (ii) adjustments made by purchasers in 1994
related to oil sold in prior periods on several wells, and (iii)
normal declines in production on several wells. Average gas prices
decreased to $1.36 per Mcf for the year ended December 31, 1995 from
$1.67 per Mcf for the year ended December 31, 1994. Average oil
prices increased to $16.17 per barrel for the year ended December 31,
1995 from $14.93 per barrel for the year ended December 31, 1994.
Depletion of Net Profits Interests decreased $144,769 (19.3%) for
the year ended December 31, 1995 as compared to the year ended
December 31, 1994 primarily due to upward revisions of previous
reserve estimates.
35
As set forth under "Results of Operations" above, the P-2
Partnership recognized a non-cash charge against earnings of $182,970
for the year ended December 31, 1995. This impairment provision was
necessary due to the unamortized costs of Net Profits Interests
exceeding the undiscounted future net revenues from such Net Profits
Interests, in accordance with the P-2 Partnership's adoption of SFAS
No. 121. No similar charge was necessary during the year ended
December 31, 1994 under the P-2 Partnership's prior impairment policy.
General and administrative expenses remained relatively constant
for the year ended December 31, 1995 as compared to the year ended
December 31, 1994. As a percentage of Net Profits, these expenses
were 14.7% and 13.8%, respectively, for the years ended December 31,
1995 and 1994.
P-3 Partnership
---------------
Year Ended December 31, 1996 Compared
to Year Ended December 31, 1995
-------------------------------------
Total Net Profits increased $379,207 (28.6%) for the year ended
December 31, 1996 as compared to the year ended December 31, 1995. Of
this increase, approximately $166,000 and $435,000, respectively, were
related to increases in the average prices of oil and gas sold and
approximately $36,000 was related to a decrease in production expenses
incurred by the owners of the Working Interests, partially offset by
decreases of approximately $121,000 and $141,000, respectively,
related to decreases in volumes of oil and gas sold. Volumes of oil
and gas sold decreased 7,467 barrels and 103,370 Mcf, respectively,
for the year ended December 31, 1996 as compared to the year ended
December 31, 1995. The decrease in lease operating expenses resulted
primarily from the decreases in volumes of oil and gas sold during the
year ended December 31, 1996 as compared to the year ended December
31, 1995, partially offset by an increase in production taxes
associated with the increase in Net Profits discussed above. Average
oil and gas prices increased to $19.90 per barrel and $1.95 per Mcf,
respectively, for the year ended December 31, 1996 from $16.17 per
barrel and $1.36 per Mcf, respectively, for the year ended December
31, 1995.
36
Depletion of Net Profits Interests decreased $626,740 (54.6%) for
the year ended December 31, 1996 as compared to the year ended
December 31, 1995. This decrease was primarily due to (i) a decrease
in capitalized costs due to an impairment provision recognized during
the fourth quarter of 1995, (ii) upward revisions in the estimates of
remaining oil and gas reserves at December 31, 1996, and (iii) the
decrease in equivalent units of production sold during the year ended
December 31, 1996 as compared to the year ended December 31, 1995. As
a percentage of Net Profits, this expense decreased to 30.5% for the
year ended December 31, 1996 from 86.5% for the year ended December
31, 1995. This decrease was primarily due to the dollar decrease in
depletion of Net Profits Interests discussed above and the increases
in the average prices of oil and gas sold during the year ended
December 31, 1996 as compared to the year ended December 31, 1996.
As set forth under "Results of Operations" above, the P-3
Partnership recognized a non-cash charge against earnings of $377,983
for the year ended December 31, 1995. This impairment provision was
necessary due to the unamortized costs of Net Profits Interests
exceeding the undiscounted future net revenues from such Net Profits
Interests, in accordance with the P-3 Partnership's adoption of SFAS
No. 121. No similar charge was necessary during the year ended
December 31, 1996.
General and administrative expenses remained relatively constant
for the year ended December 31, 1996 as compared to the year ended
December 31, 1995. As a percentage of Net Profits, these expenses
decreased to 12.0% for the year ended December 31, 1996 from 15.0% for
the year ended December 31, 1995. This percentage decrease was
primarily due to the increase in Net Profits discussed above.
Cumulative cash distributions to the Limited Partners in the P-3
Partnership through December 31, 1996 totalled $11,960,401 or 70.5% of
Limited Partner capital contributions.
37
Year Ended December 31, 1995 Compared
to Year Ended December 31, 1994
-------------------------------------
Total Net Profits decreased $145,355 (9.9%) for the year ended
December 31, 1995 as compared to the year ended December 31, 1994. Of
this decrease, approximately $136,000 was related to a decrease in
volumes of oil sold and approximately $261,000 was related to a
decrease in the average price of gas sold, partially offset by an
increase of approximately $107,000 related to a decrease in production
expenses incurred by the owners of the Working Interests and increases
of approximately $84,000 and $64,000, respectively, related to
increases in the volumes of gas sold and the average price of oil
sold. Volumes of oil sold decreased 9,100 barrels and volumes of gas
sold increased 50,491 Mcf for the year ended December 31, 1995 as
compared to the year ended December 31, 1994. The decrease in volumes
of oil sold was primarily due to (i) the sale of a significant Net
Profits Interest during the year ended December 31, 1995, (ii)
adjustments made by purchasers in 1994 related to oil sold in prior
periods on several wells, and (iii) normal declines in production on
several wells. Average gas prices decreased to $1.36 per Mcf for the
year ended December 31, 1995 from $1.67 per Mcf for the year ended
December 31, 1994. Average oil prices increased to $16.17 per barrel
for the year ended December 31, 1995 from $14.94 per barrel for the
year ended December 31, 1994.
Depletion of Net Profits Interests decreased $246,202 (17.7%) for
the year ended December 31, 1995 as compared to the year ended
December 31, 1994 primarily due to upward revisions of previous
reserve estimates.
As set forth under "Results of Operations" above, the P-3
Partnership recognized a non-cash charge against earnings of $377,983
for the year ended December 31, 1995. This impairment provision was
necessary due to the unamortized costs of Net Profits Interests
exceeding the undiscounted future net revenues from such Net Profits
Interests, in accordance with the P-3 Partnership's adoption of SFAS
No. 121. No similar charge was necessary during the year ended
December 31, 1994 under the P-3 Partnership's prior impairment policy.
General and administrative expenses remained relatively constant
for the year ended December 31, 1995 as compared to the year ended
December 31, 1994. As a percentage of Net Profits, these expenses
were 15.0% and 13.8%, respectively, for the years ended December 31,
1995 and 1994.
38
P-4 Partnership
---------------
Year Ended December 31, 1996 Compared
to Year Ended December 31, 1995
-------------------------------------
Total Net Profits increased $122,482 (9.8%) for the year ended
December 31, 1996 as compared to the year ended December 31, 1995. Of
this increase, approximately $75,000 and $404,000, respectively, were
related to increases in the average prices of oil and gas sold and
approximately $118,000 was related to a decrease in production
expenses attributable to the Working Interests, partially offset by
decreases of approximately $103,000 and $375,000, respectively,
related to decreases in volumes of oil and gas sold. Volumes of oil
and gas sold decreased 5,898 barrels and 254,801 Mcf, respectively,
for the year ended December 31, 1996 as compared to the year ended
December 31, 1995. The decrease in volumes of oil sold was primarily
due to normal declines in production due to diminished oil reserves on
several wells. The decrease in volumes of gas sold was primarily due
to (i) the sale of several gas producing wells during the year ended
December 31, 1996, (ii) the normal declines in production on several
wells due to diminished gas reserves, and (iii) a positive prior
period volume adjustment made by the purchaser on one well during the
year ended December 31, 1995. The decrease in production expenses
resulted primarily from the decreases in volumes of oil and gas sold
during the year ended December 31, 1996 as compared to the year ended
December 31, 1995. Average oil and gas prices increased to $20.79 per
barrel and $2.11 per Mcf, respectively, for the year ended December
31, 1996 from $17.51 per barrel and $1.47 per Mcf, respectively, for
the year ended December 31, 1995.
Depletion of Net Profits Interests decreased $450,079 (45.4%) for
the year ended December 31, 1996 as compared to the year ended
December 31, 1995. This decrease was primarily due to (i) a decrease
in capitalized costs due to an impairment provision recognized during
the fourth quarter of 1995, (ii) upward revisions in the estimates of
remaining oil and gas reserves at December 31, 1996, and (iii) the
decrease in equivalent units of production sold during the year ended
December 31, 1996 as compared to the year ended December 31, 1995. As
a percentage of Net Profits, this expense decreased to 39.4% for the
year ended December 31, 1996 from 79.2% for the year ended December
31, 1995. This decrease was primarily due to the dollar decrease in
depletion of Net Profits Interests discussed above and the increases
in the average prices of oil and gas sold during the year ended
December 31, 1996 as compared to the year ended December 31, 1995.
39
As set forth under "Results of Operations" above, the P-4
Partnership recognized a non-cash charge against earnings of $581,036
for the year ended December 31, 1995. This impairment provision was
necessary due to the unamortized costs of Net Profits Interests
exceeding the undiscounted future net revenues from such Net Profits
Interests, in accordance with the P-4 Partnership's adoption of SFAS
No. 121. No similar charge was necessary during the year ended
December 31, 1996 under SFAS No. 121.
General and administrative expenses remained relatively constant
for the year ended December 31, 1996 as compared to the year ended
December 31, 1995. As a percentage of Net Profits, these expenses
remained relatively constant at 11.2% for the year ended December 31,
1996 as compared to 11.8% for the year ended December 31, 1995.
Cumulative cash distributions to the Limited Partners in the P-4
Partnership through December 31, 1996 totalled $9,910,945 or 78.5% of
Limited Partner capital contributions.
Year Ended December 31, 1995 Compared
to Year Ended December 31, 1994
-------------------------------------
Total Net Profits decreased $528,153 (29.7%) for the year ended
December 31, 1995 as compared to the year ended December 31, 1994. Of
this decrease, approximately $92,000 and $57,000, respectively, were
related to decreases in volumes of oil and gas sold and approximately
$443,000 was related to a decrease in the average price of gas sold.
Volumes of oil and gas sold decreased 5,693 barrels and 28,710 Mcf,
respectively, for the year ended December 31, 1995 as compared to the
year ended December 31, 1994. The decrease in volumes of oil sold was
primarily due to (i) normal declines in production on a few
significant wells during the year ended December 31, 1995 and (ii)
decreased production on a few other wells due to salt water disposal
difficulties. Average gas prices decreased to $1.47 per Mcf for the
year ended December 31, 1995 from $1.97 per Mcf for the year ended
December 31, 1994. Average oil prices increased to $17.51 per barrel
for the year ended December 31, 1995 from $16.10 per barrel for the
year ended December 31, 1994.
Depletion of Net Profits Interests decreased $740,951 (42.8%) for
the year ended December 31, 1995 as compared to the year ended
December 31, 1994. This decrease was primarily due to upward revisions
of previous reserve estimates and the decrease in equivalent units of
production sold.
40
As set forth under "Results of Operations" above, the P-4
Partnership recognized a non-cash charge against earnings of $581,036
for the year ended December 31, 1995. This impairment provision was
necessary due to the unamortized costs of Net Profits Interests
exceeding the undiscounted future net revenues from such Net Profits
Interests, in accordance with the P-4 Partnership's adoption of SFAS
No. 121. No similar charge was necessary during the year ended
December 31, 1994 under the P-4 Partnership's prior impairment policy.
General and administrative expenses remained relatively constant
for the year ended December 31, 1995 as compared to the year ended
December 31, 1994. As a percentage of Net Profits, these expenses
increased to 11.8% for the year ended December 31, 1995 from 8.5% for
the year ended December 31, 1994. This percentage increase was
primarily due to the decrease in Net Profits during the year ended
December 31, 1995.
P-5 Partnership
---------------
Year Ended December 31, 1996 Compared
to Year Ended December 31, 1995
---------------------------------------
Total Net Profits increased $173,674 (18.5%) for the year ended
December 31, 1996 as compared to the year ended December 31, 1995. Of
this increase, approximately $30,000 and $383,000, respectively, were
related to increases in the average prices of oil and gas sold,
partially offset by decreases of approximately $212,000 and $19,000,
respectively, related to a decrease in volumes of gas sold and an
increase in production taxes paid by the owners of the Working
Interests. Volumes of oil and gas sold decreased 85 barrels and
156,865 Mcf, respectively, for the year ended December 31, 1996 as
compared to the year ended December 31, 1995. The decrease in the
volumes of gas sold was primarily due to (i) normal declines in
production on several wells due to diminished gas reserves and (ii)
positive prior period volume adjustments made by the purchaser on two
wells during the year ended December 31, 1995. Average oil and gas
prices increased to $19.95 per barrel and $1.96 per Mcf, respectively,
for the year ended December 31, 1996 from $17.14 per barrel and $1.35
per Mcf, respectively, for the year ended December 31, 1995.
41
Depletion of Net Profits Interests decreased $416,821 (53.0%) for
the year ended December 31, 1996 as compared to the year ended
December 31, 1995. This decrease was primarily due to (i) a decrease
in capitalized costs due to an impairment provision recognized during
the fourth quarter of 1995, (ii) upward revisions in the estimates of
remaining oil and gas reserves at December 31, 1996, and (iii) the
decrease in equivalent units of production sold during the year ended
December 31, 1996 as compared to the year ended December 31, 1995. As
a percentage of Net Profits, this expense decreased to 33.2% for the
year ended December 31, 1996 from 83.7% for the year ended December
31, 1995. This decrease was primarily due to the dollar decrease in
depletion of Net Profits Interests discussed above and the increases
in the average prices of oil and gas sold during the year ended
December 31, 1996 as compared to the year ended December 31, 1995.
As set forth under "Results of Operations" above, the P-5
Partnership recognized a non-cash charge against earnings of $194,933
for the year ended December 31, 1995. This impairment provision was
necessary due to the unamortized costs of Net Profits Interests
exceeding the undiscounted future net revenues from such Net Profits
Interests, in accordance with the P-5 Partnership's adoption of SFAS
No. 121. No similar charge was necessary during the year ended
December 31, 1996.
General and administrative expenses remained relatively constant
for the year ended December 31, 1996 as compared to the year ended
December 31, 1995. As a percentage of Net Profits, these expenses
decreased to 12.8% for the year ended December 31, 1996 from 14.8% for
the year ended December 31, 1995. This percentage decrease was
primarily due to the increase in Net Profits discussed above.
Cumulative cash distributions to the Limited Partners in the P-5
Partnership through December 31, 1996 totalled $5,353,759 or 45.2% of
Limited Partner capital contributions.
42
Year Ended December 31, 1995 Compared
to Year Ended December 31, 1994
-------------------------------------
Total Net Profits decreased $242,013 (20.5%) for the year ended
December 31, 1995 as compared to the year ended December 31, 1994. Of
this decrease, approximately $182,000 and $165,000, respectively, were
related to decreases in the volumes and average prices of gas sold,
partially offset by an increase of approximately $62,000 related to a
decrease in production expenses incurred by the owners of the Working
Interests and an increase of approximately $24,000 related to an
increase in volumes of oil sold. Volumes of oil sold increased 1,529
barrels and volumes of gas sold decreased 116,941 Mcf for the year
ended December 31, 1995 as compared to the year ended December 31,
1994. Average gas prices decreased to $1.35 per Mcf for the year
ended December 31, 1995 from $1.56 per Mcf for the year ended
December 31, 1994. Average oil prices increased to $17.14 per barrel
for the year ended December 31, 1995 from $15.60 per barrel for the
year ended December 31, 1994.
Depletion of Net Profits Interests decreased $859,473 (52.2%) for
the year ended December 31, 1995 as compared to the year ended
December 31, 1994. This decrease was primarily due to (i) an
impairment provision recorded in 1994 which significantly depleted the
Net Profits Interests subject to depletion in 1995, (ii) upward
revisions and extensions of previous reserve estimates, and (iii) the
decrease in equivalent units of production sold.
As set forth under "Results of Operations" above, the P-5
Partnership recognized a non-cash charge against earnings of $194,933
for the year ended December 31, 1995. This impairment provision was
necessary due to the unamortized costs of Net Profits Interests
exceeding the undiscounted future net revenues from such Net Profits
Interests, in accordance with the P-5 Partnership's adoption of SFAS
No. 121. A similar charge of $1,191,000 was recognized for the year
ended December 31, 1994 pursuant to the P-5 Partnership's prior
impairment policy due to a decline in gas prices.
General and administrative expenses remained relatively constant
for the year ended December 31, 1995 as compared to the year ended
December 31, 1994. As a percentage of Net Profits, these expenses
increased to 14.8% for the year ended December 31, 1995 from 12.0% for
the year ended December 31, 1994. This percentage increase was
primarily due to the decrease in Net Profits during the year ended
December 31, 1995.
43
P-6 Partnership
---------------
Year Ended December 31, 1996 Compared
to Year Ended December 31, 1995
--------------------------------------
Total Net Profits increased $718,772 (56.0%) for the year ended
December 31, 1996 as compared to the year ended December 31, 1995. Of
this increase, approximately $81,000 and $825,000, respectively, were
related to increases in the average prices of oil and gas sold and
approximately $60,000 was related to a decrease in production expenses
attributable to the Working Interest, partially offset by a decrease
of approximately $287,000 related to a decrease in volumes of gas
sold. Volumes of oil sold increased 2,228 barrels, while volumes of
gas sold decreased 217,471 Mcf for the year ended December 31, 1996 as
compared to the year ended December 31, 1995. The decrease in volumes
of gas sold was primarily due to (i) the normal declines in
production on several wells due to diminished gas reserves and (ii)
positive prior period adjustments made by the purchaser on several
wells during the year ended December 31, 1995. The decrease in
production expenses resulted primarily from the decreases in volumes
of oil and gas sold during the year ended December 31, 1996 as
compared to the year ended December 31, 1995, partially offset by an
increase in production taxes associated with the increase in Net
Profits discussed above. Average oil and gas prices increased to
$20.46 per barrel and $2.03 per Mcf, respectively, for the year ended
December 31, 1996 from $16.65 per barrel and $1.32 per Mcf,
respectively, for the year ended December 31, 1995.
Depletion of Net Profits Interests decreased $732,087 (48.2%) for
the year ended December 31, 1996 as compared to the year ended
December 31, 1995. This decrease was primarily due to (i) a decrease
in capitalized costs due to an impairment provision recognized during
the fourth quarter of 1995, (ii) upward revisions in the estimates of
remaining oil and gas reserves at December 31, 1996, and (iii) the
decrease in volumes of gas sold during the year ended December 31,
1996 as compared to the year ended December 31, 1995. As a percentage
of Net Profits, this expense decreased to 39.4% for the year ended
December 31, 1996 from 118.4% for the year ended December 31, 1995.
This decrease was primarily due to the dollar decrease in depletion of
Net Profits Interests discussed above and the increases in the average
prices of oil and gas sold during the year ended December 31, 1996 as
compared to the year ended December 31, 1995.
44
As set forth under "Results of Operations" above, the P-6
Partnership recognized a non-cash charge against earnings of $478,168
for the year ended December 31, 1995. This impairment provision was
necessary due to the unamortized costs of Net Profits Interests
exceeding the undiscounted future net revenues from such Net Profits
Interests, in accordance with the P-6 Partnership's adoption of SFAS
No. 121. No similar charge was necessary during the year ended
December 31, 1996.
General and administrative expenses remained relatively constant
for the year ended December 31, 1996 as compared to the year ended
December 31, 1995. As a percentage of Net Profits, these expenses
decreased to 8.6% for the year ended December 31, 1996 from 13.5% for
the year ended December 31, 1995. This percentage decrease was
primarily due to the increase in Net Profits discussed above.
Cumulative cash distributions to the Limited Partners in the P-6
Partnership through December 31, 1996 totalled $6,785,248 or 47.4% of
Limited Partner capital contributions.
Year Ended December 31, 1995 Compared
to Year Ended December 31, 1994
-------------------------------------
Total Net Profits decreased $203,136 (13.7%) for the year ended
December 31, 1995 as compared to the year ended December 31, 1994. Of
this decrease, approximately $180,000 and $207,000, respectively, were
related to decreases in the volumes and average price of gas sold,
partially offset by an increase of approximately $174,000 related to a
decrease in operating expenses incurred by the owner of the Working
Interests and an increase of approximately $20,000 related to an
increase in the average price of oil sold. Volumes of oil and gas
sold decreased 562 barrels and 122,288 Mcf, respectively, for the year
ended December 31, 1995 as compared to the year ended December 31,
1994. Average gas prices decreased to $1.32 per Mcf for the year ended
December 31, 1995 from $1.47 per Mcf for the year ended December 31,
1994. Average oil prices increased to $16.65 per barrel for the year
ended December 31, 1995 from $15.63 per barrel for the year ended
December 31, 1994.
Depletion of Net Profits Interests decreased $103,414 (6.4%) for
the year ended December 31, 1995 as compared to the year ended
December 31, 1994 primarily due to the decrease in equivalent units of
production sold, partially offset by downward revisions of previous
reserve estimates.
45
As set forth under "Results of Operations" above, the P-6
Partnership recognized a non-cash charge against earnings of $478,168
for the year ended December 31, 1995. This impairment provision was
necessary due to the unamortized costs of Net Profits Interests
exceeding the undiscounted future net revenues from such Net Profits
Interests, in accordance with the P-6 Partnership's adoption of SFAS
No. 121. No similar charge was necessary during the year ended
December 31, 1994 under the P-6 Partnership's prior impairment policy.
General and administrative expenses remained relatively constant
for the year ended December 31, 1995 as compared to the year ended
December 31, 1994. As a percentage of Net Profits, these expenses
were 13.5% and 11.6%, respectively, for the years ended December 31,
1995 and 1994.
Average Proceeds and Units of Production
The following is a comparison of the annual equivalent units of
production (one barrel of oil or six Mcf of gas) and the average
proceeds received per equivalent unit of production for the oil and
gas sales attributable to the Partnerships' Net Profits for the years
ended December 31, 1996, 1995, and 1994. These factors comprise the
change in oil and gas sales discussed in the "Results of Operations"
section above.
46
1996 Compared to 1995
---------------------
Equivalent Units Average Proceeds
of Production per Equivalent Unit
-------------------------- ----------------------
P/ship 1996 1995 % Change 1996 1995 % Change
------ ------- ------- -------- ----- ----- --------
P-1 111,872 126,422 (12%) $10.65 $7.40 44%
P-2 89,057 102,038 (13%) 10.23 7.01 46%
P-3 167,429 192,125 (13%) 10.19 6.91 47%
P-4 128,089 176,454 (27%) 10.72 7.09 51%
P-5 115,423 141,653 (19%) 9.64 6.63 45%
P-6 215,152 249,170 (14%) 9.31 5.15 81%
1995 Compared to 1994
---------------------
Equivalent Units Average Proceeds
of Production per Equivalent Unit
-------------------------- ----------------------
P/ship 1995 1994 % Change 1995 1994 % Change
------ ------- ------- -------- ----- ----- --------
P-1 126,422 136,328 ( 7%) $7.40 $7.99 ( 7%)
P-2 102,038 102,710 ( 1%) 7.01 7.66 ( 8%)
P-3 192,125 192,810 - 6.91 7.64 (10%)
P-4 176,454 186,932 ( 6%) 7.09 9.52 (26%)
P-5 141,653 159,614 (11%) 6.63 7.40 (10%)
P-6 249,170 270,113 ( 8%) 5.15 5.51 ( 7%)
Liquidity and Capital Resources
Net proceeds from operations less necessary operating capital are
distributed to the Limited Partners on a quarterly basis. See "Item
5. Market for Units and Related Limited Partner Matters." The net
proceeds from the Net Profits Interests are not reinvested in
productive assets. Assuming production levels for the year ended
December 31, 1996, the Partnerships' proved reserve quantities at
December 31, 1996 would have the following lives:
Partnership Gas-Years Oil-Years
----------- --------- ---------
P-1 5.8 7.4
P-2 6.3 7.7
P-3 6.3 7.7
P-4 5.0 3.3
P-5 5.2 4.8
P-6 4.7 6.6
47
The Partnerships' available capital from the Limited Partners'
subscriptions has been spent on Net Profits Interests and there should
be no further material capital resource commitments in the future.
The Partnerships have no debt commitments. Cash for operational
purposes will be provided by revenues from current oil and gas
production.
The Samson Companies are currently in the process of evaluating
certain oil and gas properties owned by the Partnerships and other
entities of the Samson Companies. As a result of such evaluation, it
is expected that certain of these properties will be placed in bid
packages and offered for sale during the first half of 1997. It is
likely that the Partnerships will have a Net Profits Interest in some
of the properties being sold. It is currently estimated that the
value of such sales, as a percentage of total proved reserves of any
Partnership, will range from 1% to 20%.
The decision to accept any offer for the purchase of a property
in which one or more Partnerships have a Net Profits Interest will be
made by the General Partner after giving due consideration to the
offer price and the General Partner's estimate of both the property's
remaining proved reserves and future operating costs. Net proceeds
from the sale of any such properties will be distributed to the
Partnerships and will be included in the calculation of the
Partnerships' cash distributions for the quarter immediately following
the Partnerships' receipt of the proceeds.
Following completion of any sale, the Partnerships' quantity of
proved reserves will be reduced. It is also possible that the
Partnerships' repurchase values and future cash distributions could
decline as a result of a reduction of the Partnerships' reserve base.
On the other hand, the General Partner believes there will be
beneficial operating efficiencies related to the Partnerships'
remaining properties. This is primarily due to the fact that the
properties being considered for sale are more likely to bear a higher
ratio of operating expenses as compared to reserves than the
properties not being considered for sale. The net effect of such
property sales is difficult to predict as of the date of this Annual
Report.
48
There can be no assurance as to the amount of the Partnerships'
future cash distributions. The Partnerships' ability to make cash
distributions depends primarily upon the level of available cash flow
generated by the Partnerships' Net Profits Interests, which will be
affected (either positively or negatively) by many factors beyond the
control of the Partnerships, including the price of and demand for oil
and gas and other market and economic conditions. Even if prices and
costs remain stable, the amount of cash available for distributions
will decline over time (as the volume of production from producing
properties declines) since the Partnerships are not replacing
production through acquisitions of Net Profits Interests in other
producing properties and drilling. If the Partnerships sell any of
their Net Profits Interests as discussed above, the Partnerships'
quantity of proved reserves will be reduced; therefore, it is possible
that the Partnerships' future cash distributions could decline as a
result of a reduction of the Partnerships' reserve base.
Inflation and Changing Prices
Prices obtained for oil and gas production depend upon numerous
factors, including the extent of domestic and foreign production,
foreign imports of oil, market demand, domestic and foreign economic
conditions in general, and governmental regulations and tax laws. The
general level of inflation in the economy did not have a material
effect on the operations of the Partnerships in 1996. Oil and gas
prices have fluctuated during recent years and generally have not
followed the same pattern as inflation. See "Item 2. Properties -
Oil and Gas Production, Revenue, and Price History."
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data are indexed in
Item 14 hereof.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
49
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE GENERAL PARTNER
The Partnerships have no directors or executive officers. The
following individuals are directors and executive officers of the
General Partner. The business address of such director and executive
officers is Two West Second Street, Tulsa, Oklahoma 74103.
Name Age Position with General Partner
---------------- --- --------------------------------
Dennis R. Neill 45 President and Director
Judy K. Fox 46 Secretary
The director will hold office until the next annual meeting of
shareholders of Geodyne and until his successor has been duly elected
and qualified. All executive officers serve at the discretion of the
Board of Directors.
Dennis R. Neill joined the Samson Companies in 1981, was named
Senior Vice President and Director of Geodyne on March 3, 1993, and
was named President of Geodyne on June 30, 1996. Prior to joining the
Samson Companies, he was associated with a Tulsa law firm, Conner and
Winters, where his principal practice was in the securities area. He
received a Bachelor of Arts degree in political science from Oklahoma
State University and a Juris Doctorate degree from the University of
Texas. Mr. Neill also serves as Senior Vice President of Samson
Investment Company; President and Director of Samson Properties
Incorporated, Samson Hydrocarbons Company, Dyco Petroleum Corporation,
Geodyne Depositary Company, Geodyne Institutional Depositary Company,
Geodyne Nominee Corporation, Berry Gas Company, Circle L Drilling
Company, and Compression, Inc.; and President and Chairman of the
Board of Directors of Samson Securities Company.
Judy K. Fox joined the Samson Companies in 1990 and was named
Secretary of Geodyne on June 30, 1996. Prior to joining the Samson
Companies, she served as Gas Contract Manager for Ely Energy Company.
Ms. Fox is also Secretary of Berry Gas Company, Circle L Drilling
Company, Compression, Inc., Dyco Petroleum Corporation, Geodyne
Depositary Company, Geodyne Institutional Depositary Company, Geodyne
Nominee Corporation, Samson Hydrocarbons Company, and Samson
Properties Incorporated.
50
ITEM 11. EXECUTIVE COMPENSATION
The General Partner and its affiliates are reimbursed for actual
general and administrative costs and operating costs incurred and
attributable to the conduct of the business affairs and operations of
the Partnerships, computed on a cost basis, determined in accordance
with generally accepted accounting principles. Such reimbursed costs
and expenses allocated to the Partnerships include office rent,
secretarial, employee compensation and benefits, travel and
communication costs, fees for professional services, and other items
generally classified as general or administrative expense. The amount
of general and administrative expense allocated to the General Partner
and its affiliates and charged to each Partnership for the years ended
December 31, 1996, 1995, and 1994 is set forth in the table below.
Partnership 1996 1995 1994
----------- -------- -------- --------
P-1 $113,760 $113,760 $113,762
P-2 94,836 94,836 94,836
P-3 178,560 178,560 178,565
P-4 132,960 132,960 132,954
P-5 124,680 124,680 124,683
P-6 150,564 150,564 150,569
None of the officers or directors of the General Partner receive
compensation directly from the Partnerships. The Partnerships
reimburse the General Partner or its affiliates for that portion of
such officers' and directors' salaries and expenses attributable to
time devoted by such individuals to the Partnerships' activities. The
following tables indicate the approximate amount of general and
administrative expense reimbursement attributable to the salaries of
the directors, officers, and employees of the General Partner and its
affiliates for the years ended December 31, 1996, 1995, and 1994:
51
Salary Reimbursements
P-1 Partnership
---------------
Long Term Compensation
-------------------------------
Annual Compensation Awards Payouts
------------------------- --------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
C. Philip
Tholen,
President,
Chief Executive
Officer(1)(2) 1994 - - - - - - -
1995 - - - - - - -
1996 - - - - - - -
Dennis R. Neill,
President(2)(3) 1996 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(4) 1994 $60,294 - - - - - -
1995 $62,113 - - - - - -
1996 $66,550 - - - - - -
- ----------
(1) Mr. Tholen served as President and Chief Executive Officer of Geodyne until July 1, 1996.
(2) The general and administrative expenses paid by the P-1 Partnership and attributable to
salary reimbursements do not include any salary or other compensation attributable to Mr.
Tholen or Mr. Neill.
(3) Mr. Neill became President of Geodyne on July 1, 1996.
(4) No officer or director of Geodyne or its affiliates provides full-time services to the P-1
Partnership and no individual's salary or other compensation reimbursement from the P-1
Partnership equals or exceeds $100,000 per annum.
52
Salary Reimbursements
P-2 Partnership
---------------
Long Term Compensation
-------------------------------
Annual Compensation Awards Payouts
------------------------- --------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
C. Philip
Tholen,
President,
Chief Executive
Officer(1)(2) 1994 - - - - - - -
1995 - - - - - - -
1996 - - - - - - -
Dennis R. Neill,
President(2)(3) 1996 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(4) 1994 $50,263 - - - - - -
1995 $51,780 - - - - - -
1996 $55,479 - - - - - -
- ----------
(1) Mr. Tholen served as President and Chief Executive Officer of Geodyne until July 1, 1996.
(2) The general and administrative expenses paid by the P-2 Partnership and attributable to
salary reimbursements do not include any salary or other compensation attributable to Mr.
Tholen or Mr. Neill.
(3) Mr. Neill became President of Geodyne on July 1, 1996.
(4) No officer or director of Geodyne or its affiliates provides full-time services to the P-2
Partnership and no individual's salary or other compensation reimbursement from the P-2
Partnership equals or exceeds $100,000 per annum.
53
Salary Reimbursements
P-3 Partnership
---------------
Long Term Compensation
-------------------------------
Annual Compensation Awards Payouts
------------------------- --------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
C. Philip
Tholen,
President,
Chief Executive
Officer(1)(2) 1994 - - - - - - -
1995 - - - - - - -
1996 - - - - - - -
Dennis R. Neill,
President(2)(3) 1996 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(4) 1994 $ 94,639 - - - - - -
1995 $ 97,494 - - - - - -
1996 $104,458 - - - - - -
- ----------
(1) Mr. Tholen served as President and Chief Executive Officer of Geodyne until July 1, 1996.
(2) The general and administrative expenses paid by the P-3 Partnership and attributable to
salary reimbursements do not include any salary or other compensation attributable to Mr.
Tholen or Mr. Neill.
(3) Mr. Neill became President of Geodyne on July 1, 1996.
(4) No officer or director of Geodyne or its affiliates provides full-time services to the P-3
Partnership and no individual's salary or other compensation reimbursement from the P-3
Partnership equals or exceeds $100,000 per annum.
54
Salary Reimbursements
P-4 Partnership
---------------
Long Term Compensation
-------------------------------
Annual Compensation Awards Payouts
------------------------- --------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
C. Philip
Tholen,
President,
Chief Executive
Officer(1)(2) 1994 - - - - - - -
1995 - - - - - - -
1996 - - - - - - -
Dennis R. Neill,
President(2)(3) 1996 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(4) 1994 $70,466 - - - - - -
1995 $72,596 - - - - - -
1996 $77,782 - - - - - -
- ----------
(1) Mr. Tholen served as President and Chief Executive Officer of Geodyne until July 1, 1996.
(2) The general and administrative expenses paid by the P-4 Partnership and attributable to
salary reimbursements do not include any salary or other compensation attributable to Mr.
Tholen or Mr. Neill.
(3) Mr. Neill became President of Geodyne on July 1, 1996.
(4) No officer or director of Geodyne or its affiliates provides full-time services to the P-4
Partnership and no individual's salary or other compensation reimbursement from the P-4
Partnership equals or exceeds $100,000 per annum.
55
Salary Reimbursements
P-5 Partnership
---------------
Long Term Compensation
-------------------------------
Annual Compensation Awards Payouts
------------------------- --------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
C. Philip
Tholen,
President,
Chief Executive
Officer(1)(2) 1994 - - - - - - -
1995 - - - - - - -
1996 - - - - - - -
Dennis R. Neill,
President(2)(3) 1996 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(4) 1994 $66,082 - - - - - -
1995 $68,075 - - - - - -
1996 $72,938 - - - - - -
- ----------
(1) Mr. Tholen served as President and Chief Executive Officer of Geodyne until July 1, 1996.
(2) The general and administrative expenses paid by the P-5 Partnership and attributable to
salary reimbursements do not include any salary or other compensation attributable to Mr.
Tholen or Mr. Neill.
(3) Mr. Neill became President of Geodyne on July 1, 1996.
(4) No officer or director of Geodyne or its affiliates provides full-time services to the P-5
Partnership and no individual's salary or other compensation reimbursement from the P-5
Partnership equals or exceeds $100,000 per annum.
56
Salary Reimbursements
P-6 Partnership
---------------
Long Term Compensation
-------------------------------
Annual Compensation Awards Payouts
------------------------- --------------------- -------
Securi-
Other ties All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($) ($) SARs(#) ($) ($)
- --------------- ---- ------- ------- ------- ---------- -------- ------- -------
C. Philip
Tholen,
President,
Chief Executive
Officer(1)(2) 1994 - - - - - - -
1995 - - - - - - -
1996 - - - - - - -
Dennis R. Neill,
President(2)(3) 1996 - - - - - - -
All Executive
Officers,
Directors,
and Employees
as a group(4) 1994 $79,802 - - - - - -
1995 $82,208 - - - - - -
1996 $88,080 - - - - - -
- ----------
(1) Mr. Tholen served as President and Chief Executive Officer of Geodyne until July 1, 1996.
(2) The general and administrative expenses paid by the P-6 Partnership and attributable to
salary reimbursements do not include any salary or other compensation attributable to Mr.
Tholen or Mr. Neill.
(3) Mr. Neill became President of Geodyne on July 1, 1996.
(4) No officer or director of Geodyne or its affiliates provides full-time services to the P-6
Partnership and no individual's salary or other compensation reimbursement from the P-6
Partnership equals or exceeds $100,000 per annum.
57
During 1994 and 1995 El Paso, an affiliate of the Partnerships
until December 6, 1995, purchased a portion of the gas attributable to
the Partnerships' Net Profits Interests at market prices and resold
such gas directly to end-users and local distribution companies.
Affiliates of the Partnerships serve as operator of some of the
wells in which the Partnerships own a Net Profits Interest. The
owners of the working interests in these wells contract with such
affiliates for services as operator of the wells. As operator, such
affiliates are compensated at rates provided in the operating
agreements in effect and charged to all parties to such agreement.
Such compensation may occur both prior and subsequent to the
commencement of commercial marketing of production of oil or gas. The
dollar amount of such compensation which burdens the Partnerships' Net
Profits Interests is impossible to quantify as of the date of this
Annual Report.
In addition to the compensation/reimbursements noted above,
during the three years ended December 31, 1996, the Samson Companies
were in the business of supplying field and drilling equipment and
services to affiliated and unaffiliated parties in the industry.
These companies may have provided equipment and services for wells in
which the Partnerships have a Net Profits Interest. These equipment
and services were provided at prices or rates equal to or less than
those normally charged in the same or comparable geographic area by
unaffiliated persons or companies dealing at arm's length.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table provides information as to the beneficial
ownership of the Units as of February 28, 1997 by (i) each beneficial
owner of more than five percent of the issued and outstanding Units,
(ii) the director and officers of the General Partner, and (iii) the
General Partner and its affiliates. The address of the General
Partner, its officers and director, and Samson Resources Company is
Samson Plaza, Two West Second Street, Tulsa, Oklahoma 74103.
58
Number of Units
Beneficially
Owned (Percent
Beneficial Owner of Outstanding)
- -------------------------------------------- ---------------
P-1 Partnership:
- ---------------
Samson Resources Company 12,278 (11.4%)
All affiliates, directors, and officers of
the General Partner as a group and the
General Partner (4 persons) 12,278 (11.4%)
P-2 Partnership:
- ---------------
Samson Resources Company 6,985 ( 7.8%)
Masco Master Investment Account
21001 Van Born Road
Taylor, MI 48180 10,600 (11.8%)
Loma Linda University
Medical Center
P. O. Box 2000
Loma Linda, CA 92354 5,000 ( 5.5%)
All affiliates, directors, and officers
of the General Partner as a group and
the General Partner (4 persons) 6,985 ( 7.8%)
P-3 Partnership:
- ---------------
Samson Resources Company 38,972 (23.0%)
Merced County Retirement Association
Pension Trust
2222 M. Street
Merced, CA 95340 10,000 ( 5.9%)
All affiliates, directors, and officers
of the General Partner as a group and
the General Partner (4 persons) 38,972 (23.0%)
59
P-4 Partnership:
- ---------------
Samson Resources Company 9,147 ( 7.2%)
Masco Master Investment Account
21001 Van Born Road
Taylor, MI 48180 10,600 ( 8.4%)
All affiliates, directors, and officers
of the General Partner as a group and
the General Partner (4 persons) 9,147 ( 7.2%)
P-5 Partnership:
- ---------------
Samson Resources Company 13,400 (11.3%)
All affiliates, directors, and officers
of the General Partner as a group and
the General Partner (4 persons) 13,400 (11.3%)
P-6 Partnership:
- ---------------
Samson Resources Company 10,768 ( 7.5%)
ATL, Inc.
1200 Harbor Boulevard, 5th Floor 54,887 (38.4%)
Weehawken, NJ 07087
All affiliates, directors, and officers
of the General Partner as a group and
the General Partner (4 persons) 10,768 ( 7.5%)
60
Section 16(a) Beneficial Ownership Reporting Compliance
On February 1, 1996 the Board of Trustees for the Policemen and
Firemen Retirement System of the City of Detroit (the "Retirement
System") conveyed 54,887 (38.4%) of the Units of the P-6 Partnership
to ATL, Inc. As of the date of this Annual Report, the General
Partner has received no Report under Section 16 of the Securities and
Exchange Act of 1934 (the "Act") from the Retirement System. The
General Partner believes that the Retirement System's transaction was
not timely reported under Section 16 of the Act. In addition, on
March 11, 1996, the General Partner received ATL, Inc.'s Initial
Statement of Beneficial Ownership of Securities on Form 3 by way of
cover letter dated March 8, 1996. The General Partner believes ATL's
transaction was not timely reported under Section 16 of the Act.
To the best knowledge of the Partnerships and the General
Partner, there were no other officers, directors, or ten percent
owners who were delinquent filers of reports required under Section 16
of the Act.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The General Partner and certain of its affiliates engage in oil
and gas activities independently of the Partnerships which result in
conflicts of interest that cannot be totally eliminated. The
allocation of acquisition opportunities and the nature of the
compensation arrangements between the Partnerships and the General
Partner also create potential conflicts of interest. An affiliate of
the Partnerships owns some of the Partnerships' Units and therefore
has an identity of interest with other Limited Partners with respect
to the operations of the Partnerships.
In order to attempt to assure limited liability for the Limited
Partners as well as an orderly conduct of business, management of the
Partnerships is exercised solely by the General Partner. The
Partnership Agreements grant the General Partner broad discretionary
authority with respect to the Partnerships' expenditure and control of
funds, including borrowings. These provisions are similar to those
contained in prospectuses and partnership agreements for other public
oil and gas partnerships. Broad discretion as to general management
of the Partnerships involves circumstances where the General Partner
has conflicts of interest and where it must allocate costs and
expenses, or opportunities, among the Partnerships and other competing
interests.
61
The General Partner does not devote all of its time, efforts, and
personnel exclusively to the Partnerships. Furthermore, the
Partnerships do not have any employees, but instead rely on the
personnel of the Samson Companies. The Partnerships thus compete with
the Samson Companies (including other currently sponsored oil and gas
partnerships) for the time and resources of such personnel. The
Samson Companies devote such time and personnel to the management of
the Partnerships as are indicated by the circumstances and as are con-
sistent with the General Partner's fiduciary duties.
Affiliates of the Partnerships operate certain wells in which the
Partnerships have a net profits interest and are compensated for such
services at rates comparable to charges of unaffiliated third parties
for services in the same geographic area. These costs are charged to
the owners of the working interest of such wells and are considered
when calculating the net profits interest payable to the Partnerships.
These costs are thus indirectly borne by the Partnership.
As a result of Samson Investment Company's ("Samson") acquisition
of the General Partner and its affiliates, Samson, PaineWebber, and
the General Partner and certain of its affiliates entered into an
advisory agreement which relates primarily to the Partnerships.
PaineWebber served as the dealer manager of the original offering of
Units. The Advisory Agreement will expire on March 3, 1998. The
Advisory Agreement provides that: (i) Samson and the General Partner
will comply, and will cause the Partnerships to comply, with
provisions of the Partnership Agreements (including all restrictions,
prohibitions, and other provisions of such agreements concerning
transactions in which Samson or its affiliates purchase or sell
properties from or to, or render services to, the Partnerships and the
terms of such agreements relating to farmouts of oil and gas proper-
ties), and Samson will cause the General Partner to comply with all
applicable fiduciary duties; (ii) Samson will review periodically with
PaineWebber on a retrospective basis the general operations and
performance of the Partnerships and the terms of any material
transaction by a Partnership, including any transaction that involves
participation by the Samson Companies; and (iii) Samson will review
with PaineWebber on a prospective basis, and will allow PaineWebber to
advise Samson and to comment on, (A) any General Partner-initiated
amendment to a Partnership Agreement which requires a vote of the
Limited Partners and (B) any proposal initiated by the General Partner
or any of its affiliates that would involve a reorganization, merger,
or consolidation of a Partnership, a sale of all or substantially all
of the assets of a Partnership (including a roll-up or corporate stock
exchange), the liquidation or dissolution of a Partnership, or the
exchange of cash, securities, or other assets for all or any
outstanding Units.
62
In addition, the Advisory Agreement provides, among other things,
that: (i) Samson will cause the General Partner to offer to repurchase
Units at a price to be calculated in accordance with certain
guidelines and to be paid in cash or a combination of cash and certain
securities, all subject to certain limitations and restrictions; (ii)
Samson will provide PaineWebber certain information relating to the
Partnerships and the Limited Partners; (iii) Samson and the General
partner will maintain an "800" investor services telephone number;
(iv) Samson and the General Partner will take certain actions with
respect to oil and gas properties held by nominees, insurance
maintained by the Partnerships, approval as to transfers of interests
in the Partnerships, and the selection of independent reserve
engineers; (v) Samson and the General Partner acknowledge the standing
of PaineWebber to institute actions, subject to certain limitations,
in connection with the Advisory Agreement on behalf of the Limited
Partners; and (vi) if Samson proposes a consolidation, merger, or
exchange offer involving any limited partnership managed by Samson, it
will propose to include all of the Partnerships in such transaction or
provide a statement to PaineWebber as to the reasons why some or all
of the Partnerships are not included in such transaction.
Pursuant to the Advisory Agreement, the General Partner has
agreed to reimburse PaineWebber for all reasonable expenses incurred
by it in connection with the matters contemplated by the Advisory
Agreement, and Samson has agreed to indemnify PaineWebber and certain
related parties from certain liabilities incurred in connection with
the Advisory Agreement.
Affiliates of the Partnerships are solely responsible for the
negotiation, administration, and enforcement of oil and gas sales
agreements covering the leasehold interests in which the Partnerships
hold net profits or royalty interests. Because affiliates of the
Partnerships who provide services to the owners of the working
interests underlying the Partnerships' Net Profits Interests have
fiduciary or other duties to other members of the Samson Companies,
contract amendments and negotiating positions taken by them in their
effort to enforce contracts with purchasers may not necessarily
represent the positions that the owners of such working interests
would take if they were to administer their own contracts without
involvement with other members of the Samson Companies. On the other
hand, management believes that the negotiating strength and
contractual positions of the owners of such working interests have
been enhanced by virtue of their affiliation with the Samson
Companies. For a description of certain of the relationships and
related transactions see "Item 11. Executive Compensation."
63
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
8-K
(a) Financial Statements, Financial Statement Schedules, and
Exhibits.
(1) Financial Statements: The following financial statements
for the
Geodyne Institutional/Pension Energy Income P-1 Limited
Partnership
Geodyne Institutional/Pension Energy Income P-2 Limited
Partnership
Geodyne Institutional/Pension Energy Income Limited
Partnership P-3
Geodyne Institutional/Pension Energy Income Limited
Partnership P-4
Geodyne Institutional/Pension Energy Income Limited
Partnership P-5
Geodyne Institutional/Pension Energy Income Limited
Partnership P-6
as of December 31, 1996 and 1995 and for each of the
three years in the period ended December 31, 1996 are
filed as part of this report:
Report of Independent Accountants
Combined Balance Sheets
Combined Statements of Operations
Combined Statements of Changes in
Partners' Capital (Deficit)
Combined Statements of Cash Flows
Notes to Combined Financial Statements
(2) Financial Statement Schedules:
None.
(3) Exhibits:
4.1 The Certificate and Agreements of Limited
Partnership for the following Partnerships have
been previously filed with the SEC as Exhibit 2.1
to Form 8-A filed by each Partnership on the dates
shown below and are hereby incorporated by
reference.
64
Partnership Filing Date File No.
----------- ----------- --------
P-1 June 5, 1989 0-17800
P-2 June 5, 1989 0-17800
P-3 February 20, 1990 0-18306
P-4 February 20, 1990 0-18306
P-5 November 13, 1990 0-18637
P-6 November 30, 1990 0-18937
4.2 The Agreements of Partnership for the following
NPI Partnerships have been previously filed with
the SEC as Exhibit 2.2 to Form 8-A filed by the
related Partnerships on the dates shown below and
are hereby incorporated by reference.
Form 8-A
Partnership Filing Date
----------- -----------------
P-1 June 5, 1989
P-2 June 5, 1989
P-3 February 20, 1990
P-4 February 20, 1990
P-5 June 11, 1990
P-6 December 10, 1990
4.3 Advisory Agreement dated as of November 24, 1992
between Samson, PaineWebber, Geodyne Resources,
Geodyne Properties, Inc., Geodyne Production
Company, and Geodyne Energy Company filed as
Exhibit 28.3 to Registrants' Current Report on
Form 8-K filed with the SEC on December 24, 1992
and is hereby incorporated by reference.
4.4 Second Amendment to Agreement of Limited Partner-
ship of Geodyne Institutional/Pension Energy
Income P-1 Limited Partnership, filed as Exhibit
4.1 to Registrants' Current Report on Form 8-K
dated August 2, 1993 filed with the SEC on August
10, 1993 and is hereby incorporated by reference.
65
4.5 Second Amendment to Agreement of Limited Partner-
ship of Geodyne Institutional/Pension Energy
Income P-2 Limited Partnership, filed as Exhibit
4.2 to Registrants' Current Report on Form 8-K
dated August 2, 1993 filed with the SEC on August
10, 1993 and is hereby incorporated by reference.
4.6 Second Amendment to Agreement of Limited Partner-
ship of Geodyne Institutional/Pension Energy
Income Limited Partnership P-3, filed as Exhibit
4.3 to Registrants' Current Report on Form 8-K
dated August 2, 1993 filed with the SEC on August
10, 1993 and is hereby incorporated by reference.
4.7 Second Amendment to Agreement of Limited Partner-
ship of Geodyne Institutional/Pension Energy
Income Limited Partnership P-4, filed as Exhibit
4.4 to Registrants' Current Report on Form 8-K
dated August 2, 1993 filed with the SEC on August
10, 1993 and is hereby incorporated by reference.
4.8 Second Amendment to Agreement of Limited Partner-
ship of Geodyne Institutional/Pension Energy
Income Limited Partnership P-5, filed as Exhibit
4.5 to Registrants' Current Report on Form 8-K
dated August 2, 1993 filed with the SEC on August
10, 1993 and is hereby incorporated by reference.
4.9 Second Amendment to Agreement of Limited Partner-
ship of Geodyne Institutional/Pension Energy
Income Limited Partnership P-6, filed as Exhibit
4.6 to Registrants' Current Report on Form 8-K
dated August 2, 1993 filed with the SEC on August
10, 1993 and is hereby incorporated by reference.
4.10 Third Amendment to Agreement of Limited Part-
nership of Geodyne Institutional/Pension Energy
Income P-1 Limited Partnership, filed as Exhibit
4.10 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1995 filed with
the SEC April 1, 1996 and is hereby incorporated
by reference.
66
4.11 Third Amendment to Agreement of Limited Part-
nership of Geodyne Institutional/Pension Energy
Income P-2 Limited Partnership, filed as Exhibit
4.11 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1995 filed with
the SEC on April 1, 1996 and is hereby
incorporated by reference.
4.12 Third Amendment to Agreement of Limited Part-
nership of Geodyne Institutional/Pension Energy
Income Limited Partnership P-3, filed as Exhibit
4.12 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1995 filed with
the SEC on April 1, 1996 and is hereby
incorporated by reference.
4.13 Third Amendment to Agreement of Limited Part-
nership of Geodyne Institutional/Pension Energy
Income Limited Partnership P-4, filed as Exhibit
4.13 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1995 filed with
the SEC on April 1, 1996 and is hereby
incorporated by reference.
4.14 Third Amendment to Agreement of Limited Part-
nership of Geodyne Institutional/Pension Energy
Income Limited Partnership P-5, filed as Exhibit
4.14 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1995 filed with
the SEC on April 1, 1996 and is hereby
incorporated by reference.
4.15 Third Amendment to Agreement of Limited Part-
nership of Geodyne Institutional/Pension Energy
Income Limited Partnership P-6, filed as Exhibit
4.15 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1995 filed with
the SEC on April 1, 1996 and is hereby
incorporated by reference.
* 23.1 Consent of Ryder Scott Company, Petroleum
Engineers for the Geodyne Institutional/Pension
Energy Income P-1 Limited Partnership.
* 23.2 Consent of Ryder Scott Company, Petroleum
Engineers for the Geodyne Institutional/Pension
Energy Income P-2 Limited Partnership.
* 23.3 Consent of Ryder Scott Company, Petroleum
Engineers for the Geodyne Institutional/Pension
Energy Income Limited Partnership P-3.
67
* 23.4 Consent of Ryder Scott Company, Petroleum
Engineers for the Geodyne Institutional/Pension
Energy Income Limited Partnership P-4.
* 23.5 Consent of Ryder Scott Company, Petroleum
Engineers for the Geodyne Institutional/Pension
Energy Income Limited Partnership P-5.
* 23.6 Consent of Ryder Scott Company, Petroleum
Engineers for the Geodyne Institutional/Pension
Energy Income Limited Partnership P-6.
* 27.1 Financial Data Schedule containing summary
financial information extracted from the Geodyne
Institutional/Pension Energy Income P-1 Limited
Partnership's financial statements as of December
31, 1996 and for the year ended December 31, 1996.
* 27.2 Financial Data Schedule containing summary
financial information extracted from the Geodyne
Institutional/Pension Energy Income P-2 Limited
Partnership's financial statements as of December
31, 1996 and for the year ended December 31, 1996.
* 27.3 Financial Data Schedule containing summary
financial information extracted from the Geodyne
Institutional/Pension Energy Income Limited
Partnership P-3's financial statements as of
December 31, 1996 and for the year ended December
31, 1996.
* 27.4 Financial Data Schedule containing summary
financial information extracted from the Geodyne
Institutional/Pension Energy Income Limited
Partnership P-4's financial statements as of
December 31, 1996 and for the year ended December
31, 1996.
* 27.5 Financial Data Schedule containing summary
financial information extracted from the Geodyne
Institutional/Pension Energy Income Limited
Partnership P-5's financial statements as of
December 31, 1996 and for the year ended December
31, 1996.
68
* 27.6 Financial Data Schedule containing summary
financial information extracted from the Geodyne
Institutional/Pension Energy Income Limited
Partnership P-6's financial statements as of
December 31, 1996 and for the year ended December
31, 1996.
All other Exhibits are omitted as inapplicable.
----------
*Filed herewith.
(b) Reports on Form 8-K for the fourth quarter of 1996:
None.
69
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) 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 organized.
GEODYNE INSTITUTIONAL/PENSION ENERGY
INCOME P-1 LIMITED PARTNERSHIP
By: GEODYNE RESOURCES, INC.
General Partner
March 26, 1997
By: /s/Dennis R. Neill
------------------------------
Dennis R. Neill
President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the registrant and in the capacities on the dates indicated.
By: /s/Dennis R. Neill President and March 26, 1997
------------------- Director (Principal
Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal March 26, 1997
------------------- Financial and
Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary March 26, 1997
-------------------
Judy K. Fox
70
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) 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 organized.
GEODYNE INSTITUTIONAL/PENSION ENERGY
INCOME P-2 LIMITED PARTNERSHIP
By: GEODYNE RESOURCES, INC.
General Partner
March 26, 1997
By: /s/Dennis R. Neill
------------------------------
Dennis R. Neill
President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the registrant and in the capacities on the dates indicated.
By: /s/Dennis R. Neill President and March 26, 1997
------------------- Director (Principal
Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal March 26, 1997
------------------- Financial and
Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary March 26, 1997
-------------------
Judy K. Fox
71
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) 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 organized.
GEODYNE INSTITUTIONAL/PENSION ENERGY
INCOME LIMITED PARTNERSHIP P-3
By: GEODYNE RESOURCES, INC.
General Partner
March 26, 1997
By: /s/Dennis R. Neill
------------------------------
Dennis R. Neill
President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the registrant and in the capacities on the dates indicated.
By: /s/Dennis R. Neill President and March 26, 1997
------------------- Director (Principal
Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal March 26, 1997
------------------- Financial and
Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary March 26, 1997
-------------------
Judy K. Fox
72
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) 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 organized.
GEODYNE INSTITUTIONAL/PENSION ENERGY
INCOME LIMITED PARTNERSHIP P-4
By: GEODYNE RESOURCES, INC.
General Partner
March 26, 1997
By: /s/Dennis R. Neill
------------------------------
Dennis R. Neill
President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the registrant and in the capacities on the dates indicated.
By: /s/Dennis R. Neill President and March 26, 1997
------------------- Director (Principal
Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal March 26, 1997
------------------- Financial and
Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary March 26, 1997
-------------------
Judy K. Fox
73
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) 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 organized.
GEODYNE INSTITUTIONAL/PENSION ENERGY
INCOME LIMITED PARTNERSHIP P-5
By: GEODYNE RESOURCES, INC.
General Partner
March 26, 1997
By: /s/Dennis R. Neill
------------------------------
Dennis R. Neill
President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the registrant and in the capacities on the dates indicated.
By: /s/Dennis R. Neill President and March 26, 1997
------------------- Director (Principal
Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal March 26, 1997
------------------- Financial and
Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary March 26, 1997
-------------------
Judy K. Fox
74
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) 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 organized.
GEODYNE INSTITUTIONAL/PENSION ENERGY
INCOME LIMITED PARTNERSHIP P-6
By: GEODYNE RESOURCES, INC.
General Partner
March 26, 1997
By: /s/Dennis R. Neill
------------------------------
Dennis R. Neill
President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the registrant and in the capacities on the dates indicated.
By: /s/Dennis R. Neill President and March 26, 1997
------------------- Director (Principal
Dennis R. Neill Executive Officer)
/s/Patrick M. Hall (Principal March 26, 1997
------------------- Financial and
Patrick M. Hall Accounting Officer)
/s/Judy K. Fox Secretary March 26, 1997
-------------------
Judy K. Fox
75
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
AND GEODYNE NPI PARTNERSHIP P-1
We have audited the combined balance sheets of the Geodyne
Institutional/Pension Energy Income P-1 Limited Partnership, a Texas
limited partnership, and Geodyne NPI Partnership P-1, an Oklahoma
general partnership, as of December 31, 1996 and 1995 and the related
combined statements of operations, changes in partners' capital
(deficit), and cash flows for the years ended December 31, 1996, 1995,
and 1994. These financial statements are the responsibility of the
Partnerships' management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the combined financial statements referred to
above present fairly, in all material respects, the combined financial
position of the Geodyne Institutional/Pension Energy Income P-1
Limited Partnership and Geodyne NPI Partnership P-1 at December 31,
1996 and 1995 and the combined results of their operations and cash
flows for the years ended December 31, 1996, 1995, and 1994, in
conformity with generally accepted accounting principles.
As disclosed in Note 1 to the combined financial statements, the
Geodyne Institutional/Pension Energy Income P-1 Limited Partnership
and Geodyne NPI Partnership P-1 changed their method of accounting for
impairment of their Net Profits Interests as of October 1, 1995.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma
March 22, 1997
F-1
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
Combined Balance Sheets
December 31, 1996 and 1995
ASSETS
------
1996 1995
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 293,296 $ 241,524
Accounts receivable:
Net Profits 257,458 221,147
--------- ---------
Total current assets $ 550,754 $ 462,671
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 2,680,005 3,026,259
--------- ---------
$3,230,759 $3,488,930
========= =========
PARTNERS' CAPITAL (DEFICIT)
---------------------------
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 62,666) ($ 48,322)
Limited Partners, issued and
outstanding, 108,074 Units 3,293,425 3,537,252
--------- ---------
Total Partners' capital $3,230,759 $3,488,930
--------- ---------
$3,230,759 $3,488,930
========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-2
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
Combined Statements of Operations
For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994
------------ ------------ ------------
REVENUES:
Net Profits $1,191,311 $935,026 $1,089,659
Interest income 9,643 8,151 6,528
Gain on sale of
Net Profits
Interests 80,721 7,144 7,048
--------- ------- ---------
$1,281,675 $950,321 $1,103,235
COSTS AND EXPENSES:
Depletion of
Net Profits
Interests $ 324,506 $698,380 $1,017,309
Impairment Provision - 86,264 -
General and
administrative 130,147 126,220 129,791
--------- ------- ---------
$ 454,653 $910,864 $1,147,100
--------- ------- ---------
NET INCOME (LOSS) $ 827,022 $ 39,457 ($ 43,865)
========== ======= =========
GENERAL PARTNER -
NET INCOME $ 53,849 $ 33,359 $ 38,499
========= ======= =========
LIMITED PARTNERS - NET
INCOME (LOSS) $ 773,173 $ 6,098 ($ 82,364)
========= ======= =========
NET INCOME (LOSS)
per Unit $ 7.15 $ .06 ($ .76)
========= ======= =========
UNITS OUTSTANDING 108,074 108,074 108,074
========= ======= =========
The accompanying notes are an integral
part of these combined financial statements.
F-3
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
Combined Statements of Changes in Partners' Capital (Deficit)
For the Years Ended December 31, 1996, 1995, and 1994
Limited General
Partners Partner Combined
------------ --------- ------------
Balance, December 31, 1993 $5,298,518 ($30,180) $5,268,338
Net income (loss) ( 82,364) 38,499 ( 43,865)
Cash distributions ( 930,000) ( 51,000) ( 981,000)
--------- ------ ---------
Balance, December 31, 1994 $4,286,154 ($42,681) $4,243,473
Net income 6,098 33,359 39,457
Cash distributions ( 755,000) ( 39,000) ( 794,000)
--------- ------ ---------
Balance, December 31, 1995 $3,537,252 ($48,322) $3,488,930
Net income 773,173 53,849 827,022
Cash distributions ( 1,017,000) ( 68,193) ( 1,085,193)
--------- ------ ---------
Balance, December 31, 1996 $3,293,425 ($62,666) $3,230,759
========= ====== =========
The accompanying notes are an integral
part of these combined financial statements.
F-4
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
Combined Statements of Cash Flows
For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) $ 827,022 $ 39,457 ($ 43,865)
Adjustments to reconcile
net income (loss) to
net cash provided by
operating activities:
Depletion of Net
Profits Interests 324,506 698,380 1,017,309
Impairment Provision - 86,264 -
Gain on sale of
Net Profits Interests ( 80,721) ( 7,144) ( 7,048)
Increase in accounts
receivable ( 36,311) ( 34,097) ( 66,503)
--------- ------- ---------
Net cash provided by
operating activities $1,034,496 $782,860 $ 899,893
--------- ------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 12,540) ($ 4,566) ($ 15,149)
Proceeds from sale of
Net Profits Interests 115,009 30,046 19,794
--------- ------- ---------
Net cash provided by
investing activities $ 102,469 $ 25,480 $ 4,645
--------- ------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($1,085,193) ($794,000) ($ 981,000)
--------- ------- ---------
Net cash used by financing
activities ($1,085,193) ($794,000) ($ 981,000)
--------- ------- ---------
F-5
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS $ 51,772 $ 14,340 ($ 76,462)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 241,524 227,184 303,646
--------- ------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 293,296 $241,524 $ 227,184
========= ======= =========
The accompanying notes are an integral
part of these combined financial statements.
F-6
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-2 LIMITED PARTNERSHIP
AND GEODYNE NPI PARTNERSHIP P-2
We have audited the combined balance sheets of the Geodyne
Institutional/Pension Energy Income P-2 Limited Partnership, a Texas
limited partnership, and Geodyne NPI Partnership P-2, an Oklahoma
general partnership, as of December 31, 1996 and 1995 and the related
combined statements of operations, changes in partners' capital
(deficit), and cash flows for the years ended December 31, 1996, 1995,
and 1994. These financial statements are the responsibility of the
Partnerships' management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the combined financial statements referred to
above present fairly, in all material respects, the combined financial
position of the Geodyne Institutional/Pension Energy Income P-2
Limited Partnership and Geodyne NPI Partnership P-2 at December 31,
1996 and 1995 and the combined results of their operations and cash
flows for the years ended December 31, 1996, 1995, and 1994, in
conformity with generally accepted accounting principles.
As disclosed in Note 1 to the combined financial statements, the
Geodyne Institutional/Pension Energy Income P-2 Limited Partnership
and Geodyne NPI Partnership P-2 changed their method of accounting for
impairment of their Net Profits Interests as of October 1, 1995.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma
March 22, 1997
F-7
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-2 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-2
Combined Balance Sheets
December 31, 1996 and 1995
ASSETS
------
1996 1995
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 222,506 $ 167,791
Accounts receivable:
General Partner 8,376 -
Net Profits 203,287 176,041
--------- ---------
Total current assets $ 434,169 $ 343,832
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 2,201,380 2,510,707
--------- ---------
$2,635,549 $2,854,539
========= =========
PARTNERS' CAPITAL (DEFICIT)
---------------------------
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 57,428) ($ 46,190)
Limited Partners, issued and
outstanding, 90,094 Units 2,692,977 2,900,729
--------- ---------
Total Partners' capital $2,635,549 $2,854,539
--------- ---------
$2,635,549 $2,854,539
========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-8
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-2 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-2
Combined Statements of Operations
For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994
---------- ---------- ----------
REVENUES:
Net Profits $911,429 $715,608 $786,768
Interest income 7,216 5,184 4,824
Gain (loss) on sale of
Net Profits
Interests 57,048 13,376 ( 5,749)
------- ------- -------
$975,693 $734,168 $785,843
COSTS AND EXPENSES:
Depletion of Net
Profits Interests $275,464 $605,201 $749,970
Impairment provision - 182,970 -
General and
administrative 108,749 105,286 108,596
------- ------- -------
$384,213 $893,457 $858,566
------- ------- -------
NET INCOME (LOSS) $591,480 ($159,289) ($ 72,723)
======= ======= =======
GENERAL PARTNER -
NET INCOME $ 40,232 $ 23,562 $ 26,363
======= ======= =======
LIMITED PARTNERS - NET
INCOME (LOSS) $551,248 ($182,851) ($ 99,086)
======= ======= =======
NET INCOME (LOSS)
per Unit $ 6.12 ($ 2.03) ($ 1.10)
======= ======= =======
UNITS OUTSTANDING 90,094 90,094 90,094
======= ======= =======
The accompanying notes are an integral
part of these combined financial statements.
F-9
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-2 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-2
Combined Statements of Changes in Partners' Capital (Deficit)
For the Years Ended December 31, 1996, 1995, and 1994
Limited General
Partners Partner Combined
------------ --------- ------------
Balance, December 31, 1993 $4,507,666 ($24,615) $4,483,051
Net income (loss) ( 99,086) 26,363 ( 72,723)
Cash distributions ( 780,000) ( 44,000) ( 824,000)
--------- ------ ---------
Balance, December 31, 1994 $3,628,580 ($42,252) $3,586,328
Net income (loss) ( 182,851) 23,562 ( 159,289)
Cash distributions ( 545,000) ( 27,500) ( 572,500)
--------- ------ ---------
Balance, December 31, 1995 $2,900,729 ($46,190) $2,854,539
Net income 551,248 40,232 591,480
Cash distributions ( 759,000) ( 51,470) ( 810,470)
--------- ------ ---------
Balance, December 31, 1996 $2,692,977 ($57,428) $2,635,549
========= ====== =========
The accompanying notes are an integral
part of these combined financial statements.
F-10
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-2 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-2
Combined Statements of Cash Flows
For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) $591,480 ($159,289) ($ 72,723)
Adjustments to reconcile
net income (loss) to
net cash provided by
operating activities:
Depletion of Net
Profits Interests 275,464 605,201 749,970
Impairment provision - 182,970 -
(Gain) loss on sale of
Net Profits Interests ( 57,048) ( 13,376) 5,749
(Increase) decrease in
accounts receivable
-General Partner ( 8,376) - -
(Increase) decrease in
accounts receivable
- Net Profits ( 27,246) ( 39,805) 36,284
------- ------- -------
Net cash provided by
operating activities $774,274 $575,701 $719,280
------- ------- -------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 6,613) ($ 9,877) ($ 20,511)
Proceeds from sale of
Net Profits Interests 97,524 36,381 1,502
------- ------- -------
Net cash provided (used)
by investing activities $ 90,911 $ 26,504 ($ 19,009)
------- ------- -------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($810,470) ($572,500) ($824,000)
------- ------- -------
Net cash used by financing
activities ($810,470) ($572,500) ($824,000)
------- ------- -------
F-11
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS $ 54,715 $ 29,705 ($123,729)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 167,791 138,086 261,815
------- ------- -------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $222,506 $167,791 $138,086
======= ======= =======
The accompanying notes are an integral
part of these combined financial statements.
F-12
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
AND GEODYNE NPI PARTNERSHIP P-3
We have audited the combined balance sheets of the Geodyne
Institutional/Pension Energy Income Limited Partnership P-3, an
Oklahoma limited partnership, and Geodyne NPI Partnership P-3, an
Oklahoma general partnership, as of December 31, 1996 and 1995 and the
related combined statements of operations, changes in partners'
capital (deficit), and cash flows for the years ended December 31,
1996, 1995, and 1994. These financial statements are the responsi-
bility of the Partnerships' management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the combined financial statements referred to
above present fairly, in all material respects, the combined financial
position of the Geodyne Institutional/Pension Energy Income Limited
Partnership P-3 and Geodyne NPI Partnership P-3 at December 31, 1996
and 1995 and the combined results of their operations and cash flows
for the years ended December 31, 1996, 1995, and 1994, in conformity
with generally accepted accounting principles.
As disclosed in Note 1 to the combined financial statements, the
Geodyne Institutional/Pension Energy Income P-3 Limited Partnership
and Geodyne NPI Partnership P-3 changed their method of accounting for
impairment of their Net Profits Interests as of October 1, 1995.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma
March 22, 1997
F-13
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
Combined Balance Sheets
December 31, 1996 and 1995
ASSETS
------
1996 1995
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 415,354 $ 296,629
Accounts receivable:
General Partner 16,473 -
Net Profits 379,725 318,575
--------- ---------
Total current assets $ 811,552 $ 615,204
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 4,156,531 4,740,639
--------- ---------
$4,968,083 $5,355,843
========= =========
PARTNERS' CAPITAL (DEFICIT)
---------------------------
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 107,085) ($ 86,631)
Limited Partners, issued and
outstanding, 169,637 Units 5,075,168 5,442,474
--------- ---------
Total Partners' capital $4,968,083 $5,355,843
--------- ---------
$4,968,083 $5,355,843
========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-14
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
Combined Statements of Operations
For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994
------------ ------------ ------------
REVENUES:
Net Profits $1,706,259 $1,327,052 $1,472,407
Interest income 12,976 10,368 9,129
Gain (loss) on sale of
Net Profits Interests 105,977 16,231 ( 18,646)
--------- --------- ---------
$1,825,212 $1,353,651 $1,462,890
COSTS AND EXPENSES:
Depletion of Net
Profits Interests $ 521,166 $1,147,906 $1,394,108
Impairment provision - 377,983 -
General and
administrative 204,160 199,113 202,908
--------- --------- ---------
$ 725,326 $1,725,002 $1,597,016
--------- --------- ---------
NET INCOME (LOSS) $1,099,886 ($ 371,351) ($ 134,126)
========= ========= =========
GENERAL PARTNER -
NET INCOME $ 75,192 $ 42,468 $ 49,058
========= ========= =========
LIMITED PARTNERS - NET
INCOME (LOSS) $1,024,694 ($ 413,819) ($ 183,184)
========= ========= =========
NET INCOME (LOSS)
per Unit $ 6.04 ($ 2.44) ($ 1.08)
========= ========= =========
UNITS OUTSTANDING 169,637 169,637 169,637
========= ========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-15
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
Combined Statements of Changes in Partners' Capital (Deficit)
For the Years Ended December 31, 1996, 1995, and 1994
Limited General
Partners Partner Combined
------------- ---------- ------------
Balance, Dec. 31, 1993 $ 8,554,477 ($ 46,157) $8,508,320
Net income (loss) ( 183,184) 49,058 ( 134,126)
Cash distributions ( 1,460,000) ( 78,000) ( 1,538,000)
---------- ------- ---------
Balance, Dec. 31, 1994 $ 6,911,293 ($ 75,099) $6,836,194
Net income (loss) ( 413,819) 42,468 ( 371,351)
Cash distributions ( 1,055,000) ( 54,000) ( 1,109,000)
---------- ------- ---------
Balance, Dec. 31, 1995 $ 5,442,474 ($ 86,631) $5,355,843
Net income 1,024,694 75,192 1,099,886
Cash distributions ( 1,392,000) ( 95,646) ( 1,487,646)
---------- ------- ---------
Balance, Dec. 31, 1996 $ 5,075,168 ($107,085) $4,968,083
========== ======= =========
The accompanying notes are an integral
part of these combined financial statements.
F-16
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
Combined Statements of Cash Flows
For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) $1,099,886 ($ 371,351) ($ 134,126)
Adjustments to reconcile
net income (loss) to net
cash provided by
operating activities:
Depletion of Net
Profits Interests 521,166 1,147,906 1,394,108
Impairment provision - 377,983 -
(Gain) loss on sale of
Net Profits Interests ( 105,977) ( 16,231) 18,646
(Increase) decrease in
accounts receivable
- Net Profits ( 61,150) ( 67,313) 72,737
(Increase) decrease in
accounts receivable
-General Partner ( 16,473) - -
--------- --------- ---------
Net cash provided by
operating activities $1,437,452 $1,070,994 $1,351,365
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 12,220) ($ 19,116) ($ 39,265)
Proceeds from sale of
Net Profits Interests 181,139 68,171 2,730
--------- --------- ---------
Net cash provided (used)
by investing activities $ 168,919 $ 49,055 ($ 36,535)
--------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($1,487,646) ($1,109,000) ($1,538,000)
--------- --------- ---------
Net cash used by financing
activities ($1,487,646) ($1,109,000) ($1,538,000)
--------- --------- ---------
F-17
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS $ 118,725 $ 11,049 ($ 223,170)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 296,629 285,580 508,750
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 415,354 $ 296,629 $ 285,580
========= ========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-18
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
AND GEODYNE NPI PARTNERSHIP P-4
We have audited the combined balance sheets of the Geodyne
Institutional/Pension Energy Income Limited Partnership P-4, an
Oklahoma limited partnership, and Geodyne NPI Partnership P-4, an
Oklahoma general partnership, as of December 31, 1996 and 1995 and the
related combined statements of operations, changes in partners'
capital (deficit), and cash flows for the years ended December 31,
1996, 1995, and 1994. These financial statements are the responsi-
bility of the Partnerships' management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the combined financial statements referred to
above present fairly, in all material respects, the combined financial
position of the Geodyne Institutional/Pension Energy Income Limited
Partnership P-4 and Geodyne NPI Partnership P-4 at December 31, 1996
and 1995 and the combined results of their operations and cash flows
for the years ended December 31, 1996, 1995, and 1994, in conformity
with generally accepted accounting principles.
As disclosed in Note 1 to the combined financial statements, the
Geodyne Institutional/Pension Energy Income P-4 Limited Partnership
and Geodyne NPI Partnership P-4 changed their method of accounting for
impairment of their Net Profits Interests as of October 1, 1995.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma
March 22, 1997
F-19
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
Combined Balance Sheets
December 31, 1996 and 1995
ASSETS
------
1996 1995
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 345,876 $ 288,117
Accounts receivable:
Net Profits 369,940 352,907
--------- ---------
Total current assets $ 715,816 $ 641,024
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 2,567,661 3,299,455
--------- ---------
$3,283,477 $3,940,479
========= =========
PARTNERS' CAPITAL (DEFICIT)
---------------------------
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 81,373) ($ 54,546)
Limited Partners, issued and
outstanding, 126,306 Units 3,364,850 3,995,025
--------- ---------
Total Partners' capital $3,283,477 $3,940,479
--------- ---------
$3,283,477 $3,940,479
========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-20
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
Combined Statements of Operations
For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994
------------ ------------ ------------
REVENUES:
Net Profits $1,373,635 $1,251,153 $1,779,306
Interest income 11,768 12,458 17,220
Loss on sale of
Net Profits
Interests ( 52,591) ( 508) ( 2,030)
--------- --------- ---------
$1,332,812 $1,263,103 $1,794,496
COSTS AND EXPENSES:
Depletion of Net
Profits Interests $ 540,791 $ 990,870 $1,731,821
Impairment provision - 581,036 -
General and
administrative 154,265 147,935 150,583
--------- --------- ---------
$ 695,056 $1,719,841 $1,882,404
--------- --------- ---------
NET INCOME (LOSS) $ 637,756 ($ 456,738) ($ 87,908)
========= ========= =========
GENERAL PARTNER -
NET INCOME $ 52,931 $ 40,039 $ 64,877
========= ========= =========
LIMITED PARTNERS - NET
INCOME (LOSS) $ 584,825 ($ 496,777) ($ 152,785)
========= ========= =========
NET INCOME (LOSS)
per Unit $ 4.63 ($ 3.93) ($ 1.21)
========= ========= =========
UNITS OUTSTANDING 126,306 126,306 126,306
========= ========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-21
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
Combined Statements of Changes in Partners' Capital (Deficit)
For the Years Ended December 31, 1996, 1995, and 1994
Limited General
Partners Partner Combined
------------ ---------- ------------
Balance, December 31, 1993 $7,609,587 ($ 2,462) $7,607,125
Net income (loss) ( 152,785) 64,877 ( 87,908)
Cash distributions ( 1,910,000) ( 103,000) ( 2,013,000)
--------- ------- ---------
Balance, December 31, 1994 $5,546,802 ($ 40,585) $5,506,217
Net income (loss) ( 496,777) 40,039 ( 456,738)
Cash distributions ( 1,055,000) ( 54,000) ( 1,109,000)
--------- ------- ---------
Balance, December 31, 1995 $3,995,025 ($ 54,546) $3,940,479
Net income 584,825 52,931 637,756
Cash distributions ( 1,215,000) ( 79,758) ( 1,294,758)
--------- ------- ---------
Balance, December 31, 1996 $3,364,850 ($ 81,373) $3,283,477
========= ======= =========
The accompanying notes are an integral
part of these combined financial statements.
F-22
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
Combined Statements of Cash Flows
For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) $ 637,756 ($ 456,738) ($ 87,908)
Adjustments to reconcile
net income (loss) to
net cash provided by
operating activities:
Depletion of Net
Profits Interests 540,791 990,870 1,731,821
Impairment provision - 581,036 -
(Gain) loss on sale of
Net Profits Interests 52,591 508 2,030
(Increase) decrease in
accounts receivable ( 17,033) ( 139,959) 166,198
--------- --------- ---------
Net cash provided by
operating activities $1,214,105 $ 975,717 $1,812,141
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 804) ($ 19,172) ($ 15,542)
Proceeds from sale of
Net Profits Interests 139,216 9,907 1,038
--------- --------- ---------
Net cash provided (used)
by investing activities $ 138,412 ($ 9,265) ($ 14,504)
--------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($1,294,758) ($1,109,000) ($2,013,000)
--------- --------- ---------
Net cash used by financing
activities ($1,294,758) ($1,109,000) ($2,013,000)
--------- --------- ---------
F-23
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS $ 57,759 ($ 142,548) ($ 215,363)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 288,117 430,665 646,028
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 345,876 $ 288,117 $ 430,665
========= ========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-24
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
AND GEODYNE NPI PARTNERSHIP P-5
We have audited the combined balance sheets of the Geodyne
Institutional/Pension Energy Income Limited Partnership P-5, an
Oklahoma limited partnership, and Geodyne NPI Partnership P-5, an
Oklahoma general partnership, as of December 31, 1996 and 1995 and the
related combined statements of operations, changes in partners'
capital (deficit), and cash flows for the years ended December 31,
1996, 1995, and 1994. These financial statements are the responsi-
bility of the Partnerships' management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the combined financial statements referred to
above present fairly, in all material respects, the combined financial
position of the Geodyne Institutional/Pension Energy Income Limited
Partnership P-5 and Geodyne NPI Partnership P-5 at December 31, 1996
and 1995 and the combined results of their operations and cash flows
for the years ended December 31, 1996, 1995, and 1994, in conformity
with generally accepted accounting principles.
As disclosed in Note 1 to the combined financial statements, the
Geodyne Institutional/Pension Energy Income P-5 Limited Partnership
and Geodyne NPI Partnership P-5 changed their method of accounting for
impairment of their Net Profits Interests as of October 1, 1995.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma
March 22, 1997
F-25
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
Combined Balance Sheets
December 31, 1996 and 1995
ASSETS
------
1996 1995
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 247,540 $ 167,076
Accounts receivable:
Net Profits 209,058 150,207
--------- ---------
Total current assets $ 456,598 $ 317,283
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 2,536,590 2,908,234
--------- ---------
$2,993,188 $3,225,517
========= =========
PARTNERS' CAPITAL (DEFICIT)
---------------------------
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 60,088) ($ 48,425)
Limited Partners, issued and
outstanding, 118,449 Units 3,053,276 3,273,942
--------- ---------
Total Partners' capital $2,993,188 $3,225,517
--------- ---------
$2,993,188 $3,225,517
========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-26
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
Combined Statements of Operations
For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994
------------ ------------ ------------
REVENUES:
Net Profits $1,112,631 $ 938,957 $1,180,970
Interest income 7,595 8,722 10,217
Gain (loss) on sale of
Net Profits
Interests 30,479 1,364 ( 1,216)
--------- --------- ---------
$1,150,705 $ 949,043 $1,189,971
COSTS AND EXPENSES:
Depletion of Net
Profits Interests $ 368,974 $ 785,795 $1,645,268
Impairment provision - 194,933 1,191,000
General and
administrative 142,033 138,959 141,316
--------- --------- ---------
$ 511,007 $1,119,687 $2,977,584
--------- --------- ---------
NET INCOME (LOSS) $ 639,698 ($ 170,644) ($1,787,613)
========= ========= =========
GENERAL PARTNER -
NET INCOME $ 46,364 $ 30,697 $ 24,070
========= ========= =========
LIMITED PARTNERS - NET
INCOME (LOSS) $ 593,334 ($ 201,341) ($1,811,683)
========= ========= =========
NET INCOME (LOSS)
per Unit $ 5.01 ($ 1.70) ($ 15.30)
========= ========= =========
UNITS OUTSTANDING 118,449 118,449 118,449
========= ========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-27
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
Combined Statements of Changes in Partners' Capital (Deficit)
For the Years Ended December 31, 1996, 1995, and 1994
Limited General
Partners Partner Combined
------------ ---------- ------------
Balance, December 31, 1993 $7,036,966 ($ 9,192) $7,027,774
Net income (loss) ( 1,811,683) 24,070 ( 1,787,613)
Cash distributions ( 1,065,000) ( 59,500) ( 1,124,500)
--------- ------ ---------
Balance, December 31, 1994 $4,160,283 ($44,622) $4,115,661
Net income (loss) ( 201,341) 30,697 ( 170,644)
Cash distributions ( 685,000) ( 34,500) ( 719,500)
--------- ------ ---------
Balance, December 31, 1995 $3,273,942 ($48,425) $3,225,517
Net income 593,334 46,364 639,698
Cash distributions ( 814,000) ( 58,027) ( 872,027)
--------- ------ ---------
Balance, December 31, 1996 $3,053,276 ($60,088) $2,993,188
========= ====== =========
The accompanying notes are an integral
part of these combined financial statements.
F-28
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
Combined Statements of Cash Flows
For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) $639,698 ($ 170,644) ($1,787,613)
Adjustments to reconcile
net income (loss) to
net cash provided by
operating activities:
Depletion of Net
Profits Interests 368,974 785,795 1,645,268
Impairment provision - 194,933 1,191,000
(Gain) loss on sale of
Net Profits Interests ( 30,479) ( 1,364) 1,216
Increase in accounts
receivable ( 58,851) ( 34,700) ( 115,507)
Decrease in accounts
payable - - ( 22,488)
------- --------- ---------
Net cash provided by
operating activities $919,342 $ 774,020 $ 911,876
------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 2,807) ($ 29,603) ($ 44,895)
Proceeds from sale of
Net Profits Interests 35,956 1,557 152
------- --------- ---------
Net cash provided (used)
by investing activities $ 33,149 ($ 28,046) ($ 44,743)
------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($872,027) ($ 719,500) ($1,124,500)
------- --------- ---------
Net cash used by financing
activities ($872,027) ($ 719,500) ($1,124,500)
------- --------- ---------
F-29
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS $ 80,464 $ 26,474 ($ 257,367)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 167,076 140,602 397,969
------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $247,540 $ 167,076 $ 140,602
======= ========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-30
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
AND GEODYNE NPI PARTNERSHIP P-6
We have audited the combined balance sheets of the Geodyne
Institutional/Pension Energy Income Limited Partnership P-6, an
Oklahoma limited partnership, and Geodyne NPI Partnership P-6, an
Oklahoma general partnership, as of December 31, 1996 and 1995 and the
related combined statements of operations, changes in partners'
capital (deficit), and cash flows for the years ended December 31,
1996, 1995, and 1994. These financial statements are the responsi-
bility of the Partnerships' management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the combined financial statements referred to
above present fairly, in all material respects, the combined financial
position of the Geodyne Institutional/Pension Energy Income Limited
Partnership P-6 and Geodyne NPI Partnership P-6 at December 31, 1996
and 1995 and the combined results of their operations and cash flows
for the years ended December 31, 1996, 1995, and 1994, in conformity
with generally accepted accounting principles.
As disclosed in Note 1 to the combined financial statements, the
Geodyne Institutional/Pension Energy Income P-6 Limited Partnership
and Geodyne NPI Partnership P-6 changed their method of accounting for
impairment of their Net Profits Interests as of October 1, 1995.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma
March 22, 1997
F-31
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
Combined Balance Sheets
December 31, 1996 and 1995
ASSETS
------
1996 1995
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 319,699 $ 254,180
Accounts receivable:
Net Profits 428,072 231,575
--------- ---------
Total current assets $ 747,771 $ 485,755
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 3,966,906 4,684,277
--------- ---------
$4,714,677 $5,170,032
========= =========
PARTNERS' CAPITAL (DEFICIT)
---------------------------
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 59,021) ($ 47,281)
Limited Partners, issued and
outstanding, 143,041 Units 4,773,698 5,217,313
--------- ---------
Total Partners' capital $4,714,677 $5,170,032
--------- ---------
$4,714,677 $5,170,032
========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-32
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
Combined Statements of Operations
For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994
------------ ------------ ------------
REVENUES:
Net Profits $2,002,957 $1,284,185 $1,487,321
Interest income 13,419 10,768 13,160
Gain (loss) on sale
of Net Profits
Interests 24,815 6,045 ( 319)
--------- --------- ---------
$2,041,191 $1,300,998 $1,500,162
COSTS AND EXPENSES:
Depletion of Net
Profits Interests $ 788,251 $1,520,338 $1,623,752
Impairment provision - 478,168 -
General and
administrative 171,630 173,446 172,922
--------- --------- ---------
$ 959,881 $2,171,952 $1,796,674
--------- --------- ---------
NET INCOME (LOSS) $1,081,310 ($ 870,954) ($ 296,512)
========= ========= =========
GENERAL PARTNER -
NET INCOME $ 84,925 $ 36,393 $ 50,124
========= ========= =========
LIMITED PARTNERS - NET
INCOME (LOSS) $ 996,385 ($ 907,347) ($ 346,636)
========= ========= =========
NET INCOME (LOSS)
per Unit $ 6.97 ($ 6.34) ($ 2.42)
========= ========= =========
UNITS OUTSTANDING 143,041 143,041 143,041
========= ========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-33
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
Combined Statements of Changes in Partners' Capital (Deficit)
For the Years Ended December 31, 1996, 1995, and 1994
Limited General
Partners Partner Combined
------------ ---------- ------------
Balance, Dec. 31, 1993 $8,651,296 ($21,298) $8,629,998
Net income (loss) ( 346,636) 50,124 ( 296,512)
Cash distributions ( 1,360,000) ( 70,000) ( 1,430,000)
--------- ------ ---------
Balance, Dec. 31, 1994 $6,944,660 ($41,174) $6,903,486
Net income (loss) ( 907,347) 36,393 ( 870,954)
Cash distributions ( 820,000) ( 42,500) ( 862,500)
--------- ------ ---------
Balance, Dec. 31, 1995 $5,217,313 ($47,281) $5,170,032
Net income 996,385 84,925 1,081,310
Cash distributions ( 1,440,000) ( 96,665) ( 1,536,665)
---------- ------ ---------
Balance, Dec. 31, 1996 $4,773,698 ($59,021) $4,714,677
========= ====== =========
The accompanying notes are an integral
part of these combined financial statements.
F-34
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
Combined Statements of Cash Flows
For the Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994
------------ ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) $1,081,310 ($ 870,954) ($ 296,512)
Adjustments to reconcile
net income (loss) to net
cash provided by
operating activities:
Depletion of Net
Profits Interests 788,251 1,520,338 1,623,752
Impairment provision - 478,168 -
(Gain) loss on sale of
Net Profits Interests ( 24,815) ( 6,045) 319
Increase in accounts
receivable ( 196,497) ( 177,962) ( 53,613)
Decrease in accounts
payable - - ( 46,188)
--------- --------- ---------
Net cash provided by
operating activities $1,648,249 $ 943,545 $1,227,758
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures ($ 73,296) ($ 50,621) ($ 66,775)
Proceeds from sale of
Net Profits Interests 27,231 10,790 216
--------- --------- ---------
Net cash used by
investing activities ($ 46,065) ($ 39,831) ($ 66,559)
--------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions ($1,536,665) ($ 862,500) ($1,430,000)
--------- --------- ---------
Net cash used by financing
activities ($1,536,665) ($ 862,500) ($1,430,000)
--------- --------- ---------
F-35
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS $ 65,519 $ 41,214 ($ 268,801)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 254,180 212,966 481,767
--------- --------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 319,699 $ 254,180 $ 212,966
========= ========= =========
The accompanying notes are an integral
part of these combined financial statements.
F-36
GEODYNE INSTITUTIONAL/PENSION PROGRAM
Notes to the Combined Financial Statements
For the Periods Ended December 31, 1996, 1995, and 1994
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Operations
The Geodyne Institutional/Pension Energy Income Limited
Partnerships (the "Partnerships") were formed pursuant to a public
offering of depositary units ("Units"). Upon formation, investors
became limited partners (the "Limited Partners") and held Units issued
by each Partnership. Geodyne Resources, Inc. ("Geodyne") is the
general partner of each of the Partnerships. Each Partnership is a
general partner in the related Geodyne NPI Partnership (the "NPI
Partnerships") in which Geodyne serves as the managing partner.
Limited Partners' capital contributions were contributed to the
related NPI Partnerships for investment in net profits interests,
royalty interests, and other nonoperating interests in producing oil
and gas properties. Most of the net profits interests acquired by the
Partnerships have been carved out of working interests in producing
properties, located in the continental United States, which were
acquired by affiliated oil and gas investment programs (the
"Affiliated Programs").
Net profits interests entitle the Partnerships to a share of net
revenues from producing properties measured by a specific percentage
of the net profits realized by such Affiliated Programs as owners of
the working interests in the producing properties. Except where
otherwise noted, references to certain operational activities of the
Partnerships include the activities of the Affiliated Programs. As
the holder of a net profits interest, a Partnership is not liable to
pay any amount by which oil and gas operating costs and expenses
exceed revenues for any period, although any deficit, together with
interest, is applied to reduce the amounts payable to the Partnership
in subsequent periods. As used in these financial statements, the
Partnerships' net profits and royalty interests in oil and gas sales
are referred to as "Net Profits" and the Partnerships' net profits and
royalty interests in oil and gas properties are referred to as "Net
Profits Interests."
The Partnerships were activated on the following dates with the
following Limited Partner capital contributions:
F-37
Limited Partner
Date of Capital
Partnership Activation Contributions
----------- ----------------- ---------------
P-1 October 25, 1988 $10,807,400
P-2 February 9, 1989 9,009,400
P-3 May 10, 1989 16,963,700
P-4 November 21, 1989 12,630,600
P-5 February 27, 1990 11,844,900
P-6 September 5, 1990 14,304,100
For purposes of these financial statements, the Partnerships and
NPI Partnerships are collectively referred to as the "Partnerships"
and the general partner and managing partner are collectively referred
to as the "General Partner". An affiliate of the General Partner
owned the following Units at December 31, 1996:
Percent of
Number of Outstanding
Partnership Units Owned Units
----------- ----------- -----------
P-1 12,183 11.3%
P-2 6,985 7.8%
P-3 38,928 23.0%
P-4 9,147 7.2%
P-5 13,119 11.1%
P-6 10,466 7.3%
The Partnerships' sole business is owning Net Profits Interests.
Substantially all of the gas reserves attributable to the
Partnerships' Net Profits Interests are being sold regionally in the
"spot market." Due to the highly competitive nature of the spot
market, prices on the spot market are subject to wide seasonal and
regional pricing fluctuations. In addition, such spot market sales
are generally short term in nature and are dependent upon the
obtaining of transportation services provided by pipelines.
Allocation of Costs and Revenues
The combination of the allocation provisions in each Partner-
ships' limited partnership agreement and NPI Partnerships' partnership
agreement (collectively, the "Partnership Agreement") results in
allocations of costs and income between the Limited Partners and
General Partner as follows:
F-38
Before Payout After Payout
------------------ ------------------
General Limited General Limited
Partner Partners Partner Partners
------- -------- ------- --------
Costs(1)
- -------------------------
Sales commissions, payment
for organization and
offering costs and
acquisition fee 1% 99% - -
Property acquisition costs 1% 99% 1% 99%
General and administrative
costs and direct
administrative costs(2) 5% 95% 15% 85%
Income(1)
- -------------------------
Temporary investments of
Limited Partners' capital
contributions 1% 99% 1% 99%
Income from oil and gas
production(2) 5% 95% 15% 85%
Gain on sale of
Net Profits Interests(2) 5% 95% 15% 85%
All other income(2) 5% 95% 15% 85%
- ----------
(1) The allocations in the table result generally from the combined
effect of the allocation provisions in the Partnership
Agreements. For example, direct administrative costs of the NPI
Partnership are allocated 95.9596% to the Partnership and 4.0404%
to the managing partner. The 95.9596% portion of these costs
allocated to the limited partnership, when passed through the
limited partnership, is further allocated 99% to the Limited
Partners and 1% to the general partner. In this manner the
Limited Partners are allocated 95% of such costs and the General
Partner is allocated 5% of such costs.
F-39
(2) If, at payout, the total distributions received by the Limited
Partners from the commencement of the property investment period
have averaged on an annualized basis an amount that is less than
12% of the Limited Partners' subscriptions, the percentage of
income, and costs which are shared in the same proportions as
income, allocated to the General Partner will increase to only
10% and the Limited Partners will be allocated 90% thereof until
such time, if ever, that the distributions to the Limited
Partners from the commencement of the property investment period
reaches a yearly average equal to at least 12% of the Limited
Partners' subscriptions. Thereafter, income, and costs shared in
the same proportions as income, will be allocated 15% to the
General Partner and 85% to the Limited Partners.
Basis of Presentation
These financial statements reflect the combined accounts of each
Partnership after the elimination of all inter-partnership
transactions and balances.
Cash and Cash Equivalents
The Partnerships consider all highly liquid investments with a
maturity of three months or less when purchased to be cash
equivalents. Cash equivalents are not insured, which cause the
Partnerships to be subject to risk.
Credit Risk
Accrued oil and gas sales which are due from a variety of oil and
gas purchasers subject the Partnerships to a concentration of credit
risk. Some of these purchasers are discussed in Note 4 - Major
Customers. Subsequent to year-end, all oil and gas sales accrued as
of December 31, 1996 have been collected.
Receivable from General Partner
The receivable from the General Partner at December 31, 1996 for
the P-2 and P-3 Partnerships represents proceeds due to the
Partnerships for the sale of Net Profits Interests. Subsequent to
December 31, 1996 such receivable was collected by the P-2 and P-3
Partnerships.
F-40
Net Profits Interests
The Partnerships follow the successful efforts method of
accounting for their Net Profits Interests. Under the successful
efforts method, the Partnerships capitalize all acquisition costs.
Such acquisition costs include costs incurred by the Partnerships or
the General Partner to acquire a Net Profits Interest, including
related title insurance or examination costs, commissions,
engineering, legal and accounting fees, and similar costs directly
related to the acquisitions plus an allocated portion of the General
Partner's property screening costs. The net acquisition cost to the
Partnerships of Net Profits Interests in properties acquired by the
General Partner consists of the cost of acquiring the underlying
properties, adjusted for the net cash results of operations, including
interest incurred to finance the net acquisition, for the period of
time the properties are held by the General Partner. Impairment of
Net Profits Interests in unproved oil and gas properties is recognized
based upon an individual property assessment. Upon discovery of
commercial reserves, Net Profits Interests in unproved properties are
transferred to producing properties.
Depletion of the cost of Net Profits Interests is computed on the
units-of-production method. The Partnerships' calculation of
depletion of its Net Profits Interests includes estimated
dismantlement and abandonment costs, net of estimated salvage values.
The depletion rate per equivalent barrel of oil produced during the
years ended December 31, 1996, 1995, and 1994 were as follows:
Partnership 1996 1995 1994
----------- ---- ----- -----
P-1 2.90 5.52 7.46
P-2 3.09 5.93 7.30
P-3 3.11 5.97 7.23
P-4 4.22 5.62 9.26
P-5 3.20 5.55 10.31
P-6 3.66 6.10 6.01
Effective October 1, 1995, the Partnerships adopted the
requirements of Statement of Financial Accounting Standards ("SFAS")
No. 121, "Accounting for the Impairment of Long Lived Assets and
Assets Held for Disposal," which is intended to establish more
consistent accounting standards for measuring the recoverability of
long-lived assets. SFAS No. 121 requires successful efforts
companies, like the Partnerships, to evaluate the recoverability of
the carrying costs of their Net Profits Interests at the lowest level
for which there are identifiable cash flows that are largely
independent of the cash flows of other
F-41
groups of Net Profits Interests. With respect to the Partnerships'
Net Profits Interests, this evaluation was performed for each field,
rather than for the Partnerships' Net Profits Interests as a whole as
previously allowed by the Securities and Exchange Commission ("SEC").
SFAS No. 121 provides that if the unamortized costs of Net Profits
Interests exceed the expected undiscounted future cash flows from such
Net Profits Interests, the cost of the Net Profits Interest is written
down to fair value, which is determined by using the discounted future
cash flows. The following non-cash charges were recorded by the
Partnerships during the fourth quarter of 1995 pursuant to SFAS No.
121 and during the year ended December 31, 1994 pursuant to the
Partnerships' prior impairment policy:
Partnership 1995 1994
----------- -------- ----------
P-1 $ 86,264 -
P-2 182,970 -
P-3 377,983 -
P-4 581,036 -
P-5 194,933 $1,191,000
P-6 478,168 -
No such charge was recorded for any Partnership during the year ended
December 31, 1996.
Subsequent to December 31, 1996, the oil and gas industry has
seen a drop in oil and gas prices. The Partnerships' reserves were
determined at December 31, 1996 using oil and gas prices of $23.75 per
barrel and $3.57 per Mcf, respectively. As of the date of this Annual
Report on Form 10-K, oil and gas prices received by the Partnerships
have decreased to approximately $19.00 per barrel and $1.60 per Mcf,
respectively (the "Filing Date Prices"). If the Filing Date Prices,
as opposed to December 31, 1996 prices, were used to determine the
recoverability of the Partnerships' oil and gas reserves, impairment
provisions in the following approximate amounts would have been
required at December 31, 1996:
Partnership Amount
----------- --------
P-1 $114,000
P-2 114,000
P-3 221,000
P-4 85,000
P-5 123,000
P-6 445,000
F-42
If the Filing Date Prices are in effect on March 31, 1997, the above
impairment provisions will be reflected in the Partnerships' financial
statements as of March 31, 1997. Impairment provisions do not impact
the Partnerships' cash flows from operating activities; however, they
do impact the amount of General Partner and Limited Partner capital.
The risk that the Partnerships will be required to record further
impairment provisions in the future, beyond those noted above,
increases when oil and gas prices are depressed. Accordingly, the P-4
Partnership has Net Profits Interests in two fields and all other
Partnerships have Net Profits Interests in three fields in which it is
reasonably possible that impairment provisions will be recorded in the
near term if gas prices decrease below the Filing Date Prices.
Revenues from a net profits interest consist of a share of the
oil and gas sales of the property, less operating and production
expenses.
Accounts Receivable (Accounts Payable) - Net Profits
The Partnerships accrue for oil and gas revenues less expenses
from its Net Profits Interests. Sales of gas applicable to the
Partnerships' Interests in producing oil and gas leases are recorded
as revenue when the gas is metered and title transferred pursuant to
the gas sales contracts covering the Partnerships' Net Profits
Interests. During such times as a Partnership's sales of gas exceed
its pro rata Net Profits Interest in a well, such sales are recorded
as revenue unless total sales from the well have exceeded the
Partnership's share of estimated total gas reserves underlying the
property, at which time such excess is recorded as a liability. This
liability is recorded as a reduction to accounts receivable. At
December 31, 1996 and 1995 total sales exceeded the Partnerships' Net
Profits Interests in estimated total gas reserves as follows:
1996 1995
-------------------- --------------------
Partnership Mcf Amount Mcf Amount
----------- -------- ---------- -------- ----------
P-1 (11,242) ($16,863) ( 7,107) ($13,788)
P-2 (10,944) ( 16,416) ( 5,634) ( 10,986)
P-3 (20,540) ( 30,810) (14,235) ( 27,758)
P-4 (26,973) ( 40,460) (12,424) ( 24,972)
P-5 (12,159) ( 18,239) ( 5,931) ( 11,388)
P-6 ( 3,483) ( 5,225) ( 4,567) ( 8,495)
F-43
Also included in accounts receivable from (accounts payable to)
oil and gas sales are amounts which represent costs deferred or
accrued for lease operating expenses incurred in connection with the
Partnerships' net underproduced or overproduced gas imbalance
positions. At December 31, 1996 and 1995, cumulative total gas sales
volumes were less than (more than) the Partnerships' Net Profits
Interests in gas production by the following amounts:
1996 1995
-------------------- ---------------------
Partnership Mcf Amount Mcf Amount
----------- --------- --------- --------- ----------
P-1 41,624 23,626 78,404 $ 49,002
P-2 40,121 23,254 72,177 47,369
P-3 77,659 44,934 131,563 86,739
P-4 204,628 98,630 223,838 106,838
P-5 ( 71,197) (25,190) ( 66,114) ( 20,264)
P-6 (107,990) (55,259) (102,560) ( 54,674)
General and Administrative Overhead
The General Partner and its affiliates are reimbursed for actual
general and administrative costs incurred and attributable to the
conduct of the business affairs and operations of the Partnerships.
Use of Estimates in Financial Statements
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates. Further, accounts receivable
(payable) - Net Profits includes accrued liabilities, accrued lease
operating expenses, and deferred lease operating expenses related to
gas balancing which involve estimates that could materially differ
from the actual amounts ultimately realized or incurred in the near
term. Oil and gas reserves (see Note 4) also involve significant
estimates which could materially differ from the actual amounts
ultimately realized.
Income Taxes
Income or loss for income tax purposes is includable in the income
tax returns of the partners. Accordingly, no recognition has been
given to income taxes in these financial statements.
F-44
2. TRANSACTIONS WITH RELATED PARTIES
The Partnerships reimburse the General Partner for the general and
administrative overhead applicable to the Partnerships, based on an
allocation of actual costs incurred. The following is a summary of
payments made to the General Partner or its affiliates by the
Partnerships for general and administrative costs for the years ended
December 31, 1996, 1995, and 1994:
Partnership 1996 1995 1994
----------- -------- -------- --------
P-1 $113,760 $113,760 $113,762
P-2 94,836 94,836 94,836
P-3 178,560 178,560 178,565
P-4 132,960 132,960 132,954
P-5 124,680 124,680 124,683
P-6 150,564 150,564 150,569
Affiliates of the Partnerships operate certain of the properties
in which the Partnerships owned a Net Profits Interest and their
policy is to bill the owners of the working interests of such
properties for all customary charges and cost reimbursements
associated with these activities, together with any compressor
rentals, consulting, or other services provided.
During 1995 and 1994, gas production from some of the properties
in which the Partnerships owned a Net Profits Interest was sold to El
Paso Energy Marketing Company, formerly known as Premier Gas Company
("El Paso"). El Paso, like other similar gas marketing firms, then
resold such gas to third parties at market prices. El Paso was an
affiliate of the Partnerships until December 6, 1995.
3. MAJOR CUSTOMERS
The following table sets forth purchasers who individually
accounted for more than ten percent of the Partnerships' combined oil
and gas sales during the years ended December 31, 1996, 1995, and
1994:
F-45
Percentage
-------------------
Partnership Purchaser 1996 1995 1994
----------- ------------------------ ----- ----- -----
P-1 El Paso 23.0% 18.4% 22.9%
Texaco Exploration and
Production, Inc.
("Texaco") 10.4% 13.0% - %
Chevron U.S.A., Inc. 10.1% - % - %
P-2 El Paso 22.4% 17.7% 23.0%
Texaco 12.6% 13.7% - %
P-3 El Paso 22.3% 17.7% 22.9%
Texaco 12.7% 13.6% - %
P-4 El Paso 60.2% 49.9% 52.8%
Mesa Pipeline Co. 18.2% 18.6% - %
Mesa Operating Ltd.
Partnership - % - % 15.4%
Snyder Oil Corp. - % - % 10.1%
P-5 El Paso 62.0% 55.6% 70.0%
Apache Corporation - % 12.4% - %
P-6 El Paso 27.0% 42.5% 33.2%
Western Gas Resources - % - % 10.7%
Houston Pipeline Company - % - % 18.9%
Tejas Gas Marketing
Company 13.7% - % - %
HPL Resources Company 19.1% - % - %
In the event of interruption of purchases by one or more these
significant customers or the cessation or material change in
availability of open access transportation by pipeline transporters,
the Partnerships may encounter difficulty in marketing their gas and
in maintaining historic sales levels. Alternative purchasers or
transporters may not be readily available.
4. SUPPLEMENTAL OIL AND GAS INFORMATION
The following supplemental information regarding the Net Profits
Interest activities of the Partnerships is presented pursuant to the
disclosure requirements promulgated by the SEC.
Capitalized Costs
Capitalized costs and accumulated depletion at December 31, 1996
and 1995 were as follows:
F-46
P-1 Partnership
---------------
1996 1995
------------ ------------
Net Profits Interests in proved
oil and gas properties $7,343,643 $8,080,020
Net Profits Interests in unproved
oil and gas properties not
subject to depletion 788,097 788,097
--------- ---------
$8,131,740 $8,868,117
Less accumulated depletion
and valuation allowance ( 5,451,735) ( 5,841,858)
--------- ---------
Net Profits Interests, net $2,680,005 $3,026,259
========= =========
P-2 Partnership
---------------
1996 1995
------------ ------------
Net Profits Interests in proved
oil and gas properties $6,049,274 $6,807,611
Net Profits Interests in unproved
oil and gas properties not
subject to depletion 614,888 614,888
--------- ---------
$6,664,162 $7,422,499
Less accumulated depletion
and valuation allowance ( 4,462,782) ( 4,911,792)
--------- ---------
Net Profits Interests, net $2,201,380 $2,510,707
========= =========
F-47
P-3 Partnership
---------------
1996 1995
------------- -------------
Net Profits Interests in proved
oil and gas properties $11,377,680 $12,790,404
Net Profits Interests in unproved
oil and gas properties not
subject to depletion 1,193,468 1,193,468
---------- ----------
$12,571,148 $13,983,872
Less accumulated depletion
and valuation allowance ( 8,414,617) ( 9,243,233)
---------- ----------
Net Profits Interests, net $ 4,156,531 $ 4,740,639
========== ==========
P-4 Partnership
---------------
1996 1995
------------- -------------
Net Profits Interests in proved
oil and gas properties $ 8,753,695 $10,593,452
Net Profits Interests in unproved
oil and gas properties not
subject to depletion 735,371 735,371
---------- ----------
$ 9,489,066 $11,328,823
Less accumulated depletion
and valuation allowance ( 6,921,405) ( 8,029,368)
---------- ----------
Net Profits Interests, net $ 2,567,661 $ 3,299,455
========== ==========
F-48
P-5 Partnership
---------------
1996 1995
------------- -------------
Net Profits Interests in proved
oil and gas properties $ 9,461,206 $ 9,643,267
Net Profits Interests in unproved
oil and gas properties not
subject to depletion 897,564 897,564
---------- ----------
$10,358,770 $10,540,831
Less accumulated depletion
and valuation allowance ( 7,822,180) ( 7,632,597)
---------- ----------
Net Profits Interest, net $ 2,536,590 $ 2,908,234
========== ==========
P-6 Partnership
---------------
1996 1995
------------- -------------
Net Profits Interests in proved
oil and gas properties $12,204,492 $12,253,886
Net Profits Interests in unproved
oil and gas properties not
subject to depletion 454,263 454,263
---------- ----------
$12,658,755 $12,708,149
Less accumulated depletion
and valuation allowance ( 8,691,849) ( 8,023,872)
---------- ----------
Net Profits Interests, net $ 3,966,906 $ 4,684,277
========== ==========
F-49
Costs Incurred
Costs incurred for the years ended December 31, 1996, 1995, and 1994
for each of the Partnerships were as follows:
P-1 Partnership
---------------
1996 1995 1994
------- ------- -------
Acquisition of Net Profits Interests $ - $ - $ -
Development costs of Net Profits
Interests 12,540 4,566 15,149
------ ----- ------
$12,540 $4,566 $15,149
====== ===== ======
P-2 Partnership
---------------
1996 1995 1994
------- ------- -------
Acquisition of Net Profits Interests $ - $ - $ -
Development costs of Net Profits
Interests 6,613 9,877 20,511
----- ----- ------
$6,613 $9,877 $20,511
===== ===== ======
P-3 Partnership
---------------
1996 1995 1994
-------- ------- -------
Acquisition of Net Profits Interests $ - $ - $ -
Development costs of Net Profits
Interests 12,220 19,116 39,265
------ ------ ------
$12,220 $19,116 $39,265
====== ====== ======
F-50
P-4 Partnership
---------------
1996 1995 1994
-------- ------- -------
Acquisition of Net Profits Interests $ - $ - $ -
Development costs of Net Profits
Interests 804 19,172 15,542
--- ------ ------
$804 $19,172 $15,542
=== ====== ======
P-5 Partnership
---------------
1996 1995 1994
------- ------- -------
Acquisition of Net Profits Interests $ - $ - $ -
Development costs of Net Profits
Interests 2,807 29,603 44,895
----- ------ ------
$2,807 $29,603 $44,895
===== ====== ======
P-6 Partnership
---------------
1996 1995 1994
------- ------- -------
Acquisition of Net Profits Interests $ - $ - $ -
Development costs of Net Profits
Interests 73,296 50,621 66,775
------ ------ ------
$73,296 $50,621 $66,775
====== ====== ======
F-51
Quantities of Proved Oil and Gas Reserves - Unaudited
The following tables summarize changes in net quantities of
proved reserves attributable to the Partnerships' Net Profits
Interests, all of which are located in the United States, for the
periods indicated. The proved reserves were estimated by petroleum
engineers employed by affiliates of the Partnerships. Certain reserve
information was reviewed by Ryder Scott Company Petroleum Engineers,
an independent petroleum engineering firm.
P-1 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, December 31, 1993 284,744 3,257,736
Production ( 45,617) ( 544,265)
Sales of minerals in place ( 161) ( 325)
Revisions of previous estimates 9,058 ( 56,773)
------- ---------
Proved reserves, December 31, 1994 248,024 2,656,373
Production ( 39,075) ( 524,079)
Sales of minerals in place ( 3,823) ( 27,794)
Extensions and discoveries - 79,261
Revisions of previous estimates 45,514 512,461
------- ---------
Proved reserves, December 31, 1995 250,640 2,696,222
Production ( 33,798) ( 468,446)
Sales of minerals in place ( 5,578) ( 78,601)
Extensions and discoveries 2,158 29,265
Revisions of previous estimates 37,840 522,920
------- ---------
Proved reserves, December 31, 1996 251,262 2,701,360
======= =========
PROVED DEVELOPED RESERVES:
December 31, 1994 248,024 2,633,606
======= =========
December 31, 1995 250,640 2,696,222
======= =========
December 31, 1996 249,094 2,674,248
======= =========
F-52
P-2 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, December 31, 1993 205,271 2,959,071
Production ( 32,934) ( 418,655)
Sales of minerals in place ( 135) ( 472)
Revisions of previous estimates 7,668 ( 65,378)
------- ---------
Proved reserves, December 31, 1994 179,870 2,474,566
Production ( 28,040) ( 443,985)
Sales of minerals in place ( 2,746) ( 26,060)
Extensions and discoveries - 54,118
Revisions of previous estimates 31,208 431,237
------- ---------
Proved reserves, December 31, 1995 180,292 2,489,876
Production ( 24,049) ( 390,047)
Sales of minerals in place ( 3,888) ( 79,207)
Extensions and discoveries 1,469 19,983
Revisions of previous estimates 31,869 407,527
------- ---------
Proved reserves, December 31, 1996 185,693 2,448,132
======= =========
PROVED DEVELOPED RESERVES:
December 31, 1994 179,870 2,459,020
======= =========
December 31, 1995 180,292 2,489,876
======= =========
December 31, 1996 183,318 2,418,444
======= =========
F-53
P-3 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, December 31, 1993 380,812 5,632,961
Production ( 61,063) ( 790,479)
Sales of minerals in place ( 250) ( 863)
Revisions of previous estimates 13,756 ( 139,432)
------- ---------
Proved reserves, December 31, 1994 333,255 4,702,187
Production ( 51,963) ( 840,970)
Sales of minerals in place ( 5,045) ( 49,808)
Extensions and discoveries - 99,853
Revisions of previous estimates 57,775 797,901
------- ---------
Proved reserves, December 31, 1995 334,022 4,709,163
Production ( 44,496) ( 737,600)
Sales of minerals in place ( 7,247) ( 152,220)
Extensions and discoveries 2,720 36,867
Revisions of previous estimates 59,454 765,991
------- ---------
Proved reserves, December 31, 1996 344,453 4,622,201
======= =========
PROVED DEVELOPED RESERVES:
December 31, 1994 333,255 4,673,503
======= =========
December 31, 1995 334,022 4,709,163
======= =========
December 31, 1996 339,979 4,566,276
======= =========
F-54
P-4 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, December 31, 1993 118,800 4,846,195
Production ( 34,540) ( 914,352)
Sales of minerals in place ( 14) ( 757)
Revisions of previous estimates 10,388 ( 125,860)
------- ---------
Proved reserves, December 31, 1994 94,634 3,805,226
Production ( 28,847) ( 885,642)
Sales of minerals in place ( 74) ( 23,687)
Revisions of previous estimates 18,681 576,462
------- ---------
Proves reserves, December 31, 1995 84,394 3,472,359
Production ( 22,949) ( 630,841)
Sales of minerals in place ( 661) ( 198,487)
Revisions of previous estimates 15,013 480,088
------- ---------
Proved reserves, December 31, 1996 75,797 3,123,119
======= =========
PROVED DEVELOPED RESERVES:
December 31, 1994 94,341 3,753,688
======= =========
December 31, 1995 84,394 3,472,359
======= =========
December 31, 1996 69,266 3,022,629
======= =========
F-55
P-5 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, December 31, 1993 46,503 4,631,535
Production ( 9,313) ( 901,804)
Sales of minerals in place ( 8) ( 1,281)
Revisions of previous estimates ( 1,506) 24,165
------ ---------
Proved reserves, December 31, 1994 35,676 3,752,615
Production (10,842) ( 784,863)
Sales of minerals in place ( 107) ( 601)
Extensions and discoveries 12,096 143,318
Revisions of previous estimates ( 725) 120,437
------ ---------
Proved reserves, December 31, 1995 36,098 3,230,906
Production (10,757) ( 627,998)
Sales of minerals in place ( 664) ( 23,621)
Extensions and discoveries 8,865 45,915
Revisions of previous estimates 17,989 636,220
------ ---------
Proved reserves, December 31, 1996 51,531 3,261,422
====== =========
PROVED DEVELOPED RESERVES:
December 31, 1994 24,952 3,548,806
====== =========
December 31, 1995 36,017 3,180,500
====== =========
December 31, 1996 51,388 3,232,004
====== =========
F-56
P-6 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- ------------
Proved reserves, December 31, 1993 167,537 7,949,856
Production ( 19,711) (1,502,411)
Sales of minerals in place ( 3) ( 440)
Revisions of previous estimates 9,329 1,027,315
------- ---------
Proved reserves, December 31, 1994 157,152 7,474,320
Production ( 19,149) (1,380,123)
Sales of minerals in place ( 336) ( 8,470)
Extensions and discoveries 4,273 34,927
Revisions of previous estimates 7,331 ( 175,080)
------- ---------
Proved reserves, December 31, 1995 149,271 5,945,574
Production ( 21,377) (1,162,652)
Sales of minerals in place ( 20,978) ( 54,473)
Extensions and discoveries 3,053 59,267
Revisions of previous estimates 30,411 695,404
------- ---------
Proved reserves, December 31, 1996 140,380 5,483,120
======= =========
PROVED DEVELOPED RESERVES:
December 31, 1994 145,841 7,289,113
======= =========
December 31, 1995 149,244 5,927,504
======= =========
December 31, 1996 140,330 5,473,020
======= =========
Standardized Measure of Discounted Future Net Cash Flows of
Proved Oil and Gas Reserves - Unaudited
The following tables set forth the estimated future net cash
flows as of December 31, 1996 relating to the Partnerships' proved
reserves attributable to the Partnerships' Net Profits Interests based
on the standardized measure as prescribed in SFAS No. 69:
F-57
Partnership
-----------------------------------------
P-1 P-2 P-3
------------ ------------ -------------
Future cash inflows $15,789,650 $13,490,597 $25,341,322
Future production and
development costs ( 3,234,752) ( 2,904,363) ( 5,492,232)
---------- ---------- ----------
Future net cash flows $12,554,898 $10,586,234 $19,849,090
10% discount to
reflect timing
of cash flows ( 5,150,734) ( 4,356,971) ( 8,167,807)
---------- ---------- ----------
Standardized measure
of discounted future
net cash flows $ 7,404,164 $ 6,229,263 $11,681,283
========== ========== ==========
Partnership
-----------------------------------------
P-4 P-5 P-6
------------ ------------ -------------
Future cash inflows $13,537,516 $12,307,368 $22,213,533
Future production and
development costs ( 3,087,539) ( 2,776,870) ( 6,751,045)
---------- ---------- ----------
Future net cash flows $10,449,977 $ 9,530,498 $15,462,488
10% discount to
reflect timing
of cash flows ( 3,374,479) ( 3,308,502) ( 4,852,430)
---------- ---------- ----------
Standardized measure
of discounted future
net cash flows $ 7,075,498 $ 6,221,996 $10,610,058
========== ========== ==========
F-58
The process of estimating oil and gas reserves is complex, requiring
significant subjective decisions in the evaluation of available
geological, engineering, and economic data for each reservoir. The
data for a given reservoir may change substantially over time as a
result of, among other things, additional development activity,
production history, and viability of production under varying economic
conditions; consequently, it is reasonably possible that material
revisions to existing reserve estimates may occur in the near future.
Although every reasonable effort has been made to ensure that the
reserve estimates reported herein represent the most accurate
assessment possible, the significance of the subjective decisions
required and variances in available data for various reservoirs make
these estimates generally less precise than other estimates presented
in connection with financial statement disclosures. The Partnerships'
reserves were determined at December 31, 1996 using oil and gas prices
of $23.75 per barrel and $3.57 per Mcf, respectively. As of the date
of this Annual Report on Form 10-K, oil and gas prices received by the
Partnerships had decreased to approximately $19.00 per barrel and
$1.60 per Mcf, respectively. If such prices, as opposed to December
31, 1996 prices, were used in calculating the standardized measure of
discounted future net cash flows of the Partnerships' proved oil and
gas reserves as of December 31, 1996, such decrease would have had a
significant effect on the value of the reserves disclosed herein.
F-59
INDEX TO EXHIBITS
-----------------
Number Description
- ------ -----------
4.1 The Certificate and Agreements of Limited Partnership for
the following Partnerships have been previously filed with
the SEC as Exhibit 2.1 to Form 8-A filed by each Partnership
on the dates shown below and are hereby incorporated by
reference.
Partnership Filing Date File No.
----------- ----------- --------
P-1 June 5, 1989 0-17800
P-2 June 5, 1989 0-17800
P-3 February 20, 1990 0-18306
P-4 February 20, 1990 0-18306
P-5 November 13, 1990 0-18637
P-6 November 30, 1990 0-18937
4.2 The Agreements of Partnership for the following NPI
Partnerships have been previously filed with the SEC as
Exhibit 2.2 to Form 8-A filed by the related Partnerships on
the dates shown below and are hereby incorporated by
reference.
Form 8-A
Partnership Filing Date
----------- -----------------
P-1 June 5, 1989
P-2 June 5, 1989
P-3 February 20, 1990
P-4 February 20, 1990
P-5 June 11, 1990
P-6 December 10, 1990
4.3 Advisory Agreement dated as of November 24, 1992 between
Samson, PaineWebber, Geodyne Resources, Geodyne Properties,
Inc., Geodyne Production Company, and Geodyne Energy Company
filed as Exhibit 28.3 to Registrants' Current Report on Form
8-K filed with the SEC on December 24, 1992 and is hereby
incorporated by reference.
F-60
4.4 Second Amendment to Agreement of Limited Partnership of
Geodyne Institutional/Pension Energy Income P-1 Limited
Partnership, filed as Exhibit 4.1 to Registrants' Current
Report on Form 8-K dated August 2, 1993 filed with the SEC
on August 10, 1993 and is hereby incorporated by reference.
4.5 Second Amendment to Agreement of Limited Partnership of
Geodyne Institutional/Pension Energy Income P-2 Limited
Partnership, filed as Exhibit 4.2 to Registrants' Current
Report on Form 8-K dated August 2, 1993 filed with the SEC
on August 10, 1993 and is hereby incorporated by reference.
4.6 Second Amendment to Agreement of Limited Partnership of
Geodyne Institutional/Pension Energy Income Limited
Partnership P-3, filed as Exhibit 4.3 to Registrants'
Current Report on Form 8-K dated August 2, 1993 filed with
the SEC on August 10, 1993 and is hereby incorporated by
reference.
4.7 Second Amendment to Agreement of Limited Partnership of
Geodyne Institutional/Pension Energy Income Limited
Partnership P-4, filed as Exhibit 4.4 to Registrants'
Current Report on Form 8-K dated August 2, 1993 filed with
the SEC on August 10, 1993 and is hereby incorporated by
reference.
4.8 Second Amendment to Agreement of Limited Partnership of
Geodyne Institutional/Pension Energy Income Limited
Partnership P-5, filed as Exhibit 4.5 to Registrants'
Current Report on Form 8-K dated August 2, 1993 filed with
the SEC on August 10, 1993 and is hereby incorporated by
reference.
4.9 Second Amendment to Agreement of Limited Partnership of
Geodyne Institutional/Pension Energy Income Limited
Partnership P-6, filed as Exhibit 4.6 to Registrants'
Current Report on Form 8-K dated August 2, 1993 filed with
the SEC on August 10, 1993 and is hereby incorporated by
reference.
4.10 Third Amendment to Agreement of Limited Partnership of
Geodyne Institutional/Pension Energy Income P-1 Limited
Partnership, filed as Exhibit 4.10 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1995
filed with the SEC on April 1, 1996 and is hereby
incorporated by reference.
F-61
4.11 Third Amendment to Agreement of Limited Partnership of
Geodyne Institutional/Pension Energy Income P-2 Limited
Partnership, filed as Exhibit 4.11 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1995
filed with the SEC on April 1, 1996 and is hereby
incorporated by reference.
4.12 Third Amendment to Agreement of Limited Partnership of
Geodyne Institutional/Pension Energy Income Limited
Partnership P-3, filed as Exhibit 4.12 to Registrant's
Annual Report on Form 10-K for the year ended December 31,
1995 filed with the SEC on April 1, 1996 and is hereby
incorporated by reference.
4.13 Third Amendment to Agreement of Limited Partnership of
Geodyne Institutional/Pension Energy Income Limited
Partnership P-4, filed as Exhibit 4.13 to Registrant's
Annual Report on Form 10-K for the year ended December 31,
1995 filed with the SEC on April 1, 1996 and is hereby
incorporated by reference.
4.14 Third Amendment to Agreement of Limited Partnership of
Geodyne Institutional/Pension Energy Income Limited
Partnership P-5, filed as Exhibit 4.14 to Registrant's
Annual Report on Form 10-K for the year ended December 31,
1995 filed with the SEC on April 1, 1996 and is hereby
incorporated by reference.
4.15 Third Amendment to Agreement of Limited Partnership of
Geodyne Institutional/Pension Energy Income Limited
Partnership P-6, filed as Exhibit 4.15 to Registrant's
Annual Report on Form 10-K for the year ended December 31,
1995 filed with the SEC on April 1, 1996 and is hereby
incorporated by reference.
*23.1 Consent of Ryder Scott Company, Petroleum Engineers for the
Geodyne Institutional/Pension Energy Income P-1 Limited
Partnership.
*23.2 Consent of Ryder Scott Company, Petroleum Engineers for the
Geodyne Institutional/Pension Energy Income P-2 Limited
Partnership.
*23.3 Consent of Ryder Scott Company, Petroleum Engineers for the
Geodyne Institutional/Pension Energy Income Limited Partner-
ship P-3.
F-62
*23.4 Consent of Ryder Scott Company, Petroleum Engineers for the
Geodyne Institutional/Pension Energy Income Limited Partner-
ship P-4.
*23.5 Consent of Ryder Scott Company, Petroleum Engineers for the
Geodyne Institutional/Pension Energy Income Limited Partner-
ship P-5.
*23.6 Consent of Ryder Scott Company, Petroleum Engineers for the
Geodyne Institutional/Pension Energy Income Limited Partner-
ship P-6.
*27.1 Financial Data Schedule containing summary financial
information extracted from the Geodyne Institutional/Pension
Energy Income P-1 Limited Partnership's financial statements
as of December 31, 1996 and for the year ended December 31,
1996.
*27.2 Financial Data Schedule containing summary financial
information extracted from the Geodyne Institutional/Pension
Energy Income P-2 Limited Partnership's financial statements
as of December 31, 1996 and for the year ended December 31,
1996.
*27.3 Financial Data Schedule containing summary financial
information extracted from the Geodyne Institutional/Pension
Energy Income Limited Partnership P-3's financial statements
as of December 31, 1996 and for the year ended December 31,
1996.
*27.4 Financial Data Schedule containing summary financial
information extracted from the Geodyne Institutional/Pension
Energy Income Limited Partnership P-4's financial statements
as of December 31, 1996 and for the year ended December 31,
1996.
*27.5 Financial Data Schedule containing summary financial
information extracted from the Geodyne Institutional/Pension
Energy Income Limited Partnership P-5's financial statements
as of December 31, 1996 and for the year ended December 31,
1996.
*27.6 Financial Data Schedule containing summary financial
information extracted from the Geodyne Institutional/Pension
Energy Income Limited Partnership P-6's financial statements
as of December 31, 1996 and for the year ended December 31,
1996.
F-63
All other Exhibits are omitted as inapplicable.
----------
* Filed herewith.
F-64