SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 2002
Commission File Number:
I-D: 0-15831 I-E: 0-15832 I-F: 0-15833
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
--------------------------------------------------------
(Exact name of Registrant as specified in its Articles)
I-D 73-1265223
I-E 73-1270110
Oklahoma I-F 73-1292669
- ---------------------------- -------------------------------
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or Number)
organization)
Two West Second Street, Tulsa, Oklahoma 74103
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(918) 583-1791
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
-1-
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2002 2001
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $125,894 $148,852
Accounts receivable:
Oil and gas sales 109,913 61,223
General Partner (Note 2) - 49,103
-------- --------
Total current assets $235,807 $259,178
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 390,245 411,383
DEFERRED CHARGE 98,433 98,433
-------- --------
$724,485 $768,994
======== ========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 16,508 $ 10,086
Gas imbalance payable 27,101 27,101
-------- --------
Total current liabilities $ 43,609 $ 37,187
ACCRUED LIABILITY $ 37,370 $ 37,370
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 25,566) ($ 32,551)
Limited Partners, issued and
outstanding, 7,195 units 669,072 726,988
-------- --------
Total Partners' capital $643,506 $694,437
-------- --------
$724,485 $768,994
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-2-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2002 AND 2001
(Unaudited)
2002 2001
--------- ---------
REVENUES:
Oil and gas sales $202,124 $293,201
Interest income 248 2,067
-------- --------
$202,372 $295,268
COSTS AND EXPENSES:
Lease operating $ 29,303 $ 55,029
Production tax 11,784 18,362
Depreciation, depletion, and
amortization of oil and gas
properties 13,178 10,539
General and administrative
(Note 2) 25,003 22,017
-------- --------
$ 79,268 $105,947
-------- --------
NET INCOME $123,104 $189,321
======== ========
GENERAL PARTNER - NET INCOME $ 20,274 $ 29,564
======== ========
LIMITED PARTNERS - NET INCOME $102,830 $159,757
======== ========
NET INCOME per unit $ 14.30 $ 22.20
======== ========
UNITS OUTSTANDING 7,195 7,195
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-3-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
(Unaudited)
2002 2001
--------- ---------
REVENUES:
Oil and gas sales $354,471 $655,182
Interest income 731 4,786
Gain on sale of oil and gas
properties - 2,933
-------- --------
$355,202 $662,901
COSTS AND EXPENSES:
Lease operating $ 75,776 $ 87,563
Production tax 21,156 47,173
Depreciation, depletion, and
amortization of oil and gas
properties 26,232 21,243
General and administrative
(Note 2) 59,512 58,705
-------- --------
$182,676 $214,684
-------- --------
NET INCOME $172,526 $448,217
======== ========
GENERAL PARTNER - NET INCOME $ 29,442 $ 69,078
======== ========
LIMITED PARTNERS - NET INCOME $143,084 $379,139
======== ========
NET INCOME per unit $ 19.89 $ 52.69
======== ========
UNITS OUTSTANDING 7,195 7,195
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-4-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
(Unaudited)
2002 2001
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $172,526 $448,217
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 26,232 21,243
Gain on sale of oil and gas
properties - ( 2,933)
(Increase) decrease in accounts
receivable - oil and gas sales ( 48,690) 47,939
Increase (decrease) in accounts
payable 6,422 ( 397)
Decrease in gas imbalance payable - ( 4,229)
Decrease in accrued liability - ( 1,827)
-------- --------
Net cash provided by operating
activities $156,490 $508,013
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 6,241) ($ 42,335)
Proceeds from sale of oil and
gas properties 50,250 3,225
-------- --------
Net cash provided (used) by investing
activities $ 44,009 ($ 39,110)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($223,457) ($487,111)
-------- --------
Net cash used by financing activities ($223,457) ($487,111)
-------- --------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 22,958) ($ 18,208)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 148,852 238,748
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $125,894 $220,540
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-5-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-E
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2002 2001
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 779,586 $ 780,235
Accounts receivable:
Oil and gas sales 682,829 465,409
General Partner (Note 2) - 157,811
---------- ----------
Total current assets $1,462,415 $1,403,455
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,134,887 2,290,340
DEFERRED CHARGE 542,109 542,109
---------- ----------
$4,139,411 $4,235,904
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 146,412 $ 99,801
Accrued liability - other (Note 1) 88,892 245,985
Gas imbalance payable 99,465 99,465
---------- ----------
Total current liabilities $ 334,769 $ 445,251
ACCRUED LIABILITY $ 219,317 $ 219,317
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 106,650) ($ 183,708)
Limited Partners, issued and
outstanding, 41,839 units 3,691,975 3,755,044
---------- ----------
Total Partners' capital $3,585,325 $3,571,336
---------- ----------
$4,139,411 $4,235,904
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-6-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-E
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2002 AND 2001
(Unaudited)
2002 2001
---------- ----------
REVENUES:
Oil and gas sales $1,162,692 $1,795,100
Interest income 1,536 11,638
Gain on sale of oil and gas
properties - 146
---------- ----------
$1,164,228 $1,806,884
COSTS AND EXPENSES:
Lease operating $ 202,597 $ 229,043
Production tax 67,699 115,788
Depreciation, depletion, and
amortization of oil and gas
properties 91,905 105,689
General and administrative
(Note 2) 122,776 120,565
---------- ----------
$ 484,977 $ 571,085
---------- ----------
NET INCOME $ 679,251 $1,235,799
========== ==========
GENERAL PARTNER - NET INCOME $ 114,524 $ 198,420
========== ==========
LIMITED PARTNERS - NET INCOME $ 564,727 $1,037,379
========== ==========
NET INCOME per unit $ 13.50 $ 24.79
========== ==========
UNITS OUTSTANDING 41,839 41,839
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-7-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-E
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
(Unaudited)
2002 2001
---------- ----------
REVENUES:
Oil and gas sales $2,068,984 $3,908,472
Interest income 4,062 26,741
Gain on sale of oil and gas
properties - 9,546
---------- ----------
$2,073,046 $3,944,759
COSTS AND EXPENSES:
Lease operating $ 540,957 $ 500,146
Production tax 111,944 262,250
Depreciation, depletion, and
amortization of oil and gas
properties 191,851 210,012
General and administrative
(Note 2) 264,552 259,445
---------- ----------
$1,109,304 $1,231,853
---------- ----------
NET INCOME $ 963,742 $2,712,906
========== ==========
GENERAL PARTNER - NET INCOME $ 170,811 $ 431,010
========== ==========
LIMITED PARTNERS - NET INCOME $ 792,931 $2,281,896
========== ==========
NET INCOME per unit $ 18.95 $ 54.54
========== ==========
UNITS OUTSTANDING 41,839 41,839
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-8-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-E
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
(Unaudited)
2002 2001
--------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $963,742 $2,712,906
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 191,851 210,012
Gain on sale of oil and gas
properties - ( 9,546)
(Increase) decrease in accounts
receivable - oil and gas sales ( 217,420) 195,308
Increase in accounts payable 46,611 343
Decrease in accrued liability -
other ( 157,093) -
Decrease in gas imbalance payable - ( 42,632)
Decrease in accrued liability - ( 9,276)
-------- ----------
Net cash provided by operating
activities $827,691 $3,057,115
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 42,569) ($ 257,743)
Proceeds from the sale of oil and gas
properties 163,982 16,952
-------- ----------
Net cash provided (used) by investing
activities $121,413 ($ 240,791)
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($949,753) ($2,818,270)
-------- ----------
Net cash used by financing activities ($949,753) ($2,818,270)
-------- ----------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 649) ($ 1,946)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 780,235 1,309,542
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $779,586 $1,307,596
======== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-9-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-F
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2002 2001
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 225,760 $ 114,388
Accounts receivable:
Oil and gas sales 203,243 138,533
General Partner (Note 2) - 54,282
---------- ----------
Total current assets $ 429,003 $ 307,203
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 652,763 687,356
DEFERRED CHARGE 396,557 396,557
---------- ----------
$1,478,323 $1,391,116
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 73,157 $ 48,556
Accrued liability - other (Note 1) 62,225 172,190
Gas imbalance payable 32,160 32,160
---------- ----------
Total current liabilities $ 167,542 $ 252,906
ACCRUED LIABILITY $ 171,440 $ 171,440
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 18,930) ($ 49,082)
Limited Partners, issued and
outstanding, 14,321 units 1,158,271 1,015,852
---------- ----------
Total Partners' capital $1,139,341 $ 966,770
---------- ----------
$1,478,323 $1,391,116
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-10-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-F
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2002 AND 2001
(Unaudited)
2002 2001
--------- ----------
REVENUES:
Oil and gas sales $375,956 $427,825
Interest income 429 3,387
Gain on sale of oil and gas
properties - 102
-------- --------
$376,385 $431,314
COSTS AND EXPENSES:
Lease operating $101,219 $108,436
Production tax 21,670 26,096
Depreciation, depletion, and
amortization of oil and gas
properties 23,525 26,860
General and administrative
(Note 2) 45,114 42,277
-------- --------
$191,528 $203,669
-------- --------
NET INCOME $184,857 $227,645
======== ========
GENERAL PARTNER - NET INCOME $ 30,958 $ 37,399
======== ========
LIMITED PARTNERS - NET INCOME $153,899 $190,246
======== ========
NET INCOME per unit $ 10.74 $ 13.29
======== ========
UNITS OUTSTANDING 14,321 14,321
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-11-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-F
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
(Unaudited)
2002 2001
--------- -----------
REVENUES:
Oil and gas sales $618,965 $ 985,491
Interest income 868 8,180
Gain on sale of oil and gas
properties - 38,675
-------- ----------
$619,833 $1,032,346
COSTS AND EXPENSES:
Lease operating $191,670 $ 216,944
Production tax 26,583 61,658
Depreciation, depletion, and
amortization of oil and gas
properties 48,096 62,040
General and administrative
(Note 2) 101,693 99,977
-------- ----------
$368,042 $ 440,619
-------- ----------
NET INCOME $251,791 $ 591,727
======== ==========
GENERAL PARTNER - NET INCOME $ 44,372 $ 90,817
======== ==========
LIMITED PARTNERS - NET INCOME $207,419 $ 500,910
======== ==========
NET INCOME per unit $ 14.48 $ 34.98
======== ==========
UNITS OUTSTANDING 14,321 14,321
======== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-12-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-F
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
(Unaudited)
2002 2001
--------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $251,791 $591,727
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 48,096 62,040
Gain on sale of oil and gas
properties - ( 38,675)
(Increase) decrease in accounts
receivable - oil and gas sales ( 64,710) 100,074
Increase in accounts payable 24,601 447
Decrease in accrued liability -
other ( 109,965) -
Decrease in gas imbalance payable - ( 24,092)
-------- --------
Net cash provided by operating
activities $149,813 $691,521
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 16,463) ($ 11,500)
Proceeds from the sale of oil and
gas properties 57,242 40,845
-------- --------
Net cash provided by investing
activities $ 40,779 $ 29,345
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 79,220) ($864,840)
-------- --------
Net cash used by financing activities ($ 79,220) ($864,840)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $111,372 ($143,974)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 114,388 437,623
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $225,760 $293,649
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-13-
GEODYNE ENERGY INCOME PROGRAM I LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE COMBINED FINANCIAL STATEMENTS
JUNE 30, 2002
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The combined balance sheets as of June 30, 2002, combined statements of
operations for the three and six months ended June 30, 2002 and 2001, and
combined statements of cash flows for the six months ended June 30, 2002
and 2001 have been prepared by Geodyne Resources, Inc., the General
Partner of the limited partnerships, without audit. Each limited
partnership is a general partner in the related Geodyne Energy Income
Production Partnership in which Geodyne Resources, Inc. serves as the
managing partner. Unless the context indicates otherwise, all references
to a "Partnership" or the "Partnerships" are references to the limited
partnership and its related production partnership, collectively, and all
references to the "General Partner" are references to the general partner
of the limited partnerships and the managing partner of the production
partnerships, collectively. In the opinion of management the financial
statements referred to above include all necessary adjustments, consisting
of normal recurring adjustments, to present fairly the combined financial
position at June 30, 2002, the combined results of operations for the
three and six months ended June 30, 2002 and 2001, and the combined cash
flows for the six months ended June 30, 2002 and 2001.
Information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. The accompanying interim
financial statements should be read in conjunction with the Partnerships'
Annual Report on Form 10-K filed for the year ended December 31, 2001. The
results of operations for the period ended June 30, 2002 are not
necessarily indicative of the results to be expected for the full year.
The Limited Partners' net income or loss per unit is based upon each
$1,000 initial capital contribution.
-14-
OIL AND GAS PROPERTIES
----------------------
The Partnerships follow the successful efforts method of accounting for
their oil and gas properties. Under the successful efforts method, the
Partnerships capitalize all property acquisition costs and development
costs incurred in connection with the further development of oil and gas
reserves. Property acquisition costs include costs incurred by the
Partnerships or the General Partner to acquire producing properties,
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 acquisition cost to the Partnerships of
properties acquired by the General Partner is adjusted to reflect the net
cash results of operations, including interest incurred to finance the
acquisition, for the period of time the properties are held by the General
Partner prior to their transfer to the Partnerships. Leasehold impairment
is recognized based upon an individual property assessment and exploratory
experience. Upon discovery of commercial reserves, leasehold costs are
transferred to producing properties.
Depletion of the costs of producing oil and gas properties, amortization
of related intangible drilling and development costs, and depreciation of
tangible lease and well equipment are computed on the unit-of-production
method. The Partnerships' depletion, depreciation, and amortization
includes estimated dismantlement and abandonment costs, net of estimated
salvage value.
When complete units of depreciable property are retired or sold, the asset
cost and related accumulated depreciation are eliminated with any gain or
loss reflected in income. When less than complete units of depreciable
property are retired or sold, the proceeds are credited to oil and gas
properties.
ACCRUED LIABILITY - OTHER
-------------------------
The Accrued Liability - Other at June 30, 2002 and December 31, 2001 for
the I-E and I-F Partnerships represents a charge accrued for the payment
of a judgment related to plugging liabilities, which judgment is currently
under appeal. The decrease in the Accrued Liability - Other from December
31, 2001 to June 30, 2002 was due to a partial settlement of this
judgment, which settlement was paid in June 2002.
-15-
2. TRANSACTIONS WITH RELATED PARTIES
---------------------------------
The Partnerships' partnership agreements provide for reimbursement to the
General Partner for all direct general and administrative expenses and for
the general and administrative overhead applicable to the Partnerships
based on an allocation of actual costs incurred. During the three months
ended June 30, 2002, the following payments were made to the General
Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
I-D $5,017 $ 19,986
I-E 6,556 116,220
I-F 5,334 39,780
During the six months ended June 30, 2002, the following payments were
made to the General Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
I-D $19,540 $ 39,972
I-E 32,112 232,440
I-F 22,133 79,560
Affiliates of the Partnerships operate certain of the Partnerships'
properties and their policy is to bill the Partnerships for all customary
charges and cost reimbursements associated with their activities.
ACCOUNTS RECEIVABLE - GENERAL PARTNER
-------------------------------------
The Accounts Receivable - General Partner at December 31, 2001 for the
I-D, I-E, and I-F Partnerships represents accrued proceeds from a related
party for the sale of certain oil and gas properties during December 2001.
Such amount was received in January 2002.
-16-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
USE OF FORWARD-LOOKING STATEMENTS AND ESTIMATES
- -----------------------------------------------
This Quarterly 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
Quarterly 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, and otherwise indicated.
GENERAL
- -------
The Partnerships are engaged in the business of acquiring and operating
producing oil and gas properties located in the continental United States.
In general, a Partnership acquired producing properties and did not engage
in development drilling or enhanced recovery projects, except as an
incidental part of the management of the producing properties acquired.
Therefore, the economic life of each Partnership, and its related
Production Partnership, is limited to the period of time required to fully
produce its acquired oil and gas reserves. The net proceeds from the oil
and gas operations are distributed to the Limited Partners and the General
Partner in accordance with the terms of the Partnerships' partnership
agreements.
-17-
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Partnerships began operations and investors were assigned their rights
as Limited Partners, having made capital contributions in the amounts and
on the dates set forth below:
Limited
Date of Partner Capital
Partnership Activation Contributions
----------- ------------------ ---------------
I-D March 4, 1986 $ 7,194,700
I-E September 10, 1986 41,839,400
I-F December 16, 1986 14,320,900
In general, the amount of funds available for acquisition of producing
properties was equal to the capital contributions of the Limited Partners,
less 15% for sales commissions and organization and management fees. All
of the Partnerships have fully invested their capital contributions.
Net proceeds from the operations less necessary operating capital are
distributed to the Limited Partners on a quarterly basis. Revenues and net
proceeds of a Partnership are largely dependent upon the volumes of oil
and gas sold and the prices received for such oil and gas. While the
General Partner cannot predict future pricing trends, it believes the
working capital available as of June 30, 2002 and the net revenue
generated from future operations will provide sufficient working capital
to meet current and future obligations.
Occasional expenditures for new wells or well recompletions or workovers,
however, may reduce or eliminate cash available for a particular quarterly
cash distribution. During the six months ended June 30, 2002, capital
expenditures for the I-F Partnership totaled $16,463. These expenditures
were primarily due to a successful recompletion in the Jo-Mill Unit
located in Borden County, Texas. The I-F Partnership owns a working
interest of approximately 0.3% in this well. In addition, during the six
months ended June 30, 2001, capital expenditures for the I-D and I-E
Partnerships totaled $42,335 and $257,743, respectively. These
expenditures were primarily due to the successful recompletion of the
Haley 08-1 well located in Winkler County, Texas, in which the I-D and I-E
Partnerships own working interests of approximately 1.2% and 7.3%,
respectively.
-18-
The I-D, I-E, and I-F Partnerships' Statements of Cash Flows for the six
months ended June 30, 2002 include proceeds from the sale of certain oil
and gas properties during December 2001. These proceeds were included in
the Partnerships' cash distributions paid in February 2002.
Pursuant to the terms of the Partnerships' partnership agreements (the
"Partnership Agreements"), the Partnerships would have terminated on
December 31, 1999. However, the Partnership Agreements provide that the
General Partner may extend the term of each Partnership for up to five
periods of two years each. The General Partner has extended the terms of
the Partnerships for their second two year extension period to December
31, 2003.
NEW ACCOUNTING PRONOUNCEMENTS
Below is a brief description of Financial Accounting Standards ("FAS")
recently issued by the Financial Accounting Standards Board ("FASB") which
may have an impact on the Partnerships' future results of operations and
financial position.
In July 2001, the FASB issued FAS No. 143, "Accounting for Asset
Retirement Obligations", which is effective for fiscal years beginning
after June 15, 2002 (January 1, 2003 for the Partnerships). FAS No. 143
will require the recording of the fair value of liabilities associated
with the retirement of long-lived assets (mainly plugging and abandonment
costs for the Partnerships' depleted wells), in the period in which the
liabilities are incurred (at the time the wells are drilled). Management
has not yet determined the effect of adopting this statement on the
Partnerships' financial condition or results of operations.
In August 2001, the FASB issued FAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets", which is effective for
fiscal years beginning after December 15, 2001 (January 1, 2002 for the
Partnerships). This statement supersedes FAS No. 121 "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of". The provisions of FAS No. 144, as they relate to the Partnerships,
are essentially the same as FAS No. 121 and thus are not expected to have
a significant effect on the Partnerships' financial condition or results
of operations.
-19-
RESULTS OF OPERATIONS
- ---------------------
GENERAL DISCUSSION
The following general discussion should be read in conjunction with the
analysis of results of operations provided below. The most important
variables affecting the Partnerships' revenues are the prices received for
the sale of oil and gas and the volumes of oil and gas produced. The
Partnerships' production is mainly natural gas, so such pricing and
volumes are the most significant factors.
Historically, oil and gas prices have been volatile and are likely to
continue to be volatile. As a result, forecasting future prices is subject
to great uncertainty and inaccuracy. 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. Such
spot market sales are generally short-term in nature and are dependent
upon the obtaining of transportation services provided by pipelines. It is
likewise difficult to predict production volumes. However, oil and gas are
depleting assets, so it can be expected that production levels will
decline over time. Gas prices in early 2001 were significantly higher than
the Partnerships' historical average. This was attributable to the higher
prices for crude oil, a substitute fuel in some markets, and reduced
production due to lower capital investments in 1998 and 1999. However,
prices for both oil and gas soon declined and were relatively lower in
late 2001 and early 2002 as a result of the declining economy and
relatively mild winter weather. Recently, prices of oil and gas have
improved, to some extent due to unrest in the Middle East. It is not
possible to accurately predict future trends.
-20-
I-D PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2001.
Three Months Ended June 30,
---------------------------
2002 2001
-------- --------
Oil and gas sales $202,124 $293,201
Oil and gas production expenses $ 41,087 $ 73,391
Barrels produced 1,151 770
Mcf produced 57,373 52,353
Average price/Bbl $ 24.05 $ 27.34
Average price/Mcf $ 3.04 $ 5.20
As shown in the table above, total oil and gas sales decreased $91,077
(31.1%) for the three months ended June 30, 2002 as compared to the three
months ended June 30, 2001. Of this decrease, approximately $124,000 was
related to a decrease in the average price of gas sold, which decrease was
partially offset by increases of approximately $10,000 and $26,000,
respectively, related to increases in volumes of oil and gas sold. Volumes
of oil and gas sold increased 381 barrels and 5,020 Mcf, respectively, for
the three months ended June 30, 2002 as compared to the three months ended
June 30, 2001. The increase in volumes of oil sold was primarily due to
(i) an increase in production on one significant well due to the
successful recompletion of that well during early 2002, (ii) a positive
prior period volume adjustment made by the operator on another significant
well during the three months ended June 30, 2002, and (iii) an increase in
production on another significant well following successful repairs made
during early 2001. The increase in volumes of gas sold was primarily due
to (i) positive prior period volume adjustments made by the purchasers on
two significant wells during the three months ended June 30, 2002 and (ii)
the I-D Partnership receiving an increased percentage of sales on another
significant well during the three months ended June 30, 2002 due to gas
balancing. As of the date of this Quarterly Report, management expects the
increased sales percentage due to gas balancing to continue for the
foreseeable future, thereby continuing to contribute to an increase in
volumes of gas sold for the I-D Partnership. Average oil and gas prices
decreased to $24.05 per barrel and $3.04 per Mcf, respectively, for the
three months ended June 30, 2002 from $27.34 per barrel and $5.20 per Mcf,
respectively, for the three months ended June 30, 2001.
-21-
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $32,304 (44.0%) for the three months ended
June 30, 2002 as compared to the three months ended June 30, 2001. This
decrease was primarily due to (i) a decrease in workover expenses incurred
on one significant well during the three months ended June 30, 2002 as
compared to the three months ended June 30, 2001 and (ii) a decrease in
production taxes associated with the decrease in oil and gas sales. As a
percentage of oil and gas sales, these expenses decreased to 20.3% for the
three months ended June 30, 2002 from 25.0% for the three months ended
June 30, 2001. This percentage decrease was primarily due to the dollar
decrease in oil and gas production expenses.
Depreciation, depletion, and amortization of oil and gas properties
increased $2,639 (25.0%) for the three months ended June 30, 2002 as
compared to the three months ended June 30, 2001. This increase was
primarily due to (i) the increases in volumes of oil and gas sold and (ii)
downward revisions in the estimates of remaining oil reserves. As a
percentage of oil and gas sales, this expense increased to 6.5% for the
three months ended June 30, 2002 from 3.6% for the three months ended June
30, 2001. This percentage increase was primarily due to the decreases in
the average prices of oil and gas sold.
General and administrative expenses increased $2,986 (13.6%) for the three
months ended June 30, 2002 as compared to the three months ended June 30,
2001. This increase was primarily due to a change in allocation of audit
fees among the I-D Partnership and other affiliated partnerships. As a
percentage of oil and gas sales, this expense increased to 12.4% for the
three months ended June 30, 2002 from 7.5% for the three months ended June
30, 2001. This percentage increase was primarily due to the decrease in
oil and gas sales.
SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2001.
Six Months Ended June 30,
-------------------------
2002 2001
-------- --------
Oil and gas sales $354,471 $655,182
Oil and gas production expenses $ 96,932 $134,736
Barrels produced 1,915 1,807
Mcf produced 116,469 103,986
Average price/Bbl $ 22.57 $ 28.00
Average price/Mcf $ 2.67 $ 5.81
-22-
As shown in the table above, total oil and gas sales decreased $300,711
(45.9%) for the six months ended June 30, 2002 as compared to the six
months ended June 30, 2001. Of this decrease, approximately $366,000 was
related to a decrease in the average price of gas sold, which decrease was
partially offset by an increase of approximately $73,000 related to an
increase in volumes of gas sold. Volumes of oil and gas sold increased 108
barrels and 12,483 Mcf, respectively, for the six months ended June 30,
2002 as compared to the six months ended June 30, 2001. The increase in
volumes of gas sold was primarily due to (i) a negative prior period gas
balancing adjustment on one significant well during the six months ended
June 30, 2001, (ii) the I-D Partnership receiving an increased percentage
of sales on another significant well during the six months ended June 30,
2002 due to gas balancing, and (iii) a positive prior period gas balancing
adjustment on another significant well during the six months ended June
30, 2002. As of the date of this Quarterly Report, management expects the
increased sales percentage due to gas balancing to continue for the
foreseeable future, thereby continuing to contribute to an increase in
volumes of gas sold for the I-D Partnership. Average oil and gas prices
decreased to $22.57 per barrel and $2.67 per Mcf, respectively, for the
six months ended June 30, 2002 from $28.00 per barrel and $5.81 per Mcf,
respectively, for the six months ended June 30, 2001.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $37,804 (28.1%) for the six months ended June
30, 2002 as compared to the six months ended June 30, 2001. This decrease
was primarily due to (i) a decrease in production taxes associated with
the decrease in oil and gas sales and (ii) a decrease in workover expenses
incurred on one significant well during the six months ended June 30, 2002
as compared to the six months ended June 30, 2001. As a percentage of oil
and gas sales, these expenses increased to 27.3% for the six months ended
June 30, 2002 from 20.6% for the six months ended June 30, 2001. This
percentage increase was primarily due to the decreases in the average
prices of oil and gas sold.
Depreciation, depletion, and amortization of oil and gas properties
increased $4,989 (23.5%) for the six months ended June 30, 2002 as
compared to the six months ended June 30, 2001. This increase was
primarily due to (i) downward revisions in the estimates of remaining oil
reserves and (ii) the increases in volumes of oil and gas sold. As a
percentage of oil and gas sales, this expense increased to 7.4% for the
six months ended June 30, 2002 from 3.2% for the six months ended June 30,
2001. This percentage increase was primarily due to the decreases in the
average prices of oil and gas sold.
-23-
General and administrative expenses increased $807 (1.4%) for the six
months ended June 30, 2002 as compared to the six months ended June 30,
2001. As a percentage of oil and gas sales, these expenses increased to
16.8% for the six months ended June 30, 2002 from 9.0% for the six months
ended June 30, 2001. This percentage increase was primarily due to the
decrease in oil and gas sales.
The Limited Partners have received cash distributions through June 30,
2002 totaling $16,115,175 or 223.99% of Limited Partners' capital
contributions.
I-E PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2001.
Three Months Ended June 30,
---------------------------
2002 2001
----------- ----------
Oil and gas sales $1,162,692 $1,795,100
Oil and gas production expenses $ 270,296 $ 344,831
Barrels produced 12,499 10,439
Mcf produced 287,789 299,725
Average price/Bbl $ 22.93 $ 24.72
Average price/Mcf $ 3.04 $ 5.13
As shown in the table above, total oil and gas sales decreased $632,408
(35.2%) for the three months ended June 30, 2002 as compared to the three
months ended June 30, 2001. Of this decrease, approximately $600,000 was
related to a decrease in the average price of gas sold. Volumes of oil
sold increased 2,060 barrels, while volumes of gas sold decreased 11,936
Mcf for the three months ended June 30, 2002 as compared to the three
months ended June 30, 2001. The increase in volumes of oil sold was
primarily due to (i) an increase in production on one significant well
following successful repairs made during early 2001, (ii) an increase in
production on another significant well due to the successful recompletion
of that well during early 2002, and (iii) a negative prior period volume
adjustment on one significant well during the three months ended June 30,
2001. Average oil and gas prices decreased to $22.93 per barrel and $3.04
per Mcf, respectively, for the three months ended June 30, 2002 from
$24.72 per barrel and $5.13 per Mcf, respectively, for the three months
ended June 30, 2001.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $74,535 (21.6%) for the three months ended
June 30, 2002 as compared to the three months ended June 30, 2001. This
decrease was primarily due to (i) a decrease in production taxes
-24-
associated with the decrease in oil and gas sales, (ii) workover expenses
incurred on one significant well during the three months ended June 30,
2001, and (iii) a decrease in workover expenses incurred on two wells
within the same unit during the three months ended June 30, 2002 as
compared to the three months ended June 30, 2001. As a percentage of oil
and gas sales, these expenses increased to 23.2% for the three months
ended June 30, 2002 from 19.2% for the three months ended June 30, 2001.
This percentage increase was primarily due to the decreases in the average
prices of oil and gas sold.
Depreciation, depletion, and amortization of oil and gas properties
decreased $13,784 (13.0%) for the three months ended June 30, 2002 as
compared to the three months ended June 30, 2001. This decrease was
primarily due to a decrease in depletable oil and gas properties primarily
due to two significant wells being substantially depleted in 2001 due to
the lack of remaining economically recoverable reserves. As a percentage
of oil and gas sales, this expense increased to 7.9% for the three months
ended June 30, 2002 from 5.9% for the three months ended June 30, 2001.
This percentage increase was primarily due to the decreases in the average
prices of oil and gas sold.
General and administrative expense increased $2,211 (1.8%) for the three
months ended June 30, 2002 as compared to the three months ended June 30,
2001. As a percentage of oil and gas sales, these expenses increased to
10.6% for the three months ended June 30, 2002 from 6.7% for the three
months ended June 30, 2001. This percentage increase was primarily due to
the decrease in oil and gas sales.
SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2001.
Six Months Ended June 30,
---------------------------
2002 2001
---------- ----------
Oil and gas sales $2,068,984 $3,908,472
Oil and gas production expenses $ 652,901 $ 762,396
Barrels produced 23,492 21,959
Mcf produced 616,357 588,285
Average price/Bbl $ 19.99 $ 26.15
Average price/Mcf $ 2.59 $ 5.67
As shown in the table above, total oil and gas sales decreased $1,839,488
(47.1%) for the six months ended June 30, 2002 as compared to the six
months ended June 30, 2001. Of this decrease, approximately $1,894,000 was
related to a decrease in the average price of gas sold. Volumes of oil and
gas sold increased 1,533 barrels and 28,072 Mcf, respectively, for the six
months ended June 30, 2002 as
-25-
compared to the six months ended June 30, 2001. Average oil and gas prices
decreased to $19.99 per barrel and $2.59 per Mcf, respectively, for the
six months ended June 30, 2002 from $26.15 per barrel and $5.67 per Mcf,
respectively, for the six months ended June 30, 2001.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $109,495 (14.4%) for the six months ended June
30, 2002 as compared to the six months ended June 30, 2001. This decrease
was primarily due to (i) a decrease in production taxes associated with
the decrease in oil and gas sales and (ii) a partial reversal during the
six months ended June 30, 2002 of approximately $75,000 (due to a partial
post-judgment settlement) of a charge previously accrued for a judgment.
These decreases were partially offset by an increase in lease operating
expenses associated with the increases in volumes of oil and gas sold. As
a percentage of oil and gas sales, these expenses increased to 31.6% for
the six months ended June 30, 2002 from 19.5% for the six months ended
June 30, 2001. This percentage increase was primarily due to the decreases
in the average prices of oil and gas sold.
Depreciation, depletion, and amortization of oil and gas properties
decreased $18,161 (8.6%) for the six months ended June 30, 2002 as
compared to the six months ended June 30, 2001. As a percentage of oil and
gas sales, this expense increased to 9.3% for the six months ended June
30, 2002 from 5.4% for the six months ended June 30, 2001. This percentage
increase was primarily due to the decreases in the average prices of oil
and gas sold.
General and administrative expenses increased $5,107 (2.0%) for the six
months ended June 30, 2002 as compared to the six months ended June 30,
2001. As a percentage of oil and gas sales, these expenses increased to
12.8% for the six months ended June 30, 2002 from 6.6% for the six months
ended June 30, 2001. This percentage increase was primarily due to the
decrease in oil and gas sales.
The Limited Partners have received cash distributions through June 30,
2002 totaling $64,176,552 or 153.39% of Limited Partners' capital
contributions.
-26-
I-F PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2001.
Three Months Ended June 30,
---------------------------
2002 2001
-------- --------
Oil and gas sales $375,956 $427,825
Oil and gas production expenses $122,889 $134,532
Barrels produced 6,083 4,500
Mcf produced 72,079 53,582
Average price/Bbl $ 22.83 $ 22.69
Average price/Mcf $ 3.29 $ 6.08
As shown in the table above, total oil and gas sales decreased $51,869
(12.1%) for the three months ended June 30, 2002 as compared to the three
months ended June 30, 2001. Of this decrease, approximately $201,000 was
related to a decrease in the average price of gas sold. This decrease was
partially offset by increases of approximately $36,000 and $112,000,
respectively, related to increases in volumes of oil and gas sold. Volumes
of oil and gas sold increased 1,583 barrels and 18,497 Mcf, respectively,
for the three months ended June 30, 2002 as compared to the three months
ended June 30, 2001. The increase in volumes of oil sold was primarily due
to (i) a negative prior period volume adjustment on one significant well
during the three months ended June 30, 2001, (ii) an increase in
production on another significant well following successful repairs made
during early 2001, and (iii) an increase in production on one significant
well due to the successful recompletion of that well during early 2002.
The increase in volumes of gas sold was primarily due to (i) a positive
prior period volume adjustment made by the purchaser on one significant
well during the three months ended June 30, 2002, (ii) the I-F Partnership
receiving an increased percentage of sales on another significant well
during the three months ended June 30, 2002 due to gas balancing, and
(iii) an increase in production on one significant well following
successful repairs made during early 2001. As of the date of this
Quarterly Report, management expects the increased sales percentage due to
gas balancing to continue for the foreseeable future, thereby continuing
to contribute to an increase in volumes of gas sold for the I-F
Partnership. Average oil prices increased to $22.83 per barrel for the
three months ended June 30, 2002 from $22.69 per barrel for the three
months ended June 30, 2001. Average gas prices decreased to $3.29 per Mcf
for the three months ended June 30, 2002 from $6.08 per Mcf for the three
months ended June 30, 2001.
-27-
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $11,643 (8.7%) for the three months ended June
30, 2002 as compared to the three months ended June 30, 2001. As a
percentage of oil and gas sales, these expenses increased to 32.7% for the
three months ended June 30, 2002 from 31.4% for the three months ended
June 30, 2001.
Depreciation, depletion, and amortization of oil and gas properties
decreased $3,335 (12.4%) for the three months ended June 30, 2002 as
compared to the three months ended June 30, 2001. This decrease was
primarily due to a decrease in depletable oil and gas properties primarily
due to two significant wells being substantially depleted in 2001 due to
the lack of remaining economically recoverable reserves, which decrease
was partially offset by the increases in volumes of oil and gas sold. As a
percentage of oil and gas sales, this expense remained constant at 6.3%
for the three months ended June 30, 2002 and 2001.
General and administrative expenses increased $2,837 (6.7%) for the three
months ended June 30, 2002 as compared to the three months ended June 30,
2001. As a percentage of oil and gas sales, these expenses increased to
12.0% for the three months ended June 30, 2002 from 9.9% for the three
months ended June 30, 2001. This percentage increase was primarily due to
the decrease in oil and gas sales.
SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2001.
Six Months Ended June 30,
-------------------------
2002 2001
-------- --------
Oil and gas sales $618,965 $985,491
Oil and gas production expenses $218,253 $278,602
Barrels produced 11,520 10,071
Mcf produced 152,861 125,694
Average price/Bbl $ 19.39 $ 25.51
Average price/Mcf $ 2.59 $ 5.80
As shown in the table above, total oil and gas sales decreased $366,526
(37.2%) for the six months ended June 30, 2002 as compared to the six
months ended June 30, 2001. Of this decrease, approximately $70,000 and
$491,000, respectively, were related to decreases in the average prices of
oil and gas sold. These decreases were partially offset by increases of
approximately $37,000 and $157,000, respectively, related to increases in
volumes of oil and gas sold. Volumes of oil and gas sold increased 1,449
barrels and 27,167 Mcf, respectively, for the six months ended June 30,
2002 as compared to the six months ended June 30, 2001.
-28-
The increase in volumes of oil sold was primarily due to (i) a positive
prior period volume adjustment made by the purchaser on one significant
well during the six months ended June 30, 2002, (ii) a negative prior
period volume adjustment on another significant well during the six months
ended June 30, 2001, and (iii) an increase in production on one
significant well due to the successful recompletion of that well during
early 2001. The increase in volumes of gas sold was primarily due to (i) a
negative prior period gas balancing adjustment on one significant well
during the six months ended June 30, 2001 and (ii) a positive prior period
volume adjustment made by the purchaser on another significant well during
the six months ended June 30, 2002. Average oil and gas prices decreased
to $19.39 per barrel and $2.59 per Mcf, respectively, for the six months
ended June 30, 2002 from $25.51 per barrel and $5.80 per Mcf,
respectively, for the six months ended June 30, 2001.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $60,349 (21.7%) for the six months ended June
30, 2002 as compared to the six months ended June 30, 2001. This decrease
was primarily due to (i) a partial reversal during the six months ended
June 30, 2002 of approximately $52,000 (due to a partial post-judgment
settlement) of a charge previously accrued for a judgment and (ii) a
decrease in production taxes associated with the decrease in oil and gas
sales. These decreases were partially offset by an increase in lease
operating expenses associated with the increases in volumes of oil and gas
sold. As a percentage of oil and gas sales, these expenses increased to
35.3% for the six months ended June 30, 2002 from 28.3% for the six months
ended June 30, 2001. This percentage increase was primarily due to the
decreases in the average prices of oil and gas sold.
Depreciation, depletion, amortization of oil and gas properties decreased
$13,944 (22.5%) for the six months ended June 30, 2002 as compared to the
six months ended June 30, 2001. This decrease was primarily due to a
decrease in depletable oil and gas properties primarily due to two
significant wells being substantially depleted in 2001 due to the lack of
remaining economically recoverable reserves, which decrease was partially
offset by the increases in volumes of oil and gas sold. As a percentage of
oil and gas sales, this expense increased to 7.8% for the six months ended
June 30, 2002 from 6.3% for the six months ended June 30, 2001. This
percentage increase was primarily due to the decreases in the average
prices of oil and gas sold.
-29-
General and administrative expenses increased $1,716 (1.7%) for the six
months ended June 30, 2002 as compared to the six months ended June 30,
2001. As a percentage of oil and gas sales, these expenses increased to
16.4% for the six months ended June 30, 2002 from 10.1% for the six months
ended June 30, 2001. This percentage increase was primarily due to the
decrease in oil and gas sales.
The Limited Partners have received cash distributions through June 30,
2002 totaling $20,520,664 or 143.29% of Limited Partners' capital
contributions.
-30-
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
The Partnerships do not hold any market risk sensitive instruments.
-31-
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
A lawsuit styled Xplor Energy Operating Co. v. The Newton Corp, et al.,
Case No. 99-04-01960-CV was filed on May 12, 1999 in the 284th Judicial District
Court of Montgomery County, Texas against Samson. The Plaintiff had acquired at
auction the interests of the I-E and I-F Partnerships and other owners in the
State 87-S1 well. The lawsuit alleged that Samson and others were the record
owners of the lease when it expired and therefore were responsible for the costs
of plugging and abandoning the well. Plaintiff sought to recover the Defendants'
proportionate share of the costs to plug and abandon the well along with
attorneys' fees and interest. The Defendants denied liability and trial was held
on August 6, 2001. At the conclusion of the trial the Court awarded the
Plaintiff $447,245.55. On January 15, 2002 the Defendants filed an appeal of the
matter with the Court of Appeals, Fifth District of Texas, Dallas, Texas, Case
No. 05-02-00070-CV. Samson, on behalf of the I-E and I-F Partnerships and
others, intends to vigorously pursue this appeal. In connection with this
appeal, the Defendants filed an appellate bond in the amount of $491,970.10,
which consists of $86,444.12 for damages, $360,801.43 for costs and attorneys'
fees, and $44,724.55 for estimated post-judgment interest. The I-E and I-F
Partnerships had working interests in the plugged well and their portions of the
judgment and estimated post-judgment interest are approximately $246,000 and
$172,000, respectively.
On April 23, 2002 the I-E and I-F Partnerships entered into a settlement
agreement with Xplor Energy Operating Company thereby settling for $82,500 and
$57,750, respectively, the portion of the judgment which is in favor of Xplor.
The appeal is still ongoing with respect to the portion of the judgment which is
in favor of The Newton Corporation. The I-E and I-F Partnerships' portions of
the remaining judgment and estimated post-judgment interest are approximately
$89,000 and $62,000, respectively.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
99.1 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 for the I-D Partnership.
-32-
99.2 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 for the I-E Partnership.
99.3 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 for the I-F Partnership.
(b) Reports on Form 8-K.
None.
-33-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP I-F
(Registrant)
BY: GEODYNE RESOURCES, INC.
General Partner
Date: August 13, 2002 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: August 13, 2002 By: /s/Craig D. Loseke
--------------------------------
(Signature)
Craig D. Loseke
Chief Accounting Officer
-34-
INDEX TO EXHIBITS
-----------------
Exh.
No. Exhibit
- ---- -------
99.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership I-D.
99.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership I-E.
99.3 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
Geodyne Energy Income Limited Partnership I-F.
-35-