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 September 30, 2003
Commission File Number:
P-1: 0-17800 P-4: 0-18308 P-6: 0-18937
P-3: 0-18306 P-5: 0-18637
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 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-3 73-1336573
P-1: Texas P-4 73-1341929
P-3 through P-6: P-5 73-1353774
Oklahoma P-6 73-1357375
---------------------------- -------------------------------
(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
------ ------
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes No X
------ ------
-1-
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2003 2002
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 413,519 $ 309,227
Accounts receivable:
Net Profits 173,035 195,043
---------- ----------
Total current assets $ 586,554 $ 504,270
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 746,623 726,622
---------- ----------
$1,333,177 $1,230,892
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 54,793) ($ 61,127)
Limited Partners, issued and
outstanding, 108,074 units 1,387,970 1,292,019
---------- ----------
Total Partners' capital $1,333,177 $1,230,892
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-2-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
-------- --------
REVENUES:
Net Profits $329,145 $282,385
Interest income 576 459
-------- --------
$329,721 $282,844
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 23,043 $ 25,991
General and administrative
(Note 2) 32,799 32,819
-------- --------
$ 55,842 $ 58,810
-------- --------
NET INCOME $273,879 $224,034
======== ========
GENERAL PARTNER - NET INCOME $ 29,404 $ 24,697
======== ========
LIMITED PARTNERS - NET INCOME $244,475 $199,337
======== ========
NET INCOME per unit $ 2.26 $ 1.84
======== ========
UNITS OUTSTANDING 108,074 108,074
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-3-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
---------- --------
REVENUES:
Net Profits $1,097,097 $687,306
Interest income 1,623 1,140
Gain on sale of Net Profits
Interests - 37,624
---------- --------
$1,098,720 $726,070
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 65,231 $ 82,210
General and administrative
(Note 2) 112,417 112,099
---------- --------
$ 177,648 $194,309
---------- --------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $ 921,072 $531,761
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) 3,732 -
---------- --------
NET INCOME $ 924,804 $531,761
========== ========
GENERAL PARTNER - NET INCOME $ 97,853 $ 60,461
========== ========
LIMITED PARTNERS - NET INCOME $ 826,951 $471,300
========== ========
NET INCOME per unit $ 7.65 $ 4.36
========== ========
UNITS OUTSTANDING 108,074 108,074
========== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-4-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $924,804 $531,761
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) ( 3,732) -
Depletion of Net Profits
Interests 65,231 82,210
Gain on sale of Net Profits
Interests - ( 37,624)
Increase in accounts receivable -
Net Profits ( 35,388) ( 59,761)
-------- --------
Net cash provided by operating
activities $950,915 $516,586
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 24,989) ($ 43,918)
Proceeds from sale of Net Profits
Interests 885 40,468
-------- --------
Net cash used by investing
activities ($ 24,104) ($ 3,450)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($822,519) ($445,330)
-------- --------
Net cash used by financing
activities ($822,519) ($445,330)
-------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $104,292 $ 67,806
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 309,227 182,282
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $413,519 $250,088
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-5-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2003 2002
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 599,066 $ 433,562
Accounts receivable:
Net Profits 243,101 285,379
---------- ----------
Total current assets $ 842,167 $ 718,941
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 1,212,040 1,170,405
---------- ----------
$2,054,207 $1,889,346
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 41,393) ($ 51,594)
Limited Partners, issued and
outstanding, 169,637 units 2,095,600 1,940,940
---------- ----------
Total Partners' capital $2,054,207 $1,889,346
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-6-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
-------- --------
REVENUES:
Net Profits $474,905 $400,421
Interest income 835 680
-------- --------
$475,740 $401,101
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 33,638 $ 38,803
General and administrative
(Note 2) 50,691 49,780
-------- --------
$ 84,329 $ 88,583
-------- --------
NET INCOME $391,411 $312,518
======== ========
GENERAL PARTNER - NET INCOME $ 42,085 $ 34,676
======== ========
LIMITED PARTNERS - NET INCOME $349,326 $277,842
======== ========
NET INCOME per unit $ 2.06 $ 1.64
======== ========
UNITS OUTSTANDING 169,637 169,637
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-7-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
---------- ----------
REVENUES:
Net Profits $1,594,314 $ 980,257
Interest income 2,340 1,739
Gain on sale of Net Profits
Interests - 47,198
---------- ----------
$1,596,654 $1,029,194
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 98,784 $ 128,016
General and administrative
(Note 2) 164,217 163,680
---------- ----------
$ 263,001 $ 291,696
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,333,653 $ 737,498
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) 4,070 -
---------- ----------
NET INCOME $1,337,723 $ 737,498
========== ==========
GENERAL PARTNER - NET INCOME $ 142,063 $ 85,097
========== ==========
LIMITED PARTNERS - NET INCOME $1,195,660 $ 652,401
========== ==========
NET INCOME per unit $ 7.05 $ 3.85
========== ==========
UNITS OUTSTANDING 169,637 169,637
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-8-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,337,723 $737,498
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) ( 4,070) -
Depletion of Net Profits
Interests 98,784 128,016
Gain on sale of Net Profits
Interests - ( 47,198)
Increase in accounts receivable -
Net Profits ( 55,539) ( 77,840)
---------- --------
Net cash provided by operating
activities $1,376,898 $740,476
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 39,108) ($ 64,560)
Proceeds from the sale of Net
Profits Interests 576 51,193
---------- --------
Net cash used by investing
activities ($ 38,532) ($ 13,367)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,172,862) ($635,106)
---------- --------
Net cash used by financing
activities ($1,172,862) ($635,106)
---------- ---------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 165,504 $ 92,003
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 433,562 266,929
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 599,066 $358,932
========== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-9-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2003 2002
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 472,914 $ 351,179
Accounts receivable:
Related Party (Note 2) - 416
Net Profits 296,097 376,603
---------- ----------
Total current assets $ 769,011 $ 728,198
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 453,929 448,053
---------- ----------
$1,222,940 $1,176,251
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 59,065) ($ 57,787)
Limited Partners, issued and
outstanding, 126,306 units 1,282,005 1,234,038
---------- ----------
Total Partners' capital $1,222,940 $1,176,251
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-10-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
-------- --------
REVENUES:
Net Profits $357,764 $402,565
Interest income 734 914
-------- --------
$358,498 $403,479
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 23,510 $116,804
General and administrative
(Note 2) 37,938 36,646
-------- --------
$ 61,448 $153,450
-------- --------
NET INCOME $297,050 $250,029
======== ========
GENERAL PARTNER - NET INCOME $ 31,747 $ 35,423
======== ========
LIMITED PARTNERS - NET INCOME $265,303 $214,606
======== ========
NET INCOME per unit $ 2.10 $ 1.70
======== ========
UNITS OUTSTANDING 126,306 126,306
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-11-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
------------ ----------
REVENUES:
Net Profits $1,302,591 $1,127,891
Interest income 2,233 2,633
---------- ----------
$1,304,824 $1,130,524
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 66,524 $ 199,672
General and administrative
(Note 2) 125,894 123,780
---------- ----------
$ 192,418 $ 323,452
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,112,406 $ 807,072
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) ( 439) -
---------- ----------
NET INCOME $1,111,967 $ 807,072
========== ==========
GENERAL PARTNER - NET INCOME $ 117,000 $ 98,414
========== ==========
LIMITED PARTNERS - NET INCOME $ 994,967 $ 708,658
========== ==========
NET INCOME per unit $ 7.88 $ 5.61
========== ==========
UNITS OUTSTANDING 126,306 126,306
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-12-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,111,967 $807,072
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) 439 -
Depletion of Net Profits
Interests 66,524 199,672
Decrease in accounts receivable -
related party 5 -
Decrease (increase) in accounts
receivable - Net Profits 24,966 ( 74,236)
---------- --------
Net cash provided by operating
activities $1,203,901 $932,508
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 17,299) ($ 63,754)
Proceeds from sale of Net Profits
Interests 411 -
---------- --------
Net cash used by investing activities ($ 16,888) ($ 63,754)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,065,278) ($883,711)
---------- --------
Net cash used by financing
activities ($1,065,278) ($883,711)
---------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 121,735 ($ 14,957)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 351,179 420,602
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 472,914 $405,645
========== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-13-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2003 2002
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 453,479 $ 252,994
Accounts receivable:
Net Profits 12,998 65,132
---------- ----------
Total current assets $ 466,477 $ 318,126
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 635,217 612,748
---------- ----------
$1,101,694 $ 930,874
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 57,060) ($ 70,113)
Limited Partners, issued and
outstanding, 118,449 units 1,158,754 1,000,987
---------- ----------
Total Partners' capital $1,101,694 $ 930,874
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-14-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
-------- --------
REVENUES:
Net Profits $288,814 $233,706
Interest income 662 579
-------- --------
$289,476 $234,285
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 14,637 $ 18,946
General and administrative
(Note 2) 35,631 34,464
-------- --------
$ 50,268 $ 53,410
-------- --------
NET INCOME $239,208 $180,875
======== ========
GENERAL PARTNER - NET INCOME $ 25,172 $ 9,772
======== ========
LIMITED PARTNERS - NET INCOME $214,036 $171,103
======== ========
NET INCOME per unit $ 1.80 $ 1.45
======== ========
UNITS OUTSTANDING 118,449 118,449
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-15-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
---------- --------
REVENUES:
Net Profits $1,047,998 $654,466
Interest income 1,850 1,560
Gain on sale of Net Profits
Interests - 9,113
---------- --------
$1,049,848 $665,139
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 56,027 $ 67,048
General and administrative
(Note 2) 119,276 117,183
---------- --------
$ 175,303 $184,231
---------- --------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $ 874,545 $480,908
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) 2,785 -
---------- --------
NET INCOME $ 877,330 $480,908
========== ========
GENERAL PARTNER - NET INCOME $ 58,563 $ 26,649
========== ========
LIMITED PARTNERS - NET INCOME $ 818,767 $454,259
========== ========
NET INCOME per unit $ 6.91 $ 3.84
========== ========
UNITS OUTSTANDING 118,449 118,449
========== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-16-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $877,330 $480,908
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) ( 2,785) -
Depletion of Net Profits
Interests 56,027 67,048
Gain on sale of Net Profits
Interests - ( 9,113)
Increase in accounts receivable -
Net Profits ( 18,863) ( 15,193)
-------- --------
Net cash provided by operating
activities $911,709 $523,650
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 13,491) ($ 40,494)
Proceeds from the sale of Net
Profits Interests 8,777 9,712
-------- --------
Net cash used by investing activities ($ 4,714) ($ 30,782)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($706,510) ($412,728)
-------- --------
Net cash used by financing
activities ($706,510) ($412,728)
-------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $200,485 $ 80,140
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 252,994 171,708
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $453,479 $251,848
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-17-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2003 2002
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 670,602 $ 317,796
Accounts receivable:
Net Profits - 146,070
---------- ----------
Total current assets $ 670,602 $ 463,866
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 1,300,176 1,196,952
---------- ----------
$1,970,778 $1,660,818
========== ==========
PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 8,057 $ -
---------- ----------
Total current liabilities $ 8,057 $ -
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 55,505) ($ 67,729)
Limited Partners, issued and
outstanding, 143,041 units 2,018,226 1,728,547
---------- ----------
Total Partners' capital $1,962,721 $1,660,818
---------- ----------
$1,970,778 $1,660,818
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-18-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
-------- --------
REVENUES:
Net Profits $456,758 $375,268
Interest income 1,071 853
-------- --------
$457,829 $376,121
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 33,524 $ 25,892
General and administrative
(Note 2) 42,864 41,293
-------- --------
$ 76,388 $ 67,185
-------- --------
NET INCOME $381,441 $308,936
======== ========
GENERAL PARTNER - NET INCOME $ 41,054 $ 33,139
======== ========
LIMITED PARTNERS - NET INCOME $340,387 $275,797
======== ========
NET INCOME per unit $ 2.38 $ 1.93
======== ========
UNITS OUTSTANDING 143,041 143,041
======== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-19-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
---------- ----------
REVENUES:
Net Profits $1,900,291 $1,167,557
Interest income 2,752 2,067
Gain on sale of Net Profits
Interests - 10,265
---------- ----------
$1,903,043 $1,179,889
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 109,895 $ 131,054
General and administrative
(Note 2) 140,001 137,838
---------- ----------
$ 249,896 $ 268,892
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,653,147 $ 910,997
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) 1,477 -
---------- ----------
NET INCOME $1,654,624 $ 910,997
========== ==========
GENERAL PARTNER - NET INCOME $ 174,945 $ 102,688
========== ==========
LIMITED PARTNERS - NET INCOME $1,479,679 $ 808,309
========== ==========
NET INCOME per unit $ 10.34 $ 5.65
========== ==========
UNITS OUTSTANDING 143,041 143,041
========== ==========
The accompanying condensed notes are an integral part of
these combined financial statements.
-20-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
2003 2002
------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,654,624 $910,997
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) ( 1,477) -
Depletion of Net Profits
Interests 109,895 131,054
Gain on sale of Net Profits
Interests - ( 10,265)
Increase in accounts receivable -
Net Profits ( 63,992) ( 65,751)
Increase in accounts payable 8,057 -
---------- --------
Net cash provided by operating
activities $1,707,107 $966,035
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 6,832) ($ 41,666)
Proceeds from sale of Net Profits
Interests 5,252 10,867
---------- --------
Net cash used by investing activities ($ 1,580) ($ 30,799)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,352,721) ($736,111)
---------- --------
Net cash used by financing
activities ($1,352,721) ($736,111)
---------- --------
NET INCREASE IN CASH AND CASH
CASH EQUIVALENTS $ 352,806 $199,125
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 317,796 187,301
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 670,602 $386,426
========== ========
The accompanying condensed notes are an integral part of
these combined financial statements.
-21-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE COMBINED FINANCIAL STATEMENTS
SEPTEMBER 30, 2003
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The combined balance sheets as of September 30, 2003, combined statements
of operations for the three and nine months ended September 30, 2003 and
2002, and combined statements of cash flows for the nine months ended
September 30, 2003 and 2002 have been prepared by Geodyne Resources, Inc.,
the General Partner of the Geodyne Institutional/Pension Energy Income
Limited Partnerships, without audit. Each limited partnership is a general
partner in the related Geodyne NPI Partnership (the "NPI Partnerships") in
which Geodyne Resources, Inc. serves as the managing partner. For the
purposes of these financial statements, the general partner and managing
partner are collectively referred to as the "General Partner" and the
limited partnerships and NPI Partnerships are collectively referred to as
the "Partnerships". 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 September 30, 2003, the combined results of operations for the three
and nine months ended September 30, 2003 and 2002, and the combined cash
flows for the nine months ended September 30, 2003 and 2002.
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, 2002. The
results of operations for the period ended September 30, 2003 are not
necessarily indicative of the results to be expected for the full year.
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 working
interests from which the Partnerships' Net Profits Interests are carved
are referred to as "Working Interests".
The Limited Partners' net income or loss per unit is based upon each $100
initial capital contribution.
-22-
NET PROFITS INTERESTS
---------------------
The Partnerships follow the successful efforts method of accounting for
their Net Profits Interests. Under the successful efforts method, the NPI
Partnerships capitalize all acquisition costs. 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 NPI Partnership of Net Profits Interests 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.
Depletion of the costs of Net Profits Interests is computed on the
unit-of-production method. The Partnerships' calculation of depletion of
its Net Profits Interests includes estimated dismantlement and abandonment
costs and estimated salvage value of the equipment.
The Partnerships do not directly bear capital costs. However, the
Partnerships indirectly bear certain capital costs incurred by the owners
of the Working Interests to the extent such capital costs are charged
against the applicable oil and gas revenues in calculating the Net Profits
payable to the Partnerships. For financial reporting purposes only, such
capital costs are reported as capital expenditures in the Partnerships'
Statements of Cash Flows.
NEW ACCOUNTING PRONOUNCEMENTS
-----------------------------
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). On January 1,
2003, the Partnerships adopted FAS No. 143 and recorded an increase in Net
Profits Interests, an increase (decrease) in net income for the cumulative
effect of the change in accounting principle, and an asset retirement
obligation, resulting in a decrease of accounts receivable - Net Profits,
in the following approximate amounts for each Partnership:
-23-
Increase
(Decrease)
in
Net Income
Increase for the
in Change in Asset
Net Profits Accounting Retirement
Partnerships Interests Principle Obligation
------------ ----------- ---------- ----------
P-1 $ 59,000 $4,000 $ 55,000
P-3 99,000 4,000 95,000
P-4 54,000 ( 400) 54,000
P-5 72,000 3,000 69,000
P-6 206,000 1,000 205,000
These amounts differ significantly from the estimates disclosed in the
Annual Report on Form 10-K for the year ended December 31, 2002 due to a
revision of the methodology used in calculating the change in Net Profits
Interests.
The asset retirement obligation will be adjusted upwards each quarter in
order to recognize accretion of the time-related discount factor. For the
nine months ended September 30, 2003, the P-1, P-3, P-4, P-5, and P-6
Partnerships recognized approximately $2,000, $4,000, $5,000, $2,000 and
$7,000 of an increase in depletion of Net Profits Interests, which was
comprised of accretion of the asset retirement obligation and depletion of
the increase in Net Profits Interests.
If this accounting policy had been in effect on January 1, 2002, the
proforma impact on the P-1, P-3, P-4, P-5, and P-6 Partnerships during the
nine months ended September 30, 2002 would have been an increase in
depreciation, depletion, and amortization expense of approximately $2,000,
$4,000, $3,000, $2,000, and $7,000.
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 September 30, 2003, the following payments were made to the General
Partner or its affiliates by the Partnerships:
-24-
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------ --------------
P-1 $ 4,359 $ 28,440
P-3 6,051 44,640
P-4 4,698 33,240
P-5 4,461 31,170
P-6 5,223 37,641
During the nine months ended September 30, 2003, the following payments
were made to the General Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------ --------------
P-1 $27,097 $ 85,320
P-3 30,297 133,920
P-4 26,174 99,720
P-5 25,766 93,510
P-6 27,078 112,923
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.
The accounts receivable - related party at December 31, 2002 for the P-4
Partnership represents accrued proceeds and interest due from the General
Partner for the sale of certain oil and gas properties during 2002. Such
amount was received from the General Partner in February 2003.
-25-
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 Net Profits
Interests in producing oil and gas properties located in the continental
United States. In general, a Partnership acquired passive interests in
producing properties and does not directly engage in development drilling
or enhanced recovery projects. Therefore, the economic life of each
limited partnership, and its related NPI Partnership, is limited to the
period of time required to fully produce its acquired oil and gas
reserves. A Net Profits Interest entitles the Partnerships to a portion of
the oil and gas sales less operating and production expenses and
development costs generated by the owner of the underlying Working
Interests. The net proceeds from the oil and gas operations are
distributed to the Limited Partners
-26-
and the General Partner in accordance with the terms of the
Partnerships' partnership agreements.
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
----------- ----------------- ---------------
P-1 October 25, 1988 $10,807,400
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
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 Partnerships' Net Profits Interests 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 September 30, 2003 and the
net revenue generated from future operations will provide sufficient
working capital to meet current and future obligations.
Occasional expenditures by the owners of the Working Interests for new
wells or well recompletions or workovers, however, may reduce or eliminate
cash available for a particular quarterly cash distribution. During the
nine months ended September 30, 2002, capital expenditures affecting the
P-1, P-3, and P-4 Partnerships' Net Profits Interests totaled $43,918,
$64,560, and $63,754, respectively. The capital expenditures for the P-1
and P-3 Partnerships were indirectly incurred as a result of drilling and
completion activities on one property, the CHB Weir in Lea County, New
Mexico. These activities were successful leading to an increase in both
oil and gas reserves and production on this well. The capital expenditures
for the P-4 Partnership were indirectly incurred as a result of drilling
and completion activities on another property, the Donald #1 SWD in
Jefferson Davis
-27-
Parish, Louisiana. Any other capital expenditures incurred by the
Partnerships during the nine months September 30, 2003 and 2003 were not
material to the Partnerships' cash flows.
The Partnerships' termination date under the partnership agreements is
December 31, 2005. The General Partner may extend the terms of the
Partnerships for up to five two-year extension periods. The General
Partner has not yet determined whether it will extend the terms of any
Partnership. Accordingly, the financial statements have not been presented
on a liquidation basis because it is not probable that the Partnerships
will be terminated within the next year.
CRITICAL ACCOUNTING POLICIES
- ----------------------------
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 the 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 any interest incurred to finance the acquisition,
for the period of time the properties are held by the General Partner.
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 and estimated salvage value of the equipment.
The Partnerships evaluate the recoverability of the carrying costs of
their Net Profits Interests in proved oil and gas properties for each oil
and gas field (rather than separately for each well). If the unamortized
costs of a Net Profits Interest within a field exceeds the expected
undiscounted future cash flows from such Net Profits Interest, the cost of
the Net Profits Interest is written down to fair value, which is
determined by using the estimated discounted future cash flows from the
Net Profits Interest.
-28-
Accounts Receivable (Accounts Payable) - Net Profits
Revenues from a Net Profits Interest consist of a share of the oil and gas
sales of the property, less operating and production expenses. The
partnerships accrue for oil and gas revenues less expenses from the Net
Profits Interests. Sales of gas applicable to the Net Profits Interests
are recorded as revenue when the gas is metered and title transferred
pursuant to the gas sales contracts. During such times as sales of gas
exceed a Partnership's pro rata share of estimated total gas reserves
attributable to the underlying property, such excess is recorded as a
liability. The rates per Mcf used to calculate this liability are based on
the average gas price received for the volumes at the time the
overproduction occurred. This also approximates the price for which the
Partnerships are currently settling this liability. This liability is
recorded as a reduction of accounts receivable.
Also included in accounts receivable (payable) - Net Profits are amounts
which represent costs deferred or accrued for Net Profits relating to
lease operating expenses incurred in connection with the net underproduced
or overproduced gas imbalance positions. The rate used in calculating the
deferred charge or accrued liability is the annual average production
costs per Mcf. Also included in accounts receivable (payable) - Net
Profits is the asset retirement obligation.
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). On January 1,
2003, the Partnerships adopted FAS No. 143 and recorded an increase in Net
Profits Interests, an increase (decrease) in net income for the cumulative
effect of the change in accounting principle, and an asset retirement
obligation, resulting in a decrease of accounts receivable - Net Profits,
in the following approximate amounts for each Partnership:
-29-
Increase
(Decrease)
in
Net Income
Increase for the
in Change in Asset
Net Profits Accounting Retirement
Partnerships Interests Principle Obligation
------------ ----------- ---------- ----------
P-1 $ 59,000 $4,000 $ 55,000
P-3 99,000 4,000 95,000
P-4 54,000 ( 400) 54,000
P-5 72,000 3,000 69,000
P-6 206,000 1,000 205,000
These amounts differ significantly from the estimates disclosed in the
Annual Report on Form 10-K for the year ended December 31, 2002 due to a
revision in the methodology used in calculating the change in Net Profits
Interests.
The asset retirement obligation will be adjusted upwards each quarter in
order to recognize accretion of the time-related discount factor. For the
nine months ended September 30, 2003, the P-1, P-3, P-4, P-5, and P-6
Partnerships recognized approximately $2,000, $4,000, $5,000, $2,000 and
$7,000 of an increase depletion of Net Profits Interests, which was
comprised of accretion of the asset retirement obligation and depletion of
the increase in Net Profits Interests.
PROVED RESERVES AND NET PRESENT VALUE
- -------------------------------------
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 future. Although every
reasonable effort has been made to ensure that these reserve estimates
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.
-30-
The following tables summarize changes in net quantities of the
Partnerships' proved reserves, 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, and are
annually reviewed by an independent engineering firm. "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. The following
information includes certain gas balancing adjustments which cause the gas
volume to differ from the reserve reports prepared by the General Partner.
P-1 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2002 160,338 1,732,980
Production ( 5,158) ( 72,967)
Revisions of previous
estimates 2,141 37,033
------- ---------
Proved reserves, March 31, 2003 157,321 1,697,046
Production ( 4,940) ( 70,772)
Revisions of previous
estimates 43,504 718,213
------- ---------
Proved reserves, June 30, 2003 195,885 2,344,487
Production ( 4,593) ( 68,831)
Extensions and discoveries 1,783 773
Revisions of previous
estimates 4,657 ( 43,971)
------- ---------
Proved reserves, Sept. 30, 2003 197,732 2,232,458
======= =========
-31-
P-3 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2002 216,687 2,901,481
Production ( 6,603) ( 106,976)
Revisions of previous
estimates 2,714 50,994
------- ---------
Proved reserves, March 31, 2003 212,798 2,845,499
Production ( 6,443) ( 107,977)
Revisions of previous
estimates 54,640 1,046,105
------- ---------
Proved reserves, June 30, 2003 260,995 3,783,627
Production ( 5,896) ( 104,243)
Extensions and discoveries 2,802 10,568
Revisions of previous
estimates 5,075 ( 66,665)
------- ---------
Proved reserves, Sept. 30, 2003 262,976 3,623,287
======= =========
-32-
P-4 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2002 29,515 2,008,648
Production ( 6,220) ( 77,970)
Revisions of previous
estimates 1,803 24,331
------ ---------
Proved reserves, March 31, 2003 25,098 1,955,009
Production ( 5,727) ( 55,580)
Revisions of previous
estimates 6,133 413,150
------ ---------
Proved reserves, June 30, 2003 25,504 2,312,579
Production ( 4,612) ( 65,963)
Extensions and discoveries 38 17,229
Revisions of previous
estimates 1,549 34,338
------ ---------
Proved reserves, Sept. 30, 2003 22,479 2,298,183
====== =========
-33-
P-5 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2002 44,787 2,206,895
Production ( 2,795) ( 86,929)
Revisions of previous
estimates 554 ( 5,324)
------ ---------
Proved reserves, March 31, 2003 42,546 2,114,642
Production ( 1,513) ( 76,908)
Revisions of previous
estimates 2,766 258,214
------ ---------
Proved reserves, June 30, 2003 43,799 2,295,948
Production ( 851) ( 73,140)
Revisions of previous
estimates 4,768 ( 21,341)
------ ---------
Proved reserves, Sept. 30, 2003 47,716 2,201,467
====== =========
-34-
P-6 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2002 114,215 3,923,928
Production ( 5,202) ( 159,930)
Revisions of previous
estimates 1,871 7,777
------- ---------
Proved reserves, March 31, 2003 110,884 3,771,775
Production ( 4,590) ( 153,919)
Revisions of previous
estimates 14,154 397,227
------- ---------
Proved reserves, June 30, 2003 120,448 4,015,083
Production ( 2,756) ( 121,866)
Revisions of previous
estimates ( 230) ( 95,293)
------- ---------
Proved reserves, Sept. 30, 2003 117,462 3,797,924
======= =========
The net present value of the Partnerships' reserves may change
dramatically as oil and gas prices change or as volumes change for the
reasons described above. 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.
The following table indicates the estimated net present value of the
Partnerships' proved reserves as of September 30, 2003, June 30, 2003,
March 31, 2003, and December 31, 2002. Net present value attributable to
the Partnerships' proved reserves was calculated on the basis of current
costs and prices as of the date of estimation. Such prices were not
escalated except in certain circumstances where escalations were fixed and
readily determinable in accordance with applicable contract provisions.
The table also indicates the gas prices in effect on the dates
corresponding to the reserve valuations. Changes in the oil and gas prices
have caused the estimates of remaining economically recoverable reserves,
as well as the values placed on said reserves to fluctuate. The prices
used in calculating the net present value attributable to the
Partnerships' proved reserves do not necessarily reflect market prices for
oil and gas production subsequent to September 30, 2003. There can be no
assurance that the
-35-
prices used in calculating the net present value of the Partnerships'
proved reserves at September 30, 2003 will actually be realized for such
production.
Net Present Value of Reserves (In 000's)
----------------------------------------------------
Partnership 9/30/03 6/30/03 3/31/03 12/31/02
----------- ------- ------- ------- --------
P-1 $5,847 $ 6,788 $5,688 $5,643
P-3 8,954 10,418 8,961 8,815
P-4 5,316 6,001 5,575 5,421
P-5 4,594 5,848 5,647 5,459
P-6 7,968 10,033 9,782 9,390
Oil and Gas Prices
---------------------------------------------------
Pricing 9/30/03 6/30/03 3/31/03 12/31/02
----------- ------- ------- ------- --------
Oil (Bbl) $26.00 $ 27.00 $27.75 $28.00
Gas (Mcf) 4.58 5.18 5.06 4.74
The Partnerships had downward revisions in the estimated net present value
of reserves at September 30, 2003 as compared to June 30, 2003 primarily
due to decreases in the oil and gas prices used to value the reserves.
RESULTS OF OPERATIONS
- ---------------------
GENERAL DISCUSSION
The following general discussion should be read in conjunction with the
analysis of results of operations provided below.
The primary source of liquidity and Partnership cash distributions comes
from the net revenues generated from the sale of oil and gas produced from
the Partnerships' oil and gas properties. The level of net revenues is
highly dependent upon the total volumes of oil and natural gas sold. Oil
and gas reserves are depleting assets and will experience production
declines over time, thereby likely resulting in reduced net revenues. The
level of net revenues is also highly dependent upon the prices received
for oil and gas sales, which prices have historically been very volatile
and may continue to be so.
Additionally, lower oil and natural gas prices may reduce the amount of
oil and gas that is economic to produce and reduce the Partnerships'
revenues and cash flow. Various factors beyond the Partnerships' control
will affect prices for oil and natural gas, such as:
-36-
* Worldwide and domestic supplies of oil and natural gas;
* The ability of the members of the Organization of Petroleum
Exporting Countries ("OPEC") to agree to and maintain oil prices and
production quotas;
* Political instability or armed conflict in oil-producing regions
or around major shipping areas;
* The level of consumer demand and overall economic activity;
* The competitiveness of alternative fuels;
* Weather conditions;
* The availability of pipelines for transportation; and
* Domestic and foreign government regulations and taxes.
Recently, while economic factors have been relatively unfavorable for oil
and natural gas demand, oil prices, to an extent, have benefited from the
political uncertainty associated with the increase in terrorist activities
in parts of the world. In the last few years, natural gas prices have
varied significantly, from low prices in late 2001 and early 2002, to
rising prices in the later part of 2002 and early 2003. The high natural
gas prices were associated with cold winter weather and decreased supply
from reduced capital investment for new drilling, while the low prices
were associated with warm winter weather and reduced economic activity.
The more recent increase in prices is the result of increased demand from
weather patterns, the pricing effect of relatively high oil prices and
increased concern about the ability of the industry to meet any
longer-term demand increases based upon current drilling activity.
It is not possible to predict the future direction of oil or natural gas
prices or whether the above discussed trends will remain. Operating costs,
including General and Administrative Expenses, may not decline over time
or may experience only a gradual decline, thus adversely affecting net
revenues as either production or oil and natural gas prices decline. In
any particular period, net revenues may also be affected by either the
receipt of proceeds from property sales or the incursion of additional
costs as a result of well workovers, recompletions, new well drilling, and
other events.
-37-
P-1 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2002.
Three Months Ended September 30,
--------------------------------
2003 2002
-------- --------
Net Profits $329,145 $282,385
Barrels produced 4,593 4,984
Mcf produced 68,831 75,023
Average price/Bbl $ 29.17 $ 27.19
Average price/Mcf $ 3.75 $ 2.81
As shown in the table above, total Net Profits increased $46,760 (16.6%)
for the three months ended September 30, 2003 as compared to the three
months ended September 30, 2002. Of this increase, approximately $9,000
and $65,000, respectively, were related to increases in the average prices
of oil and gas sold. These increases were partially offset by decreases of
approximately $11,000 and $17,000, respectively, related to decreases in
volumes of oil and gas sold. Volumes of oil and gas sold decreased 391
barrels and 6,192 Mcf, respectively, for the three months ended September
30, 2003 as compared to the three months ended September 30, 2002. The
decrease in volumes of gas sold was primarily due to (i) normal declines
in production, (ii) positive prior period volume adjustments made by the
operators on two significant wells during the three months ended September
30, 2002, and (iii) a negative prior period volume adjustment made by the
purchaser on one significant well during the three months ended September
30, 2003. These decreases were partially offset by (i) positive prior
period volume adjustments made by the purchasers on two significant wells
during the three months ended September 30, 2003 and (ii) a positive prior
period volume adjustment made by the operator on one significant well
during the three months ended September 30, 2003. Average oil and gas
prices increased to $29.17 per barrel and $3.75 per Mcf, respectively, for
the three months ended September 30, 2003 from $27.19 per barrel and $2.81
per Mcf, respectively, for the three months ended September 30, 2002.
Depletion of Net Profits Interests decreased $2,948 (11.3%) for the three
months ended September 30, 2003 as compared to the three months ended
September 30, 2002. This decrease was primarily due to the decreases in
volumes of oil and gas sold. As a percentage of Net Profits, this expense
decreased to 7.0% for the three months ended September 30, 2003 from 9.2%
for the three months ended September 30, 2002. This percentage decrease
was primarily due to the increases in the average prices of oil and gas
sold.
-38-
General and administrative expenses remained relatively constant for the
three months ended September 30, 2003 and 2002. As a percentage of Net
Profits, these expenses decreased to 10.0% for the three months ended
September 30, 2003 from 11.6% for the three months ended September 30,
2002. This percentage decrease was primarily due to the increase in Net
Profits.
NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2002.
Nine Months Ended September 30,
-------------------------------
2003 2002
---------- --------
Net Profits $1,097,097 $687,306
Barrels produced 14,691 15,811
Mcf produced 212,570 214,491
Average price/Bbl $ 28.53 $ 23.01
Average price/Mcf $ 4.43 $ 2.53
As shown in the table above, total Net Profits increased $409,791 (59.6%)
for the nine months ended September 30, 2003 as compared to the nine
months ended September 30, 2002. Of this increase, approximately $81,000
and $405,000, respectively, were related to increases in the average
prices of oil and gas sold. These increases were partially offset by a
decrease of approximately $45,000 related to an increase in production
expenses. Volumes of oil and gas sold decreased 1,120 barrels and 1,921
Mcf, respectively, for the nine months ended September 30, 2003 as
compared to the nine months ended September 30, 2002. Average oil and gas
prices increased to $28.53 per barrel and $4.43 per Mcf, respectively, for
the nine months ended September 30, 2003 from $23.01 per barrel and $2.53
per Mcf, respectively, for the nine months ended September 30, 2002.
The P-1 Partnership sold certain oil and gas properties during the nine
months ended September 30, 2002 and recognized a $37,624 gain on such
sales. No such sales occurred during the nine months ended September 30,
2003.
Depletion of Net Profits Interests decreased $16,979 (20.7%) for the nine
months ended September 30, 2003 as compared to the nine months ended
September 30, 2002. This decrease was primarily due to (i) upward
revisions in the estimates of remaining oil and gas reserves for the nine
months ended September 30, 2003 and (ii) the decreases in volumes of oil
and gas sold. As a percentage of Net Profits, this expense decreased to
5.9% for the nine months ended September 30, 2003 from 12.0% for the nine
months ended September 30, 2002. This percentage decrease was primarily
due to the increases in the average prices of oil and gas sold.
-39-
General and administrative expenses remained relatively constant for the
nine months ended September 30, 2003 and 2002. As a percentage of Net
Profits, these expenses decreased to 10.2% for the nine months ended
September 30, 2003 from 16.3% for the nine months ended September 30,
2002. This percentage decrease was primarily due to the increase in Net
Profits.
Cumulative cash distributions to the Limited Partners through September
30, 2003 were $15,351,558 or 142.05% of Limited Partners' capital
contributions.
P-3 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2002.
Three Months Ended September 30,
--------------------------------
2003 2002
-------- --------
Net Profits $474,905 $400,421
Barrels produced 5,896 6,409
Mcf produced 104,243 114,529
Average price/Bbl $ 29.13 $ 27.26
Average price/Mcf $ 3.87 $ 2.86
As shown in the table above, total Net Profits increased $74,484 (18.6%)
for the three months ended September 30, 2003 as compared to the three
months ended September 30, 2002. Of this increase, approximately $11,000
and $105,000, respectively, were related to increases in the average
prices of oil and gas sold. These increases were partially offset by
decreases of approximately $14,000 and $29,000, respectively, related to
decreases in volumes of oil and gas sold. Volumes of oil and gas sold
decreased 513 barrels and 10,286 Mcf, respectively, for the three months
ended September 30, 2003 as compared to the three months ended September
30, 2002. The decrease in volumes of gas sold was primarily due to (i)
normal declines in production, (ii) positive prior period volume
adjustments made by the operators on two significant wells during the
three months ended September 30, 2002, and (iii) a negative prior period
volume adjustment made by the purchaser on one significant well during the
three months ended September 30, 2003. These decreases were partially
offset by (i) positive prior period volume adjustments made by the
purchasers on two significant wells during the three months ended
September 30, 2003 and (ii) a positive prior period volume adjustment made
by the operator on one significant well during the three months ended
September 30, 2003. Average oil and gas prices increased to $29.13 per
barrel and $3.87 per Mcf, respectively, for the three months ended
September 30, 2003 from $27.26 per barrel and $2.86 per Mcf, respectively,
for the three months ended September 30, 2002.
-40-
Depletion of Net Profits Interests decreased $5,165 (13.3%) for the three
months ended September 30, 2003 as compared to the three months ended
September 30, 2002. This decrease was primarily due to the decreases in
volumes of oil and gas sold. As a percentage of Net Profits, this expense
decreased to 7.1% for the three months ended September 30, 2003 from 9.7%
for the three months ended September 30, 2002. This percentage decrease
was primarily due to the increases in the average prices of oil and gas
sold.
General and administrative expenses increased $911 (1.8%) for the three
months ended September 30, 2003 as compared to the three months ended
September 30, 2002. As a percentage of Net Profits, these expenses
decreased to 10.7% for the three months ended September 30, 2003 from
12.4% for the three months ended September 30, 2002. This percentage
decrease was primarily due to the increase in Net Profits.
NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2002.
Nine Months Ended September 30,
-------------------------------
2003 2002
---------- --------
Net Profits $1,594,314 $980,257
Barrels produced 18,942 20,346
Mcf produced 319,196 325,015
Average price/Bbl $ 28.54 $ 23.01
Average price/Mcf $ 4.56 $ 2.59
As shown in the table above, total Net Profits increased $614,057 (62.6%)
for the nine months ended September 30, 2003 as compared to the nine
months ended September 30, 2002. Of this increase, approximately $105,000
and $629,000, respectively, were related to increases in the average
prices of oil and gas sold. These increases were partially offset by a
decrease of approximately $72,000 related to an increase in production
expenses. Volumes of oil and gas sold decreased 1,404 barrels and 5,819
Mcf, respectively, for the nine months ended September 30, 2003 as
compared to the nine months ended September 30, 2002. Average oil and gas
prices increased to $28.54 per barrel and $4.56 per Mcf, respectively, for
the nine months ended September 30, 2003 from $23.01 per barrel and $2.59
per Mcf, respectively, for the nine months ended September 30, 2002.
The P-3 Partnership sold certain oil and gas properties during the nine
months ended September 30, 2002 and recognized a $47,198 gain on such
sales. No such sales occurred during the nine months ended September 30,
2003.
-41-
Depletion of Net Profits Interests decreased $29,232 (22.8%) for the nine
months ended September 30, 2003 as compared to the nine months ended
September 30, 2002. This decrease was primarily due to (i) upward
revisions in the estimates of remaining oil and gas reserves for the nine
months ended September 30, 2003 and (ii) the decreases in volumes of oil
and gas sold. As a percentage of Net Profits, this expense decreased to
6.2% for the nine months ended September 30, 2003 from 13.1% for the nine
months ended September 30, 2002. This percentage decrease was primarily
due to the increases in the average prices of oil and gas sold.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 2003 and 2002. As a percentage of Net
Profits, these expenses decreased to 10.3% for the nine months ended
September 30, 2003 from 16.7% for the nine months ended September 30,
2002. This percentage decrease was primarily due to the increase in Net
Profits.
Cumulative cash distributions to the Limited Partners through September
30, 2003 were $21,395,401 or 126.12% of Limited Partners' capital
contributions.
P-4 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2002.
Three Months Ended September 30,
--------------------------------
2003 2002
-------- --------
Net Profits $357,764 $402,565
Barrels produced 4,612 6,831
Mcf produced 65,963 124,276
Average price/Bbl $ 28.13 $ 26.73
Average price/Mcf $ 5.06 $ 2.69
As shown in the table above, total Net Profits decreased $44,801 (11.1%)
for the three months ended September 30, 2003 as compared to the three
months ended September 30, 2002. Of this decrease, approximately $59,000
and $156,000, respectively, were related to decreases in the volumes of
oil and gas sold. These decreases were partially offset by increases of
approximately (i) $6,000 and $156,000, respectively, related to increases
in the average prices of oil and gas sold and (ii) $8,000 related to a
decrease in production expenses. Volumes of oil and gas sold decreased
2,219 barrels and 58,313 Mcf, respectively, for the three months ended
September 30, 2003 as compared to the three months ended September 30,
2002. The decrease in volumes of oil sold was primarily due to normal
declines in production, which decrease was partially offset by an increase
in production during the three months ended September 30, 2003 on one
significant well due to a successful workover of that
-42-
well during mid 2002. The decrease in volumes of gas sold was primarily
due to (i) a positive prior period gas balancing adjustment on one
significant well during the three months ended September 30, 2002, (ii)
normal declines in production, and (iii) a substantial decline in
production on another significant well following the workover of that well
during early 2002. The well with a substantial decline in production is
not expected to return to previously high levels of production. Average
oil and gas prices increased to $28.13 per barrel and $5.06 per Mcf,
respectively, for the three months ended September 30, 2003 from $26.73
per barrel and $2.69 per Mcf, respectively, for the three months ended
September 30, 2002.
Depletion of Net Profits Interests decreased $93,294 (79.9%) for the three
months ended September 30, 2003 as compared to the three months ended
September 30, 2002. This decrease was primarily due to (i) the decreases
in volumes of oil and gas sold and (ii) two significant wells being fully
depleted during the three months ended September 30, 2002 due to the lack
of remaining economically recoverable reserves. As a percentage of Net
Profits, this expense decreased to 6.6% for the three months ended
September 30, 2003 from 29.0% for the three months ended September 30,
2002. This percentage decrease was primarily due to the dollar decrease in
depletion of Net Profits Interests.
General and administrative expenses increased $1,292 (3.5%) for the three
months ended September 30, 2003 as compared to the three months ended
September 30, 2002. As a percentage of Net Profits, these expenses
increased to 10.6% for the three months ended September 30, 2003 from 9.1%
for the three months ended September 30, 2002. This percentage increase
was primarily due to the decrease in Net Profits.
NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2002.
Nine Months Ended September 30,
-------------------------------
2003 2002
---------- ----------
Net Profits $1,302,591 $1,127,891
Barrels produced 16,559 20,183
Mcf produced 199,513 375,634
Average price/Bbl $ 29.56 $ 23.37
Average price/Mcf $ 5.49 $ 2.68
As shown in the table above, total Net Profits increased $174,700 (15.5%)
for the nine months ended September 30, 2003 as compared to the nine
months ended September 30, 2002. Of this increase approximately (i)
$103,000 and $561,000, respectively, were related to increases in the
average prices of oil and gas sold and (ii) $67,000 was related to a
decrease in production expenses. These increases were partially offset by
decreases of
-43-
approximately $85,000 and $471,000, respectively, related to decreases in
volumes of oil and gas sold. Volumes of oil and gas sold decreased 3,624
barrels and 176,121 Mcf, respectively, for the nine months ended September
30, 2003 as compared to the nine months ended September 30, 2002. The
decrease in volumes of oil sold was primarily due to normal declines in
production, which decrease was partially offset by an increase in
production on one significant well during the nine months ended September
30, 2003 due to the successful workover of that well during mid 2002. The
decrease in volumes of gas sold was primarily due to (i) positive prior
period gas balancing adjustments on two significant wells during the nine
months ended September 30, 2002, (ii) a substantial decline in production
on one significant well following a workover of that well during early
2002, and (iii) normal declines in production. The well with a substantial
decline in production is not expected to return to previously high levels
of production. The decrease in production expense was primarily due to (i)
a decrease in lease operating expenses associated with the decreases in
volumes of oil and gas sold and (ii) workover expenses incurred on two
significant wells during the nine months ended September 30, 2002. These
decreases were partially offset by negative prior period production tax
adjustments on two significant wells during the nine months ended
September 30, 2002. Average oil and gas prices increased to $29.56 per
barrel and $5.49 per Mcf, respectively, for the nine months ended
September 30, 2003 from $23.37 per barrel and $2.68 per Mcf, respectively,
for the nine months ended September 30, 2002.
Depletion of Net Profits Interests decreased $133,148 (66.7%) for the nine
months ended September 30, 2003 as compared to the nine months ended
September 30, 2002. This decrease was primarily due to (i) the decreases
in volumes of oil and gas sold, (ii) two significant wells being fully
depleted during the nine months ended September 30, 2002 due to the lack
of economically recoverable reserves, and (iii) upward revisions in the
estimates of remaining oil and gas reserves for the nine months ended
September 30, 2003. As a percentage of Net Profits, this expense decreased
to 5.1% for the nine months ended September 30, 2003 from 17.7% for the
nine months ended September 30, 2002. This percentage decrease was
primarily due to the dollar decrease in depletion of Net Profits
Interests.
General and administrative expenses increased $2,114 (1.7%) for the nine
months ended September 30, 2003 as compared to the nine months ended
September 30, 2002. As a percentage of Net Profits, these expenses
decreased to 9.7% for the nine months ended September 30, 2003 from 11.0%
for the nine months ended September 30, 2002. This percentage decrease was
primarily due to the increase in Net Profits.
-44-
Cumulative cash distributions to the Limited Partners through September
30, 2003 were $17,391,945 or 137.70% of Limited Partners' capital
contributions.
P-5 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2002.
Three Months Ended September 30,
--------------------------------
2003 2002
-------- --------
Net Profits $288,814 $233,706
Barrels produced 851 948
Mcf produced 73,140 97,886
Average price/Bbl $ 30.03 $ 28.83
Average price/Mcf $ 4.55 $ 2.78
As shown in the table above, total Net Profits increased $55,109 (23.6%)
for the three months ended September 30, 2003 as compared to the three
months ended September 30, 2002. Of this increase, approximately $129,000
was related to an increase in the average price of gas sold, which
increase was partially offset by a decrease of approximately $69,000
related to a decrease in volumes of gas sold. Volumes of oil and gas sold
decreased 97 barrels and 24,746 Mcf, respectively, for the three months
ended September 30, 2003 as compared to the three months ended September
30, 2002. The decrease in volumes of gas sold was primarily due to (i)
normal declines in production, (ii) a positive prior period volume
adjustment made by the purchaser on one significant well during the three
months ended September 30, 2002, and (iii) the shutting-in of another
significant well during the three months ended September 30, 2003 in order
to perform a workover. The shut-in well is expected to return to
production in late 2003. Average oil and gas prices increased to $30.03
per barrel and $4.55 per Mcf, respectively, for the three months ended
September 30, 2003 from $28.83 per barrel and $2.78 per Mcf, respectively,
for the three months ended September 30, 2002.
Depletion of Net Profits Interests decreased $4,309 (22.7%) for the three
months ended September 30, 2003 as compared to the three months ended
September 30, 2002. This decrease was primarily due to the decreases in
volumes of oil and gas sold. As a percentage of Net Profits, this expense
decreased to 5.1% for the three months ended September 30, 2003 from 8.1%
for the three months ended September 30, 2002. This percentage decrease
was primarily due to the increases in the average prices of oil and gas
sold.
-45-
General and administrative expenses increased $1,167 (3.4%) for the three
months ended September 30, 2003 as compared to the three months ended
September 30, 2002. As a percentage of Net Profits, these expenses
decreased to 12.3% for the three months ended September 30, 2003 from
14.7% for the three months ended September 30, 2002. This percentage
decrease was primarily due to the increase in Net Profits.
NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2002.
Nine Months Ended September 30,
-------------------------------
2003 2002
---------- --------
Net Profits $1,047,998 $654,466
Barrels produced 5,159 3,452
Mcf produced 236,977 303,174
Average price/Bbl $ 30.08 $ 23.50
Average price/Mcf $ 4.87 $ 2.67
As shown in the table above, total Net Profits increased $393,533 (60.1%)
for the nine months ended September 30, 2003 as compared to the nine
months ended September 30, 2002. Of this increase, approximately (i)
$520,000 was related to an increase in the average price of gas sold and
(ii) $40,000 was related to an increase in volumes of oil sold. These
increases were partially offset by a decrease of approximately $177,000
related to a decrease in volumes of gas sold. Volumes of oil sold
increased 1,707 barrels, while volumes of gas sold decreased 66,197 Mcf
for the nine months ended September 30, 2003 as compared to the nine
months ended September 30, 2002. The increase in volumes of oil sold was
primarily due to increased production on one significant well due to the
successful recompletion of that well during mid 2002. The decrease in
volumes of gas sold was primarily due to (i) normal declines in production
and (ii) the shutting-in of two significant wells during the nine months
ended September 30, 2003 in order to perform workovers on those wells. One
of the shut-in wells has already returned to production and the other well
is expected to return to production in late 2003. These decreases were
partially offset by the successful completion of one significant well
during early 2003. Average oil and gas prices increased to $30.08 per
barrel and $4.87 per Mcf, respectively, for the nine months ended
September 30, 2003 from $23.50 per barrel and $2.67 per Mcf, respectively,
for the nine months ended September 30, 2002.
Depletion of Net Profits Interests decreased $11,021 (16.4%) for the nine
months ended September 30, 2003 as compared to the nine months ended
September 30, 2002. This decrease was primarily due to the decreases in
volumes of oil and gas sold. As a percentage of Net Profits, this expense
decreased to 5.3% for the nine months ended September 30, 2003 from 10.2%
for the nine months ended September 30, 2002. This
-46-
percentage decrease was primarily due to the increases in the average
prices of oil and gas sold.
General and administrative expenses increased $2,093 (1.8%) for the nine
months ended September 30, 2003 as compared to the nine months ended
September 30, 2002. As a percentage of Net Profits, these expenses
decreased to 11.4% for the nine months ended September 30, 2003 from 17.9%
for the nine months ended September 30, 2002. This percentage decrease was
primarily due to the increase in Net Profits.
The P-5 Partnership achieved payout during the nine months ended September
30, 2003. After payout, operations and revenues for the P-5 Partnership
have been and will be allocated using after payout percentages. After
payout percentages allocate operating income and expenses 10% to the
General Partner and 90% to the Limited Partners. Before payout, operating
income and expenses were allocated 5% to the General Partner and 95% to
the Limited Partners. See the P-5 Partnership's Annual Report on Form 10-K
for the year ended December 31, 2002 for a further discussion of pre and
post payout allocations of income and expense.
Cumulative cash distributions to the Limited Partners through September
30, 2003 were $12,084,759 or 102.02% of Limited Partners' capital
contributions.
P-6 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2002.
Three Months Ended September 30,
--------------------------------
2003 2002
-------- --------
Net Profits $456,758 $375,268
Barrels produced 2,756 3,421
Mcf produced 121,866 152,369
Average price/Bbl $ 26.60 $ 26.98
Average price/Mcf $ 4.26 $ 2.81
As shown in the table above, total Net Profits increased $81,490 (21.7%)
for the three months ended September 30, 2003 as compared to the three
months ended September 30, 2002. Of this increase, approximately (i)
$177,000 was related to an increase in the average price of gas sold and
(ii) $9,000 was related to a decrease in production expenses. These
increases were partially offset by decreases of approximately $18,000 and
$86,000, respectively, related to decreases in volumes of oil and gas
sold. Volumes of oil and gas sold decreased 665 barrels and 30,503 Mcf,
respectively, for the three months ended September 30, 2003 as compared to
the three months ended September 30, 2002. The decrease in volumes of oil
sold was primarily due to (i) normal declines in production and (ii) a
positive prior
-47-
period volume adjustment made by the purchaser on one significant well
during the three months ended September 30, 2002. These decreases were
partially offset by an increase in production on one significant well
following successful repairs made during late 2002. The decrease in
volumes of gas sold was primarily due to (i) normal declines in
production, (ii) the shutting-in of one significant well during the three
months ended September 30, 2003 in order to perform a workover, and (iii)
a positive prior period volume adjustment made by the purchaser on another
significant well during the three months ended September 30, 2002. The
shut-in well is expected to return to production in late 2003. This
decrease was partially offset by an increase in production on one
significant well due to the successful workover of that well during early
2003. The decrease in production expense was primarily due to (i) a
decrease in lease operating expenses associated with the decreases in
volumes of oil and gas sold and (ii) repair and maintenance expenses
incurred on one significant well during the three months ended September
30, 2002. These decreases were partially offset by (i) an increase in
production taxes associated with the increase in oil and gas sales, (ii)
subsurface repair and maintenance expenses incurred on one significant
well during the three months ended September 30, 2003, and (iii) a
negative prior period lease operating expense adjustment made by the
operator on another significant well during the three months ended
September 30, 2002. Average oil prices decreased to $26.60 per barrel for
the three months ended September 30, 2003 from $26.98 per barrel for the
three months ended September 30, 2002. Average gas prices increased to
$4.26 per Mcf for the three months ended September 30, 2003 from $2.81 per
Mcf for the three months ended September 30, 2002.
Depletion of Net Profits Interests increased $7,632 (29.5%) for the three
months ended September 30, 2003 as compared to the three months ended
September 30, 2002. This increase was primarily due to downward revisions
in the estimates of remaining oil and gas reserves for the three months
ended September 30, 2003. As a percentage of Net Profits, this expense
increased to 7.3% for the three months ended September 30, 2003 from 6.9%
for the three months ended September 30, 2002.
General and administrative expenses increased $1,571 (3.8%) for the three
months ended September 30, 2003 as compared to the three months ended
September 30, 2002. As a percentage of Net Profits, these expenses
decreased to 9.4% for the three months ended September 30, 2003 from 11.0%
for the three months ended September 30, 2002. This percentage decrease
was primarily due to the increase in Net Profits.
-48-
NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2002.
Nine Months Ended September 30,
-------------------------------
2003 2002
---------- ----------
Net Profits $1,900,291 $1,167,557
Barrels produced 12,548 10,426
Mcf produced 435,715 509,685
Average price/Bbl $ 28.72 $ 22.60
Average price/Mcf $ 4.78 $ 2.74
As shown in the table above, total Net Profits increased $732,734 (62.8%)
for the nine months ended September 30, 2003 as compared to the nine
months ended September 30, 2002. Of this increase, approximately $77,000
and $891,000, respectively, were related to increases in the average
prices of oil and gas sold. These increases were partially offset by
decreases of approximately (i) $203,000 related to a decrease in volumes
of gas sold and (ii) $80,000 related to an increase in production
expenses. Volumes of oil sold increased 2,122 barrels, while volumes of
gas sold decreased 73,970 Mcf for the nine months ended September 30, 2003
as compared to the nine months ended September 30, 2002. The increase in
volumes of oil sold was primarily due to an increase in production on one
significant well due to the successful recompletion of that well during
late 2002. The decrease in volumes of gas sold was primarily due to (i)
normal declines in production and (ii) a positive prior period volume
adjustment made by the purchaser on one significant well during the nine
months ended September 30, 2002. Average oil and gas prices increased to
$28.72 per barrel and $4.78 per Mcf, respectively, for the nine months
ended September 30, 2003 from $22.60 per barrel and $2.74 per Mcf,
respectively, for the nine months ended September 30, 2002.
Depletion of Net Profits Interests decreased $21,159 (16.1%) for the nine
months ended September 30, 2003 as compared to the nine months ended
September 30, 2002. This decrease was primarily due to (i) several wells
being fully depleted in 2002 due to the lack of remaining economically
recoverable reserves, (ii) the decrease in volumes of gas sold, and (iii)
upward revisions in the estimates of remaining oil and gas reserves for
the nine months ended September 30, 2003. As a percentage of Net Profits,
this expense decreased to 5.8% for the nine months ended September 30,
2003 from 11.2% for the nine months ended September 30, 2002. This
percentage decrease was primarily due to the increases in the average
prices of oil and gas sold.
-49-
General and administrative expenses increased $2,163 (1.6%) for the nine
months ended September 30, 2003 as compared to the nine months ended
September 30, 2002. As a percentage of Net Profits, these expenses
decreased to 7.4% for the nine months ended September 30, 2003 from 11.8%
for the nine months ended September 30, 2002. This percentage decrease was
primarily due to the increase in Net Profits.
Cumulative cash distributions to the Limited Partners through September
30, 2003 were $17,385,248 or 121.54% of Limited Partners' capital
contribution.
-50-
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
The Partnerships do not hold any market risk sensitive instruments.
ITEM 4. EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
As of the end of this period covered by this report, the principal
executive officer and principal financial officer conducted an
evaluation of the Partnerships' disclosure controls and procedures
(as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
and Exchange Act of 1934). Based on this evaluation, such officers
concluded that the Partnerships' disclosure controls and procedures
are effective to ensure that information required to be disclosed by
the Partnerships in reports filed under the Exchange Act is
recorded, processed, summarized, and reported accurately and within
the time periods specified in the Securities and Exchange Commission
rules and forms.
-51-
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
31.1 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-1 Partnership.
31.2 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the P-1 Partnership.
31.3 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-3 Partnership.
31.4 Certification by Craig D.Loseke required by Rule
13a-14(a)/15d-14(a) for the P-3 Partnership.
31.5 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-4 Partnership.
31.6 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the P-4 Partnership.
31.7 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-5 Partnership.
31.8 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the P-5 Partnership.
31.9 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the P-6 Partnership.
31.10 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the P-6 Partnership.
32.1 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 for the P-1 Partnership.
32.3 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 for the P-3 Partnership.
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32.4 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 for the P-4 Partnership.
32.5 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 for the P-5 Partnership.
32.6 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 for the P-6 Partnership.
(b) Reports on Form 8-K.
None.
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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 INSTITUTIONAL/PENSION ENERGY INCOME P-1
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
(Registrant)
BY: GEODYNE RESOURCES, INC.
General Partner
Date: November 13, 2003 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: November 13, 2003 By: /s/Craig D. Loseke
--------------------------------
(Signature)
Craig D. Loseke
Chief Accounting Officer
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INDEX TO EXHIBITS
-----------------
Exh.
No. Exhibit
- ---- -------
31.1 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income P-1 Limited
Partnership.
31.2 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income P-1 Limited
Partnership.
31.3 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-3.
31.4 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-3.
31.5 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-4.
31.6 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-4.
31.7 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-5.
31.8 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-5.
31.9 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-6.
31.10 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Institutional/Pension Energy Income Limited
Partnership P-6.
32.1 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 Institutional/Pension Energy Income P-1 Limited Partnership.
32.3 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 Institutional/Pension Energy Income Limited Partnership P-3.
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32.4 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 Institutional/Pension Energy Income Limited Partnership P-4.
32.5 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 Institutional/Pension Energy Income Limited Partnership P-5.
32.6 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 Institutional/Pension Energy Income Limited Partnership P-6.
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