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, 2004
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
------ ------
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 ENERGY INCOME LIMITED PARTNERSHIP I-D
GEODYNE ENERGY INCOME PRODUCTION PARTNERSHIP I-D
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
2004 2003
---------- ------------
CURRENT ASSETS:
Cash and cash equivalents $221,009 $257,054
Accounts receivable:
Oil and gas sales 163,174 129,047
-------- --------
Total current assets $384,183 $386,101
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 383,136 391,322
DEFERRED CHARGE 84,813 86,567
-------- --------
$852,132 $863,990
======== ========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 18,632 $ 24,251
Gas imbalance payable 28,871 28,358
Asset retirement obligation - current
(Note 1) 1,186 252
-------- --------
Total current liabilities $ 48,689 $ 52,861
LONG-TERM LIABILITIES:
Accrued liability $ 33,573 $ 35,408
Asset retirement obligation
(Note 1) 29,244 29,596
-------- --------
Total long-term liabilities $ 62,817 $ 65,004
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 18,231) ($ 23,613)
Limited Partners, issued and
outstanding, 7,195 units 758,857 769,738
-------- --------
Total Partners' capital $740,626 $746,125
-------- --------
$852,132 $863,990
======== ========
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, 2004 AND 2003
(Unaudited)
2004 2003
-------- --------
REVENUES:
Oil and gas sales $244,861 $296,147
Interest income 315 266
-------- --------
$245,176 $296,413
COSTS AND EXPENSES:
Lease operating $ 21,496 $ 26,242
Production tax 16,975 19,457
Depreciation, depletion, and
amortization of oil and gas
properties 11,575 7,158
General and administrative
(Note 2) 36,180 29,318
-------- --------
$ 86,226 $ 82,175
-------- --------
NET INCOME $158,950 $214,238
======== ========
GENERAL PARTNER - NET INCOME $ 25,416 $ 33,168
======== ========
LIMITED PARTNERS - NET INCOME $133,534 $181,070
======== ========
NET INCOME per unit $ 18.56 $ 25.16
======== ========
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, 2004 AND 2003
(Unaudited)
2004 2003
-------- --------
REVENUES:
Oil and gas sales $463,339 $564,851
Interest income 513 548
-------- --------
$463,852 $565,399
COSTS AND EXPENSES:
Lease operating $ 56,618 $ 73,968
Production tax 32,225 37,950
Depreciation, depletion, and
amortization of oil and gas
properties 19,085 16,692
General and administrative
(Note 2) 63,319 61,076
-------- --------
$171,247 $189,686
-------- --------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $292,605 $375,713
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 1,099
-------- --------
NET INCOME $292,605 $376,812
======== ========
GENERAL PARTNER - NET INCOME $ 46,486 $ 58,620
======== ========
LIMITED PARTNERS - NET INCOME $246,119 $318,192
======== ========
NET INCOME per unit $ 34.21 $ 44.22
======== ========
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, 2004 AND 2003
(Unaudited)
2004 2003
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $292,605 $376,812
Adjustments to reconcile net
income to net cash provided
by operating activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - ( 1,099)
Depreciation, depletion, and
amortization of oil and gas
properties 19,085 16,692
Settlement of asset retirement
obligation - ( 20)
Increase in accounts receivable -
oil and gas sales ( 34,127) ( 60,526)
Decrease in deferred charge 1,754 -
Decrease in accounts payable ( 7,276) ( 11,153)
Increase in gas imbalance payable 513 -
Decrease in accrued liability ( 1,835) -
-------- --------
Net cash provided by operating
activities $270,719 $320,706
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 8,752) ($ 21,184)
Proceeds from sale of oil and
gas properties 92 -
-------- --------
Net cash used by investing
activities ($ 8,660) ($ 21,184)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($298,104) ($197,823)
-------- --------
Net cash used by financing activities ($298,104) ($197,823)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 36,045) $101,699
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 257,054 171,131
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $221,009 $272,830
======== ========
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,
2004 2003
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $1,434,874 $1,541,576
Accounts receivable:
Oil and gas sales 1,025,179 806,189
---------- ----------
Total current assets $2,460,053 $2,347,765
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 2,136,426 2,200,076
DEFERRED CHARGE 444,614 455,095
---------- ----------
$5,041,093 $5,002,936
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 165,198 $ 240,583
Accrued liability - other (Note 1) 88,892 88,892
Gas imbalance payable 98,748 92,999
Asset retirement obligation -
current (Note 1) 10,791 5,347
---------- ----------
Total current liabilities $ 363,629 $ 427,821
LONG-TERM LIABILITIES:
Accrued liability $ 171,087 $ 186,239
Asset retirement obligation
(Note 1) 273,941 275,883
---------- ----------
Total long-term liabilities $ 445,028 $ 462,122
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 59,332) ($ 99,284)
Limited Partners, issued and
outstanding, 41,839 units 4,291,768 4,212,277
---------- ----------
Total Partners' capital $4,232,436 $4,112,993
---------- ----------
$5,041,093 $5,002,936
========== ==========
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, 2004 AND 2003
(Unaudited)
2004 2003
---------- ----------
REVENUES:
Oil and gas sales $1,550,019 $1,966,923
Interest income 2,007 2,025
---------- ----------
$1,552,026 $1,968,948
COSTS AND EXPENSES:
Lease operating $ 218,760 $ 210,589
Production tax 97,429 116,754
Depreciation, depletion, and
amortization of oil and gas
properties 51,545 39,761
General and administrative
(Note 2) 137,412 128,332
---------- ----------
$ 505,146 $ 495,436
---------- ----------
NET INCOME $1,046,880 $1,473,512
========== ==========
GENERAL PARTNER - NET INCOME $ 163,947 $ 226,290
========== ==========
LIMITED PARTNERS - NET INCOME $ 882,933 $1,247,222
========== ==========
NET INCOME per unit $ 21.10 $ 29.81
========== ==========
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, 2004 AND 2003
(Unaudited)
2004 2003
---------- ----------
REVENUES:
Oil and gas sales $2,926,256 $3,549,374
Interest income 3,270 3,903
---------- ----------
$2,929,526 $3,553,277
COSTS AND EXPENSES:
Lease operating $ 529,992 $ 540,217
Production tax 185,719 218,502
Depreciation, depletion, and
amortization of oil and gas
properties 107,616 108,544
General and administrative
(Note 2) 267,297 261,366
---------- ----------
$1,090,624 $1,128,629
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,838,902 $2,424,648
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 4,178
---------- ----------
NET INCOME $1,838,902 $2,428,826
========== ==========
GENERAL PARTNER - NET INCOME $ 290,411 $ 378,350
========== ==========
LIMITED PARTNERS - NET INCOME $1,548,491 $2,050,476
========== ==========
NET INCOME per unit $ 37.01 $ 49.01
========== ==========
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, 2004 AND 2003
(Unaudited)
2004 2003
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,838,902 $2,428,826
Adjustments to reconcile net
income to net cash provided
by operating activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - ( 4,178)
Depreciation, depletion, and
amortization of oil and gas
properties 107,616 108,544
Increase in accounts receivable -
oil and gas sales ( 218,990) ( 326,604)
Decrease in deferred charge 10,481 -
Decrease in accounts payable ( 78,755) ( 76,532)
Increase in gas imbalance payable 5,749 -
Decrease in accrued liability ( 15,152) -
---------- ----------
Net cash provided by operating
activities $1,649,851 $2,130,056
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 37,198) ($ 85,012)
Proceeds from the sale of oil and
gas properties 104 -
---------- ----------
Net cash used by investing activities ($ 37,094) ($ 85,012)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,719,459) ($1,279,568)
---------- ----------
Net cash used by financing activities ($1,719,459) ($1,279,568)
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 106,702) $ 765,476
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,541,576 1,098,557
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $1,434,874 $1,864,033
========== ==========
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,
2004 2003
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 477,773 $ 513,327
Accounts receivable:
Oil and gas sales 326,301 262,908
---------- ----------
Total current assets $ 804,074 $ 776,235
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 799,272 811,852
DEFERRED CHARGE 340,558 347,840
---------- ----------
$1,943,904 $1,935,927
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 78,770 $ 112,239
Accrued liability - other (Note 1) 62,225 62,225
Gas imbalance payable 31,448 30,890
Asset retirement obligation -
current (Note 1) 5,893 3,481
---------- ----------
Total current liabilities $ 178,336 $ 208,835
LONG-TERM LIABILITIES:
Accrued liability $ 146,592 $ 151,391
Asset retirement obligation
(Note 1) 118,092 118,854
---------- ----------
Total long-term liabilities $ 264,684 $ 270,245
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 1,337) ($ 13,564)
Limited Partners, issued and
outstanding, 14,321 units 1,502,221 1,470,411
---------- ----------
Total Partners' capital $1,500,884 $1,456,847
---------- ----------
$1,943,904 $1,935,927
========== ==========
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, 2004 AND 2003
(Unaudited)
2004 2003
-------- --------
REVENUES:
Oil and gas sales $500,053 $555,719
Interest income 714 657
-------- --------
$500,767 $556,376
COSTS AND EXPENSES:
Lease operating $111,505 $ 97,710
Production tax 29,490 30,210
Depreciation, depletion, and
amortization of oil and gas
properties 11,741 13,283
General and administrative
(Note 2) 57,002 49,686
-------- --------
$209,738 $190,889
-------- --------
NET INCOME $291,029 $365,487
======== ========
GENERAL PARTNER - NET INCOME $ 45,191 $ 56,584
======== ========
LIMITED PARTNERS - NET INCOME $245,838 $308,903
======== ========
NET INCOME per unit $ 17.17 $ 21.57
======== ========
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, 2004 AND 2003
(Unaudited)
2004 2003
-------- ------------
REVENUES:
Oil and gas sales $960,226 $1,095,381
Interest income 1,114 1,235
-------- ----------
$961,340 $1,096,616
COSTS AND EXPENSES:
Lease operating $226,284 $ 215,369
Production tax 56,934 63,296
Depreciation, depletion, and
amortization of oil and gas
properties 33,610 35,438
General and administrative
(Note 2) 105,279 102,278
-------- ----------
$422,107 $ 416,381
-------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $539,233 $ 680,235
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - ( 318)
-------- ----------
NET INCOME $539,233 $ 679,917
======== ==========
GENERAL PARTNER - NET INCOME $ 85,423 $ 106,808
======== ==========
LIMITED PARTNERS - NET INCOME $453,810 $ 573,109
======== ==========
NET INCOME per unit $ 31.69 $ 40.02
======== ==========
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, 2004 AND 2003
(Unaudited)
2004 2003
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $539,233 $679,917
Adjustments to reconcile net
income to net cash provided
by operating activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 318
Depreciation, depletion, and
amortization of oil and gas
properties 33,610 35,438
Increase in accounts receivable -
oil and gas sales ( 63,393) ( 78,636)
Decrease in deferred charge 7,282 -
Decrease in accounts payable ( 35,481) ( 24,396)
Increase in gas imbalance payable 558 -
Decrease in accrued liability ( 4,799) -
-------- --------
Net cash provided by operating
activities $477,010 $612,641
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 17,368) ($ 33,921)
-------- --------
Net cash used by investing
activities ($ 17,368) ($ 33,921)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($495,196) ($375,172)
-------- --------
Net cash used by financing activities ($495,196) ($375,172)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 35,554) $203,548
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 513,327 316,892
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $477,773 $520,440
======== ========
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, 2004
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The combined balance sheets as of June 30, 2004, combined statements of
operations for the three and six months ended June 30, 2004 and 2003, and
combined statements of cash flows for the six months ended June 30, 2004
and 2003 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, 2004, the combined results of operations for the
three and six months ended June 30, 2004 and 2003, and the combined cash
flows for the six months ended June 30, 2004 and 2003.
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, 2003. The
results of operations for the period ended June 30, 2004 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.
RECLASSIFICATION
----------------
Certain prior year balances have been reclassified to conform with current
year presentation.
-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.
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 and estimated
salvage value of the equipment.
When complete units of depreciable property are retired or sold, the asset
cost and related accumulated depreciation are eliminated with any gain or
loss (including the elimination of the asset retirement obligation)
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, 2004 and December 31, 2003 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.
-15-
ASSET RETIREMENT OBLIGATIONS
----------------------------
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
capitalized cost of oil and gas properties, an increase(decrease) in net
income for the cumulative effect of the change in accounting principle,
and an asset retirement obligation in the following approximate amounts
for each Partnership:
Increase
(Decrease)
Increase in
in Net Income
Capitalized for the
Cost of Oil Change in Asset
and Gas Accounting Retirement
Partnerships Properties Principle Obligation
------------ ----------- ---------- ----------
I-D $ 30,000 $ 1,000 $ 29,000
I-E 278,000 4,000 274,000
I-F 119,000 ( 300) 119,000
The asset retirement obligation will be adjusted upwards each quarter in
order to recognize accretion of the time-related discount factor. For the
six months ended June 30, 2004, the I-D, I-E, and I-F Partnerships
recognized approximately $1,000, $5,000, and $2,000, respectively, of an
increase in depreciation, depletion, and amortization expense, which was
comprised of accretion of the asset retirement obligation and depletion of
the increase in capitalized cost of oil and gas properties.
The components of the change in asset retirement obligations for the three
and six months ended June 30, 2004 and 2003 are as shown below.
-16-
I-D Partnership
---------------
Three Months Three Months
Ended Ended
6/30/2004 6/30/2003
------------ ------------
Total Asset Retirement
Obligation, April 1 $ 30,135 $ 28,475
Additions and Revisions - 20
Accretion Expense 295 315
-------- --------
Total Asset Retirement
Obligation, End of Quarter $ 30,430 $ 28,810
======== ========
Six Months Six Months
Ended Ended
6/30/2004 6/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $ 29,848 $ 29,376
Settlements and Disposals - ( 1,196)
Accretion Expense 582 630
-------- --------
Total Asset Retirement
Obligation, End of Period $ 30,430 $ 28,810
======== ========
Asset Retirement Obligation -
Current $ 1,186 $ -
Asset Retirement Obligation -
Long-Term 29,244 28,810
-17-
I-E Partnership
---------------
Three Months Three Months
Ended Ended
6/30/2004 6/30/2003
------------ ------------
Total Asset Retirement
Obligation, April 1 $282,982 $276,038
Accretion Expense 1,750 2,456
-------- --------
Total Asset Retirement
Obligation, End of Quarter $284,732 $278,494
======== ========
Six Months Six Months
Ended Ended
6/30/2004 6/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $281,230 $273,582
Accretion Expense 3,502 4,912
-------- --------
Total Asset Retirement
Obligation, End of Period $284,732 $278,494
======== ========
Asset Retirement Obligation -
Current $ 10,791 $ -
Asset Retirement Obligation -
Long-Term 273,941 278,494
-18-
I-F Partnership
---------------
Three Months Three Months
Ended Ended
6/30/2004 6/30/2003
------------ ------------
Total Asset Retirement
Obligation, April 1 $123,158 $120,543
Accretion Expense 827 1,115
-------- --------
Total Asset Retirement
Obligation, End of Quarter $123,985 $121,658
======== ========
Six Months Six Months
Ended Ended
6/30/2004 6/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $122,335 $119,428
Accretion Expense 1,650 2,230
-------- --------
Total Asset Retirement
Obligation, End of Period $123,985 $121,658
======== ========
Asset Retirement Obligation -
Current $ 5,893 $ -
Asset Retirement Obligation -
Long-Term 118,092 121,658
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, 2004, the following payments were made to the General
Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
I-D $16,194 $ 19,986
I-E 21,192 116,220
I-F 17,222 39,780
-19-
During the six months ended June 30, 2004, the following payments were
made to the General Partner or its affiliates by the Partnerships:
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
I-D $23,347 $ 39,972
I-E 34,857 232,440
I-F 25,719 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.
-20-
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.
-21-
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, 2004 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.
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 third two year extension period to December 31,
2005. As of the date of this Quarterly Report, the General Partner has not
determined whether to further extend the term of any Partnership.
CRITICAL ACCOUNTING POLICIES
----------------------------
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
-22-
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 the 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.
Depletion of the cost 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' calculation of depreciation, depletion, and
amortization includes estimated dismantlement and abandonment costs and
estimated salvage value of the equipment. When complete units of
depreciable property are retired or sold, the asset cost and related
accumulated depreciation are eliminated with any gain or loss (including
the elimination of the asset retirement obligation) reflected in income.
When less than complete units of depreciable property are retired or sold,
the proceeds are credited to oil and gas properties.
The Partnerships evaluate the recoverability of the carrying costs of
their proved oil and gas properties for each oil and gas field (rather
than separately for each well). If the unamortized costs of oil and gas
properties within a field exceeds the expected undiscounted future cash
flows from such properties, the cost of the properties is written down to
fair value, which is determined by using the estimated discounted future
cash flows from the properties. The risk that the Partnerships will be
required to record impairment provisions in the future increases as oil
and gas prices decrease.
The Deferred Charge on the Balance Sheets represents costs deferred for
lease operating expenses incurred in connection with the Partnerships'
underproduced gas imbalance positions. Conversely, the Accrued Liability
represents charges accrued for lease operating expenses incurred in
connection with the Partnerships' overproduced gas imbalance positions.
The rate used in calculating the Deferred Charge and Accrued Liability is
the annual average production costs per Mcf.
The Partnerships' oil and condensate production is sold, title passed, and
revenue recognized at or near the Partnerships' wells under short-term
purchase contracts at prevailing prices in accordance with arrangements
which are customary in the oil and gas industry. Sales of gas applicable
to the Partnerships' interest in producing oil
-23-
and gas leases are recorded as revenue when the gas is metered and title
transferred pursuant to the gas sales contracts covering the Partnerships'
interest in gas reserves. During such times as a Partnership's sales of
gas exceed its pro rata ownership in a well, such sales are recorded as
revenues unless total sales from the well have exceeded the Partnership's
share of estimated total gas reserves underlying the property, at which
time such excess is recorded as a liability. The rates per Mcf used to
calculate this liability are based on the average gas prices received for
the volumes at the time the overproduction occurred. This also
approximates the price for which the Partnerships are currently settling
this liability. These amounts were recorded as gas imbalance payables in
accordance with the sales method. These gas imbalance payables will be
settled by either gas production by the underproduced party in excess of
current estimates of total gas reserves for the well or by negotiated or
contractual payment to the underproduced party.
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
capitalized cost of oil and gas properties, an increase (decrease) in net
income for the cumulative effect of the change in accounting principle,
and an asset retirement obligation in the following approximate amounts
for each Partnership:
Increase
(Decrease)
Increase in
in Net Income
Capitalized for the
Cost of Oil Change in Asset
and Gas Accounting Retirement
Partnerships Properties Principle Obligation
------------ ----------- ---------- ----------
I-D $ 30,000 $ 1,000 $ 29,000
I-E 278,000 4,000 274,000
I-F 119,000 ( 300) 119,000
The asset retirement obligation will be adjusted upwards each quarter in
order to recognize accretion of the time-related discount factor. For the
six months ended June 30, 2004, the I-D, I-E, and I-F Partnerships
recognized
-24-
approximately $1,000, $5,000, and $2,000, respectively, of an increase in
depreciation, depletion, and amortization expense, which was comprised of
accretion of the asset retirement obligation and depletion of the increase
in capitalized cost of oil and gas properties.
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.
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.
-25-
I-D Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2003 60,374 1,618,197
Production ( 847) ( 39,051)
Extensions and discoveries 1,748 983
Revisions of previous estimates 92 2,225
------- ---------
Proved reserves, March 31, 2004 61,367 1,582,354
Production ( 840) ( 39,049)
Extensions and discoveries - 21
Revisions of previous estimates 866 ( 30,597)
------- ---------
Proved reserves, June 30, 2004 61,393 1,512,729
======= =========
I-E Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2003 421,996 8,460,984
Production ( 11,579) ( 215,701)
Extensions and discoveries 7,547 4,246
Revisions of previous
estimates 12,342 11,905
------- ---------
Proved reserves, March 31, 2004 430,306 8,261,434
Production ( 11,664) ( 210,241)
Extensions and discoveries - 86
Revisions of previous
estimates 19,262 ( 24,881)
------- ---------
Proved reserves, June 30, 2004 437,904 8,026,398
======= =========
-26-
I-F Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2003 197,264 2,585,274
Production ( 5,237) ( 61,429)
Extensions and discoveries 3,519 1,980
Revisions of previous
estimates 5,842 10,243
------- ---------
Proved reserves, March 31, 2004 201,388 2,536,068
Production ( 5,084) ( 58,914)
Extensions and discoveries - 38
Revisions of previous
estimates 8,385 ( 34,252)
------- ---------
Proved reserves, June 30, 2004 204,689 2,442,940
======= =========
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 June 30, 2004, March 31, 2004, and
December 31, 2003. 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 cause 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
June 30, 2004. There can be no assurance that the prices used in
calculating the net present value of the Partnerships' proved reserves at
June 30, 2004 will actually be realized for such production.
-27-
Net Present Value of Reserves
------------------------------------------
Partnership 6/30/04 3/31/04 12/31/03
----------- ------------ ----------- -----------
I-D $ 4,511,217 $ 4,525,368 $ 4,506,015
I-E 25,057,286 24,589,562 24,355,021
I-F 7,806,952 7,807,309 7,501,060
Oil and Gas Prices
------------------------------------------
Pricing 6/30/04 3/31/04 12/31/03
----------- ----------- ----------- -----------
Oil (Bbl) $ 33.75 $ 32.50 $ 29.25
Gas (Mcf) 6.04 5.63 5.77
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:
* 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.
-28-
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.
I-D PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2004 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2003.
Three Months Ended June 30,
---------------------------
2004 2003
-------- --------
Oil and gas sales $244,861 $296,147
Oil and gas production expenses $ 38,471 $ 45,699
Barrels produced 840 941
Mcf produced 39,049 56,157
Average price/Bbl $ 37.44 $ 29.25
Average price/Mcf $ 5.47 $ 4.78
As shown in the table above, total oil and gas sales decreased $51,286
(17.3%) for the three months ended June 30, 2004 as compared to the three
months ended June 30, 2003. Of this decrease, approximately $82,000 was
related to a decrease in volumes of gas sold, which decrease was partially
offset by increases of approximately $7,000 and $27,000, respectively,
related to increases in the average prices of oil and gas sold. Volumes of
oil and gas sold decreased 101 barrels and 17,108 Mcf, respectively, for
the three months ended June 30, 2004 as compared to the three months ended
June 30, 2003. The decrease in volumes of oil sold was primarily due to
normal declines in production. The decrease in volumes of gas sold was
primarily due to (i) a positive prior period volume adjustment made by the
operator on one significant well during the three months ended June 30,
2003, (ii) normal declines in production, and (iii) the temporary
shutting-in of another significant well due to production difficulties
during the three months ended June 30, 2004.
-29-
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $7,228 (15.8%) for the three months ended June
30, 2004 as compared to the three months ended June 30, 2003. This
decrease was primarily due to (i) expenses incurred on one significant
well related to the abandonment of that well during the three months ended
June 30, 2003 due to severe mechanical problems 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 increased to 15.7% for the
three months ended June 30, 2004 from 15.4% for the three months ended
June 30, 2003.
Depreciation, depletion, and amortization of oil and gas properties
increased $4,417 (61.7%) for the three months ended June 30, 2004 as
compared to the three months ended June 30, 2003. This increase was
primarily due to several wells being fully depleted during the three
months ended June 30, 2004 due to the lack of remaining reserves. As a
percentage of oil and gas sales, this expense increased to 4.7% for the
three months ended June 30, 2004 from 2.4% for the three months ended June
30, 2003. This percentage increase was primarily due to (i) the dollar
increase in depreciation, depletion, and amortization of oil and gas
properties and (ii) the decrease in oil and gas sales.
General and administrative expenses increased $6,862 (23.4%) for the three
months ended June 30, 2004 as compared to the three months ended June 30,
2003. As a percentage of oil and gas sales, these expenses increased to
14.8% for the three months ended June 30, 2004 from 9.9% for the three
months ended June 30, 2003. This percentage increase was primarily due to
the (i) dollar increase in general and administrative expenses and (ii)
decrease in oil and gas sales.
SIX MONTHS ENDED JUNE 30, 2004 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2003.
Six Months Ended June 30,
-------------------------
2004 2003
-------- --------
Oil and gas sales $463,339 $564,851
Oil and gas production expenses $ 88,843 $111,918
Barrels produced 1,687 1,823
Mcf produced 78,100 97,542
Average price/Bbl $ 35.48 $ 30.51
Average price/Mcf $ 5.17 $ 5.22
As shown in the table above, total oil and gas sales decreased $101,512
(18.0%) for the six months ended June 30, 2004 as compared to the six
months ended June 30, 2003. Of this decrease, approximately $101,000 was
related to a decrease in volumes of gas sold. Volumes of oil and gas sold
decreased 136 barrels and 19,442 Mcf, respectively, for
-30-
the six months ended June 30, 2004 as compared to the six months ended
June 30, 2003. The decrease in volumes of gas sold was primarily due to
(i) normal declines in production and (ii) the temporary shutting-in of
one significant well due to production difficulties during the six months
ended June 30, 2004.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $23,075 (20.6%) for the six months ended June
30, 2004 as compared to the six months ended June 30, 2003. This decrease
was primarily due to (i) a decrease in lease operating expenses associated
with the decreases in volumes of oil and gas sold, (ii) expenses incurred
on one significant well related to the abandonment of that well during the
six months ended June 30, 2003 due to severe mechanical problems, and
(iii) 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 19.2% for the six months ended June 30, 2004 from 19.8% for
the six months ended June 30, 2003.
Depreciation, depletion, and amortization of oil and gas properties
increased $2,393 (14.3%) for the six months ended June 30, 2004 as
compared to the six months ended June 30, 2003. This increase was
primarily due to several wells being fully depleted during the six months
ended June 30, 2004 due to the lack of remaining reserves. As a percentage
of oil and gas sales, this expense increased to 4.1% for the six months
ended June 30, 2004 from 3.0% for the six months ended June 30, 2003. This
percentage increase was primarily due to (i) the decrease in oil and gas
sales and (ii) the dollar increase in depreciation, depletion, and
amortization of oil and gas properties.
General and administrative expenses increased $2,243 (3.7%) for the six
months ended June 30, 2004 as compared to the six months ended June 30,
2003. As a percentage of oil and gas sales, these expenses increased to
13.7% for the six months ended June 30, 2004 from 10.8% for the six months
ended June 30, 2003. This percentage increase was primarily due to the
decrease in oil and gas sales.
The Limited Partners have received cash distributions through June 30,
2004 totaling $16,996,175 or 236.23% of Limited Partners' capital
contributions.
-31-
I-E PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2004 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2003.
Three Months Ended June 30,
---------------------------
2004 2003
---------- ----------
Oil and gas sales $1,550,019 $1,966,923
Oil and gas production expenses $ 316,189 $ 327,343
Barrels produced 11,664 17,762
Mcf produced 210,241 320,893
Average price/Bbl $ 34.42 $ 26.58
Average price/Mcf $ 5.46 $ 4.66
As shown in the table above, total oil and gas sales decreased $416,904
(21.2%) for the three months ended June 30, 2004 as compared to the three
months ended June 30, 2003. Of this decrease, approximately $162,000 and
$515,000, respectively, were related to decreases in volumes of oil and
gas sold. These decreases were partially offset by increases of
approximately $91,000 and $169,000, respectively, related to increases in
the average prices of oil and gas sold. Volumes of oil and gas sold
decreased 6,098 barrels and 110,652 Mcf, respectively, for the three
months ended June 30, 2004 as compared to the three months ended June 30,
2003. The decrease in volumes of oil sold was primarily due to (i)
positive prior period volume adjustments made by the operators on two
significant wells during the three months ended June 30, 2003 and (ii)
normal declines in production. The decrease in volumes of gas sold was
primarily due to (i) a positive prior period volume adjustment made by the
operator on one significant well during the three months ended June 30,
2003, (ii) normal declines in production, and (iii) the temporary
shutting-in of another significant well due to production difficulties
during the three months ended June 30, 2004.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $11,154 (3.4%) for the three months ended June
30, 2004 as compared to the three months ended June 30, 2003. As a
percentage of oil and gas sales, these expenses increased to 20.4% for the
three months ended June 30, 2004 from 16.6% for the three months ended
June 30, 2003. This percentage increase was primarily due to the decrease
in oil and gas sales.
-32-
Depreciation, depletion, and amortization of oil and gas properties
increased $11,784 (29.6%) for the three months ended June 30, 2004 as
compared to the three months ended June 30, 2003. This increase was
primarily due to several wells being fully depleted during the three
months ended June 30, 2004 due to the lack of remaining reserves, which
increase was partially offset by the decreases in volumes of oil and gas
sold. As a percentage of oil and gas sales, this expense increased to 3.3%
for the three months ended June 30, 2004 from 2.0% for the three months
ended June 30, 2003. This percentage increase was primarily due to the (i)
dollar increase in depreciation, depletion, and amortization of oil and
gas properties and (ii) the decrease in oil and gas sales.
General and administrative expenses increased $9,080 (7.1%) for the three
months ended June 30, 2004 as compared to the three months ended June 30,
2003. As a percentage of oil and gas sales, these expenses increased to
8.9% for the three months ended June 30, 2004 from 6.5% for the three
months ended June 30, 2003. This percentage increase was primarily due to
the decrease in oil and gas sales.
SIX MONTHS ENDED JUNE 30, 2004 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2003.
Six Months Ended June 30,
---------------------------
2004 2003
---------- ----------
Oil and gas sales $2,926,256 $3,549,374
Oil and gas production expenses $ 715,711 $ 758,719
Barrels produced 23,243 29,468
Mcf produced 425,942 534,138
Average price/Bbl $ 32.64 $ 27.93
Average price/Mcf $ 5.09 $ 5.10
As shown in the table above, total oil and gas sales decreased $623,118
(17.6%) for the six months ended June 30, 2004 as compared to the six
months ended June 30, 2003. Of this decrease, approximately $174,000 and
$552,000, respectively, were related to decreases in volumes of oil and
gas sold. These decreases were partially offset by an increase of
approximately $110,000 related to an increase in the average price of oil
sold. Volumes of oil and gas sold decreased 6,225 barrels and 108,196 Mcf,
respectively, for the six months ended June 30, 2004 as compared to the
six months ended June 30, 2003. The decrease in volumes of oil sold was
primarily due to (i) normal declines in production and (ii) positive prior
period volume adjustments made by the operators on two significant wells
during the six months ended June 30, 2003. The decrease in volumes of gas
sold was primarily due to (i) normal declines in production and (ii) the
temporary shutting-in of one significant well due to production
difficulties during the six months ended June 30, 2004.
-33-
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $43,008 (5.7%) for the six months ended June
30, 2004 as compared to the six months ended June 30, 2003. As a
percentage of oil and gas sales, these expenses increased to 24.5% for the
six months ended June 30, 2004 from 21.4% for the six months ended June
30, 2003. This percentage increase was primarily due to the decrease in
oil and gas sales.
Depreciation, depletion, and amortization of oil and gas properties
remained relatively constant for the six months ended June 30, 2004 and
2003. A decrease primarily due to the decreases in volumes of oil and gas
sold was substantially offset by (i) an increase in depletable oil and gas
properties primarily due to recompletion activities on one significant
well in 2003 and (ii) several other wells being fully depleted during the
six months ended June 30, 2004 due to the lack of remaining reserves. As a
percentage of oil and gas sales, this expense increased to 3.7% for the
six months ended June 30, 2004 from 3.1% for the six months ended June 30,
2003. This percentage increase was primarily due to the decrease in oil
and gas sales.
General and administrative expenses increased $5,931 (2.3%) for the six
months ended June 30, 2004 as compared to the six months ended June 30,
2003. As a percentage of oil and gas sales, these expenses increased to
9.1% for the six months ended June 30, 2004 from 7.4% for the six months
ended June 30, 2003. This percentage increase was primarily due to the
decrease in oil and gas sales.
The Limited Partners have received cash distributions through June 30,
2004 totaling $69,520,552 or 166.16% of Limited Partners' capital
contributions.
I-F PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2004 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2003.
Three Months Ended June 30,
---------------------------
2004 2003
-------- --------
Oil and gas sales $500,053 $555,719
Oil and gas production expenses $140,995 $127,920
Barrels produced 5,084 7,648
Mcf produced 58,914 66,330
Average price/Bbl $ 34.77 $ 26.65
Average price/Mcf $ 5.49 $ 5.31
As shown in the table above, total oil and gas sales decreased $55,666
(10.0%) for the three months ended June 30, 2004 as compared to the three
months ended June 30, 2003. Of this decrease, approximately $68,000 and
$40,000, respectively, were related to decreases in volumes of oil and gas
sold. These decreases were partially offset by
-34-
increases of approximately $41,000 and $11,000, respectively, related to
increases in the average prices of oil and gas sold. Volumes of oil and
gas sold decreased 2,564 barrels and 7,416 Mcf, respectively, for the
three months ended June 30, 2004 as compared to the three months ended
June 30, 2003. The decrease in volumes of oil sold was primarily due to
(i) positive prior period volume adjustments made by the operators on two
significant wells during the three months ended June 30, 2003 and (ii)
normal declines in production. The decrease in volumes of gas sold was
primarily due to (i) the temporary shutting-in of one significant well due
to production difficulties during the three months ended June 30, 2004,
(ii) a positive prior period gas balancing adjustment on another
significant well during the three months ended June 30, 2003, and (iii)
normal declines in production.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $13,075 (10.2%) for the three months ended
June 30, 2004 as compared to the three months ended June 30, 2003. This
increase was primarily due to (i) workover expenses incurred on two
significant wells during the three months ended June 30, 2004 and (ii)
repair and maintenance expenses incurred on another significant well
during the three months ended June 30, 2004. As a percentage of oil and
gas sales, these expenses increased to 28.2% for the three months ended
June 30, 2004 from 23.0% for the three months ended June 30, 2003. This
percentage increase was primarily due to (i) the decrease in oil and gas
sales and (ii) the dollar increase in oil and gas production expenses.
Depreciation, depletion, and amortization of oil and gas properties
decreased $1,542 (11.6%) for the three months ended June 30, 2004 as
compared to the three months ended June 30, 2003. This decrease was
primarily due to the decreases in volumes of oil and gas sold. As a
percentage of oil and gas sales, this expense decreased to 2.3% for the
three months ended June 30, 2004 from 2.4% for the three months ended June
30, 2003.
General and administrative expenses increased $7,316 (14.7%) for the three
months ended June 30, 2004 as compared to the three months ended June 30,
2003. As a percentage of oil and gas sales, these expenses increased to
11.4% for the three months ended June 30, 2004 from 8.9% for the three
months ended June 30, 2003. This percentage increase was primarily due to
(i) the dollar increase in general and administrative expenses and (ii)
the decrease in oil and gas sales.
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SIX MONTHS ENDED JUNE 30, 2004 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2003.
Six Months Ended June 30,
-------------------------
2004 2003
-------- ----------
Oil and gas sales $960,226 $1,095,381
Oil and gas production expenses $283,218 $ 278,665
Barrels produced 10,321 13,233
Mcf produced 120,343 136,494
Average price/Bbl $ 32.97 $ 28.07
Average price/Mcf $ 5.15 $ 5.30
As shown in the table above, total oil and gas sales decreased $135,155
(12.3%) for the six months ended June 30, 2004 as compared to the six
months ended June 30, 2003. Of this decrease, approximately (i) $82,000
and $86,000, respectively, were related to decreases in volumes of oil and
gas sold and (ii) $18,000 was related to a decrease in the average price
of gas sold. These decreases were partially offset by an increase of
approximately $51,000 related to an increase in the average price of oil
sold. Volumes of oil and gas sold decreased 2,912 barrels and 16,151 Mcf,
respectively, for the six months ended June 30, 2004 as compared to the
six months ended June 30, 2003. The decrease in volumes of oil sold was
primarily due to (i) normal declines in production and (ii) positive prior
period volume adjustments made by the operators on two significant wells
during the six months ended June 30, 2003. The decrease in volumes of gas
sold was primarily due to (i) normal declines in production and (ii) the
temporary shutting-in of one significant well due to production
difficulties during the six months ended June 30, 2004.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $4,553 (1.6%) for the six months ended June
30, 2004 as compared to the six months ended June 30, 2003. This increase
was primarily due to (i) workover expenses incurred on two significant
wells during the six months ended June 30, 2004 and (ii) repair and
maintenance expenses incurred on another significant well during the six
months ended June 30, 2004. These increases were partially offset by a
decrease in production taxes associated with the decrease in oil and gas
sales. As a percentage of oil and gas sales, these expenses increased to
29.5% for the six months ended June 30, 2004 from 25.4% for the six months
ended June 30, 2003. This percentage increase was primarily due to the
decrease in oil and gas sales.
Depreciation, depletion, and amortization of oil and gas properties
decreased $1,828 (5.2%) for the six months ended June 30, 2004 as compared
to the six months ended June 30, 2003. As a percentage of oil and gas
sales, this expense
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increased to 3.5% for the six months ended June 30, 2004 from 3.2% for the
six months ended June 30, 2003.
General and administrative expenses increased $3,001 (2.9%) for the six
months ended June 30, 2004 as compared to the six months ended June 30,
2003. As a percentage of oil and gas sales, these expenses increased to
11.0% for the six months ended June 30, 2004 from 9.3% for the six months
ended June 30, 2003. This percentage increase was primarily due to the
decrease in oil and gas sales.
The Limited Partners have received cash distributions through June 30,
2004 totaling $21,898,664 or 152.91% of Limited Partners' capital
contributions.
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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.
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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 I-D Partnership.
31.2 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the I-D Partnership.
31.3 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the I-E Partnership.
31.4 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the I-E Partnership.
31.5 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the I-F Partnership.
31.6 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the I-F 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
I-D Partnership.
32.2 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.
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
I-F 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 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 11, 2004 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: August 11, 2004 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 Energy Income Limited Partnership I-D.
31.2 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership I-D.
31.3 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership I-E.
31.4 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership I-E.
31.5 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership I-F.
31.6 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership I-F.
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 Energy
Income Limited Partnership I-D.
32.2 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.
33.3 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.
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