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:
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
June 30, December 31,
2004 2003
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 394,670 $ 399,580
Accounts receivable:
Net Profits 218,323 139,856
---------- ----------
Total current assets $ 612,993 $ 539,436
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 704,678 732,423
---------- ----------
$1,317,671 $1,271,859
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 53,956) ($ 58,713)
Limited Partners, issued and
outstanding, 108,074 units 1,371,627 1,330,572
---------- ----------
Total Partners' capital $1,317,671 $1,271,859
========== ==========
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 JUNE 30, 2004 AND 2003
(Unaudited)
2004 2003
-------- --------
REVENUES:
Net Profits $388,100 $381,327
Interest income 620 528
Gain on sale of Net Profits
Interests 14,928 -
-------- --------
$403,648 $381,855
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 13,215 $ 16,463
General and administrative
(Note 2) 45,197 38,654
-------- --------
$ 58,412 $ 55,117
-------- --------
NET INCOME $345,236 $326,738
======== ========
GENERAL PARTNER - NET INCOME $ 34,304 $ 34,103
======== ========
LIMITED PARTNERS - NET INCOME $310,932 $292,635
======== ========
NET INCOME per unit $ 2.87 $ 2.71
======== ========
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 SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(Unaudited)
2004 2003
-------- --------
REVENUES:
Net Profits $806,477 $767,952
Interest income 1,030 1,047
Gain on sale of Net Profits
Interests 15,453 -
-------- --------
$822,960 $768,999
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 31,913 $ 42,188
General and administrative
(Note 2) 81,628 79,618
-------- --------
$113,541 $121,806
-------- --------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $709,419 $647,193
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 3,732
-------- --------
NET INCOME $709,419 $650,925
======== ========
GENERAL PARTNER - NET INCOME $ 72,364 $ 68,449
======== ========
LIMITED PARTNERS - NET INCOME $637,055 $582,476
======== ========
NET INCOME per unit $ 5.89 $ 5.39
======== ========
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 SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $709,419 $650,925
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 31,913 42,188
Gain on sale of Net Profits
Interests ( 15,453) -
Increase in accounts receivable -
Net Profits ( 79,739) ( 68,029)
-------- --------
Net cash provided by operating
activities $646,140 $621,352
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 3,324) ($ 17,824)
Proceeds from the sale of Net
Profits Interests 15,881 -
-------- --------
Net cash provided (used) by investing
activities $ 12,557 ($ 17,824)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($663,607) ($458,176)
-------- --------
Net cash used by financing
activities ($663,607) ($458,176)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 4,910) $145,352
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 399,580 309,227
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $394,670 $454,579
======== ========
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
June 30, December 31,
2004 2003
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 576,040 $ 581,527
Accounts receivable:
Net Profits 303,041 199,159
---------- ----------
Total current assets $ 879,081 $ 780,686
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 1,165,775 1,190,694
---------- ----------
$2,044,856 $1,971,380
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 40,027) ($ 47,020)
Limited Partners, issued and
outstanding, 169,637 units 2,084,883 2,018,400
---------- ----------
Total Partners' capital $2,044,856 $1,971,380
========== ==========
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 JUNE 30, 2004 AND 2003
(Unaudited)
2004 2003
-------- --------
REVENUES:
Net Profits $562,152 $570,653
Interest income 960 775
Gain on sale of Net Profits
Interests 18,807 -
-------- --------
$581,919 $571,428
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 19,208 $ 27,672
General and administrative
(Note 2) 62,332 55,471
-------- --------
$ 81,540 $ 83,143
-------- --------
NET INCOME $500,379 $488,285
======== ========
GENERAL PARTNER - NET INCOME $ 49,974 $ 51,242
======== ========
LIMITED PARTNERS - NET INCOME $450,405 $437,043
======== ========
NET INCOME per unit $ 2.65 $ 2.58
======== ========
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 SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(Unaudited)
2004 2003
----------- ----------
REVENUES:
Net Profits $1,183,266 $1,119,409
Interest income 1,607 1,505
Gain on sale of Net Profits
Interests 19,856 -
---------- ----------
$1,204,729 $1,120,914
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 48,602 $ 65,146
General and administrative
(Note 2) 116,127 113,526
---------- ----------
$ 164,729 $ 178,672
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,040,000 $ 942,242
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 4,070
---------- ----------
NET INCOME $1,040,000 $ 946,312
========== ==========
GENERAL PARTNER - NET INCOME $ 106,517 $ 99,978
========== ==========
LIMITED PARTNERS - NET INCOME $ 933,483 $ 846,334
========== ==========
NET INCOME per unit $ 5.50 $ 4.99
========== ==========
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 SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(Unaudited)
2004 2003
------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,040,000 $946,312
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 48,602 65,146
Gain on sale of Net Profits
Interests ( 19,856) -
Increase in accounts receivable -
Net Profits ( 107,488) ( 105,253)
---------- --------
Net cash provided by operating
activities $ 961,258 $902,135
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 20,382) ($ 21,758)
Proceeds from the sale of Net
Profits Interests 20,161 -
---------- --------
Net cash used by investing activities ($ 221) ($ 21,758)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 966,524) ($644,891)
---------- --------
Net cash used by financing
activities ($ 966,524) ($644,891)
---------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 5,487) $235,486
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 581,527 433,562
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 576,040 $669,048
========== ========
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
June 30, December 31,
2004 2003
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 438,098 $ 399,864
Accounts receivable:
Net Profits 322,016 240,436
---------- ----------
Total current assets $ 760,114 $ 640,300
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 409,528 436,463
---------- ----------
$1,169,642 $1,076,763
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 56,982) ($ 66,233)
Limited Partners, issued and
outstanding, 126,306 units 1,226,624 1,142,996
---------- ----------
Total Partners' capital $1,169,642 $1,076,763
========== ==========
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 JUNE 30, 2004 AND 2003
(Unaudited)
2004 2003
-------- --------
REVENUES:
Net Profits $438,744 $433,999
Interest income 649 811
-------- --------
$439,393 $434,810
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 25,010 $ 15,055
General and administrative
(Note 2) 50,270 42,956
-------- --------
$ 75,280 $ 58,011
-------- --------
NET INCOME $364,113 $376,799
======== ========
GENERAL PARTNER - NET INCOME $ 38,597 $ 38,954
======== ========
LIMITED PARTNERS - NET INCOME $325,516 $337,845
======== ========
NET INCOME per unit $ 2.58 $ 2.68
======== ========
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 SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(Unaudited)
2004 2003
-------- ----------
REVENUES:
Net Profits $839,003 $944,827
Interest income 1,098 1,499
Gain on sale of Net Profits
Interests 962 -
-------- --------
$841,063 $946,326
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 59,212 $ 43,014
General and administrative
(Note 2) 90,910 87,956
-------- --------
$150,122 $130,970
-------- --------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $690,941 $815,356
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - ( 439)
-------- --------
NET INCOME $690,941 $814,917
======== ========
GENERAL PARTNER - NET INCOME $ 74,313 $ 85,253
======== ========
LIMITED PARTNERS - NET INCOME $616,628 $729,664
======== ========
NET INCOME per unit $ 4.88 $ 5.78
======== ========
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 SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $690,941 $814,917
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 439
Depletion of Net Profits
Interests 59,212 43,014
Gain on sale of Net Profits
Interests ( 962) -
Settlement of asset retirement
obligation ( 77) -
Decrease in accounts receivable -
related party - 5
Increase in accounts receivable -
Net Profits ( 80,778) ( 41,364)
-------- --------
Net cash provided by operating
activities $668,336 $817,011
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 32,475) ($ 1,396)
Proceeds from sale of Net Profits
Interests 435 438
-------- --------
Net cash used by investing
activities ($ 32,040) ($ 958)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($598,062) ($613,891)
-------- --------
Net cash used by financing
activities ($598,062) ($613,891)
-------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 38,234 $202,162
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 399,864 351,179
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $438,098 $553,341
======== ========
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
June 30, December 31,
2004 2003
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 400,555 $ 337,494
Accounts receivable:
Net Profits 46,429 -
---------- ----------
Total current assets $ 446,984 $ 337,494
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 615,711 616,277
---------- ----------
$1,062,695 $ 953,771
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ - $ 3,810
---------- ----------
Total current liabilities $ - $ 3,810
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 49,417) ($ 59,667)
Limited Partners, issued and
outstanding, 118,449 units 1,112,112 1,009,628
---------- ----------
Total Partners' capital $1,062,695 $ 949,961
---------- ----------
$1,062,695 $ 953,771
========== ==========
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 JUNE 30, 2004 AND 2003
(Unaudited)
2004 2003
-------- --------
REVENUES:
Net Profits $364,014 $312,701
Interest income 522 677
Loss on sale of Net Profits
Interests ( 866) -
-------- --------
$363,670 $313,378
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 23,167 $ 25,065
General and administrative
(Note 2) 48,083 40,825
-------- --------
$ 71,250 $ 65,890
-------- --------
NET INCOME $292,420 $247,488
======== ========
GENERAL PARTNER - NET INCOME $ 31,275 $ 13,343
======== ========
LIMITED PARTNERS - NET INCOME $261,145 $234,145
======== ========
NET INCOME per unit $ 2.21 $ 1.98
======== ========
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 SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(Unaudited)
2004 2003
-------- --------
REVENUES:
Net Profits $679,013 $759,184
Interest income 916 1,188
Loss on sale of Net Profits
Interests ( 749) -
-------- --------
$679,180 $760,372
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 53,547 $ 41,390
General and administrative
(Note 2) 86,509 83,645
-------- --------
$140,056 $125,035
-------- --------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $539,124 $635,337
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 2,785
-------- --------
NET INCOME $539,124 $638,122
======== ========
GENERAL PARTNER - NET INCOME $ 58,640 $ 33,391
======== ========
LIMITED PARTNERS - NET INCOME $480,484 $604,731
======== ========
NET INCOME per unit $ 4.06 $ 5.11
======== ========
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 SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $539,124 $638,122
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 53,547 41,390
Loss on sale of Net Profits
Interests 749 -
Increase in accounts receivable -
Net Profits ( 57,056) ( 59,455)
-------- --------
Net cash provided by operating
activities $536,364 $617,272
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 46,913) ($ 15,668)
Proceeds from the sale of Net
Profits Interests - 9,791
-------- --------
Net cash used by investing activities ($ 46,913) ($ 5,877)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($426,390) ($417,162)
-------- --------
Net cash used by financing
activities ($426,390) ($417,162)
-------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 63,061 $194,233
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 337,494 252,994
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $400,555 $447,227
======== ========
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
June 30, December 31,
2004 2003
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 587,145 $ 567,735
Accounts receivable:
Net Profits 42,395 -
---------- ----------
Total current assets $ 629,540 $ 567,735
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 1,213,748 1,264,192
---------- ----------
$1,843,288 $1,831,927
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ - $ 39,658
---------- ----------
Total current liabilities $ - $ 39,658
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 51,318) ($ 60,944)
Limited Partners, issued and
outstanding, 143,041 units 1,894,606 1,853,213
---------- ----------
Total Partners' capital $1,843,288 $1,792,269
---------- ----------
$1,843,288 $1,831,927
========== ==========
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 JUNE 30, 2004 AND 2003
(Unaudited)
2004 2003
-------- --------
REVENUES:
Net Profits $541,287 $721,301
Interest income 833 1,049
Loss on sale of Net Profits
Interests ( 297) -
-------- --------
$541,823 $722,350
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 36,385 $ 41,977
General and administrative
(Note 2) 54,928 47,492
-------- --------
$ 91,313 $ 89,469
-------- --------
NET INCOME $450,510 $632,881
======== ========
GENERAL PARTNER - NET INCOME $ 48,242 $ 66,961
======== ========
LIMITED PARTNERS - NET INCOME $402,268 $565,920
======== ========
NET INCOME per unit $ 2.81 $ 3.95
======== ========
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 SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(Unaudited)
2004 2003
----------- -----------
REVENUES:
Net Profits $1,080,172 $1,443,533
Interest income 1,475 1,681
Loss on sale of Net Profits
Interests ( 256) -
---------- ----------
$1,081,391 $1,445,214
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 72,472 $ 76,371
General and administrative
(Note 2) 100,288 97,137
---------- ----------
$ 172,760 $ 173,508
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $ 908,631 $1,271,706
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 1,477
---------- ----------
NET INCOME $ 908,631 $1,273,183
========== ==========
GENERAL PARTNER - NET INCOME $ 97,238 $ 133,891
========== ==========
LIMITED PARTNERS - NET INCOME $ 811,393 $1,139,292
========== ==========
NET INCOME per unit $ 5.67 $ 7.96
========== ==========
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 SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $908,631 $1,273,183
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 72,472 76,371
Loss on sale of Net Profits
Interests 256 -
Increase in accounts receivable -
Net Profits ( 86,570) ( 169,855)
-------- ----------
Net cash provided by operating
activities $894,789 $1,178,222
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 17,767) ($ 10,263)
Proceeds from sale of Net Profits
Interests - 7,116
-------- ----------
Net cash used by investing activities ($ 17,767) ($ 3,147)
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($857,612) ($ 664,130)
-------- ----------
Net cash used by financing
activities ($857,612) ($ 664,130)
-------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 19,410 $ 510,945
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 567,735 317,796
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $587,145 $ 828,741
======== ==========
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
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 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 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.
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.
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 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
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 P-1, P-3, P-4, P-5, and P-6
Partnerships recognized approximately $1,000, $2,000, $1,000, $2,000 and
$4,000 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.
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.
P-1 Partnership
---------------
Three Months Three Months
Ended Ended
6/30/2004 6/30/2003
------------ ------------
Total Asset Retirement
Obligation, April 1 $57,011 $56,135
Accretion Expense 620 640
------- -------
Total Asset Retirement
Obligation, End of Quarter $57,631 $56,775
======= =======
Six Months Six Months
Ended Ended
6/30/2004 6/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $56,388 $55,495
Accretion Expense 1,243 1,280
------- -------
Total Asset Retirement
Obligation, End of Period $57,631 $56,775
======= =======
-24-
P-3 Partnership
---------------
Three Months Three Months
Ended Ended
6/30/2004 6/30/2003
------------ ------------
Total Asset Retirement
Obligation, April 1 $96,695 $95,712
Accretion Expense 1,036 1,090
------- -------
Total Asset Retirement
Obligation, End of Quarter $97,731 $96,802
======= =======
Six Months Six Months
Ended Ended
6/30/2004 6/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $95,666 $94,622
Accretion Expense 2,065 2,180
------- -------
Total Asset Retirement
Obligation, End of Period $97,731 $96,802
======= =======
-25-
P-4 Partnership
---------------
Three Months Three Months
Ended Ended
6/30/2004 6/30/2003
------------ ------------
Total Asset Retirement
Obligation, April 1 $54,806 $54,498
Accretion Expense 461 512
------- -------
Total Asset Retirement
Obligation, End of Quarter $55,267 $55,010
======= =======
Six Months Six Months
Ended Ended
6/30/2004 6/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $56,632 $53,986
Settlements and Disposals ( 2,277) -
Accretion Expense 912 1,024
------- -------
Total Asset Retirement
Obligation, End of Period $55,267 $55,010
======= =======
-26-
P-5 Partnership
---------------
Three Months Three Months
Ended Ended
6/30/2004 6/30/2003
------------ ------------
Total Asset Retirement
Obligation, April 1 $74,235 $69,612
Accretion Expense 606 694
------- -------
Total Asset Retirement
Obligation, End of Quarter $74,841 $70,306
======= =======
Six Months Six Months
Ended Ended
6/30/2004 6/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $72,299 $68,918
Additions and revisions 1,332 -
Accretion Expense 1,210 1,388
------- -------
Total Asset Retirement
Obligation, End of Period $74,841 $70,306
======= =======
-27-
P-6 Partnership
---------------
Three Months Three Months
Ended Ended
6/30/2004 6/30/2003
------------ ------------
Total Asset Retirement
Obligation, April 1 $208,324 $206,417
Accretion Expense 1,387 1,841
-------- --------
Total Asset Retirement
Obligation, End of Quarter $209,711 $208,258
======== ========
Six Months Six Months
Ended Ended
6/30/2004 6/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $206,661 $204,576
Additions and revisions 279 -
Accretion Expense 2,771 3,682
-------- --------
Total Asset Retirement
Obligation, End of Period $209,711 $208,258
======== ========
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
----------- ------------------ --------------
P-1 $16,757 $28,440
P-3 17,692 44,640
P-4 17,030 33,240
P-5 16,913 31,170
P-6 17,287 37,641
-28-
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
----------- ------------------ --------------
P-1 $24,748 $56,880
P-3 26,847 89,280
P-4 24,430 66,480
P-5 24,169 62,340
P-6 25,006 75,282
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.
-29-
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 and the General Partner in accordance
with the terms of the Partnerships' partnership agreements.
-30-
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 June 30, 2004 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.
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.
-31-
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
unit-of-production method. The Partnerships' calculation of depletion of
their 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.
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.
-32-
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:
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
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 P-1, P-3, P-4, P-5, and P-6
Partnerships recognized approximately $1,000, $2,000, $1,000, $2,000 and
$4,000 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.
-33-
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.
-34-
P-1 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2003 208,273 2,266,710
Production ( 5,644) ( 76,701)
Sale of minerals in place ( 30) -
Revisions of previous
estimates ( 3,173) ( 10,382)
------- ---------
Proved reserves, March 31, 2004 199,426 2,179,627
Production ( 4,426) ( 57,246)
Revisions of previous
estimates 26,610 228,065
------- ---------
Proved reserves, June 30, 2004 221,610 2,350,446
======= =========
P-3 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2003 276,495 3,719,305
Production ( 7,208) ( 118,733)
Sale of minerals in place ( 57) -
Revisions of previous
estimates ( 3,914) ( 6,355)
------- ---------
Proved reserves, March 31, 2004 265,316 3,594,217
Production ( 5,754) ( 89,392)
Revisions of previous
estimates 33,981 334,974
------- ---------
Proved reserves, June 30, 2004 293,543 3,839,799
======= =========
-35-
P-4 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2003 65,990 2,098,543
Production ( 4,775) ( 66,934)
Sales of minerals in place ( 52) -
Revisions of previous
estimates 455 13,281
------- ---------
Proved reserves, March 31, 2004 61,618 2,044,890
Production ( 4,799) ( 61,180)
Extensions and discoveries 129 241
Revisions of previous
estimates 3,689 132,232
------- ---------
Proved reserves, June 30, 2004 60,637 2,116,183
======= =========
P-5 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2003 47,470 2,346,641
Production ( 1,387) ( 73,924)
Sale of minerals in place ( 5) -
Revisions of previous
estimates ( 6,089) ( 22,991)
------- ---------
Proved reserves, March 31, 2004 39,989 2,249,726
Production ( 1,308) ( 60,761)
Extensions and discoveries - 74,679
Revisions of previous
estimates 3,086 102,130
------- ---------
Proved reserves, June 30, 2004 41,767 2,365,774
======= =========
-36-
P-6 Partnership
---------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2003 125,839 4,110,686
Production ( 3,307) ( 127,504)
Revisions of previous
estimates 928 18,194
------- ---------
Proved reserves, March 31, 2004 123,460 4,001,376
Production ( 2,502) ( 107,645)
Extensions and discoveries - 25,630
Revisions of previous
estimates 9,170 360,754
------- ---------
Proved reserves, June 30, 2004 130,128 4,280,115
======= =========
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 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 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.
-37-
Net Present Value of Reserves
------------------------------------------
Partnership 6/30/04 3/31/04 12/31/03
----------- ----------- ----------- -----------
P-1 $ 8,002,571 $ 7,181,805 $ 7,346,507
P-3 12,315,158 11,117,252 11,351,122
P-4 6,786,386 6,657,181 6,828,512
P-5 6,097,874 5,532,746 6,052,433
P-6 11,069,301 9,997,752 10,326,528
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;
-38-
* Weather conditions;
* The availability of pipelines for transportation; and * Domestic and
foreign government regulations and taxes.
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.
P-1 PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2004 COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 2003.
Three Months Ended June 30,
---------------------------
2004 2003
-------- --------
Net Profits $388,100 $381,327
Barrels produced 4,426 4,940
Mcf produced 57,246 70,772
Average price/Bbl $ 34.71 $ 26.46
Average price/Mcf $ 5.13 $ 4.84
As shown in the table above, total Net Profits increased $6,773 (1.8%) for
the three months ended June 30, 2004 as compared to the three months ended
June 30, 2003. Of this increase, approximately (i) $37,000 and $17,000,
respectively, were related to increases in the average prices of oil and
gas sold and (ii) $32,000 was related to a decrease in production
expenses. These increases were partially offset by decreases of
approximately $14,000 and $65,000, respectively, related to decreases in
volumes of oil and gas sold. Volumes of oil and gas sold decreased 514
barrels and 13,526 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 a positive prior period volume
adjustment made by the operator on one significant well during the three
months ended June 30, 2003. The decrease in volumes of gas 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. These decreases were
partially offset by an increase in volumes of gas sold due to the payout
of one non-consent well. The decrease in production expenses was primarily
due to (i) workover expenses incurred on several wells during the three
-39-
months ended June 30, 2003 and (ii) a decrease in lease operating expenses
associated with the decreases in volumes of oil and gas sold.
Depletion of Net Profits Interests decreased $3,248 (19.7%) 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 Net Profits, this expense decreased to
3.4% for the three months ended June 30, 2004 from 4.3% for the three
months ended June 30, 2003. This percentage decrease was primarily due to
the dollar decrease in depletion of Net Profits Interests.
General and administrative expenses increased $6,543 (16.9%) for the three
months ended June 30, 2004 as compared to the three months ended June 30,
2003. As a percentage of Net Profits, these expenses increased to 11.6%
for the three months ended June 30, 2004 from 10.1% for the three months
ended June 30, 2003. This percentage increase was primarily due to the
dollar increase in general and administrative expenses.
SIX MONTHS ENDED JUNE 30, 2004 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2003.
Six Months Ended June 30,
-------------------------
2004 2003
-------- --------
Net Profits $806,477 $767,952
Barrels produced 10,070 10,098
Mcf produced 133,947 143,739
Average price/Bbl $ 32.44 $ 28.24
Average price/Mcf $ 4.68 $ 4.75
As shown in the table above, total Net Profits increased $38,525 (5.0%)
for the six months ended June 30, 2004 as compared to the six months ended
June 30, 2003. Of this increase, approximately (i) $53,000 was related to
a decrease in production expenses and (ii) $42,000 was related to an
increase in the average price of oil sold. These increases were partially
offset by decreases of approximately (i) $47,000 related to a decrease in
volumes of gas sold and (ii) $10,000 related to a decrease in the average
price of gas sold. Volumes of oil and gas sold decreased 28 barrels and
9,792 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
gas sold was primarily due to (i) positive prior period volume adjustments
made by the operators on two significant wells during the six months ended
June 30, 2003 and (ii) normal declines in production. These decreases were
partially offset by an increase in volumes of gas sold due to the payout
of one non-consent well. The decrease in production expenses was primarily
due to (i) workover
-40-
expenses incurred on several wells during the six months ended June 30,
2003 and (ii) a decrease in lease operating expenses associated with the
decreases in volumes of oil and gas sold.
Depletion of Net Profits Interests decreased $10,275 (24.4%) 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) upward revisions in the
estimates of remaining oil and gas reserves at June 30, 2004 as compared
to June 30, 2003 and (ii) the decreases in volumes of oil and gas sold. As
a percentage of Net Profits, this expense decreased to 4.0% for the six
months ended June 30, 2004 from 5.5% for the six months ended June 30,
2003. This percentage decrease was primarily due to the dollar decrease in
depletion of Net Profits Interests.
General and administrative expenses increased $2,010 (2.5%) for the six
months ended June 30, 2004 as compared to the six months ended June 30,
2003. As a percentage of Net Profits, these expenses decreased to 10.1%
for the six months ended June 30, 2004 from 10.4% for the six months ended
June 30, 2003.
Cumulative cash distributions to the Limited Partners through June 30,
2004 were $16,248,558 or 150.35% of Limited Partners' capital
contributions.
P-3 PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2004 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2003.
Three Months Ended June 30,
---------------------------
2004 2003
-------- --------
Net Profits $562,152 $570,653
Barrels produced 5,754 6,443
Mcf produced 89,392 107,977
Average price/Bbl $ 34.78 $ 26.55
Average price/Mcf $ 5.22 $ 4.98
As shown in the table above, total Net Profits decreased $8,501 (1.5%) for
the three months ended June 30, 2004 as compared to the three months ended
June 30, 2003. Of this decrease, approximately $18,000 and $93,000,
respectively, were related to decreases in volumes of oil and gas sold.
These decreases were partially offset by increases of approximately, (i)
$47,000 and $21,000, respectively, related to increases in the average
prices of oil and gas sold and (ii) $34,000 related to a decrease in
production expenses. Volumes of oil and gas sold decreased 689 barrels and
18,585 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
-41-
to a positive prior period volume adjustment made by the operator on one
significant well during the three months ended June 30, 2003. The decrease
in volumes of gas 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. These decreases were partially offset by an increase in
volumes of gas sold due to the payout of one non-consent well. The
decrease in production expenses was primarily due to (i) workover expenses
incurred on several wells during the three months ended June 30, 2003 and
(ii) a decrease in lease operating expenses associated with the decreases
in volumes of oil and gas sold. These decreases were partially offset by
workover expenses incurred on one significant well during the three months
ended June 30, 2004.
Depletion of Net Profits Interests decreased $8,464 (30.6%) for the three
months ended June 30, 2004 as compared to the three months ended June 30,
2003. This decrease was primarily due to (i) the decreases in volumes of
oil and gas sold and (ii) upward revisions in the estimates of remaining
oil and gas reserves at June 30, 2004 as compared to June 30, 2003. As a
percentage of Net Profits, this expense decreased to 3.4% for the three
months ended June 30, 2004 from 4.8% for the three months ended June 30,
2003. This percentage decrease was primarily due to the dollar decrease in
depletion of Net Profits Interests.
General and administrative expenses increased $6,861 (12.4%) for the three
months ended June 30, 2004 as compared to the three months ended June 30,
2003. As a percentage of Net Profits, these expenses increased to 11.1%
for the three months ended June 30, 2004 from 9.7% for the three months
ended June 30, 2003. This percentage increase was primarily due to the
dollar increase in general and administrative expenses.
SIX MONTHS ENDED JUNE 30, 2004 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2003.
Six Months Ended June 30,
-------------------------
2004 2003
---------- ----------
Net Profits $1,183,266 $1,119,409
Barrels produced 12,962 13,046
Mcf produced 208,125 214,953
Average price/Bbl $ 32.51 $ 28.27
Average price/Mcf $ 4.80 $ 4.89
As shown in the table above, total Net Profits increased $63,857 (5.7%)
for the six months ended June 30, 2004 as compared to the six months ended
June 30, 2003. Of this increase, approximately (i) $63,000 was related to
a decrease in production expenses and (ii) $55,000 was related
-42-
to an increase in the average price of oil sold. These increases were
partially offset by decreases of approximately (i) $33,000 related to a
decrease in volumes of gas sold and (ii) $18,000 related to a decrease in
the average price of gas sold. Volumes of oil and gas sold decreased 84
barrels and 6,828 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 gas sold was primarily due to (i) positive prior period volume
adjustments made by the operators on two significant wells during the six
months ended June 30, 2003 and (ii) normal declines in production. These
decreases were partially offset by an increase in volumes of gas sold due
to the payout of one non-consent well. The decrease in production expenses
was primarily due to (i) workover expenses incurred on several wells
during the six months ended June 30, 2003 and (ii) a decrease in lease
operating expenses associated with the decreases in volumes of oil and gas
sold. These decreases were partially offset by workover expenses incurred
on one significant well during the six months ended June 30, 2004.
Depletion of Net Profits Interests decreased $16,544 (25.4%) 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) upward revisions in the
estimates of remaining oil and gas reserves at June 30, 2004 as compared
to June 30, 2003 and (ii) the decreases in volumes of oil and gas sold. As
a percentage of Net Profits, this expense decreased to 4.1% for the six
months ended June 30, 2004 from 5.8% for the six months ended June 30,
2003. This percentage decrease was primarily due to the dollar decrease in
depletion of Net Profits Interests.
General and administrative expenses increased $2,601 (2.3%) for the six
months ended June 30, 2004 as compared to the six months ended June 30,
2003. As a percentage of Net Profits, these expenses decreased to 9.8% for
the six months ended June 30, 2004 from 10.1% for the six months ended
June 30, 2003.
Cumulative cash distributions to the Limited Partners through June 30,
2004 were $22,684,401 or 133.72% of Limited Partners' capital
contributions.
-43-
P-4 PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2004 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2003.
Three Months Ended June 30,
---------------------------
2004 2003
-------- --------
Net Profits $438,744 $433,999
Barrels produced 4,799 5,727
Mcf produced 61,180 55,580
Average price/Bbl $ 37.18 $ 28.50
Average price/Mcf $ 5.97 $ 6.35
As shown in the table above, total Net Profits increased $4,745 (1.1%) for
the three months ended June 30, 2004 as compared to the three months ended
June 30, 2003. Of this increase, approximately (i) $42,000 was related to
an increase in the average price of oil sold and (ii) $35,000 was related
to an increase in volumes of gas sold. These increases were partially
offset by decreases of approximately (i) $26,000 related to a decrease in
volumes of oil sold, (ii) $24,000 related to a decrease in the average
price of gas sold, and (iii) $22,000 related to an increase in production
expenses. Volumes of oil sold decreased 928 barrels, while volumes of gas
sold increased 5,600 Mcf 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
increase in volumes of gas sold was primarily due to the payout of two
non-consent wells. These increases were partially offset by
normal declines in production. The increase in production expenses was
primarily due to (i) workover expenses incurred on one significant well
during the three months ended June 30, 2004, (ii) positive prior period
lease operating expense adjustments made by the operator on several wells
during the three months ended June 30, 2004, and (iii) an increase in
production taxes associated with the payout of two non-consent wells.
Depletion of Net Profits Interests increased $9,955 (66.1%) 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) one significant well being
substantially depleted during the three months ended June 30, 2004 and
(ii) the abandonment of another significant well during 2004 following an
unsuccessful recompletion attempt. These increases were partially offset
by upward revisions in the estimates of remaining oil and gas reserves at
June 30, 2004 as compared to June 30, 2003. As a percentage of Net
Profits, this expense increased to 5.7% for the three months ended June
30, 2004 from 3.5% for the three months ended June 30, 2003. This
percentage increase was primarily due to the dollar increase in depletion
of Net Profits Interests.
-44-
General and administrative expenses increased $7,314 (17.0%) for the three
months ended June 30, 2004 as compared to the three months ended June 30,
2003. As a percentage of Net Profits, these expenses increased to 11.5%
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
dollar increase in general and administrative expenses.
SIX MONTHS ENDED JUNE 30, 2004 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2003.
Six Months Ended June 30,
-------------------------
2004 2003
-------- --------
Net Profits $839,003 $944,827
Barrels produced 9,574 11,947
Mcf produced 128,114 133,550
Average price/Bbl $ 35.42 $ 30.11
Average price/Mcf $ 5.61 $ 5.71
As shown in the table above, total Net Profits decreased $105,824 (11.2%)
for the six months ended June 30, 2004 as compared to the six months ended
June 30, 2003. Of this decrease, approximately (i) $71,000 and $31,000,
respectively, were related to decreases in volumes of oil and gas sold,
(ii) $42,000 was related to an increase in production expenses, and (iii)
$12,000 was related to a decrease in the average price of gas sold. These
decreases were partially offset by an increase of approximately $50,000
related to an increase in the average price of oil sold. Volumes of oil
and gas sold decreased 2,373 barrels and 5,436 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) a positive prior period volume
adjustment made by the operator on one significant well 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) positive prior
period volume adjustments made by the operators on two significant wells
during the six months ended June 30, 2003. These decreases were partially
offset by an increase in volumes of gas sold due to the payout of two
non-consent wells. The increase in production expenses was primarily due
to (i) workover expenses incurred on several wells during the six months
ended June 30, 2004, (ii) positive prior period lease operating expense
adjustments made by the operator on several wells during the six months
ended June 30, 2004, and (iii) an increase in production taxes associated
with the payout of two non-consent wells.
-45-
Depletion of Net Profits Interests increased $16,198 (37.7%) 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) the abandonment of one
significant well during 2004 following an unsuccessful recompletion
attempt and (ii) another significant well being substantially depleted
during the six months ended June 30, 2004. These increases were partially
offset by upward revisions in the estimates of remaining oil and gas
reserves at June 30, 2004 as compared to June 30, 2003. As a percentage of
Net Profits, this expense increased to 7.1% for the six months ended June
30, 2004 from 4.6% for the six months ended June 30, 2003. This percentage
increase was primarily due to the dollar increase in depletion of Net
Profits Interests.
General and administrative expenses increased $2,954 (3.4%) for the six
months ended June 30, 2004 as compared to the six months ended June 30,
2003. As a percentage of Net Profits, these expenses increased to 10.8%
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 Net Profits.
Cumulative cash distributions to the Limited Partners through June 30,
2004 were $18,250,945 or 144.50% of Limited Partners' capital
contributions.
P-5 PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2004 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2003.
Three Months Ended June 30,
---------------------------
2004 2003
-------- --------
Net Profits $364,014 $312,701
Barrels produced 1,308 1,513
Mcf produced 60,761 76,908
Average price/Bbl $ 36.14 $ 27.35
Average price/Mcf $ 6.31 $ 4.81
As shown in the table above, total Net Profits increased $51,313 (16.4%)
for the three months ended June 30, 2004 as compared to the three months
ended June 30, 2003. Of this increase, approximately (i) $12,000 and
$91,000, respectively, were related to increases in the average prices of
oil and gas sold and (ii) $32,000 was related to a decrease in production
expenses. These increases were partially offset by decreases of
approximately $6,000 and $78,000, respectively, related to decreases in
volumes of oil and gas sold. Volumes of oil and gas sold decreased 205
barrels and 16,147 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
-46-
primarily due to (i) normal declines in production and (ii) the
shutting-in of a producing zone on one significant well during late 2003.
As of the date of this Quarterly Report, management does not expect the
shut-in zone to return to production. The decrease in volumes of gas sold
was primarily due to (i) downward revisions in the estimates of remaining
gas reserves on one significant well resulting in the P-5 Partnership
becoming over produced past ultimate reserves thereby increasing gas
imbalance payable and (ii) normal declines in production. These decreases
were partially offset by the successful completion of another significant
well during early 2004. The decrease in production expense was primarily
due to (i) workover expenses incurred on one significant well during the
three months ended June 30, 2003 and (ii) a decrease in lease operating
expenses associated with the decreases in volumes of oil and gas sold.
Depletion of Net Profits Interests decreased $1,898 (7.6%) for the three
months ended June 30, 2004 as compared to the three months ended June 30,
2003. As a percentage of Net Profits, this expense decreased to 6.4% for
the three months ended June 30, 2004 from 8.0% for the three months ended
June 30, 2003. This percentage decrease was primarily due to the increases
in the average prices of oil and gas sold.
General and administrative expenses increased $7,258 (17.8%) for the three
months ended June 30, 2004 as compared to the three months ended June 30,
2003. As a percentage of Net Profits, these expenses increased to 13.2%
for the three months ended June 30, 2004 from 13.1% for the three months
ended June 30, 2003.
SIX MONTHS ENDED JUNE 30, 2004 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2003.
Six Months Ended June 30,
-------------------------
2004 2003
-------- --------
Net Profits $679,013 $759,184
Barrels produced 2,695 4,308
Mcf produced 134,685 163,837
Average price/Bbl $ 34.06 $ 30.09
Average price/Mcf $ 5.44 $ 5.01
As shown in the table above, total Net Profits decreased $80,171 (10.6%)
for the six months ended June 30, 2004 as compared to the six months ended
June 30, 2003. Of this decrease, approximately $49,000 and $146,000,
respectively, were related to decreases in volumes of oil and gas sold.
These decreases were partially offset by increases of approximately (i)
$11,000 and $58,000, respectively, related to increases in the average
prices of oil and gas sold and (ii) $46,000 related to a decrease in
production expenses. Volumes of oil and gas sold decreased 1,613 barrels
and
-47-
29,152 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)
the shutting-in of a producing zone on one significant well during late
2003. As of the date of this Quarterly Report, management does not expect
the shut-in zone to return to production. The decrease in volumes of gas
sold was primarily due to (i) downward revisions in the estimates of
remaining gas reserves on one significant well resulting in the P-5
Partnership becoming over produced past ultimate reserves thereby
increasing gas imbalance payable and (ii) normal declines in production.
These decreases were partially offset by the successful completion of
another significant well during early 2004. 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, (ii)
workover expenses incurred on one significant well during the six months
ended June 30, 2003, and (iii) a decrease in production taxes associated
with the decrease in oil and gas sales.
Depletion of Net Profits Interests increased $12,157 (29.4%) for the six
months ended June 30, 2004 as compared to the six months ended June 30,
2003. This increase was primarily due to an increase in depletable Net
Profits Interests primarily due to developmental drilling activities on
several properties during the six months ended June 30, 2004. As a
percentage of Net Profits, this expense increased to 7.9% for the six
months ended June 30, 2004 from 5.5% for the six months ended June 30,
2003. This percentage increase was primarily due to the dollar increase in
depletion of Net Profits Interests.
General and administrative expenses increased $2,864 (3.4%) for the six
months ended June 30, 2004 as compared to the six months ended June 30,
2003. As a percentage of Net Profits, these expenses increased to 12.7%
for the six months ended June 30, 2004 from 11.0% for the six months ended
June 30, 2003. This percentage increase was primarily due to the decrease
in Net Profits.
Cumulative cash distributions to the Limited Partners through June 30,
2004 were $12,768,759 or 107.80% of Limited Partners' capital
contributions.
-48-
P-6 PARTNERSHIP
THREE MONTHS ENDED JUNE 30, 2004 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2003.
Three Months Ended June 30,
---------------------------
2004 2003
-------- --------
Net Profits $541,287 $721,301
Barrels produced 2,502 4,590
Mcf produced 107,645 153,919
Average price/Bbl $ 37.56 $ 28.71
Average price/Mcf $ 5.70 $ 5.11
As shown in the table above, total Net Profits decreased $180,014 (25.0%)
for the three months ended June 30, 2004 as compared to the three months
ended June 30, 2003. Of this decrease, approximately $60,000 and $236,000,
respectively, were related to decreases in volumes of oil and gas sold.
These decreases were partially offset by increases of approximately (i)
$22,000 and $63,000, respectively, related to the average prices of oil
and gas sold and (ii) $31,000 related to a decrease in production
expenses. Volumes of oil and gas sold decreased 2,088 barrels and 46,274
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) normal declines in production and (ii) the
shutting-in of a producing zone on one significant well during late 2003.
As of the date of this Quarterly Report, management does not expect the
shut-in zone to return to production. The decrease in volumes of gas sold
was primarily due to (i) downward revisions in the estimates of remaining
gas reserves on one significant well resulting in the P-6 Partnership
becoming over produced past ultimate reserves thereby increasing gas
imbalance payable and (ii) normal declines in production. The decrease in
production expenses was primarily due to (i) workover expenses incurred on
one significant well during the three months ended June 30, 2003 and (ii)
a decrease in production taxes associated with the decrease in oil and gas
sales.
Depletion of Net Profits Interests decreased $5,592 (13.3%) 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. These decreases were partially offset by several wells being
fully depleted during the three months ended June 30, 2004 due to the lack
of remaining reserves. As a percentage of Net Profits, this expense
increased to 6.7% for the three months ended June 30, 2004 from 5.8% for
the three months ended June 30, 2003. This percentage increase was
primarily due to the decrease in Net Profits.
-49-
General and administrative expenses increased $7,436 (15.7%) for the three
months ended June 30, 2004 as compared to the three months ended June 30,
2003. As a percentage of Net Profits, these expenses increased to 10.1%
for the three months ended June 30, 2004 from 6.6% for the three months
ended June 30, 2003. This percentage increase was primarily due to the
decrease in Net Profits.
SIX MONTHS ENDED JUNE 30, 2004 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2003.
Six Months Ended June 30,
-------------------------
2004 2003
---------- ----------
Net Profits $1,080,172 $1,443,533
Barrels produced 5,809 9,792
Mcf produced 235,149 313,849
Average price/Bbl $ 34.15 $ 29.32
Average price/Mcf $ 5.17 $ 4.98
As shown in the table above, total Net Profits decreased $363,361 (25.2%)
for the six months ended June 30, 2004 as compared to the six months ended
June 30, 2003. Of this decrease, approximately $117,000 and $392,000,
respectively, were related to decreases in volumes of oil and gas sold.
These decreases were partially offset by increases of approximately (i)
$75,000 related to a decrease in production expenses and (ii) $43,000
related to an increase in the average price of gas sold. Volumes of oil
and gas sold decreased 3,983 barrels and 78,700 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) the
shutting-in of a producing zone on one significant well during late 2003
and (ii) normal declines in production. As of the date of this Quarterly
Report, management does not expect the shut-in zone to return to
production. The decrease in volumes of gas sold was primarily due to (i)
downward revisions in the estimates of remaining gas reserves on one
significant well resulting in the P-6 Partnership becoming over produced
past ultimate reserves thereby increasing gas imbalance payable, (ii)
normal declines in production, and (iii) a positive prior period volume
adjustment made by the operator on one significant well during the six
months ended June 30, 2003. The decrease in production expenses was
primarily due to (i) workover expenses incurred on several wells during
the six months ended June 30, 2003 and (ii) a decrease in production taxes
associated with the decrease in oil and gas sales.
Depletion of Net Profits Interests decreased $3,899 (5.1%) for the six
months ended June 30, 2004 as compared to the six months ended June 30,
2003. As a percentage of Net Profits, this expense increased to 6.7% for
the six months ended June 30, 2004 from 5.3% for the six months ended June
30, 2003. This percentage increase was primarily due to the decrease in
Net Profits.
-50-
General and administrative expenses increased $3,151 (3.2%) for the six
months ended June 30, 2004 as compared to the six months ended June 30,
2003. As a percentage of Net Profits, these expenses increased to 9.3% for
the six months ended June 30, 2004 from 6.7% for the six months ended June
30, 2003. This percentage increase was primarily due to the decrease in
Net Profits.
Cumulative cash distributions to the Limited Partners through June 30,
2004 were $18,654,248 or 130.41% of Limited Partners' capital
contribution.
-51-
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.
-52-
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: 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 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 P-3 Limited Partnership.
31.4 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-3 Limited Partnership.
31.5 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-4 Limited Partnership.
31.6 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-4 Limited Partnership.
31.7 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-5 Limited Partnership.
31.8 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-5 Limited Partnership.
31.9 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-6 Limited Partnership.
31.10 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Institutional/Pension Energy Income P-6 Limited 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 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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