SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 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
September 30, December 31,
2004 2003
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 456,328 $ 399,580
Accounts receivable:
Net Profits 181,671 139,856
---------- ----------
Total current assets $ 637,999 $ 539,436
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 694,058 732,423
---------- ----------
$1,332,057 $1,271,859
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 54,124) ($ 58,713)
Limited Partners, issued and
outstanding, 108,074 units 1,386,181 1,330,572
---------- ----------
Total Partners' capital $1,332,057 $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 SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
-------- --------
REVENUES:
Net Profits $389,691 $329,145
Interest income 731 576
Gain on sale of Net Profits
Interests 2,110 -
-------- --------
$392,532 $329,721
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 20,536 $ 23,043
General and administrative
(Note 2) 30,644 32,799
-------- --------
$ 51,180 $ 55,842
-------- --------
NET INCOME $341,352 $273,879
======== ========
GENERAL PARTNER - NET INCOME $ 35,798 $ 29,404
======== ========
LIMITED PARTNERS - NET INCOME $305,554 $244,475
======== ========
NET INCOME per unit $ 2.83 $ 2.26
======== ========
UNITS OUTSTANDING 108,074 108,074
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-3-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ----------
REVENUES:
Net Profits $1,196,168 $1,097,097
Interest income 1,761 1,623
Gain on sale of Net Profits
Interests 17,563 -
---------- ----------
$1,215,492 $1,098,720
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 52,449 $ 65,231
General and administrative
(Note 2) 112,272 112,417
---------- ----------
$ 164,721 $ 177,648
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,050,771 $ 921,072
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 3,732
---------- ----------
NET INCOME $1,050,771 $ 924,804
========== ==========
GENERAL PARTNER - NET INCOME $ 108,162 $ 97,853
========== ==========
LIMITED PARTNERS - NET INCOME $ 942,609 $ 826,951
========== ==========
NET INCOME per unit $ 8.72 $ 7.65
========== ==========
UNITS OUTSTANDING 108,074 108,074
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-4-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME P-1 LIMITED PARTNERSHIP
GEODYNE NPI PARTNERSHIP P-1
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,050,771 $924,804
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 52,449 65,231
Gain on sale of Net Profits
Interests ( 17,563) -
Increase in accounts receivable -
Net Profits ( 43,786) ( 35,388)
---------- --------
Net cash provided by operating
activities $1,041,871 $950,915
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 10,342) ($ 24,989)
Proceeds from the sale of Net
Profits Interests 15,792 885
---------- --------
Net cash provided (used) by investing
activities $ 5,450 ($ 24,104)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 990,573) ($822,519)
---------- --------
Net cash used by financing
activities ($ 990,573) ($822,519)
---------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 56,748 $104,292
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 399,580 309,227
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 456,328 $413,519
========== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-5-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2004 2003
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 674,235 $ 581,527
Accounts receivable:
Net Profits 259,309 199,159
---------- ----------
Total current assets $ 933,544 $ 780,686
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 1,079,487 1,190,694
---------- ----------
$2,013,031 $1,971,380
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 40,253) ($ 47,020)
Limited Partners, issued and
outstanding, 169,637 units 2,053,284 2,018,400
---------- ----------
Total Partners' capital $2,013,031 $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 SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
-------- --------
REVENUES:
Net Profits $564,291 $474,905
Interest income 1,083 835
Gain on sale of Net Profits
Interests 2,658 -
-------- --------
$568,032 $475,740
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 99,511 $ 33,638
General and administrative
(Note 2) 47,291 50,691
-------- --------
$146,802 $ 84,329
-------- --------
NET INCOME $421,230 $391,411
======== ========
GENERAL PARTNER - NET INCOME $ 50,829 $ 42,085
======== ========
LIMITED PARTNERS - NET INCOME $370,401 $349,326
======== ========
NET INCOME per unit $ 2.19 $ 2.06
======== ========
UNITS OUTSTANDING 169,637 169,637
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-7-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ----------
REVENUES:
Net Profits $1,747,557 $1,594,314
Interest income 2,690 2,340
Gain on sale of Net Profits
Interests 22,514 -
---------- ----------
$1,772,761 $1,596,654
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 148,113 $ 98,784
General and administrative
(Note 2) 163,418 164,217
---------- ----------
$ 311,531 $ 263,001
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,461,230 $1,333,653
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 4,070
---------- ----------
NET INCOME $1,461,230 $1,337,723
========== ==========
GENERAL PARTNER - NET INCOME $ 157,346 $ 142,063
========== ==========
LIMITED PARTNERS - NET INCOME $1,303,884 $1,195,660
========== ==========
NET INCOME per unit $ 7.69 $ 7.05
========== ==========
UNITS OUTSTANDING 169,637 169,637
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-8-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-3
GEODYNE NPI PARTNERSHIP P-3
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,461,230 $1,337,723
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 148,113 98,784
Gain on sale of Net Profits
Interests ( 22,514) -
Increase in accounts receivable -
Net Profits ( 63,800) ( 55,539)
---------- ----------
Net cash provided by operating
activities $1,523,029 $1,376,898
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 31,066) ($ 39,108)
Proceeds from the sale of Net
Profits Interests 20,324 576
---------- ----------
Net cash used by investing
activities ($ 10,742) ($ 38,532)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,419,579) ($1,172,862)
---------- ----------
Net cash used by financing
activities ($1,419,579) ($1,172,862)
---------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 92,708 $ 165,504
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 581,527 433,562
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 674,235 $ 599,066
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-9-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2004 2003
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 508,554 $ 399,864
Accounts receivable:
Net Profits 308,262 240,436
---------- ----------
Total current assets $ 816,816 $ 640,300
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 396,259 436,463
---------- ----------
$1,213,075 $1,076,763
========== ==========
PARTNERS' CAPITAL (DEFICIT)
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 56,898) ($ 66,233)
Limited Partners, issued and
outstanding, 126,306 units 1,269,973 1,142,996
---------- ----------
Total Partners' capital $1,213,075 $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 SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
-------- --------
REVENUES:
Net Profits $415,595 $357,764
Interest income 727 734
-------- --------
$416,322 $358,498
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 12,617 $ 23,510
General and administrative
(Note 2) 35,469 37,938
-------- --------
$ 48,086 $ 61,448
-------- --------
NET INCOME $368,236 $297,050
======== ========
GENERAL PARTNER - NET INCOME $ 37,887 $ 31,747
======== ========
LIMITED PARTNERS - NET INCOME $330,349 $265,303
======== ========
NET INCOME per unit $ 2.62 $ 2.10
======== ========
UNITS OUTSTANDING 126,306 126,306
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-11-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ------------
REVENUES:
Net Profits $1,254,598 $1,302,591
Interest income 1,825 2,233
Gain on sale of Net Profits
Interests 962 -
---------- ----------
$1,257,385 $1,304,824
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 71,829 $ 66,524
General and administrative
(Note 2) 126,379 125,894
---------- ----------
$ 198,208 $ 192,418
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,059,177 $1,112,406
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - ( 439)
---------- ----------
NET INCOME $1,059,177 $1,111,967
========== ==========
GENERAL PARTNER - NET INCOME $ 112,200 $ 117,000
========== ==========
LIMITED PARTNERS - NET INCOME $ 946,977 $ 994,967
========== ==========
NET INCOME per unit $ 7.50 $ 7.88
========== ==========
UNITS OUTSTANDING 126,306 126,306
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-12-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-4
GEODYNE NPI PARTNERSHIP P-4
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,059,177 $1,111,967
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 71,829 66,524
Gain on sale of Net Profits
Interests ( 962) -
Settlement of asset retirement
obligation ( 77) -
Decrease in accounts receivable -
related party - 5
(Increase) decrease in accounts
receivable - Net Profits ( 66,803) 24,966
---------- ----------
Net cash provided by operating
activities $1,063,164 $1,203,901
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 32,044) ($ 17,299)
Proceeds from sale of Net Profits
Interests 435 411
---------- ----------
Net cash used by investing
activities ($ 31,609) ($ 16,888)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 922,865) ($1,065,278)
---------- ----------
Net cash used by financing
activities ($ 922,865) ($1,065,278)
---------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 108,690 $ 121,735
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 399,864 351,179
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 508,554 $ 472,914
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-13-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2004 2003
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 402,525 $ 337,494
Accounts receivable:
Net Profits 14,122 -
---------- ----------
Total current assets $ 416,647 $ 337,494
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 610,957 616,277
---------- ----------
$1,027,604 $ 953,771
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ - $ 3,810
---------- ----------
Total current liabilities $ - $ 3,810
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 56,696) ($ 59,667)
Limited Partners, issued and
outstanding, 118,449 units 1,084,300 1,009,628
---------- ----------
Total Partners' capital $1,027,604 $ 949,961
---------- ----------
$1,027,604 $ 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 SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
-------- --------
REVENUES:
Net Profits $262,437 $288,814
Interest income 664 662
-------- --------
$263,101 $289,476
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 9,775 $ 14,637
General and administrative
(Note 2) 33,324 35,631
-------- --------
$ 43,099 $ 50,268
-------- --------
NET INCOME $220,002 $239,208
======== ========
GENERAL PARTNER - NET INCOME $ 22,814 $ 25,172
======== ========
LIMITED PARTNERS - NET INCOME $197,188 $214,036
======== ========
NET INCOME per unit $ 1.66 $ 1.80
======== ========
UNITS OUTSTANDING 118,449 118,449
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-15-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ----------
REVENUES:
Net Profits $941,450 $1,047,998
Interest income 1,580 1,850
Loss on sale of Net Profits
Interests ( 749) -
-------- ----------
$942,281 $1,049,848
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 63,322 $ 56,027
General and administrative
(Note 2) 119,833 119,276
-------- ----------
$183,155 $ 175,303
-------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $759,126 $ 874,545
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 2,785
-------- ----------
NET INCOME $759,126 $ 877,330
======== ==========
GENERAL PARTNER - NET INCOME $ 81,454 $ 58,563
======== ==========
LIMITED PARTNERS - NET INCOME $677,672 $ 818,767
======== ==========
NET INCOME per unit $ 5.72 $ 6.91
======== ==========
UNITS OUTSTANDING 118,449 118,449
======== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-16-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-5
GEODYNE NPI PARTNERSHIP P-5
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $759,126 $877,330
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 63,322 56,027
Loss on sale of Net Profits
Interests 749 -
Settlement of asset retirement
obligation ( 104) -
Increase in accounts receivable -
Net Profits ( 25,735) ( 18,863)
-------- --------
Net cash provided by operating
activities $797,358 $911,709
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 50,844) ($ 13,491)
Proceeds from the sale of Net
Profits Interests - 8,777
-------- --------
Net cash used by investing activities ($ 50,844) ($ 4,714)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($681,483) ($706,510)
-------- --------
Net cash used by financing
activities ($681,483) ($706,510)
-------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 65,031 $200,485
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 337,494 252,994
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $402,525 $453,479
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-17-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
COMBINED BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2004 2003
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 653,975 $ 567,735
---------- ----------
Total current assets $ 653,975 $ 567,735
NET PROFITS INTERESTS, net, utilizing
the successful efforts method 1,197,197 1,264,192
---------- ----------
$1,851,172 $1,831,927
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 163,171 $ 39,658
---------- ----------
Total current liabilities $ 163,171 $ 39,658
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 70,380) ($ 60,944)
Limited Partners, issued and
outstanding, 143,041 units 1,758,381 1,853,213
---------- ----------
Total Partners' capital $1,688,001 $1,792,269
---------- ----------
$1,851,172 $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 SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
-------- --------
REVENUES:
Net Profits $336,118 $456,758
Interest income 973 1,071
-------- --------
$337,091 $457,829
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 22,903 $ 33,524
General and administrative
(Note 2) 40,033 42,864
-------- --------
$ 62,936 $ 76,388
-------- --------
NET INCOME $274,155 $381,441
======== ========
GENERAL PARTNER - NET INCOME $ 29,380 $ 41,054
======== ========
LIMITED PARTNERS - NET INCOME $244,775 $340,387
======== ========
NET INCOME per unit $ 1.71 $ 2.38
======== ========
UNITS OUTSTANDING 143,041 143,041
======== ========
The accompanying condensed notes are an integral part of these
combined financial statements.
-19-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
------------ ----------
REVENUES:
Net Profits $1,416,290 $1,900,291
Interest income 2,448 2,752
Loss on sale of Net Profits
Interests ( 256) -
---------- ----------
$1,418,482 $1,903,043
COSTS AND EXPENSES:
Depletion of Net Profits
Interests $ 95,375 $ 109,895
General and administrative
(Note 2) 140,321 140,001
---------- ----------
$ 235,696 $ 249,896
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,182,786 $1,653,147
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 1,477
---------- ----------
NET INCOME $1,182,786 $1,654,624
========== ==========
GENERAL PARTNER - NET INCOME $ 126,618 $ 174,945
========== ==========
LIMITED PARTNERS - NET INCOME $1,056,168 $1,479,679
========== ==========
NET INCOME per unit $ 7.38 $ 10.34
========== ==========
UNITS OUTSTANDING 143,041 143,041
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-20-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIP P-6
GEODYNE NPI PARTNERSHIP P-6
COMBINED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,182,786 $1,654,624
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 95,375 109,895
Loss on sale of Net Profits
Interests 256 -
Settlement of asset retirement
obligation ( 36) -
(Increase) decrease in accounts
receivable - Net Profits 114,027 ( 55,935)
---------- ----------
Net cash provided by operating
activities $1,392,408 $1,707,107
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 19,114) ($ 6,832)
Proceeds from sale of Net Profits
Interests - 5,252
---------- ----------
Net cash used by investing
activities ($ 19,114) ($ 1,580)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,287,054) ($1,352,721)
---------- ----------
Net cash used by financing
activities ($1,287,054) ($1,352,721)
---------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 86,240 $ 352,806
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 567,735 317,796
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 653,975 $ 670,602
========== ==========
The accompanying condensed notes are an integral part of these
combined financial statements.
-21-
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE COMBINED FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The combined balance sheets as of September 30, 2004, combined statements
of operations for the three and nine months ended September 30, 2004 and
2003, and combined statements of cash flows for the nine months ended
September 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 September 30, 2004, the combined results of operations for the three
and nine months ended September 30, 2004 and 2003, and the combined cash
flows for the nine months ended September 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 September 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-
RECLASSIFICATION
----------------
Certain prior year balances have been reclassified to conform with current
year presentation.
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
nine months ended September 30, 2004, the P-1, P-3, P-4, P-5, and P-6
Partnerships recognized approximately $2,000, $4,000, $2,000, $2,000 and
$5,000 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 nine months ended September 30, 2004 and 2003 are as shown below.
-24-
P-1 Partnership
---------------
Three Months Three Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, July 1 $57,631 $56,775
Settlements and Disposals ( 238) -
Accretion expense 598 621
------- -------
Total Asset Retirement
Obligation, End of Quarter $57,991 $57,396
======= =======
Nine Months Nine Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $56,388 $55,495
Settlements and Disposals ( 238) -
Accretion expense 1,841 1,901
------- -------
Total Asset Retirement
Obligation, End of Period $57,991 $57,396
======= =======
-25-
P-3 Partnership
---------------
Three Months Three Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, July 1 $97,731 $96,802
Settlements and Disposals ( 300) -
Accretion expense 982 1,015
------- -------
Total Asset Retirement
Obligation, End of Quarter $98,413 $97,817
======= =======
Nine Months Nine Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $95,666 $94,622
Settlements and Disposals ( 300) -
Accretion expense 3,047 3,195
------- -------
Total Asset Retirement
Obligation, End of Period $98,413 $97,817
======= =======
-26-
P-4 Partnership
---------------
Three Months Three Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, July 1 $55,267 $55,010
Accretion expense 451 530
------- -------
Total Asset Retirement
Obligation, End of Quarter $55,718 $55,540
======= =======
Nine Months Nine Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $56,632 $53,986
Settlements and Disposals ( 2,277) -
Accretion expense 1,363 1,554
------- -------
Total Asset Retirement
Obligation, End of Period $55,718 $55,540
======= =======
-27-
P-5 Partnership
---------------
Three Months Three Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, July 1 $74,841 $70,306
Additions and revisions ( 451) -
Settlements and disposals ( 104) -
Accretion expense 584 691
------- -------
Total Asset Retirement
Obligation, End of Quarter $74,870 $70,997
======= =======
Nine Months Nine Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $72,299 $68,918
Additions and revisions 881 -
Settlements and disposals ( 104) -
Accretion expense 1,794 2,079
------- -------
Total Asset Retirement
Obligation, End of Period $74,870 $70,997
======= =======
-28-
P-6 Partnership
---------------
Three Months Three Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, July 1 $209,711 $208,258
Additions and revisions 29 -
Settlements and disposals ( 36) -
Accretion expense 1,371 1,804
-------- --------
Total Asset Retirement
Obligation, End of Quarter $211,075 $210,062
======== ========
Nine Months Nine Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $206,661 $204,576
Additions and revisions 308 -
Settlements and disposals ( 36) -
Accretion expense 4,142 5,486
-------- --------
Total Asset Retirement
Obligation, End of Period $211,075 $210,062
======== ========
2. TRANSACTIONS WITH RELATED PARTIES
---------------------------------
The Partnerships' partnership agreements provide for reimbursement to the
General Partner for all direct general and administrative expenses and for
the general and administrative overhead applicable to the Partnerships
based on an allocation of actual costs incurred. During the three months
ended September 30, 2004, the following payments were made to the General
Partner or its affiliates by the Partnerships:
-29-
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------ --------------
P-1 $2,204 $28,440
P-3 2,651 44,640
P-4 2,229 33,240
P-5 2,154 31,170
P-6 2,392 37,641
During the nine months ended September 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 $26,952 $ 85,320
P-3 29,498 133,920
P-4 26,659 99,720
P-5 26,323 93,510
P-6 27,398 112,923
Affiliates of the Partnerships operate certain of the Partnerships'
properties and their policy is to bill the Partnerships for all customary
charges and cost reimbursements associated with their activities.
-30-
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
-31-
and the General Partner in accordance with the terms of the
Partnerships' partnership agreements.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Partnerships began operations and investors were assigned their rights
as Limited Partners, having made capital contributions in the amounts and
on the dates set forth below:
Limited
Date of Partner Capital
Partnership Activation Contributions
----------- ----------------- ---------------
P-1 October 25, 1988 $10,807,400
P-3 May 10, 1989 16,963,700
P-4 November 21, 1989 12,630,600
P-5 February 27, 1990 11,844,900
P-6 September 5, 1990 14,304,100
In general, the amount of funds available for acquisition of producing
properties was equal to the capital contributions of the Limited Partners,
less 15% for sales commissions and organization and management fees. All
of the Partnerships have fully invested their capital contributions.
Net proceeds from the Partnerships' Net Profits Interests less necessary
operating capital are distributed to the Limited Partners on a quarterly
basis. Revenues and net proceeds of a Partnership are largely dependent
upon the volumes of oil and gas sold and the prices received for such oil
and gas. While the General Partner cannot predict future pricing trends,
it believes the working capital available as of September 30, 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.
-32-
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
-33-
this liability. This liability is recorded as a reduction of accounts
receivable.
Also included in accounts receivable (payable) - Net Profits are amounts
which represent costs deferred or accrued for Net Profits relating to
lease operating expenses incurred in connection with the net underproduced
or overproduced gas imbalance positions. The rate used in calculating the
deferred charge or accrued liability is the annual average production
costs per Mcf. Also included in accounts receivable (payable) - Net
Profits is the asset retirement obligation.
NEW ACCOUNTING PRONOUNCEMENTS
- -----------------------------
Below is a brief description of Financial Accounting Standards ("FAS")
recently issued by the Financial Accounting Standards Board ("FASB") which
may have an impact on the Partnerships' future results of operations and
financial position.
In July 2001, the FASB issued FAS No. 143, "Accounting for Asset
Retirement Obligations", which is effective for fiscal years beginning
after June 15, 2002 (January 1, 2003 for the Partnerships). On January 1,
2003, the Partnerships adopted FAS No. 143 and recorded an increase in Net
Profits Interests, an increase (decrease) in net income for the cumulative
effect of the change in accounting principle, and an asset retirement
obligation, resulting in a decrease of accounts receivable - Net Profits,
in the following approximate amounts for each Partnership:
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
-34-
The asset retirement obligation will be adjusted upwards each quarter in
order to recognize accretion of the time-related discount factor. For the
nine months ended September 30, 2004, the P-1, P-3, P-4, P-5, and P-6
Partnerships recognized approximately $2,000, $4,000, $2,000, $2,000 and
$5,000 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.
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.
-35-
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
Production ( 4,267) ( 72,900)
Revisions of previous
estimates 3,394 23,166
------- ---------
Proved reserves, Sept. 30, 2004 220,737 2,300,712
======= =========
-36-
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
Production ( 5,516) ( 109,226)
Revisions of previous
estimates 3,234 ( 40,269)
------- ---------
Proved reserves, Sept. 30, 2004 291,261 3,690,304
======= =========
-37-
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
Production ( 4,790) ( 57,728)
Extensions and discoveries 33 198
Revisions of previous
estimates 2,725 1,338
------ ---------
Proved reserves, Sept. 30, 2004 58,605 2,059,991
====== =========
-38-
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
Production ( 748) ( 74,039)
Revisions of previous
estimates 2,500 6,455
------- ---------
Proved reserves, Sept. 30, 2004 43,519 2,298,190
======= =========
-39-
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
Production 870 ( 95,096)
Revisions of previous
estimates 2,779 ( 33,271)
------- ---------
Proved reserves, Sept. 30, 2004 133,777 4,151,748
======= =========
The net present value of the Partnerships' reserves may change
dramatically as oil and gas prices change or as volumes change for the
reasons described above. Net present value represents estimated future
gross cash flow from the production and sale of proved reserves, net of
estimated oil and gas production costs (including production taxes, ad
valorem taxes, and operating expenses) and estimated future development
costs, discounted at 10% per annum.
The following table indicates the estimated net present value of the
Partnerships' proved reserves as of September 30, 2004, 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
-40-
market prices for oil and gas production subsequent to September 30, 2004.
There can be no assurance that the prices used in calculating the net
present value of the Partnerships' proved reserves at September 30, 2004
will actually be realized for such production.
Net Present Value of Reserves (In 000's)
--------------------------------------------
Partnership 9/30/04 6/30/04 3/31/04 12/31/03
----------- ------- ------- ------- --------
P-1 $ 9,103 $ 8,003 $ 7,182 $ 7,347
P-3 13,485 12,315 11,117 11,351
P-4 6,960 6,786 6,657 6,829
P-5 6,164 6,098 5,533 6,052
P-6 11,781 11,069 9,998 10,327
Oil and Gas Prices
--------------------------------------------
Pricing 9/30/04 6/30/04 3/31/04 12/31/03
----------- ------- ------- ------- --------
Oil (Bbl) $ 49.56 $ 33.75 $ 32.50 $ 29.25
Gas (Mcf) 6.23 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:
-41-
* 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.
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 SEPTEMBER 30, 2004 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2003.
Three Months Ended September 30,
--------------------------------
2004 2003
-------- --------
Net Profits $389,691 $329,145
Barrels produced 4,267 4,593
Mcf produced 72,900 68,831
Average price/Bbl $ 39.47 $ 29.17
Average price/Mcf $ 4.57 $ 3.75
As shown in the table above, total Net Profits increased $60,546 (18.4%)
for the three months ended September 30, 2004 as compared to the three
months ended September 30, 2003. Of this increase, approximately (i)
$44,000 and $60,000, respectively, were related to increases in the
average prices of oil and gas sold and (ii) $15,000 was related to an
increase in volumes of gas sold. These increases were partially offset by
decreases of approximately (i) $49,000 related to an increase in
production expenses and (ii) $9,000 related to a decrease in volumes of
oil sold. Volumes of oil sold decreased 326 barrels, while volumes of gas
sold increased 4,069 Mcf for the three months ended September 30, 2004 as
compared to the three months ended September 30, 2003. The increase in
-42-
production expenses was primarily due to (i) workover expenses incurred on
two significant wells during the three months ended September 30, 2004 and
(ii) an increase in production taxes associated with the increase in oil
and gas sales.
Depletion of Net Profits Interests decreased $2,507 (10.9%) for the three
months ended September 30, 2004 as compared to the three months ended
September 30, 2003. This decrease was primarily due to upward revisions in
the estimates of remaining oil and gas reserves since September 30, 2003.
As a percentage of Net Profits, this expense decreased to 5.3% for the
three months ended September 30, 2004 from 7.0% for the three months ended
September 30, 2003. This percentage decrease was primarily due to (i) the
increase in Net Profits and (ii) the dollar decrease in depletion of Net
Profits Interests.
General and administrative expenses decreased $2,155 (6.6%) for the three
months ended September 30, 2004 as compared to the three months ended
September 30, 2003. As a percentage of Net Profits, these expenses
decreased to 7.9% for the three months ended September 30, 2004 from 10.0%
for the three months ended September 30, 2003. This percentage decrease
was primarily due to the increase in Net Profits.
NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2003.
Nine Months Ended September 30,
-------------------------------
2004 2003
---------- ----------
Net Profits $1,196,168 $1,097,097
Barrels produced 14,337 14,691
Mcf produced 206,847 212,570
Average price/Bbl $ 34.53 $ 28.53
Average price/Mcf $ 4.64 $ 4.43
As shown in the table above, total Net Profits increased $99,071 (9.0%)
for the nine months ended September 30, 2004 as compared to the nine
months ended September 30, 2003. Of this increase, approximately $86,000
and $44,000, respectively, were related to increases in the average prices
of oil and gas sold. These increases were partially offset by decreases of
approximately $10,000 and $25,000, respectively, related to decreases in
volumes of oil and gas sold. Volumes of oil and gas sold decreased 354
barrels and 5,723 Mcf, respectively, for the nine months ended September
30, 2004 as compared to the nine months ended September 30, 2003.
-43-
Depletion of Net Profits Interests decreased $12,782 (19.6%) for the nine
months ended September 30, 2004 as compared to the nine months ended
September 30, 2003. This decrease was primarily due to upward revisions in
the estimates of remaining oil and gas reserves since September 30, 2003.
As a percentage of Net Profits, this expense decreased to 4.4% for the
nine months ended September 30, 2004 from 5.9% for the nine months ended
September 30, 2003. This percentage decrease was primarily due to the
dollar decrease in depletion of Net Profits Interests.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 2004 and 2003. As a percentage of Net
Profits, these expenses decreased to 9.4% for the nine months ended
September 30, 2004 from 10.2% for the nine months ended September 30,
2003.
Cumulative cash distributions to the Limited Partners through September
30, 2004 were $16,539,558 or 153.04% of Limited Partners' capital
contributions.
P-3 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2003.
Three Months Ended September 30,
--------------------------------
2004 2003
-------- --------
Net Profits $564,291 $474,905
Barrels produced 5,516 5,896
Mcf produced 109,226 104,243
Average price/Bbl $ 39.42 $ 29.13
Average price/Mcf $ 4.68 $ 3.87
As shown in the table above, total Net Profits increased $89,386 (18.8%)
for the three months ended September 30, 2004 as compared to the three
months ended September 30, 2003. Of this increase, approximately (i)
$56,000 and $89,000, respectively, were related to increases in the
average prices of oil and gas sold and (ii) $19,000 was related to an
increase in volumes of gas sold. These increases were partially offset by
decreases of approximately (i) $64,000 related to an increase in
production expenses and (ii) $11,000 related to a decrease in volumes of
oil sold. Volumes of oil sold decreased 380 barrels, while volumes of gas
sold increased 4,983 Mcf for the three months ended September 30, 2004 as
compared to the three months ended September 30, 2003. The increase in
production expenses was primarily due to (i) workover expenses incurred on
two significant wells during the three months ended September 30, 2004 and
(ii) an increase in production taxes associated with the increase in oil
and gas sales.
-44-
Depletion of Net Profits Interests increased $65,873 (195.8%) for the
three months ended September 30, 2004 as compared to the three months
ended September 30, 2003. This increase was primarily due to one
significant well being fully depleted during the three months ended
September 30, 2004 due to the lack of remaining reserves, which increase
was partially offset by upward revisions in the estimates of remaining oil
and gas reserves since September 30, 2003. As a percentage of Net Profits,
this expense increased to 17.6% for the three months ended September 30,
2004 from 7.1% for the three months ended September 30, 2003. This
percentage increase was primarily due to the dollar increase in depletion
of Net Profits Interests.
General and administrative expenses decreased $3,400 (6.7%) for the three
months ended September 30, 2004 as compared to the three months ended
September 30, 2003. As a percentage of Net Profits, these expenses
decreased to 8.4% for the three months ended September 30, 2004 from 10.7%
for the three months ended September 30, 2003. This percentage decrease
was primarily due to the increase in Net Profits.
NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2003.
Nine Months Ended September 30,
-------------------------------
2004 2003
---------- ----------
Net Profits $1,747,557 $1,594,314
Barrels produced 18,478 18,942
Mcf produced 317,351 319,196
Average price/Bbl $ 34.57 $ 28.54
Average price/Mcf $ 4.76 $ 4.56
As shown in the table above, total Net Profits increased $153,243 (9.6%)
for the nine months ended September 30, 2004 as compared to the nine
months ended September 30, 2003. Of this increase, approximately $111,000
and $65,000, respectively, were related to increases in the average prices
of oil and gas sold. Volumes of oil and gas sold decreased 464 barrels and
1,845 Mcf, respectively, for the nine months ended September 30, 2004 as
compared to the nine months ended September 30, 2003.
Depletion of Net Profits Interests increased $49,329 (49.9%) for the nine
months ended September 30, 2004 as compared to the nine months ended
September 30, 2003. This increase was primarily due to one significant
well being fully depleted during the nine months ended September 30, 2004
due to the lack of remaining reserves, which increase was partially offset
by upward revisions in the estimates of remaining oil and gas reserves
since September 30, 2003. As a percentage of Net Profits, this expense
increased to 8.5% for the nine months ended September 30, 2004 from 6.2%
for the nine
-45-
months ended September 30, 2003. This percentage increase was primarily
due to the dollar increase in depletion of Net Profits Interests.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 2004 and 2003. As a percentage of Net
Profits, these expenses decreased to 9.4% for the nine months ended
September 30, 2004 from 10.3% for the nine months ended September 30,
2003.
Cumulative cash distributions to the Limited Partners through September
30, 2004 were $23,086,401 or 136.09% of Limited Partners' capital
contributions.
P-4 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2003.
Three Months Ended September 30,
--------------------------------
2004 2003
-------- --------
Net Profits $415,595 $357,764
Barrels produced 4,790 4,612
Mcf produced 57,728 65,963
Average price/Bbl $ 41.75 $ 28.13
Average price/Mcf $ 5.36 $ 5.06
As shown in the table above, total Net Profits increased $57,831 (16.2%)
for the three months ended September 30, 2004 as compared to the three
months ended September 30, 2003. Of this increase, approximately (i)
$65,000 and $18,000, respectively, were related to increases in the
average prices of oil and gas sold and (ii) $11,000 was related to a
decrease in production expenses. These increases were partially offset by
a decrease of approximately $42,000 related to a decrease in volumes of
gas sold. Volumes of oil sold increased 178 barrels, while volumes of gas
sold decreased 8,235 Mcf for the three months ended September 30, 2004 as
compared to the three months ended September 30, 2003. The decrease in
volumes of gas sold was primarily due to (i) normal declines in production
and (ii) a positive prior period volume adjustment made by the operator on
one significant well during the three months ended September 30, 2003.
These decreases were partially offset by the first receipt of revenues
from a well during the three months ended September 30, 2004. The decrease
in production expenses was primarily due to workover expenses incurred on
two significant wells during the three months ended September 30, 2003,
which decrease was partially offset by an increase in production taxes
associated with the payout of one non-consent well.
-46-
Depletion of Net Profits Interests decreased $10,893 (46.3%) for the three
months ended September 30, 2004 as compared to the three months ended
September 30, 2003. This decrease was primarily due to upward revisions in
the estimates of remaining oil reserves since September 30, 2003, which
decrease was partially offset by one significant well being fully depleted
during the three months ended September 30, 2004. As a percentage of Net
Profits, this expense decreased to 3.0% for the three months ended
September 30, 2004 from 6.6% for the three months ended September 30,
2003. This percentage decrease was primarily due to the dollar decrease in
depletion of Net Profits Interests.
General and administrative expenses decreased $2,469 (6.5%) for the three
months ended September 30, 2004 as compared to the three months ended
September 30, 2003. As a percentage of Net Profits, these expenses
decreased to 8.5% for the three months ended September 30, 2004 from 10.6%
for the three months ended September 30, 2003. This percentage decrease
was primarily due to the increase in Net Profits Interests.
NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2003.
Nine Months Ended September 30,
-------------------------------
2004 2003
---------- ----------
Net Profits $1,254,598 $1,302,591
Barrels produced 14,364 16,559
Mcf produced 185,842 199,513
Average price/Bbl $ 37.53 $ 29.56
Average price/Mcf $ 5.54 $ 5.49
As shown in the table above, total Net Profits decreased $47,993 (3.7%)
for the nine months ended September 30, 2004 as compared to the nine
months ended September 30, 2003. Of this decrease, approximately (i)
$65,000 and $75,000, respectively, were related to decreases in volumes of
oil and gas sold and (ii) $31,000 was related to an increase in production
expenses. These decreases were partially offset by increases of
approximately $115,000 and $8,000, respectively, related to increases in
the average prices of oil and gas sold. Volumes of oil and gas sold
decreased 2,195 barrels and 13,671 Mcf, respectively, for the nine months
ended September 30, 2004 as compared to the nine months ended September
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 nine
months ended September 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
-47-
wells during the nine months ended September 30, 2003. These decreases
were partially offset by the first receipt of revenues from a well during
the three months ended September 30, 2004. The increase in production
expenses was primarily due to (i) workover expenses incurred on several
wells during the nine months ended September 30, 2004, (ii) positive prior
period lease operating expense adjustments made by the operators on
several wells during the nine months ended September 30, 2004, and (iii)
an increase in production taxes associated with the payout of one
non-consent well.
Depletion of Net Profits Interests increased $5,305 (8.0%) for the nine
months ended September 30, 2004 as compared to the nine months ended
September 30, 2003. As a percentage of Net Profits, this expense increased
to 5.7% for the nine months ended September 30, 2004 from 5.1% for the
nine months ended September 30, 2003. This percentage increase was
primarily due to (i) the dollar increase in depletion of Net Profits
Interests and (ii) the decrease in Net Profits.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 2004 and 2003. As a percentage of Net
Profits, these expenses increased to 10.1% for the nine months ended
September 30, 2004 from 9.7% for the nine months ended September 30, 2003.
Cumulative cash distributions to the Limited Partners through September
30, 2004 were $18,537,945 or 146.77% of Limited Partners' capital
contributions.
-48-
P-5 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2003.
Three Months Ended September 30,
--------------------------------
2004 2003
-------- --------
Net Profits $262,437 $288,814
Barrels produced 748 851
Mcf produced 74,039 73,140
Average price/Bbl $ 43.20 $ 30.03
Average price/Mcf $ 4.40 $ 4.55
As shown in the table above, total Net Profits decreased $26,377 (9.1%)
for the three months ended September 30, 2004 as compared to the three
months ended September 30, 2003. Of this decrease, approximately (i)
$26,000 was related to an increase in production expenses, (ii) $11,000
was related to a decrease in the average price of gas sold, and (iii)
$3,000 was related to a decrease in volumes of oil sold. These decreases
were partially offset by increases of approximately (i) $10,000 related to
an increase in the average price of oil sold and (ii) $4,000 related to an
increase in volumes of gas sold. Volumes of oil sold decreased 103
barrels, while volumes of gas sold increased 899 Mcf for the three months
ended September 30, 2004 as compared to the three months ended September
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 increase in production expenses was primarily due to
workover expenses incurred on two significant wells during the three
months ended September 30, 2004.
Depletion of Net Profits Interests decreased $4,862 (33.2%) for the three
months ended September 30, 2004 as compared to the three months ended
September 30, 2003. This decrease was primarily due to upward revisions in
the estimates of remaining gas reserves since September 30, 2003. As a
percentage of Net Profits, this expense decreased to 3.7% for the three
months ended September 30, 2004 from 5.1% for the three months ended
September 30, 2003. This percentage decrease was primarily due to the
dollar decrease in depletion of Net Profits Interests.
General and administrative expenses decreased $2,307 (6.5%) for the three
months ended September 30, 2004 as compared to the three months ended
September 30, 2003. As a percentage of Net Profits, these expenses
increased to 12.7% for the three months ended September 30, 2004 from
12.3% for the three months ended September 30, 2003.
-49-
NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2003.
Nine Months Ended September 30,
------------------------------
2004 2003
-------- ----------
Net Profits $941,450 $1,047,998
Barrels produced 3,443 5,159
Mcf produced 208,724 236,977
Average price/Bbl $ 36.05 $ 30.08
Average price/Mcf $ 5.08 $ 4.87
As shown in the table above, total Net Profits decreased $106,548 (10.2%)
for the nine months ended September 30, 2004 as compared to the nine
months ended September 30, 2003. Of this decrease, approximately $52,000
and $138,000, respectively, were related to decreases in volumes of oil
and gas sold. These decreases were partially offset by increases of
approximately (i) $21,000 and $43,000, respectively, related to increases
in the average prices of oil and gas sold and (ii) $19,000 related to a
decrease in production expenses. Volumes of oil and gas sold decreased
1,716 barrels and 28,253 Mcf, respectively, for the nine months ended
September 30, 2004 as compared to the nine months ended September 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-5 Partnership becoming over produced
beyond ultimate reserves thereby increasing the Partnership's gas
imbalance payable and (ii) normal declines in production. These decreases
were partially offset by the successful completion of one 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 nine months ended September 30, 2003, and
(iii) a decrease in production taxes associated with the decrease in oil
and gas sales. These decreases were partially offset by workover expenses
incurred on two significant wells during the nine months ended September
30, 2004.
-50-
Depletion of Net Profits Interests increased $7,295 (13.0%) for the nine
months ended September 30, 2004 as compared to the nine months ended
September 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 nine months ended September
30, 2004, which increase was partially offset by upward revisions in the
estimates of remaining gas reserves since September 30, 2003. As a
percentage of Net Profits, this expense increased to 6.7% for the nine
months ended September 30, 2004 from 5.3% for the nine months ended
September 30, 2003. This percentage increase was primarily due to (i) the
dollar increase in depletion of Net Profits Interests and (ii) the
decrease in Net Profits.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 2004 and 2003. As a percentage of Net
Profits, these expenses increased to 12.7% for the nine months ended
September 30, 2004 from 11.4% for the nine months ended September 30,
2003. This percentage increase was primarily due to the decrease in Net
Profits.
Cumulative cash distributions to the Limited Partners through September
30, 2004 were $12,993,759 or 109.70% of Limited Partners' capital
contributions.
P-6 PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2003.
Three Months Ended September 30,
--------------------------------
2004 2003
---------- --------
Net Profits $336,118 $456,758
Barrels produced ( 870) 2,756
Mcf produced 95,096 121,866
Average price/Bbl $ - $ 26.60
Average price/Mcf $ 5.41 $ 4.26
As shown in the table above, total Net Profits decreased $120,640 (26.4%)
for the three months ended September 30, 2004 as compared to the three
months ended September 30, 2003. Of this decrease, approximately (i)
$96,000 and $114,000, respectively, were related to decreases in volumes
of oil and gas sold and (ii) $54,000 was related to an increase in
production expenses. These decreases were partially offset by increases of
approximately $34,000 and $109,000, respectively, related to increases in
the average prices of oil and gas sold. Volumes of oil and gas sold
decreased 3,626 barrels and 26,770 Mcf, respectively, for the three months
ended September 30, 2004 as compared to the three months ended September
30, 2003. The decrease in
-51-
volumes of oil sold was primarily due to (i) a substantial negative prior
period volume adjustment made by the operator on one significant well
during the three months ended September 30, 2004, (ii) normal declines in
production, and (iii) the shutting-in of a producing zone on one other
significant well during late 2003. As of this Quarterly Report, management
does not expect the shut-in zone to return to production. Without the
negative prior period adjustment volumes of oil sold for the three months
ended September 30, 2004 would have been 1,629 barrels with an average
price of $42.63. The decrease in volumes of gas sold was primarily due to
(i) negative prior period volume adjustments on two significant wells
during the three months ended September 30, 2004 and (ii) normal declines
in production. The increase in production expenses was primarily due to
(i) workover expenses incurred on two significant wells during the three
months ended September 30, 2004, (ii) an increase in production taxes
associated with the increase in oil and gas sales, and (iii) an increase
in repair and maintenance expenses incurred on two significant wells
during the three months ended September 30, 2004 as compared to the three
months ended September 30, 2003.
Depletion of Net Profits Interests decreased $10,621 (31.7%) for the three
months ended September 30, 2004 as compared to the three months ended
September 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 6.8% for the three months ended September 30, 2004 from 7.3%
for the three months ended September 30, 2003.
General and administrative expenses decreased $2,831 (6.6%) for the three
months ended September 30, 2004 as compared to the three months ended
September 30, 2003. As a percentage of Net Profits, these expenses
increased to 11.9% for the three months ended September 30, 2004 from 9.4%
for the three months ended September 30, 2003. This percentage increase
was primarily due to the decrease in Net Profits.
NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2003.
Nine Months Ended September 30,
-------------------------------
2004 2003
---------- ----------
Net Profits $1,416,290 $1,900,291
Barrels produced 4,939 12,548
Mcf produced 330,245 435,715
Average price/Bbl $ 42.44 $ 28.72
Average price/Mcf $ 5.24 $ 4.78
As shown in the table above, total Net Profits decreased $484,001 (25.5%)
for the nine months ended September 30,
-52-
2004 as compared to the nine months ended September 30, 2003. Of this
decrease, approximately $219,000 and $504,000, respectively, were related
to decreases in volumes of oil and gas sold. These decreases were
partially offset by increases of approximately $68,000 and $150,000,
respectively, related to increases in the average prices of oil and gas
sold. Volumes of oil and gas sold decreased 7,609 barrels and 105,470 Mcf,
respectively, for the nine months ended September 30, 2004 as compared to
the nine months ended September 30, 2003. The decrease in volumes of oil
sold was primarily due to (i) a negative prior period volume adjustment
made by the operator on one significant well during the nine months ended
September 30, 2004, (ii) normal declines in production, and (iii) the
shutting-in of a producing zone on one other 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 the Partnership's gas imbalance payable, (ii) normal declines
in production, and (iii) negative prior period volume adjustments made by
the operators on two significant wells during the nine months ended
September 30, 2004.
Depletion of Net Profits Interests decreased $14,520 (13.2%) for the nine
months ended September 30, 2004 as compared to the nine months ended
September 30, 2003. This decrease was primarily due to the decreases in
volumes of oil and gas sold, which decrease was partially offset by one
significant well being fully depleted during the nine months ended
September 30, 2004 due to the lack of remaining reserves. As a percentage
of Net Profits, this expense increased to 6.7% for the nine months ended
September 30, 2004 from 5.8% for the nine months ended September 30, 2003.
This percentage increase was primarily due to the decrease in Net Profits.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 2004 and 2003. As a percentage of Net
Profits, these expenses increased to 9.9% for the nine months ended
September 30, 2004 from 7.4% for the nine months ended September 30, 2003.
This percentage increase was primarily due to the decrease in Net Profits.
Cumulative cash distributions to the Limited Partners through September
30, 2004 were $19,035,248 or 133.08% of Limited Partners' capital
contribution.
-53-
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
The Partnerships do not hold any market risk sensitive instruments.
ITEM 4. 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.
-54-
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.
-55-
32.4 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 for the P-4 Partnership.
32.5 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 for the P-5 Partnership.
32.6 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 for the P-6 Partnership.
(b) Reports on Form 8-K.
None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME
P-1 LIMITED PARTNERSHIP
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME
LIMITED PARTNERSHIP P-3
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME
LIMITED PARTNERSHIP P-4
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME
LIMITED PARTNERSHIP P-5
GEODYNE INSTITUTIONAL/PENSION ENERGY INCOME
LIMITED PARTNERSHIP P-6
(Registrant)
BY: GEODYNE RESOURCES, INC.
General Partner
Date: November 12, 2004 By: /s/Dennis R. Neill
--------------------------------
(Signature)
Dennis R. Neill
President
Date: November 12, 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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