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:
III-A: 0-18302 III-B: 0-18636 III-C: 0-18634
III-D: 0-18936 III-E: 0-19010 III-F: 0-19102
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
---------------------------------------------------------
(Exact name of Registrant as specified in its Articles)
III-A 73-1352993
III-B 73-1358666
III-C 73-1356542
III-D 73-1357374
III-E 73-1367188
Oklahoma III-F 73-1377737
- ---------------------------- -------------------------------
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or Number)
organization)
Two West Second Street, Tulsa, Oklahoma 74103
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(918) 583-1791
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes No X
------ ------
-1-
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2004 2003
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $1,025,250 $ 804,593
Accounts receivable:
Oil and gas sales 640,269 509,275
---------- ----------
Total current assets $1,665,519 $1,313,868
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 764,555 847,993
DEFERRED CHARGE 190,806 195,649
---------- ----------
$2,620,880 $2,357,510
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 80,076 $ 76,949
Gas imbalance payable 20,904 22,289
Asset retirement obligation -
current (Note 1) 16,604 8,501
---------- ----------
Total current liabilities $ 117,584 $ 107,739
LONG-TERM LIABILITIES:
Accrued liability $ 30,538 $ 34,046
Asset retirement obligation
(Note 1) 96,366 106,492
---------- ----------
Total long-term liabilities $ 126,904 $ 140,538
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 86,382) ($ 104,097)
Limited Partners, issued and
outstanding, 263,976 units 2,462,774 2,213,330
---------- ----------
Total Partners' capital $2,376,392 $2,109,233
---------- ----------
$2,620,880 $2,357,510
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-2-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- --------
REVENUES:
Oil and gas sales $1,024,984 $944,055
Interest income 1,579 1,515
---------- --------
$1,026,563 $945,570
COSTS AND EXPENSES:
Lease operating $ 104,716 $139,845
Production tax 84,577 77,201
Depreciation, depletion, and
amortization of oil and gas
properties 26,320 35,461
General and administrative
(Note 2) 73,946 79,346
---------- --------
$ 289,559 $331,853
---------- --------
NET INCOME $ 737,004 $613,717
========== ========
GENERAL PARTNER - NET INCOME $ 75,911 $ 64,412
========== ========
LIMITED PARTNERS - NET INCOME $ 661,093 $549,305
========== ========
NET INCOME per unit $ 2.50 $ 2.08
========== ========
UNITS OUTSTANDING 263,976 263,976
========== ========
The accompanying condensed notes are an integral part of
these financial statements.
-3-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ------------
REVENUES:
Oil and gas sales $3,115,672 $3,235,948
Interest income 3,770 4,627
Gain on sale of oil and gas
properties 1,399 -
---------- ----------
$3,120,841 $3,240,575
COSTS AND EXPENSES:
Lease operating $ 375,591 $ 355,365
Production tax 260,081 245,143
Depreciation, depletion, and
amortization of oil and gas
properties 151,189 123,776
General and administrative
(Note 2) 242,120 242,950
---------- ----------
$1,028,981 $ 967,234
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $2,091,860 $2,273,341
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - ( 673)
---------- ----------
NET INCOME $2,091,860 $2,272,668
========== ==========
GENERAL PARTNER - NET INCOME $ 222,416 $ 238,005
========== ==========
LIMITED PARTNERS - NET INCOME $1,869,444 $2,034,663
========== ==========
NET INCOME per unit $ 7.08 $ 7.71
========== ==========
UNITS OUTSTANDING 263,976 263,976
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-4-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $2,091,860 $2,272,668
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 673
Depreciation, depletion, and
amortization of oil and gas
properties 151,189 123,776
Gain on sale of oil and gas
properties ( 1,399) -
Decrease in accounts receivable
- related party - 10
Settlement of asset retirement
obligation ( 165) -
(Increase) decrease in accounts
receivable - oil and gas sales ( 130,994) 53,620
Decrease in deferred charge 4,843 31,045
Increase (decrease) in accounts
payable 3,342 ( 1,526)
Decrease in gas imbalance
payable ( 1,385) -
Decrease in accrued liability ( 3,508) ( 8,465)
---------- ----------
Net cash provided by operating
activities $2,113,783 $2,471,801
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 68,800) ($ 36,944)
Proceeds from sale of oil and gas
properties 375 878
---------- ----------
Net cash used by investing activities ($ 68,425) ($ 36,066)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,824,701) ($2,191,849)
---------- ----------
Net cash used by financing activities ($1,824,701) ($2,191,849)
---------- ----------
The accompanying condensed notes are an integral part of
these financial statements.
-5-
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 220,657 $ 243,886
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 804,593 718,665
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $1,025,250 $ 962,551
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-6-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2004 2003
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 511,792 $ 417,271
Accounts receivable:
Oil and gas sales 345,212 274,296
---------- ----------
Total current assets $ 857,004 $ 691,567
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 403,375 450,273
DEFERRED CHARGE 123,784 128,417
---------- ----------
$1,384,163 $1,270,257
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 51,329 $ 52,293
Gas imbalance payable 10,934 11,711
Asset retirement obligation -
current (Note 1) 30,779 25,060
---------- ----------
Total current liabilities $ 93,042 $ 89,064
LONG-TERM LIABILITIES:
Accrued liability $ 10,847 $ 13,746
Asset retirement obligation
(Note 1) 49,315 58,151
---------- ----------
Total long-term liabilities $ 60,162 $ 71,897
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 55,413) ($ 68,928)
Limited Partners, issued and
outstanding, 138,336 units 1,286,372 1,178,224
---------- ----------
Total Partners' capital $1,230,959 $1,109,296
---------- ----------
$1,384,163 $1,270,257
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-7-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
-------- --------
REVENUES:
Oil and gas sales $545,780 $510,724
Interest income 744 761
-------- --------
$546,524 $511,485
COSTS AND EXPENSES:
Lease operating $ 65,180 $ 80,394
Production tax 47,089 42,522
Depreciation, depletion, and
amortization of oil and gas
properties 14,326 21,374
General and administrative
(Note 2) 39,806 42,501
-------- --------
$166,401 $186,791
-------- --------
NET INCOME $380,123 $324,694
======== ========
GENERAL PARTNER - NET INCOME $ 58,912 $ 51,583
======== ========
LIMITED PARTNERS - NET INCOME $321,211 $273,111
======== ========
NET INCOME per unit $ 2.32 $ 1.97
======== ========
UNITS OUTSTANDING 138,336 138,336
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
-8-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ------------
REVENUES:
Oil and gas sales $1,587,512 $1,782,665
Interest income 1,763 2,387
---------- ----------
$1,589,275 $1,785,052
COSTS AND EXPENSES:
Lease operating $ 234,273 $ 198,053
Production tax 139,400 138,177
Depreciation, depletion, and
amortization of oil and gas
properties 90,345 78,951
General and administrative
(Note 2) 137,573 137,168
---------- ----------
$ 601,591 $ 552,349
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $ 987,684 $1,232,703
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - ( 586)
---------- ----------
NET INCOME $ 987,684 $1,232,117
========== ==========
GENERAL PARTNER - NET INCOME $ 160,536 $ 195,595
========== ==========
LIMITED PARTNERS - NET INCOME $ 827,148 $1,036,522
========== ==========
NET INCOME per unit $ 5.98 $ 7.49
========== ==========
UNITS OUTSTANDING 138,336 138,336
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-9-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 987,684 $1,232,117
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 586
Depreciation, depletion, and
amortization of oil and gas
properties 90,345 78,951
Settlement of asset retirement
obligation ( 109) -
Decrease in accounts receivable
- related party - 7
(Increase) decrease in accounts
receivable - oil and gas sales ( 70,916) 36,552
Decrease in deferred charge 4,633 -
Decrease in accounts payable ( 882) ( 7,764)
Decrease in gas imbalance payable ( 777) -
Decrease in accrued liability ( 2,899) ( 2,607)
---------- ----------
Net cash provided by operating
activities $1,007,079 $1,337,842
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 46,537) ($ 22,723)
Proceeds from sale of oil and gas
properties - 461
---------- ----------
Net cash used by investing activities ($ 46,537) ($ 22,262)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($ 866,021) ($1,210,260)
---------- ----------
Net cash used by financing activities ($ 866,021) ($1,210,260)
---------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 94,521 $ 105,320
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 417,271 397,754
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 511,792 $ 503,074
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-10-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2004 2003
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 819,315 $ 711,441
Accounts receivable:
Oil and gas sales 468,317 446,858
---------- ----------
Total current assets $1,287,632 $1,158,299
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,507,229 1,691,169
DEFERRED CHARGE 52,008 53,217
---------- ----------
$2,846,869 $2,902,685
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 127,985 $ 77,907
Gas imbalance payable 86,036 38,187
Asset retirement obligation -
current (Note 1) 34,286 28,206
---------- ----------
Total current liabilities $ 248,307 $ 144,300
LONG-TERM LIABILITIES:
Accrued liability $ 179,128 $ 202,758
Asset retirement obligation
(Note 1) 166,237 166,247
---------- ----------
Total long-term liabilities $ 345,365 $ 369,005
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 160,229) ($ 153,480)
Limited Partners, issued and
outstanding, 244,536 units 2,413,426 2,542,860
---------- ----------
Total Partners' capital $2,253,197 $2,389,380
---------- ----------
$2,846,869 $2,902,685
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-11-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
-------- --------
REVENUES:
Oil and gas sales $691,851 $756,408
Interest income 1,316 1,332
-------- --------
$693,167 $757,740
COSTS AND EXPENSES:
Lease operating $160,910 $105,493
Production tax 48,473 54,176
Depreciation, depletion, and
amortization of oil and gas
properties 196,749 47,365
General and administrative
(Note 2) 68,067 73,072
-------- --------
$474,199 $280,106
-------- --------
NET INCOME $218,968 $477,634
======== ========
GENERAL PARTNER - NET INCOME $ 39,473 $ 51,893
======== ========
LIMITED PARTNERS - NET INCOME $179,495 $425,741
======== ========
NET INCOME per unit $ 0.74 $ 1.74
======== ========
UNITS OUTSTANDING 244,536 244,536
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
-12-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
------------ ----------
REVENUES:
Oil and gas sales $2,420,732 $2,875,739
Interest income 3,215 3,657
Loss on sale of oil and gas
properties ( 891) -
---------- ----------
$2,423,056 $2,879,396
COSTS AND EXPENSES:
Lease operating $ 427,884 $ 423,962
Production tax 169,447 198,867
Depreciation, depletion, and
amortization of oil and gas
properties 307,239 146,921
General and administrative
(Note 2) 225,268 225,930
---------- ----------
$1,129,838 $ 995,680
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,293,218 $1,883,716
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 2,317
---------- ----------
NET INCOME $1,293,218 $1,886,033
========== ==========
GENERAL PARTNER - NET INCOME $ 156,652 $ 201,252
========== ==========
LIMITED PARTNERS - NET INCOME $1,136,566 $1,684,781
========== ==========
NET INCOME per unit $ 4.65 $ 6.89
========== ==========
UNITS OUTSTANDING 244,536 244,536
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-13-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,293,218 $1,886,033
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - ( 2,317)
Depreciation, depletion, and
amortization of oil and gas
properties 307,239 146,921
Settlement of asset retirement
obligation ( 131) -
Loss on sale of oil and gas
properties 891 -
(Increase) decrease in accounts
receivable - oil and gas sales ( 21,459) 22,298
Decrease in deferred charge 1,209 -
Increase (decrease) in accounts
payable 39,553 ( 61,583)
Increase in gas imbalance payable 47,849 -
Decrease in accrued liability ( 23,630) -
---------- ----------
Net cash provided by operating
activities $1,644,739 $1,991,352
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 107,464) ($ 17,815)
Proceeds from sale of oil and gas
properties - 18,381
---------- ----------
Net cash provided (used) by investing
activities ($ 107,464) $ 566
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,429,401) ($1,589,993)
---------- ----------
Net cash used by financing activities ($1,429,401) ($1,589,993)
---------- ----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 107,874 $ 401,925
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 711,441 480,424
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 819,315 $ 882,349
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-14-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2004 2003
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 486,354 $ 438,562
Accounts receivable:
Oil and gas sales 279,688 339,466
---------- ----------
Total current assets $ 766,042 $ 778,028
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 605,369 943,562
DEFERRED CHARGE 9,125 9,952
---------- ----------
$1,380,536 $1,731,542
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 159,878 $ 83,251
Gas imbalance payable 44,673 5,189
Asset retirement obligation -
current (Note 1) 11,890 7,187
---------- ----------
Total current liabilities $ 216,441 $ 95,627
LONG-TERM LIABILITIES:
Accrued liability $ 205,072 $ 247,304
Asset retirement obligation
(Note 1) 94,812 306,844
---------- ----------
Total long-term liabilities $ 299,884 $ 554,148
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 72,494) ($ 47,561)
Limited Partners, issued and
outstanding, 131,008 units 936,705 1,129,328
---------- ----------
Total Partners' capital $ 864,211 $1,081,767
---------- ----------
$1,380,536 $1,731,542
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-15-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- --------
REVENUES:
Oil and gas sales $397,237 $338,938
Interest income 979 752
-------- --------
$398,216 $339,690
COSTS AND EXPENSES:
Lease operating $115,595 $ 66,624
Production tax 28,056 23,908
Depreciation, depletion, and
amortization of oil and gas
properties 11,942 19,988
General and administrative
(Note 2) 41,178 39,783
-------- --------
$196,771 $150,303
-------- --------
INCOME FROM CONTINUING OPERATIONS $201,445 $189,387
Income (loss) from discontinued
operations (Note 3) ( 67,866) 24,823
-------- --------
NET INCOME $133,579 $214,210
======== ========
GENERAL PARTNER - NET INCOME $ 14,335 $ 23,877
======== ========
LIMITED PARTNERS - NET INCOME $119,244 $190,333
======== ========
NET INCOME per unit $ 0.91 $ 1.45
======== ========
UNITS OUTSTANDING 131,008 131,008
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
-16-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
------------ ----------
REVENUES:
Oil and gas sales $1,390,879 $1,681,615
Interest income 2,082 2,153
Loss on sale of oil and gas
properties ( 128) -
---------- ----------
$1,392,833 $1,683,768
COSTS AND EXPENSES:
Lease operating $ 234,776 $ 255,215
Production tax 98,090 116,383
Depreciation, depletion, and
amortization of oil and gas
properties 72,799 66,228
General and administrative
(Note 2) 135,363 131,031
---------- ----------
$ 541,028 $ 568,857
---------- ----------
INCOME FROM CONTINUING OPERATIONS $ 851,805 $1,114,911
Income (loss) from discontinued
operations (Note 3) ( 88,868) 70,602
Gain on disposal of discontinued
operations (Note 3) 10,368 -
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $ 773,305 $1,185,513
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 2,875
---------- ----------
NET INCOME $ 773,305 $1,188,388
========== ==========
GENERAL PARTNER - NET INCOME $ 83,928 $ 125,642
========== ==========
LIMITED PARTNERS - NET INCOME $ 689,377 $1,062,746
========== ==========
NET INCOME per unit $ 5.26 $ 8.11
========== ==========
UNITS OUTSTANDING 131,008 131,008
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-17-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $773,305 $1,188,388
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - ( 2,875)
Depreciation, depletion, and
amortization of oil and gas
properties 75,617 80,862
Loss on sale of oil and gas
properties 128 -
Settlement of asset retirement
obligation ( 17) -
Gain on disposal of discontinued
operations (Note 3) ( 10,368) -
Decrease in accounts receivable
- oil and gas sales 59,778 43,131
Decrease in deferred charge 827 -
Increase (decrease) in accounts
payable 69,375 ( 78,373)
Increase in gas imbalance payable 39,484 -
Decrease in accrued liability ( 42,232) -
-------- ----------
Net cash provided by operating
activities $965,897 $1,231,133
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 15,830) ($ 5,662)
Proceeds from disposal of
discontinued operations (Note 3) 88,586 13,975
-------- ----------
Net cash provided by investing
activities $ 72,756 $ 8,313
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($990,861) ($1,052,481)
-------- ----------
Net cash used by financing activities ($990,861) ($1,052,481)
-------- ----------
-18-
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 47,792 $ 186,965
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 438,562 306,024
-------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $486,354 $ 492,989
======== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-19-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2004 2003
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $1,230,596 $1,513,224
Accounts receivable:
Oil and gas sales 720,223 1,087,689
---------- ----------
Total current assets $1,950,819 $2,600,913
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,959,924 4,004,314
DEFERRED CHARGE 48,795 49,696
---------- ----------
$3,959,538 $6,654,923
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 753,915 $ 415,194
Gas imbalance payable 2,736 2,736
Asset retirement obligation -
current (Note 1) 23,221 12,713
---------- ----------
Total current liabilities $ 779,872 $ 430,643
LONG-TERM LIABILITIES:
Accrued liability $ 303,894 $ 342,831
Asset retirement obligation
(Note 1) 196,081 1,756,150
---------- ----------
Total long-term liabilities $ 499,975 $2,098,981
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 317,476) ($ 177,234)
Limited Partners, issued and
outstanding, 418,266 units 2,997,167 4,302,533
---------- ----------
Total Partners' capital $2,679,691 $4,125,299
---------- ----------
$3,959,538 $6,654,923
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-20-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
------------ ----------
REVENUES:
Oil and gas sales $1,103,595 $962,495
Interest income 3,659 1,705
---------- --------
$1,107,254 $964,200
COSTS AND EXPENSES:
Lease operating $ 236,393 $254,274
Production tax 80,003 60,783
Depreciation, depletion, and
amortization of oil and gas
properties 67,474 40,269
General and administrative
(Note 2) 119,719 124,495
---------- --------
$ 503,589 $479,821
---------- --------
NET INCOME FROM CONTINUING OPERATIONS $ 603,665 $484,379
Income (loss) from discontinued
operations (Note 3) ( 484,339) 166,374
---------- --------
NET INCOME $ 119,326 $650,753
========== ========
GENERAL PARTNER - NET INCOME $ 17,640 $ 73,912
========== ========
LIMITED PARTNERS - NET INCOME $ 101,686 $576,841
========== ========
NET INCOME per unit $ .24 $ 1.38
========== ========
UNITS OUTSTANDING 418,266 418,266
========== ========
The accompanying condensed notes are an integral part of
these financial statements.
-21-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
------------ ----------
REVENUES:
Oil and gas sales $3,371,556 $3,504,582
Interest income 7,071 3,973
---------- ----------
$3,378,627 $3,508,555
COSTS AND EXPENSES:
Lease operating $ 691,008 $ 767,307
Production tax 233,838 219,097
Depreciation, depletion, and
amortization of oil and gas
properties 136,694 174,176
General and administrative
(Note 2) 375,998 373,638
---------- ----------
$1,437,538 $1,534,218
---------- ----------
NET INCOME FROM CONTINUING OPERATIONS $1,941,089 $1,974,337
Income (loss) from discontinued
operations (Note 3) ( 633,223) 500,096
Gain on disposal of discontinued
operations (Note 3) 88,757 -
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,396,623 $2,474,433
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 2,725
---------- ----------
NET INCOME $1,396,623 $2,477,158
========== ==========
GENERAL PARTNER - NET INCOME $ 152,989 $ 272,306
========== ==========
LIMITED PARTNERS - NET INCOME $1,243,634 $2,204,852
========== ==========
NET INCOME per unit $ 2.97 $ 5.27
========== ==========
UNITS OUTSTANDING 418,266 418,266
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-22-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,396,623 $2,477,158
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - ( 2,725)
Depreciation, depletion, and
amortization of oil and gas
properties 155,929 282,208
Settlement of asset retirement
obligation - ( 1,848)
Gain on disposal of discontinued
operations (Note 3) ( 88,757) -
(Increase) decrease in accounts
receivable - oil and gas sales 367,466 ( 139,742)
Decrease in deferred charge 901 8,263
Increase (decrease) in accounts
payable 273,738 ( 277,964)
Decrease in accrued liability -
other - ( 122,289)
Decrease in accrued liability ( 38,937) -
---------- ----------
Net cash provided by operating
activities $2,066,963 $2,223,061
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 139,581) ($ 16,896)
Proceeds from disposal of
discontinued operations (Note 3) 632,221 30,348
---------- ----------
Net cash provided by investing
activities $ 492,640 $ 13,452
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($2,842,231) ($1,640,269)
---------- ----------
Net cash used by financing activities ($2,842,231) ($1,640,269)
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 282,628) $ 596,244
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,513,224 801,420
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $1,230,596 $1,397,664
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-23-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
2004 2003
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 618,177 $ 521,918
Accounts receivable:
Oil and gas sales 466,594 352,465
---------- ----------
Total current assets $1,084,771 $ 874,383
NET OIL AND GAS PROPERTIES, utilizing
the successful efforts method 1,735,242 1,695,682
DEFERRED CHARGE 21,871 22,237
---------- ----------
$2,841,884 $2,592,302
========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 141,176 $ 96,896
Gas imbalance payable 2,295 2,295
Asset retirement obligation -
current (Note 1) 4,485 4,002
---------- ----------
Total current liabilities $ 147,956 $ 103,193
LONG-TERM LIABILITIES:
Accrued liability $ 108,441 $ 131,768
Asset retirement obligation
(Note 1) 143,106 138,975
---------- ----------
Total long-term liabilities $ 251,547 $ 270,743
PARTNERS' CAPITAL (DEFICIT):
General Partner ($ 145,847) ($ 156,356)
Limited Partners, issued and
outstanding, 221,484 units 2,588,228 2,374,722
---------- ----------
Total Partners' capital $2,442,381 $2,218,366
---------- ----------
$2,841,884 $2,592,302
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-24-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
-------- --------
REVENUES:
Oil and gas sales $752,555 $532,513
Interest income 921 711
-------- --------
$753,476 $533,224
COSTS AND EXPENSES:
Lease operating $143,065 $150,230
Production tax 41,096 31,428
Depreciation, depletion, and
amortization of oil and gas
properties 54,989 40,193
General and administrative
(Note 2) 62,009 66,409
-------- --------
$301,159 $288,260
-------- --------
NET INCOME $452,317 $244,964
======== ========
GENERAL PARTNER - NET INCOME $ 24,770 $ 13,821
======== ========
LIMITED PARTNERS - NET INCOME $427,547 $231,143
======== ========
NET INCOME per unit $ 1.93 $ 1.04
======== ========
UNITS OUTSTANDING 221,484 221,484
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
-25-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
---------- ----------
REVENUES:
Oil and gas sales $2,107,070 $1,916,888
Interest income 2,294 1,644
---------- ----------
$2,109,364 $1,918,532
COSTS AND EXPENSES:
Lease operating $ 420,092 $ 458,886
Production tax 113,825 107,920
Depreciation, depletion, and
amortization of oil and gas
properties 112,987 180,351
General and administrative
(Note 2) 206,764 206,977
---------- ----------
$ 853,668 $ 954,134
---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $1,255,696 $ 964,398
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - 3,712
---------- ----------
NET INCOME $1,255,696 $ 968,110
========== ==========
GENERAL PARTNER - NET INCOME $ 67,190 $ 55,353
========== ==========
LIMITED PARTNERS - NET INCOME $1,188,506 $ 912,757
========== ==========
NET INCOME per unit $ 5.37 $ 4.12
========== ==========
UNITS OUTSTANDING 221,484 221,484
========== ==========
The accompanying condensed notes are an integral part of
these financial statements.
-26-
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
2004 2003
------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,255,696 $968,110
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting for asset retirement
obligations (Note 1) - ( 3,712)
Depreciation, depletion, and
amortization of oil and gas
properties 112,987 180,351
Settlement of asset retirement
obligation - ( 903)
Increase in accounts receivable
- oil and gas sales ( 114,129) ( 25,048)
Decrease in deferred charge 366 3,894
Decrease in accounts payable ( 10,288) ( 30,319)
Decrease in accrued liability
- other - ( 102,690)
Increase (decrease) in accrued
liability ( 23,327) 8,071
---------- --------
Net cash provided by operating
activities $1,221,305 $997,754
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ($ 100,813) ($ 12,842)
Proceeds from the sale of oil
and gas properties 7,448 12,575
---------- --------
Net cash used by investing activities ($ 93,365) ($ 267)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($1,031,681) ($749,675)
---------- --------
Net cash used by financing activities ($1,031,681) ($749,675)
---------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 96,259 $247,812
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 521,918 284,588
---------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 618,177 $532,400
========== ========
The accompanying condensed notes are an integral part of
these financial statements.
-27-
GEODYNE ENERGY INCOME PROGRAM III LIMITED PARTNERSHIPS
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheets as of September 30, 2004, statements of operations for
the three and nine months ended September 30, 2004 and 2003, and
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 Partnerships (the "General Partner"), without audit. In the opinion of
management the financial statements referred to above include all
necessary adjustments, consisting of normal recurring adjustments, to
present fairly the financial position at September 30, 2004, the results
of operations for the three and nine months ended September 30, 2004 and
2003, and the 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.
The Limited Partners' net income or loss per unit is based upon each $100
initial capital contribution.
DISCONTINUED OPERATIONS
-----------------------
As further described in Note 3, the III-D and III-E Partnerships sold all
of their oil and gas assets held in the Jay-Little Escambia Creek Field
("Jay Field") on May 12, 2004 at a large public oil and gas auction.
RECLASSIFICATION
----------------
Certain prior year balances have been reclassified to conform with current
year presentation.
-28-
OIL AND GAS PROPERTIES
----------------------
The Partnerships follow the successful efforts method of accounting for
their oil and gas properties. Under the successful efforts method, the
Partnerships capitalize all property acquisition costs and development
costs incurred in connection with the further development of oil and gas
reserves. Property acquisition costs include costs incurred by the
Partnerships or the General Partner to acquire producing properties,
including related title insurance or examination costs, commissions,
engineering, legal and accounting fees, and similar costs directly related
to the acquisitions, plus an allocated portion, of the General Partner's
property screening costs. The acquisition cost to the Partnerships of
properties acquired by the General Partner is adjusted to reflect the net
cash results of operations, including interest incurred to finance the
acquisition, for the period of time the properties are held by the General
Partner.
Depletion of the costs of producing oil and gas properties, amortization
of related intangible drilling and development costs, and depreciation of
tangible lease and well equipment are computed on the unit-of-production
method. The Partnerships' depletion, depreciation, and amortization
includes estimated dismantlement and abandonment costs and estimated
salvage value of the equipment.
When complete units of depreciable property are retired or sold, the asset
cost and related accumulated depreciation are eliminated with any gain or
loss (including the elimination of the asset retirement obligation)
reflected in income. When less than complete units of depreciable property
are retired or sold, the proceeds are credited to oil and gas properties.
ASSET RETIREMENT OBLIGATIONS
----------------------------
In July 2001, the FASB issued FAS No. 143, "Accounting for Asset
Retirement Obligations", which is effective for fiscal years beginning
after June 15, 2002 (January 1, 2003 for the Partnerships). On January 1,
2003, the Partnerships adopted FAS No. 143 and recorded an increase in
capitalized cost of oil and gas properties, an increase (decrease) in net
income for the cumulative effect of the change in accounting principle,
and an asset retirement obligation in the following approximate amounts
for each Partnership:
-29-
Increase
(decrease)
Increase in
in Net Income
Capitalized for the
Cost of Oil Change in Asset
and Gas Accounting Retirement
Partnerships Properties Principle Obligation
------------ ----------- ---------- ----------
III-A $109,000 ($1,000) $110,000
III-B 76,000 ( 1,000) 77,000
III-C 192,000 2,000 190,000
III-D 109,000 3,000 106,000
III-E 264,000 3,000 261,000
III-F 144,000 4,000 140,000
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 III-A, III-B, III-C, III-D,
III-E, and III-F Partnerships recognized approximately $4,000, $1,000,
$7,000, $3,000, $7,000, and $6,000, respectively, of an increase in
depreciation, depletion, and amortization expense, which was comprised of
accretion of the asset retirement obligation and depletion of the increase
in capitalized cost of oil and gas properties.
The components of the change in asset retirement obligations for the three
and nine months ended September 30, 2004 and 2003 are as shown below.
-30-
III-A Partnership
-----------------
Three Months Three Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, July 1 $112,025 $111,916
Accretion expense 945 1,035
-------- --------
Total Asset Retirement
Obligation, End of Quarter $112,970 $112,951
======== ========
Nine Months Nine Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $114,993 $109,762
Settlements and disposals ( 4,865) -
Accretion expense 2,842 3,189
-------- --------
Total Asset Retirement
Obligation, End of Period $112,970 $112,951
======== ========
Asset Retirement Obligation -
Current $ 16,604 $ -
Asset Retirement Obligation -
Long-Term 96,366 112,951
-31-
III-B Partnership
-----------------
Three Months Three Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, July 1 $ 80,077 $ 78,006
Accretion expense 17 714
-------- --------
Total Asset Retirement
Obligation, End of Quarter $ 80,094 $ 78,720
======== ========
Nine Months Nine Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $ 83,211 $ 76,536
Settlements and disposals ( 3,209)
Accretion expense 92 2,184
-------- --------
Total Asset Retirement
Obligation, End of Period $ 80,094 $ 78,720
======== ========
Asset Retirement Obligation -
Current $ 30,779 $ -
Asset Retirement Obligation -
Long-Term 49,315 78,720
-32-
III-C Partnership
-----------------
Three Months Three Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, July 1 $198,939 $193,621
Additions and revisions 22 -
Settlements and disposals ( 131) -
Accretion expense 1,693 1,919
-------- --------
Total Asset Retirement
Obligation, End of Quarter $200,523 $195,540
======== ========
Nine Months Nine Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $194,453 $189,767
Additions and revisions 1,044 -
Settlements and disposals ( 131) -
Accretion expense 5,157 5,773
-------- --------
Total Asset Retirement
Obligation, End of Period $200,523 $195,540
======== ========
Asset Retirement Obligation -
Current $ 34,286 $ -
Asset Retirement Obligation -
Long-Term 166,237 195,540
-33-
III-D Partnership
-----------------
Three Months Three Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, July 1 $105,878 $108,623
Additions and revisions 3 -
Settlements and disposals ( 17) -
Accretion expense 838 1,035
-------- --------
Total Asset Retirement
Obligation, End of Quarter $106,702 $109,658
======== ========
Nine Months Nine Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $314,031 $106,449
Additions and revisions 149 -
Settlements and disposals ( 17) -
Accretion expense 5,366 3,209
Discontinued operations ( 212,827) -
-------- --------
Total Asset Retirement
Obligation, End of Period $106,702 $109,658
======== ========
Asset Retirement Obligation -
Current $ 11,890 $ -
Asset Retirement Obligation -
Long-Term 94,812 109,658
-34-
III-E Partnership
-----------------
Three Months Three Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, July 1 $ 217,719 $262,879
Accretion expense 1,583 2,485
---------- --------
Total Asset Retirement
Obligation, End of Quarter $ 219,302 $265,364
========== ========
Nine Months Nine Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $1,768,863 $260,513
Settlements and disposals - ( 2,742)
Accretion expense 24,042 7,593
Discontinued operations ( 1,573,603) -
---------- --------
Total Asset Retirement
Obligation, End of Period $ 219,302 $265,364
========== ========
Asset Retirement Obligation -
Current $ 23,221 $ -
Asset Retirement Obligation -
Long-Term 196,081 265,364
-35-
III-F Partnership
-----------------
Three Months Three Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, July 1 $146,070 $140,398
Accretion expense 1,521 1,508
-------- --------
Total Asset Retirement
Obligation, End of Quarter $147,591 $141,906
======== ========
Nine Months Nine Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Total Asset Retirement
Obligation, January 1 $142,977 $139,563
Settlements and disposals - ( 2,303)
Accretion expense 4,614 4,646
-------- --------
Total Asset Retirement
Obligation, End of Period $147,591 $141,906
======== ========
Asset Retirement Obligation -
Current $ 4,485 $ -
Asset Retirement Obligation -
Long-Term 143,106 141,906
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:
-36-
Direct General Administrative
Partnership and Administrative Overhead
----------- ------------------- ---------------
III-A $ 4,478 $ 69,468
III-B 3,401 36,405
III-C 3,714 64,353
III-D 6,702 34,476
III-E 9,649 110,070
III-F 3,725 58,284
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
----------- ------------------- ---------------
III-A $ 33,716 $208,404
III-B 28,358 109,215
III-C 32,209 193,059
III-D 31,935 103,428
III-E 45,788 330,210
III-F 31,912 174,852
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.
3. DISCONTINUED OPERATIONS
-----------------------
On May 12, 2004 the III-D and III-E Partnerships sold all of their
interest in the Jay Field located in Santa Rosa County, Florida at a large
public oil and gas auction for approximately $721,000, subject to standard
transaction requirements and adjustments. These proceeds were allocated
approximately $89,000 and $632,000, respectively, to the III-D and III-E
Partnerships. This represents the sale of all oil and gas assets held by
the III-D and III-E Partnerships in the Jay Field and is therefore a
disposal of a business segment under Statement of Financial Accounting
Standards No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" (FAS 144). The sale resulted in a gain on disposal of
discontinued operations of approximately $10,000 and $89,000,
respectively, for the III-D and III-E Partnerships. Accordingly, current
year results of the Jay Field segment have been classified as
discontinued, and prior periods have been restated.
-37-
Results from discontinued operations are as follows:
III-D Partnership
-----------------
Three Months Three Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Oil and gas sales ($ 46) $102,562
Lease operating ( 67,798) ( 61,670)
Production tax ( 22) ( 7,926)
Depreciation, depletion, and
amortization of oil and gas
properties - ( 8,143)
-------- --------
Income (loss) from
discontinued operations ($ 67,866) $ 24,823
======== ========
Nine Months Nine Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Oil and gas sales $149,190 $286,579
Lease operating ( 225,400) ( 178,458)
Production tax ( 9,840) ( 22,885)
Depreciation, depletion, and
amortization of oil and gas
properties ( 2,818) ( 14,634)
-------- --------
Income (loss) from
discontinued operations ($ 88,868) $ 70,602
======== ========
-38-
III-E Partnership
-----------------
Three Months Three Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Oil and gas sales ($ 328) $ 731,773
Lease operating ( 483,855) ( 449,043)
Production tax ( 156) ( 56,554)
Depreciation, depletion, and
amortization of oil and gas
properties - ( 59,802)
---------- ----------
Income (loss) from
discontinued operations ($ 484,339) $ 166,374
========== ==========
Nine Months Nine Months
Ended Ended
9/30/2004 9/30/2003
------------ ------------
Oil and gas sales $1,064,866 $2,045,036
Lease operating ( 1,608,617) ( 1,273,599)
Production tax ( 70,237) ( 163,309)
Depreciation, depletion, and
amortization of oil and gas
properties ( 19,235) ( 108,032)
---------- ----------
Income (loss) from
discontinued operations ($ 633,223) $ 500,096
========== ==========
-39-
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.
DISCONTINUED OPERATIONS
- -----------------------
The III-D and III-E Partnerships owned working interests in the Jay Field
located in Santa Rosa County, Florida. This property, consisting of
several oil and gas producing wells, several nitrogen gas injection wells
(to stimulate production), and a gas plant, is operated by ExxonMobil. The
injection process leads to very high operating costs. As a result, changes
in oil (in particular) and natural gas prices can significantly impact net
cash flow and the estimated net present value of this property's proved
reserves. Based on information received from the operator, in late 2001
through early 2003 this property experienced mechanical and operational
difficulties primarily associated with the nitrogen injection system and
gas plant operations. Also, the drilling of a directional well has
significantly exceeded the operator's original cost estimates. Recently,
the operator notified the working interest owners that
-40-
additional costs would be incurred in order to plug several wells. As a
result of these costs, cash flow from this property has been reduced and
at times has been negative. This property is very sensitive to changes in
oil prices and production volumes.
In May 2004, the III-D and III-E Partnerships sold all of their interests
in the Jay Field and the disposal was treated as a discontinued operation.
The sales proceeds consisting of approximately $89,000 and $632,000,
respectively, were included in the August 15, 2004 cash distributions to
the III-D and III-E Partnerships. The sale of the Jay Field interests will
impact the continuing future operations of the III-D and III-E
Partnerships. It is anticipated that these Partnerships will have lower
lease operating costs, lower oil and gas sales, and a reduction in their
asset retirement obligations. A routine audit by an unaffiliated
non-operator of joint interest billings after the close date of the sale
resulted in additional expenses of approximately $68,000 and $484,000,
respectively, for the III-D and III-E Partnerships. The expenses represent
costs incurred before the effective date of the sale. We anticipate
similar expenses in the future. The reader should refer to Note 3 -
Discontinued Operations to the consolidated financial statements included
in PART I, ITEM 1 of this Quarterly Report on Form 10-Q for additional
information regarding this matter.
GENERAL
- -------
The Partnerships are engaged in the business of acquiring and operating
producing oil and gas properties located in the continental United States.
In general, a Partnership acquired producing properties and did not engage
in development drilling or enhanced recovery projects, except as an
incidental part of the management of the producing properties acquired.
Therefore, the economic life of each Partnership is limited to the period
of time required to fully produce its acquired oil and gas reserves. The
net proceeds from the oil and gas operations are distributed to the
Limited Partners and the General Partner in accordance with the terms of
the Partnerships' partnership agreements.
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:
-41-
Limited
Date of Partner Capital
Partnership Activation Contributions
----------- ------------------ ---------------
III-A November 22, 1989 $26,397,600
III-B January 24, 1990 13,833,600
III-C February 27, 1990 24,453,600
III-D September 5, 1990 13,100,800
III-E December 26, 1990 41,826,600
III-F March 7, 1991 22,148,400
In general, the amount of funds available for acquisition of producing
properties was equal to the capital contributions of the Limited Partners,
less 15% for sales commissions and organization and management fees. All
of the Partnerships have fully invested their capital contributions.
Net proceeds from the operations less necessary operating capital are
distributed to the Limited Partners on a quarterly basis. Revenues and net
proceeds of a Partnership are largely dependent upon the volumes of oil
and gas sold and the prices received for such oil and gas. While the
General Partner cannot predict future pricing trends, it believes the
working capital available as of September 30, 2004 and the net revenue
generated from future operations will provide sufficient working capital
to meet current and future obligations.
Occasional expenditures for new wells or well recompletions or workovers,
however, may reduce or eliminate cash available for a particular quarterly
distribution.
Pursuant to the terms of the Partnership Agreements for the Partnerships
(the "Partnership Agreements") the Partnerships were initially scheduled
to terminate on the dates indicated in the "Initial Termination Date"
column of the following chart. However, the Partnership Agreements provide
that the General Partner may extend the term of each Partnership for up to
five periods of two years each. As of the date of this Quarterly Report,
the General Partner has extended the terms of the III-A, III-B, III-C,
III-D, III-E Partnerships for the third extension period, and the III-F
Partnership for the second extension period. Therefore, the Partnerships
are currently scheduled to terminate on the dates indicated in the
"Current Termination Date" column of the following chart.
Initial Extensions Current
Partnership Termination Date Exercised Termination Date
----------- ----------------- --------- -----------------
III-A November 22, 1999 3 November 22, 2005
III-B January 24, 2000 3 December 31, 2005
III-C February 28, 2000 3 December 31, 2005
III-D September 5, 2000 3 December 31, 2005
III-E December 26, 2000 3 December 31, 2005
III-F March 7, 2001 2 March 7, 2005
-42-
CRITICAL ACCOUNTING POLICIES
- ----------------------------
The Partnerships follow the successful efforts method of accounting for
their oil and gas properties. Under the successful efforts method, the
Partnerships capitalize all property acquisition costs and development
costs incurred in connection with the further development of oil and gas
reserves. Property acquisition costs include costs incurred by the
Partnerships or the General Partner to acquire producing properties,
including related title insurance or examination costs, commissions,
engineering, legal and accounting fees, and similar costs directly related
to the acquisitions plus an allocated portion of the General Partner's
property screening costs. The acquisition cost to the Partnerships of the
properties acquired by the General Partner is adjusted to reflect the net
cash results of operations, including interest incurred to finance the
acquisition, for the period of time the properties are held by the General
Partner.
Depletion of the cost of producing oil and gas properties, amortization of
related intangible drilling and development costs, and depreciation of
tangible lease and well equipment are computed on the unit-of-production
method. The Partnerships' calculation of depreciation, depletion, and
amortization includes estimated dismantlement and abandonment costs and
estimated salvage value of the equipment. When complete units of
depreciable property are retired or sold, the asset cost and related
accumulated depreciation are eliminated with any gain or loss (including
the elimination of the asset retirement obligation) reflected in income.
When less that complete units of depreciable property are retired or sold,
the proceeds are credited to oil and gas properties.
The Partnerships evaluate the recoverability of the carrying costs of
their proved oil and gas properties for each oil and gas field (rather
than separately for each well). If the unamortized costs of oil and gas
properties within a field exceeds the expected undiscounted future cash
flows from such properties, the cost of the properties is written down to
fair value, which is determined by using the estimated discounted future
cash flows from the properties. The risk that the Partnerships will be
required to record impairment provisions in the future increases as oil
and gas prices decrease.
The Deferred Charge on the Balance Sheets represents costs deferred for
lease operating expenses incurred in connection with the Partnerships'
underproduced gas imbalance positions. Conversely, the Accrued Liability
represents charges accrued for lease operating expenses incurred in
connection with the Partnerships' overproduced gas imbalance positions.
The rate used in calculating the Deferred Charge and Accrued Liability is
the annual average production costs per Mcf.
-43-
The Partnerships' oil and condensate production is sold, title passed, and
revenue recognized at or near the Partnerships' wells under short-term
purchase contracts at prevailing prices in accordance with arrangements
which are customary in the oil and gas industry. Sales of gas applicable
to the Partnerships' interest in producing oil and gas leases are recorded
as revenue when the gas is metered and title transferred pursuant to the
gas sales contracts covering the Partnerships' interest in gas reserves.
During such times as a Partnership's sales of gas exceed its pro rata
ownership in a well, such sales are recorded as revenues unless total
sales from the well have exceeded the Partnership's share of estimated
total gas reserves underlying the property, at which time such excess is
recorded as a liability. The rates per Mcf used to calculate this
liability are based on the average gas prices received for the volumes at
the time the overproduction occurred. This also approximates the price for
which the Partnerships are currently settling this liability. These
amounts were recorded as gas imbalance payables in accordance with the
sales method. These gas imbalance payables will be settled by either gas
production by the underproduced party in excess of current estimates of
total gas reserves for the well or by negotiated or contractual payment to
the underproduced party.
NEW ACCOUNTING PRONOUNCEMENTS
- -----------------------------
Below is a brief description of Financial Accounting Standards ("FAS")
recently issued by the Financial Accounting Standards Board ("FASB") which
may have an impact on the Partnerships' future results of operations and
financial position.
In July 2001, the FASB issued FAS No. 143, "Accounting for Asset
Retirement Obligations", which is effective for fiscal years beginning
after June 15, 2002 (January 1, 2003 for the Partnerships). On January 1,
2003, the Partnerships adopted FAS No. 143 and recorded an increase in
capitalized cost of oil and gas properties, an increase (decrease) in net
income for the cumulative effect of the change in accounting principle,
and an asset retirement obligation in the following approximate amounts
for each Partnership:
-44-
Increase
(decrease)
Increase in
in Net Income
Capitalized for the
Cost of Oil Change in Asset
and Gas Accounting Retirement
Partnerships Properties Principle Obligation
------------ ----------- ---------- ----------
III-A $109,000 ($1,000) $110,000
III-B 76,000 ( 1,000) 77,000
III-C 192,000 2,000 190,000
III-D 109,000 3,000 106,000
III-E 264,000 3,000 261,000
III-F 144,000 4,000 140,000
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 III-A, III-B, III-C, III-D,
III-E, and III-F Partnerships recognized approximately $4,000, $1,000,
$7,000, $3,000, $7,000, and $6,000, respectively, of an increase in
depreciation, depletion, and amortization expense, which was comprised of
accretion of the asset retirement obligation and depletion of the increase
in capitalized cost of oil and gas properties.
PROVED RESERVES AND NET PRESENT VALUE
- -------------------------------------
The process of estimating oil and gas reserves is complex, requiring
significant subjective decisions in the evaluation of available
geological, engineering, and economic data for each reservoir. The data
for a given reservoir may change substantially over time as a result of,
among other things, additional development activity, production history,
and viability of production under varying economic conditions;
consequently, it is reasonably possible that material revisions to
existing reserve estimates may occur in the future. Although every
reasonable effort has been made to ensure that these reserve estimates
represent the most accurate assessment possible, the significance of the
subjective decisions required and variances in available data for various
reservoirs make these estimates generally less precise than other
estimates presented in connection with financial statement disclosures.
-45-
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.
III-A Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2003 139,211 4,039,478
Production ( 10,018) ( 126,475)
Revisions of previous
estimates 754 17,659
-------- ---------
Proved reserves, March 31, 2004 129,947 3,930,662
Production ( 10,053) ( 119,410)
Extensions and discoveries 275 515
Sale of minerals in place ( 78) -
Revisions of previous
estimates 6,108 255,823
-------- ---------
Proved reserves, June 30, 2004 126,199 4,067,590
Production ( 10,084) ( 111,220)
Extensions and discoveries 70 583
Revisions of previous
estimates 5,566 912
-------- ---------
Proved reserves, Sept. 30, 2004 121,751 3,957,865
======== =========
-46-
III-B Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2003 87,639 1,677,840
Production ( 7,027) ( 47,281)
Revisions of previous
estimates 1,071 ( 5,634)
------- ---------
Proved reserves, March 31, 2004 81,683 1,624,925
Production ( 6,752) ( 50,491)
Extensions and discoveries 181 340
Revisions of previous
estimates 1,704 107,352
------- ---------
Proved reserves, June 30, 2004 76,816 1,682,126
Production ( 6,537) ( 47,789)
Extensions and discoveries 47 385
Revisions of previous
estimates 5,271 1,473
------- ---------
Proved reserves, Sept. 30, 2004 75,597 1,636,195
======= =========
-47-
III-C Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2003 99,719 5,349,105
Production ( 2,855) ( 156,564)
Sale of minerals in place ( 6) -
Revisions of previous
estimates ( 6,327) ( 28,640)
------- ---------
Proved reserves, March 31, 2004 90,531 5,163,901
Production ( 2,672) ( 121,950)
Extension and discoveries - 88,801
Revisions of previous
estimates 3,537 243,198
------- ---------
Proved reserves, June 30, 2004 91,396 5,373,950
Production ( 1,414) ( 125,994)
Extension and discoveries 143 1,727
Revisions of previous
estimates 3,228 ( 189,061)
------- ---------
Proved reserves, Sept. 30, 2004 93,353 5,060,622
======= =========
-48-
III-D Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2003 157,044 2,652,614
Production ( 2,273) ( 89,584)
Discontinued operations ( 72,676) ( 14,536)
Revisions of previous
estimates 342 ( 714)
------- ---------
Proved reserves, March 31, 2004 82,437 2,547,780
Production ( 2,557) ( 59,892)
Extension and discoveries - 12,717
Discontinued operations ( 506) ( 1,107)
Revisions of previous
estimates 8,575 106,941
------- ---------
Proved reserves, June 30, 2004 87,949 2,606,439
Production ( 1,593) ( 67,763)
Discontinued operations - ( 15)
Revisions of previous
estimates 3,799 ( 3,475)
------- ---------
Proved reserves, Sept. 30, 2004 90,155 2,535,186
======= =========
-49-
III-E Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- ------------
Proved reserves, Dec. 31, 2003 674,924 6,565,947
Production ( 7,433) ( 181,161)
Discontinued operations (518,676) ( 103,734)
Revisions of previous
estimates 3,737 95,261
------- ---------
Proved reserves, March 31, 2004 152,552 6,376,313
Production ( 6,329) ( 177,447)
Discontinued operations ( 3,621) ( 7,905)
Revisions of previous
estimates 21,872 489,782
------- ---------
Proved reserves, June 30, 2004 164,474 6,680,743
Production ( 3,420) ( 179,461)
Extensions and discoveries 74 7,216
Discontinued operations - ( 104)
Revisions of previous
estimates ( 580) 32,646
------- ---------
Proved reserves, Sept. 30, 2004 160,548 6,541,040
======= =========
-50-
III-F Partnership
-----------------
Crude Natural
Oil Gas
(Barrels) (Mcf)
--------- -----------
Proved reserves, Dec. 31, 2003 360,288 4,482,383
Production ( 4,927) ( 98,635)
Revisions of previous
estimates 17,271 152,498
------- ---------
Proved reserves, March 31, 2004 372,632 4,536,246
Production ( 4,860) ( 103,452)
Revisions of previous
estimates ( 53,333) 185,762
------- ---------
Proved reserves, June 30, 2004 314,439 4,618,556
Production ( 5,192) ( 104,753)
Extensions and discoveries 62 6,060
Revisions of previous
estimates 11,957 ( 299)
------- ---------
Proved reserves, Sept. 30, 2004 321,266 4,519,564
======= =========
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
cause the estimates of remaining economically recoverable reserves, as
well as the values placed on said reserves to fluctuate. The prices used
in calculating the net present value attributable to the Partnerships'
proved reserves do not necessarily reflect market prices for oil and gas
production subsequent to September 30, 2004. There
-51-
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
----------- ------- ------- ------- --------
III-A $13,603 $13,199 $13,032 $13,777
III-B 6,391 5,997 5,998 6,144
III-C 13,243 13,685 12,794 13,638
III-D 7,407 6,991 6,506 6,866
III-E 18,533 17,795 15,860 16,043
III-F 14,485 12,973 12,120 12,072
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:
* 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;
-52-
* 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.
III-A PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2003.
Three Months Ended September 30,
--------------------------------
2004 2003
---------- --------
Oil and gas sales $1,024,984 $944,055
Oil and gas production expenses $ 189,293 $217,046
Barrels produced 10,084 9,725
Mcf produced 111,220 132,867
Average price/Bbl $ 41.78 $ 28.14
Average price/Mcf $ 5.43 $ 5.05
As shown in the table above, total oil and gas sales increased $80,929
(8.6%) for the three months ended September 30, 2004 as compared to the
three months ended September 30, 2003. Of this increase, approximately (i)
$137,000 and $43,000, respectively, were related to increases in the
average prices of oil and gas sold and (ii) $10,000 was related to an
increase in volumes of oil sold. These increases were partially offset by
a decrease of approximately $109,000 related to a decrease in volumes of
gas sold. Volumes of oil sold increased 359 barrels, while volumes of gas
sold decreased 21,647 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 on
one well during the three months ended September 30, 2004.
-53-
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $27,753 (12.8%) for the three months ended
September 30, 2004 as compared to the three months ended September 30,
2003. This decrease was primarily due to (i) workover expenses incurred on
several wells during the three months ended September 30, 2003 and (ii) a
refund of production taxes on another significant well during the three
months ended September 30, 2004. These decreases were partially offset by
(i) an increase in production taxes associated with the increase in oil
and gas sales and (ii) an increase in production taxes associated with the
first receipt of revenues on one well during the three months ended
September 30, 2004. As a percentage of oil and gas sales, these expenses
decreased to 18.5% for the three months ended September 30, 2004 from
23.0% for the three months ended September 30, 2003. This percentage
decrease was primarily due to (i) the dollar decrease in oil and gas
production expenses and (ii) the increase in oil and gas sales.
Depreciation, depletion, and amortization of oil and gas properties
decreased $9,141 (25.8%) for the three months ended September 30, 2004 as
compared to the three months ended September 30, 2003. This decrease was
primarily due to (i) upward revisions in the estimates of remaining oil
reserves since September 30, 2003 and (ii) the decrease in volumes of gas
sold. These decreases were partially offset by one significant well being
fully depleted during the three months ended Septmeber 30, 2004 due to the
lack of remaining reserves. As a percentage of oil and gas sales, this
expense decreased to 2.6% for the three months ended September 30, 2004
from 3.8% for the three months ended September 30, 2003. This percentage
decrease was primarily due to the dollar decrease in depreciation,
depletion, and amortization of oil and gas properties.
General and administrative expenses decreased $5,400 (6.8%) for the three
months ended September 30, 2004 as compared to the three months ended
September 30, 2003. As a percentage of oil and gas sales, these expenses
decreased to 7.2% for the three months ended September 30, 2004 from 8.4%
for the three months ended September 30, 2003. This percentage decrease
was primarily due to (i) the increase in oil and gas sales and (ii) the
dollar decrease in general and administrative expenses.
-54-
NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2003.
Nine Months Ended September 30,
-------------------------------
2004 2003
---------- ----------
Oil and gas sales $3,115,672 $3,235,948
Oil and gas production expenses $ 635,672 $ 600,508
Barrels produced 30,155 34,845
Mcf produced 357,105 401,770
Average price/Bbl $ 37.54 $ 29.56
Average price/Mcf $ 5.55 $ 5.49
As shown in the table above, total oil and gas sales decreased $120,276
(3.7%) for the nine months ended September 30, 2004 as compared to the
nine months ended September 30, 2003. Of this decrease, approximately
$139,000 and $245,000, respectively, were related to decreases in volumes
of oil and gas sold. These decreases were partially offset by increases of
approximately $241,000 and $23,000, respectively, related to increases in
the average prices of oil and gas sold. Volumes of oil and gas sold
decreased 4,690 barrels and 44,665 Mcf, respectively, for the nine months
ended September 30, 2004 as compared to the nine months ended September
30, 2003. The decreases in volumes of oil and gas sold were primarily due
to normal declines in production. The decrease in volumes of gas sold was
partially offset by the first receipt of revenues on one well during the
nine months ended September 30, 2004.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $35,164 (5.9%) for the nine months ended
September 30, 2004 as compared to the nine months ended September 30,
2003. This increase was primarily due to (i) workover expenses incurred on
two significant wells during the nine months ended September 30, 2004,
(ii) the receipt of an environmental clean-up credit on another
significant well during the nine months ended September 30, 2003, and
(iii) an increase in production taxes associated with the first receipt of
revenues on one well during the nine months ended September 30, 2004. As a
percentage of oil and gas sales, these expenses increased to 20.4% for the
nine months ended September 30, 2004 from 18.6% for the nine months ended
September 30, 2003.
Depreciation, depletion, and amortization of oil and gas properties
increased $27,413 (22.1%) for the nine months ended September 30, 2004 as
compared to the nine months ended September 30, 2003. This increase was
primarily due to (i) the abandonment of one significant well during 2004
following an unsuccessful recompletion attempt and (ii)
-55-
another significant well being fully depleted during the nine months ended
September 30, 2004 due to the lack of remaining reserves. These increases
were partially offset by (i) the decreases in volumes of oil and gas sold
and (ii) upward revisions in the estimates of remaining oil reserves since
September 30, 2003. As a percentage of oil and gas sales, this expense
increased to 4.9% for the nine months ended September 30, 2004 from 3.8%
for the nine months ended September 30, 2003. This percentage increase was
primarily due to the dollar increase in depreciation, depletion, and
amortization of oil and gas properties.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 2004 and 2003. As a percentage of oil and
gas sales, this expense increased to 7.8% for the nine months ended
September 30, 2004 from 7.5% for the nine months ended September 30, 2003.
The Limited Partners have received cash distributions through September
30, 2004 totaling $38,179,701 or 144.63% of Limited Partners' capital
contributions.
III-B PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2003.
Three Months Ended September 30,
--------------------------------
2004 2003
-------- --------
Oil and gas sales $545,780 $510,724
Oil and gas production expenses $112,269 $122,916
Barrels produced 6,537 6,905
Mcf produced 47,789 62,163
Average price/Bbl $ 42.16 $ 28.62
Average price/Mcf $ 5.65 $ 5.04
As shown in the table above, total oil and gas sales increased $35,056
(6.9%) for the three months ended September 30, 2004 as compared to the
three months ended September 30, 2003. Of this increase, approximately
$89,000 and $29,000, respectively, were related to increases in the
average prices of oil and gas sold. These increases were partially offset
by decreases of approximately $11,000 and $72,000, respectively, related
to decreases in volumes of oil and gas sold. Volumes of oil and gas sold
decreased 368 barrels and 14,374 Mcf, respectively, 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.
-56-
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $10,647 (8.7%) for the three months ended
September 30, 2004 as compared to the three months ended September 30,
2003. This decrease was primarily due to (i) workover expenses incurred on
several wells during the three months ended September 30, 2003 and (ii) a
refund of production taxes on another significant well during the three
months ended September 30, 2004. These decreases were partially offset by
an increase in production taxes associated with the increase in oil and
gas sales. As a percentage of oil and gas sales, these expenses decreased
to 20.6% for the three months ended September 30, 2004 from 24.1% for the
three months ended September 30, 2003. This percentage decrease was
primarily due to (i) the dollar decrease in oil and gas production
expenses and (ii) the increase in oil and gas sales.
Depreciation, depletion, and amortization of oil and gas properties
decreased $7,048 (33.0%) for the three months ended September 30, 2004 as
compared to the three months ended September 30, 2003. This decrease was
primarily due to (i) upward revisions in the estimates of remaining oil
reserves since September 30, 2003 and (ii) the decreases in volumes of oil
and gas sold. These decreases were partially offset by one significant
well being fully depleted during the three months ended September 30, 2004
due to the lack of remaining reserves. As a percentage of oil and gas
sales, this expense decreased to 2.6% for the three months ended September
30, 2004 from 4.2% for the three months ended September 30, 2003. This
percentage decrease was primarily due to the dollar decrease in
depreciation, depletion, and amortization of oil and gas properties.
General and administrative expenses decreased $2,695 (6.3%) for the three
months ended September 30, 2004 as compared to the three months ended
September 30, 2003. As a percentage of oil and gas sales, these expenses
decreased to 7.3% for the three months ended September 30, 2004 from 8.3%
for the three months ended September 30, 2003. This percentage decrease
was primarily due to (i) the dollar decrease in general and administrative
expenses and (ii) the increase in oil and gas sales.
-57-
NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2003.
Nine Months Ended September 30,
-------------------------------
2004 2003
---------- ----------
Oil and gas sales $1,587,512 $1,782,665
Oil and gas production expenses $ 373,673 $ 336,230
Barrels produced 20,316 24,350
Mcf produced 145,561 193,568
Average price/Bbl $ 37.54 $ 29.73
Average price/Mcf $ 5.67 $ 5.47
As shown in the table above, total oil and gas sales decreased $195,153
(10.9%) for the nine months ended September 30, 2004 as compared to the
nine months ended September 30, 2003. Of this decrease, approximately
$120,000 and $263,000, respectively, were related to decreases in volumes
of oil and gas sold. These decreases were partially offset by increases of
approximately $159,000 and $29,000, respectively, related to increases in
the average prices of oil and gas sold. Volumes of oil and gas sold
decreased 4,034 barrels and 48,007 Mcf, respectively, for the nine months
ended September 30, 2004 as compared to the nine months ended September
30, 2003. The decreases in volumes of oil and gas sold were primarily due
to normal declines in production.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $37,443 (11.1%) for the nine months ended
September 30, 2004 as compared to the nine months ended September 30,
2003. This increase was primarily due to (i) workover expenses incurred on
two significant wells during the nine months ended September 30, 2004 and
(ii) the receipt of an environmental clean-up credit on another
significant well during the nine months ended September 30, 2003. As a
percentage of oil and gas sales, these expenses increased to 23.5% for the
nine months ended September 30, 2004 from 18.9% for the nine months ended
September 30, 2003. This percentage increase was primarily due to (i) the
decrease in oil and gas sales and (ii) the dollar increase in oil and gas
production expenses.
Depreciation, depletion, and amortization of oil and gas properties
increased $11,394 (14.4%) for the nine months ended September 30, 2004 as
compared to the nine months ended September 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 fully depleted during the nine months ended
September 30, 2004 due to the lack of remaining reserves. These increases
were partially offset by (i) the decreases in volumes of oil and gas sold
and (ii) upward revisions in the estimates of remaining oil reserves since
September 30, 2003. As a percentage of oil and gas
-58-
sales, this expense increased to 5.7% for the nine months ended September
30, 2004 from 4.4% for the nine months ended September 30, 2003. This
percentage increase was primarily due to (i) the dollar increase in
depreciation, depletion, and amortization of oil and gas properties and
(ii) the decrease in oil and gas sales.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 2004 and 2003. As a percentage of oil and
gas sales, these expenses increased to 8.7% for the nine months ended
September 30, 2004 from 7.7% for the nine months ended September 30, 2003.
This percentage increase was primarily due to the decrease in oil and gas
sales.
The Limited Partners have received cash distributions through September
30, 2004 totaling $21,496,353 or 155.39% of Limited Partners' capital
contributions.
III-C PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2003.
Three Months Ended September 30,
--------------------------------
2004 2003
-------- --------
Oil and gas sales $691,851 $756,408
Oil and gas production expenses $209,383 $159,669
Barrels produced 1,414 1,918
Mcf produced 125,994 155,930
Average price/Bbl $ 43.23 $ 27.95
Average price/Mcf $ 5.01 $ 4.51
As shown in the table above, total oil and gas sales decreased $64,557
(8.5%) for the three months ended September 30, 2004 as compared to the
three months ended September 30, 2003. Of this decrease, approximately
$14,000 and $135,000, respectively, were related to decreases in volumes
of oil and gas sold. These decreases were partially offset by increases of
approximately $21,000 and $63,000, respectively, related to increases in
the average prices of oil and gas sold. Volumes of oil and gas sold
decreased 504 barrels and 29,936 Mcf, respectively, 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)
normal declines in production and (ii) the shutting-in of a production
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)
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.
-59-
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $49,714 (31.1%) for the three months ended
September 30, 2004 as compared to the three months ended September 30,
2003. This increase was primarily due to workover expenses incurred on two
significant wells during the three months ended September 30, 2004. As a
percentage of oil and gas sales, these expenses increased to 30.3% for the
three months ended September 30, 2004 as compared to 21.1% for the three
months ended September 30, 2003. This percentage increase was primarily
due to the dollar increase in oil and gas production expenses.
Depreciation, depletion, and amortization of oil and gas properties
increased $149,384 (315.4%) for the three months ended September 30, 2004
as compared to the three months ended September 30, 2003. This increase
was primarily due to downward revisions in the estimates of remaining oil
and gas reserves on one significant well since September 30, 2003. This
increase was partially offset by the decreases in volumes of oil and gas
sold. As a percentage of oil and gas sales, this expense increased to
28.4% for the three months ended September 30, 2004 from 6.3% for the
three months ended September 30, 2003. This percentage increase was
primarily due to the dollar increase in depreciation, depletion, and
amortization of oil and gas properties.
General and administrative expenses decreased $5,005 (6.8%) for the three
months ended September 30, 2004 as compared to the three months ended
September 30, 2003. As a percentage of oil and gas sales, these expenses
increased to 9.8% for the three months ended September 30, 2004 from 9.7%
for the three months ended September 30, 2003.
NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2003.
Nine Months Ended September 30,
-------------------------------
2004 2003
---------- ----------
Oil and gas sales $2,420,732 $2,875,739
Oil and gas production expenses $ 597,331 $ 622,829
Barrels produced 6,941 11,492
Mcf produced 404,508 507,311
Average price/Bbl $ 36.36 $ 30.09
Average price/Mcf $ 5.36 $ 4.99
As shown in the table above, total oil and gas sales decreased $455,007
(15.8%) for the nine months ended September 30, 2004 as compared to the
nine months ended September 30, 2003. Of this decrease, approximately
$137,000 and $513,000, respectively, were related to decreases in volumes
of oil and gas sold. These decreases were partially offset by an increase
of approximately $151,000 related to an increase in the average price of
gas
-60-
sold. Volumes of oil and gas sold decreased 4,551 barrels and 102,803 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 production 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) normal declines in production, (ii) downward
revisions in the estimates of remaining gas reserves on one significant
well resulting in the III-C Partnership becoming over produced in excess
of estimated ultimate reserves thereby increasing gas imbalance payable,
and (iii) the III-C Partnership receiving a reduced percentage of sales on
another significant well during the nine months ended September 30, 2004
due to gas balancing. These decreases were partially offset by the
successful completion of a new well during early 2004. As of this date of
this Quarterly Report, management expects the gas balancing adjustment to
continue for the foreseeable future, thereby continuing to contribute to a
decrease in volumes of gas sold by the III-C Partnership.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $25,498 (4.1%) for the nine months ended
September 30, 2004 as compared to the nine months ended September 30,
2003. As a percentage of oil and gas sales, these expenses increased to
24.7% for the nine months ended September 30, 2004 from 21.7% for the nine
months ended September 30, 2003. This percentage increase was primarily
due to the decrease in oil and gas sales.
Depreciation, depletion, and amortization of oil and gas properties
increased $160,318 (109.1%) for the nine months ended September 30, 2004
as compared to the nine months ended September 30, 2003. This increase was
primarily due to downward revisions in the estimates of remaining oil and
gas reserves on two significant wells since September 30, 2003. This
increase was partially offset by the decreases in volumes of oil and gas
sold. As a percentage of oil and gas sales, this expense increased to
12.7% 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 the dollar increase in depreciation, depletion and amortization of
oil and gas properties.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 2004 and 2003. As a percentage of oil and
gas sales, these expenses increased to 9.3% for the nine months ended
September 30, 2004 from 7.9% for the nine months ended September 30, 2003.
This percentage increase was primarily due to the decrease in oil and gas
sales.
-61-
The Limited Partners have received cash distributions through September
30, 2004 totaling $28,930,795 or 118.31% of Limited Partners' capital
contributions.
III-D PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2003.
Three Months Ended September 30,
--------------------------------
2004 2003
-------- --------
Oil and gas sales $397,237 $338,938
Oil and gas production expenses $143,651 $ 90,532
Barrels produced 1,593 2,047
Mcf produced 67,763 70,326
Average price/Bbl $ 41.90 $ 27.06
Average price/Mcf $ 4.88 $ 4.03
As shown in the table above, total oil and gas sales increased $58,299
(17.2%) for the three months ended September 30, 2004 as compared to the
three months ended September 30, 2003. Of this increase, approximately
$24,000 and $57,000, respectively, were related to increases in the
average prices of oil and gas sold. These increases were partially offset
by decreases of approximately $13,000 and $10,000, respectively, related
to decreases in volumes of oil and gas sold. Volumes of oil and gas sold
decreased 454 barrels and 2,563 Mcf, respectively, 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 production 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.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $53,119 (58.7%) for the three months ended
September 30, 2004 as compared to the three months ended September 30,
2003. This increase 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. As a percentage of oil and gas sales, these expenses
increased to 36.2% for the three months ended September 30, 2004 from
26.7% for the three months ended September 30, 2003. This percentage
increase was primarily due to the dollar increase in oil and gas
production expenses.
Depreciation, depletion, and amortization of oil and gas properties
decreased $8,046 (40.3%) for the three months ended September 30, 2004
as compared to the three months ended September 30, 2003. This
decrease was primarily due to the decreases in volumes of oil and gas
sold. This
-62-
decrease was partially offset by downward revisions in the estimates of
remaining oil and gas reserves on two significant wells since September
30, 2003. As a percentage of oil and gas sales, these expenses decreased
to 3.0% for the three months ended September 30, 2004 from 5.9% for the
three months ended September 30, 2003. This percentage decrease was
primarily due to the dollar decrease in depreciation, depletion, and
amortization of oil and gas properties.
General and administrative expenses increased $1,395 (3.5%) for the three
months ended September 30, 2004 as compared to the three months ended
September 30, 2003. As a percentage of oil and gas sales, these expenses
decreased to 10.4% for the three months ended September 30, 2004 from
11.7% for the three months ended September 30, 2003. This percentage
decrease was primarily due to the increase in oil and gas sales.
NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2003.
Nine Months Ended September 30,
-------------------------------
2004 2003
---------- ----------
Oil and gas sales $1,390,879 $1,681,615
Oil and gas production expenses $ 332,866 $ 371,598
Barrels produced 6,423 10,613
Mcf produced 217,239 285,044
Average price/Bbl $ 35.83 $ 28.07
Average price/Mcf $ 5.34 $ 4.85
As shown in the table above, total oil and gas sales decreased $290,736
(17.3%) for the nine months ended September 30, 2004 as compared to the
nine months ended September 30, 2003. Of this decrease, approximately
$118,000 and $329,000, respectively, were related to decreases in volumes
of oil and gas sold. These decreases were partially offset by increases of
approximately $50,000 and $106,000, respectively, related to increases in
the average prices of oil and gas sold. Volumes of oil and gas sold
decreased 4,190 barrels and 67,805 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 production 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 III-D Partnership becoming over produced
in excess of estimated ultimate reserves thereby increasing gas imbalance
payable, (ii) normal declines in production, and (iii) the III-D
Partnership receiving a reduced percentage of sales on another
-63-
significant well during the nine months ended September 30, 2004 due to
gas balancing. As of the date of this Quarterly Report, management expects
the gas balancing adjustment to continue for the foreseeable future,
thereby continuing to contribute to a decrease in volumes of gas sold for
the III-D Partnership.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $38,732 (10.4%) for nine months ended
September 30, 2004 as compared to the nine months ended September 30,
2003. This decrease was primarily due to (i) a decrease in lease operating
expenses associated with the decreases in volumes of oil and gas sold,
(ii) 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 other significant
wells during the nine months ended September 30, 2004. As a percentage of
oil and gas sales, these expenses increased to 23.9% for the nine months
ended September 30, 2004 from 22.1% for the nine months ended September
30, 2003.
Depreciation, depletion, and amortization of oil and gas properties
increased $6,571 (9.9%) for the nine months ended September 30, 2004 as
compared to the nine months ended September 30, 2003. This increase was
primarily due to downward revisions in the estimates of remaining oil and
gas reserves on two significant wells since September 30, 2003. This
increase was partially offset by the decreases in volumes of oil and gas
sold. As a percentage of oil and gas sales, these expenses increased to
5.2% for the nine months ended September 30, 2004 from 3.9% for the nine
months ended September 30, 2003. This percentage increase was primarily
due to (i) the decrease in oil and gas sales and (ii) the dollar increase
in depreciation, depletion, and amortization of oil and gas properties.
General and administrative expenses increased $4,332 (3.3%) for the nine
months ended September 30, 2004 as compared to the nine months ended
September 30, 2003. As a percentage of oil and gas sales, these expenses
increased to 9.7% for the nine months ended September 30, 2004 from 7.8%
for the nine months ended September 30, 2003. This percentage increase was
primarily due to the decrease in oil and gas sales.
The Limited Partners have received cash distributions through September
30, 2004 totaling $16,193,669 or 123.61% of Limited Partners' capital
contributions.
-64-
III-E PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2003.
Three Months Ended September 30,
--------------------------------
2004 2003
---------- --------
Oil and gas sales $1,103,595 $962,495
Oil and gas production expenses $ 316,396 $315,057
Barrels produced 3,420 7,541
Mcf produced 179,461 181,038
Average price/Bbl $ 52.45 $ 25.77
Average price/Mcf $ 5.15 $ 4.24
As shown in the table above, total oil and gas sales increased $141,100
(14.7%) for the three months ended September 30, 2004 as compared to the
three months ended September 30, 2003. Of this increase, approximately
$91,000 and $163,000, respectively, were related to increases in the
average prices of oil and gas sold. These increases were partially offset
by a decrease of approximately $106,000 related to a decrease in volumes
of oil sold. Volumes of oil and gas sold decreased 4,121 barrels and 1,577
Mcf, respectively, 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) a negative prior period
volume adjustment made by the operator on one significant well during the
three months ended September 30, 2004 and (ii) normal declines in
production. The decrease in volumes of gas sold was primarily due to (i)
normal declines in production and (ii) a negative prior period volume
adjustment made by the operator on one significant well during the three
months ended September 30, 2004. These decreases were substantially offset
by (i) an increase in production on several wells due to successful
workovers of those wells during late 2003 and (iii) a negative prior
period volume adjustment made by the operator on another significant well
during the three months ended September 30, 2003.
Oil and gas production expenses (including lease operating expenses and
production taxes) remained relatively constant for the three months ended
September 30, 2004 and 2003. Expense increases primarily due to (i)
workover expenses incurred on one significant well during the three months
ended September 30, 2004 and (ii) an increase in production taxes
associated with the increase in oil and gas sales were substantially
offset by (i) a decrease in lease operating expenses associated with the
decreases in volumes of oil and gas sold and (ii) workover expenses
incurred on another significant well during the three months ended
September 30, 2003. As a percentage of oil and gas sales, these expenses
decreased to 28.7% for the three months ended September 30, 2004 from
32.7% for the three months ended September 30, 2003. This percentage
decrease was primarily due to the increase in oil and gas sales.
-65-
Depreciation, depletion, and amortization of oil and gas properties
increased $27,205 (67.6%) for the three months ended September 30, 2004 as
compared to the three months ended September 30, 2003. This increase was
primarily due to an increase in depletable oil and gas properties
primarily due to recompletion activities on two significant wells during
the three months ended September 30, 2004. As a percentage of oil and gas
sales, this expense increased to 6.1% for the three months ended September
30, 2004 from 4.2% for the three months ended September 30, 2003. This
percentage increase was primarily due to the dollar increase in the
depreciation, depletion, and amortization of oil and gas properties.
General and administrative expenses decreased $4,776 (3.8%) for the three
months ended September 30, 2004 as compared to the three months ended
September 30, 2003. As a percentage of oil and gas sales, these expenses
decreased to 10.8% for the three months ended September 30, 2004 from
12.9% for the three months ended September 30, 2003. This percentage
decrease was primarily due to the increase in oil and gas sales.
NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2003.
Nine Months Ended September 30,
-------------------------------
2004 2003
---------- ----------
Oil and gas sales $3,371,556 $3,504,582
Oil and gas production expenses $ 924,846 $ 986,404
Barrels produced 17,182 24,888
Mcf produced 538,069 592,126
Average price/Bbl $ 35.81 $ 26.89
Average price/Mcf $ 5.12 $ 4.79
As shown in the table above, total oil and gas sales decreased $133,026
(3.8%) for the nine months ended September 30, 2004 as compared to the
nine months ended September 30, 2003. Of this decrease, approximately
$207,000 and $259,000, respectively, were related to decreases in volumes
of oil and gas sold. These decreases were partially offset by increases of
approximately $153,000 and $180,000, respectively, related to increases in
the average prices of oil and gas sold. Volumes of oil and gas sold
decreased 7,706 barrels and 54,057 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 negative prior period volume
adjustment made by the operator on one significant well during the nine
months ended September 30, 2004.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $61,558 (6.2%) for
-66-
the nine months ended September 30, 2004 as compared to the nine months
ended September 30, 2003. As a percentage of oil and gas sales, these
expenses decreased to 27.4% for the nine months ended September 30, 2004
from 28.1% for the nine months ended September 30, 2003.
Depreciation, depletion, and amortization of oil and gas properties
decreased $37,482 (21.5%) for the nine months ended September 30, 2004 as
compared to the nine months ended September 30, 2003. This decrease was
primarily due to (i) one significant well being fully depleted during the
nine months ended September 30, 2003 due to the lack of remaining
reserves, (ii) the decreases in volumes of oil and gas sold, and (iii) the
abandonment of one significant well during the nine months ended September
30, 2003 due to severe mechanical problems. These decreases were partially
offset by an increase in depletable oil and gas properties primarily due
to recompletion activities on two significant wells during the three
months ended September 30, 2004. As a percentage of oil and gas sales,
this expense decreased to 4.1% for the nine months ended September 30,
2004 from 5.0% for the nine months ended September 30, 2003. This
percentage decrease was primarily due to the dollar decrease in
depreciation, depletion, and amortization of oil and gas properties.
General and administrative expenses remained relatively constant for the
nine months ended September 30, 2004 and 2003. As a percentage of oil and
gas sales, these expenses increased to 11.2% for the nine months ended
September 30, 2004 from 10.7% for the nine months ended September 30,
2003.
The Limited Partners have received cash distributions through September
30, 2004 totaling $49,037,016 or 117.24% of Limited Partners' capital
contributions.
III-F PARTNERSHIP
THREE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2003.
Three Months Ended September 30,
--------------------------------
2004 2003
-------- --------
Oil and gas sales $752,555 $532,513
Oil and gas production expenses $184,161 $181,658
Barrels produced 5,192 5,094
Mcf produced 104,753 94,683
Average price/Bbl $ 40.76 $ 27.38
Average price/Mcf $ 5.16 $ 4.15
As shown in the table above, total oil and gas sales increased $220,042
(41.3%) for the three months ended September 30, 2004 as compared to the
three months ended September 30, 2003. Of this increase, approximately (i)
-67-
$69,000 and $106,000, respectively, were related to increases in the
average prices of oil and gas sold and (ii) $42,000 was related to an
increase in volumes of gas sold. Volumes of oil and gas sold increased 98
barrels and 10,070 Mcf, respectively, for the three months ended September
30, 2004 as compared to the three months ended September 30, 2003. The
increase in volumes of gas sold was primarily due to (i) an increase in
production on one significant well due to the successful workover of that
well during mid 2003 and (ii) an increase in production on one other
significant well following successful repairs made during late 2003.
Oil and gas production expenses (including lease operating expenses and
production taxes) increased $2,503 (1.4%) for the three months ended
September 30, 2004 as compared to the three months ended September 30,
2003. This increase was primarily due to (i) an increase in production
taxes associated with the increase in oil and gas sales and (ii) workover
expenses incurred on one significant well during the three months ended
September 30, 2004. These increases were partially offset by workover
expenses incurred on another significant well during the three months
ended September 30, 2003. As a percentage of oil and gas sales, these
expenses decreased to 24.5% for the three months ended September 30, 2004
from 34.1% for the three months ended September 30, 2003. This percentage
decrease was primarily due to the increase in oil and gas sales.
Depreciation, depletion, and amortization of oil and gas properties
increased $14,796 (36.8%) for the three months ended September 30, 2004 as
compared to the three months ended September 30, 2003. This increase was
primarily due to an increase in depletable oil and gas properties
primarily due to recompletion activities on two significant wells during
the three months ended September 30, 2004. This increase was partially
offset by upward revisions in the estimates of remaining oil and gas
reserves since September 30, 2003. As a percentage of oil and gas sales,
these expenses decreased to 7.3% for the three months ended September 30,
2004 from 7.5% for the three months ended September 30, 2003.
General and administrative expenses decreased $4,400 (6.6%) for the three
months ended September 30, 2004 as compared to the three months ended
September 30, 2003. As a percentage of oil and gas sales, these expenses
decreased to 8.2% for the three months ended September 30, 2004 from 12.5%
for the three months ended September 30, 2003. This percentage decrease
was primarily due to the increase in oil and gas sales.
-68-
NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2003.
Nine Months Ended September 30,
-------------------------------
2004 2003
---------- ----------
Oil and gas sales $2,107,070 $1,916,888
Oil and gas production expenses $ 533,917 $ 566,806
Barrels produced 14,979 15,390
Mcf produced 306,840 316,201
Average price/Bbl $ 36.64 $ 28.92
Average price/Mcf $ 5.08 $ 4.65
As shown in the table above, total oil and gas sales increased $190,182
(9.9%) for the nine months ended September 30, 2004 as compared to the
nine months ended September 30, 2003. Of this increase, approximately
$116,000 and $130,000, respectively, were related to increases in the
average prices of oil and gas sold. These increases were partially offset
by a decrease of approximately $44,000 related to a decrease in volumes of
gas sold. Volumes of oil and gas sold decreased 411 barrels and 9,361 Mcf,
respectively, for the nine months ended September 30, 2004 as compared to
the nine months ended September 30, 2003.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $32,889 (5.8%) for the nine months ended
September 30, 2004 as compared to the nine months ended September 30,
2003. As a percentage of oil and gas sales, these expenses decreased to
25.3% for the nine months ended September 30, 2004 from 29.6% for the nine
months ended September 30, 2003. This percentage decrease was primarily
due to (i) the increase in oil and gas sales and (ii) the dollar decrease
in oil and gas production expenses.
Depreciation, depletion, and amortization of oil and gas properties
decreased $67,364 (37.4%) for the nine months ended September 30, 2004 as
compared to the nine months ended September 30, 2003. This decrease was
primarily due to (i) the abandonment of one significant well during the
nine months ended September 30, 2003 due to severe mechanical problems,
(ii) two other significant wells being fully depleted during the nine
months ended September 30, 2003 due to the lack of remaining reserves, and
(iii) upward revisions in the estimates of remaining oil and gas reserves
since September 30, 2003. These decreases were partially offset by an
increase in depletable oil and gas properties primarily due to
recompletion activities on two significant wells during the nine months
ended September 30, 2004. As a percentage of oil and gas sales, this
expense decreased to 5.4% for the nine months ended September 30, 2004
from 9.4% for the nine months ended September 30, 2003. This percentage
decrease was primarily due to the dollar decrease in depreciation,
depletion, and amortization of oil and gas properties.
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General and administrative expenses remained relatively constant for the
nine months ended September 30, 2004 and 2003. As a percentage of oil and
gas sales, these expenses decreased to 9.8% for the nine months ended
September 30, 2004 from 10.8% for the nine months ended September 30,
2003.
The Limited Partners have received cash distributions through September
30, 2004 totaling $19,361,904 or 87.42% of Limited Partners' capital
contributions.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Partnerships do not hold any market risk sensitive instruments.
ITEM 4. CONTROLS AND PROCEDURES
As of the end of this period covered by this report, the principal
executive officer and principal financial officer conducted an
evaluation of the Partnerships' disclosure controls and procedures
(as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
and Exchange Act of 1934). Based on this evaluation, such officers
concluded that the Partnerships' disclosure controls and procedures
are effective to ensure that information required to be disclosed by
the Partnerships in reports filed under the Exchange Act is
recorded, processed, summarized, and reported accurately and within
the time periods specified in the Securities and Exchange Commission
rules and forms.
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
31.1 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the III-A Partnership.
31.2 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-A Partnership.
31.3 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the III-B Partnership.
31.4 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-B Partnership.
31.5 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the III-C Partnership.
31.6 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-C Partnership.
31.7 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the III-D Partnership.
31.8 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-D Partnership.
31.9 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the III-E Partnership.
31.10 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-E Partnership.
31.11 Certification by Dennis R. Neill required by Rule
13a-14(a)/15d-14(a) for the III-F Partnership.
31.12 Certification by Craig D. Loseke required by Rule
13a-14(a)/15d-14(a) for the III-F Partnership.
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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
III-A Partnership.
32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the
III-B 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
III-C Partnership.
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
III-D 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
III-E 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
III-F Partnership.
(b) Reports on Form 8-K.
Current Report on Form 8-K/A filed during the third quarter of 2004:
Date of Event: May 12, 2004
Date Filed with SEC: July 13, 2004
Items Included: Item 7 - Exhibits
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-A
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-B
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-C
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-D
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-E
GEODYNE ENERGY INCOME LIMITED PARTNERSHIP III-F
(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 Energy Income Limited Partnership III-A.
31.2 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-A.
31.3 Certification Dennis R. Neill required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership III-B.
31.4 Certification Craig D. Loseke required by Rule 13a-14(a)/15d-14(a) for
the Geodyne Energy Income Limited Partnership III-B.
31.5 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-C.
31.6 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-C.
31.7 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-D.
31.8 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-D.
31.9 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-E.
31.10 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-E.
31.11 Certification by Dennis R. Neill required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-F.
31.12 Certification by Craig D. Loseke required by Rule 13a-14(a)/15d-14(a)
for the Geodyne Energy Income Limited Partnership III-F.
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32.1 Certification pursuant to 18 U.S. C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne Energy
Income Limited Partnership III-A.
32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 for the Geodyne Energy
Income Limited Partnership III-B.
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 Energy
Income Limited Partnership III-C.
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 Energy
Income Limited Partnership III-D.
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 Energy
Income Limited Partnership III-E.
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 Energy
Income Limited Partnership III-F.
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